In re the Marriage of: Judith C. McCulloch, petitioner, Respondent, vs. George F. McCulloch, Appellant.

In re the Marriage of: Judith C. McCulloch, petitioner, Respondent, vs. George F. McCulloch, Appellant. A05-1058, Court of Appeals Unpublished, March 7, 2006.

This opinion will be unpublished and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

A05-1058

 

In re the Marriage of:

 

Judith C. McCulloch, petitioner,

Respondent,

 

vs.

 

George F. McCulloch,

Appellant.

 

Filed March 7, 2006

Affirmed

Worke, Judge

 

Ramsey County District Court

File No. F1-87-22821

 

James T. Williamson, M. Sue Wilson, Trina R. Chernos, Julie H. Vogel, M. Sue Wilson Law Offices, P.A., Two Carlson Parkway, Suite 150, Minneapolis, MN 55447 (for respondent)

 

John F. Gilsdorf, Jonathan K. Askvig, Gilsdorf & Askvig, 101 East Fifth Street, Suite 1712, St. Paul, MN 55101; and

 

Leland S. Watson, 401 South Second Avenue, Suite 836, Minneapolis, MN 55401 (for appellant)

 

            Considered and decided by, Wright, Presiding Judge; Dietzen, Judge; and Worke, Judge.

U N P U B L I S H E D   O P I N I O N

WORKE, Judge

            In this post-dissolution proceeding, appellant George F. McCulloch argues that the district court abused its discretion by denying his motion to reduce or terminate his spousal-maintenance obligation when there had been a substantial change in his circumstances since the prior modification in 1995.  Because the district court did not abuse its discretion, we affirm. 

D E C I S I O N

            We review a district court's maintenance award under an abuse-of-discretion standard.  Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997); Stich v. Stich, 435 N.W.2d 52, 53 (Minn. 1989); Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982).  A district court abuses its discretion regarding spousal maintenance if its findings of fact are unsupported by the record or if it improperly applies the law.  Dobrin, 569 N.W.2d at 202 & n.3 (citing Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988)). 

Incremental Increase

            For the first time on appeal, appellant argues that an "incremental change" in circumstances occurred between the 1997 order and 2004 motion that would satisfy the test set forth in Phillips v. Phillips, 472 N.W.2d 677 (Minn. App. 1991).  This court generally considers "only those issues that the record shows were presented and considered by the [district] court in deciding the matter before it."  Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988).  Because appellant failed to raise this issue in the district court, we will not address it on appeal.  

Motion to Reduce or Terminate

            The modification of spousal-maintenance awards is governed by Minn. Stat.  § 518.64 (2004).  "The terms of an order respecting maintenance or support may be modified upon a showing of one or more of the following: (1) substantially increased or decreased earnings of a party; (2) substantially increased or decreased need of a party . . . which makes the terms unreasonable and unfair."  Minn. Stat. § 518.64, subd. 2 (a).  A district court should exercise its discretion to modify "with great caution and only upon clear proof of facts showing that the circumstances of the parties are markedly different from those in which they were when the decree was rendered." Rubenstein v. Rubenstein, 295 Minn. 29, 32, 202 N.W.2d 662, 664 (1972).  The party moving to modify maintenance bears the burden to show that there has been a substantial change in circumstances and that the current support order is unreasonable and unfair. Minn. Stat.  § 518.64, subd. 2; Hecker v. Hecker, 568 N.W.2d 705, 709 (Minn. 1997). 

            Here, appellant argues that the district court abused its discretion in finding that appellant did not prove that there was a change in circumstances since the last spousal-maintenance modification in 1995 and that he did not establish that his existing maintenance obligation is unreasonable and unfair.  At the time of the 1995 order, appellant's monthly income had been reduced from $5,601 to $1,143 in social-security benefits, and his monthly expenses were $2,257.  Appellant's spousal-maintenance obligation was reduced from $2,000 per month to $571.50 per month.  At the time of the 2004 motion, appellant's monthly income had increased to $1,440 in social-security benefits, which were supplemented with proceeds from marital assets.  Appellant's monthly expenses had decreased to $1,925, including expenses that he shared with his current wife and his monthly maintenance obligation to respondentfor total monthly expenses in the amount of $3,631.    

            Appellant argues that he has been depleting assets in order to meet his monthly maintenance obligation.  He states that his "liquid assets, from which income, in addition to his SSI, may be derived to meet his monthly expenses, has [sic] diminished in this 10-year period, primarily through depletion to cover the shortfall for [his monthly living] expenses, from $245,417 to $97,000."  The district court found that appellant's argument was not credible.  In reviewing appellant's assets, the district court found "[w]hatever [appellant] is doing with his assets, based on the above inconsistencies and blatant obfuscations, it cannot be found that [appellant] is being credible that he is depleting his assets on spousal maintenance alone."  This court defers to the district court's credibility determinations.  Vangsness v. Vangsness, 607 N.W.2d 468, 472 (Minn. App. 2000). 

            Appellant also argues that the substantial increase in the cost of respondent's medical insurance results in the order being unreasonable and unfair.  While appellant's argument that his maintenance obligation has increased over time is correct, this approach fails to consider the entire picture.  Overall, appellant's monthly income has increased and his monthly expenses (less his maintenance obligation) have decreased.  When viewing the entire picture, the district court correctly determined that appellant failed to show a substantial change in circumstances making the award unreasonable and unfair.

            Appellant also argues that the district court abused its discretion in requiring appellant to provide evidence of his present wife's income and assets.  Specifically, the district court stated, "No evidence has been provided as to [appellant's] wife's income and assets."  Appellant correctly maintains that the district court cannot take into consideration appellant's present wife's income or assets in considering the maintenance modification.  Wagstrom v. Wagstrom, 394 N.W.2d 841, 844 n.3 (Minn. App. 1986), review denied (Minn. Nov. 26, 1986).  Appellant fails, however, to address the district court's additional finding that, "[w]hile [appellant's wife's] income is not available for the determination of [appellant's] spousal maintenance obligation, it is essential to determine the credibility of [appellant's] claims."  Respondent argued to the district court that appellant was transferring assets and income to his wife.  The district court did not require the information to make its determination regarding the requested modification but, rather, to assist in making a credibility determination. 

            Finally, appellant argues that the district court abused its discretion in finding and concluding that appellant had not established his eligibility for a maintenance modification because he claimed he has no interest in the house that he shares with his present wife.  Appellant's argument does not correctly reflect the district court's finding.  Appellant claimed that the house he shares with his present wife is her house and that he has no interest in the home.  After the hearing, appellant allegedly learned that his wife had placed the home in a trust with appellant listed as the sole beneficiary.  The district court found that "[t]he suggestion that his wife placed the home into a trust with the [appellant] as the sole beneficiary was a mistake only discovered four days after this hearing simply is not believable."  Again, this court defers to the district court's credibility determinations.  Vangsness, 607 N.W.2d at 472.  The district court also made a detailed finding regarding the proceeds appellant provided to his wife when they purchased their home in Arizona in 1994.  That home was eventually sold and a new home purchased, the sale price of which was paid in cash.  Further, the district court's denial of appellant's motion to modify his maintenance obligation was not based solely on the issue of whether appellant had an interest in his wife's home. 

            Appellant has failed to meet his burden that there has been a substantial change in circumstances warranting a modification of his maintenance obligation.  No evidence was presented to prove that the amounts withdrawn from his IRA or that the proceeds received from his inheritance were used to meet his spousal-maintenance obligation.  The district court did not abuse its discretion by denying appellant's motion to reduce or terminate his spousal-maintenance obligation.

Exclusion of Respondent's Assets

            Appellant argues that the district court improperly excluded respondent's liquid assets in identifying the reasonable income and expenses of both parties.  The district court found that "[t]he January 6, 1995 Order found that [respondent] had $350,000 in assets of which $150,000 was the house; thus leaving $200,000 in assets for calculating income.  Out of the $200,000, $181,086 was the value of the original awarded assets; leaving $18,914 for income for the determination of spousal maintenance."   

            Respondent's memorandum of law in opposition to appellant's motion explains that at the time of the dissolution, respondent was awarded $93,827, "which comprised appellant's 401(k) and her own IRA accounts.  The $93,827 was placed in an investment account, and no contributions were made to the account between 1988 and 1997."  The memorandum further provides:

In the Order dated January 6, 1995 the Court determined that [respondent] had assets totaling $350,000 of which $150,000 was the house [respondent] was awarded in the dissolution.  Therefore, as of January 6, 1995 [respondent] had only $200,000 in assets that could possibly have been considered for the purposes of calculating income.  However, [respondent's] original $93,827 would have appreciated at a rate commensurate with the market.  Using the growth of the Dow Jones Industrial Average from 1988 to 1995 yields a 93% appreciation rate.  Therefore, from 1988 to 1995 [respondent's] $93,827 would have passively appreciated to $181,086.  Therefore, $181,086 of the remaining $200,000 was property awarded to [respondent] in the dissolution plus the passive appreciation on that property, and only $18,914 of [respondent's] assets in 1995 could be considered for the purposes of calculating spousal maintenance. 

The district court adopted the numbers from respondent's memorandum in its findings.  That being the case, the $200,000 includes appreciation of the liquid assets awarded to respondent in the dissolution that were capable of generating income.  As such, the district court did consider all assets capable of generating income for respondent, including marital assets awarded to her in the dissolution.  The district court did not abuse its discretion because it did not improperly exclude respondent's liquid assets in identifying the reasonable income and expenses of the parties. 

            Appellant also argues that the district court abused its discretion by failing to properly consider the present availability of social-security benefits to respondent.  The district court found that "[respondent] may be entitled to Social Security benefits now or in the future.  While there has been much speculation by the parties, no determination by the Social Security Administration as to any application by [respondent] has been provided."  Appellant claims that when respondent turned 62, she was entitled to immediately begin drawing 37% of the social security income appellant is entitled to.  While it may be true that respondent is entitled to draw 37% of appellant's social-security benefits, no evidence was presented regarding the current amount of appellant's social-security income.  The only evidence the district court had to rely on was appellant's assertions.  "As we have previously stated, this court will not speculate, and the appellant cannot complain where inadequate documentation leads at least in part to the [district] court's refusal to modify a decree."  Tuthill v. Tuthill, 399 N.W.2d 230, 232 (Minn. App. 1987) (citing Taflin v. Taflin, 366 N.W.2d 315, 319 (Minn. App. 1985)).  The district court did not abuse its discretion in failing to include the present availability of social-security benefits to respondent.

            Affirmed.