In re Felicia R. Lundstrom, petitioner, Respondent, vs. Leon D. Lundstrom, Appellant.

In re Felicia R. Lundstrom, petitioner, Respondent, vs. Leon D. Lundstrom, Appellant. A04-1309, Court of Appeals Unpublished, March 22, 2005. This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

  STATE OF MINNESOTA

IN COURT OF APPEALS

A04-1309

 

In re Felicia R. Lundstrom, petitioner,
Respondent,
 
vs.
 
Leon D. Lundstrom,
Appellant.

 

Filed March 22, 2005 Affirmed

Peterson, Judge

 

Pennington County District Court

File No. F303309

 

Kevin T. Duffy, PO Box 715, Thief River Falls, MN  56701 (for respondent)

 

Michael L. Jorgenson, Charlson & Jorgenson P.A., 119 West Second Street, PO Box 506, Thief River Falls, MN  56701 (for appellant)

 

            Considered and decided by Klaphake, Presiding Judge; Kalitowksi, Judge; and Peterson, Judge.

U N P U B L I S H E D   O P I N I O N

PETERSON, Judge

 

In this appeal from a marital-dissolution judgment, appellant argues that (1) he should have been awarded physical custody of the parties' children; (2) the district court's division of marital property is inequitable; and (3) the district court erroneously imputed income to appellant when setting child support.  We affirm.

FACTS

            Appellant-husband Leon Daniel Lundstrom and respondent-wife Felicia Renae Lundstrom married in July 1997 and have three minor children.  At the time they married, appellant worked driving two truck routes, and respondent stayed home to care for their first child.  In 1998, after appellant's employment was terminated, the parties moved to Thief River Falls, where respondent obtained employment in September 1998.  Their second child was born two months later.

Appellant remained unemployed until March 1999, when he began working at the Pennington County Jail, earning $8.85 per hour plus medical-insurance benefits. Appellant quit this job in March 2001 and remained unemployed for two years.  The parties' youngest child was born in July 2000.

In February 2003, appellant began working as a machinist earning $9.00 per hour.  He remained employed until September 2003, when he took a leave of absence to harvest his crops.  He did not return to his machinist job, and since that time, he has been self-employed as a farmer.  He applied for unemployment benefits, but his application was denied because he declined to return to work when called by his employer.  Appellant reported a $14,753 loss from his farming operation in 2001 and a $1,819 profit in 2002.  Respondent became self-employed as an agent for American Family Insurance, and in 2002, earned $41,808 before taxes.

In April 2003, respondent initiated this dissolution action.  In June 2003, appellant was awarded temporary custody of the children and temporary exclusive use of the marital home, and respondent was ordered to pay child support.

During the course of this proceeding, respondent sold two snowmobiles that the parties acquired during the marriage.  One was sold for the amount of the outstanding loan against it, approximately $3,200, and the other was sold for $1,840, which respondent used to pay her attorney fees.  Also during the course of the proceedings, respondent traded in two of the parties' vehicles, which were encumbered, for a 2003 Ford pickup.  Respondent sustained a loss on the transaction, and as a result, the pickup, which is valued at $24,000, is encumbered with a debt of $35,932.  At trial, respondent stated that she would pay the debt because she created it.

Before trial, the parties entered into a stipulation agreeing that appellant would be granted his farming operation with its assets and debts and respondent would be granted her insurance business with its assets and debts.  Also, both parties waived spousal maintenance.  The district court included the parties' stipulation in its judgment and decree.

At trial, each party claimed to be the primary caretaker of the children.  Appellant and his mother testified that appellant provided the vast majority of the children's care throughout the parties' marriage.  Respondent testified that when she was working and appellant was unemployed and at home, appellant's mother was the children's primary caretaker during the day.

A custody evaluation completed by Regina Larson recommended that the parties share legal custody and that respondent have sole physical custody.  Larson's report highlights the parties' different parenting styles, the influence of the children's paternal grandmother, and the conflict that exists between respondent and appellant's parents.  Larson also documented her concerns about appellant's alcohol use.  At trial, Larson testified that she found respondent more credible than appellant.

The district court awarded the parties joint legal custody and respondent sole physical custody of the parties' children, subject to reasonable parenting time with appellant.  The district court determined that while appellant's mother provided much of the primary care for the children in the past two to three years, respondent was, nonetheless, the children's primary caretaker as between the parties.  The district court determined that appellant was capable of earning a net monthly income of $1,165 and ordered appellant to pay $407.75 per month in child support.

Respondent was awarded the parties' home and all the furnishings, her business, life insurance policies, a vehicle, and other personal effects.  Appellant was awarded his farming operation and two vehicles, one of which was a nonmarital asset.  Both parties were ordered to pay certain debts and their own attorney fees.

Appellant made no post-trial motions and appeals from the judgment.

D E C I S I O N

In an appeal from a judgment when no motion for a new trial or amended findings was made, this court may review substantive issues of law properly raised at trial, as well as whether the evidence supports the findings of fact and the findings of fact support the conclusions of law and the judgment.  Alpha Real Estate Co. of Rochester v. Delta Dental Plan of Minn., 664 N.W.2d 303, 310 (Minn. 2003).  Findings of fact are not set aside unless clearly erroneous and, when determining whether the evidence supports the findings, we review the evidence in the light most favorable to the findings.  Minn. R. Civ. P. 52.01; Ayers v. Ayers, 508 N.W.2d 515, 521 (Minn. 1993).

            Property Division

            Appellant argues that the division of the marital assets is inequitable.  District courts have broad discretion when dividing marital property, and appellate courts will not alter a district court's property division absent a clear abuse of discretion or an erroneous application of the law.  Chamberlain v. Chamberlain, 615 N.W.2d 405, 412 (Minn. App. 2000) (clear abuse of discretion), review denied (Minn. Oct. 25, 2000); Ebnet v. Ebnet, 347 N.W.2d 840, 842 (Minn. App. 1984) (misapplication of the law).  A district court abuses its discretion regarding a property division if its findings of fact are against logic and the facts on the record.  Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).  We "will affirm the [district] court's division of property if it had an acceptable basis in fact and principle even though we might have taken a different approach."  Antone v. Antone, 645 N.W.2d 96, 100 (Minn. 2002).

Upon a dissolution of a marriage . . . the court shall make a just and equitable division of the marital property of the parties . . . after making findings regarding the division of the property.  The court shall base its findings on all relevant factors including the length of the marriage, . . . the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, needs, opportunity for future acquisition of capital assets, and income of each party.  The court shall also consider the contribution of each in the acquisition, preservation, depreciation or appreciation in the amount or value of the marital property, as well as the contribution of a spouse as a homemaker. . . .  The court may also award to either spouse the household goods and furniture of the parties, whether or not acquired during the marriage.

 

Minn. Stat. § 518.58, subd. 1 (2004).  The property division must be just and equitable, it need not be equal.  Justis v. Justis, 384 N.W.2d 885, 888 (Minn. App. 1986), review denied (Minn. May 29, 1986). 

            The district court awarded respondent the marital home, which was valued at $27,100 and subject to the $18,000 balance owing on a contract for deed, all of the household furnishings, valued at $5,000, and life insurance policies valued at $878.72.  Respondent was also awarded the 2003 pickup in her possession, which has a market value of $24,000, but is subject to a $35,932 debt that respondent must pay.  Respondent also must pay $3,586 in credit-card debt, $948 in medical expenses incurred during the marriage, $6,325.20 in marital taxes, and a $3,400 loan from American Family.

            The district court awarded appellant an unencumbered 1989 pickup valued at $2,500, a go-cart valued at $450, and an unencumbered 1979 pickup valued at $3,000, which is a nonmarital asset.  Also, appellant must pay $2,400 in credit-card debt.  Pursuant to the parties' stipulation, appellant was awarded his farming operation, with its assets and debts, and respondent was awarded her insurance business, with its assets and debts.

Appellant argues that the division is inequitable because, when the unsecured debts and the snowmobile that respondent sold to pay her attorney fees are considered, his net property award is valued at $550, and respondent's net property award is valued at $13,418.72.  But appellant does not provide any reason why only the unsecured debts assigned to the parties should be considered when determining the net value of each party's property award.  Respondent agreed to be solely responsible for significant amounts of debt, but that does not mean that the debts should not be considered when determining whether the property division is equitable.  When the debts assigned to the parties are included in the calculation of the net property awards, respondent's property award has a negative value. 

Appellant also argues that the property division is inequitable because respondent makes more income than he does; he has no income from which to buy any assets; and he has no place to live because the marital home was awarded to respondent.  But in making this argument, appellant fails to recognize that the district court found that appellant is capable of earning a net monthly income of $1,165 and that both parties testified that the marital home should be awarded to the party who is granted physical custody of the children.  Appellant has not shown that the district court abused its discretion when dividing the marital property.

Physical Custody

Appellant argues that the best-interests-of-the-child factors set forth in Minn. Stat. § 518.17, subd. 1 (2004), favor awarding him physical custody and that the district court's findings to the contrary are not supported by the record.

A district court has broad discretion to provide for the custody of the parties' children.  Durkin v. Hinich, 442 N.W.2d 148, 151 (Minn. 1989).  The law "leaves scant if any room for an appellate court to question the trial court's balancing of best-interests considerations."  Vangsness v. Vangsness, 607 N.W.2d 468, 477 (Minn. App. 2000).  Appellate review of custody determinations is limited to determining whether the district court abused its discretion by making findings unsupported by the evidence or by improperly applying the law.  Silbaugh v. Silbaugh, 543 N.W.2d 639, 641 (Minn. 1996).  A district court's findings of fact will be sustained unless they are clearly erroneous.  Pikula v. Pikula, 374 N.W.2d 705, 710 (Minn. 1985).  The basis for the court's custody determination must be set forth with a high degree of particularity.  Durkin, 442 N.W.2d at 151. 

The district court made specific findings with respect to the factors set forth in Minn. Stat. § 518.17, subd. 1, which a court is to consider when determining the best interests of the children.  Appellant argues that one of the district court's findings demonstrates that the court relied on evidence about the parties' relative incomes when determining custody and that the district court misapplied the law by treating the parties' relative incomes as a factor in its physical-custody determination.    The district court found:

            [Respondent's] employment has been the primary source of the family's financial security and stability.  [Appellant's] periodic and lengthy periods of voluntary unemployment other than a farming operation that is essentially part-time and provides him with little or no income places his ability to provide his children with a stable home and environment at substantial risk.

 

This finding does not demonstrate that the district court improperly relied on evidence about the parties' relative incomes when determining custody.  Two of the best-interests factors that the district court was to consider when determining custody were "the length of time the child has lived in a stable, satisfactory environment and the desirability of maintaining continuity" and "the permanence, as a family unit, of the existing or proposed custodial home."  Minn. Stat. § 518.17. subd. 1(a)(7) and (8).  The district court's finding addresses these factors. 

The parties lived in a home that they were purchasing by contract for deed, and to continue living there, they needed to pay the expenses associated with the home.  The district court's finding simply recognizes that paying these expenses is necessary to maintain the family home and that appellant is not likely to be able to pay the expenses with the income from his farming operation.  Evidence in the record supports the district court's finding that appellant's farming operation has been his only employment for significant periods and that appellant earns very little, if any, income from this operation. 

One of the factors that the court is to consider when determining the best interests of a child is the child's primary caretaker.  Minn. Stat. § 518.17, subd. 1(a)(3).  Appellant argues that the record does not support the district court's finding that respondent has been the children's primary caretaker.  The district court found, "The children's paternal grandmother has been allowed to provide much of the primary care for the children in the past two to three years, but [respondent] has been their primary caretaker in respect to the care provided by the parties." 

Respondent testified that when she went to work in the morning, appellant always took the children to his mother's house even when he was unemployed.  Respondent testified that appellant did not stay home with the children and do things that a traditional stay-at-home mother would do, such as laundry, cleaning, preparing meals, and grocery shopping.  Respondent testified that she did those things on the weekends because appellant did not do them during the week.  Respondent also testified, and appellant acknowledged, that during the first years of their oldest child's life, respondent stayed home and was the primary caregiver.  There was also testimony that respondent helped get the children ready in the morning before going to work, put them to bed at night, helped the oldest child with his homework, secured the children's immunization records for school, and attended pre-school evaluation meetings and parent-teacher conferences.

Appellant's mother testified that she provided daycare for the children from 9:30 a.m. until 5:00 p.m. "almost every day."  And the custody evaluator testified that her inquiries revealed that "grandmother has given a lot of the primary care," and that when respondent got home from work, it was respondent, not appellant, who took care of the children.

Although there was also evidence that could have supported a finding that appellant was the primary caretaker, or that neither party was the primary caretaker, "it is the role of the [district] court to make that determination."  Sefkow v. Sefkow, 427 N.W.2d 203, 211 (Minn. 1988).  The district court determined that respondent was the primary caretaker, and because there is evidence to support the court's finding, the finding is not clearly erroneous.   See Pikula, 374 N.W.2d at 710.

Appellant also disputes the district court's evaluation of some of the other best-interests factors.  He contends that because respondent did not submit evidence of her intimate relationship with the children, the district court erred when it found that "[b]oth parties have a warm, supportive, loving, and mutually rewarding relationship with their children. The children are happy and comfortable in the company of both parties."  But the custody evaluator's report states, "office and home visits revealed warm, supportive, loving and mutually rewarding relationships between the children and each of their parents."  This evidence supports the district court's finding.

Appellant argues that because the children's relationship with his mother is significant, the Minn. Stat. § 518.17, subd. 1(a)(5), best-interests factor, which requires the district court to consider "the interaction and interrelationship of the child with a . . . person who may significantly affect the child's best interests," favors him over respondent.  But appellant does not identify any district court error.  Appellant simply states that the children have no significant relationship with any of respondent's extended family or with respondent's children from a prior marriage and argues that because the children's relationship with his mother is significant, respondent's intent to stop using his mother as a daycare provider indicates that respondent does not have the children's best interests at heart.  The district court found, however, that respondent

has stated that if she were awarded custody of the children she would allow liberal visitation with [appellant] and would not interfere with the children's good relationship with their paternal grandmother.  There is no evidence before this court or anything in [respondent's] past conduct that would require the court to find otherwise. 

 

Appellant has not demonstrated any district court error with respect to this factor.

Appellant argues that the evidence established that he would provide a more stable environment for the children and more continuity, and therefore, the Minn. Stat. § 518.17, subd. 1(a)(6), factor relating to the children's adjustment to home, school, and community favors him.  Appellant contends that because respondent at one time stated that she planned to move to Oregon, and because respondent intends to change daycare providers, he is the parent who can provide more stability for the children.  But the district court found that respondent has established a business in Thief River Falls and does not intend to remove the children from the area if awarded custody.  Even if this factor favors appellant because awarding respondent physical custody means that the children will need to adjust to a new daycare provider, this adjustment is not a sufficient basis for us to conclude that the district court abused its discretion by awarding respondent physical custody.  

Appellant argues that the evidence presented at trial concerning the length of time the children have lived in a stable, satisfactory environment and the desirability of maintaining continuity favor granting him physical custody.  However, as we have already explained, the district court found that respondent's employment has been the primary source of the family's financial security and stability and that the lengthy periods when appellant has been voluntarily unemployed, except for a part-time farming operation, place his ability to provide his children with a stable home and environment at substantial risk.

Appellant argues that he has the greater capacity and disposition to continue raising the children in their religion.  But the children's religion is only one element of the factor that requires the district court to consider "the capacity and disposition of the parties to give the child love, affection, and guidance, and to continue educating and raising the child in the child's culture and religion or creed, if any."  Minn. Stat. § 518.17, subd. 1(a)(10).  The district court found that appellant (1) was recently convicted of disorderly conduct for threatening respondent; (2) has made derogatory comments about respondent in the children's presence and has encouraged the oldest child to make derogatory statements about respondent; (3) frequently called the oldest child names and has little, if any, insight into the emotional damage this behavior causes; (4) used racist language in front of the children; and (5) has a drinking problem that places his ability to properly care for and supervise his children at risk.  These findings indicate shortcomings in appellant's capacity and disposition to give the children love, affection, or guidance.  Appellant disputes these findings, but respondent's testimony and the custody evaluator's report and testimony support the district court's findings.  When there is conflicting evidence, appellate courts defer to the district court's determinations of credibility and the weight to be given witness testimony.  See Sefkow, 427 N.W.2d at 210.  

Although the district court's findings are not all stated explicitly in terms of the statutory best-interests factors, the findings describe the basis for the district court's custody determination with great particularity, and we conclude that appellant has not shown that the district court abused its broad discretion when it awarded respondent physical custody of the parties' children.

Child Support

            Appellant argues that the district court abused its discretion by establishing child support on the basis of imputed income because (1) the record does not show that he acted in bad faith; and (2) there is no finding of a recent voluntary change in his employment status.  Appellant contends that his child-support obligation should be based on his farming income.

A district court has broad discretion to provide for the support of the parties' children.  Putz v. Putz, 645 N.W.2d 343, 347 (Minn. 2002).  A district court abuses its discretion when it sets support in a manner that is against logic and the facts on record or misapplies the law.  Rutten, 347 N.W.2d at 50 (against logic); Ver Kuilen v. Ver Kuilen, 578 N.W.2d 790, 792 (Minn. App. 1998) (application of law).  A district court's findings on net income for purposes of child support will be affirmed on appeal if those findings have a reasonable basis in fact and are not clearly erroneous.  State ex rel. Rimolde v. Tinker, 601 N.W.2d 468 470 (Minn. App. 1999).  A determination of the amount of an obligor's income for purposes of child support is a finding of fact and will not be altered on appeal unless clearly erroneous.  See Ludwigson v. Ludwigson, 642 N.W.2d 441, 446 (Minn. App. 2002).

The amount of child support that the district court ordered appellant to pay is based on income that the court imputed to appellant.  Appellant acknowledges that a court may impute income when a child-support obligor is voluntarily unemployed or underemployed, but, citing Schneider v. Schneider, he argues that income may only be imputed when there is a showing of bad faith. 473 N.W.2d 329, 332 (Minn. App. 1991).  However, Schneider was decided before the legislature enacted Minn. Stat. § 518.551, subd. 5b(d)(2004), which states:

If the court finds that a parent is voluntarily unemployed or underemployed or was voluntarily unemployed or underemployed . . . support shall be calculated based on a determination of imputed income.  A parent is not considered voluntarily unemployed or underemployed upon a showing by the parent that the unemployment or underemployment: (1) is temporary and will ultimately lead to an increase in income; or (2) represents a bona fide career change that outweighs the adverse effect of that parent's diminished income on the child.[1]

 

The statute does not state that child support shall be calculated based on imputed income only if a voluntarily unemployed or underemployed parent acted in bad faith, and following the adoption of section 518.551, subdivision 5b, this court explained that "when setting child support, courts are no longer required to find bad faith before considering an obligor's earning capacity." Walker v. Walker, 553 N.W.2d 90, 97, n.1 (Minn. App. 1996).  Appellant argues, however, that in Putz, which was decided after section 518.551, subd. 5b(d), was enacted, the supreme court used the bad-faith standard to impute income to a child-support obligor. 645 N.W.2d at 351.  Therefore, appellant contends, section 518.551, subdivision 5b(d), did not set aside the bad-faith standard and the bad-faith standard should be applied in this case.  Appellant misinterprets Putz.

In Putz, a child-support obligor worked at a job that paid approximately $40,000 per year.  Id. at 345.  The obligor voluntarily quit his job and enrolled as a full-time college student, anticipating that when he completed his studies, he would be able to earn $70,000 per year.  Id. at 346.  A child support magistrate found that the obligor's unemployment was temporary and designed to lead to an increase in income, and based on this finding, ordered a reduction of the obligor's child-support obligation. Id.  On appeal, this court affirmed, relying on the principle that an obligor is generally not considered voluntarily unemployed while attending school.  Id. at 347.  On appeal to the supreme court, the county, on behalf of the obligee, urged the court to consider "whether the obligor unjustifiably self-limited his or her income in bad faith."  Id. at 349.  The obligor argued that case law allowing courts to impute income to an obligor who unjustifiably self-limits his income in bad faith was superceded by section 518.551, subd. 5b(d).  Id.

Essentially, the obligor's argument was that because he met one of the two conditions enumerated in section 518.551, subdivision 5b(d), he could not be considered to be voluntarily unemployed.  Id.  The supreme court rejected the obligor's argument and held "that section 518.551, sub. 5b(d), does not limit the power of the courts to consider whether an obligor's unemployment or underemployment is in bad faith toward his or her support obligation."  Id. at 351.

            The supreme court's holding in Putz does not mean that income may be imputed to a child-support obligor who is voluntarily unemployed or underemployed only if the obligor acted in bad faith.  To the contrary, the supreme court's holding means that even if a child-support obligor meets one of the two conditions enumerated in section 518.551, subdivision 5b(d), for not being considered voluntarily unemployed or underemployed, income may, nevertheless, be imputed to the obligor if the obligor acted in bad faith to meet one of the conditions.  As the supreme court explained in Putz,

[u]nder section 518.551, subd. 5b(d), there are only two situations in which an obligor who chooses to terminate or scale back employment is not voluntarily unemployed or underemployed. In all other situations, including those in which the obligor unjustifiably self-limits his or her income in bad faith, the obligor is voluntarily unemployed or underemployed and the court must calculate the support obligation on the basis of imputed income.

 

Id.  Appellant is not within either of the two situations in which an obligor who chooses to terminate or scale back employment is not voluntarily unemployed or underemployed.  Therefore, the district court did not err by imputing income to appellant without first finding that appellant acted in bad faith.

            There is also no merit to appellant's argument that his child-support obligation unfairly requires him to stop farming and enter another profession.  Appellant testified that he works full time at farming only two weeks in the spring and two weeks in the fall, that the time commitment during the rest of the growing season is minimal, and that he spends no time farming during the winter.  The district court did not abuse its discretion by imputing income to appellant in an amount that reflects what appellant could earn by working during the substantial portion of the year that he is not farming.

            Affirmed.

[1] This statutory language was enacted in 1991.  1991 Minn. Laws ch. 292, art. 5 § 76.