Opinion
No. C7-99-610.
Filed November 2, 1999.
Appeal from the District Court, Hennepin County, File No. 212795.
Elizabeth B. Bryant, Kristy A. K. Rodd, Fredrikson Byron, P.A., (for appellant)
John A. Warchol, Warchol, Berndt, Hajek, P.A., (for respondent)
Considered and decided by Shumaker, Presiding Judge, Davies, Judge, and Willis, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1998).
UNPUBLISHED OPINION
Appellant Jeffery William Holte challenges the ALJ's denial of his motion for modification of child support. Appellant also challenges the district court's: (1) calculation of respondent's income and monthly budget; (2) denial of his motion to reduce or eliminate his spousal maintenance obligation; and (3) order that he pay an outstanding medical bill. We affirm, and deny respondent's motion for fees on appeal.
FACTS
At the time appellant Jeffery William Holte and respondent Catherine Ann Holte divorced, the parties had three minor children. Appellant earned $60,000 per year, with a net monthly income of $3,127.50. Respondent worked part-time and earned approximately $12,000 per year, with a net monthly income of $950.
With the assistance of counsel, the parties reached a stipulation as to all issues. Under the parties' agreement, appellant agreed to pay $1,200 per month in child support, an amount in excess of the amount required by the Minnesota Child Support Guidelines. Child support would be reduced, however, as each child became emancipated. Appellant also agreed to pay $600 per month in permanent spousal maintenance.
In June 1998, two years after the dissolution, appellant lost his job. He then filed a motion to reduce child support and to eliminate his spousal maintenance obligation. By the time appellant's motion was heard before an ALJ, he had located employment paying $52,000 per year, producing a net monthly income of $2,969, a decrease of $159 from his monthly income at the time of the dissolution agreement. At the time of the hearing, respondent earned $25,829 a year, a net monthly increase of $605 over her net income at the time of the stipulated judgment.
DECISION I.
Appellant claims the ALJ abused its discretion in denying the motion to modify child support. The same standard applies to the review of an ALJ's child support decision as applies to a district court decision. Lee v. Lee, 459 N.W.2d 365, 368-69 (Minn.App. 1990), review denied (Minn. Oct. 18, 1990). Modification of child support is within a district court's broad discretion, and we will not reverse absent an abuse of that discretion. Moylan v. Moylan, 384 N.W.2d 859, 864 (Minn. 1986). Such an abuse occurs when a district court resolves the issue in a manner "that is against logic and the facts on record * * *." Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
Modification of child support requires a finding that a substantial change in circumstances has occurred and that the change makes the existing award unreasonable and unfair. Marx v. Marx , 409 N.W.2d 526, 527-28 (Minn.App. 1987); Minn. Stat. § 518.64, subd. 2(a) (1998).
Under the stipulated judgment formula, appellant's child support payments would now be $1,029 per month, a decrease due to the emancipation of one of the children. The ALJ determined that, if Minn. Stat. § 518.551, subd. 5 (1998), were applied, appellant's child support obligations would, instead, be $891 per month. Appellant's argument for modification to this lower figure is that a deviation from the guidelines is no longer justified due to respondent's increased income. But he does not claim that non-guidelines child support has put him in a worse position than when he originally stipulated to the child support level. See LaBelle v. LaBelle, 302 Minn. 98, 115-16, 223 N.W.2d 400, 410 (1974) (stating parties to dissolution may stipulate to a result that court could not order sua sponte). Absent substantially changed circumstances rendering the existing support obligation unreasonable and unfair, the ALJ did not abuse his discretion in denying the motion to replace the stipulated child-support formula with the guidelines. See Allan v. Allan, 509 N.W.2d 593, 596 (Minn.App. 1993) (holding that support obligation may be changed from formula to specific dollar amount only on showing of substantially changed circumstances making existing order unreasonable and unfair).
II.
We turn now to the appeal from the district court order denying modification of spousal maintenance. Appellant first challenges the district court's factual basis for determining respondent's income and monthly budget. In reviewing findings of fact, this court applies a clearly erroneous standard. Minn.R.Civ.P. 52.01. In deciding whether the findings of fact are clearly erroneous, the evidence and reasonable inferences therefrom must be viewed in the light most favorable to the prevailing party. Lossing v. Lossing, 403 N.W.2d 688, 690 (Minn.App. 1987).
The district court found that respondent currently has income from regular employment of $25,829 per year gross ($1,555 per month net), plus another $200 per month. Appellant contends the district court should have used respondent's tax returns in calculating respondent's income. Procedural and evidentiary rulings are within the district court's discretion and are reviewed under an abuse-of-discretion standard. Lines v. Ryan, 272 N.W.2d 896, 902 (Minn. 1978). The court was provided respondent's current payroll stub, which the court used to project respondent's 1998 earnings. The calculation using respondent's current pay, instead of her previous earnings and tax returns, was not error. Merrick v. Merrick, 440 N.W.2d 142, 146 (Minn.App. 1989) (holding that district court should have used pay stubs dating from January to June to calculate current income rather than prior year's tax returns).
Appellant also contends the district court erred when it accepted respondent's budget. Respondent submitted a budget to the court, explained her reasons for including child care for the following year, and nothing was offered to rebut her projected expenses. The district court did not err in accepting respondent's budget.
III.
Appellant next argues that the district court abused its discretion in refusing to modify or eliminate his spousal maintenance obligation, even accepting the facts as found. Modification decisions will not be reversed absent an abuse of discretion. Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982).
When a stipulation fixing the respective rights and obligations of the parties is central to the original judgment and decree, the district court * * * must appreciate that the stipulation represents the parties' voluntary acquiescence in an equitable settlement. In that regard, we have cautioned the district court to exercise its considerable discretion carefully and only reluctantly when it is faced with a request to alter the terms of an agreement which was negotiated by the parties.
Beck v. Kaplan, 566 N.W.2d 723, 726 (Minn. 1997) (citation omitted). The party seeking modification bears the burden of demonstrating that: (1) a substantial change in circumstances has occurred; and (2) the change in circumstances has rendered the original maintenance award unreasonable and unfair. Hecker v. Hecker, 568 N.W.2d 705, 709 (Minn. 1997); see Minn. Stat. § 518.64, subd. 2(a) (1998).
The district court concluded that the change in the parties' incomes did not warrant maintenance modification because respondent needed to earn even more money to meet the needs of her household. This court has noted that recipients of permanent maintenance are not automatically penalized if their earnings increase through the years. Borchert v. Borchert, 391 N.W.2d 74, 76 (Minn.App. 1986). Respondent's increase of $605 net income per month, and appellant's decrease of $159 net income per month, did not make it an abuse of discretion to continue the stipulated maintenance when respondent still has a monthly deficit because her expenses have increased by $1,436. See Savoren v. Savoren, 386 N.W.2d 288, 291 (Minn.App. 1986) (appellant required to show both substantial change in earnings and that existing award unfair as result of change).
IV.
Appellant also challenges the district court's finding that he is responsible for an outstanding medical bill incurred on behalf of one of the parties' children. "Medical needs of minor children, including insurance coverage, are in the nature of child support." Korf v. Korf, 553 N.W.2d 706, 708 (Minn.App. 1996). The district court has broad discretion in determining child support obligations and its decision will not be reversed absent an abuse of that discretion. Rutten, 347 N.W.2d at 50.
The district court found that a disagreement about insurance coverage arose because of appellant's apparent failure to get the required pre-authorization before the child had surgery. If the insurance company does not ultimately cover this medical bill, it will be due to appellant's failure to get the required pre-authorization. As between the parties here, it is appropriate for him to bear the entire expense. The district court did not abuse its discretion.
V.
We deny respondent's motion for attorney fees on appeal.