In Re the Marriage of: Gerald George Walbridge, petitioner, Appellant, vs. Sandra Lee Simmons f/k/a Sandra Lee Walbridge, Respondent.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (1998).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C5-00-841

 

In Re the Marriage of:

Gerald George Walbridge,

petitioner,

Appellant,

 

vs.

 

Sandra Lee Simmons f/k/a

Sandra Lee Walbridge,

Respondent.

 

 

Filed October 24, 2000

Affirmed in part and reversed in part
Klaphake, Judge

 

Ramsey County District Court

File No. F9-97-1796

 

 

Gerald George Walbridge, 7218-218th Street North, Forest Lake, MN  55025 (pro se appellant)

 

Tom Lee, Law Office of Tom Lee, P.A., 2589 Hamline Avenue North, Suite B, Roseville, MN  55113 (for respondent)

 

            Considered and decided by Klaphake, Presiding Judge, Lansing, Judge, and Schumacher, Judge.

U N P U B L I S H E D   O P I N I O N

KLAPHAKE, Judge

            In this marital dissolution, appellant Gerald Walbridge argues that the trial court abused its discretion by assessing attorney fees against him and by requiring him to pay all taxes incurred on his withdrawal of funds from a 401(k) account.  Walbridge further argues that the trial court erred in sequestering future workers' compensation benefits that he may recover.  Because the trial court did not abuse its discretion in awarding attorney fees and by requiring Walbridge to pay the 401(k) taxes, we affirm on those issues.  Because there is no statutory basis for sequestering future workers' compensation proceeds, either to secure a marital property settlement or solely to pay attorney fees, we reverse on that issue.

D E C I S I O N

            1.         Attorney Fees

            A trial court may award attorney fees if it is demonstrated that the fees incurred were necessary for the good-faith assertion of a party's rights, that the party from whom the fees are sought is able to pay them, and that the other party does not have the means to pay.  Minn. Stat. § 518.14, subd. 1 (1998).  The trial court also may order a party to pay attorney fees, costs, and disbursements on behalf of the opposing party if the court finds that the party has unreasonably contributed to the length or expense of a proceeding.  Id.  An award of attorney fees "rests almost entirely within the discretion of the trial 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).  Where a party contributes to the length and cost of a proceeding through "duplicitous and disingenuous" positions, an award of reasonable attorney fees is appropriate.  Redmond v. Redmond, 594 N.W.2d 272, 276 (Minn. App. 1999). 

            The trial court found that Walbridge's action in filing for Chapter 7 bankruptcy "unreasonably contributed to the substantial delay in resolving this matter."  In its order denying Walbridge's motion to amend the judgment, the court further concluded:

This matter has been delayed substantially by [Walbridge's] dilatory tactics, specifically removing all the money from his 401k account contrary to the restraining order, purchasing a home during the pendency of the litigation without [Simmons's] consent; and, attempting to discharge the property settlement in bankruptcy.  All of these actions caused substantial delay and undoubtedly increased [Simmons's] legal costs[.]

 

In light of Walbridge's actions, the trial court did not abuse its discretion in ordering him to pay attorney fees.

2.         Taxes on 401(k) Plan

            "A trial court has broad discretion in making a property division" and will not be overturned absent an abuse of that discretion.  Kitchar v. Kitchar, 553 N.W.2d 97, 102 (Minn. App. 1996), review denied (Minn. Oct. 29, 1996).  The 401(k) plan was treated as a marital asset by the trial court in this case.

            In a November 10, 1998 written stipulation, the parties agreed that Walbridge would pay "all of the taxes resulting from the withdrawal of his 3M 401(K) plan."  Both parties and their attorneys initialed this paragraph.  In paragraph 11 of the judgment, however, the trial court ordered both parties to pay one-half of the taxes owing on the withdrawal.  In the next paragraph, the court ordered:

The terms of [the Partial Final Stipulation and Order] shall remain in full force and effect, and shall not merge upon entry of the Judgment and Decree herein, except as herein modified in the Marital Termination Agreement due to changes necessitated by [Walbridge's] filing of a chapter 7 bankruptcy petition on April 9, 1999.

 

On Simmons's posttrial motion, the trial court amended paragraph 11 to read:  "That [Walbridge] shall pay all of the taxes resulting from the withdrawal of $57,838.22 from [his] 3M 401(K) plan after commencement of this dissolution proceeding." 

            Presumably, the trial court recognized its error in the judgment, as the parties had agreed in their November 10, 1998 stipulation that Walbridge would pay these taxes.  A trial court's construction of its own decree is given great weight.  Mikoda v. Mikoda, 413 N.W.2d 238, 242 (Minn. App. 1987), review denied (Minn. Dec. 22, 1987).  Walbridge was the party who originally removed the funds from the 401(k) account, triggering the taxable event, and there is no doubt that the parties agreed that he would be responsible for these taxes.  The trial court therefore did not abuse its discretion by ordering Walbridge to pay the taxes in accordance with the earlier stipulated settlement.

            3.         Sequestration

A court may sequester an obligor's personal estate and the rents and profits of real estate in order to guarantee maintenance or support payments.  Minn. Stat. § 518.24 (1998).  Likewise, a court may place a lien upon marital property after division or sequester it as provided by statute in order to provide for the payment of maintenance or support.  Minn. Stat. § 518.64, subd. 2(e) (1998).  A court may order attorney fees to be collected "by execution, or out of property sequestered, or in any other manner within the power of the court."  Minn. Stat. § 518.14, subd. 1. 

            The trial court in this case ordered sequestration of any workers' compensation settlement that Walbridge may be awarded to secure payment of the outstanding $10,111 of the marital property settlement and attorney fees.  "Sequestration" is defined as the "process by which property is removed from the possessor pending the outcome of a dispute in which two or more parties contend for it."  Bryan Garner, Black's Law Dictionary 1370 (7th ed. 1999).  To "sequester" is to "seize" property.  Id.  The workers' compensation act prohibits the seizure of any claim for compensation "for the payment of any debtor liability" as follows:

No claim for compensation or settlement of a claim for compensation owned by an injured employee or dependents is assignable.  Except as otherwise provided in this chapter, any claim for compensation owned by an injured employee or dependents is exempt from seizure or sale for the payment of any debt or liability. 

 

Minn. Stat. § 176.175, subd. 2 (Supp. 1999).

 

It is clearly lawful to sequester a workers' compensation award for the payment of support or maintenance.   See Lukaswicz v. Lukaswicz, 494 N.W.2d 507, 508 (Minn. App. 1993) (workers' compensation awards are income under Minn. Stat. § 518.54, subd. 6, and are therefore subject to sequestration under Minn. Stat. § 518.24).  However, there is no direct reference to enforcement of a division of marital property by sequestration, nor is the power to sequester a future workers' compensation settlement for the sole purpose of paying attorney fees clearly shown.  See Minn. Stat. § 518.14, subd. 1 ("The court may authorize the collection of [attorney fees] by execution, or out of property sequestered, or in any other manner within the power of the court.")

Applying Minnesota law, the federal district court has ruled that lump sum workers' compensation settlements are exempt from seizure for payment of a debt under Minn. Stat. § 176.175, subd. 2, even if received prior to the filing for bankruptcy.  Gagne v. Christians, 172 B.R. 50, 53 (D. Minn. 1994).  The court reasoned that the lump sum payment does not differ in rationale from a periodic payment, which is clearly exempt from seizure under Minn. Stat. § 176.175, subd. 2.  Id. 

            In this case, Simmons's claim for $10,111, which represents a portion of the marital property settlement and her award of attorney fees, is to be reduced to an interest-bearing judgment before giving her a lien in Walbridge's future workers' compensation settlement.  Thus, sequestration for the purpose of paying these debts serves essentially the same purpose as a seizure by a creditor, which is barred by Minn. Stat. § 176.175, subd. 2.  The dissolution statutes contain no provision to supercede Minn. Stat. §  176.175, subd. 2, at least for the specific purpose of finalizing a marital property settlement or solely for payment of attorney fees, as opposed to a claim for maintenance or support.

The partial final stipulation and order provides for payment of these debts, once reduced to judgment, by lien on Walbridge's pension, unless prepaid by Walbridge.  The trial court abused its discretion by ordering sequestration of any future workers' compensation settlement; the lien on Walbridge's pension is sufficient.  We therefore reverse the trial court's sequestration order, but affirm the lien.

            Affirmed in part and reversed in part.