Opinion
No. C9-00-776.
Filed December 12, 2000.
Appeal from the District Court, Hennepin County, File No. 201984.
Anne Heimkes Tuttle, (for respondent)
Mark Nygaard, (for appellant)
Considered and decided by Klaphake, Presiding Judge, Harten, Judge, and Anderson, 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This opinion will be unpublished and may not be cited except as provided by Minn.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UNPUBLISHED OPINION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 challenges two post-dissolution decree determinations by the district court that refinancing and capital improvement costs were to be deducted from his lien against the marital home. We conclude that the dissolution judgment unambiguously provides that refinancing costs are not to be deducted from appellant's lien. We further conclude that the dissolution judgment clearly required the consent of the parties, in writing, to any capital improvements, but appellant did not consent to the improvements made by respondent. Accordingly, we hold that the district court abused its discretion and reverse both district court orders. We also deny appellant's request for conduct-based attorney fees.
FACTS
In 1996, the district court dissolved the marriage of appellant Thomas Raymond Tadlock and respondent Elizabeth Ann Tadlock. The judgment awarded respondent the marital homestead subject to appellant's lien. The judgment provided that upon the sale of the property, net proceeds would be divided equally between the parties after deducting (1) actual expenses associated with the sale, (2) the principal owed on the then existing-encumbrances, and (3) capital improvement expenses in excess of $500 agreed on in writing by the parties.
Beginning in July 1999, respondent brought a series of motions to compel appellant's cooperation in obtaining loans for home improvements. Respondent also sought a second mortgage on the home to satisfy appellant's lien and requested a court-ordered appraisal of the property. The district court found the contemplated improvements necessary and ordered appellant to cooperate with the loan arrangements.
In February 2000, the parties disagreed as to whether respondent should be allowed to deduct refinancing and improvement costs from appellant's marital lien. The district court found that a new furnace and air conditioner were necessary to maintain the value of the home, did not consider those items capital improvements, and ordered those costs deducted from appellant's lien. The district court further found that it was reasonable to allow respondent to deduct refinancing costs from the lien. Appellant filed his appeal from this order in May 2000.
In June 2000, appellant sought further clarification of the February order, arguing that because respondent refinanced the home for a total mortgage amount higher than necessary to pay appellant's lien, he should not have to share the refinancing costs. Appellant also sought attorney fees. The district court determined that appellant had not produced credible evidence of respondent's loan and denied his request for attorney fees. The district court ordered refinancing costs of $4,103 and improvement costs of $3,480 to be deducted from the net proceeds of the home refinancing. Appellant asks this court to review both the February and July 2000 orders, contending that the district court abused its discretion by requiring him to share improvement and refinancing costs. Appellant also asks for attorney fees.
DECISION I.
Appellant first argues that the district court abused its discretion by interpreting the judgment to allow the deduction of refinancing and improvement costs from his marital lien. We will not reverse a district court's order interpreting a dissolution decree absent an abuse of discretion. Potter v. Potter, 471 N.W.2d 113, 114 (Minn.App. 1991).
A lien on a homestead is a division of property. Kerr v. Kerr, 309 Minn. 124, 126, 243 N.W.2d 313, 314 (1976). Absent certain exceptions, district courts may not modify a division of property. Minn. Stat. § 518.64, subd. 2(e) (1998); Redmond v. Redmond, 594 N.W.2d 272, 275 (Minn.App. 1999). But "a divorce decree that is ambiguous or uncertain on its face" may be clarified by the district court that ordered it. Mikoda v. Mikoda, 413 N.W.2d 238, 241 (Minn.App. 1987) review denied (Minn. Dec. 22, 1987) (citations omitted). Whether language is ambiguous is a question of law, and if the language in question is reasonably subject to more than one interpretation, there is ambiguity. Halverson v. Halverson, 381 N.W.2d 69, 71 (Minn.App. 1986).
District courts may clarify and construe a dissolution judgment so long as it does not change the parties' substantive rights. Ulrich v. Ulrich, 400 N.W.2d 213, 218 (Minn.App. 1987). The interpretation must also accurately express the thoughts the judgment intended to convey. Bone v. Bone, 438 N.W.2d 448, 451 (Minn.App. 1989). A clarifying order must consider the terms implied in the judgment, as well as those actually expressed. Thompson v. Thompson, 385 N.W.2d 20, 22 (Minn.App. 1986).
A. Refinancing
Appellant argues that the dissolution judgment is not ambiguous and that refinancing costs were not allowed under the terms of the judgment. The judgment provided:
(i) Upon sale of the property, the net proceeds shall be divided equally between the parties after the deduction of the following:
(1) The actual expenses associated with the sale of the homestead,
(2) The principal owed on the now-existing encumbrances * * * , and
(3) The expense for any capital improvements which cost in excess of Five Hundred Dollars ($500) which the parties agreed to in writing. These expenses shall be credited to the party who incurred the expense.
(ii) Should the Petitioner desire to satisfy the Respondent's lien interest when it becomes due without selling the home, and the parties cannot agree upon the value of the homestead, an appraisal shall be done of the homestead. * * * The Respondent's lien shall then be calculated through the application of the formula contained in subpart (i), above.
The district court reviewed these provisions and found:
[I]t is reasonable to assume that Respondent is entitled to the net proceeds of refinancing as satisfaction of his lien in the event his lien is satisfied through refinancing instead of sale of the homestead. The Court notes that this interpretation or clarification of the Judgment and Decree does not constitute a[n] amendment to the terms of the Judgment and Decree.
We disagree. The dissolution judgment, although providing for appellant's lien to be reduced by the costs associated with home sale, is completely silent as to what is to occur in the event of refinancing. There is also no evidence that refinancing costs and home sale costs are essentially the same. And even if such evidence existed, refinancing is not the same as, or equivalent to, the sale of real estate. In this case, the silence is evidence of the opposite of ambiguity; the judgment at issue was based on a stipulation between the parties and appellant could have agreed to bear the refinancing costs. Plainly, he did not do so. Under these circumstances, appellant's substantial property rights were infringed by the district court's decision to treat refinancing costs in the same manner as sale costs. We hold that the judgment is unambiguous as a matter of law and reverse. Because we reverse, we do not reach appellant's claim that the refinancing costs were greater than necessary.
B. Furnace and Air Conditioner
Appellant next argues that the costs of the new furnace and central air conditioner should not have been deducted from his lien because they constitute capital improvements to which he did not agree in writing. The judgment provides for deducting from sale proceeds "[t]he expense for any capital improvements which cost in excess of Five Hundred Dollars ($500) which the parties agreed to in writing." The district court determined that the new furnace and air conditioner were not capital improvements, but were instead necessary to maintain the value of the home, and ordered those costs deducted from appellant's lien. We disagree and conclude that the furnace and central air conditioning were capital improvements.
The Minnesota Supreme Court has defined an "improvement" as:
a permanent addition to or betterment of real property that enhances its capital value and that involves the expenditure of labor or money and is designed to make the property more useful or valuable as distinguished from ordinary repairs.
Kloster-Madsen, Inc. v. Tafi's Inc., 303 Minn. 59, 63, 226 N.W.2d 603, 607 (1975). There is no evidence that an emergency made furnace replacement necessary, and the addition of a central air conditioner is not an "ordinary repair." Instead, it is an improvement "designed to make the property more useful or valuable."
Respondent argues that, even if the furnace and air conditioner are capital improvements, Stromberg v. Stromberg allows those costs to be deducted from appellant's lien without his consent despite the judgment's clear language to the contrary. 397 N.W.2d 396, 401 (Minn.App. 1986). Stromberg is distinguishable. There, the original judgment ordered the sale of the home and provided that the parties share maintenance expenses, but the judgment did not provide that improvements made by one party required the consent of the other. Id. at 398. Stromberg held that because the capital improvements made by the husband enhanced the value of the marital home and were reflected in the final sale price, the wife was responsible for half the costs. Id. at 401.
In this case, however, the judgment provides that respondent is responsible for ordinary maintenance, and only those capital improvement costs in excess of $500 to which the parties agreed in writing would be deducted from home-sale proceeds. Appellant did not agree to the installation of the new furnace or air conditioner. Although it is conceivable that the district court acted equitably and fairly, it was not the result to which the parties stipulated. Because the district court abused its discretion by failing to recognize the furnace and air conditioner as capital improvements, and by deducting the costs of those improvements from appellant's lien, we reverse.
II.
Appellant argues that the district court should not have denied his motion for conduct-based attorney fees. District courts have discretion to award fees "against a party who unreasonably contributes to the length or expense of the proceeding." Minn. Stat. § 518.14, subd. 1 (1998). The decision to grant or to deny attorney fees in dissolution cases rests almost entirely in the discretion of the district court and will not be disturbed absent a clear abuse of discretion. Solon v. Solon, 255 N.W.2d 395, 397 (Minn. 1977). In addition, we have the discretion to award appellate attorney fees in dissolution cases where the requirements of Minn. Stat. § 518.14, subd. 1, are satisfied. Case v. Case, 516 N.W.2d 570, 574 (Minn.App. 1994).
Nothing in the record suggests that respondent brought her claim in bad faith or that she unreasonably contributed to the length or cost of proceedings. Respondent's motions were brought to determine the amount of appellant's lien so that respondent could satisfy her obligation to appellant by refinancing the marital home. The district court did not abuse its discretion by denying appellant conduct-based attorney fees. We now deny appellant's request for fees on appeal.