In re the Marriage of: David John Mielke, petitioner, Appellant, vs. Kelly Ann Solt-Mielke, Respondent.

In re the Marriage of: David John Mielke, petitioner, Appellant, vs. Kelly Ann Solt-Mielke, Respondent. A05-1670, Court of Appeals Unpublished, July 3, 2006.

This opinion will be unpublished and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

A05-1670

 

In re the Marriage of:

David John Mielke, petitioner,

Appellant,

 

vs.

 

Kelly Ann Solt-Mielke,

Respondent.

 

Filed July 3, 2006

Affirmed

Halbrooks, Judge

 

 

Ramsey County District Court

File No. FX-03-001087

 

Robert A. Manson, Robert A. Manson, P.A., 2233 Hamline Avenue North, Suite 609, Roseville, MN 55113 (for appellant)

 

Kelly Ann Solt-Mielke, 1800 Wordsworth Avenue, St. Paul, MN 55116 (pro se respondent)

 

 

            Considered and decided by Peterson, Presiding Judge; Halbrooks, Judge; and Minge, 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 finding him voluntarily unemployed, modifying his child-support obligation, and awarding respondent attorney fees.  Because the record supports the district court's findings of fact and the district court did not abuse its discretion, we affirm.   

FACTS

            Appellant David Mielke and respondent Kelly Solt married in 1990.  They separated in August 2002, and appellant filed a petition for dissolution in May 2003.  They have three children.

            The parties reached an agreement concerning all contested dissolution matters, which they read into the record at trial.  The district court accepted the terms of the agreement, and counsel for appellant indicated that he would draft the judgment, which was ultimately signed by the court. 

            The judgment required appellant to pay child support of $632 per month based on his net monthly income of $1,805 from unemployment compensation, effective January 15, 2004.  The parties were each ordered to pay $278.50 per month for the children's medical and dental insurance costs.  Neither the judgment nor the recitation of the agreement into the record delineates how child support was calculated. 

            In October 2004, appellant moved to suspend his child-support obligation and correct the amount of arrears he owed, arguing that he was no longer receiving unemployment compensation and that he suffered from medical issues that limited his ability to work.  In his supporting affidavit, appellant stated that he had been terminated from his employment with Xcel Energy in January 2004 and that he had been receiving unemployment compensation of approximately $2,051 per month.  Appellant reported that Xcel Energy contested his unemployment compensation, and a senior unemployment-review judge (SURJ) determined that appellant was disqualified from receiving benefits because he had been terminated for employment misconduct.  Appellant stated that he was ordered to pay back the $8,109 in unemployment benefits that he had received, 60% of which had already been passed on to respondent as child support.  Appellant attached a copy of the SURJ's decision, dated August 5, 2004, as an exhibit to his affidavit. 

            Before the motion hearing, appellant submitted an additional affidavit, indicating that he had secured employment at Volt Temporaries, earning $13 per hour with no benefits.  The child-support magistrate (CSM) denied appellant's motion on the ground that support calculated based on his income from Volt Temporaries did not differ from the ordered support by at least 20%.

            Appellant moved the district court for an order granting relief from the dissolution judgment "based upon mistake" and ordering child support of $534.27, an amount that takes into consideration the $278.50 he pays for his portion of the children's medical insurance premiums.  Respondent opposed the motion and moved in part for a recalculation of appellant's support obligation from January through October 2004 "based on [appellant's] ability to earn, his previous employment and child support calculated on his previous net income."  Respondent also requested attorney fees based on bad faith.  Appellant responded with a motion asking the court to either suspend child support from January to October 2004 or to set his child-support obligation at $534.27. 

            At the motion hearing, respondent argued that she would have asked the court to impute income in the dissolution judgment if she had known then that appellant was unemployed and had been terminated for employment misconduct.  Appellant argued that respondent was aware of his unemployment at the time that she stipulated to the child-support award and that she waived any argument about income imputation by failing to make it before judgment was entered. 

            Finding that appellant had "allowed the Decree to be entered based on information he knew to be false," the district court recalculated appellant's child support for January through the end of September 2004 and imputed to appellant the income that he had previously received as an employee at Xcel Energy.  As a result, appellant was ordered to pay monthly child support of $1,081.69 for January through the end of September 2004, based on an imputed net monthly income of $3,090.54. 

            The district court also concluded that there was insufficient evidence supporting appellant's claim that he suffers from medical restrictions limiting his employment search and capacity and that there was no evidence supporting appellant's claim that he had actively and diligently sought employment after being terminated from Xcel Energy.  Finally, the district court found that appellant was liable for $750 of respondent's attorney fees as a sanction for his misconduct.  This appeal follows.  

D E C I S I O N

I.

 

            Appellant contends that the district court clearly erred by basing its finding that he was voluntarily unemployed on a SURJ's decision denying unemployment benefits because of appellant's employment misconduct.  We note initially that appellant submitted the SURJ's decision denying unemployment benefits as evidence in support of his October 2004 motion to suspend child support.  He conceded that Xcel had terminated him and explained the SURJ's decision in his affidavit accompanying that motion.  And while respondent provided the court with a copy of the decision in support of her March 2005 motion, the record also contains respondent's sworn affidavit showing that appellant told respondent in a January 16, 2004 phone conversation that he "was terminated from Xcel due to excessive absenteeism, tardiness, and falsifying time records." 

            Minnesota law clearly provides that a SURJ's decision may not be used as evidence in other types of proceedings.  Minn. Stat. § 268.105, subd. 5a (Supp. 2005).  But there is no indication that the district court here based its determination that appellant was voluntarily unemployed on the SURJ's finding that appellant committed employment misconduct.  While the district court noted the SURJ's finding that appellant had been discharged for employment misconduct, it also found that appellant's claim that he suffers from medical issues that limit his employment search and capabilities was not supported by the evidence.  Further, the district court rejected appellant's claim that he had actively and diligently sought employment after losing his job at Xcel Energy, finding that appellant's evidence consisted of an incomplete, self-generated job log that is "not an example of a diligent job search." 

            Given the other evidence in the record concerning the reason that appellant was fired, coupled with the district court's findings concerning appellant's job search and his claims regarding his medical condition, we conclude that the district court's finding that appellant was voluntarily unemployed was based on the record as a whole and not dependent on the SURJ's findings or decision. 

            We also reject appellant's argument that the district court erred by finding that his dismissal for tardiness and absenteeism constitutes voluntary unemployment because the district court's finding of voluntary unemployment is not so narrowly drawn.  In Lee v. Lee, we held that even where an individual is terminated for misconduct, the resulting decrease in income does not constitute voluntary unemployment unless there is "evidence that the misconduct was an attempt to induce termination and thereby avoid a child support obligation."  459 N.W.2d 365, 370 (Minn. App. 1990), review denied (Minn. Oct. 18, 1990).  In finding appellant voluntarily unemployed, the district court did not focus solely on the circumstances of his employment separation, but looked also to his ability and efforts to obtain reemployment.  So while the district court could not properly make a finding of voluntary unemployment based on the terms of appellant's termination alone, it could and did find that appellant's continued unemployment was voluntary.  See id. (reversing voluntary unemployment determination but noting that on remand the court "shall not be precluded from evaluating [the obligor's] efforts to seek reemployment"). 

II.

            Appellant argues that the district court erroneously found that appellant had engaged in misconduct or fraud because he allowed the dissolution judgment to be entered based on information he knew to be false.  "On appeal, a trial court's decision to vacate a decree involving property division, child support, and spousal maintenance because of fraud on the court will not be disturbed absent an abuse of discretion."  Sanborn v. Sanborn, 503 N.W.2d 499, 502 (Minn. App. 1993), review denied (Minn. Sept. 21, 1993).  A district court's findings as to whether a judgment was prompted by mistake or fraud will not be set aside unless clearly erroneous.  Hestekin v. Hestekin, 587 N.W.2d 308, 310 (Minn. App. 1998). 

            Minn. Stat. § 518.145, subd. 2 (2004), provides that the court may relieve a party from a judgment and decree, order, or proceeding for

(1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under the Rules of Civil Procedure, rule 59.03; [or]

(3) fraud, whether denominated intrinsic or extrinsic, misrepresentation, or other misconduct of an adverse party[.]

 

Once a judgment is entered, "[t]he sole relief from the judgment and decree lies in meeting the requirements of Minn. Stat. § 518.145, subd. 2."  Shirk v. Shirk, 561 N.W.2d 519, 522 (Minn. 1997).

            Courts employ a broad definition of fraud in dissolution cases.  Sanborn, 503 N.W.2d at 502.  In such proceedings, fraud on the court consists of "an intentional course of material misrepresentation or non-disclosure, having the result of misleading the court and opposing [party] and making the property settlement grossly unfair."  Maranda v. Maranda, 449 N.W.2d 158, 165 (Minn. 1989).  But we have clarified that "[o]rdinary fraud, in a dissolution context, does not require an affirmative misrepresentation or an intentional course of concealment because parties to a marriage dissolution have a duty to disclose all assets and liabilities completely and accurately."  Doering v. Doering, 629 N.W.2d 124, 130 (Minn. App. 2001), review denied (Minn. Sept. 11, 2001).  "The general rule is that parties to a marital dissolution proceeding have a duty to make a full and accurate disclosure of all assets and liabilities to facilitate the trial court's property distribution.  This duty to fully disclose extends to the time the decree is entered."  Ronnkvist v. Ronnkvist, 331 N.W.2d 764, 765-66 (Minn. 1983) (citation omitted).

            Appellant argues that he did not perpetrate a fraud because respondent knew both that he was unemployed at the time of the stipulation and that he was terminated for misconduct.  He points to respondent's March 2005 affidavit, which states that the SURJ's "decision confirms the position I, and my attorney stated last April at the time we were scheduled for our divorce trial[:]  [Appellant] was fired from his employment at Xcel Energy, which he held for 16 years, due to his own willful misconduct." 

            But while respondent may have known why appellant was terminated, the issue is not simply whether appellant disclosed the reason that he was terminated, but also whether appellant should have disclosed that his unemployment benefits were being challenged and that they were ultimately denied.  In the district court, respondent argued that, had she known before the entry of the stipulated dissolution decree that appellant was not going to be receiving unemployment benefits, she would have argued for an imputation of income based on his ability to earn.  Appellant contends that respondent waived any claim for imputation of income by failing to raise it during the dissolution proceedings. 

            There is no evidence in the record indicating when appellant first became aware that his receipt of unemployment benefits was in jeopardy.  The dissolution judgment was not finalized until August 18, 2004, and the record supports the district court's finding that appellant was aware that the decree-drafting process was an ongoing concern.  The SURJ's decision denying unemployment benefits is dated August 5, 2004.  That decision was clearly not appellant's first notice that he might not be entitled to the income he was claiming for purposes of calculating his ongoing child support.  There is no indication in the record that appellant ever notified his attorney or respondent about the fact that his benefits were being challenged.  Nor did appellant, before the entry of the dissolution judgment, notify his attorney or respondent of the fact that he was not entitled to benefits.  Appellant's failure to disclose either of the material facts that his unemployment benefits were being challenged or that they had been denied misled respondent into an incorrect understanding of his income that in turn made the stipulated child-support award unfair.  See Sanborn, 503 N.W.2d at 503. 

            This case is similar to that presented in Sanborn, in which we upheld the district court's determination that a former husband made material misrepresentations when he both misrepresented the value of his business and failed to disclose negotiations for the business's sale.  Id. at 503-04.  The nondisclosures and misrepresentations in Sanborn were pertinent in part because of how they "distorted the financial impact" on the former husband.  Id.at 504.  Likewise, appellant's failure here to disclose the issues surrounding his unemployment benefits distorted the respondent's view of his income, thereby tainting negotiations and resulting in an unfair support award.   

III.

            Appellant contends that the district court erred by imputing to him the income that he previously earned at Xcel Energy, arguing that the evidence shows that he could not obtain such employment.  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.  Ludwigson v. Ludwigson, 642 N.W.2d 441, 446 (Minn. App. 2002).  If a court finds that an obligor is voluntarily unemployed or underemployed, the court must impute income as the basis for a child-support calculation.  Minn. Stat. § 518.551, subd. 5b(d) (2004).  "Imputed income" is an obligor's estimated earning ability based on prior earning history, education, and job skills, and on the availability of jobs within the community for a person with the obligor's qualifications.  Id. 

            Appellant's contention that respondent waived the issue of income imputation lacks merit, given appellant's nondisclosure of the details of his financial situation at the time the stipulation was entered into and his nondisclosure of the denial of his benefits before the dissolution decree was entered. 

            And while appellant contends that the evidence "shows that he has work restrictions, is partially disabled, suffers from chronic pain and depression, and cannot perform his previous work," the record supports the district court's determination that appellant failed to present sufficient evidence supporting these claims.  Appellant did not submit any affidavits from physicians delineating his alleged limitations.  While the record does contain a letter from a doctor who describes appellant's lower-back pain and characterizes the problems as resulting from a 1990 work injury, the district court found, and appellant does not dispute, that appellant worked at Xcel Energy following that injury for 14 years.  The only evidence concerning appellant's claim that he cannot perform his previous work is his own affidavit to that effect.  This court defers to the district court's credibility determinations.  Vangsness v. Vangsness, 607 N.W.2d 468, 472 (Minn. App. 2000).  Appellant has failed to demonstrate that the district court's income determination was clearly erroneous.

IV.

            Finally, appellant contends that the district court abused its discretion by awarding attorney fees to respondent.  The district court awarded respondent $750 in attorney fees, finding "that this unnecessary proceeding is due to [appellant's] misconduct, if not fraudulent conduct, and that he should be sanctioned by paying a portion of Respondent's attorney fees." 

            An award of conduct-based attorney fees rests almost entirely within the discretion of the district court and will not be disturbed absent a clear abuse of discretion.  Crosby v. Crosby, 587 N.W.2d 292, 298 (Minn. App. 1998) (quotation omitted), review denied (Minn. Feb. 18, 1999).  On this record, we conclude that the district court's award of conduct-based attorney fees was not an abuse of discretion.  See Minn. Stat. § 518.14, subd. 1 (2004) (stating that court may award conduct-based attorney fees "against a party who unreasonably contributes to the length or expense of the proceeding").

            Affirmed.