In re the Marriage of:  LeAnn Marie Murra, petitioner, Appellant, vs. Wayne Arnold Murra, Respondent.

In re the Marriage of:  LeAnn Marie Murra, petitioner, Appellant, vs. Wayne Arnold Murra, Respondent. A05-2547, Court of Appeals Unpublished, September 26, 2006.

This opinion will be unpublished and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

A05-2547

 

In re the Marriage of:  LeAnn Marie Murra,
petitioner,
Appellant,
 
vs.
 
Wayne Arnold Murra,
Respondent.

 

Filed September 26, 2006

Affirmed in part and reversed and remanded in part

Peterson, Judge

 

Blue Earth County District Court

File No. FA-04-1765

 

James J. Vedder, Edward L. Winer, Moss & Barnett, 4800 Wells Fargo Center, 90 South Seventh Street, Minneapolis, MN  55402-4129 (for appellant)

 

Michael H. Kennedy, Kennedy & Kennedy, 99 Navaho Avenue, Suite 104, P.O. Box 3223, Mankato, MN  56002-3223 (for respondent)

 

            Considered and decided by Randall, Presiding Judge; Kalitowski, Judge; and Peterson, Judge.

U N P U B L I S H E D   O P I N I O N

PETERSON, Judge

            In this appeal from an amended marital-dissolution judgment, appellant-wife challenges a permanent-spousal-maintenance award, arguing that the district court (1) erred by imputing employment income to her; (2) understated her reasonable monthly expenses by not considering the marital standard of living; and (3) overstated her investment income.  We affirm the district court's determinations regarding reasonable monthly expenses and investment income.  But because we conclude that the district court abused its discretion by imputing employment income to appellant, we reverse the maintenance award and remand for reconsideration.

FACTS

The parties' 24-year marriage was dissolved by a judgment and decree on August 11, 2005.  At the time of dissolution, appellant-wife LeAnn Marie Murra was 50 years old, and respondent-husband Wayne Arnold Murra was 51 years old.  One of the parties' three children was still a minor at the time of the dissolution.  The judgment incorporated the parties' agreements regarding child custody, child support, parenting time, and the division of property.  The district court decided the remaining issue of spousal maintenance.  

            At the time of the dissolution, husband was a regional sales manager for Wells Fargo Home Mortgage.  His gross annual minimum income was $71,482.08, and he received additional compensation in the form of monthly commissions and annual bonuses, which fluctuated because they were based on mortgage production.  Husband's average gross annual income from 1999 through 2004 was $513,000, with a low of $180,500 and a high of $708,600.  During the marriage, wife was a homemaker.  She cared for the children and took care of the parties' home, cabin, and rental property.  The district court found that wife was capable of working full time as a receptionist and imputed income of $20,000 per year to her.

            The family owned a lake cabin for 11 years.  Approximately five years before the divorce, the parties purchased a new lake cabin for $325,000.  At the time of the dissolution, the cabin was worth approximately $1.3 million.  The parties also owned the marital homestead, another home that wife lived in at the time of the divorce, and a duplex that they rented to tenants.  The district court ordered the sale of the lake cabin and the duplex, with the proceeds to be divided evenly between the parties.  The marital homestead was awarded to husband, and the other home was awarded to wife, both subject to the existing encumbrances.  The property awards were then equalized through awards of investment accounts and the cash values of life-insurance policies.  Each party received approximately $1.1 million in real-estate equity, investment accounts, and cash.  In addition, each party received approximately $750,000 in retirement accounts.  The district court found that wife has the ability to generate up to $70,000 per year in investment income from her property distribution. 

            The district court concluded that wife's $70,000 per year in investment income and employment income of $20,000 per year would give her a monthly net income of approximately $5,000.  The district court found wife's reasonable monthly expenses to be $7,880, and ordered husband to pay wife $4,300 per month in permanent spousal maintenance to meet her reasonable needs. [1] This appeal followed.

 

D E C I S I O N

            The determination of spousal maintenance is within the district court's broad discretion.  Stich v. Stich, 435 N.W.2d 52, 53 (Minn. 1989).  An appellate court evaluates the district court's decision on maintenance under an abuse-of-discretion standard.  Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997); Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982).  The district court will not be determined to have abused its discretion with respect to an award of maintenance unless the court's resolution of the issue is "against logic and the facts on record."  Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).  "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).  An appellate court defers to the district court's credibility determinations.  Vangsness v. Vangsness, 607 N.W.2d 468, 472 (Minn. App. 2000).

            The district court may award maintenance in a marital dissolution proceeding if it finds that the spouse seeking maintenance lacks sufficient property to provide for the spouse's reasonable needs or is unable to provide adequate self-support through appropriate employment.  Minn. Stat. § 518.552, subd. 1 (2004). The court is to consider all relevant circumstances, including the standard of living established during the marriage, in determining whether a spouse is able to provide adequate self-support.  Id., subd. 1(b).  The Minnesota Supreme Court has recognized that there is a "burden of proof contemplated by the spousal maintenance statute" and that "[i]mplicit in Minn. Stat. § 518.552 is that the spouse seeking maintenance demonstrate the need therefor."  Dobrin, 569 N.W.2d at 202.

 

            Imputed Income

            Wife argues that the district court abused its discretion by imputing employment income to her.  In order to impute employment income to a party for the purpose of determining whether maintenance is needed, the court must find that the party is voluntarily underemployed in bad faith.  Maurer v. Maurer, 607 N.W.2d 176, 180 (Minn. App. 2000) (citing Carrick v. Carrick, 560 N.W.2d 407, 410 (Minn. App. 1997)), rev'd on other grounds, 623 N.W.2d 604 (Minn. 2001).

As a matter of law, however, a court may not find bad faith underemployment where . . . a homemaker has continued to work the same part-time hours at the time of dissolution as she did during the marriage, has been employed in the same type of position as she was during the marriage, and where there is no evidence of any intent to reduce income for the purposes of obtaining maintenance.

 

Carrick, 560 N.W.2d at 410.

            In Carrick, this court explained:

            There is no authority for finding bad faith underemployment at the time of an initial award of maintenance merely because a potential obligee has not yet rehabilitated when the record indicates the obligee has continued in the same employment and there is no evidence of an intent to reduce income for the purposes of obtaining maintenance.

 

Id. at 410-11.  This court held in Carrick that the district court erred in finding that the obligee spouse limited her income in bad faith when there was no evidence that the obligee intentionally stayed in her part-time employment position or that she changed to a lower-paying position in order to collect more spousal maintenance.  Id. at 411. 

            Here, the district court did not find that wife was underemployed in bad faith; the court found that wife has "the ability to successfully engage in such education or training as would be needed to gain the experience necessary to become gainfully employed.  And if so gainfully employed, she has the ability to generate up to $20,000 per year of income."  But without allowing any time for wife to engage in education or training that would enable her to become gainfully employed, the district court imputed to her $20,000 of earned income per year.   

            There is no evidence that wife intentionally reduced her income for the purpose of obtaining maintenance.  Wife will no longer earn income by managing the parties' duplex; but that is because the dissolution judgment orders that the duplex be sold.  Under these circumstances, we conclude that the district court abused its discretion by imputing employment income to wife without allowing any time for her to become gainfully employed.  Therefore, we reverse the maintenance award and remand for reconsideration.  On remand, the district court may, at its discretion, open the record to receive additional evidence and argument.

            Reasonable Monthly Expenses

            Wife argues that the district court abused its discretion and erred as a matter of law when it did not include in her reasonable monthly expenses (a) the cost of acquiring and maintaining a lake cabin; (b) $700 per month as a replacement reserve for buying a car; and (c) a monthly amount for savings.  Wife contends that in not treating these expenses as reasonable, the district court failed to consider the parties' marital standard of living.

            But in its findings, the district court explicitly acknowledged that the parties "led an upper middle class life style."  "The purpose of a maintenance award is to allow the recipient and the obligor to have a standard of living that approximates the marital standard of living, as closely as is equitable under the circumstances."  Peterka v. Peterka, 675 N.W.2d 353, 358 (Minn. App. 2004).  This does not mean, however, that a maintenance recipient's reasonable monthly expenses must include every expense that the parties incurred while married.  The district court explained why it did not include the expenses of owning a cabin in wife's reasonable monthly expenses even though the parties had owned a cabin for several years:

            I have not allocated any funds towards [wife's] request for expenses to maintain a cabin.  It is true that [wife] has been associated with a cabin on a lake for many years.  Nonetheless, I explicitly deem it unreasonable to designate funds for it.  It is not appropriate to assign money to what may be no more than a wish list item.  [Wife] wants a cabin on Lake Minnetonka, a goal that is excessive and certainly not an expenditure that would fall into any definition of reasonable under her circumstances.  [Wife] claims to want a cabin "for the children."  It needs to be noted that although she possessed the cabin owned by the parties this past year, she emotionally acknowledged that the children did not visit her much.  I will not designate funds that must be paid by [husband] that are intended to be expended by [wife] on behalf of their adult children.  In so many words, such expenditure would amount to child support by another name. 

 

            The district court's explanation indicates that wife did not request funds to maintain a cabin in order to meet her monthly needs; she wanted a cabin for the parties' children.  Under these circumstances, we conclude that the district court did not abuse its broad discretion when it did not include the cost of acquiring and maintaining a cabin in wife's reasonable monthly expenses.

             The district court included in wife's reasonable monthly expenses $283 for transportation.  Wife also received as part of the property distribution a 2005 Honda Pilot.  The district court deleted entirely the $700 per month that wife requested for a replacement reserve to be used to purchase a car at some time in the future.  Wife does not claim that she is currently making any car payments.  Under these circumstances, the district court did not abuse its broad discretion by not including in wife's reasonable monthly expenses an amount for purchasing an unidentified car at some time in the future.  See Toughill v. Toughill, 609 N.W.2d 634, 641 (Minn. App. 2000) (concluding that district court did not abuse it broad discretion when it did not consider anticipated expenses because it had no evidence about what those expenses would be in the future).

            The district court also deleted from wife's claimed reasonable monthly expenses an amount for savings and explained that it did so because "[wife] will receive a significant amount of cash out of the marital estate."  In the property distribution, wife received approximately $1.1 million in real-estate equity, investment accounts, and cash and approximately $750,000 in retirement accounts.  Under these circumstances, the district court did not abuse its broad discretion by not including in wife's reasonable monthly expenses an amount for additional saving.

            Finally, wife argues that the district court erred when it imputed investment income to her based on the assumption that wife will invest the proceeds from the sale of the parties' lake cabin.  Wife contends that if the maintenance award does not include an amount for the cost of acquiring and maintaining a lake cabin, she will need to use part of her property award to purchase a lake cabin, and, therefore, those funds will not be available to earn investment income.  Wife is correct that if she uses her share of the proceeds from the sale of the parties' cabin to purchase another cabin, those funds will not be available to invest, and her investment income will be less than the district court found.  But that is true of all of the assets that wife received in the property award; if they are not invested, wife will not receive investment income.  When determining the amount of maintenance, the district court was required to consider "the financial resources of the party seeking maintenance, including marital property apportioned to the party."  Minn. Stat. § 518.552, subd. 2(a) (2004).  Wife's financial resources include one half of the proceeds from the sale of the cabin, and these proceeds can be invested.  Wife does not claim that the district court erred in determining the amount that wife can earn by investing the proceeds; her argument is simply another way of arguing that the district court abused its discretion by not including in her reasonable monthly expenses the cost of acquiring and maintaining another cabin.  Because we have already concluded that the district court did not abuse its discretion by not including those expenses in wife's reasonable monthly expenses, we also conclude that the district court did not err in imputing investment income to wife based on the assumption that wife will invest the proceeds from the sale of the parties' cabin. 

            Affirmed in part and reversed and remanded in part.

[1] The shortfall between wife's monthly net income and expenses was $2,880.  The court ordered husband to pay $4,300 in monthly maintenance to cover the $2,880 shortfall because any maintenance that wife receives is subject to income tax.