Opinion
No. C7-97-1980.
Filed May 26, 1998.
Appeal from the District Court, Crow Wing County, File No. F79265.
John H. Erickson, (for respondent).
Roger T. Grembowski, (pro se appellant).
Considered and decided by Shumaker, Presiding Judge, Huspeni, Judge, and Schumacher, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
Appellant Roger Thomas Grembowski seeks to abolish or alter a constructive trust that was created to pay child support. Grembowski also seeks to reverse the district court's award of attorney fees to respondent Cristy Jane Grembowski, n/k/a Cristy Jane Kintop. We affirm in part and reverse in part.
FACTS
Grembowski and Kintop were divorced in 1988. Grembowski was ordered to pay child support for the parties' four children; by 1994, he was approximately $30,000 in arrears. The current appeal arises out of a September 1997 judgment on several motions Grembowski made.
Grembowski was involved in an automobile accident in 1993. He was injured and reached a settlement worth approximately $50,000. In April 1996, due to Grembowski's poor work history and child support arrears, the district court created a constructive trust for the $50,000. The purpose of the trust was to "ensure payment of [Grembowski]'s future child support obligation, with payment to be made upon Order of the Court after application by either party and a hearing." The court appointed the Crow Wing County court administrator as administrator of the trust. This court affirmed the propriety of the trust. See In re Marriage of Grembowski , No. C4-95-23 (Minn.App. Oct. 23, 1995).
In 1994, Grembowski paid approximately $23,000 of back child support.
From November 1995 through March 1996, Grembowski owed Kintop approximately $11,000. In April 1996, the district court ordered the $11,000 to be paid from the trust. Grembowski did not appeal the April 1996 judgment. As of September 1997, the principal balance of the constructive trust was $39,161.64.
In the district court's April 1996 findings of fact, it specifically found that Grembowski "paid by payment and credits $23,722.35." It is not clear from the record whether this was Grembowski's money and credits or whether it came from the accident settlement.
Since the divorce, Grembowski has been employed at numerous jobs for short periods of time before leaving. He has also experienced periods of unemployment. In 1994, the district court noted that Grembowski "ha[d] made only minimal efforts to find employment in the last five years." In April 1996, after noting Grembowski's work history, the district court concluded there was no assurance that Grembowski would stay employed or would continue to make the ordered child support.
Grembowski appeals from a September 1997 judgment that: (1) held res judicata barred reconsideration of the constructive trust; (2) found the reasons for creating the trust still existed; (3) authorized payments from the trust to cover outstanding medical bills and settlement costs from Grembowski's accident; and (4) awarded attorney fees from the trust to the attorneys for Kintop and Grembowski.
DECISION
1. Res Judicata.
Grembowski makes several challenges to the propriety of the constructive trust. The district court held that "[c]reation of, and reasons for, the constructive trust are res judicata." "[A]n adjudication on the merits of an issue is conclusive and should not be relitigated." Loo v. Loo , 520 N.W.2d 740, 744 (Minn. 1994). "Res judicata applies when there has been a final judgment on the merits, the same cause of action is involved, and the parties are identical." AFSCME Council No. 14 v. Washington County Bd. of Comm'rs. 527 N.W.2d 127, 130 (Minn.App. 1995). We review the applicability of res judicata de novo. Id.
First, the parties are identifical in this court's 1995 order opinion, in the district court's April 1996 judgment, and in this action. Second, Grembowski continues to claim that the constructive trust is improper. This issue has already been decided. The overall propriety of the constructive trust was ruled on by this court's 1995 decision and by the district court's April 1996 decision. Grembowski did not appeal the April 1996 judgment. See Dieseth v. Calder Mfg. Co. , 275 Minn. 365, 370, 147 N.W.2d 100, 103 (1966) ("[e]ven though the decision of the trial court in the first order may have been wrong, if it is an appealable order, it is still final after the time for appeal has expired"). Both of these final judgments compel the doctrine of res judicata as to Grembowski's current challenge to the existence of the trust.
Grembowski also argues that the trust should be dismantled because he is current in his support. While this issue was not clearly addressed by this court's 1995 decision and the district court's April 1996 decision, the doctrine of res judicata also operates to bar a claimant from litigating an issue that could have been brought with a previous action. Youngstown Mines Corp. v. Prout , 266 Minn. 450, 466, 124 N.W.2d 328, 340 (1963). Accordingly, we hold that Grembowski is barred from litigating this issue.
Even if res judicata did not apply to Grembowski's challenge to the continuance of the trust, we conclude that, on this record, the district court's reasons for the continued existence of the trust are not clearly erroneous. See Ferguson v. Shea , 374 N.W.2d 575, 576 (Minn.App. 1985) (trial court's findings supporting the creation of a constructive trust will not be set aside unless clearly erroneous). If an obligor has a history of nonpayment, a district court's creation of a trust to secure future child support is proper. Ulrich v. Ulrich , 400 N.W.2d 213, 217 (Minn.App. 1987). Grembowski's unstable work habits and history of non-payment of support justify the continued existence of the constructive trust.
2. Escrow Account and Present Value of the Trust.
Grembowski argues that he should be entitled to use the funds in the trust account to create an escrow account under Minn. Stat. § 518.614 (1996). The district court did not address this issue in its September 1997 order. An issue that has not been decided by the district court and that has been raised for the first time on appeal is generally not properly before this court. Miller v. Mercy Med. Ctr. , 380 N.W.2d 827, 831 (Minn.App. 1986), review denied (Minn. Mar. 21, 1986). This court does, however, have discretionary power to review such an issue. Id. ; Minn.R.Civ.App.P. 103.04. We have granted review where the issue was a matter of law and the parties have briefed the issue. Rasivong v. Lakewood Community College , 504 N.W.2d 778, 783 (Minn.App. 1993), review denied (Minn. Oct. 19, 1993). The interpretation of a statute is a question of law. Hibbing Educ. Ass'n v. Public Employment Relations Bd. , 369 N.W.2d 527, 529 (Minn. 1985). Further, we have also granted review in the interest of ending the litigation. Frank v. Winter , 528 N.W.2d 910, 913 (Minn.App. 1995), review denied (Minn. Apr. 27, 1995).
Grembowski currently has income withheld from his paycheck to pay his child support. He argues that the trust administrator should use money in the constructive trust to create an escrow account under section 518.614 and thereby terminate the paycheck income withholding. The trust and the income withholding both address Grembowski's child support obligation, but their purposes are different. The trust exists because Grembowski has a poor work history that in the past created large arrears. The trust serves to ensure that, even if Grembowski is not working, his children will receive support. On the other hand, income withholding exists to satisfy Grembowski's present and ongoing child support obligation. We find no merit in Grembowski's escrow claim.
Grembowski also claims that the district court erred when it failed to limit the amount of the trust to the present value of Grembowski's future child support obligation. The district court found that to pay out a portion of the trust to Grembowski would be "contrary to the public policy of the State of Minnesota and not in the best interests of the parties' minor children." The district court added that to make such payments would deprive the children of potential payments that they may be entitled to collect.
Grembowski's "present value" claim challenges the district court's finding of the necessity of maintaining the trust. The district court's reasoning is based on its underlying findings that the trust is a function of Grembowski's history of non-payment. The refusal to reduce the trust to the present value of Grembowski's child support obligation, in light of those circumstances, is not clearly erroneous.
3. Attorney Fees.
The award of attorney fees rests in the discretion of the district court. Solon v. Solon , 255 N.W.2d 395, 397 (Minn. 1977). "[O]nly rarely will a trial court's decision regarding attorney fees be overturned on appeal." Burns v. Burns , 466 N.W.2d 421, 424 (Minn.App. 1991).
The district court ordered money from the trust to pay outstanding medical bills from the automobile accident, mediation costs related to the settlement, Grembowski's former attorney, and Kintop's attorney fees. In April 1996, when justifying the creation of the constructive trust, the district court concluded that, "to ensure that [Kintop] receives future child support payments from [Grembowski] it is absolutely necessary that a constructive trust be established over [Grembowski]'s proceeds from his personal injury action." The court also held that it was fair and just to pay outstanding obligations that arose from the accident because the money in the trust arose out of Grembowski's settlement of a personal injury action. The April 1996 decision made no mention of use of the funds to pay legal fees and costs unrelated to the accident.
The use of the constructive trust to pay obligations arising out of Grembowski's accident was proper because it was contemplated by the district court at the time the trust was created. We conclude, however, that the district court's decision to use constructive trust funds to pay the parties' attorney fees and costs is inconsistent with the purpose of the trust. We find no error, however, in the district court's decision that attorney fees should be paid to Grembowski's former attorney and Kintop's attorney. We reverse that portion of the district court's attorney fees award that required the trust to pay.
Kintop requests the trust pay for costs and fees on appeal. Courts can assess attorney fees against a party for unreasonably contributing to the length of appeal, regardless of the financial resources of the parties. Dabrowski v. Dabrowski , 477 N.W.2d 761, 766 (Minn.App. 1991) (interpreting Minn. Stat. § 518.14). Because Grembowski's claims on appeal sought to relitigate the propriety of the trust, an issue already clearly decided, he unreasonably contributed to the length and expense of the proceedings. See Minn. Stat. § 518.14, subd. (1) (1996). We award Kintop $1,000 on appeal, payable by Grembowski, not the trust.