In re the Marriage of: Dean Vincent Harris, petitioner, Appellant, vs. Donna Louise Harris, Respondent.

In re the Marriage of: Dean Vincent Harris, petitioner, Appellant, vs. Donna Louise Harris, Respondent. A05-1958, Court of Appeals Unpublished, August 22, 2006.

This opinion will be unpublished and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

A05-1958

 

In re the Marriage of:

 

Dean Vincent Harris, petitioner,

Appellant,

 

vs.

 

Donna Louise Harris,

Respondent.

 

 

Filed August 22, 2006

Affirmed in part, reversed in part, and remanded

Lansing, Judge

Concurring in part, dissenting in part, Randall, Judge

 

Itasca County District Court

File No. 31-F0-04-000659

 

Michael W. Jonak, Jonak Law Office, 426 Northwest Fourth Street, Grand Rapids, MN 55744 (for appellant)

 

James H. Henrichsen, Henrichsen Law Office, 215 First Avenue Northwest, Grand Rapids, MN 55744 (for respondent)

 

            Considered and decided by Willis, Presiding Judge; Lansing, Judge; and Randall, Judge.

U N P U B L I S H E D   O P I N I O N

LANSING, Judge

            In this appeal from judgment and the denial of an alternative motion for amended findings and conclusions or a new trial in a marital-dissolution proceeding, Dean Harris challenges the district court's determinations on spousal maintenance, marital-property division, and attorneys' fees.  Because the district court did not abuse its discretion in ordering maintenance or dividing the property, we affirm those decisions.  But the record lacks sufficient information to determine the reasonableness of the attorneys' fees.  We therefore reverse and remand for further findings on this issue.

F A C T S

Dean and Donna Harris dissolved their twenty-one-year marriage in January 2005.  The Harrises stipulated to the disposition of all their real and personal property, marital debts, retirement accounts, and healthcare coverage and expenses.  They submitted to the district court five contested issues:  the value of Dean Harris's vehicle; the valuation date for division of his retirement accounts; and Donna Harris's requests for spousal maintenance, a property-equalization payment, and attorneys' fees.

            In its dissolution judgment that followed the contested hearing, the district court ordered Dean Harris to pay Donna Harris $750 a month for permanent spousal maintenance.  In determining this amount, the court found that Dean Harris's monthly net income as a lead utility operator for Minnesota Power is $3,737.43.  It found that Donna Harris earns a monthly net income of $1,029.43 working for Arrowhead Promotions.  The court determined that Donna Harris's expenses exceeded her income by $1,375.53.  It also found that Dean Harris's claimed monthly expenses of $3,403.81 were overstated because he included expenses for which he was no longer responsible and overestimated other expenses.  Donna Harris was forty-five years old at the time of the hearing.  The district court found that, with a high-school education and no job training, she qualifies for employment that pays approximately $7 an hour.  Because of the lack of resources available to her, the court found that Donna Harris is unable to meet her financial needs independently.

The district court ordered Dean Harris to make a property-equalization payment of $3,867.50 to Donna Harris, one-half of the difference between the equities in their vehicles.  The court valued Dean Harris's Chevrolet Silverado at $9,820, and valued Donna Harris's Pontiac Bonneville at $9,085, less an outstanding loan.  The court also ordered Dean Harris to pay Donna Harris $1,300 for attorneys' fees. 

Dean Harris moved for either amended findings of fact and conclusions of law or a new trial.  The district court issued an amended order in July 2005, essentially reaffirming its findings and conclusions and denying the motion for a new trial.  On appeal, Dean Harris argues that the district court abused its discretion by:  (1) determining the duration and amount of the maintenance ordered; (2) ordering an equalization payment; and (3) imposing attorneys' fees.

D E C I S I O N

I

            Before a district court may order spousal maintenance, it must address the threshold issue of whether a spouse lacks sufficient assets to provide for the spouse's reasonable needs or whether the spouse is unable to provide adequate self-support.  Minn. Stat. § 518.552, subd. 1 (2004).  In determining the amount and duration of maintenance, the district court must consider all relevant factors, including the financial resources of the parties, the time that the spouse receiving maintenance needs to acquire education leading to appropriate employment, the marital standard of living, the duration of the marriage, the length of absence from employment, the age and physical condition of the receiving spouse, the providing spouse's ability to pay maintenance, and the contributions of the parties in acquiring marital property.  Id., subd. 2 (2004).

Dean Harris challenges the district court's order that he pay Donna Harris permanent monthly maintenance of $750.  He contends that the duration and amount of maintenance is not justified by the Harrises' financial circumstances and that temporary maintenance of a lesser amount would be fair and equitable.  We review a district court's maintenance determination under an abuse-of-discretion standard.  Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997).  The underlying findings on which the district court bases its decision must be affirmed unless clearly erroneous.  Reif v. Reif, 426 N.W.2d 227, 230 (Minn. App. 1988).  A conclusion is clearly erroneous if it is against logic and the facts on record.  Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).  We examine the district court's decision in light of the factors enumerated in Minn. Stat. § 518.552, subds. 1-2.  Erlandson v. Erlandson, 318 N.W.2d 36, 38-39 (Minn. 1982). 

Dean Harris first contends that the district court failed to consider the assets that Donna Harris would receive from the Harrises' stipulated settlement.  The district court's finding that Donna Harris lacks sufficient property to meet her reasonable needs is supported by the record.  The district court noted that the dissolution judgment provided Donna Harris with only a modest equalization payment of $3,867.50.  It found that, although she would receive one-half of Dean Harris's two retirement accounts, only the funds from his retirement stock-option plan, approximately $13,500, would be available to her until Dean Harris retires.  The district court reasonably concluded that, because Donna Harris does not have her own retirement accounts, she might choose to allocate the half-interest she receives from Dean Harris's retirement stock-option plan toward her retirement, rather than use these funds for living expenses.

Dean Harris next argues that Donna Harris does not need maintenance because she is able to earn substantially more than she earns at her current job.  He points out that Donna Harris failed to inform the district court at trial that she is a certified respite-care provider.  The record supports the district court's findings that Donna Harris is unable to provide adequate self-support and requires the amount of maintenance ordered.  Donna Harris was forty-five years old at the time of the contested dissolution hearing.  The Harrises' children are grown, living out of the home, and independent.  The district court found that Donna Harris has no formal education or job training other than her high-school degree.  Although the district court found that "she is physically healthy and has no emotional issues other than the strain of the [dissolution]," unrefuted evidence demonstrates that she has ongoing medical issues that require chiropractic care.  In its amended order, the court issued a finding that Donna Harris's certification as a respite-care provider was a fact known to Dean Harris and that the certificate was discoverable for presentation at trial.  The court also found that Donna Harris could no longer work as a respite-care provider because of her neck and back problems. 

Donna Harris works forty hours a week at Arrowhead Promotions, where she began working in April 2004.  She earns $7 an hour, and her monthly net income is approximately $1,029.  She has averaged $7 an hour in her past employment even considering her work as a respite-care provider.  Based on unrefuted evidence, the district court found that she qualifies only for employment that pays approximately $7 an hour, her current wage.  The court found Donna Harris's reasonable monthly expenses total about $2,405, more than twice her income.  These expenses include medical-insurance coverage, which Dean Harris was previously paying.

The court's findings on Donna Harris's income and expenses are not clearly erroneous.  Based on these findings, the district court did not abuse its discretion by determining that Donna Harris needs permanent spousal maintenance. 

The record also supports the district court's findings that Dean Harris is able to provide adequate self-support while paying $750 a month in spousal maintenance.  Dean Harris has been employed by Minnesota Power for twenty-five years.  He works a forty-hour week, earning over $25 an hour.  He occasionally works more than forty hours a week and earns up to two times his base hourly rate for these overtime hours.  In 2003 he earned approximately $58,210, and his monthly net income was $3,737.43.  At the time of the hearing, Dean Harris anticipated that his year-end income for 2004 would be greater than his 2003 income because of overtime.  The district court's finding that Dean Harris has monthly net income of $3,737.43 is not clearly erroneous. 

Dean Harris presented monthly expenses of $3,403.81.  He testified that this total includes a $266 monthly payment on Donna Harris's vehicle, which he admitted he would no longer be responsible to pay.  He also revealed that the $280 amount he listed as "Personal Allowances and Incidentals" was entirely for cigarettes and beer.  The district court reduced Dean Harris's claimed transportation expenses by $266 and implicitly reduced his expenses for cigarettes and beer to approximately $130 by finding that he could afford a $750 monthly maintenance payment.

The Harrises' dissolution undeniably creates a financial hardship for both parties.  They do not individually have access to the combined financial resources that were available to them jointly as husband and wife.  But the record does not support Dean Harris's claim that the district court abused its discretion by providing for an unfairly high amount of maintenance.  The district court determined that Donna Harris's reasonable monthly expenses are about $2,405 and that her net monthly income, before she became unemployed, was $1,029.  This results in a deficit of $1,376.  The district court determined that Dean Harris's reasonable monthly expenses are approximately $2,988 and that his net monthly income is about $3,737.  This budget permits a $750 monthly maintenance payment.

It is noteworthy that the district court computed Dean Harris's monthly income without including his 2004 bonus of $6,000 and his additional overtime pay.  The district court also accepted all of Dean Harris's claimed monthly expenses except for the $266 that he will no longer be paying and $150 of his $280 budget for beer and cigarettes.  His accepted expenses include $1,057 for mortgage payments and $235 for credit-card and loan payments.  The credit-card and loan debt, which totaled $5,413, was incurred for postseparation repairs and improvements to the marital homestead.  Dean Harris received the homestead in the property distribution, subject to Donna Harris's equitable lien of $3,867.50.  Dean Harris's intended sale of the house will eliminate the mortgage payments and will likely reduce his housing expenses to the monthly amount comparable to the $475 a month that Donna Harris has claimed. 

The district court also allowed Dean Harris his claimed monthly personal expenses of $130 for beer and cigarettes, $75 for recreation and travel, $25 for newspapers and magazines.  This allows Dean Harris discretionary expenditures of $230 a month after his maintenance payment.  Donna Harris, on the other hand, has claimed $136 in personal expenses and, even including the $750 maintenance, will have a monthly deficit of more than $625.

The district court's finding that Dean Harris is able to pay Donna Harris maintenance of $750 a month is not clearly erroneous.  The district court did not abuse its discretion by finding that Dean Harris is able to meet his own needs while paying spousal maintenance.

With respect to the other relevant statutory factors for determining the amount and duration of maintenance, the court noted that the record contains no evidence on several factors, including the Harrises' marital standard of living; whether Donna Harris stayed home with children in previous years; any loss of earnings, seniority, retirement benefits, and other employment opportunities she had forgone; and the contributions of either spouse in acquiring and maintaining marital property or in being a homemaker or furthering the other spouse's employment or business.  Although additional evidence would have assisted the district court in making its decision and equally assisted our appellate review, the record adequately supports the amount and duration of maintenance.  Given the discretion afforded to a district court's spousal-maintenance determination, the evidence of Donna Harris's inability to meet her needs through her financial resources or income, and the evidence of Dean Harris's ability to pay the amount of maintenance ordered, the district court was justified in ordering maintenance of $750 a month. 

Finally, Dean Harris argues that the district erred by not limiting the duration of spousal maintenance.  He argues that Donna Harris has chosen to remain underemployed and is capable of earning more than her current income.

The district court has broad discretion to determine the duration of a maintenance obligation, but if uncertainty exists on whether the maintenance should be temporary or permanent, the court shall order permanent maintenance subject to later modification.  Id., subd. 3 (2004); Nardini v. Nardini, 414 N.W.2d 184, 196 (Minn. 1987).  Temporary maintenance is based on the assumption that the receiving party will obtain suitable employment and become self-supporting.  Nardini, 414 N.W.2d at 198.  The record does not support Dean Harris's claim that Donna Harris can become self-supporting in two years.

The district court found that, considering Donna Harris's age, limited education and earnings history, and twenty-one year marriage, she qualifies only for employment paying her current wage of $7 an hour.  If Donna Harris is able to obtain future employment that exceeds her current earning capacity, Dean Harris may seek modification based on changed circumstances.  See Minn. Stat. § 518.64, subd. 2(a) (2004) (providing grounds for modifying maintenance order).  Because these findings are not clearly erroneous, the district court did not abuse its discretion by ordering permanent maintenance.

II

Dean Harris argues that the district court erred by ordering him to make a property-equalization payment of $3,867.50 to Donna Harris.  District courts have broad discretion over the division of marital property and a property division will not be overturned on appeal except for a clear abuse of discretion.  Bogen v. Bogen, 261 N.W.2d 606, 609 (Minn. 1977); Sirek v. Sirek, 693 N.W.2d 896, 898 (Minn. App. 2005).  Appellate courts "will affirm the [district] court's division of property if it had an acceptable basis in fact and principle even though [the appellate court] might have taken a different approach."  Antone v. Antone, 645 N.W.2d 96, 100 (Minn. 2002).

            Dean Harris contends that the district court erred by ordering him to make a property-equalization payment because:  (1) no evidence was presented on the value of personal property that the Harrises divided by stipulation; (2) Donna Harris's testimony on Dean Harris's equitable interest in his vehicle and the marital homestead was not supported by evidence; and (3) the district court failed to consider that Dean Harris had agreed to take responsibility for all remaining marital credit-card debt.

First, we reject Dean Harris's argument that the district court could not order an equalization payment unless it considered the value of all personal property that the Harrises divided.  The court divided the personal property in accordance with the Harrises' stipulation.  The Harrises stipulated to the division of all personal property without disputing value, except for Dean Harris's vehicle.  Under the stipulation, the Harrises agreed to keep the personal property that each had in his or her own possession, including bank accounts, life-insurance policies, household goods and furniture, and agreed to share equally in Dean Harris's retirement accounts.  Dean Harris received a 1997 Chevrolet Silverado, which was unencumbered, and Donna Harris received a 2000 Pontiac Bonneville, subject to its outstanding loan.  The Harrises could not agree on the value of the Chevrolet.  The court made its decision on the amount of an equalization payment based on the only property value that the Harrises disputed, the value of Dean Harris's Chevrolet.  The district court did not abuse its broad discretion in determining the amount of the payment.

Second, the record supports the district court's findings on the values of Dean Harris's vehicle and the Harrises' marital homestead.  The court valued Dean Harris's vehicle at $9,820 and Donna Harris's vehicle at $9,085, less an outstanding loan for her car of approximately $7,000.  Dean Harris contends that $9,820 is too high because the estimate does not take into account his car's high mileage or a $500 deductible he must pay for some repairs.  The district court heard his testimony and that of Donna Harris, who provided Kelley Blue Book reports for both vehicles.  The report for Dean Harris's Chevrolet reflected the high mileage.  The district court credited Donna Harris's evidence of the Chevrolet's value rather than Dean Harris's unsupported opinion of the value.  The equalization payment of $3,867.50 is one-half of $7,735, the difference between the value of the Chevrolet and the net value of the Pontiac.  Because the district court's findings are not clearly erroneous, the district court did not abuse its broad discretion by ordering Dean Harris to pay Donna Harris to adjust for the difference in their vehicles' values.

            Dean Harris contends that the estimate of the marital-homestead equity, with which he agreed at trial, needs to be adjusted to allow for a septic-system replacement and other repairs that will make the house more marketable.  But the real-estate appraisal, with which both Harrises agreed, was completed as of October 29, 2004, shortly before trial.  The appraiser's certification states that the appraisal value accounts for the factors that affect the market value.  The dissolution judgment incorporated the Harrises' stipulation that Dean Harris would receive the marital homestead.  The Harrises agreed that Dean Harris would receive the marital homestead, subject to primary and secondary mortgages that would be his sole responsibility.  The Harrises agreed on the value of the homestead, approximately $187,000, and the outstanding balances on the mortgages totaling approximately $179,500.  The court did not abuse its discretion by ordering the Harrises to split the net equity evenly with each receiving about $7,287.

Finally, Dean Harris argues that, in ordering an equalization payment, the district court failed to consider that he agreed to take responsibility for approximately $5,400 of remaining marital credit-card debt.  The district court had all of the information submitted with the Harrises' stipulated division of property and debts and decided to order an equalization payment addressing the one unresolved area of valuation, the difference between the net values of the two cars.  The Harrises' stipulation did not preclude the district court from ordering an equalization payment to allow for the difference it found in the values of the Harrises' vehicles.

III

Dean Harris contends that the district court erred by granting Donna Harris's request for attorneys' fees.  A court shall provide need-based attorneys' fees when necessary for the good-faith assertion of a party's rights if the party seeking fees lacks the ability to pay them and the party from whom fees are sought has the ability to pay.  Minn. Stat. § 518.14, subd. 1 (2004).  We will not reverse a district court's decision to impose attorneys' fees absent an abuse of discretion.  Gully v. Gully, 599 N.W.2d 814, 825 (Minn. 1999). 

            Conclusory findings on the statutory factors do not adequately support an order for attorneys' fees.  Geske v. Marcolina, 624 N.W.2d 813, 817 (Minn. App. 2001) (remanding for specific findings clarifying parties' abilities to pay attorneys' fees).  Although the district court did not specifically make findings required by statute, we may reasonably infer those findings from the district court's familiarity with the Harrises' finances and the court's other rulings.  See Gully, 599 N.W.2d at 826 (inferring district court's familiarity with parties' finances).  But the district court based the amount solely on Donna Harris's testimony that she paid $2,500 in attorneys' fees so far in the proceeding and that she owed "$1,300 and something."  The court had no other information.  It did not know the nature of the work performed, the number of hours her attorney had spent on her case, or her attorney's hourly rate.  See Minn. R. Gen. Pract. 119.01-.02 (requiring request for attorneys' fees of $1,000 or more to be accompanied by attorney affidavit detailing work performed, time spent on work, and hourly rate for work).  Because the district court could not determine whether $1,300 for attorneys' fees was reasonable, we reverse and remand for further findings on this issue.  

Affirmed in part, reversed in part, and remanded.

 

 

RANDALL, Judge (concurring in part, dissenting in part).         

            I respectfully dissent on the issue of permanent maintenance.  I concur with the majority on the other issues.

In light of appellant's current financial situation, I believe a permanent monthly maintenance award of $750 is excessive.

            According to appellant's presented monthly expenses, he has $599.62 of available income.  After the district court reduced his present expenses by $416, income available to appellant is $749.62.  Thus, the district court's spousal maintenance award deprives him of every penny of available income, even based on the most conservative estimate of appellant's living expenses.  Paying the spousal maintenance affirmed by this court will result in a shortcoming in his ability to pay his own monthly expenses.  At the least, it will divest appellant of absolutely all his available income. 

            In addition to his regular monthly living expenses, appellant has taken responsibility for all of the remaining marital credit card debt, which totals $5,413.71, and he has been ordered to make a property-equalization payment to respondent of $3,867.50.  Appellant also bears sole responsibility for the outstanding balance on two mortgages on the marital estate, which total $179,713.22.  The district court has to consider appellant's ability to meet his own needs while paying spousal maintenance.  Minn. Stat. § 518.552, subd. 2(g) (2004).

            It is unlikely that in addition to covering his living expenses, appellant will be able to pay off the marital debts he has accepted and make the property equalization payment when the entirety of his $750 available monthly income is channeled into spousal maintenance.  Appellant simply does not have the means to pay $750 per month.  By affirming spousal maintenance in this amount, this court is setting appellant up for failure.

            The majority cites Nardini v. Nardini for the premise that a temporary maintenance award assumes that the party receiving maintenance will become self-sufficient.  414 N.W.2d 184, 198 (Minn. 1987).  The court in Nardini expounded that self-sufficiency can be achieved through the combination of investments and employment.  Id. at 198.  The obligee in Nardini was awarded permanent maintenance because it would have been unfair to expect her to "abandon what she has known as a career as a homemaker and embark on some undefined new career."  Id.  Obligee in that case had a "limited ability to compete in the labor market," and had foregone the opportunity to pursue a career outside the home.  Id. 

            The present case is distinguishable.  Unlike the obligee in Nardini, who had no income and was a homemaker during the long duration of the marriage, respondent never gave up her work outside the home.  She was employed during the entire course of marriage and currently earns an income that amounts to a significant portion, about half, of her living expenses.  In determining the appropriateness of permanent maintenance, this court must consider the extent to which the obligee's work skills and experience has become outmoded and whether obligee's earning capacity has become permanently diminished.  Minn. Stat. § 518.552, subd. 2(d) (2004).  Because respondent has remained active in the workforce, her skills are not diminished.  Based on her income alone she is currently partially self-supporting.  See Minn. Stat. § 518.552, subd. 2(b) (2004).

            Respondent's income must be considered in conjunction with her other financial resources.  Minn. Stat. § 518.552, subd. 2(a) (2004).  This includes marital assets.  Id.  Loss of retirement assets is a factor to be considered in determining whether permanent maintenance is appropriate.  Minn. Stat. § 518.552, subd. 2(e) (2004).  Respondent in this case is not deprived of retirement benefits.  In the divorce proceedings she was allotted an even half of both of appellant's retirement accounts.  Respondent will also be eligible for social security.  The district court did not appear to consider those assets as long term factors enabling respondent to provide for her economic needs without permanent spousal maintenance prior to her retirement.  In the interim, respondent has access to $13,500 of funds from appellant's RSOP account.  The interest earned on them is available to help cover respondent's living expenses. Respondent is young and has sound physical and emotional health.  These are also statutory factors to be considered.  Minn. Stat. § 518.552, subd. 2(f) (2004).

Neither party is in great shape financially, but I conclude respondent has adequate financial resources to meet her needs independent of permanent spousal  maintenance in the amount of $750 per month.  See Minn. Stat. § 518.552, subd. 2(a).  Based on the subdivision 2 factors, I cannot find justification for an award of permanent maintenance.  I would reverse in part the order of the district court and remand for a calculation of reasonable temporary maintenance for a period of approximately two to five years.  Both parties would retain their right to bring subsequent motions for modification.

Permanent maintenance is not favored over temporary maintenance when it is clear the statutory factors do not justify an award of permanent maintenance.  Minn. Stat. § 518.552, subd. 3 (2004).

In examining the record on the parties' financial resources and needs, I suggest a reasonable amount of temporary maintenance for the next few years would be in the neighborhood of $350 per month.