In re the Marriage of: Qingyan Chen, petitioner, Appellant, vs. Zihong Zhao, Respondent.

In re the Marriage of: Qingyan Chen, petitioner, Appellant, vs. Zihong Zhao, Respondent. A06-2064, Court of Appeals Unpublished Decision, December 4, 2007.

This opinion will be unpublished and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

A06-2064

 

In re the Marriage of:
 
Qingyan Chen, petitioner,
Appellant,
 
vs.
 
Zihong Zhao,
Respondent.

Filed December 4, 2007

Affirmed as modified

Shumaker, Judge

 

Ramsey County District Court

File No. F8-04-546

 

 

Frank T. Mabley, 217 Roseville Office Plaza, 1970 Oakcrest Avenue, Roseville, MN 55113 (for appellant)

 

Mary Sherman Hill, 300 Brighton Business Center, 888 West County Road D, New Brighton, MN 55112 (for respondent)

 

            Considered and decided by Wright, Presiding Judge; Shumaker, Judge; and Stoneburner, Judge. 

U N P U B L I S H E D   O P I N I O N

SHUMAKER, Judge

In this dissolution appeal, appellant-husband challenges the district court's rulings (1) failing to set off wife's award against husband's award; (2) denying husband's motion for a new trial; (3) declining to amend its original findings of facts as to specific assets and debts; (3) awarding wife need-based attorney fees; and (5) making findings about husband's bad faith and misconduct.  We affirm as modified.

FACTS

Appellant-husband Qingyan Chen and respondent-wife Zihong Zhao were married on October 5, 1999, and separated on May 16, 2003.  They had no children during their marriage.  After a two-day trial, the district court entered its judgment and decree dissolving the parties' marriage on February 8, 2006.

Using a valuation date of August 5, 2004, the court divided the parties' real and personal property and their debts, and awarded to wife temporary rehabilitative spousal maintenance.

Husband moved for a new trial on all issues or, in the alternative, for amended findings of fact.  The court denied the motion and clarified several of its original findings.

Husband contends that the court erred by failing to set off wife's indebtedness to husband against husband's indebtedness to wife; by failing to find that nondisclosure and delayed disclosure of assets warranted a new trial; by failing to account for and to fairly allocate certain assets and debts; by awarding attorney fees to wife; and by finding misconduct and bad faith by husband.

D E C I S I O N

I.

            Husband argues that the district court erred in failing to set off the award of $22,000 that wife owes to husband against the award he owes to her.  "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) (citing Chamberlain v. Chamberlain, 615 N.W.2d 405, 412 (Minn. App. 2000), review denied (Minn. Oct. 25, 2000), and Ebnet v. Ebnet, 347 N.W.2d 840, 842 (Minn. App. 1984)).  Although the district court has broad discretion in awarding marital property, its disposition must not be based on a finding of fact that is clearly in error.  Id.  "A finding is clearly erroneous if the reviewing court is left with the definite and firm conviction that a mistake has been made."  Vangsness v. Vangsness, 607 N.W.2d 468, 472 (Minn. App. 2000) (quotation omitted). 

            In its February 8, 2006 and October 26, 2006 orders, the district court determined that husband should pay to wife $56,250.72 and wife should pay to husband $22,000, reflecting its division of the marital property.  Husband persuasively argues that because wife's debt is unsecured and wife has little means by which to pay off her debt, the district court's failure to set off the award puts him in a precarious financial position.  A set-off does not change the ultimate amount of either award, but it does increase the likelihood of each party receiving payment.  Because nothing in the record suggests any reason for not ordering a set-off and because a set-off would best effectuate the court's property division, we conclude the district court abused its discretion in failing to order a set-off.  Therefore, the judgment is modified to reflect that wife's indebtedness is set-off against husband's indebtedness so that husband owes to wife $34,250.72.

II.

 

Husband also challenges the district court's denial of his motion for a new trial.  This court reviews the district court's denial of a motion for a new trial under an abuse-of-discretion standard.  Boschee v. Duevel, 530 N.W.2d 834, 840 (Minn. App. 1995), review denied (Minn. June 14, 1995).  Because the district court has the discretion to grant a new trial, we will not disturb the decision absent a clear abuse of that discretion.  Halla Nursery, Inc. v. Baumann-Furrie & Co., 454 N.W.2d 905, 910 (Minn. 1990).

Husband contends that the court erred when it ruled that he "failed to set forth any specific grounds for granting the new trial."  He points to his Amended Memorandum, submitted with his motion for new trial, in which he alleges that wife failed to disclose certain bank accounts, failed to provide monthly statements for those accounts, and failed to provide statements for accounts out of which loans were made.  He also alleges in that memorandum that wife testified falsely regarding the source of funds for her computer.

These surely are specific factual allegations, but we understand the court's order to mean that, despite their specificity, these alleged factual grounds are not sufficient for the grant of a new trial under Minn. R. Civ. P. 59.01.  See In re Estate of Williams, 217 Minn. 634, 634, 13 N.W.2d 736, 736 (1944) (noting denial of a new trial must be affirmed if new-trial motion failed to identify specific grounds for a new trial); Swartwoudt v. Swartwoudt, 349 N.W.2d 600, 602 (Minn. App. 1984) (stating that a new-trial motion must explicitly state Rule 59.01 basis for a new trial), review denied (Minn. Sept. 12, 1984).

In support of its ruling, the court noted that "the parties submitted a stipulation which addressed all of the accounts of the parties," wife testified at trial about bank accounts, and wife provided husband with authorization to review her bank accounts.

The parties' stipulation addressed their debts, but it did not mention assets, such as bank accounts.  Husband claims that wife had undisclosed bank accounts totaling $11,397.70.  The case was tried in September 2005.  Husband's evidence shows that wife had three bank accounts with balances as of various dates: TCF in the amount of $1,363.43 on 4/3/03; TCF in the amount of $3,034.27 on 10/7/99; and USAFCU in the amount of $7,000 on 10/4/01.  Husband offered no evidence that these accounts existed or had balances as of the trial date or even within 2 ½ years before that date.  Wife testified that there were no bank balances as of the trial date.

We find no clear error here.  The court apparently believed wife's testimony that she had no bank accounts as of the trial date, and there was no evidence to the contrary.  See Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988) (stating appellate courts defer to district court credibility determinations).  It appears that wife did have such accounts at a time remote from the time of the dissolution litigation, but, without some evidence that the assets in those accounts still existed, the court was left simply with wife's testimony, which was not unreasonable to believe. 

Husband argues that the untimely disclosure of these accounts surprised and prejudiced him.  It is unclear why all discovery was not concluded before the trial, as is the usual case.  But it does not seem likely that the outcome of the proceeding would have been different had the court been apprised of assets that existed during the marriage but did not exist within a reasonable time before the dissolution.  Thus, husband has not demonstrated the requisite prejudice to require a new trial.  See Minn. R. Civ. P. 61 (requiring harmless error to be ignored). 

III.

Husband maintains that the district court abused its discretion in its failure to amend specific findings regarding wife's assets, husband's assets, and husband's debts.  The purpose of a motion for amended findings "is to permit the trial court a review of its own exercise of discretion."  Stroh v. Stroh, 383 N.W.2d 402, 407 (Minn. App. 1986).  In considering such a motion, "the trial court must apply the evidence as submitted during the trial of the case."  Rathbun v. W.T. Grant Co., 300 Minn. 223, 238, 219 N.W.2d 641, 651 (1974).  The standard of review this court applies is abuse of discretion.  See Preferred Fin. Corp. v. Quality Homes, Inc., 439 N.W.2d 741, 743 (Minn. App. 1989) (holding that district court's denial of the parties' motions for amended findings or a new trial will not be disturbed on appeal absent a clear abuse of discretion). 

Many of the errors husband alleges are in the realm of property division.  Determining whether property is marital or nonmarital is a question this court reviews de novo.  Gottsacker v. Gottsacker, 664 N.W.2d 848, 852 (Minn. 2003).  But this court defers to the district court's findings of fact unless they are clearly erroneous.  Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997) (citation omitted).  We will affirm the district court's property division if it has an adequate basis in fact and principle, even if we may have taken a different approach.  Antone v. Antone, 645 N.W.2d 96, 100 (Minn. 2002); see Korf v. Korf, 553 N.W.2d 706, 712 (Minn. App. 1996) (stating that in dissolution proceedings, debts are apportioned as part of the property settlement and are divided in the same way as assets).

            a.         Specifically, husband argues that the district court should have amended its findings regarding some of wife's assets.  He claims the district court ignored certain undisclosed funds and failed to equally apportion tax returns for 2002 and 2003.  

            Husband alleges that the district court ignored a sum of $21,502 that wife took in secret from the marriage.  Wife filed an immigration form that required her to list her total assets.  She indicated they were in the sum of $21,502.  On appeal, husband fails to present evidence as to the source of the $21,502, or whether those claimed assets had ever belonged to him or really ever existed, or, if they did, whether wife actually possessed the $21,502 she claimed.  He points to no evidence that would persuade this court that the district court clearly erred in not including $21,502 as marital property.  Further, the district court did not ignore the $21,502 because in its amended findings the court included a dragnet clause, stating that "[a]ll requests for amended findings as asserted by the Petitioner are denied except those that are granted."  See Roberge v. Cambridge Coop. Creamery Co., 248 Minn. 184, 195, 79 N.W.2d 142, 149 (1956) (holding denial of motion for amended findings is equivalent to a finding contrary to that sought in motion). 

Husband also alleges that the district court ignored evidence of wife's TCF bank account, number 2852093591, with a $1,363.43 balance; he argues that wife failed to disclose this account at trial.  He thus asks this court for a $686.71 reduction in wife's award.  At trial, however, husband's counsel cross-examined wife about a TCF bank account.  While husband's counsel did not mention a specific account number, wife testified that she had a TCF account but that she had closed it and there was no money in the account. While husband points to his own affidavit, attached to his motion for amended findings, which lists the account and balance, and an attached exhibit which shows a balance of $1,363.43 on April 3, 2003, the only other evidence is wife's conflicting trial testimony.  The district court, as fact-finder, determined that at the time of trial wife had no money in a TCF bank account.  That determination is supported by the record and, thus, is not an abuse of its discretion.  Sefkow, 427 N.W.2d at 210.

            Husband also claims the district court erroneously apportioned tax refunds from 2002 and 2003 and requests a reduction in wife's award.  Marital property division, however, does not need to be "mathematically equal to be just and equitable."  Justis v. Justis, 384 N.W.2d 885, 888 (Minn. App. 1986), review denied (Minn. May 29, 1986).  The record supports the district court's allocation of tax refunds and, thus, the court did not abuse its discretion by failing to amend such findings.

b.           Husband argues that the district court should have amended its findings regarding his assets, specifically his E-Trade stock account and the mortgage refinance proceeds.  The district court valued his E-Trade account at $8,773.17, which is consistent with the record.  Husband does not point to persuasive evidence to the contrary.  Thus, the district court's original finding was not clearly erroneous, nor is its specific refusal to amend its finding as to the value an abuse of its discretion.

Husband also alleges error in the district court's failure to amend its finding that $1,484 of the couple's home-mortgage-refinance proceeds was used by husband for nonmarital purposes.  Again, he argues that the district court ignored his argument in its amended findings.  The district court did not amend its original order that awarded to wife $742, half the amount of the proceeds.  The record, though, is consistent with the district court's finding that an equal division of the $1,484 was an equitable division of the proceeds.  The court did not abuse its discretion, and, again, did address this issue implicitly through the dragnet clause in its amended findings.

c.            Husband next asserts that the district court abused its discretion in failing to amend its findings regarding his debts to his credit-card company, the IRS, and his brother.  "Debts, like assets, are apportionable, and each division of property is considered in the light of the particular facts of that case."  Chamberlain, 615 N.W.2d at 414 (quotations omitted).

   Husband challenges the district court's disposition of his marital credit-card debt, totaling $29,719.04.  Husband insists that the district court erred by failing to amend its findings to divide this equally; he was charged with the full amount of the debt.  But this debt must be taken in context: in the property division, wife was charged with her own marital credit-card debt, totaling approximately $21,000. Thus, even if this court might have apportioned the debt differently, it does not mean the district court abused its discretion.  Antone, 645 N.W.2d at 100.  Both parties had large credit-card debt, and the district court, in its findings, apportioned the debt appropriately.

Next, husband argues that the district court should have amended its findings to reduce wife's property award by $2,982, reflecting half of an IRS debt of $5,964.  The district court's apportionment of a tax liability is subject to an abuse-of-discretion review.  Rudd v. Rudd, 372 N.W.2d 851, 855 (Minn. App. 1985), rev'd in part on other grounds, 380 N.W.2d 765 (Minn. 1986); see also Haasken v. Haasken, 396 N.W.2d 253, 260 (Minn. App. 1986) (reviewing trial court's apportionment of future tax liability under an abuse-of-discretion standard).   At trial, the parties stipulated to the amount of the IRS debt, but not that it was marital in nature. Husband had paid the debt by the time of trial, but wanted it included in the marital-debt calculation.  It was not a legal error for the district court, after hearing the relevant testimony and weighing the relevant evidence, to conclude that the IRS debt was not properly included as a marital debt.  See Gottsacker, 664 N.W.2d at 882 (noting that whether property is marital or nonmarital is a legal question).

Finally, husband alleges that the district court abused its discretion by not amending its findings to classify husband's $7,030 debt to his brother as a marital debt.  The district court did not rule that the debt was marital, and instead concluded that it was solely his.  At trial, husband and wife offered conflicting testimony as to whether wife even knew of the existence of the loan.  The district court had the ability to observe and evaluate the witnesses as they testified and weigh the credibilityof that testimony.  See Minn. R. Civ. P. 52.01 (stating "due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses").  The district court did not abuse its discretion by failing to amend its original finding that this loan was nonmarital debt.

IV.

Husband challenges the district court's award of need-based attorney fees based on its finding that wife did not have the financial means to pay her attorney.  An award of attorney fees "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).  The district court must make specific findings on these statutory factors.  In re Marriage of Richards, 472 N.W.2d 162, 166 (Minn. App. 1991).  A district court "shall" award need-based attorney fees if the fees are necessary for a party's good-faith assertion of rights, the payor can pay the fees, and the recipient cannot.  Minn. Stat. § 518.14, subd. 1 (2006).

The district court awarded $4,260 in attorney fees to wife, which was 68% of her total attorney fees.  The record supports this award.  The district court found that husband was able to contribute to wife's fees because he had a gross annual income of $57,795.31 and a net annual income of $46,342.47.  The district court also found that husband's net monthly income totaled $3,861.87, but his monthly expenses were only $2,544, leaving an excess amount of $1,317.87.  Further, it found that wife had no monthly income because she was attending school full time and was unemployed.

            The record does support an award of attorney fees; husband had a well-paying job and wife was unemployed for most of the marriage.  Additionally, the district court found that wife's health problems were severe; those medical problems make holding down a job difficult.  The district court heard and evaluated the evidence.  It was within the discretion of the district court to award attorney fees.  The district court made a finding, supported by the record, that husband had the means to pay the need-based attorney fees and wife did not.

V.

We agree with husband that the court's findings as to misconduct neither affected the property division nor provided a basis for attorney fees awarded to wife.  Although it is not our prerogative to order that the findings on husband's alleged misconduct be stricken from the record, as husband urges, we do not affirm those findings and hold that they constitute an issue that was unnecessary for the district court to determine and is unnecessary for us to reach.

In sum, we affirm the district court's denial of husband's motion for a new trial, or in the alternative, amended findings.  We affirm its findings as to its award of need-based attorney fees.  However, we modify the district court's separate property awards and instead conclude that wife's payment of $22,000 to husband shall be set off against husband's payment to wife.

            Affirmed as modified.