In re the Marriage of: Lisa Kegler Shea, petitioner, Respondent, vs. Richard Arthur Shea, Appellant.

In re the Marriage of: Lisa Kegler Shea, petitioner, Respondent, vs. Richard Arthur Shea, Appellant. A06-1180, Court of Appeals Unpublished, February 13, 2007.

This opinion will be unpublished and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

A06-1180

 

 

In re the Marriage of:

Lisa Kegler Shea, petitioner,

Respondent,

 

vs.

 

Richard Arthur Shea,

Appellant.

 

Filed February 13, 2007

Affirmed

Huspeni, Judge*

 

 

Carver County District Court

File No. FA-04-423

 

Joan Miller, Miller Law Offices, 327 South Marschall Road, Suite 255, Shakopee, MN  55379 (for respondent)

 

Kristine A. Anderson, Loftness & Anderson, P.A., 327 South Marschall Road, Suite 370, Shakopee, MN  55379 (for appellant)

 

Jean Harriman, P.O. Box 163, Chaska, MN 55318 (guardian ad litem)

 

            Considered and decided by Stoneburner, Presiding Judge; Halbrooks, Judge; and Huspeni, Judge.

U N P U B L I S H E D   O P I N I O N

HUSPENI, Judge

In seeking review of several decisions of the district court in a dissolution judgment, appellant challenges (a) the spousal maintenance award, claiming that the record does not support the duration or amount of the award or its designation as permanent; (b) the valuation of the parties' property because the district court selected multiple valuation dates without adequate explanation and awarded respondent a share of the increase in the value of certain assets occurring after the parties' separation; (c) the requirement that appellant pay all of the children's uninsured medical expenses, and the award to respondent of certain tax deductions and exemptions; (d) the failure of the district court to grant appellant sole legal and physical custody of the children; and (e) the parenting-time schedule established by the district court.  Because evidence in the record supports each of the contested decisions of the district court, and because there was no abuse of discretion in those decisions, we affirm. 

FACTS

            Appellant Richard Shea and respondent Lisa Shea were married in September 1988.  Three children were born during the marriage, B.S., in February 1991; D.S., in July 1993; and N.S., in April 1999.  During the marriage, appellant was the primary economic provider; respondent was a traditional homemaker and the primary caretaker of the children.

            In 2004, respondent initiated a dissolution action; custody, parenting time, maintenance, and property division were contested.  Following a five-day trial that began in October 2005 and ended in January 2006, the district court awarded respondent permanent spousal maintenance in the amount of $2,500 per month.  The parties were granted joint legal custody, with respondent having sole physical custody and appellant having liberal parenting time.  Appellant was ordered to pay child support in the amount of $2,441 per month and to provide medical, dental, and vision insurance to the parties' minor children.  Any costs not covered by insurance were ordered to be shared equally by the parties.   

            Marital property was divided nearly equally between the parties.  Using the October 31, 2005 trial date as the valuation date for the parties' retirement and non-retirement investments, the district court awarded each party a 50% interest in the Brown Company IRA and the Fidelity Rollover IRA. 

            In March 2006, respondent moved for a modification of the judgment and decree based on changes in appellant's insurance coverage.  Appellant subsequently moved for amended findings or a new trial.  In April 2006, the district court issued its order providing that the Brown Company IRA and Fidelity Rollover IRA retirement investments should be divided equally as of the date of division.  The court also ordered that, based upon a change in the health care coverage selected by appellant for the minor children "[appellant] shall pay all costs for medical, dental, and optical expenses for the minor children that are not covered by insurance."  Finally, appellant's motion for amended findings or a new trial was denied in its entirety.  This appeal followed.    

D E C I S I O N

I.

            District courts have broad discretion in considering spousal maintenance awards, and will only be reversed if this court finds an abuse of discretion.  Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982).  Each case must be decided on its own facts, but the "basic consideration is the financial need of the spouse receiving the maintenance, and the ability to meet that need balanced against the financial condition of the spouse providing that maintenance."  McConnell v. McConnell, 710 N.W.2d 583, 585 (Minn. App. 2006).  Findings of fact made in reaching a decision will not be overturned unless clearly erroneous.  Id.  "Clearly erroneous" means the findings are "manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole."  Tonka Tours, Inc. v. Chadima, 372 N.W.2d 723, 726 (Minn. 1985).

            Appellant argues that the district court abused its discretion by awarding respondent permanent spousal maintenance because the record does not support the findings on the duration and amount of the award.  In support of his argument, appellant relies on the vocational evaluator's determination that respondent can enter the job market in her current circumstances earning at least $20,000 annually, with the potential to earn $40,000 after four to five years.  Appellant, therefore, argues that temporary maintenance would have been appropriate.

            A district court may order maintenance if a party is unable to provide self-support through adequate employment or lacks sufficient property, including marital property apportioned in the dissolution, to provide for that party's reasonable needs.  Minn. Stat. § 518.552, subd. 1(a), (b) (2006).  In making this determination, the district court considers "all relevant factors," including available financial resources, the probability of self-support, the contributions of each party to marital property, marital property apportioned to the spouse requesting maintenance, the standard of living established during the marriage, the duration of the marriage, and the proposed obligor's ability to meet his or her needs.  Minn. Stat. § 518.552, subd. 2 (2006).  Doubts about the duration of a maintenance award are to be resolved in favor of a permanent award.  Minn. Stat. § 518.552, subd. 3 (2006); Nardini v. Nardini, 414 N.W.2d 184, 196 (Minn. 1987).

            Here, the district court stated that respondent's "future earnings and her ability to become fully self-supporting are uncertain."  In setting the duration and amount of the award, the district court noted respondent's modest work history and limited income potential due to her language-based learning disability.  The district court also found that during the parties' 17-year marriage, respondent "has been out of the job market, except for that she worked at a department store during one Christmas season approximately 14 1/2 years ago."  The vocational rehabilitation counselor retained by appellant testified that respondent could make a living as an esthetician, earning at least $20,000 annually, with the potential to earn $40,000 after four to five years.  But the district court, in evaluating this testimony, observed that most of the jobs referenced by the consultant as possible employment for respondent would have much lower salaries.  The court made commendably detailed findings on the issue of maintenance; those findings are supported by the record.  There was no abuse of discretion in awarding permanent spousal maintenance. 

            Appellant also challenges the amount of his maintenance obligation, arguing that when combined with his child-support obligation, he will not be able to maintain the standard of living established during the marriage.  Appellant asserts that because 60% of his income will be paid to respondent as child support and maintenance, she will continue to live at or above the parties' regular standard of living while he will bear all of the financial burden and risk.  The record, however, does not support appellant's assertion.

            The district court found appellant's net monthly income to be $8,545, a conservative estimate in light of the size of appellant's bonuses historically. The district court also found appellant's reasonable and necessary monthly living expenses to be $3,590.  After subtracting his $2,500 maintenance obligation and his $2,441 child-support obligation from his estimated net monthly income of $8,545, appellant is left with approximately $3,600.  This amount is sufficient to meet appellant's reasonable monthly living expenses.  Because the record supports the district court's findings regarding respondent's need and appellant's ability to pay spousal maintenance, the district court did not abuse its discretion in setting the level of appellant's maintenance obligation. 

II.

            Appellant next argues that the district court abused its discretion in determining the valuation date for two of the parties' investment accounts, the Brown Company IRA and the Fidelity Rollover IRA.  The district court has broad discretion in setting the valuation date for marital property.  Desrosier v. Desrosier, 551 N.W.2d 507, 510 (Minn. App. 1996).

            After the parties separated, the Brown Company IRA and the Fidelity Rollover IRA increased substantially, which, according to appellant, can be attributed to his "management" of the accounts.  In determining the valuation date for these investment accounts, the district court ordered the valuation date to be the date of the first day of trial.  In the posttrial order, however, the district court ordered that "[t]he value of the assets transferred to the [respondent] shall be determined as of the effective date of the transfer."

            Appellant alleges that the district court erred in choosing the valuation date for the investment accounts; claiming that the date of the parties' separation was the appropriate valuation date.  He also alleges error in the district court's failure to explain why a valuation date other than separation was chosen and insists that the increase in value that occurred after the parties separated must be considered to be his nonmarital property.  Thus, appellant argues the district court erred in permitting respondent to share equally in the increased value of the accounts.  

            We note initially that property acquired after the valuation date is nonmarital.  Minn. Stat. § 518.54, subd. 5(d) (2006).  A district court must value marital assets on the day of the initial prehearing conference, unless otherwise stipulated or unless the district court makes findings that another date is fair and equitable.  Minn. Stat. § 518.58, subd. 1 (2006).  But a district court may also adjust the valuation of an asset when "there is a substantial change in value of an asset between the date of valuation and the final distribution."  Id.

            Here, the matter was discussed extensively on the record at the posttrial motion hearing.  Specifically, the district court stated:

            I could make the date of the valuation change to right now, I assume it is transferred on whatever the day is, 2 days in the future.  If it's gone up fine, if not it goes down.  They both suffer.

 

            But I'm not going to give [appellant] credit for all of it because they were separated for 14 months at the time the divorce started.  These are joints assets again throughout their long marriage.  [Respondent] didn't have or had limited input into how these investments were handled and I think I set out fairly, what I thought was fairly clear.  [Appellant] has worked hard.  He's achieved what he has by making sacrifices, so.

 

            . . . .

 

            Bottom line, I'm not giving you a value as of the start of trial.  I'm giving you a value by saying each of these people are entitled to one-half as of the date of the transfer.  If there is no value, they get whatever is there. 

 

            As I say, I recognize [appellant] hasI mean he ought to be a stockbroker.  I look at what my portfolio has done and there are no guarantees.  It goes up, he's done well but he is still married until the date of this Decree and it was a marital asset and [respondent] shouldn't be entitled to anything andif it went down, it would be taking in his need to pay on the other end. 

 

            There's certainly no evidence of bad faith wheeling and dealing with their portfolio or assets.  If I divide it in two it's whatever the value was, the date you two, you ever get the documents signed. 

 

            Our review of the record convinces us that the district court considered the circumstances and made a decision that the date of transfer was fair and equitable.  We also note that but for the district court's decision to choose the date of transfer as the valuation date, the Brown Company IRA and the Fidelity Rollover IRA may not have increased quite as substantially.  Appellant claims that the substantial increase in value after the parties' separation resulted from his management of the accounts.  But  appellant had the benefit of managing the accounts as a whole.  If the accounts had been valued and divided as of the date of separation, or of the first pretrial hearing, appellant would only have had his portion of the accounts to manage.  The management of only half of the accounts, as opposed to management of the accounts as a whole, would have presumably resulted in a lesser increase in the value of the accounts. 

            Moreover, because there was a substantial change in the value of the two investment accounts between the date of valuation and the final distribution, the district court was entitled to change the valuation to the date of transfer.  See Minn. Stat. § 518.58, subd. 1 (stating that if there is a substantial change in value of an asset between the date of valuation and the final distribution, the court may adjust the valuation of that asset as necessary to effect an equitable distribution).  Accordingly, on this record, the district court did not abuse its discretion in setting the valuation date of the two investment accounts.

III.

            Appellant next argues that the district court abused its discretion in ordering him to pay all of the children's uninsured medical expenses and awarding respondent certain tax deductions and exemptions.  This court's review of that decision is limited to determining whether the district court abused its discretion by making findings unsupported by the record or by improperly applying the law.  Silbaugh v. Silbaugh, 543 N.W.2d 639, 641 (Minn. 1996). 

            The district court originally ordered the parties to equally share in the cost of unreimbursed medical, dental, and orthodontic expenses for the minor children.  After discovering that appellant's health insurance plan had changed during the dissolution proceedings, respondent filed a posttrial motion seeking, in part, a modification of the decree provision requiring the parties to equally share the cost of unreimbursed medical expenses.  The district court subsequently ordered that

[b]ased upon the modification of health care coverage which the [appellant] selected on behalf of the minor children, the Court will amend Paragraph 11 of the Conclusions of Law to delete paragraph 2 and to substitute the following language:  "The [appellant] shall pay all costs for medical, dental and optical expenses for the minor children that are not covered by insurance."

 

            Appellant appears to argue that because evidence of the changes to his health plan were available at the time of trial, it was not "new" evidence and, therefore, the district court erred in considering this evidence in the posttrial motions.  We disagree.  Minn. R. Civ. P. 59.01(d) permits a district court to examine new evidence if presented in a motion for amended findings and new trial.  To qualify as newly discovered evidence under Minn. R. Civ. P. 59.01(d), the evidence must have been in existence at the time of trial and cannot be expert testimony procured after the trial.  Swanson v. Williams, 303 Minn. 433, 436, 228 N.W.2d 860, 862 (1975).

            Here, the record reflects that on January 10, 2006, the last day of the dissolution trial, appellant was asked to verify the pay stub that he submitted into evidence.  Appellant testified that the pay stub reflected the premiums for "health care, both familythe family plan."  The pay stub reflects that as of October 2005, the monthly premium for appellant's health care coverage plan was $29.19 per week, or $126.49 per month.  The district court apparently relied on this evidence in finding that appellant "has medical, dental and hospitalization insurance through his employer for the benefit of the parties and the minor children at a cost of $126.49 per month."  Under the new plan, however, which went into effect during the trial period, appellant's monthly premiums were substantially reduced, and the deductible per individual increased to $1,000.  Thus, respondent's out-of-pocket expenses increased substantially while appellant benefited from a premium reduction.  Appellant failed to disclose this information to respondent or to the district court.  Consequently, evidence of the change in appellant's insurance coverage constitutes newly discovered evidence and the district court properly considered this evidence in addressing the posttrial motions.  Because appellant was less than candid about his medical insurance situation, the district court did not abuse its discretion in ordering appellant to pay all of the children's uninsured medical expenses.

            Appellant further argues that the district court abused its discretion by amending its findings to award respondent exclusive entitlement to the mortgage interest and property tax deductions.[1]  But the record reflects that the decree specifically contemplated appellant's interest in purchasing the family home from respondent.  The district court's subsequent order, following the parties' motions, also provided specific guidance with respect to the mortgage interest and property tax deductions in the event appellant purchased the home.  Appellant, in his reply brief, stated that he has purchased the home.  This assertion was not disputed by respondent at oral argument.  Although we are troubled by the district court's order awarding respondent exclusive entitlement to the mortgage interest and property tax deductions, and ordering appellant to pay all of the children's uninsured medical expenses on the basis that appellant was not forthright about his medical insurance situation, we find no basis for reversal.  In light of appellant's purchase of the family home, we assume that respondent would no longer have entitlement to the mortgage interest and property tax deductions.  Thus, it appears to us that the issue is moot.  We recognize that, pursuant to the district court's order, the parties were ordered to pro-rate the real estate taxes and mortgage payments through the date of closing.  But any prejudice appellant may have incurred as a result of respondent's entitlement to the pro-rated portion of the 2006 mortgage interest and property tax deductions is de minimus.  Wibbens v. Wibbens, 379 N.W.2d 225, 227 (Minn. App. 1985) (de minimus error not ground for reversal).

IV.

            A district court has broad discretion to provide for custody of the parties' children.  Durkin v. Hinich, 442 N.W.2d 148, 151 (Minn. 1989).  An appellate court's review of custody determinations is narrow and "limited to whether the [district] court abused its discretion by making findings unsupported by the evidence or by improperly applying the law."  Silbaugh, 543 N.W.2d at 641 (quotation omitted).

            The district court's determination must be primarily based on the best interests of the child.  See Pikula v. Pikula, 374 N.W.2d 705, 711 (Minn. 1985) (observing that "[t]he guiding principle in all custody cases is the best interest of the child").  "[C]urrent law leaves scant if any room for an appellate court to question the [district] court's balancing of best-interests considerations."  Vangsness v. Vangsness, 607 N.W.2d 468, 477 (Minn. App. 2000).  When considering the best interests of the child, the district court must make detailed written findings that reflect the court's consideration of factors set forth in Minn. Stat. § 518.17, subd. 1(a) (2006).  Rogge v. Rogge, 509 N.W.2d 163, 165 (Minn. App. 1993), review denied (Minn. Jan. 28, 1994).  A district court's findings of fact will be sustained unless they are clearly erroneous.  Pikula, 374 N.W.2d at 710.

            Appellant argues that the district court abused its discretion in awarding joint legal custody to the parties and sole physical custody to respondent because the decision was contrary to the weight of the evidence and is detrimental to the children's best interests.  To support his claim, appellant points to the custody evaluator's recommendation that appellant be granted sole legal and physical custody of the children.  He contends that because the district court failed to address the custody evaluator's concerns that respondent would attempt to eliminate appellant from the children's lives, sole legal and physical custody of the children should be granted to him, subject to liberal parenting time for respondent.  We disagree.

            The district court has discretion in whether or not to follow a custody recommendation.  Rutanen v. Olson, 475 N.W.2d 100, 104 (Minn. App. 1991).  But when a district court diverges from a custody recommendation, this court has required that the district court "either (a) express its reasons for rejecting the custody recommendation, or (b) provide detailed findings that examine the same factors the custody study raised."  Rogge, 509 N.W.2d at 166.

            Here, the district court made commendably detailed findings on all of the 13 best-interests factors of Minn. Stat. § 518.17, subd. 1(a).  Those detailed findings included, but certainly were not limited to, a recognition that all three children expressed a clear preference to reside with respondent, that appellant was unable to discuss the children's objections to his new relationship with a mother of two in a meaningful way, that the children's interests would be served by retaining the family configuration with respondent, from whom they receive nurture, guidance, and care when they are ill, and that the emotional abuse of respondent by appellant during the marriage directly and indirectly affected the quality and amount of time that appellant was able to have with the children under the terms of the temporary order.

Although the district court did not adopt the custody evaluator's recommendation, the findings specifically address the custody evaluator's concerns that respondent's selfish behavior, if continued, would result in disruptive behavior by the children.  But the district court also found that appellant shared equal responsibility for the parties' deteriorating relationship.  Moreover, the court's findings are clear that no alienation of the children's relationship with appellant was present.  Any possible threat of alienation is mitigated by the district court's grant of joint legal custody.  We find no abuse of discretion in the custody decision of the district court.  

V.

            Finally, appellant argues that the record does not support the parenting-time schedule set by the district court.  The district court has broad discretion in deciding parenting-time questions based on the best interests of the child and will not be reversed absent an abuse of discretion.  Braith v. Fischer, 632 N.W.2d 716, 721 (Minn. App. 2001), review denied (Minn. Oct. 24, 2001).

            As already noted, the district court made very detailed findings on the best-interests factors, and parenting time is set forth in an unambiguous and lengthy schedule.  That schedule reflects an increase in parenting time over that included in the temporary order.  Although we are not insensitive to the fact that the decree does not provide appellant with the equal parenting time he wishes to have, we see no abuse of discretion in the schedule established by the district court.  

            Affirmed.

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

[1] The decree originally provided that "[c]ommencing in 2006, the parties shall file separate returns and the [respondent] shall be entitled to claim as a deduction any property taxes or mortgage payments made on the home during 2005 and thereafter."  But at the motion hearing, the district court acknowledged that the decree was incorrect and that it intended to award appellant the deductions from 2006 and thereafter.  Following the motion hearing, however, the district court issued its order stating that "[a]t the time of the motion, the Court indicated it would allow the [appellant] to claim these expenses in 2006.  Given the increase in costs of health insurance to the [respondent], by virtue of the change in coverage, it is appropriate that she be awarded these deductions."