Julie Ann Traut, Respondent, vs. Steven M. Traut, Appellant.

Julie Ann Traut, Respondent, vs. Steven M. Traut, Appellant. A05-1556, Court of Appeals Unpublished, August 15, 2006.

This opinion will be unpublished and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

A05-1556

 

Julie Ann Traut,

Respondent,

 

vs.

 

Steven M. Traut,

Appellant.

 

Filed August 15, 2006

Affirmed in part, reversed in part, and remanded

Ross, Judge

 

Douglas County District Court

File No. F7-03-1068

 

 

Charles A. Krekelberg, Jason M. Hastings, Krekelberg, Skonseng & Hastings, P.L.L.P., 10 North Broadway, P.O. Box 353, Pelican Rapids, MN 56572 (for appellant)

 

Timothy R. Reuter, Jessica J. Smith, Kelm & Reuter, P.A., 1287 2nd Street North, Suite 101, Sauk Rapids, MN 56379 (for respondent)

 

 

            Considered and decided by Shumaker, Presiding Judge; Kalitowski, Judge; and Ross, Judge.

U N P U B L I S H E D   O P I N I O N

 

ROSS, Judge

 

In this appeal from the district court's order granting spousal maintenance, appellant husband Steven Traut argues that his maintenance obligation is defective because the district court overstated his income, underestimated respondent wife Julie Traut's ability to support herself, and erred by awarding Julie Traut permanent maintenance.  We affirm in part, reverse in part, and remand.

FACTS

 

Steven Traut and Julie Traut were married 22 years.  They filed a marital termination agreement with the district court that addressed all issues of their dissolution except spousal maintenance.  The district court issued an order for dissolution based on that agreement, and it conducted a trial to determine spousal maintenance.

            During the marriage, Julie worked primarily as a homemaker and Steven owned and operated a well-drilling business.  The district court found that the parties "lived a lavish lifestyle" and "had substantial marital assets."  At the time of the dissolution, Julie was 45 years old and "in good physical and mental health."  She worked part time in a hospital gift shop.  They have one minor child. 

The district court determined that Stevens's monthly income is $9,788.52 and that his monthly living expenses total $7,933.75.  Julie's monthly income is $316.34, but she receives $1,743.75 of monthly child support and can earn approximately $660 of monthly interest income from her property settlement.  The district court found that her total monthly income is $2,720.09 and that her monthly living expenses are $3,456.28, leaving a monthly deficit of $736.19.

After considering the statutory factors listed in Minn. Stat. § 518.552, subds. 1 and 2 (2004), the district court concluded that permanent spousal maintenance was appropriate.  It ordered Steven to pay Julie $1,295.48 as monthly spousal maintenance until their minor child graduates from high school.  After that, Julie will no longer receive child-support payments from Steven, who would increase monthly spousal maintenance to $2,000.  Steven filed a motion for amended findings, which the district court denied.  This appeal follows.

D E C I S I O N

 

Steven challenges the district court's findings of fact and conclusion to award Julie permanent spousal maintenance.  We will uphold a district court's findings of fact unless they are clearly erroneous.  Minn. R. Civ. P. 52.01; Gessner v. Gessner, 487 N.W.2d 921, 923 (Minn. App. 1992).  We review the district court's conclusions regarding spousal maintenance for an abuse of discretion.  Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997).  A district court abuses its discretion if its findings are unsupported by the record or if it improperly applies the law.  Id.at 202 & n.3.  We defer to the district court's decisions concerning the weight and credibility of evidence.  Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988).

A district court may order either spouse to pay spousal maintenance if the spouse seeking maintenance "lacks sufficient property, including marital property apportioned to the spouse, to provide for reasonable needs of the spouse considering the standard of living established during the marriage" or "is unable to provide adequate self-support, after considering the standard of living established during the marriage and all relevant circumstances, through appropriate employment."  Minn. Stat. § 518.552, subd. 1(a), (b) (2004).  The district court shall order spousal maintenance of an amount and for a duration as it deems just, based on consideration of all relevant factors.  Id., subd. 2.

Among the factors the district court considers when determining the amount of spousal maintenance is "the ability of the spouse from whom maintenance is sought to meet needs while meeting those of the spouse seeking maintenance."  Id., subd. 2(g).  Steven challenges the district court's determination of his income and its finding that he has the ability to make spousal maintenance payments.  He maintains that the district court's determination of his monthly income at $9,788.52 is not supported by the record, contending that the record supports an income determination of only $7,187.29.  The district court found that he "submitted four different numbers on four different sworn documents to the court regarding his monthly net income."  The district court indicated that it based its finding that Steven earns $9,788.52 monthly, in part, on the last income document that he submitted.  Although it did not explain precisely how it arrived at that figure, the finding falls within the range of figures Steven submitted as his monthly income.  The district court distilled its finding from the conflicting evidence that Steven presented throughout the dissolution proceedings, and the finding is therefore supported by the record.

Steven also makes two more specific challenges to the district court's income determination.  He first argues that the finding erroneously includes a $1,075 monthly payment that he receives from his business.  He argues that this payment covers a loan that the district court awarded him in the marital-property distribution and is, therefore, not income for purposes of spousal maintenance. 

Steven's loan-payment argument has merit.  Spousal maintenance is an award "of payments from the future income or earnings of one spouse for the support and maintenance of the other."  Minn. Stat. § 518.54, subd. 3 (2004) (emphasis added).  A maintenance obligor is generally not required to liquidate assets awarded in a marital-property distribution to pay maintenance.  See Fink v. Fink, 366 N.W.2d 340, 342 (Minn. App. 1985); see also Zagar v. Zagar, 396 N.W.2d 98, 101 (Minn. App. 1986) ("We find no authority to support appellant's suggestion that an award be preserved based on an expectation that the obligor liquidate assets to make payments."), superseded on other grounds by Minn. Stat. § 518.14, subd. 1 (1990), as recognized in Geske v. Marcolina, 624 N.W.2d 813, 817 n.2 (Minn. App. 2001).  The record shows that a portion of Steven's monthly income is payment on an outstanding debt that he received in the marital-property distribution.  The value of that outstanding debt is, therefore, marital property, and repayments on that loan are not income for purposes of spousal maintenance. 

We note, however, that interest from that loan is income and may be considered by the district court when determining Steven's income.  See Minn. Stat. § 518.54, subd. 6 (2004) (defining "income" as "any form of periodic payment to an individual"); Schreifels v. Schreifels, 450 N.W.2d 372, 373 (Minn. App. 1990) (treating investment earnings generated from marital property as income in a spousal maintenance determination).  To the extent the district court's income determination includes money attributable to the loan principal, that determination rests on a misapplication of law, and the district court's spousal-maintenance award, therefore, results from an abuse of discretion.  We remand this matter to the district court for a determination of that portion of Steven's income that is attributable to the loan and for reconsideration of the spousal-maintenance obligation consistent with this opinion.

Steven also argues that the district court erroneously credited him with $3,500 of monthly rental income when a letter from his accountant shows that he receives only $2,750 of monthly rental income.  But Steven indicated on other documents submitted to the district court that he earns $3,500 of monthly rental income.  Balancing competing evidence is the district court's obligation, and its decisions concerning the weight and credibility of evidence warrant our deference.  Sefkow, 427 N.W.2d at 210.  Because record evidence supports the district court's finding, we conclude that it is not clearly erroneous. 

Steven next argues that the district court erroneously determined that he is able to pay spousal maintenance.  Because we have concluded that the district court's findings regarding his income are clearly erroneous and we remand for reconsideration, we decline to address whether the record supports the district court's findings regarding Steven's ability to pay. 

Steven also challenges the district court's findings regarding Julie's ability to find employment and to support herself.  He argues that the district court failed to adequately consider her earning capacity and her ability to become self-sufficient through suitable employment.  When determining the amount and duration of spousal maintenance, the district court must consider "the time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment, and the probability, given the party's age and skills, of completing education or training and becoming fully or partially self-supporting."  Minn. Stat. § 518.552, subd. 2(b).  The district court must also consider "the duration of the marriage and, in the case of a homemaker, the length of absence from employment and the extent to which any education, skills, or experience have become outmoded and earning capacity has become permanently diminished," and "the loss of earnings, seniority, retirement benefits, and other employment opportunities forgone by the spouse seeking spousal maintenance."  Id., subd. 2(d), (e). 

The district court noted that Julie was a homemaker for more than 20 years of the parties' 22-year marriage.  She has "very few job skills," and if she completed a four-year college degree, she would not enter the workforce until she is 50 years old.  The district court found that she is in good mental and physical health but concluded that her absence from the workforce permanently diminished her earning capacity and that she has "lost out substantially on seniority, retirement benefits and employment opportunities." 

The district court's findings regarding Julie's earning capacity and ability to support herself have ample record support, and Steven points to nothing in the record contradicting them.  The district court addressed each of the factors listed in the spousal-maintenance statute.  We conclude that Steven's contention that the district court failed to consider the statutory factors is without merit.

Steven's argument that the district court failed to consider Julie's marital-property award when it calculated spousal maintenance is also unconvincing.  The district court is required to consider marital property when determining the financial resources available to a party for purposes of spousal maintenance.  Id., subd. 2(a).  The district court calculated that Julie was awarded $530,000 in liquid assets and that, after the purchase of a house, she would have $330,000 in investible assets with which she could earn roughly $660 monthly after taxes.  The district court clearly considered the marital-property award.

Steven argues finally that the record does not support an award of permanent spousal maintenance.  He is incorrect.  "Where there is some uncertainty as to the necessity of a permanent award, the court shall order a permanent award leaving its order open for later modification."  Id., subd. 3 (2004).  This statutory provision "requires that a [district] court order permanent maintenance if the court is uncertain that the spouse seeking maintenance can ever become self-supporting."  Aaker v. Aaker, 447 N.W.2d 607, 611 (Minn. App. 1989), review denied (Minn. Jan. 12, 1990).  The district court did not abuse its discretion in awarding permanent maintenance.

We are not persuaded otherwise by Steven's contention that, under Gales v. Gales, 553 N.W.2d 416 (Minn. 1996), permanent spousal maintenance requires "an exceptional case" and that nothing in the record shows that this case is exceptional.  This court has previously noted that in Dobrin v. Dobrin, 569 N.W.2d 199 (Minn. 1997), the Minnesota Supreme Court rejected the assertion that Gales re-invoked the exceptional-case standard for awarding permanent maintenance.  See Chamberlain v. Chamberlain,615 N.W.2d 405, 411 (Minn. App. 2000) (stating that "while Dobrin dispels any suggestion that Gales resurrected McClelland's‘exceptional-case' standard for awarding permanent maintenance, Dobrin also makes clear that permanent maintenance awards are considered in light of the factors set forth in Minn. Stat. § 518.552, subd. 2").  Steven's argument that the district court can award permanent spousal maintenance only in exceptional cases is unsupported.

We also find no relevance in Steven's assertion that Julie has a duty to rehabilitate after an award of temporary spousal maintenance.  Julie was awarded permanent spousal maintenance, and the caselaw cited by Steven addresses a party's duty to rehabilitate after the district court has determined that permanent maintenance is not necessary.  Here, the district court determined that it is unlikely that Julie will become self-sufficient.  See Minn. Stat. § 518.552, subd. 3 (2004); Aaker, 447 N.W.2d at 611.  We are satisfied that the record evidence supports this determination and conclude that awarding permanent spousal maintenance is, in this case, not an abuse of discretion.

We affirm the district court's decision to award Julie permanent spousal maintenance.  Its careful and otherwise supported calculation of the award's amount, however, must be redetermined on remand because it erroneously included as part of Steven's income the repayment of principal on a debt that he received as marital property.

Affirmed in part, reversed in part, and remanded.