Opinion
No. A04-2433.
Filed January 17, 2006.
Appeal from the District Court, Hennepin County, File No. Mf 246934.
Celeste Annette Voigt, (pro se respondent).
Lynn Klicker Uthe, (for appellant).
Considered and decided by Lansing, Presiding Judge; Shumaker, Judge; and Hudson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
In this appeal from judgment and the denial of a motion for amended findings in a marital-dissolution proceeding, Wade Voigt challenges the district court's determinations on child support, spousal maintenance, and attorneys' fees. Celeste Voigt, in a notice of review, also challenges the amount of attorneys' fees. Because the district court did not misapply the law, abuse its discretion, or make findings unsupported by the record, we affirm.
FACTS
Wade and Celeste Voigt separated in 2001, and the district court entered judgment dissolving their twenty-one-year marriage in May 2004. The Voigts stipulated that Celeste Voigt would receive physical and legal custody of their two minor children. At a contested hearing, the Voigts litigated the remaining issues of child support, spousal maintenance, property division, and attorneys' fees.
In the dissolution judgment that followed the contested hearing, the district court ordered Wade Voigt to pay Celeste Voigt $2,025 a month for child support and $1,970 a month for spousal maintenance. For purposes of determining support and maintenance, the district court imputed to Wade Voigt a net monthly income of $8,686. At the time of the contested hearing, in March 2004, Wade Voigt had been unemployed for several months as a result of his employer's merger with another company. The district court found that Wade Voigt's efforts to obtain new employment were minimal and unreasonable and imputed income based on his severance package and his employment history. Celeste Voigt was a homemaker for most of their marriage and, at the time of the hearing, her net monthly income was $552.
The district court denied Celeste Voigt's request for attorneys' fees but, as part of the marital-property division, ordered Wade Voigt to reimburse her for debt she incurred to pay her attorneys. The court denied Celeste Voigt's request for attorneys' fees expended in posttrial motions.
On appeal from judgment and the denial of posttrial motions, Wade Voigt argues that the district court erred by: (1) imputing income to him for purposes of spousal maintenance; (2) providing for permanent rather than temporary maintenance; (3) failing to decrease child-support payments upon emancipation of the older child; and (4) ordering him to reimburse Celeste Voigt for debt she incurred for attorneys' fees. Celeste Voigt, in a notice of review, challenges the district court's denial of her requests for attorneys' fees.
DECISION I
WadeVoigt's first three issues relate to the district court's determination of his income for purposes of maintenance. First, he argues the court erred by imputing income based on the absence of good-faith efforts to obtain employment. Second, he argues that even if the court properly imputed income, it erred by incorrectly imputing an amount that includes incentive pay and unused vacation pay. Finally, he asserts the district court erred by counting his incentive pay as both income and marital property.
The district court may impute earning capacity as a measure of income if an individual has unjustifiably self-limited his or her income. Putz v. Putz, 645 N.W.2d 343, 350 (Minn. 2002) (addressing unjustifiable self-limitation of income in context of support modification). When a change in income results from good-faith actions, a separated spouse should share in the hardship. Giesner v. Giesner, 319 N.W.2d 718, 720 (Minn. 1982) (analogizing circumstances of separated family to that of unseparated family). In determining whether unemployment or underemployment is in good faith, a court should evaluate an individual's ability to work, the availability of gainful employment, the disposition and will to provide for dependents, and the individual's diligence in seeking employment. Garcia v. Garcia, 415 N.W.2d 702, 705 (Minn.App. 1987). In its determination of spousal maintenance, the district court should not reward a lack of reasonable effort. See Hecker v. Hecker, 568 N.W.2d 705, 710 (Minn. 1997) (affirming district court's decision to impute income when party did not exercise reasonable efforts).
The dissolution judgment provided that Wade Voigt's spousal-maintenance obligation would not automatically reduce when his severance pay terminated. The district court based this determination on Wade Voigt's history of earnings and his failure to show that he would be unable to obtain comparable employment after making diligent and good-faith job-search efforts. The district court found that, in the last three years, Wade Voigt had earned in the range of $144,000 gross income each year with a net income of $9,000 a month. Wade Voigt does not dispute this finding, but disputes the court's characterizations of his efforts to obtain ongoing employment.
The record supports the district court's determination that Wade Voigt failed to show that he made diligent and good-faith efforts to obtain ongoing employment. The district court accepted Wade Voigt's testimony that he involuntarily left employment at Lutheran Brotherhood, now Thrivent, after the merger. The merger eliminated Wade Voigt's treasurer position in 2001, but he continued at Thrivent as a finance director. When problems developed in this position in January 2003, he accepted a severance package that allowed him to leave at the end of March. From March 2003 to August 2003, he continued to work at Thrivent on various projects. Thrivent classified Wade Voigt's termination as involuntary.
From August 2003 to March 2004, Wade Voigt interviewed for three positions and told one of the interviewers that he was not interested in the job. The week of the contested dissolution hearing in March he had three interviews scheduled. As part of the severance package, Thrivent provided six months of consulting services with an employment management company that specialized in placing people in management positions and offered workshops and internet-based skills and interests assessments. WadeVoigt did not use these services until late-November 2003, and then attended only one meeting and suspended all use for two months beginning in January 2004. He testified that his search efforts consisted of networking and using the internet and that he limited his search to jobs with an annual salary in the range of $120,000 and to jobs in the Minneapolis-St. Paul area because of his community ties and the area's "huge job market."
The record supports the district court's findings that his efforts were "insufficient to show good faith" and "far less than a reasonable person would or should have done." We conclude that the district court did not abuse its discretion by imputing income to Wade Voigt. Although most of Wade Voigt's argument on income imputation addresses only the issue of spousal maintenance, he also refers to the determination of income for purposes of child support. The absence of good-faith efforts applies equally to the determination of income for purposes of child support, but, in setting child support, courts are no longer required to find bad faith before imputing income to a voluntarily unemployed or underemployed parent. Walker v. Walker, 553 N.W.2d 90, 96 n. 1 (Minn.App. 1996); see also Minn. Stat. § 518.551, subd. 5b(d) (2004) (stating no requirement of bad faith); Franzen v. Borders, 521 N.W.2d 626, 628 (Minn.App. 1994) (discussing applicability of 1991 legislative amendments to determinations of child support).
Wade Voigt next contends that, even if the court acted within its discretion by imputing income, it erred by incorrectly imputing an amount that includes incentive pay and unused vacation pay. The district court imputed income by continuing Wade Voigt's spousal maintenance at the same level after the severance pay ended. He maintains that the district court therefore based the amount of imputed income on the severance compensation from Thrivent. The determination of earning capacity was based not only on the severance pay, but also on Wade Voigt's history of earnings. Averaging Wade Voigt's income over the past three years, the district court determined that he had an annual gross earning capacity of $144,000, and a net earning capacity of $9,000 a month. Nonetheless, for the purpose of analyzing Wade Voigt's argument, we will start with his contention that the imputed income is based on the severance pay, which resulted in a gross amount of approximately $106,388 a year. This amount was based on his eligible earnings, twenty percent of which was attributable to the company's incentive plan or bonus structure. The annual amount of $106,388 results in a monthly net income of $8,866. The district court, either in an error of division or transposition, imputed a net monthly income of $8,686 instead of $8,866, but neither Celeste nor Wade Voigt has raised this error. The error works in Wade Voigt's favor by imputing $180 a month less than the monthly amount of the severance pay.
Whether a source of funds is income is a question of law this court reviews de novo. Sherburne County Soc. Servs. v. Riedle, 481 N.W.2d 111, 112 (Minn.App. 1992). "Income" is "any form of periodic payment to an individual." Minn. Stat. § 518.54, subd. 6 (2004). A source of funds is income if it is a periodic and dependable source of support. Stangel v. Stangel, 366 N.W.2d 747, 749 (Minn.App. 1985). Incentive pay or bonus payments are, by definition, forms of periodic payment. Novak v. Novak, 406 N.W.2d 64, 68 (Minn.App. 1987), review denied (Minn. July 22, 1987). This court has previously held that determinations of income should include bonus payments, even when the amount of bonus income varies significantly. Id.; Desrosier v. Desrosier, 551 N.W.2d 507, 509 (Minn.App. 1996) (finding error in exclusion of bonus payments from obligor's income even though bonus was not guaranteed and amount varied).
Wade Voigt has not disputed that he regularly received incentive pay. He contends that this pay was contingent on performance and that including it as income in his severance package resulted in an amount "significantly larger" than his regular pay. We reject this argument because his income-tax filings from recent years confirm the regular receipt of income at this level. Given the consistent earnings history, the district court did not err by relying on the amount of Wade Voigt's severance package that included a percentage attributable to incentive pay.
The severance pay also included unused vacation pay. Wade Voigt contends that the vacation pay should not be included for determining his earning capacity. We agree. Net income includes income actually available and received. Lenz v. Wergin, 408 N.W.2d 873, 876 (Minn.App. 1987). Although Minnesota appellate courts have not specifically addressed whether vacation pay constitutes income for purposes of maintenance or child support, other jurisdictions have recognized that unused vacation pay should not be considered a dependable source of income and have excluded it from net-income computation. See Bridgeman v. Bridgeman, 63 S.W.3d 686, 691 (Mo.Ct.App. 2002) (affirming district court's exclusion of unused vacation pay as income); Chanko v. Chanko, 490 S.E.2d 630, 635 (S.C.Ct.App. 1997) (refusing to include unused vacation pay as income because of fluctuation in amount). The district court, in its posttrial order, also agreed that the unused vacation pay should not be considered but determined that the error was insubstantial and therefore did not affect the judgment. See Minn. R. Civ. P. 61 (stating that error will not result in reversal unless it affects substantial rights).
The district court's characterization is supported by the record. The district court found, based on historical earnings, that Wade Voigt's established earning capacity was $9,000 net a month. The district court imputed the net monthly amount of $8,686. Based on the severance pay, the imputed amount would correctly be $8,866. Because the district court imputed an amount less than Wade Voigt's earning capacity and less than the severance pay, he must demonstrate a prejudicial effect that would exceed the established $9,000 net monthly earning capacity, not just the imputed $8,686. He has not. See Bloom v. Hydrotherm, Inc., 499 N.W.2d 842, 845 (Minn.App. 1993) (holding appellant has burden of proving prejudicial error to prevail on appeal), review denied (Minn. June 28, 1993).
Finally, we reject Wade Voigt's argument that the district court double-counted his incentive pay. The dissolution judgment divided his 2003 incentive pay as marital property. The court's imputation of income is a projection of Wade Voigt's future income, not an identification of his future divisible assets. Because the marriage is dissolved, Wade Voigt's future income that is attributable to incentive pay will not be marital property.
II
Wade Voigt contends that the district court abused its discretion by not limiting the duration of spousal maintenance. When the district court finds that a spouse lacks sufficient property to meet reasonable needs or is unable to provide adequate self-support, the court determines the amount and duration of maintenance by considering "all relevant factors," including the marriage duration; the marital standard of living; the financial resources of both spouses; the contribution of both spouses to marital property; and the dependent spouse's age, health, need for education or training, and loss of employment opportunities during the marriage. Minn. Stat. § 518.552, subds. 1, 2 (2004). The district court has broad discretion in applying these considerations, but if uncertainty exists on whether the maintenance should be temporary or permanent, the court should order permanent maintenance subject to later modification. Id., subd. 3 (2004); Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
The evidence supports the district court's order of permanent spousal maintenance. In reaching its conclusion, the district court made findings related to each maintenance factor listed in Minn. Stat. § 518.552, subd. 2, and the record supports its findings. The court found that Celeste Voigt had been employed early in the marriage, but left that employment in 1988 to care for the Voigts' children. At the time of the hearing, she had been out of the workforce for most of the past sixteen years, her previous job skills were outdated, and her current part-time job as a food-service worker approximately four hours a day for a school district yielded only $11.84 an hour. Both of the Voigts' children have medical and mental-health challenges and Celeste Voigt has medical problems that include fibromyalgia, migraine headaches, and depression. The vocation assessment determined that she was currently suited for jobs that pay $11 to $12 an hour and she could potentially earn $15 an hour after three to four years of employment.
Celeste Voigt's projected reasonable monthly needs total $4,252 and her resources amount to $2,577. The marital property she received does not produce income. The district court found that her future potential earnings of $15 an hour, together with current child support, will result in a standard of living substantially below the standard established during the marriage. See Chamberlain v. Chamberlain, 615 N.W.2d 405, 411 (Minn.App. 2000) (evaluating need for maintenance based on expenses reflecting marital standard of living), review denied (Minn. Oct. 25, 2000). Wade Voigt's imputed net monthly income is $8,686 a month and his reasonable monthly expenses are $4,379. After his child-support payment, he has $2,282 a month remaining, which allows for a maintenance payment of $1,970 a month. The district court did not abuse its discretion by ordering permanent maintenance, subject to reconsideration on changed circumstances.
As part of his posttrial motion to amend the findings, Wade Voigt moved to modify spousal maintenance. The record supports the district court's denial of the motion for failure to demonstrate changed circumstances that made the original determination unreasonable or unfair. See Minn. Stat. § 518.64, subd. 2(a) (2004) (stating that party seeking modification must show one of six changed circumstances). The record shows that Wade Voigt found employment after trial. He submitted a personal affidavit and an affidavit from his accountant that contained several estimates of Wade Voigt's net monthly income but provided no concrete information on his current net income or living expenses. In light of the insufficient submissions and the absence of projected changes in his or Celeste Voigt's income, the district court did not abuse its discretion by denying the motion.
III
As a general rule, a child-support obligation ends when the child is emancipated. Maki v. Hansen, 694 N.W.2d 78, 83 (Minn.App. 2005). When a parent has a child-support obligation for more than one child and the court sets a single child-support amount without apportioning it among the obligor's children, however, the set child-support amount "continues in the full amount until the emancipation of the last child for whose benefit the order was made." Minn. Stat. § 518.64, subd. 4a(b) (2004). The unapportioned obligation in subdivision 4a(b) of section 518.64 stands in contrast with subdivision 4a(a), which provides for automatic termination upon emancipation when child support is set in a specific amount for each child. Id., subd. 4a(a) (2004).
The district court ordered Wade Voigt to pay $2,025 a month in child support and stated that amount "shall not be reduced until the last child" has been emancipated. Wade Voigt does not challenge the amount of child support, but instead he argues that the court erred by not providing for a reduction in child support upon the oldest child's emancipation. Because the district court provided for unapportioned child support rather than child support apportioned between the two children, Minn. Stat. § 518.64, subd. 4a(b), expressly authorizes the court's directive to continue support until the last child is emancipated.
IV
A court shall award need-based attorneys' fees when necessary for the good-faith assertion of a party's rights if the party seeking fees lacks the ability to pay them and the party from whom fees are sought has the ability to pay. Minn. Stat. § 518.14, subd. 1 (2004). A district court's decision on attorneys' fees will not be reversed absent an abuse of discretion. Gully v. Gully, 599 N.W.2d 814, 825 (Minn. 1999).
The district court denied Celeste Voigt's direct request for attorneys' fees and instead allocated $29,252.19 of Celeste Voigt's debt for attorneys' fees as marital debt, which Wade Voigt was required to pay. The district court also ordered Wade Voigt to pay Celeste Voigt $14,100 to reimburse her nonmarital expenditures for attorneys' fees. Wade Voigt argues that the district court abused its discretion by ordering these payments; Celeste Voigt argues the court abused its discretion by failing to order Wade Voigt to pay an additional $40,000 of attorneys' fees.
The evidence supports the district court's decisions. In the course of the litigation, Celeste Voigt was represented by three different attorneys and incurred approximately $74,000 in attorneys' fees. The district court deemed this amount "excessive" and attributable to Celeste Voigt's disorganization and lack of preparation for trial, and Celeste Voigt acknowledges that her actions increased the amount of fees. The district court found that both Celeste and Wade Voigt received marital property that could be used to pay attorneys.
Given the disparity in the parties' financial positions and Celeste Voigt's role in incurring excessive fees, the evidence supports both the court's decision to order the reimbursement and to deny further attorneys' fees. The district court acted within its discretion to deny Celeste Voigt attorneys' fees and instead order Wade Voigt to absorb some of Celeste Voigt's debt incurred for attorneys' fees. See Jones v. Jones, 402 N.W.2d 146, 149 (Minn.App. 1987) (holding district court has broad discretion in apportioning debt in dissolution proceeding).