In re the Marriage of: Mark Stephen Caron, petitioner, Respondent, vs. Ruth Ann Caron, Appellant.

In re the Marriage of: Mark Stephen Caron, petitioner, Respondent, vs. Ruth Ann Caron, Appellant. A04-2461, Court of Appeals Unpublished, September 6, 2005.

This opinion will be unpublished and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

A04-2461

 

 

In re the Marriage of:

Mark Stephen Caron, petitioner,

Respondent,

 

vs.

 

Ruth Ann Caron,

Appellant.

 

 

Filed September 6, 2005

Affirmed in part, reversed in part, and remanded

Halbrooks, Judge

 

 

Ramsey County District Court

File No. F6-02-430

 

William D. Siegel, Barna, Guzy & Steffen, Ltd., 400 Northtown Financial Plaza, 200 Coon Rapids Boulevard, Minneapolis, MN 55433 (for appellant)

 

Janet L. Goehle, Goehle Law Office, 510 Spruce Street Centre, 1600 University Avenue West, St. Paul, MN 55104; and

 

Jack D. Nelson, 1563 Portland Avenue, St. Paul, MN 55104 (for respondent)

 

            Considered and decided by Worke, Presiding Judge; Halbrooks, Judge; and Parker, Judge.*

U N P U B L I S H E D   O P I N I O N

HALBROOKS, Judge

            Appellant challenges the district court's order following her motion to amend the judgment and decree.  Appellant argues that the district court abused its discretion by (1) improperly calculating the value of the debt that the parties owe appellant's mother; (2) failing to make findings on whether other money given to the parties by appellant's parents constituted gifts or loans; (3) improperly valuing the homestead; (4) crediting respondent for making the March 2004 house payment when the issue was not properly before the district court; (5) unjustly and unequally dividing the property; (6) failing to order child support retroactive to the date of the trial; (7) unlawfully making appellant's right to the homestead and temporary maintenance contingent on her not cohabiting with a non-family member; and (8) ignoring the custody evaluator's recommendations when setting parenting time. 

Because the value the district court assigned to the homestead falls within the reasonable range of estimates in the record, we affirm on that issue.  Because the district court's decisions on child support and parenting time were not an abuse of discretion, we affirm those issues.  But because the district court improperly calculated the interest owed on the debt that the parties owe to appellant's mother, we reverse and remand that issue.  We also reverse and remand the district court's decision regarding respondent's payment of the March 2004 house payment and its effect on respondent's lien on the homestead because appellant had no meaningful opportunity to respond to an issue not
properly before the court.  Because the district court erred by ordering that appellant would automatically lose her right to the homestead and maintenance if she cohabits with a non-family member, we reverse and remand those issues.  Finally, we reverse and remand the property division to the district court for redetermination following resolution of the remanded issues. 

FACTS

            Appellant Ruth Ann Caron and respondent Mark Stephen Caron were married in July 1979.  The parties have eight children together, six of whom still resided at home as of the March 2004 dissolution judgment. 

            A two-day hearing was conducted by a family court referee in October 2003.  The referee considered the report of a family court officer regarding parenting time and heard testimony from appellant, appellant's mother, and respondent on the issue of the parties' debts.  The referee also heard testimony on the value of the parties' homestead from real-estate appraisers Richard Forsythe and Walter Griffendorf.

            The referee awarded the parties joint legal custody and appellant sole physical custody of the children, subject to respondent's right to parenting time.  The referee incorporated the parties' agreement regarding parenting time into the order and determined that, when respondent had parenting time with the children every other weekend, his time would run from Friday at 6:00 p.m. until Sunday at 6:00 p.m. 

            The referee recommended findings and conclusions to the district court that the district court incorporated into an order for judgment.  The district court awarded appellant the parties' homestead, the equity of which the district court valued at $97,910; the parties' 2002 tax refund of $3,000; and $22,295 of the parties' debts ($22,294.68 of which the court found was a debt to appellant's mother).[1]  Under the terms of the judgment, appellant's exclusive right to use and occupy the homestead terminates when any one of several contingencies occurs, one of which is if appellant "co-habit[s] with a person of the opposite sex for a period of no less than three months, which co-habitation is regular and analogous to marriage."  The district court awarded respondent a $5,882.50 lien against the parties' homestead.  The district court also required respondent to pay appellant $976.66 per month in spousal maintenance and $1,908.91 per month in child support, but stated that respondent's obligation to pay spousal maintenance would terminate if appellant cohabited with anyone.

            In April 2004, the district court issued an amended judgment that corrected two minor clerical errors in the March 2004 judgment.  Appellant moved to amend the April 2004 amended judgment.  Among other things, appellant argued that the district court erred in the April amended judgment by (1) incorrectly determining the amount of the debt the parties owe appellant's mother; (2) failing to award appellant a nonmarital interest in the homestead; (3) incorrectly valuing the homestead; (4) overvaluing the amount of respondent's tax refund; (5) failing to include respondent's work bonuses as an asset; (6) ordering appellant to sell the homestead if she were to cohabit with a person of the opposite sex for more than three months and terminating respondent's duty to pay spousal maintenance if she cohabits with someone; and (7) omitting some of the recommendations of the parenting-time investigator.  Respondent counter-moved for an order requiring family therapy, amendment of the 2003 state- and federal-tax-return award in order to share the refund or liabilities equally, and to credit respondent for the March 2004 mortgage payment by increasing his lien on the homestead or crediting his child-support obligation in a comparable amount.  

            At the motion hearing, appellant argued that respondent's issue regarding whether respondent's lien on the homestead should be increased by the amount of the mortgage payment he made in March 2004 was a new issue that had not been previously raised.  The family court referee agreed, responding, "Absolutely."  Respondent argued,

Your Honor, I thought by bringing a counter motion we could address the other issues today.  It was a counter motion, not a responsive motion that we brought.     

 

THE COURT:I'll look at it, but I don't think that that's an appropriate posture when the motion before the Court is to amend existing findings.

 

[RESPONDENT]:      Then we will withdraw that section and bring it at another time.

 

But despite respondent's statement that he was withdrawing the argument, the family court referee granted respondent's request.

In October 2004, the district court issued an order that incorporated the findings and conclusions of the family court referee.  The district court again determined that the debt the parties owe appellant's mother is $22,294.68.  The court explained the calculation by stating that, in September 1992, appellant's parents loaned the parties $16,000 on a promissory note at an interest rate of 7%.[2]  In a related ruling, the district court denied appellant's motion to amend the April amended judgment to award her a nonmarital interest in the homestead based on the district court's finding that the $16,000 loan was marital in character.

The district court referred to respondent's argument regarding the March 2004 mortgage payment.  The court stated, "Credit is given to [respondent] by adding this payment [of $1,708] to the lien on the homestead increasing the lien to $7,590.50."

The district court granted appellant's request to amend the April amended judgment to reflect that respondent received a $2,134 bonus from his employer.  But the court then determined that the amount should be awarded to respondent because he was ordered to pay more of the parties' debts than appellant was.

Regarding appellant's request to amend the April amended judgment regarding the 2002 tax refund that the parties received, the district court concluded that appellant did not provide any proof of her assertion that she received the federal tax refund and then paid the state income tax.  The district court noted, to the contrary, that respondent produced a cancelled check reflecting his payment of the state income tax.  Thus, the district court amended the April amended judgment only to show that the amount of the federal tax refund received by the parties was $2,059.95. 

On the issue of the restrictions that the district court earlier attached to appellant's use of the homestead and receipt of maintenance, the district court modified its order to state that respondent is not obligated to pay spousal maintenance if appellant "cohabits for more than six months . . . under circumstances that it is reasonable to conclude [the recipient's] basic needs are being provided by such person."  But the court stated that respondent's maintenance obligation would not terminate automatically.  Should the stated circumstances occur, respondent's recourse is to move for modification, asserting appellant's "substantially decreased need" for spousal maintenance as a result of cohabitation.  No change was made to the conditions associated with appellant's right to use the homestead.

Finally, the district court denied appellant's request to amend the findings in the April amended judgment regarding parenting time.  The district court noted that the April 2004 amended judgment incorporated the parties' stipulation that (1) they would share joint legal custody of the children, (2) appellant would have sole physical custody, (3) they agreed to the holiday custody schedule outlined by the custody evaluation, and (4) they agreed to use a specific parenting-time expeditor.  The district court therefore determined that it would be improper to go beyond the terms of the stipulation when it clearly addressed all of the necessary custody issues.  This appeal follows. 

D E C I S I O N

I.

            The first issue is whether the district court erred by adopting the family court referee's October order, which valued and divided the parties' property.  In dissolution proceedings, debts are apportioned as part of the property settlement and are divided in the same way as assets.  Korf v. Korf, 553 N.W.2d 706, 712 (Minn. App. 1996).  The district court has broad discretion regarding the valuation and division of marital property.  Ronnkvist v. Ronnkvist, 331 N.W.2d 764, 766 (Minn. 1983); Chamberlain v. Chamberlain, 615 N.W.2d 405, 412 (Minn. App. 2000), review denied (Minn. Oct. 25, 2000).  Asset valuation is a finding of fact, and in reviewing a district court's amended findings, we will reverse a finding only if it is clearly erroneous.  McCauley v. Michael, 256 N.W.2d 491, 500 (Minn. 1977); Hertz v. Hertz, 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975). 

            A.        $16,000 Loan from Appellant's Parents

            Appellant argues that the district court improperly calculated the amount of the debt the parties owe to her mother.  Both parties agree that appellant's parents lent the parties $16,000 in 1992 at an interest rate of 7% per year.  It is also undisputed that the parties never made any payments on the loan.  The district court's conclusion that the debt had grown to $22,294.68 appears to be based on respondent's argument that monthly payments of $185.74 were to have been paid to appellant's parents for ten years.  But this result does not take into consideration the agreed-on interest rate.  If the amount due increased by 7% each year, using a simple-interest calculation, the amount due on the loan in 2003 would have been $28,320.  If a compound interest rate were used, the amount would be substantially higher.  Because the district court did not include an interest rate in its calculation of the debt, the district court's finding is clearly erroneous.  We therefore reverse and remand this issue for the district court's redetermination.

B.        Other Loans from Appellant's Parents

Appellant also argues that the district court clearly erred by not considering other alleged loans made to the parties by her parents and including such loans in the property division.  Appellant's mother testified that over the course of the parties' marriage, she and her husband made multiple loans to the parties that had not been repaid.  Respondent testified that he did not recall receiving any other money or loans from appellant's parents, except for $5,000 that appellant's mother testified was initially a loan that she later cancelled. 

Whether an intrafamily transfer of money is a gift or a marital debt rests on a district court's determination of intent, which, as a fact question, depends on witness credibility.  See Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997) (stating that the donor's intent is the "most important factor in determining whether a gift is marital or nonmarital," and that intent is a question of fact); Golob v. Buckingham Hotel, 244 Minn. 301, 304, 69 N.W.2d 636, 639 (1955) (noting that determinations of questions of fact depend on witness credibility).  And credibility is a determination for the district court.  Vangsness v. Vangsness, 607 N.W.2d 468, 472 (Minn. App. 2000).  Because the district court, having heard the testimony and observed the witnesses, is better able to determine credibility than we are, we conclude that the district court did not clearly err by finding that the parties have no debts to appellant's parents other than the September 1992 loan of $16,000.

C.        Homestead

Appellant asserts that the district court clearly erred by undervaluing the parties' homestead.  The market valuation determined by the district court should be sustained if it falls within the limits of credible estimates made by competent witnesses, even if the valuation does not coincide exactly with the estimate of any of the witnesses.  Hertz v. Hertz, 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975).

In its April 2004 amended judgment, the district court noted that respondent's real-estate appraiser testified that the homestead's fair market value was $300,000, and appellant's real-estate appraiser testified that the homestead's fair market value was $210,000.  The district court subsequently determined the homestead's value to be $255,000, but did not explain how it arrived at this amount.  Appellant argues that the district court averaged the values given by each party's witness and claims that the district court's failure to make findings demonstrating how it arrived at the fair market value of $255,000 is an indication that the district court acted arbitrarily. 

We have held that the district court's discretion in valuing property is not unlimited and must be supported by the record.  Ronnkvist, 331 N.W.2d at 766; Balogh v. Balogh, 356 N.W.2d 307, 313 (Minn. App. 1984).  In Balogh, we stated:

The [district court] appears to have simply taken the appellant's figure of $1,640.00 and the respondent's figure of $90,000.00 and arrived at a figure of $45,000.00halfway in between.  While this approach might be fair when there is no great disparity in figures submitted by two opposing experts, in this instance the range between one thousand and ninety thousand dollars is substantial.

 

356 N.W.2d at 313.  In Bateman v. Bateman, 382 N.W.2d 240, 245-46 (Minn. App. 1986), we held that the district court abused its discretion in valuing an insurance agency at $141,000, without any explanation, when one expert witness testified that the value was $637,000, and the other testified that it was $32,000. 

But "[a]veraging is a fair method of calculation when there is no great disparity between estimated values."  Flynn v. Flynn, 402 N.W.2d 111, 117 (Minn. App. 1987).  In Flynn, even though one expert's estimates of the value of various limited partnerships were approximately double another expert's estimates, we concluded that the district court did not abuse its discretion by averaging the two valuations.  Id.  And in Nemitz v. Nemitz, 376 N.W.2d 243 (Minn. App. 1985), review denied (Minn. Dec. 30, 1985), we held that the district court did not abuse its discretion in valuing a business at $1.4 million, without further explanation, although the witnesses' appraisals of the business were $1.47 million, $1.07 million, and $830,000, because the evidence supported the district court's findings.  Id. at 246-47.  Here, there was evidence in the record that respondent's expert, eight months before his trial-related estimate of $300,000, had valued the property at $285,000.  Because the value of $255,000 assigned by the district court falls within the limits of credible estimates made by competent witnesses, we conclude that the district court did not clearly err in valuing the homestead.

            D.        Credit for March Mortgage Payment

            Appellant also asserts that the district court abused its discretion by adding the amount of the mortgage payment respondent made in March 2004 to respondent's lien on the homestead, increasing the lien from $5,882.50 to $7,590.50.  Appellant argues that the respondent raised this issue at the motion hearing improperly and then withdrew this portion of his motion.  Therefore, appellant argues it was not properly before the district court.

A party moving for amended findings may not limit the district court's review of the record.  McCauley, 256 N.W.2d at 499-500.  Findings of fact are frequently interrelated, and multiple findings may be based on a single item of evidence or the testimony of a single witness.  Id. at 500.  Therefore, the district court must be free to review all the evidence and all its findings in response to a motion to amend.  Id. at 499-500.  "The [district court] may find that in some cases new findings in favor of the moving party are appropriate, while in others revision unfavorable to the movant is appropriate."  Id. at 500.  But while the district court is free to review any of its findings, we agree with appellant that she had no meaningful opportunity to respond to this issue when respondent raised and then withdrew it.  We therefore remand this issue as well.

            E.        Income Tax Refund and Respondent's 2003 Bonus

            Appellant contends that the district court abused its discretion by failing to reconsider the overall property division after correctly decreasing the amount of the 2002 federal-income-tax refund that she was awarded from $3,000 to $2,059.95 and after denying her request to divide respondent's 2003 bonus between the parties.  The district court is required to distribute marital property justly and equitably, but the division need not be mathematically equal.  Justis v. Justis, 384 N.W.2d 885, 888 (Minn. App. 1986), review denied (Minn. May 29, 1986).  The October 2004 order did not address whether any of the findings created a disparity between appellant's and respondent's property awards, and it did not discuss any of the factors that Minnesota law requires the district court to take into account when dividing property, such as the health of the parties, vocational skills, and employability.  See Minn. Stat. § 518.58, subd. 1 (2004) (requiring the district court to base its findings on "all relevant factors").  In light of the district court's amended findings that potentially affect the overall property division and the issues discussed above that we are remanding to the district court for further consideration, it is necessary on remand for the district court to reexamine the property award to determine whether it is just and equitable. 

II.

            The next issue is whether the district court abused its discretion by failing to make respondent's child-support obligation retroactive to the date of trial.  The district court has broad discretion to set child-support obligations.  Korf, 553 N.W.2d at 708.  The district court may order retroactive child support following the commencement of an action under chapter 518, but is not required to do so.  Id. at 709.  Appellant fails to cite any authority in support of her argument that the district court abused its discretion by failing to order the child-support obligation to apply retroactively.  Therefore, we conclude that the district court did not abuse its discretion.  See Midway Ctr. Assocs. v. Midway Ctr., Inc., 306 Minn. 352, 356, 237 N.W.2d 76, 78 (1975) (noting, to prevail on appeal, appellant must show error and that error caused prejudice).

III.

            We next consider whether the district court abused its discretion by tying appellant's receipt of maintenance and her use of the home to future cohabitation.  The district court has broad discretion in determining the duration and amount of maintenance.  Aaker v. Aaker, 447 N.W.2d 607, 610 (Minn. App. 1989), review denied (Minn. Jan. 12, 1990).  But the district court's determination is reversible when it resolves the matter in a manner that is against logic and the facts on the record.  Id.

            Here, the district court's order amended the spousal-maintenance provision to state that if appellant cohabits with a person for more than six months, respondent may move to modify his spousal-maintenance obligation based on appellant's alleged "substantially decreased need."  In Aaker, we interpreted a spousal-maintenance provision with a cohabitation limitation to require the obligor to move the district court for modification of the spousal-maintenance obligation, claiming "substantially . . . decreased need," if the obligee cohabited with another adult for six months.  Id. at 611.  As modified, we upheld the provision.  Id.  Because the amended provision in the district court's order is consistent with the provision in Aaker and does not result in an automatic termination of respondent's maintenance obligation, the district court did not abuse its discretion by making that change.

            Appellant further challenges the provision from the April 2004 amended judgment, unchanged in the October 2004 order, that states:

[Appellant] shall have the exclusive right to use and occupy the homestead, subject to satisfaction of the foregoing lien from the immediate sale of the premises, upon the occurrence of any one of the following contingencies: . . . [appellant] co-habitats [sic] with a person of the opposite sex for a period of no less than three months, which co-habitation is regular and analogous to marriage[.]

 

            "Absent stipulation to the contrary, modification of the right to occupancy of the homestead, like modification of maintenance and child support, ‘should be allowed only when the party seeking modification can show a material change in circumstances.'"  Plonske v. Plonske, 473 N.W.2d 911, 912 (Minn. App. 1991) (emphasis omitted) (quoting Angelos v. Angelos, 372 N.W.2d 405, 407-08 (Minn. App. 1985)).  "[T]o include a provision in a final decree that would mandate a change in the occupancy of the homestead upon cohabitation by the occupying spouse, absent stipulation to the contrary, is an error of law."  Plonske, 473 at 914.  Because there was no stipulation in this case relating to cohabitation, the district court's provision limiting appellant's use or occupancy of the homestead based on cohabitation is error.  We therefore remand to the district court to either strike the offending provision from the judgment or to amend it in a manner consistent with the modification made to the spousal-maintenance provision in the October 2004 order.

IV.

            Appellant's final issue is whether the district court abused its discretion by failing to adopt the recommendations of the custody evaluator without making specific findings as to why it was disregarding certain recommendations.  The district court determined that because the parties proffered a stipulation covering all custody matters to the family court referee, it would be improper for the court to go beyond the terms of the stipulation.

            The stipulation states:

The parties agree that they will share joint legal custody of their children with sole physical custody to be awarded to [appellant].  And they agree to the holiday schedule as outlined in Mr. Melby's custody evaluation . . . with the modification that father will always have Christmas Eve . . . and mother will always have Christmas day. . . . They also agree that they will use Mr. Lee Wollery . . . as a parenting time expeditor.

 

The stipulation did not contain any reference to overnight visits with respondent.  The custody evaluator recommended that the children not stay with respondent overnight until the "successful completion of family therapy."  The district court determined that it was in the children's best interests for respondent to have parenting time "every other weekend from Friday at 6 p.m. until Sunday at 6 p.m."

            Because the parties did not stipulate to weekend visitation, the district court was incorrect in stating that the stipulation covered all custody matters.  But at the October 2003 hearing, appellant testified extensively about parenting time.  Appellant stated that after they received the custody-evaluator's report, the children attended therapy for a year.  She did not testify that respondent should not have overnight visits; instead, she testified that she preferred that respondent's weekend parenting time last only from Friday night to Saturday night, not Friday night to Sunday night.  But appellant also testified that she would not object to the children being with their father until Sunday if he would bring them to their regular activities on Sunday morning at their home parish.  Appellant's concern seemed to be about the children's attendance at Sunday church services, not staying overnight with respondent.

            Appellant cites Roehrdanz v. Roehrdanz, 410 N.W.2d 359 (Minn. App. 1987), review denied (Minn. Oct. 28, 1987), as authority for the proposition that the district court must explicitly list its reasons for rejecting the recommendations of the custody evaluator.  But Roehrdanz is easily distinguishable from the instant case.  In Roerhdanz, we stated that the district court did not abuse its discretion by not following the children's preferences in determining custody because the district court considered other relevant factors.  410 N.W.2d at 362.  The supreme court has stated that in determining which party should be granted custody of the children, "[i]t is sufficient if the findings as a whole reflect that the [district] court has taken the statutory factors into consideration, in so far as they are relevant, in reaching its decision."  Rosenfeld v. Rosenfeld, 311 Minn. 76, 83, 249 N.W.2d 168, 172 (1976). 

Here, appellant is not appealing the custody determination, only the parenting-time determination.  Minn. Stat. § 518.175, subd. 1 (2004), requires the district court to consider the best interests of the children.  The findings of fact in the March judgment and April 2004 amended judgment make clear that the district court considered the appropriate factors before reaching its decision.  Therefore, we conclude that the district court's determination regarding parenting time was not an abuse of discretion.

            Affirmed in part, reversed in part, and remanded.

*  Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10. 

[1] The loan to the parties was made by appellant's mother and father, but appellant's father passed away before these proceedings occurred.

[2] The promissory note states, "I, Mark Caron, . . . promise to pay $16,000.00 at the rate of 7% in monthly payments of $185.74 to . . . Agnes H. Kuch [appellant's mother] until the complete amount above is paid for."  The note is signed by both of appellant's parents, appellant, and respondent.  There is no indication in the note as to whether the interest is to be simple or compound.