Opinion
No. C4-02-1676.
Filed July 22, 2003.
Appeal from the District Court, Washington County, File No. F5986357.
Leoniede M. Brennan, (attorney pro se)
Wright S. Walling, Jessica J.W. Maher, Walling Berg, P.A., (for appellant)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Appellant William Braun contends that the district court erred by: failing to grant joint physical custody of the minor child to the parties, setting his child support obligation at the statutory maximum, failing to apply the Hortis/Valento formula to calculate his child support obligation, awarding attorney fees to respondent, ordering him to supply all transportation to effectuate his visitation with the minor child, awarding respondent an "equalizing" payment with respect to the marital property, and failing to order the minor child's last name changed to Braun. We affirm in part, reverse in part, and remand; motion denied.
FACTS
Appellant William Braun and respondent Leoniede Brennan were married in 1997. On December 3, 1997, the parties' son, L.B., was born. On November 19, 1998, Brennan moved out of the parties' home in Woodbury, Minnesota and signed a petition seeking legal separation on December 7, 1998. On February 26, 1999, Brennan moved the district court to amend the petition for legal separation to a petition requesting dissolution of marriage. This motion was granted. On March 12, 1999, the district court ordered a custody evaluation. This was followed by an order for appointment of a guardian ad litem. On May 3, 2000, the district court ordered Braun to pay $453 per month in child support based on the agreement between the parties.
On June 29, 2000, trial was scheduled to begin. The parties accepted the custody evaluation's recommendations. The parties also agreed to submit financial issues to independent accountants who would then submit reports to the court. The matter languished, with a series of motions and delays attributable to both parties. Eventually, on August 29, 2001, Brennan filed for bankruptcy, seeking to discharge over $100,000 in debt owed to various attorneys she had retained during the course of the dissolution proceeding.
On October 12, 2001, the district court issued an order granting the parties joint legal custody and awarding "primary physical custody" to Brennan "[p]ursuant to the recommendations of [the custody evaluation]." After setting forth a detailed itemization of the parties' agreement regarding parenting time, the district court further ordered that the upcoming trial would not address custody or visitation issues. The parties could not agree as to the child's last name. The district court referred the parties to the parenting consultant for resolution of this matter. The district court also recognized the delays in resolving the financial issues and that "[t]he court's leniency will extend no further." The district court referenced the parties' on-going disagreements regarding discovery and ordered Braun to "provide to [Brennan's] attorney all discovery as set forth as Exhibit A to [Brennan's discovery motion papers]." The district court included a penalty provision in the order regarding the discovery dispute: "Failure to provide any of the discovery contained therein shall subject [Braun] to a penalty in the form of attorney's fees in the amount of $1,000 per day until all such discovery is provided."
On March 19, 2002, the district court issued an order to show cause as to why Brennan should not be found in constructive civil contempt for failure to comply with the court's October 12th order. The order to show cause related to Brennan's failure to meet with the parenting consultant and visitation expeditor, among other issues. On April 4, 2002, after Brennan's counsel withdrew "for unknown reasons," Brennan received a continuance of the contempt hearing, which also necessitated rescheduling the trial date. The district court also ordered the parties to "simultaneously submit written arguments regarding the accountants' report. Counsel shall then have one week to submit simultaneous responses." The contempt hearing was then held on April 12, 2001. The court issued its order on May 8, 2002, finding Brennan in contempt for her failure to work with Braun and the parenting consultant as required by the district court's October 12, 2001 order. On July 30, 2002, the district court vacated the contempt order, after receiving word from the parenting consultant that Brennan had cooperated consistent with the court's order.
The district court, by judgment filed July 31, 2002, dissolved the marriage and addressed other associated matters. The court noted that Brennan is a licensed attorney practicing patent law on a part-time basis for various law firms over the last several years. The court found that Brennan earned approximately $63,000 per year from 1995 through 1998, and $83,000 in 2001.
The district court made several findings related to Braun's income. The district court found Braun to be self-employed as the sole proprietor of American Technologies and Solutions (ATS), listing the same Red Wing, Minnesota address as Braun's home address. ATS provides services to only one client, Arnan Services, Inc (Arnan). Arnan also lists the same Red Wing, Minnesota address as its business address. The parties disputed the ownership of Arnan. The district court noted that Braun has claimed, at various times, to own 0.1%, 1%, 16.6%, and 50% of Arnan. Braun's father is the other owner of Arnan. During the years 1997 through 2000, Braun claimed individual income from Arnan in amounts ranging from $1 to $9; during tax years 1999 and 2000, Arnan itself claimed ordinary income of $22 and $25, respectively, despite gross receipts in excess of $375,000 for each of those years.
The district court also noted Braun's apparent ownership of "at least 90%, and probably 98%, of Comdyne, Inc." (Comdyne), which also has the same Red Wing address as Braun, ATS, and Arnan. Braun listed himself as chief executive officer of Comdyne, which provides services to ATS. Braun claimed Comdyne earned income of between $17 and $139 from 1996 to 1998 on gross receipts in excess of $26,000 for each of those years. Although "Comdyne appears to be active at least through 2000," the district court found that it did not have "financial information regarding Comdyne after 1998."
Braun claimed income in the following amounts: $22,491 in 1995, $27,268 in 1996, $29,621 in 1997, $35,339 in 1998, and $23,840 in 1999. The district court noted "[i]nformation as to [Braun's] income in 2000 and 2001 is scant." In pre-hearing statements filed May 30, 2000 and December 26, 2001, Braun claimed net income of $6,280 and $9,588, respectively. The district court found Braun less than candid as to his finances:
After an extensive and thorough review of [Braun's] claims regarding income and expenses, the court finds [Braun's] claims lack credibility. Both ATS and Arnan are family-held entities. A review of the extreme expenses incurred by [Braun], including excessive credit card expenditures, and the payment of at least $113,000 in attorney fees, contradicts [Braun's] claims to a low income.
The district court noted Braun incurred and paid over $237,000 in debt on his Discover card during 1999 through 2001, and over $24,000 on another credit card, composed mostly of restaurant meals for Braun. The district court noted that a third credit card showed charges and payments of almost $7,000, and that "despite discovery requests, [Braun] provided no information as to the use of [a fourth credit card]."
After considering this evidence and information, or lack thereof, the district court stated:
It is inconceivable to the court that [Braun] can incur such expenses to finance his standard of living based upon his claims of a modest income. [Braun] has failed to provide the court with a satisfactory explanation as to where the income comes from for payment of these expenses. The court can only surmise that the expenses are being paid for by [Braun's] family businesses.
The district court then determined that it was appropriate under the circumstances to impute to Braun an income requiring the maximum amount of child support under the guidelines as set forth in Minn. Stat. § 518.551 (2002) $6,751 per month. This imputed income yields a maximum monthly child-support obligation of $1,687.75, which the court ordered to begin August 1, 2002.
As of July 2002.
The district court also noted that the parties agreed to prepare and submit to the court an accounting report analyzing the parties' assets, liabilities, and income. After many delays and disagreements, the report was filed on December 26, 2001. After noting
Braun's objections, the district court ordered Braun to pay Brennan $13,259 as a marital property equalizer payment.
The district court addressed the issue of discovery problems and Brennan's claim that she was owed attorney fees under the penalty provision of the court's earlier order. The district court noted that correspondence of November 20, 2001 from Braun's attorney "at least purports to provide discovery to [Brennan]. [Braun's] failure to provide appropriate discovery needlessly extended the length of this litigation * * *." The district court concluded that Braun should pay $30,000 toward Brennan's attorney fees "for his failure to provide discovery in a timely fashion." At another point in the findings, the district court described this $30,000 as "discovery costs."
With respect to custody of L.B., the court stated the parties had entered into various agreements "based primarily upon the custody evaluation." Specifically, the court decided to "award joint legal custody of [L.B.], with primary physical custody to [Brennan], subject to visitation." (emphasis added). The court went on to state, "[a]s [Brennan] is the primary custodial parent and this is not a joint physical custody arrangement, the court specifically finds that the application of the [Hortis/Valento] formula to calculate child support is inappropriate." (emphasis added).
The parties had not reached agreement as to L.B.'s full legal name. The district court again referred them to the parenting consultant to address this matter. The district court allowed, however, "[i]f issues remain unresolved despite the efforts of the parties and [the parenting consultant], the parties may bring appropriate motions, if necessary, to occur no sooner than 90 days after the filing of this order." Braun appealed the July 31, 2002 district court decision.
DECISION
1. Nolte v. Mehrens, 648 N.W.2d 727, 731 (Minn.App. 2002), requires the district court to specifically identify a physical-custody arrangement as joint or sole physical custody. In Nolte, the parties stipulated that the mother was to have "primary physical custody" of the minor child. Id. at 728. This court decided a remand was necessary because the district court had not made a specific finding as to physical custody. Id. at 731.
Here, the parties' stipulated dissolution judgment awards Brennan "primary physical custody" and the district court ruled that the judgment awarded Brennan sole physical custody as opposed to awarding the parties joint physical custody. Braun challenges this ruling, arguing that the parties' use of the term "primary physical custody" contemplated a joint physical custody arrangement rather than a sole custody arrangement.
Stipulated dissolution judgments are deemed binding contracts. Tomscak v. Tomscak, 352 N.W.2d 464, 466 (Minn.App. 1984). Whether a stipulated dissolution judgment is clear or ambiguous is a legal question. Anderson v. Archer, 510 N.W.2d 1, 3 (Minn.App. 1993) (stating whether a stipulated judgment is clear is a legal question); Halverson v. Halverson, 381 N.W.2d 69, 71 (Minn.App. 1986) (stating whether stipulated judgment provision is ambiguous is a legal question). Absent ambiguity, it is not proper for a court to interpret a stipulated judgment or a contract. See Starr v. Starr, 312 Minn. 561, 562-63, 251 N.W.2d 341, 342 (1977) (stating court cannot construe stipulation language that is plain and unambiguous); Telex Corp. v. Data Prods. Corp., 271 Minn. 288, 295, 135 N.W.2d 681, 686-87 (1965) (stating if contract is clear, "it is neither necessary nor proper in construing it to go beyond the wording of the instrument itself"). If ambiguous, the district court may interpret a judgment. Stieler v. Stieler, 244 Minn. 312, 319, 70 N.W.2d 127, 131 (1955). In doing so, the district court may consider the whole record as well as parole evidence. Palmi v. Palmi, 273 Minn. 97, 103, 140 N.W.2d 77, 81 (1966). But, "full effect must be given to that which is necessarily implied in the judgment, as well as to that actually expressed therein." Stieler, 244 Minn. at 319, 70 N.W.2d at 131- 32.
Here, while the district court did not explicitly conclude that the custody provision was ambiguous, the parties presented the district court with irreconcilably conflicting readings of that provision; Braun argued that the award to Brennan of "primary physical custody" meant that the parties were awarded joint physical custody, while Brennan argued that the provision was an award to her of sole physical custody. On this record, we conclude both that the district court implicitly ruled the provision to be ambiguous and that this ruling is consistent with case law. See Erickson v. Erickson, 449 N.W.2d 173, 178 (Minn. 1989) (stating "[d]isagreement between the parties as to the interpretation of a dissolution decree may be tantamount to a finding of ambiguity"); Halverson, 381, N.W.2d at 71 (stating judgment is ambiguous if reasonably subject to more than one interpretation).
Generally, the meaning of an ambiguous judgment provision is a fact question. See Landwehr v. Landwehr, 380 N.W.2d 136, 140 (Minn.App. 1985) (stating meaning of ambiguous judgment provision is a fact question). The district court's interpretation, on this record, was not clearly erroneous and we conclude that sole physical custody was awarded to Brennan. We note also that the district court determination is also consistent with the strong preference by Minnesota courts against the award of joint physical custody at least in contested cases. Brauer v. Brauer, 384 N.W.2d 595, 598 (Minn.App. 1986) (holding that such arrangements are appropriate "only in exceptional cases" because of the "divisiveness inherent in such a scheme").
Given that Brennan was awarded sole physical custody, the district court's decision not to apply the Hortis/Valento formula was proper. See Rogers v. Rogers, 622 N.W.2d 813, 821 (Minn. 2001) ("[T]he 1998 amendment to Minn. Stat. § 518.54, subd. 8 compels the conclusion that Hortis/Valento is not to be applied in circumstances of sole physical custody, absent findings of grounds for deviation from the guidelines * * *.").
2. Braun takes issue with the district court's determination as to his child support obligation. The district court has broad discretion with respect to child support, but it abuses its discretion when it resolves the matter in a manner that is "against logic and the facts on record." Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984). The district court's determination as to an obligor's net income for purposes of calculating child support will not be reversed unless it has no reasonable basis in fact. Strauch v. Strauch, 401 N.W.2d 444, 447 (Minn.App. 1987).
In the present case, the district court specifically found Braun's representations as to his income not credible. This determination is the district court's to make and will not be overturned on appeal unless clearly erroneous. Minn.R.Civ.P. 52.01. The district court relied upon circumstantial evidence indicating Braun earned significantly more than he claimed. The district court noted Braun's significant expenditures and the payments made toward these expenditures. Braun alleges that these expenditures were for business purposes and were not necessarily paid by him. The district court was not convinced, however, and the record certainly supports the district court's conclusion that Braun was in fact earning more than he claimed. Braun did not persuade the district court that all of these expenses were for business purposes only, and the district court noted Braun's failure to produce certain information and evidence and adequately explain his assertions that so obviously belied common sense. The district court's finding that Braun's net income as of July 1, 2002 was at least $6,751 per month is not clearly erroneous and will not be reversed on appeal.
The district court described its calculation of Braun's net income as an "imputation" of income. We conclude that the district court actually made a finding, based upon the evidence and reasonable inferences to be drawn therefrom, that Braun's net income was at least $6,751 per month. The district court did not assign to Braun an income he could or should earn, but was not; rather the district court estimated that Braun's income was, in fact, at a minimum, equal to that level of increase requiring the maximum child support obligation under the guidelines.
3. Braun also takes issue with the district court's decision to award Brennan an equalizing payment of $13,259 with respect to the parties' marital property. The district court specifically noted the parties' agreement to submit the financial information and evidence to the court in the form of a report from accountants. The district court also noted the extensive delays the court endured in waiting for the report. The parties had opportunity to submit written objections and arguments to the court regarding the accounting report, as well as responses to the opposing party's objections and arguments. Braun availed himself of these opportunities. The district court adopted the recommendation as set forth in the accounting report as to the appropriate division of the marital property. The district court's decision was clearly supported by the record and is not an abuse of discretion. See Minn.R.Civ.P. 52.01 (district court's findings of fact shall not be set aside unless clearly erroneous).
4. Braun argues that the district court's decision that he should bear full responsibilities for transportation costs related to visitation should be overturned. This decision is for the district court to make, and we will not disturb it unless the district court abused its discretion. Olson v. Olson, 534 N.W.2d 547, 550 (Minn. 1995). The record indicates that originally the parties lived in the seven-county metro area, and it was Braun's decision to relocate to Red Wing. Accordingly, the transportation costs now the subject of Braun's complaints are predominantly due to his own decision to move. The district court did not abuse its discretion in requiring Braun to pay transportation costs related to visitation.
5. Braun maintains that the district court abused its discretion by ordering him to pay $30,000 toward Brennan's attorney fees. The district court based its award on its October 12, 2001 order stating that Braun's failure to produce any of the items set forth in Brennan's "List of Information Not Yet Produced by Bill Braun" by November 20, 2001 would result in "a penalty in the form of attorney's fees in the amount of $1,000 per day until all such discovery is provided." As of the date of the court's order, filed July 31, 2002, Brennan alleged that at least some of the information had not yet been provided. Braun countered that some of Brennan's requests sought material that simply did not exist ("Swiss bank accounts," and "off-shore trusts or accounts"), and that he had supplied several releases to Brennan and her many attorneys so that she could obtain whatever other information she desired. Braun also argues that his attorney had sent some additional information, and yet another set of releases, to Brennan's attorney prior to the November 20, 2001 deadline. Brennan did not bring the discovery matter before the court again prior to the July 31, 2002 judgment. Additionally, the district court informed the parties at a hearing on December 21, 2001 (i.e. subsequent to the November 21, 2001 deadline) that it would no longer deal with discovery issues. The district court specifically referenced its right, as fact-finder, to draw reasonable inferences at trial from Braun's failure to produce certain information.
The district court's ultimate decisions as set forth in the July 31, 2002 document were based upon the written evidence and arguments the parties submitted. This was the parties' agreement, and Braun's objections to the potential shortcomings of this process are not well-taken. On the other hand, this process does offer a possible explanation as to Braun's assertion now that he was under the impression, as of July 31, 2002, that discovery issues were concluded and thus the discovery dispute and the district court's attorney fees award took him by surprise.
Given the district court's determination as to Braun's minimum net income, it would appear that Braun was made to bear this reasonable, negative inference as the district court drew in its July 31, 2002 findings of fact.
The district court's findings of July 31, 2002 do not specify how Braun failed to comply with Brennan's discovery requests. The district court did not indicate what documents or information Braun failed to provide. Exhibit A to the district court's October 11, 2001 order directing Braun to provide discovery contains items Braun maintains are mere figments of Brennan's imagination. We do not find in the record any evidence supporting Brennan's allegations that Braun has "Swiss bank accounts" or "off-shore trusts or accounts." Braun has maintained throughout that he has no such accounts.
Whether or not Braun is credible on this issue, and whether or not Brennan has satisfied the district court that there is something to actually discover, is a determination for the district court on remand. Also, the specific discovery shortcomings should be detailed warranting the district court's award of fees. The district court makes reference to the $30,000 fee assessment as "discovery costs," but provides no findings indicating how this amount was calculated. We cannot accurately determine, based on the record before us, how the district court justifies the award of fees nor how the district court arrived at the $30,000 figure. A remand is necessary on the issue of the attorney fees for the district court to set forth precisely what Braun failed to produce, whether he had justification, whether his alternative production of releases was or was not appropriate under the circumstances and related to the specific request, and the specific basis for the dollar amount assessed if an award is made. See Minn. Stat. § 518.14, subd. 1 (2002) (addressing attorney fees in dissolution matters); Geske v. Marcolina, 624 N.W.2d 813, 818-20 (Minn.App. 2001) (addressing attorney fees under Minn. Stat. § 518.14, subd. 1).
6. Braun argues that the district court erred by not ordering L.B.'s last name changed to his last name. The district court referred the parties to the parenting consultant for an attempt to reach an agreement on this matter. The parties could not reach any agreement despite the assistance of the parenting consultant. The district court did indicate, however, that the court would entertain a motion after 90 days if the issue remained unresolved. Braun did not bring such a motion, and we are not convinced that this court has jurisdiction over this issue.
Nonetheless, given this court's remand to the district court for a determination as to the attorney fees, it would seem an appropriate opportunity for Braun to seek a definitive ruling on L.B.'s last name. Certainly 90 days have now passed since the court's original order. Since this issue must first be addressed by the district court following an appropriate motion by the parties, we decline to decide it in this proceeding.
7. Brennan's motion to strike is not well-taken, and it is denied.