In re the Marriage of: Walter Frank Branz, petitioner, Respondent, vs. Marie Annette Blagsvedt Branz, Appellant.

In re the Marriage of: Walter Frank Branz, petitioner, Respondent, vs. Marie Annette Blagsvedt Branz, Appellant. A05-2222, Court of Appeals Unpublished, September 19, 2006.

This opinion will be unpublished and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

A05-2222

 

In re the Marriage of: Walter Frank Branz, petitioner,
Respondent,
 
vs.
 
Marie Annette Blagsvedt Branz,
Appellant.

 

Filed September 19, 2006

Affirmed in part, reversed in part, and remanded

Minge, Judge

 

Dakota County District Court

File No. F5-04-6740

 

 

John T. Burns, Jr., Burns Law Office, 200 American Bank Building, 14300 Nicollet Court, Burnsville, MN 55306 (for respondent)

 

Anne M. Honsa, Lisa M. Meier, Honsa & Michales, P.A., 5500 Wayzata Boulevard, Suite 1075, Minneapolis, MN 55416 (for appellant)

 

            Considered and decided by Lansing, Presiding Judge; Klaphake, Judge; and Minge, Judge.

U N P U B L I S H E D  O P I N I O N

MINGE, Judge

            Appellant challenges several portions of the judgment in this dissolution proceeding.  We reverse and remand on certain determinations regarding child support, maintenance, and property division.  Based on a representation that the parties have resolved their disputes regarding custody and parenting time, we do not consider those matters.  We affirm in all other respects.  

FACTS

            Appellant Marie Branz and respondent Walter Branz married in 1991.  The parties have two children, ages seven and ten.  A petition for dissolution was served in July 2003.  The parties reached an agreement on a number of custody and parenting-time issues and submitted all other issues to the district court in writing.  The district court adopted parts of the stipulation and omitted others.  Pursuant to the stipulation, the parties were awarded joint legal and physical custody of the children. 

            Based on a calculation of the percentage of time the children spent with each parent and an imputation of income to Marie, whom the district court found to be voluntarily unemployed, the district court ordered Walter to pay net child support in the amount of $694.56 per month.  The district court also ordered Walter to pay temporary spousal maintenance to Marie in the amount of $700 per month for three years.  Each party requested occupancy of the homestead, but the district court ordered it sold, with the proceeds used to pay marital debts and Walter's nonmarital interest.  The district court declined to award attorney fees to either party.   

            Marie moved the district court for amended findings of fact and conclusions of law or a new trial.  The district court denied Marie's motion.  This appeal follows. 

D E C I S I O N

I.          Custody and parenting time

            The first issue raised by appellant is whether the district court improperly failed to incorporate exactly into the parties' judgment and decree the terms of the parties' stipulation as to custody and parenting time.  Appellant stated at oral arguments that this issue was resolved by the March 8, 2006 order of the district court, implementing the recommendations of the parenting consultant.  We therefore do not reach this issue. 

II.         Child support

            The second issue is whether the district court improperly calculated Walter's child-support obligation.  The district court has broad discretion to provide for the support of the parties' children.  Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).  A district court abuses its discretion when it sets support in a manner that is against logic and the facts on the record or misapplies the law.  Id.; Ver Kuilen v. Ver Kuilen, 578 N.W.2d 790, 792 (Minn. App. 1998). 

            A.        Hortis/Valento calculation

            In a case involving joint physical custody, the presumptive child-support obligation for each parent is the parent's full guidelines support amount, multiplied by the percentage of time the other parent has physical custody of the child, and a single, net payment is derived by offsetting the obligations against each other.  Maschoff v. Leiding, 696 N.W.2d 834, 837 (Minn. App. 2005); Valento v. Valento, 385 N.W.2d 860, 862 (Minn. App. 1986), review denied (Minn. June 30, 1986); Hortis v. Hortis, 367 N.W.2d 633, 636 (Minn. App. 1985).  Marie challenges the district court's calculation of the percentage of time the children spend with each parent.   The finding of this percentage is a finding of fact, reviewed for clear error.  See Duffney v. Duffney, 625 N.W.2d 839, 843 (Minn. App. 2001). 

            Without explaining its calculation and apparently by adopting the percentages provided by Walter, the district court here found that the children spend 44% of their time with him and 56% of their time with Marie.  Under the parenting-time schedule, it appears that the children will be with Walter for not more than 30% of their time.[1]  Because we are unable to discern a mathematical basis for the district court's calculation of the parties' percentages of parenting time, we conclude that it is clearly erroneous, reverse the district court's determination of child support, and remand for a new calculation of the percentage of time each parent spends with the children.  We recognize that the parties' settlement of custody and parenting-time issues may affect the calculations.

            B.        Imputed income

            If the district court finds that a party "is voluntarily unemployed or underemployed . . . , support shall be calculated based on a determination of imputed income."  Minn. Stat. § 518.551, subd. 5b(d) (2004).  Marie challenges the district court's finding that she is voluntarily underemployed.  A district court abuses its discretion with respect to imputing income if it makes clearly erroneous findings.  Putz v. Putz, 645 N.W.2d 343, 353 (Minn. 2002). 

            Marie is currently unemployed.  She sustained soft tissue injuries to her neck and back in 1990 and received workers' compensation benefits in the early 1990s, but her benefits have since been discontinued and her claim remains pending.  Marie applied for Social Security disability benefits and was denied.  In 1994 and 1995, she worked part-time at a retail store, but quit when she became pregnant and had to reduce her intake of pain medications. 

            Marie submitted the opinions of her treating physician, an independent medical examiner, and a vocational consultant, all stating that she is unable to work.  A second vocational expert evaluated Marie and concluded that despite her injuries and pain, Marie could find part-time employment "either in retail sales or in her previous career as a receptionist or greeter."  The district court agreed, finding that Marie "is capable of working part-time, twenty hours per week with an hourly salary of $10.50."  The district court imputed a net monthly income to Marie of $644.56. 

            The parties presented conflicting expert testimony to the district court.  Evaluating this type of testimony is the role of the district court.  See State ex rel. Trimble v. Hedman, 291 Minn. 442, 456, 192 N.W.2d 432, 440 (1971); Griepp v. Griepp, 381 N.W.2d 865, 869 (Minn. App. 1986).  The evidence here does not so substantially contradict the district court's findings on Marie's ability to earn income as to make them clearly erroneous.  We conclude the district court did not clearly err in finding that Marie could earn $644.56 per month.

            C.        Life insurance

            The district court can require a parent to maintain life insurance as security for child support.  Emerick ex rel. Howley v. Sanchez, 547 N.W.2d 109, 112 (Minn. App. 1996).  Marie argues that the district court improperly refused her request to order life insurance.  Whether to order a parent to maintain life insurance is discretionary with the district court.  See Riley v. Riley, 369 N.W.2d 40, 44 (Minn. App. 1985), review denied (Minn. Aug. 29, 1985).  The district court found that Marie is capable of some employment and that she did not establish that the age of her children compels an order for life insurance.  Based on the record, we conclude that the district court's decision not to require Walter to maintain life insurance was not an abuse of discretion. 

III.       Maintenance

            The third issue is whether the district court abused its discretion in setting spousal maintenance.  Appellate courts review a district court's maintenance award for abuse of discretion.  Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997).  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.  Id. at 202 & n.3. 

            The district court is to consider the factors described in Minn. Stat. § 518.552, subd. 2 (2004), in determining the amount and duration of maintenance.  The district court essentially balances the recipient's needs against the obligor's ability to pay.  Prahl v. Prahl, 627 N.W.2d 698, 702 (Minn. App. 2001). 

            A.        Self-supporting

            "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."  Minn. Stat. § 518.552, subd. 3 (2004).  An award of temporary maintenance is warranted only if the district court believes the recipient can become self-supporting.  See Nardini v. Nardini, 414 N.W.2d 184, 198 (Minn. 1987).  Marie argues that temporary maintenance was improper and that permanent maintenance was warranted. 

            The district court did not make any findings on Marie's ability to eventually become self-supporting, and in fact stated that "[w]ith income from a part time job and child support, [Marie] will not have the ability to meet needs independently."  The vocational expert's report stated that Marie "could start part-time and as she was capable increase her hours," but this statement does not indicate that Marie will eventually become self-supporting.  The district court's failure to award permanent maintenance was therefore an abuse of discretion.  We reverse and remand for an award of permanent maintenance.  In setting such maintenance, we note that we are reversing the district court's determination of certain expenses and we recognize that our decision on those matters may affect the level of permanent maintenance.

            B.        Expenses

            Marie also challenges the district court's calculations of the parties' reasonable expenses.  The district court found that Walter has a net monthly income of $4,488.72 and reasonable monthly expenses of $3,081 and that Marie has an imputed monthly income of $644.56 and reasonable monthly expenses of $2,585.  The district court did not explain its calculation of the parties' monthly expenses, but apparently adopted Walter's submissions.   

                        1.  Medical Expenses

            Marie argues that her budget should have included medical expenses, such as insurance, unreimbursed medical expenses, therapy costs, and eye care, totaling $716.02 per month.  These types of expenses were not considered for either party.  Although Marie will have to pay for insurance and expenses out of income, Walter receives insurance coverage for the medical expenses through his employer.  Neither his contribution nor his employer's contribution is treated as income.  To the extent this provides him with full coverage, there is a disparity in the parties' budget comparison.  This disparity is clearly erroneous. 

                        2.  Mortgage

            Marie also argues that Walter's expenses should not include $500 per month for refinancing the mortgage on the homestead because that $500 was included as an "expected cost" of refinancing only if the district court accepted Walter's proposal that he refinance the mortgage in order to buy out Marie's interest in the home.  The district court instead ordered that the parties sell their home.  Thus, the $500 per month expense does not exist under the decree.   The district court's inclusion of this expense in Walter's budget was clearly erroneous. 

                        3.  Debt

            Marie argues that Walter's reasonable expenses should not include $300 for debt repayment because the district court ordered that all of the parties' marital debts be paid out of the proceeds of the sale of the homestead.  This $300 expense was also included in Marie's budget.  To the extent that this expense relates to marital debts that have been paid, the district court clearly erred in including it in the parties' reasonable monthly expenses.  Because both parties have the same expense, the error may be offsetting and harmless.  However on remand, corrections are being made in the budget and unless this is an actual expense, it should be deleted.[2] 

            C.        Life insurance             

            Finally, Marie argues that Walter should be required to secure his maintenance obligation with life insurance.  In its discretion, the district court can decide whether circumstances justify securing an award of maintenance with life insurance.  Laumann v. Laumann, 400 N.W.2d 355, 360 (Minn. App. 1987), review denied (Minn. Nov. 24, 1987).  Relevant factors include the duration of the marriage, the recipient's age, the level of the recipient's marketable skills, and an award of permanent maintenance.  Walker v. Walker, 553 N.W.2d 90, 96 (Minn. App. 1996).  These factors do not require that Walter maintain life insurance to secure his maintenance obligation.  Although the district court did not abuse its discretion in denying such insurance in connection with temporary maintenance, on remand the district court is directed to consider it in connection with permanent maintenance. 

IV.       Property distribution

            The fourth issue is whether the district court abused its discretion in its division of the marital assets and debts.  The district court has broad discretion over the division of marital property, and this court does not alter the district court's property division absent an abuse of discretion or an erroneous application of the law.  Sirek v. Sirek, 693 N.W.2d 896, 898 (Minn. App. 2005).    

            A.        Nonmarital interest in the homestead

            Marie argues that the district court improperly awarded Walter a $20,000 nonmarital interest in the homestead. 

Whether property is marital or nonmarital is a question of law, but a reviewing court must defer to the trial court's underlying findings of fact.  However, if we are left with the definite and firm conviction that a mistake has been made, we may find the trial court's decision to be clearly erroneous, notwithstanding the existence of evidence to support such findings. 

 

Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997) (quotation and citation omitted). 

            Property acquired during the marriage is presumptively marital; a party seeking to overcome that presumption must demonstrate by a preponderance of the evidence that the property is nonmarital.  Pfleiderer v. Pfleiderer, 591 N.W.2d 729, 732 (Minn. App. 1999).  Property acquired as an inheritance from a third party to one spouse but not to the other is nonmarital property.  Minn. Stat. § 518.54, subd. 5(a) (2004).  "For property to retain its nonmarital character, it must be kept separate from marital property or be readily traceable to an identifiable nonmarital asset."  Robert v. Zygmunt, 652 N.W.2d 537, 541 (Minn. App. 2002), review denied (Minn. Dec. 30, 2002). 

            Walter claimed that he used nonmarital property in the form of a $20,000 inheritance from his parents as part of the down payment for the parties' homestead.  The district court found that the $20,000 was an inheritance and therefore nonmarital property, found that the $20,000 had appreciated to a $36,180 nonmarital interest in the proceeds of the sale of the homestead, found a certain offsetting nonmarital interest in favor of Marie, netted the two nonmarital interests, and ordered that Walter be repaid that net nonmarital interest after the homestead is sold and the parties' marital debts are paid.  Marie concedes there was a $20,000 deposit into the parties' bank account on April 3, 1992, but claims that the source of the deposit is treasury bonds.  But because Marie does not provide evidence of the source of this deposit, the district court could have reasonably determined that the deposit was Walter's inheritance from his parents.  See Doering v. Doering, 385 N.W.2d 387, 391 (Minn. App. 1986) (referring to district court's ability to judge credibility and affirming finding that nonmarital interest in assets was traced based on witness testimony).  The district court therefore did not err in awarding Walter the net $20,000 nonmarital interest. 

            B.        Occupation of the homestead

            A district court, "having due regard to all the circumstances and the custody of children of the parties," may award the right to occupancy of the homestead to either party.  Minn. Stat. § 518.63 (2004).  Marie argues that the district court should have awarded her the right to occupy the homestead, noting that it would be difficult for her to obtain a new mortgage given her lack of employment and that it would be better for the children to remain in their home. 

            Marie provides no authority to suggest that the district court should not have ordered the homestead to be sold.  In its order denying Marie's motion for amended findings or a new trial, the district court explained its reasoning:

Unfortunately, neither party has the financial resources to remain in the home.  In addition, the divorce has been unusually acrimonious, with severe adverse effects on the emotional well-being of the children.  [Marie]'s emphasis on the home, while understandable, continues to escalate the anxiety of the children. . . .  [O]ne would hope that the children "would eventually adapt to moving" and that the resolution of this issue would ultimately be in the best interest of the children.

 

            We conclude that because the district court considered both the financial circumstances of the parties and the effect of the sale on the children, the district court's decision not to award Marie the right to occupy the homestead was not an abuse of discretion. 

            C.        Expert fees

            Marie argues that the district court improperly included Walter's expert fees as a marital debt to be paid out of the proceeds of the sale of the homestead.  In general, attorney fees incurred during a dissolution are not considered a marital debt.  Bone v. Bone, 438 N.W.2d 448, 452 (Minn. App. 1989); Filkins v. Filkins, 347 N.W.2d 526, 529 (Minn. App. 1984).  We find this rule also applicable to expert fees incurred in a dissolution.

            Walter requested that the district court consider the $3,000 that he incurred for Marie's independent medical examination with Dr. Callaghan to be a marital debt.  Marie requested that Walter assist her in paying the $5,019 fee for her witness, Dr. Chiasson.  The district court included the debt for Dr. Callaghan, but not Dr. Chiasson, in the parties' marital debts to be paid out of the proceeds of the sale of the homestead.  Because the district court provided no explanation of its characterization of Walter's expert fee as a marital debt, but not Marie's expert fee, we find this aspect of the property division to be an abuse of discretion and remand on this issue.    

            D.        Omitted assets

            Marie argues that the district court failed to address several checking and savings accounts (three savings accounts, valued at $125.49, $379.77, and $913.91, and two checking accounts, one valued at $280.99 and another, the value of which "varies").  Although these accounts are not large, as long as there are other matters that require a remand, we conclude that it was error not to address these accounts and direct that the district court consider and allocate them on remand. 

            Marie also argues that the district court did not properly value several of Walter's retirement plans.  The district court ordered that the parties each receive 50% of two retirement accounts: "NWA Pension Plan Cash Balance (Walter)," valued at $103,152.99 on February 22, 2005, and "NWA RSP Investment Fund (Walter)," valued at $118,982.66 on February 22, 2005.  It appears that these values are as of September 23, 2004, which Walter asserted was the appropriate valuation date because it was the first scheduled pretrial date.  Marie agrees with the district court that the proper valuation date is February 22, 2005, and asserts that as of that date the value was $108,144.06 for the pension plan and a total of $131,838.04 for the other plans ($107,398.62 RSP Investment Fund, $23,239.42 ESP Investment Fund, $0 ESP Preferred Stock, and $1,200 ESP Common Stock).  Thus, the district court seems to have considered all of the assets, but adopted one party's valuation date and the other party's valuation.  We remand for correction of this inconsistency. 

V.        Attorney fees

            The fifth issue is whether the district court abused its discretion in refusing to award Marie conduct-based attorney fees.  An award of attorney fees under Minn. Stat. § 518.14, subd. 1 (2004), "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). 

            Marie argues that she is entitled to attorney fees because Walter unreasonably contributed to the length and expense of the proceeding by requesting clarification from the district court on vacation and holiday time and by disputing some of Marie's discovery requests.  See Minn. Stat. § 518.14, subd. 1 (permitting a district court to award attorney fees "against a party who unreasonably contributes to the length or expense of the proceeding").  Walter describes a number of ways in which he believes Marie's conduct in the proceedings was unreasonable.  Based on the disputes in this record, we conclude that the district court did not abuse its discretion in declining to award Marie conduct-based attorney fees. 

CONCLUSION

            We acknowledge that in crafting a judgment and decree, the district court may have balanced a number of details in order to make the overall result comport with the district court's view of fairness.  On remand, we have identified certain matters that need correction.  On remand, the district court has the discretion to reopen the record and to adjust other matters as it determines necessary to achieve a fair and just result. 

            Affirmed in part, reversed in part, and remanded.

[1] This court considered the schedule for time as resulting in 67 hours with Walter every two weeks during the school year, 116.5 hours every two weeks in the summer, two full weeks of his vacation, and half of the children's other vacation.

[2] Marie also contends that the district court improperly imputed income to her in making its maintenance award.  Income can be imputed to a maintenance recipient who is underemployed in bad faith.  Carrick v. Carrick, 560 N.W.2d 407, 410 (Minn. App. 1997).  We find no error here because the district court did not impute income to Marie for purposes of maintenance, but only noted the parties' inability to meet expenses even if Marie is employed.