Mary Elizabeth Knox, petitioner, Respondent, vs. Harold Thomas Knox, III, Appellant.
Annotate this CaseThis opinion will be unpublished and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
A05-1989
Mary Elizabeth Knox, petitioner,
Respondent,
vs.
Harold Thomas Knox, III,
Appellant.
Filed August 15, 2006
Affirmed; motion denied Willis, Judge
Hennepin County District Court
File No. DC 226730
Corrine D. Lynch, One Corporate Center IV, 7301 Ohms Lane, Suite 425, Edina, MN 55439 (for respondent)
Kathryn A. Graves, Katz, Manka, Teplinsky, Due & Sobol, Ltd., 225 South Sixth Street, Suite 4150, Minneapolis, MN 55402 (for appellant)
Considered and decided by Willis, Presiding Judge; Lansing, Judge; and Forsberg, Judge.*
U N P U B L I S H E D O P I N I O N
WILLIS, Judge
Appellant husband argues that the district court abused its discretion by modifying his spousal-maintenance obligation and by awarding attorney fees to respondent wife. Because we find no abuse of discretion, we affirm. We further deny respondent's motion for attorney fees.
FACTS
The 17-year marriage of appellant husband Harold Thomas Knox III and respondent wife Mary Knox was dissolved in December 1996. Under a stipulated judgment, wife was awarded sole physical custody of the parties' son, who was then 16 years old. Wife also was awarded permanent spousal maintenance equal to 25% of husband's net income, not including bonuses. At the time of the dissolution, husband's net income was approximately $6,400 per month, and wife's maintenance award was, therefore, approximately $1,600 per month.
In 2004, husband moved to modify the spousal-maintenance award, seeking either to terminate the award or to reduce it and set it "at a specific monthly amount." At the time of the motion, husband's net monthly income was $8,846 and wife's maintenance was $2,030 per month. The district court denied husband's motion and directed that wife should continue to receive 25% of husband's net income as maintenance. Husband appealed the denial of his motion.
In April 2005, this court reversed the district court's order, determining that there had been a substantial change in circumstances that made the then-current maintenance order unreasonable and unfair because (1) wife's earnings had substantially increased, (2) husband's earnings had substantially increased and the manner in which he was paid had changed from a base salary plus a bonus to a fixed salary, and (3) wife's needs had substantially changed because the parties' child was emancipated. Knox v. Knox, No. A04-1934 (Minn. App. Apr. 14, 2005) (order op.). This court remanded for determination of a "defined-sum maintenance award based on the parties' current resources and needs." Id.
In June 2005, husband again moved to modify or terminate the spousal-maintenance award. Wife moved to set maintenance at a specific dollar amount as directed by this court. After a hearing, the district court ordered husband to pay maintenance of $2,000 monthly, finding that wife needed maintenance in that amount and that husband had the ability to pay. The district court also ordered husband to pay wife $6,326.50 for her attorney fees. Husband appeals both the spousal-maintenance and attorney-fee awards.
D E C I S I O NI.
Husband argues that the district court abused its discretion by modifying his spousal-maintenance obligation to $2,000 per month. 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 regarding maintenance if 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 & n.3 (Minn. 1997). "Findings of fact concerning spousal maintenance must be upheld unless they are clearly erroneous." Gessner v. Gessner, 487 N.W.2d 921, 923 (Minn. App. 1992). Minnesota Statutes section 518.64, subdivision 2 (2004), provides that a district court can modify spousal maintenance
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.
In addition, the district court must apply the factors in Minn. Stat. § 518.552 as they exist at the time of the motion. Minn. Stat. § 518.64, subd. 2(c). Among the factors that must be applied are the financial resources of the party seeking maintenance and that party's ability to meet needs independently. Minn. Stat. § 518.552, subd. 2 (2004). The amount of maintenance is essentially the result of balancing the recipient's need against the obligor's ability to pay. See Erlandson v. Erlandson, 318 N.W.2d 36, 39-40 (Minn. 1982).
In its remand instructions, this court directed that "[i]n calculating [wife's] needs, expenses attributable to the adult child may not be included and income may be attributed to respondent for providing rent-free accommodations to the adult child." On remand, the district court found that wife "maintains that the parties' adult son and his wife live with her, but that they cover all of their own expenses. [Husband] has supplied this Court with no evidence to the contrary, nor any basis on which to impute income to [wife]."
Husband argues that the district court's finding was erroneous, asserting that when the district court calculated wife's need, it included living expenses attributable to their adult son, including his monthly car payments and automobile insurance payments. But in wife's affidavit and her answers to husband's interrogatories, she states that although the parties' son has a car loan in her name, he makes the monthly payments. And the record shows that the monthly budget that wife submitted to the district court did not include the son's car-loan payment. The record also includes copies of respondent wife's checking-account statements that show an automatic withdrawal of approximately $231 to State Farm each month, which is the amount that wife claimed in her monthly budget for her own automobile insurance. Because there is no record evidence showing that wife makes the son's car-loan payments or pays for his automobile insurance, we determine that the district court did not erroneously include the son's expenses when calculating wife's need.
Husband also asserts that in determining wife's income, the district court should have imputed a reasonable rental payment from the son to wife. Husband asserts that because the parties' son and his family live with wife, she has higher rent and utility expenses than she would otherwise have. But because the record shows that the son's family lived with wife only temporarily, we determine that the district court did not abuse its discretion by not imputing to wife any rental income from the son.
Husband further argues that the district court abused its discretion by not considering wife's ability to work full time and fully support herself. The district court found that wife, who worked part time as a waitress at the time of dissolution, and still does so, has a net monthly income of $1,250. Husband asserts that wife can and should work a 40-hour work week and that, based on wife's average hourly earning rate of $17.74, the district court should have found that wife has a net monthly income of $2,419. But because a recipient of permanent maintenance is not obligated to rehabilitate herself or to become self-sufficient in order to relieve her former spouse from his maintenance obligation, we determine that the district court did not abuse its discretion. See Schroeder v. Schroeder, 405 N.W.2d 267, 269 (Minn. App. 1987) (determining that permanent-maintenance recipient who worked part time had no obligation to undertake full-time employment).
Husband disputes the district court's finding that husband had the ability to pay $2,000 per month in maintenance. First, the district court found that husband had net monthly income of $8,928, and husband does not dispute this finding. But husband asserts that because of his expenses, he does not have the ability to pay the ordered spousal maintenance. The district court found that husband's stated monthly living expenses of $12,746 were "grossly overstated." Husband disputes this finding, asserting that the expenses included the cost of two homes: his house in North Carolina, which he is trying to sell, and his new home in California. But because reasonable living expenses are based on the parties' standard of living during the marriage and the record shows that husband and wife did not own two homes during their marriage, we determine that the cost of one of the homes should be disregarded in considering husband's reasonable expenses. See Minn. Stat. § 518.552, subd. 2(c). Husband concedes that when the North Carolina house is sold, his monthly expenses will decrease by at least $4,045. But he asserts that he will then have monthly expenses of approximately $8,700 and that based on his net monthly income of $8,928, he will still not have the ability to pay $2,000 in spousal maintenance.
But husband's submitted monthly budget shows that it includes his current wife's expenses. Consideration of expenses associated with an obligor's new family is inappropriate when determining whether the obligor has the ability to pay maintenance. Peterka v. Peterka, 675 N.W.2d 353, 358 (Minn. App. 2004). Because husband did not provide the district court with a monthly budget reflecting only his own living expenses, we conclude that the district court's finding that husband has the ability to pay $2,000 per month in spousal maintenance is not clearly erroneous. "On appeal, a party cannot complain about a district court's failure to rule in [his] favor when one of the reasons it did not do so is because that party failed to provide the district court with the evidence that would allow the district court to fully address the question." Eisenschenk v. Eisenschenk, 668 N.W.2d 235, 243 (Minn. App. 2003) (citing Tuthill v. Tuthill, 399 N.W.2d 230, 232 (Minn. App. 1987) (stating this proposition in maintenance-modification context)) (other citation omitted), review denied (Minn. Nov. 25, 2003).
II.
Wife moved for an award of $7,500 in attorney fees. The district court ordered husband to pay wife $6,326.50 for her attorney fees, finding that "[a]s a result of [husband's] overstatement of his reasonable monthly expenses, and his refusal to make the appropriate disclosure of his familial income," husband's conduct "delayed final resolution and increased the expense of these proceedings," warranting a conduct-based award of attorney fees to wife. The district court also found that wife was in need of an attorney-fee award to "permit her to carry on and contest these proceedings" and that husband had the ability to contribute toward them.
A district court "shall" impose need-based attorney fees and "may" award conduct-based attorney fees under Minn. Stat. § 518.14, subd. 1 (2004). An award of fees "rests almost entirely within the discretion of the [district] 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). A district court shall award need-based attorney fees when necessary for the good-faith assertion of a party's rights if the party seeking fees lacks the ability to pay them and the party from whom fees are sought has the ability to pay. Minn. Stat. § 518.14, subd. 1. A district court must ordinarily make specific findings on these factors, but reversal for a lack of findings is not necessary if the order reasonably implies that the factors were considered, and the district court had access to the parties' financial records and was familiar with the procedural history of the case. Geske v. Marcolina, 624 N.W.2d 813, 817 (Minn. App. 2001). To award conduct-based fees, the district court must identify the offending conduct, the conduct must have occurred during the litigation process, and the conduct must be found to have unreasonably contributed to the length or expense of the proceeding. Minn. Stat. § 518.14, subd. 1.
Husband argues first that the fee award was an abuse of discretion because "the factual basis upon which the court granted conduct-based fees was clearly erroneous." The district court found that husband's "overstatement of his reasonable monthly expenses, and his refusal to make the appropriate disclosure of his familial income" delayed final resolution and "increased the expense of these proceedings." Because the record shows that husband overstated his monthly expenses and that, despite numerous requests for his complete tax records, he delayed in providing this information until shortly before the hearing, we conclude that the district court did not abuse its discretion by awarding conduct-based attorney fees.
Husband asserts next that the district court abused its discretion by not indicating how much of the fee award was based on need and how much was conduct-based and that, therefore, the award should be reversed. Because the standards for awarding need-based and conduct-based fee awards are different, awards made under Minn. Stat. § 518.14, subd. 1, "must indicate to what extent the award was based on need or conduct or both." Geske, 624 N.W.2d at 816. Although the district court should have apportioned the award, we determine that its failure to do so was harmless error because after a review of the order and the record, we determine that the vast majority of the attorney-fee award is justified as conduct-based and that the remainder is justified because of wife's need. See Minn. R. Civ. P. 61 (requiring harmless error to be ignored).
Husband also argues that the district court's award was an abuse of discretion because wife's motion did not strictly comply with Minn. R. Gen. Pract. 119. Under rules 119.01 and 119.02, in an action in which attorney fees of $1,000 or more are sought, application must be made by motion and accompanied by an attorney affidavit describing each item of work performed, the time spent on each item of work, and the hourly rate for the work performed. The district court found that wife was entitled to attorney fees in the amount of $6,326.50, based on wife's affidavit that this was the amount that she owed her attorney for "this proceeding." There was no separate affidavit of her attorney. On this record, and given the district court's familiarity with the history of this case and its access to the parties' financial information, we determine that the district court did not abuse its discretion by waiving the requirements of Rule 119. See Gully v. Gully, 599 N.W.2d 814, 826 (Minn. 1999) (determining that when the "court is familiar with the history of the case and has access to the parties' financial information, it may waive the requirements of Rule 119").
III.
Respondent's counsel moves for an award of appellate attorney fees. The one-paragraph motion cites Minn. R. Civ. App. P. 139.06 and is supported by an affidavit and billing information from counsel. Rule 139.06 prescribes the procedure for seeking appellate fees, but it does not create a substantive basis for claiming attorney fees. Minn. R. Civ. App. P. 139.06 1998 advisory comm. cmt. Neither the motion nor the supporting materials cite Minn. Stat. § 518.14, on which the district court's award was based; identify specific conduct on appeal that would support an award of conduct-based fees; or contain competent evidence on the parties' current financial resources, to support a potential award of need-based fees. The motion is not supported by any memorandum or argument from which we might be able to understand the basis for counsel's assertion that appellate fees should be awarded. Further, the supporting documentation is not limited to fees incurred in defense of this appeal, and it includes no evidence on the usual and customary charges for appellate work by attorneys with experience comparable to that of respondent's counsel. See Minn. R. Civ. App. P. 139.06, subd. 1 (motions for fees "must include sufficient documentation to enable the appellate court to determine the appropriate amount of fees"), 1998 advisory comm. cmt. (addressing appropriate documentation). Because the submissions are inadequate and respondent has not established that she is entitled to appellate fees, we deny the motion.
Affirmed; motion denied.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
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