In re the Marriage of: Jan Thompson Humphrey, petitioner, Appellant, vs. Douglas Sannes Humphrey, Respondent.

In re the Marriage of: Jan Thompson Humphrey, petitioner, Appellant, vs. Douglas Sannes Humphrey, Respondent. A06-934, Court of Appeals Unpublished, June 12, 2007.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2006).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-934

 

In re the Marriage of: Jan Thompson Humphrey, petitioner,
Appellant,
 
vs.
 
Douglas Sannes Humphrey,
Respondent.

 

Filed June 12, 2007

Affirmed

Minge, Judge

 

Hennepin County District Court

File No. 27FA-292898

 

 

Richard D. Goff, Mary E. Schweertman Cincotta, Richard D. Goff & Associates, 3908 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for appellant)

 

A. Larry Katz, Susan A. Daudelin, Katz, Manka, Teplinsky, Due & Sobol, Ltd., 225 South Sixth Street, Suite 4150, Minneapolis, MN 55402 (for respondent)

 

            Considered and decided by Minge, Presiding Judge; Wright, Judge; and Harten, Judge.*

U N P U B L I S H E D  O P I N I O N

 

MINGE, Judge

            Appellant-wife challenges the district court's calculation of respondent-husband's monthly income for spousal maintenance purposes, its award of spousal maintenance, and its division of the parties' property.  We affirm. 

FACTS

 

            Appellant Jan Humphrey and respondent Douglas Humphrey married in 1969.  They had two children during their marriage.  Both children are now adults.  The parties maintained separate financial accounts and "enjoyed a very comfortable standard of living during their marriage."  Although appellant was primarily a homemaker during the parties' marriage, she worked at the beginning and end of the marriage.  From 1970 until 1972, appellant was a legal secretary.  And after the parties' first child was born in 1973, appellant was a full-time homemaker.  Starting in 1993, appellant held various positions.  In September 2002, appellant began working as a part-time personal shopper at a department store.  In 2004, appellant earned $25,467 working approximately 24 hours each week. 

            Appellant's father died when she was a child.  Prior to his death, he established a trust and named appellant as the beneficiary.  Appellant received $500 per month between the ages of 21 and 25 and the remainder of more than $500,000 when she turned 25.  Appellant also inherited approximately $200,000 from her mother's estate during the marriage.  Appellant's entire inheritance, from both of her parents, has been spent, except for $27,000 that remains in an account in appellant's name, and approximately $30,000 in an account for the parties' children. 

            Appellant used a portion of her inheritance to purchase the parties' homes.  The parties purchased their first home using only funds from appellant's trust fund.  The down payment for the parties' second home was also funded by appellant's trust fund.  The parties made significant improvements to the five homes they lived in during their marriage, using both marital funds and the proceeds from sales of their previous homes to fund the improvements.  The district court found that respondent repaid appellant for her non-marital contributions to their homes and that appellant used proceeds from the sales of the homes to satisfy her personal debts. 

            Respondent has been self-employed as an independent manufacturing sales representative since 1970.  In this position, respondent sells products used in residential construction, including kitchen cabinets.  In 2004, respondent's Schedule C shows that his business income was $169,685.  In the five years prior to trial, respondent earned an average business income of approximately $125,000.  The district court found that respondent has approximately $7,000 "available to him" each month.  Respondent also receives an income of approximately $8,000 per year from certain non-marital property. 

            After a two-day trial, the district court awarded appellant permanent spousal maintenance of $3,500 per month.  In addition to various other divisions, the parties were each awarded a one-half interest in the equity of the homestead: $165,701 ($82,850.50 each). 

            Appellant moved for amended findings, or, in the alternative, a new trial.  Appellant requested that the district court: (a) find that respondent's net income totals $9,127 per month; (b) find that appellant is entitled to a permanent maintenance award of $5,450 per month; and (c) award appellant the homestead property.  The district court denied appellant's motion, noting:

The Court . . . understood that the lifestyle of the parties, as viewed by [appellant], was based upon her expansive use of her inheritance to provide herself, as well as the family, with a standard of living that was beyond [r]espondent's means to provide.  Therefore, it would not be equitable or reasonable to require [r]espondent to now provide [appellant] with that standard of living. . . .  The decisions made were not a judgment of [appellant]'s choices, but a reflection of the reality of the situation.  Establishing [r]espondent's current income was based upon expert testimony and recognition of a self-employed individual's fluctuating income.

 

But because the parties agreed that the district court's initial order had misstated appellant's net income, the district court issued an amended judgment to correct the error.  This appeal follows. 

D E C I S I O N

I.

            The first issue is whether the district court clearly erred in its calculation of respondent's income for spousal maintenance purposes.  We review a district court's maintenance award under an abuse-of-discretion standard.  Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997).  A district court abuses its discretion in awarding maintenance if its findings of fact are unsupported by the record or if it improperly applies the law.  Id.  "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); see Minn. R. Civ. P. 52.01. 

            Appellant contends that there are no findings that support averaging respondent's income.  Averaging income may be appropriate when an obligor's income fluctuates.  See Veit v. Veit, 413 N.W.2d 601, 606 (Minn. App. 1987) (approving the averaging of a child-support obligor's income over a 42-month period due to income fluctuations in the obligor's real-estate business).  In such cases, averaging "takes into account fluctuations and more accurately measures income."  Id.  But averaging is inappropriate if it is clear that an obligor's income increases each year.  Sefkow v. Sefkow, 372 N.W.2d 37, 47-48 (Minn. App. 1985), remanded on other grounds, 374 N.W.2d 733 (Minn. 1985). 

            Respondent's business income between 2000 and 2004 was as follows: $110,212 in 2000; $106,211 in 2001; $101,232 in 2002; $139,568 in 2003; and $169,685 in 2004.  Respondent's average income over this five-year period was $125,381.60.  And the district court found that respondent "expects his 200[5] income to be equal to or greater than 2004."  The record indicates that respondent's income fluctuates.  Respondent testified that this is because his business is selling products used in home construction and the housing market fluctuates. 

            In its order, the district court does not clearly state that it averaged respondent's income.  Rather, the district court made the following findings of fact:

In the [temporary] Order . . ., [r]espondent's average net monthly income was determined for purposes of establishing temporary support. . . .  [H]is net monthly income was found to be approximately $7,000.  This figure also did not take into account any tax consequences from land ownership or other factors. 

 

In its temporary order, from December 2004, the district court found that "[a]fter allocating 38% of [r]espondent's pre-tax income of $139,500 for taxes, he has an average net monthly income in excess of $7,000." 

Appellant contends that the district court erred by ignoring trial exhibit eight, a calculation of the parties' financial situation.  Appellant argues that this exhibit shows that respondent's net monthly income is actually $9,126.75.  Although the district court does not explain its failure to use this figure, the district court's order denying appellant's posttrial motions states that its calculation of "[r]espondent's current income was based upon expert testimony and recognition of a self-employed individual's fluctuating income." 

We conclude that the evidence, including the parties' tax returns and the record of earlier proceedings, indicates that the district court averaged respondent's income which explains its finding that respondent has approximately $7,000 in disposable income each month.  Although respondent's income increased substantially in 2004 and 2005, his Schedule C earnings history demonstrates that his income has not always been as high.  Given respondent's work in the housing market and the testimony about the housing market's fluctuation, the district court's decision to average his income was not an abuse of discretion.  We conclude that the district court's finding of respondent's income for spousal-maintenance purposes is not clearly erroneous.   

II.

            The next issue is whether the district court abused its discretion by failing to provide appellant with a sufficient amount of spousal maintenance to meet her reasonable needs.  Appellant contends that a proper balancing of her needs against respondent's ability to pay warrants a permanent spousal-maintenance award of $4,875 per month. 

            "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).  When setting maintenance, the district court is to consider: (1) "the financial resources of the party seeking maintenance" and his or her ability "to meet needs independently"; (2) the probability of that party "becoming fully or partially self-supporting"; (3) the marital standard of living; (4) the length of the marriage and the extent to which the party's skills "have become outmoded and earning capacity has become permanently diminished"; (5) whether the party lost earnings or employment opportunities; (6) the age and physical and emotional condition of the party seeking maintenance; (7) the ability of the party from whom maintenance is sought to meet his or her own needs while also meeting the needs of the party seeking maintenance; and (8) the parties' contributions to "the acquisition, preservation, depreciation, or appreciation in the amount or value of the marital property" and a spouse's contributions as a homemaker.  Minn. Stat. § 518.552, subd. 2 (2006).  No single factor is dispositive.  Elwell v. Elwell, 372 N.W.2d 67, 69 (Minn. App. 1985).  The district court's role is to balance the recipient's need against the obligor's ability to pay.  Prahl v. Prahl, 627 N.W.2d 698, 702 (Minn. App. 2001). 

            The district court found that appellant's average net monthly income is $1,817.  At trial, appellant claimed that her monthly living expenses total $8,216.  But the district court found that appellant's reasonable budget is $5,480 per month.  After subtracting appellant's net monthly income from her reasonable budget, a shortfall of $3,663 results. 

            The district court found that

[b]ased upon [appellant]'s age, earnings history, the lifestyle she would have led if she had not used her substantial inheritance to enhance her own lifestyle, the length of the marriage, and all of the other factors regarding spousal maintenance, [appellant] cannot meet her reasonable monthly expenses from her own income and she is not likely to increase her income substantially during the remainder of her employable years.  [Appellant] requires permanent spousal maintenance. 

 

            The district court also considered the previously cited factors listed in Minn. Stat. § 518.552, subd. 2.  The district court found that appellant's only resources are her income and the remaining portion of her inheritance, $27,000.  Citing appellant's age, the district court found that "it is not reasonable to expect [her] to obtain further education or training" and that "[i]t is unlikely that . . . [appellant] could expect to find employment that would meet her reasonable expenses."  The district court recognized that appellant and respondent had "enjoyed a very comfortable standard of living during their marriage."  The parties traveled extensively, sent their children to private schools, and entertained frequently.  The district court found that these activities were "funded by [the parties'] respective nonmarital inheritance[s]." 

            The district court also noted that the parties were married for 36 years.  And although appellant was certified as a legal secretary, the district court found that appellant's "office skills are outmoded, and her recent sales experience will not allow her to earn the same level of income as she may have been able to obtain had she been working outside the home during the entire marriage."  The district court also found "that [appellant] elected unemployment in favor of using her substantial inheritance to create a lifestyle for herself that was greater than what could have been provided" by respondent's income.  The district court credited appellant with "intelligent home buying," noting that her skill "netted the parties increasing proceeds."  The district court further found that these proceeds, in part, "were used to pay substantial credit card debts." 

            Although respondent suffered a stroke in 1999, there was no evidence that he was unable to work.  The district court found that respondent would have $2,730 remaining each month after meeting his own expenses.  This amount does not include income from his non-marital assets. 

            Finally, the district court found that appellant "contributed significant nonmarital funds to the acquisition of the parties' various homes," but observed that these amounts were repaid, with interest.  The district court credited appellant's role as a homemaker, which allowed respondent to travel for his job, "result[ing] in increased earnings for the family."  Ultimately, based on the statutory factors, the district court found that appellant is entitled to permanent spousal maintenance of $3,500 per month.  The district court credited the parties' lifestyle to appellant's "expansive use of her inheritance to provide    . . . a standard of living that was beyond [r]espondent's means to provide."  The district court also reasoned that "it would not be equitable or reasonable to require [r]espondent to now provide [appellant] with that standard of living."

            The district court properly considered all of the relevant factors, determined maintenance, and appropriately balanced appellant's needs against respondent's ability to pay.  We conclude that the district court did not abuse its discretion by awarding appellant permanent spousal maintenance of $3,500 per month. 

III.

            The final issue is whether the district court's property division constitutes an abuse of discretion.  "District courts have broad discretion over the division of marital property and appellate courts will not alter a district court's property division absent a clear abuse of discretion or an erroneous application of the law."  Sirek v. Sirek, 693 N.W.2d 896, 898 (Minn. App. 2005).  A district court abuses its discretion regarding a property division if its conclusions are "against logic and the facts on [the] record."  Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).  Appellate courts "will affirm the [district] court's division of property if it had an acceptable basis in fact and principle even though [the appellate court] might have taken a different approach."  Antone v. Antone, 645 N.W.2d 96, 100 (Minn. 2002). 

            In a dissolution proceeding, the district court must "make a just and equitable division of the marital property of the parties."  Minn. Stat. § 518.58, subd. 1 (2006).  The district court must make findings on a number of factors to support its division of property, including "the length of the marriage, any prior marriage of a party, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, needs, opportunity for future acquisition of capital assets, and income of each party."  Id.  The district court must also "consider the contribution of each in the acquisition, preservation, depreciation or appreciation in the amount or value of the marital property, as well as the contribution of a spouse as homemaker."  Id. 

            An equitable division is the overriding statutory requirement.  Oberle v. Oberle, 355 N.W.2d 210, 212 (Minn. App. 1984).  An equitable division is not necessarily an equal division.  Olness v. Olness, 364 N.W.2d 912, 915 (Minn. App. 1985).  But upon the dissolution of a long-term marriage, an equal distribution is presumptively equitable.  See Miller v. Miller, 352 N.W.2d 738, 742 (Minn. 1984). 

            The district court awarded appellant a one-half interest in the parties' homestead property, the parties' life insurance policies, and a certificate of deposit, in addition to her retirement account and a $14,397 cash equalizer.  The district court found that although appellant had made nonmarital contributions that allowed the parties to purchase various homes throughout their marriage, she was repaid.  The district court also found that the proceeds from the parties' home sales were used, in part, to pay off appellant's personal debt, and that she had failed to meet her burden to claim a nonmarital interest in the parties' residence. 

            Appellant acknowledges that, under the district court's division, each party received "exactly one-half or $120,253 of marital value."  But appellant points out that respondent received his nonmarital interests in real property, his family trust, and a business.  Appellant also emphasizes that she has only a small portion of her nonmarital assets remaining and has very little saved for retirement.  In response, respondent points out that his non-marital assets are modest and that based on the terms and management of his family's trust, he is unlikely to receive any significant distribution.

            We recognize that based on the disparity between the parties' incomes and nonmarital assets owned, the district court could have awarded a larger portion of the marital assets to appellant.  But even though the district court may have been justified in taking a different approach, there is still a sufficient basis for the district court's division.  As appellant acknowledges, the district court equally divided the marital property.  According to our caselaw, such a division is presumptively equitable.  Miller, 352 N.W.2d at 742.  Appellant has not overcome that presumption.  We conclude that the district court did not abuse its discretion in its division of the parties' assets.  

            Affirmed.

 

Dated:

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.