Opinion
No. C9-97-944.
Filed December 30, 1997.
Appeal from the District Court, Clay County, File No. F8891860.
Alan J. Sheppard, (for respondent)
DeAnn M. Pladson, (for appellant)
Considered and decided by Schumacher, Presiding Judge, Huspeni Judge, Forsberg, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
Pamela Kludt appeals from an administrative law judge's downward modification of respondent's child support, his failure to establish an escrow account or award attorney fees, and the terms of reimbursement of appellant's out-of-pocket medical costs.
DECISION I.
The decision to modify child support payments is within the broad discretion of the trial court and may be reversed only if there is "a clearly erroneous conclusion that is against logic and the facts on record." Moylan v. Moylan , 384 N.W.2d 859, 864 (Minn. 1986).
Appellant cites three factors in arguing that the ALJ erred in granting modification of respondent's support payments: (a) invocation of a rebuttable presumption; (b) exclusion of respondent's additional sources of income; and (c) failure to impute income.
Modification of child support payments may only be made upon a showing of, inter alia, substantially decreased earnings of a party "which makes the terms unreasonable and unfair." Minn. Stat. § 518.64, subd. 2(a) (1996). If a current guideline calculation produces an award that differs by at least 20% and in an amount of at least $50, a change in circumstances is presumed and the current support obligation is "rebuttably presumed to be unreasonable and unfair." Id.
Appellant contends that the ALJ erred in invoking the rebuttable presumption because a 20% difference would result in a support obligation of $1,112 or less and the current guideline obligation was $1,120. But the difference is de minimus and on this record it was not a reversible error to invoke the presumption. However, we conclude that the presumption was rebutted. Accordingly, the ALJ found a substantial change in circumstances based on the decrease in respondent's net monthly income from $2,700 in 1989 to $2,600 in 1996. On this record, the ALJ's determination was not clearly erroneous.
When modifying child support, the court must consider a number of factors, including "all earnings, income, and resources of the parents, including real and personal property." Minn. Stat. § 518.551, subd. 5(c)(1) (1996). Gifts may be included in an obligor's net income if it is "regularly received from a dependable source." Barnier v. Wells , 476 N.W.2d 795, 797 (Minn.App. 1991). Net income for purposes of determining child support includes "in-kind payments received by the obligor * * * if the payments reduce the obligor's living expenses." Minn. Stat. § 518.551, subd. 5(b)(1) (1996). Whether a source of funds is income for purposes of determining a person's child support obligation is a question of law that this court may review de novo. See Watson v. Watson , 379 N.W.2d 588, 590 (Minn.App. 1985).
Here respondent's repayment to his father of the credit card charges excludes their use from respondent's income and the use of his father's van, which is most aptly viewed as a gift, cannot be construed as income regularly received from a dependable source. The only in-kind payment on the record was a desk and credenza that was included in the income calculation. Finally, appellant offered no evidence of the dependability of respondent's contingency fees and accounts receivable. See Desrosier v. Desrosier , 551 N.W.2d 507, 509 (Minn.App. 1996) (finding annual bonus is dependable source of income and should be included in calculating child support payments).
A court may impute income where the obligor is voluntarily unemployed or underemployed. Minn. Stat. § 518.551, subd. 5b(d) (1996). In determining whether a party is voluntarily underemployed, a court cannot substitute its judgment as to what course an obligor should follow in the details of his business affairs. Hopp v. Hopp , 279 Minn. 170, 175-76, 156 N.W.2d 212, 217 (1968). The record supports the ALJ's conclusion that respondent was not voluntarily underemployed. See id. (holding that if the obligor has chosen not to make reasonable efforts to earn sufficient income, the court can refuse to accept the obligor's inability to perform as an excuse for failure to comply). Moreover, income may be imputed when it is impracticable to determine. Beede v. Law , 400 N.W.2d 831, 835 (Minn.App. 1987). Here respondent drew an ascertainable salary from his business and there is no need to impute income.
II.
Appellant next argues the ALJ erred by failing to require respondent to make a lump sum payment for appellant's out-of-pocket medical expenses. A trial court's duty in determining payments of past due obligations is to establish practical terms that avoid future litigation, as opposed to unrealistic provisions that would burden the obligor with an unrealistic financial obligation. Braun v. Braun , 350 N.W.2d 492, 494 (Minn.App. 1984). In this case, where it was appropriate to lower respondent's support obligation due to a decrease in income, we conclude that the repayment terms are practical and commensurate with respondent's ability to pay.
The ALJ ordered payment of "$100 per month to the extent there is any outstanding reimbursement remaining after crediting the Obligor for any overpayment in his child support between September 1, 1996 and April 30, 1997." Thus, it appears respondent only remains liable for $257.50.
III.
Appellant contends that pursuant to Minn. Stat. § 518.611, subd. 2(a) (1996), the ALJ erred when it implicitly denied her request for establishing an escrow account to facilitate regular support payments. "Statutory construction is a question of law which this court reviews de novo." Royal-Milbank Ins. Co. v. Busse , 474 N.W.2d 441, 442 (Minn.App. 1991) (citation omitted). Minn. Stat. § 518.611, subd. 2(a) requires "where income withholding is ineffective due to the obligor's method of obtaining income, the court shall order the obligor to * * * establish an account * * * for the purpose of depositing court-ordered child support payments." Respondent is not in arrears and appellant has not established that the statute mandates an escrow account under these circumstances.
IV.
Finally, appellant asserts that the ALJ erred by refusing to award attorney fees. A trial court may award reasonable attorney fees to a party after considering the financial resources of both parties. Minn. Stat. § 518.14 (1996). The decision rests almost entirely within the discretion of the trial court. Novick v. Novick , 366 N.W.2d 330, 334 (Minn.App. 1985). We find no abuse of discretion in the denial of attorney fees.
Affirmed.
While I believe the result reached by the majority is an equitable one, I submit that both the applicability of the rebuttable presumption and the determination of changed circumstances to support a decreased child support award merit closer examination. At the time of the dissolution in 1989, respondent's net monthly income was $2,700 and his child support obligation was $1,161. At the time of the modification hearing in 1997, respondent's net monthly income was $2,603 and his monthly child support obligation had risen to $1,390. This increase came as a result of cost-of-living adjustments made pursuant to Minn. Stat. § 518.641 (1996).
Rather than require this court to struggle with the questions of whether the 20% presumption had been met or whether the circumstances had changed substantially, in candor, we might recognize the possibility that even though appellant and the minor children unquestionably endured the effects of higher prices, respondent's income between 1989 and 1997 had not kept pace with the cost of living, and perhaps his child support obligation should not have reflected the cost-of-living increase either.
Under the terms of the dissolution decree, it was respondent's obligation to seek appropriate relief from the consequences of the cost-of-living statute. Had he done so, perhaps the parties could have been spared the expense of this litigation and been able to reallocate family resources for the benefit of the minor children.
Appendix A of the decree of dissolution dated November 14, 1989, reads in relevant part:
THE CHILD SUPPORT ORDERED HEREIN SHALL BE ADJUSTED EVERY TWO (2) YEARS BASED UPON A CHANGE IN THE COST-OF-LIVING EFFECTIVE ON THE FIRST OF MAY OF THIS YEAR, AS PROVIDED IN MINNESOTA STATUTES § 518.641. * * * ANY COST-OF-LIVING ADJUSTMENT PROVIDED FOR HEREIN SHALL BE COMPOUNDED. NO ADJUSTMENT FOR COST-OF-LIVING SHALL BE MADE UNLESS THE FOLLOWING CONDITIONS ARE MET:
(1) The person entitled to receive the payment or the public authority serves a notice of its application for adjustment by mail on the person responsible to make the payment at Obligor's last known address at least twenty (20) days before the effective date of the cost-of-living adjustment;
(2) Said notice shall inform the person responsible to make the child support payments that an adjustment in payment shall become effective on the first day of May; and
(3) The cost-of-living adjustment shall be automatic unless the person responsible to make the payment requests a court hearing on the issue of whether the adjustment should take effect and to stay imposition of the adjustment pending the outcome of the hearing. Notice of said Court hearing shall be served on the person entitled to receive the payment and the public authority involved, if any.