In re the Marriage of: Gerald Ernest Jeschke, petitioner, Appellant, vs. Kirsten Jean Libby, Respondent.

In re the Marriage of: Gerald Ernest Jeschke, petitioner, Appellant, vs. Kirsten Jean Libby, Respondent. A06-1359, Court of Appeals Unpublished, July 31, 2007.

This opinion will be unpublished and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

A06-1359

 

 

In re the Marriage of:

Gerald Ernest Jeschke, petitioner,

Appellant,

 

vs.

 

Kirsten Jean Libby,

Respondent.

 

 

Filed July 31, 2007

Affirmed; motion granted in part

Toussaint, Chief Judge

 

Ramsey County District Court

File No. F6-96-76

 

 

Becky Toevs Rooney, 700 Rand Tower, 527 Marquette Avenue, Minneapolis, MN 55402 (for appellant)

 

Judith L. Oakes, Karen Terese Kugler, J. Oakes & Associates, 2589C Hamline Avenue North, Roseville, MN 55113 (for respondent)

            Considered and decided by Willis, Presiding Judge; Toussaint, Chief Judge; and Crippen, Judge.*

U N P U B L I S H E D   O P I N I O N

TOUSSAINT, Chief Judge

On appeal in this child-support dispute, appellant Gerald Ernest Jeschke argues that the record does not support the imputation of income to him, the allocation of private school tuition, or the attorney-fee award to respondent Kirsten Jean Libby.  Respondent moves for dismissal of parts of the appeal and attorney fees.  Because the district court properly exercised its broad discretion, we affirm.  Because appellant waived review of the denial of his modification motion, we grant the respondent's motion to dismiss that part of the appeal, but we deny respondent's motion for attorney fees.

FACTS

Appellant and respondent entered into a marital termination agreement and the marriage was dissolved in 1996.  Respondent was granted physical custody of their two daughters, ages two and four.  At that time, appellant earned $73,000 and respondent earned $64,000 gross income annually.  The parties stipulated that respondent would maintain the children's health insurance and appellant would pay respondent $600 per month in child support (a downward departure), in part based on appellant assuming daycare expenses.

Soon after the dissolution, appellant obtained a new job and his earnings doubled.  Appellant voluntarily increased his child-support payments (since 1998, $900 per month), paid some orthodontia expenses and the children's tuition at private school, picked up some additional expenses for the children while respondent attended law school, and, at some point, took over payment of the children's health and dental insurance.  

Beginning in 1997, appellant worked for firms operated by his current wife, Ms. Jeschke.  Through August 2004, he was a consultant for Upstream Solutions, which was wholly-owned by Ms. Jeschke.  In August 2004, "Upstream Solutions was shut down and Doonadan became the successor corporation." Ms. Jeschke became a minority owner of Doonadan, and appellant agreed to employment as Doonadan's Chief Operating Officer at an annual salary of $150,000. 

 In October 2004, based on appellant's motion for sole custody of their 13-year-old daughter and joint physical custody of their 11-year-old daughter, the court ordered a custody evaluation.  About six weeks after appellant filed the motion for a change in custody, appellant stopped receiving his regular payment of two $6,250 paychecks per month.  He received no paycheck from October 1, 2004 through March 15, 2005.  During this time, he continued to make the $900 monthly support payments and additional payments for his children's benefit. 

On November 18, 2004, respondent moved to increase child support from $600 to $2,092 per month and to require appellant to pay the younger daughter's private-school tuition as and for additional child support.  Respondent also requested that appellant pay for the children's health insurance. 

About the time of her motion to increase child support, respondent served appellant with discovery. Appellant responded to discovery late and failed to timely provide his employment agreement.  As appellant was employed by Ms. Jeschke's company, respondent also served Ms. Jeschke with a subpoena duces tecum and notice of deposition.  In her affidavit seeking to quash the subpoena, Ms. Jeschke offered that she would provide documents showing that appellant never had an ownership interest in her company and that his employment contract identifies any compensation and benefits he receives.  After the court ordered compliance with respondent's discovery, Ms. Jeschke was deposed in October 2005 under a confidentiality agreement.

The child-support issue was heard on October 25, 2005.  An order issued in December 2005, increased child support, made appellant responsible for health and dental insurance, required the parties to share unreimbursed medical expenses, split the costs of private-school tuition, and awarded respondent $3,000 in attorney fees.    In February 2006, appellant moved for amended findings, for a modified child-support order reducing his obligation, and for leave to request reconsideration.  The motion for amended findings was denied in April 2006.  In a May supplemental order, after noting its oversight in failing to address appellant's extant motions to modify support and regarding private school tuition, the district court denied the motions and the request for leave to request reconsideration.

Appellant challenges the December, April, and May orders and the corresponding June 9 judgments.  Respondent moves to dismiss the appeal and for attorney fees.

D E C I S I O N

I.

 

Respondent moves to dismiss issues not briefed in appellant's primary brief.  She contends that appellant offered no argument in regard to his appeal from the May 2006 order or the judgments.  Generally, issues not argued in briefs must be waived on appeal.  Melina v. Chaplin, 327 N.W.2d 19 (Minn. 1982). 

            The May order denied appellant's motion for child-support modification, concluding that appellant had not shown, as of his February 2006 motion, a substantial change of circumstances.  The order also denied appellant's motion regarding the allocation of private-school tuition.  On appeal, appellant briefed the issue of private-school tuition, but did not raise or brief the district court's ruling on the threshold showing for child-support modification.  Having failed to raise or brief the threshold showing for modification on appeal, appellant waived this court's review of the district court's decision on that issue; it follows that this court also will not review the merits of appellant's motion for a reduction in child-support.

            Respondent also argues that appellant failed to brief its appeal from the June 9, 2006 judgments.  The basis for the judgments and the amounts of the judgments are set out in the December 2005 order, from which appellant appeals.  These issues were briefed by appellant in his primary brief; he did not waive them.  

            Respondent's motion is granted to the extent that appellant waived this court's review of the district court's decision to deny appellant's February 2006 motion to modify his child support.

II.

Appellant argues that the district court erroneously determined his income by imputing income called for in his employment agreement.

Whether to modify support is discretionary with the district court.  Putz v. Putz, 645 N.W.2d 343, 347 (Minn. 2002).  This court will not alter the district court's decision unless it is against logic and the facts on record.  Id.   A child-support order may be modified upon a showing of substantially increased earnings of a party that makes the original order unreasonable and unfair.  Minn. Stat. § 518.64, subd. 2 (2006).   

The record supports modification of the original child-support order.  Based either on appellant's pay stubs or appellant's employment agreement, the record supports the district court's findings that there was a substantial increase in appellant's income and the change made the original decree unreasonable and unfair.  At the time of the modification motion, appellant was receiving twice the income he had been receiving at the time of the original decree; the children were no longer in daycare and were enrolled in private schools; and respondent was paying the children's health insurance.   The terms of the original decree, including below-guidelines child support, did not reflect the current circumstances of the children or the parties. 

Net income determination

The district court based its calculation of appellant's child-support obligation on a gross annual income of $150,000, even though appellant ceased receiving paychecks in October 2004. 

This court will not set aside a district court's findings regarding net income unless they are clearly erroneous.  Ludwigson v. Ludwigson, 642 N.W.2d 441, 446 (Minn. App. 2002).  The decision to accept or reject evidence of an obligor's monthly net income rests within the district court's sound discretion.  See Nelson v. Nelson, 291 Minn. 496, 497, 189 N.W.2d 413, 415 (1971) (evidentiary weight and witness credibility are province of fact-finder).  And we review the record in the light most favorable to the district court's findings.  Vangsness v. Vangsness, 607 N.W.2d 468, 474 (Minn. App. 2000). 

A court need not determine income solely on paystubs.  See Minn. Stat. § 518.551, subd. 5b (2006). The court may consider, among other documents, "employer statements," "statement of receipts and expenses if self-employed," and "all other documents evidencing income as received that provide verification of income over a longer period."  Id.   

Here, the district court considered a range of information in determining appellant's income. The following findings support its determination: (1) appellant's employment contract dated August 30, 2004 provided for a $150,000 annual salary; (2) he was employed by a company in which his wife had a significant ownership interest; (3) he received $6,250 twice each month until October 2004 (about the time the motion to increase support was served); (4) he began deferring his income in October 2004; (5) Ms. Jeschke had "sole authority to determine payment of salaries"; 6) prior to October 2004, appellant earned more per year than his wife; (7) Ms. Jeschke testified in October 2005 that she expected appellant to earn $150,000 in 2005; and (8) appellant used a company credit card, received medical insurance coverage at no cost, and paid many family expenses out of Ms. Jeschke's corporate account.  All of these findings are supported by the record[1] and support the court's income determination and child-support order.

Imputing income

Appellant argues that the court improperly imputed income to appellant.  Respondent argues that the court based its income determination on the evidence without imputing income.

If a court finds that a parent is voluntarily underemployed, "support shall be calculated based on a determination of imputed income."  Id., subd. 5b(d).  "Imputed income means the estimated earning ability of a parent based on the parent's prior earnings history, education, and job skills, and on availability of jobs within the community for an individual with the parent's qualifications."  Id. 

 The district court did not find voluntary underemployment or estimate appellant's earning ability.  The court found appellant's "‘deferral' of his contract salary, coincidental with the timing of this litigation, and considering the other circumstances of his employment, [to be] a transparent self-limitation of income."  The court also found that appellant had "voluntarily deferred receipt of a portion of the income to which he was entitled."  Viewed in their entirety, the findings indicate that appellant was entitled to continued paychecks, he chose to "defer" them, he continued to be fully employed by the company, and the expectation was that he would eventually receive the compensation.[2]  Accordingly, we cannot conclude that the district court imputed or estimated appellant's income. 

III.

The district court ordered that if the younger daughter remains in private school, beginning in 2006-07, the parties shall share the cost of tuition; appellant to pay two-thirds, respondent to pay one-third.   The court's order does not require that the parties send the child to private school and does not set out the tuition payment.  

Appellant argues that the formula used to allocate the payment of tuition is wrong and urges this court to take into account child-support payments and the parties' ability to pay after making payments. 

We see no abuse of discretion in the district court's order respecting private-school tuition.  The court found that the child is doing very well in the private school that appellant has been funding.  Continuation of private school simply provides the child with the standard of living established by the parties over the years.  See McNulty v. McNulty, 495 N.W.2d 471, 472-73 (Minn. App. 1993) (affirming order for payment of tuition that had previously been paid voluntarily), review denied (Minn. Apr. 12, 1993).  The decision to continue private school remains that of the parties, but if they decide to do so, allocation of the expense, if incurred, is supported by the current record.  We decline appellant's invitation to apply the statutory provision for payment of child-care expenses to these private-school expenses.  See Minn. Stat. § 518.551, subd. 5 (providing for allocation of "work-related and education-related child care costs").

IV.

The district court found that appellant had "not been forthcoming in discovery resulting in unnecessary delay and expense in the current motions" and awarded respondent $3,000 in reasonable attorney fees for discovery.

"Section 518.14 shall govern the award of attorney fees for motions brought under [the modification statute]."  Minn. Stat. § 518.64, subd. 2(g) (2006).  The court has discretion to award fees when a party unreasonably contributes to the length or expense of a proceeding.  Id., subd. 1. 

Appellant argues that the attorney-fee award was based on his wife's actions in defending against the subpoena duces tecum.  The district court, however, specifically identified appellant as the party who was not forthcoming in discovery.  The record contains respondent's counsel's affidavit showing that appellant failed to timely respond to discovery requests and then provided inadequate responses.  It also supported the $3,000 fee.  The discovery litigation was necessitated by appellant's inadequate responses to discovery and his reliance on the corporations' finances to support his position that his obligation to his children should be reduced.  The court recognized the need and relevance of the company's financial information and noted the particular relevance given Ms. Jeschke's ownership interest in the company that had stopped paying appellant about the time of respondent's motion to modify child support.  Regardless of any independent delay caused by Ms. Jeschke, the district court did not abuse its discretion in finding delay and expense caused by appellant or in awarding respondent $3,000.

V.

Respondent moved this court for $2,500 as attorney fees on appeal "on the ground that appellant unreasonably contributed to the expense and delay of this proceeding."  She contends that "the instant appeal fails to raise any reasonable legal or factual argument."   

Respondent correctly identifies appellant's errors in analysis.  Nevertheless, the arguments are not "so specious as to force the conclusion" that appellant argued solely to harass respondent.  Roehrdanz v. Roehrdanz, 438 N.W.2d 687, 691 (Minn. App. 1989), review denied (Minn. June 21, 1989).  Because the circumstances do not show any intent to harass or delay by pursuing these arguments, respondent is not entitled to attorney fees on appeal.

            Affirmed; motion granted in part.

 

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

[1] Appellant states that the facts are "virtually" undisputed; only the inferences to be drawn from the facts are disputed. 

[2] Appellant's representations regarding his employment are characteristic of self-employment.  Although appellant is a contract employee of the corporation, he has entangled his personal and business expenses with the owner and the company.  As often is the case with the self-employed, appellant's pay stubs are not transparent and do not tell the whole story.  Cf. Fulmer v. Fulmer, 594 N.W.2d 210, 213 (Minn. App. 1999) (noting use of earning capacity when it is impracticable to determine actual income); Ferguson v. Ferguson, 357 N.W.2d 104, 108 (Minn. App. 1984) (stating "opportunity for a self-employed person to support himself yet report negligible income is too well known to require exposition").