In re the Marriage of: Tracy Ann Cannata, petitioner, Respondent, vs. Terry Matthew Cannata, Appellant.

In re the Marriage of: Tracy Ann Cannata, petitioner, Respondent, vs. Terry Matthew Cannata, Appellant. A05-445, Court of Appeals Unpublished, January 17, 2006.

This opinion will be unpublished and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

A05-445 In re the Marriage of: Tracy Ann Cannata, petitioner,
Respondent,
 
vs.
 
Terry Matthew Cannata,
Appellant.

 

Filed January 17, 2006

Reversed

Stoneburner, Judge

 

Hennepin County District Court

File No. DC224935

 

Ellen M. Schreder, Carson, Clelland & Schreder, 6300 Shingle Creek Parkway, Suite 305, Minneapolis, MN 55430 (for respondent)

 

Jeffrey R. Arrigoni, Arrigoni Law Offices, Woodbury Office Plaza, Suite 160, 1811 Weir Drive, Woodbury, MN 55125 (for appellant)

 

            Considered and decided by Kalitowski, Presiding Judge; Stoneburner, Judge; and Crippen, Judge.*

U N P U B L I S H E D  O P I N I O N

 

STONEBURNER, Judge

 

            Appellant challenges the modification of his child-support obligation to an upward deviation from the child-support guidelines and the award of attorney fees to respondent, asserting that the findings in support of the upward deviation are clearly erroneous and that he does not have the means to pay need-based attorney fees.  Because we conclude that the record does not support (1) the findings on father's current income; (2) the finding that father has the ability to pay an upward deviation from the guidelines; and (3) the finding that father has the ability to pay need-based attorney fees, we reverse.

FACTS

 

            L.C., born in 1985, and C.C., born in 1989, are the children of the marriage of appellant Terry Matthew Cannata (father) and Tracy Ann Cannata (mother).  Both children suffer from dwarfism, obsessive-compulsive disorder, anxiety, and other disabilities.  L.C. also suffers from rheumatoid arthritis, for which she has had multiple surgeries and anticipates additional surgery.

            A 1996 stipulated dissolution decree awarded the parties joint legal custody, awarded physical custody of the children to mother, required father to pay $800 per month child support, waived maintenance, and deprived the district court of jurisdiction over maintenance. 

            Father's child-support obligation was modified in 2000 to $1,035 per month, based on the child-support guidelines applied to a net monthly income of $3,450, and increased through cost-of-living adjustments to $1,152, the amount of father's obligation prior to the order on appeal in this case. 

            In May 2004, father moved for a reduction in child support based on the anticipated emancipation of L.C., who turned 18 in June 2003 and graduated from high school in June 2004.  Mother opposed the motion and brought her own motion to continue child support for L.C., based on L.C.'s alleged inability to support herself due to her disabilities, and for an upward deviation in the amount of child support based on asserted expenses related to the special needs of both L.C. and C.C.  Mother also moved for attorney fees. 

            Prior to the hearing, father voluntarily withdrew his motion and agreed to continue paying $1,152 per month child support for both daughters despite L.C.'s age and graduation from high school.  The only issues at the hearing were mother's motion for modification to an upward deviation from the guidelines and her request for attorney fees.  The issues were submitted to the child-support magistrate (CSM) by affidavit and stipulated exhibits.

            Father sought discovery of mother's checking-account records, credit-card records, and records related to refinancing her home, among other documents, and moved for dismissal of mother's motion when she failed to produce the requested documents.  The district court ordered disclosure of some documents but ruled that mother's checking-account records, credit-card records[1] and home-refinancing documents were irrelevant and need not be produced. 

            The CSM found that father's current net monthly income is $4,111 and that his child support under the guidelines would be $1,233.50, which, because it is not 20% greater than his current support obligation, would not trigger the presumption that the existing award is unreasonable or unfair, as stated in Minn. Stat. § 518.64, subd. 2 (b)(1) (2004).  But the CSM found that mother has a "considerable shortfall" between her net monthly income (found to be $2,202 including child support),[2] and her monthly household expenses (found to be $4,231, including credit-card payments).  The CSM found that the shortfall is met by mother's incurrence of additional debt.

            The CSM disregarded some of father's claimed monthly expenses, including $1,284 in credit-card payments, to determine that father's reasonable monthly expenses for himself, his current spouse, and three children in his household are $3,561, rather than $5,005 as claimed by father.  The CSM reduced these expenses by one-fourth to arrive at monthly expenses for father and his subsequent children in the amount of $2,670.75.  The CSM then found that father could afford to pay an upward deviation to the amount of $1,400 in child support while meeting his monthly expenses.  The effect of the order, based on the CSM's findings of father's income and allowed expenses is that father has a net surplus of $40.25 per month after paying his those expenses and child support.

            The CSM found that mother's accumulation of significant debt "to meet the needs of the children, [a] reduction in social security income [for L.C.], and the continued and increasing disparity between the children's reasonable expenses and income in the household" constituted a substantial change in circumstances.  The CSM further found that father's existing support obligation is unreasonable and unfair, and ordered father to pay child support in the amount of $1,400 per month, an upward deviation from the guidelines.  The CSM stated that the deviation was warranted "in light of the special needs of the children, the reduced earning ability of [mother], the disparity in the household income, considering the standard of living of the children had the marriage remained intact, the debts incurred by [mother] for the children's benefits, [and] the dependency tax benefit received by [father]."  The CSM also awarded mother $3,659.99 in need-based attorney fees.  This appeal followed.

D E C I S I O N

 

I.                   Deviation from child-support guidelines

            a.         Standard of review

            On appeal from a CSM's ruling, the standard of review is the same as it would be on appeal from a decision made by the district court.  Ludwigson v. Ludwigson, 642 N.W.2d 441, 445-46 (Minn. App. 2002).  A district court has broad discretion in setting and modifying child support.  Putz v. Putz, 645 N.W.2d 343, 347 (Minn. 2002).  This court will reverse a decision setting support only if the district court has abused its discretion by setting support in a manner against logic and the facts on record.  Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).  Reversal is also warranted if the district court has misapplied the law.  Ver Kuilen v. Ver Kuilen,578 N.W.2d 790, 792 (Minn. App. 1998).  Findings of fact will only be set aside if clearly erroneous.  Minn. R. Civ. P. 52.01.

            b.         Deviation from child-support guidelines

We first note that appellant's rather unorganized briefing of this case alleges insufficiency of evidence to support the CSM's finding that mother's undisputed increasing debt results from the needs of the children.  Because we are reversing the upward deviation from child support guidelines on other grounds, we do not reach this issue.  Appellant specifically argues the determination that he is able to pay an upward deviation from child-support guidelines, and based on our review of the record, we agree.

There is a rebuttable presumption that guidelines child support is to be applied in establishing or modifying child support.  Minn. Stat. § 518.551, subd. 5(i) (2004).  If the district "court deviates from the guidelines, the court shall make written findings giving the amount of support calculated under the guidelines, the reasons for the deviation, and shall specifically address the criteria in [Minn. Stat. § 518.551, subd. 5(c) (2004)] and how the deviation serves the best interest of the child."  Id.  Minn. Stat. § 518.551, subd. 5(c), requires consideration, among other things, of "the financial needs and resources, physical and emotional condition, and educational needs of the [children] to be supported."  Minn. Stat. § 518.551, subd. 5(c)(2).  In Finch v. Marusich, 457 N.W.2d 767 (Minn. App. 1990), this court held that the district court abused its discretion by deviating from the child-support guidelines without adequate consideration of the child's needs and the parties' financial circumstances.  Id. at 769. 

            1.         Father's income     

            Father argues that the court clearly erred in its findings on his current income and its finding that he has the ability to pay above-guidelines support.  A determination of the amount of an obligor's income for purposes of child support is a finding of fact that will not be altered on appeal unless clearly erroneous.  Ludwigson, 642 N.W.2d at 446. 

            Father asserts that in 2004, his net monthly income, including his bonus, was $3,717.76, rather than $4,111 as found by the CSM.  Father asserts that the CSM made erroneous findings on his in-kind income for use of the company car, and failed to make statutorily permitted deductions from bonus income.  The record reflects that the CSM used appropriate tax tables to calculate deductions from father's entire gross income including his bonus, but failed to consider father's evidence demonstrating that he is now charged for personal use of the company car such that there is no in-kind benefit.  The CSM instead erroneously adopted a finding on the in-kind calculation from the 2000 order.  See County of Nicollet v. Haakenson, 497 N.W.2d 611, 615 (Minn. App. 1993) (stating district court may rely on prior information only if obligor does not provide current documentation of income).  Because the CSM calculated a general adjustment of income from all sources for tax and pension costs, we cannot determine the exact net-income effect of excluding the company-car item, but it is evident that the CSM's finding regarding father's net-monthly income is clearly erroneous.

                        2.         Ability to pay upward deviation

            Father relies on Becker County Human Servs. v. Peppel,493 N.W.2d 573, 576-77 (Minn. App. 1992), to support his argument that the CSM's finding that he is able to pay an upward deviation from support guidelines is clearly erroneous.  Peppel involved the legal issue of whether SSI benefits paid to a parent are income for purposes of determining a support obligation.  Id. at 575.  After holding that they are not, this court reversed on the alternate ground that, even if the obligor's income from SSI was counted as income for child support, the finding that she had the ability to pay $69 per month for child support was erroneous when the obligor's budget consisted largely of "absolutely essential" monthly expenses that resulted in a monthly deficit even before payment of child support.  Id.at 576-77.  Although the facts of this case, given income and expense amounts, are vastly different from the facts in Peppel, there is merit in father's assertion that the CSM's finding of his ability to pay an upward departure is not supported by the evidence.  Because the CSM acknowledge that appellant's expenses barely permitted him to pay the upward deviation even with the erroneous finding of his net income, the reduction of income to eliminate the company-car item leaves appellant with too little income to justify a finding that he is able to pay an upward deviation from the guidelines.  Because the record does not support the findings on which an upward deviation from the support guidelines was based, we reverse the modification of child support.

            3.         Additional challenged findings

            Father challenges a number of additional findings as clearly erroneous.  He first asserts that the court's finding that L.C. is not self-supporting at the present time, appearing to order that father's support for L.C. continue until she is self-supporting, is clearly erroneous.  Whether or not L.C. is self-supporting was not an issue before the CSM, although both parties, to some extent, addressed the issue.  Because the issue was not before the CSM, the finding was inappropriate and we vacate that finding.

            Father challenges a number of additional findings.  We have extensively reviewed the record and have determined that these challenged findings[3] are supported by the evidence.  See Wilson v. Moline, 234 Minn. 174, 182, 47 N.W.2d 865, 870 (1951) (stating appellate court need not "discuss and review in detail the evidence for the purpose of demonstrating that it supports the trial court's findings," and that its "duty is performed when [it] consider[s] all the evidence . . . and determine[s] that it reasonable supports the findings"); Peterka v. Peterka, 675 N.W.2d 3535, 357-58 (Minn. App. 2004) (applying Wilson in dissolution case); Vangsness v. Vangsness, 607 N.W.2d 468, 474-75 & n.1 (Minn. App. 2000) (same).

II.        Attorney fees

            Father argues that the award of need-based attorney fees to mother was an abuse of discretion because mother's parents pay her attorney fees, and he has no ability to pay the fees awarded.  District courts shall award need-based attorney fees when (1) the fees are necessary for the good-faith assertion of a party's rights; (2) the party ordered to pay the fees has the ability to pay them; and (3) the recipient of the fees award does not have the means to pay his or her fees.  Minn. Stat. § 518.14, subd. 1 (2004).  We are not persuaded that because mother's parents have paid her attorney fees she is not entitled to need-based fees.  But the CSM's conclusory finding that father has the ability to pay the fee award in this case is clearly erroneous.  Even under the CSM's erroneous calculation of father's income, father had a net cash surplus of approximately $40 each month.  There is no explanation or finding of how this amount enables father to pay a fee award of $3,569.99.  Because the finding that father has the ability to pay mother's attorney fees is clearly erroneous, we reverse the award of need-based attorney fees.

            Reversed.

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

[1] The CSM's verbal ruling on credit-card records is somewhat ambiguous, but appears to be a denial of father's request for these records, and the subsequent written order did not grant father's request for production of these records.

[2] The CSM found that mother's net monthly income from wages is $853.  Mother had received social-security income of $184.89 per month per child until L.C. turned 19 years of age, when her benefit dropped to $13 based on an increased deduction for child support.  The CSM deemed the money paid to mother by her significant other for household expenses "minimal" and arrived at mother's total net monthly income by adding her wages and the social-security payments to the child support she received. 

[3] Not including father's challenge to the finding that mother demonstrated that her increased expenses are due to the needs of the children, which, as stated above, we declined to reach in this opinion.