In Re the Marriage of: Martha Bancroft Johnson, petitioner, Respondent, vs. Conrad Iber, Appellant.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2000).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C6-01-454

 

In Re the Marriage of:

Martha Bancroft Johnson, petitioner,

Respondent,

 

vs.

 

Conrad Iber,

Appellant.

 

Filed November 27, 2001

Reversed
Klaphake, Judge

 

Hennepin County District Court

File No. 184315

 

Mary Lauhead, 3985 Clover Avenue, St. Paul, MN  55127-7015 (for respondent)

 

Eric Carlisle Nelson, Title Insurance Building, 400 Second Avenue South, Suite 700, Minneapolis, MN  55401 (for appellant)

 

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

U N P U B L I S H E D   O P I N I O N

KLAPHAKE, Judge

            Conrad Iber appeals from a district court order adopting a referee's findings and order that implemented a cost-of-living adjustment (COLA) and increased his child support obligation from $1,600 to $1,792 per month.  Because Minn. Stat. § 518.641, subd. 3 (2000) requires a court to consider whether an "insufficient cost of living or other increase in income" should prevent implementation of a COLA and because the referee's findings indicate that appellant's income is approximately the same as it was in 1995, we reverse.

D E C I S I O N

            The parties' 1995 stipulated divorce judgment included a biennial COLA provision.  Enforcement or implementation of a COLA is automatic, provided the obligee meets the statutory conditions.  See Minn. Stat. § 518.641, subd. 2 (2000) (setting out conditions and providing that if obligor does nothing in response to obligee's notice, requested adjustment takes effect without hearing).  If, as here, an obligor requests a hearing, a court "may direct that all or part of the adjustment not take effect" if "the obligor establishes an insufficient cost of living or other increase in income that prevents fulfillment of the adjusted * * * child support obligation."  Minn. Stat. § 518.641, subd. 3 (2000).

            A district court's discretion is limited to determining whether all or part of the COLA should take effect.  See McClenahan v. Warner, 461 N.W.2d 509, 511 (Minn. App. 1990).  As the obligor, appellant had the burden to show that the requested COLA should not take effect.  See Blomgren v. Blomgren, 386 N.W.2d 378, 382 (Minn. App. 1986).

            Appellant presented evidence that as of August 2000, his gross salary would be reduced by $13,000, to $166,997, a figure that included $27,984 in "variable income."  Appellant further calculated his net monthly income at $6,465.79, a figure that excluded a $700 per month retirement contribution.

            The referee for the most part accepted appellant's figures and found that appellant's net monthly income ($6,466), plus variable pay ($734), was "conservatively" $7,200, a figure that did not include the $700 retirement contribution.  By comparison, according to the 1995 judgment, appellant's gross income was $152,210 per year, or $7,740 net per month, figures that did not include variable income of approximately $3,600 gross per year, or $300 gross per month.  Based on these figures, the referee found that appellant's "income (his reduced salary, but increased variable pay) is approximately the same as in 1995" and that "the circumstances in 1995 are pretty much the same now."

            These findings support appellant's claim that the COLA should not take effect because he has not experienced an increase in income supporting such an adjustment.  Even when appellant's variable income and retirement contribution are considered, his current net monthly income is approximately $7,900.  When this is compared with his 1995 net monthly income ($7,740) and his variable income of approximately $300 (gross) per month, it is apparent that his income has not changed, or has changed very little, since the parties' divorce.

            The award of a COLA assumes that an obligor's financial situation will improve, just as children's needs increase with inflation.  Blomgren, 386 N.W.2d at 381.  Because the evidence and the referee's findings fail to support the conclusion that appellant has experienced any increase in income, the district court abused its discretion in implementing the COLA.  We therefore reverse that part of the district court's order.

            Reversed.