In re the Marriage of: Kari Donna Erickson n/k/a Kari Donna Jacobson, petitioner, Appellant, vs. Kraig Steven Erickson, Respondent, and Itasca County Health and Human Services, Intervenor.

In re the Marriage of: Kari Donna Erickson n/k/a Kari Donna Jacobson, petitioner, Appellant, vs. Kraig Steven Erickson, Respondent, and Itasca County Health and Human Services, Intervenor. A06-2061, Court of Appeals Unpublished Decision, November 20, 2007

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2006).

 

STATE OF MINNESOTA

IN COURT OF APPEALS
A06-2061

In re the Marriage of:
Kari Donna Erickson n/k/a Kari Donna Jacobson, petitioner,
Appellant,
 
vs.
 
Kraig Steven Erickson,
Respondent,
 
and
 
Itasca County Health and Human Services,
Intervenor.

 
 
Filed November 20, 2007

Affirmed in part, reversed in part, and remanded

Dietzen, Judge

 

Itasca County District Court

File No. 31-F8-04-1199

 

Kari D. Jacobson, 9213 Ranchview Lane North, Maple Grove, MN 55369 (pro se appellant)

 

Ellen E. Tholen, 702 Second Avenue, P.O. Box 210, Bovey, MN 55709 (for respondent)

 

Itasca County Health and Human Services, 1209 Second Avenue Southeast, Grand Rapids, MN 55744 (intervenor)

 

            Considered and decided by Dietzen, Presiding Judge; Randall, Judge; and Halbrooks, Judge.

U N P U B L I S H E D   O P I N I O N

DIETZEN, Judge

Appellant challenges the district court order and resulting judgment granting respondent's motion to, among other things, reduce child support, spousal maintenance, and child-support arrearages, arguing that there was no substantial change in circumstances rendering the original award unfair and unreasonable.  We affirm in part, reverse in part, and remand.

FACTS

Appellant Kari Erickson (wife) and respondent Kraig Erickson (husband) were married in May 1987 and had three children during the marriage.  The parties' marriage was dissolved by judgment and decree in August 2004. 

            The original judgment and decree, which was based in part on the marital termination agreement (MTA) executed by the parties, provided that husband would pay wife monthly child support of $1,775 plus 35% of his net annual bonus, and that husband would pay wife spousal maintenance equal to 23% of his gross income from July 2004 through June 2009, and 28% from July 2009 through January 2013.  It also provided that husband would maintain life insurance of at least $500,000 with wife named as beneficiary until he was no longer required to provide child support or spousal maintenance.

            At the time of the judgment and decree, husband was employed in Colorado.  Subsequently, husband lost his job in Colorado and obtained new employment in Duluth.  In June 2006, husband brought a motion to reduce child support and spousal maintenance, reduce the arrearages that had accumulated, and eliminate his obligation to maintain life insurance, on the grounds that he had a substantial decrease in income and that wife's income had substantially increased.

            Following a hearing, the court filed findings of fact, conclusions of law, and an order which, among other things, reduced monthly child support from $1,844 to $1,175, reduced spousal maintenance to $500 per month retroactive to July 2006, reduced the accumulated child-support arrearages by $5,900, and eliminated husband's obligation to maintain life insurance to secure spousal maintenance.  In December 2006 wife filed a rule 60.02 motion for a new trial based on newly discovered evidence which was denied.  This appeal follows.

D E C I S I O N

I.

            Wife argues that the district court erred in reducing the amount of husband's child-support obligation.  We review a district court order to modify child support for an abuse of discretion and will not reverse unless the district court resolves the matter in a manner that is against the logic and facts on record.  In re Ramsey County ex rel. Pierce County, Wis., 645 N.W.2d 747, 750 (Minn. App. 2002) (citation omitted).

Child support may be modified upon a showing that the terms of the existing support order are unreasonable or unfair because of a substantial change in circumstances, such as an increase or decrease in earnings.  Hecker v. Hecker, 568 N.W.2d 705, 709 (Minn. 1997); Minn. Stat. § 518.64, subds. 1-2 (2004).[1]  An obligor's child-support obligation is calculated by multiplying his or her monthly net income by a percentage specified in the child-support guidelines.  Minn. Stat. § 518.551, subd. 5(b) (2004).  If the application of the guidelines to the obligor's current circumstances results in a calculation that is at least 20% and at least $50 per month higher or lower than the existing obligation, it is presumed that there has been a substantial change in circumstances, and it is rebuttably presumed that the existing support order is unreasonable and unfair.  Minn. Stat. § 518.64, subd. 2(b); see Putz v. Putz, 645 N.W.2d 343, 348 (Minn. 2002).

            At the time of the modification hearing, husband's monthly child-support obligation was $1,844.  The district court found that, based on the child-support guidelines and husband's 2005 average monthly net income of $3,358, husband's monthly child-support obligation should be $1,175.  The district court reasoned, "This change [from $1,844 to $1,175] is a drop of more than 20% and more than $50, therefore [husband] has made a showing of a substantial change in circumstances."  Accordingly, the district court reduced husband's monthly child-support obligation to $1,175.

Wife argues that husband willfully limited his income and that husband could have made more money if he lived elsewhere.  If an obligor is "voluntarily unemployed or underemployed," the court must calculate the support obligation "based on a determination of [the obligor's] imputed income."  Minn. Stat. § 518.551, subd. 5b(d) (2004).  But a parent is not considered voluntarily underemployed if he makes "a bona fide career change that outweighs the adverse effect of that parent's diminished income on the child."  Id. 

The district court found that husband's

decision to return to the Duluth area was a reasonable one because [he] had worked in the Duluth area in the past, because the parties and their children had resided in the Duluth area in the past, and because [he] would be significantly closer to the children than if he had remained in Colorado. 

 

The court concluded that there is no basis in the record for finding that husband is "voluntarily underemployed" or that his move to Duluth was in bad faith.  On this record, the district court's finding was not clearly erroneous.  See Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988) (noting that deference is given to the district court's credibility determinations).

            Wife next argues that the district court underestimated husband's net income by omitting consideration of his wages for the first quarter of 2006, which averaged $5,372 per month.  We will affirm a determination of net income for the purpose of calculating child support if it has a reasonable basis in fact.  Strauch v. Strauch, 401 N.W.2d 444, 448 (Minn. App. 1987).  Here, the district court credited the testimony of the county's child support office that husband's net monthly income is $3,358, finding that it was reasonable for the county "to use [husband's] average monthly wage for all of 2005 because his wages fluctuated from quarter to quarter."  On this record, we see no abuse of discretion.  See Veit v. Veit, 413 N.W.2d 601, 606 (Minn. App. 1987) (averaging income where obligor's real estate business fluctuated).

            Wife also argues that the district court erred in not considering husband's bonus-earning potential.  We disagree.  The court found that husband's bonus income is not reliable or guaranteed and thus not appropriate to include in net income calculations.  See Haasken v. Haasken, 396 N.W.2d 253, 261 (Minn. App. 1986).  Also, the district court specifically concluded that husband should "continue to pay support on any bonuses he receives at the guideline rate of 35%."  Cf. Keil v. Keil, 390 N.W.2d 36, 38 (Minn. App. 1986) (noting support set at a base amount plus a percentage of variable income is disfavored, but not necessarily forbidden); McCulloch v. McCulloch, 435 N.W.2d 564, 567 (Minn. App. 1989) (reciting the same concerns regarding spousal maintenance). 

II.

            Appellant argues the district court erred in reducing the amount of husband's spousal-maintenance obligation.  Whether to modify maintenance is discretionary with the district court.  Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).  A district court abuses its discretion when its findings of fact are unsupported by the record or if it improperly applies the law.  Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997).  Maintenance-related findings of fact are upheld unless clearly erroneous.  Gessner v. Gessner, 487 N.W.2d 921, 923 (Minn. App. 1992).

Maintenance can be modified if a party shows a substantial change in circumstances that renders the existing maintenance amount unreasonable and unfair.  Minn. Stat. § 518.64, subd. 2; see also Hecker, 568 N.W.2d at 709.  Once it is determined that a maintenance award will be modified, the amount of the obligation is determined by balancing obligor's financial condition or ability to pay against the needs of the spouse receiving maintenance.  Dougherty v. Dougherty, 443 N.W.2d 193, 194 (Minn. App. 1989).  In determining the needs of the spouse receiving maintenance, one of the primary considerations is whether the spouse "is unable to provide adequate self-support . . . through appropriate employment."  Minn. Stat. § 518.552, subd. 1(b) (2004).

The district court found that during the relevant time period, husband's monthly gross income dropped from $6,167 to $5,290, or $877 per month, which constitutes a "substantial decrease in [husband's] net income" that "renders the current order unreasonable and unfair."  The court also found that wife has the ability to provide for her self-support, reasoning that wife has a college degree and is in training for commercial valuation services with the potential for an annual income of $50,000 to $60,000.  The district court reduced husband's monthly spousal maintenance from $1,264 to $500 until August 2007 and eliminated his maintenance obligations thereafter.  

Wife argues that the court incorrectly "imputed" income to her.  But it is proper for the district court to consider wife's earning capacity.  See, e.g., Erlandson v. Erlandson, 318 N.W.2d 36, 40 (Minn. 1982) (noting that wife made $7,072 per year, but had an earning capacity of $10,000 per year).  Further, wife's affidavit confirms that if she was not paying her employer for the commercial valuation training, that she would be making "roughly" $50,000-$60,000 annually.  We see no abuse of discretion.

III.

Wife contends the district court abused its discretion in reducing husband's child-support arrearages by $5,900.  Forgiveness of unpaid child-support arrears that accrued before a party moved to modify support is a retroactive modification of support governed by Minn. Stat. § 518.64, subd. 2(d).  Long v. Creighton, 670 N.W.2d 621, 627 (Minn. App. 2003).  Under Minn. Stat. § 518.64, subd. 2(d), the district court "may" retroactively modify an obligation if one or more of the statutory conditions are present. 

The district court found that husband's arrearages as of June 30, 2006 were $4,784 in child support, $13,101 in spousal maintenance, and $839 in child care support.  The district court also found that in July and August 2004 husband made four payments totaling $5,900 that were not properly credited to his support obligation.  Thus, the district court ruled that husband should receive a "$5,900 reduction in the amount of his child support arrears." 

The record does not support the determination made by the district court.  Specifically, the child-support arrearages were only $4,784 not $5,900, and even if added to the child-care-support arrearages of $839, the total is only $5,623.  Further, the district court stated that it was denying husband's request to reduce spousal-maintenance arrearages.  Thus, we conclude that the district court abused its discretion.  See Grein v. Grein, 364 N.W.2d 383, 387 (Minn. 1985).  On remand the district court should address the amount and accrual dates of the child-support arrearages, including wife's argument that husband was not entitled to credit for the $3,000 "retirement" check for child support on the ground that it was part of her property settlement.  Whether to reopen the record on remand is discretionary with the district court.

IV.

Wife contends that the district court failed to consider husband's increase in salary to $80,000 when reviewing spousal maintenance.  But husband's salary increase was not determined until after the district court filed its modification order and, therefore, was not presented to the district court in the modification proceeding.  Wife filed this appeal and then filed a rule 60.02 motion to reopen the judgment and for a new trial.  The district court denied her motion, judgment was entered, but no appeal was taken from the denial.

We do not consider issues raised for the first time on appeal.  See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988); Fairview Hosp. & Health Care Servs. v. St. Paul Fire & Marine Ins. Co., 518 N.W.2d 41, 46 (Minn. App. 1994) (appellate court will not consider new evidence on appeal for the purpose of reversing a district court), aff'd, 535 N.W.2d 337 (Minn. 1995).  Here, husband's raise was not before the district court when it issued its modification order.  Thus, we decline to address the issue.  Nonetheless, we observe that husband's salary increase may be the subject of a future motion to modify, including a review of the obligation to provide life insurance to the extent spousal maintenance is modified. 

Affirmed in part, reversed in part, and remanded.

[1] The legislature has since amended the child-support statute and the current child-support law is codified in chapter 518A.  The new law is effective to calculate child support for filings after January 1, 2007.  2006 Minn. Laws ch. 280, § 44.  Therefore, the prior statute applies to appellant's claims.  See Interstate Power Co. v. Nobles County Bd. of Comm'rs, 617 N.W.2d 566, 575 (Minn. 2000) (stating courts usually apply the law in effect when the court issues its decision unless doing so will impact a party's vested rights).