In re the Marriage of: Therese Marie Patera, n/k/a Therese Marie Sanders, petitioner, Respondent, vs. Michael John Patera, Appellant.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

 

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A03-1361

In re the Marriage of:

 

Therese Marie Patera,

n/k/a Therese Marie Sanders, petitioner,

Respondent,

 

vs.

 

Michael John Patera,

Appellant.

 

 

Filed May 25, 2004

Affirmed in part, reversed in part and remanded; motion denied Hudson, Judge

 

Hennepin County District Court

File No. MF 245655

 

Denis E. Grande, Joanne H. Turner, Mackall, Crounse & Moore, PLC., 1400 AT&T Tower, 901 Marquette Avenue, Minneapolis, Minnesota 55402 (for respondent)

 

Charles T. Agan, Suite 325, 7301 Ohms Lane, Edina, Minnesota 55439-2338 (for appellant)

 

            Considered and decided by Hudson, Presiding Judge; Anderson, Judge; and Stoneburner, Judge.

U N P U B L I S H E D   O P I N I O N

HUDSON, Judge

            On appeal from denial of appellant's motion to modify his spousal-maintenance and child-support obligations, appellant contends that the trial court erred by denying his motion because the graduated spousal-maintenance and child-support obligations in the judgment were based on the underlying assumption that his income would increase over time, but his income has remained stagnant.  The district court denied appellant's motion, finding that there had not been a substantial change in circumstances warranting modification.  Because we conclude that the judgment was based on the underlying assumption that appellant's income would increase over time, we reverse the district court's determination with respect to the spousal-maintenance award and remand for reconsideration.  Because appellant's current child-support obligation is within the child-support guidelines, we affirm the district court's denial of appellant's motion to modify the child-support award.  We reverse the district court's award of attorney fees, and we deny respondent-wife's motion for attorney fees on appeal.

FACTS

Respondent, Therese Marie Sanders, and appellant, Michael John Patera, were married in 1976 and divorced in 2000.  During the dissolution proceedings, the district court adopted the parties' marital termination agreement virtually in its entirety.  At the time of the dissolution, Sanders worked for the Edina School District earning a gross monthly income of $925.  The district court found that her reasonable monthly living expenses were approximately $5,602.93.  Patera is a licensed attorney who left a law firm in 1999 to begin a private practice.  In the judgment based on the stipulation, Patera projected earning an annual income of not less than $85,000 or gross monthly income of $7,083.33, and net monthly income of $4,344.05.  At the time of the dissolution, Patera's reasonable monthly living expenses were $4,454.52.  These expenses did not include his child-support and spousal-maintenance payments.  The judgment awards child support in the amount of $1,303 per month for six months and $1,540 per month thereafter, and provides that when there is only one child to support, Patera's obligation shall decrease by 16.67%.  Based on the judgment, and because there is currently only one minor child to support, the district court found that Patera's current child-support obligation is $1,356.61 per month.[1]  The judgment awarded spousal maintenance in the amount of $1,000 per month for nine months, then $1,500 per month for six months, then $2,000 per month thereafter.  The district court reviewed and adopted the stipulation containing these obligations, even though Patera's familial-support payments and reasonable monthly living expenses were significantly in excess of Patera's net monthly income. 

            Sanders contends that almost immediately after judgment was entered Patera refused to pay the amounts the parties ordered. 

            On May 29, 2003, Patera moved to modify his spousal-maintenance and child-support obligations.  The district court denied this motion finding that there had not been a substantial change in the parties' circumstances.  The district court found that the Edina School District continues to employ Sanders and that she works part-time at David's Bridal.  In addition, Sanders is eligible for tax credits, which result in refunds of all state and federal taxes.  The district court found that her current net monthly income is $1,038.65.  The court found that in order to maintain the standard of living established during the marriage, Sanders' current reasonable monthly living expenses are approximately $4,374.  The district court found that Patera's current gross annual income reported on his 2002 tax return was $87,978 and determined, using the same computations as the judgment, that his net monthly income for 2002 was $4,452.79.  In his affidavit, Patera claims his current net monthly income is $5,649.  Patera claimed monthly living expenses of $3,396, including approximately $931 in credit-card debt.  Based on these findings, the district court determined that Patera's income had risen and his living expenses had decreased, and there was no substantial change in circumstances that would warrant a modification in his child-support or spousal-maintenance obligation.

            Further, the district court found that Patera had arbitrarily reduced his court-ordered familial-support payments from $3,356.61 per month to $2,000 per month, resulting in arreages in the amount of $28,420.87 as of June 10, 2003.  The court ordered that Patera pay Sanders these arrearages and awarded Sanders attorney fees.  This appeal follows.

D E C I S I O N Spousal Maintenance and Child Support Modification

Patera contends that the district court abused its discretion by denying his motion to modify his spousal-maintenance and child-support obligation. 

On appeal from a district court's decision addressing motions to modify maintenance and motions to modify support, an appellate court reviews the district court's decision for an abuse of discretion.  Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997) (maintenance); Moylan v. Moylan, 384 N.W.2d 859, 864 (Minn. 1986) (support).  An abuse of discretion occurs when the district court resolves the matter in a manner that is "against logic and the facts on [the] record."  Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).  When a stipulation fixing the respective rights and obligations of the parties is central to the award, it represents the parties' voluntary acquiescence in an equitable settlement, and trial courts should "carefully and only reluctantly" alter its terms.  Claybaugh v. Claybaugh, 312 N.W.2d 447, 449 (Minn. 1981).  Nevertheless, a stipulation "does not operate as a bar to later consideration of whether a change in circumstances warrants a modification."  Hecker v. Hecker, 568 N.W.2d 705, 709 (Minn. 1997). 

Minn. Stat. § 518.64, subd. 2(a) (2002), provides that maintenance and support orders may be modified upon a showing of substantially changed circumstances rendering the existing support obligation unreasonable and unfair.  In determining whether a "substantial change" has actually occurred, a court must follow the guidelines provided by statute:

The terms of an order respecting maintenance or support may be modified upon a showing of one or more of the following: (1) substantially increased or decreased earnings of a party; (2) substantially increased or decreased need of a party . . .; (3) receipt of assistance . . .; (4) a change in the cost of living for either party . . ., any of which makes the terms unreasonable and unfair. . . .

 

Id.

            In addition, the supreme court has held that if a maintenance obligation is based on an underlying assumption, and that assumption is never satisfied, the failure of one party to meet that expectation can constitute a substantially changed circumstance supporting a modification.  Hecker, 568 N.W.2d at 708-10 (holding that former wife's failure to attain level of self-sufficiency contemplated by parties' stipulationfor temporary spousal maintenance was substantial change in circumstances warranting modification of spousal-maintenance award).

            Patera argues that the district court erred by failing to modify his spousal-maintenance and child-support obligations because the judgment establishing his support obligations was based on the assumption that his income would significantly increase over time, and his income has remained stagnant.  In Patera's affidavit in support of the motion to modify, he stated that he earned, on average, $117,894 as a partner in his previous law firm, and that he assumed he would make "at least as much" in private, solo practice.  Patera concluded, however, that despite his best efforts, "[t]he reality of my income has not met the expectations upon which our Judgment and Decree was based."  Moreover, at the hearing on Patera's motion to modify, Patera's counsel argued that "[Sanders] would have you accept that the parties anticipated that Mr. Patera could end up paying about 95 percent of his net income.  I don't think anybody really expected that.  They obviously assumed that his net income would go up substantially along with his obligation." 

The district court rejected Patera's argument and denied his motion, finding that there had not been a substantial change in circumstances warranting a modification of either the spousal-maintenance or child-support obligation.  But it is not clear on what basis the district court rejected Patera's argument; the district court did not specifically address Patera's assumption-based argument in its order denying Patera's motion to modify the spousal-maintenance and child-support obligations. 

Here, the plain language of the final order states that the judgment was based on the following:  "[t]he Respondent projects earning a gross annual income of not less than $85,000 within the next year."  In 2002, Patera's tax return shows he earned a gross yearly income of $87,978.  Obviously, Patera made more in 2002 than he did at the time of the 2000 stipulation.  Therefore, we agree that, based on the plain language of the judgment, there has not been a substantial change in circumstances warranting a modification of either Patera's child-support or spousal-maintenance obligations.  Nevertheless, we are troubled by the fact that on the day the judgment was entered, Patera was required to pay familial-support obligations that, when combined with what the district court found to be his reasonable monthly expenses, significantly exceeded his net monthly income.  Moreover, Patera's familial support obligations increased over time.

Thus, at the time of the judgment, appellant's net monthly income was $4,344.05, and his reasonable monthly expenses were $4,454.52.  His reasonable monthly expenses did not include his child-support or spousal-maintenance obligations, which initially amounted to $2,303, and then increased to $2,540 after six months, $3,040 three months later, and $3,540 six months later, currently amounting to $3,356.61.  Therefore, based on an income of $85,000 per year, just fifteen months after the judgment and decree was entered, Patera was required to pay almost 82% of his monthly income in support payments. 

Further, at the time of the motion to modify, the district court found that Patera's net monthly income in 2002 was $4,452.79 per month, and that he claims his current monthly income is $5,649, with reasonable monthly living expenses of $3,396.  If his current monthly income is, as he claims, $5,649 per month, with reasonable monthly expenses of $3,396 per month, and a child-support and maintenance obligation of $3,356.61 per month, his reasonable monthly expenses and familial-support obligation exceed his monthly income by more than $1,000.  Moreover, if his current monthly income is, as the district court found, $4,452.79, Patera is $2,000 short of meeting his support payments.  Given the obvious and significant disparity between Patera's income and his familial-support obligations, the parties' stipulation makes sense only if, as Patera argues, there was an underlying assumption that Patera's income would increase over time. 

            At oral argument, Sanders claimed there was no such assumption, and that the payment schedule and initially lower support figures were designed to give Patera a period of time to work on paying off his substantial debt.  According to Sanders, once Patera paid off his debt, he would theoretically have money to pay his escalating familial-support payments.  Sanders contends that the parties always anticipated that he would pay his increased spousal-maintenance and child-support obligations based on an income of $85,000 annually.  But the record, logic, and basic math do not support this interpretation of the facts.  Thus we conclude that the record supports Patera's contention that the spousal-maintenance and child-support awards in the judgment were based on the underlying assumption that Patera's income would increase over time.  Further, we conclude that, as in Hecker,the failure of appellant's income to significantly increase as anticipated constitutes a substantially changed circumstance.  To hold otherwise is against logic and the facts on the record.  Thus the trial court abused its discretion in denying Patera's motion to modify his spousal-maintenance award.  Accordingly, we remand this case for the district court to review the spousal-maintenance award and amend it as necessary under the statutory factors set out in Minn. Stat. § 518.64, subd. 2(a).

The district court, however, properly denied Patera's request for a modification of his child-support obligation.  Under the terms of the judgment, Patera's current child-support obligation is $1,356.61 per month; and the district court found that based on his stated income, guideline child support would amount to $1,412.25.  Thus, in asking for a reduction in his child-support obligations, Patera is essentially asking for a deviation from the child-support guidelines.  See Minn. Stat. § 518.551, subd. 5(c), (i) (2002).  But Patera never asked the district court to deviate from the child-support guidelines.  Therefore he has waived consideration of this issue on appeal.  Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (stating appellate courts do not address issues or theories not raised in district court).  Moreover, before the district court can deviate from the child-support guidelines "the court shall make written findings giving the amount of support calculated under the guidelines, the reasons for the deviation, and shall specifically address the criteria in paragraph (c) and how the deviation serves the best interest of the child."  Minn. Stat. § 518.551, subd. 5(i).  Because Patera never raised this issue at the district court, he did not enter the evidence upon which findings for a deviation could be made and no such findings were made.  We lack the authority to make the requisite findings to support a deviation from the guideline child-support obligation.  See Kucera v. Kucera, 275 Minn. 252, 254, 146 N.W.2d 181, 183 (1966) (stating "[i]t is not within the province of [appellate courts] to determine issues of fact on appeal"); see also Taflin v. Taflin, 366 N.W.2d 315, 319 (Minn. App. 1985) (stating parties cannot complain about denial of a motion to modify support where party failed to provide district court with the evidence necessary to allow district court to grant the motion).  Therefore, we affirm the district court's decision to deny the motion to modify Patera's child-support obligation. 

Nothing in our decision should be read to sanction or trivialize the significant arrearages Patera owes in familial support.  But we are convinced that if the current judgment remains in effect, Patera will continue to sink deeper in debt and Sanders will never collect the money she and the parties' children are rightly due.  

District Court Attorney Fees

A district court has very broad discretion in awarding attorney fees and will be reversed only where there is a clear abuse of that discretion.  Crosby v. Crosby,587 N.W.2d 292, 298 (Minn. App. 1998), review denied (Minn. Feb. 18, 1999).  Under Minnesota law, a court shall award need-based attorney fees to a party if it finds that (1) the receiving party needs that award to pursue the party's rights in the proceeding; (2) the paying party has the ability to pay attorney fees; and (3) the receiving party does not have the ability to pay them.  Minn. Stat. § 518.14, subd. 1 (2002).

Patera argues that the district court abused its discretion by awarding attorney fees to Sanders because he does not have the ability to pay Sanders' attorney fees, Sanders has the ability to pay her attorney fees, the fees were not necessary to assert Sanders' rights, and Sanders did not make a motion for attorney fees. 

The district court found that Sanders incurred significant fees defending against Patera's motion and presenting her own motion, and that Sanders does not have the ability to pay these fees.  The district court determined that, given Patera's disposable income, he has the ability to pay both parties' attorney fees.

            The district court found that Patera's net monthly income in 2002 was $4,452.79, and that he claims his current monthly income is $5,649, with reasonable monthly living expenses of $3,396.  Based on his increased earnings and decreased expenses, the court concluded he had additional disposable income and had the means to pay respondent's attorney fees. 

            Although Sanders is struggling with her expenses and cannot afford her attorney fees, we are persuaded that Patera does not have the ability to pay the fees.  As our previous discussion on the merits indicates, if Patera's monthly income is $5,649 with reasonable monthly expenses of $3,396 per month and a child support and maintenance obligation of $3,356.61 per month, he lacks the ability to pay need-based attorney fees and we conclude that the trial court abused its discretion by finding that Patera can afford to pay Sanders' attorney fees.  Accordingly, we reverse the district court's award of attorney fees.

Attorney Fees on Appeal

Sanders also moves for need-based attorney fees for this appeal, under Minn. Stat. § 518.14, subd. 1.  Whether to award need-based attorney fees on appeal is discretionary with this court.  Case v. Case, 516 N.W.2d 570, 574 (Minn. App. 1994). 

This court generally awards need-based fees if the party requesting the attorney fees cannot pay and the other party has the ability to pay.  Minn. Stat. § 518.14, subd. 1.  Here, it is clear that Sanders earns very little income and is struggling financially because she is not currently receiving any support from appellant.  Therefore, she cannot afford the attorney fees incurred in this case.  But Patera is already paying spousal maintenance and child support in an amount that, when added to his reasonable monthly expenses, exceeds his income.  Thus, while Sanders cannot pay her attorney fees, Patera does not have the ability to pay the fees either.  Therefore, Sanders' motion for attorney fees on appeal is denied.

Affirmed in part, reversed in part, and remanded; motion denied.

 

[1] At the time of the modification hearing on May 29, 2003, only one minor child resided with respondent.  That child will turn 18 in July 2004 and thus will be emancipated.