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In re Marriage of Madden

Court of Appeals of Minnesota

February 4, 2019

In re the Marriage of: Mark James Madden, petitioner, Respondent,
v.
Judy Ann Madden, Appellant.

          Wright County District Court File No. 86-FA-10-3417

          Jennifer Nixon, Law Office of Jennifer Nixon, PLLC, Maple Grove, Minnesota; and Rebecca J. Guyette, Grandchamp & Guyette, PLLC, Wayzata, Minnesota (for respondent)

          Michael D. Dittberner, Linder, Dittberner & Winter, Ltd., Edina, Minnesota (for appellant)

          Considered and decided by Johnson, Presiding Judge; Ross, Judge; and Tracy M. Smith, Judge.

         SYLLABUS

         1. When determining the amount of a modified award of permanent spousal maintenance, the district court must reconsider the factors relevant to the amount and duration of spousal maintenance, including the recipient's ability to meet his or her needs independently, as the factors exist at the time of the modification motion.

         2. When determining the amount of a modified award of permanent spousal maintenance, the district court may attribute income to the recipient based on the recipient's then-present ability to meet his or her needs independently, even if the dissolution court did not attribute income to the recipient when awarding permanent spousal maintenance in the dissolution decree. But in doing so, the district court may not attribute income to the recipient based on the recipient's lack of reasonable efforts to become partially self-supporting by increasing his or her earning capacity through additional education or vocational training, unless the district court previously had expressly imposed on the recipient an obligation to make such reasonable efforts.

          OPINION

          JOHNSON, Judge

         This appeal arises from a motion to modify an award of permanent spousal maintenance. The former husband sought to terminate or reduce his spousal-maintenance obligation after his income declined due to health problems. The district court granted the motion and reduced the award to approximately half of the amount awarded in the dissolution decree five years earlier. The former wife appeals and challenges the district court's decision on multiple grounds. We conclude that the district court erred by attributing income to the former wife without a finding that she presently is capable of earning that amount of income. The district court erred because it relied solely on a finding in the dissolution decree concerning the former wife's then-anticipated future earning capacity, without making a finding concerning her earning capacity at the time of the modification motion. The district court also erred because it found that the former wife had not made reasonable efforts to increase her earning capacity by pursuing additional education or vocational training even though the district court had not expressly imposed such an obligation on the former wife in the dissolution decree. We conclude, however, that the district court did not err in its findings related to the former wife's investment income and her reasonable monthly expenses. In addition, the district court did not err by awarding attorney fees to the former husband. Therefore, we affirm in part, reverse in part, and remand for additional proceedings.

         FACTS

         Mark James Madden and Judy Ann Madden were married in 1992. They have two children, both of whom now are adults. Throughout the marriage, Mark worked as a dentist. At the time of the dissolution, his annual gross income was $384, 729. Before their children were born, Judy worked full-time in accounting. When the children were young, she was a stay-at-home parent. She returned to work on a part-time basis in 2006 as an accountant or bookkeeper in Mark's dental office, a position she held until 2010.

         Mark petitioned to dissolve the marriage in 2010. The dissolution court conducted a two-day trial in August 2012. The dissolution court entered its judgment and decree in November 2012. One of the primary issues at trial was Judy's request for permanent spousal maintenance. In the decree, the dissolution court found that Judy lacked sufficient property to meet her reasonable needs and that she otherwise was unable to fully support herself. The dissolution court expressly considered the statutory factors relevant to the amount and duration of spousal maintenance. With respect to Judy's ability to meet her needs independently, the dissolution court found that, after the division of marital property, she would have no debt and would have assets worth approximately $1, 500, 000, including the marital homestead, a lakeshore lot, approximately $391, 000 in retirement accounts, and approximately $439, 000 in cash. The dissolution court found that she would have investment income of $8, 000 per year based on the parties' stipulation that each would receive investment income at a rate of return of two percent of invested assets.

         With respect to Judy's opportunity to become partially self-supporting, the dissolution court made a series of findings concerning Judy's then-present earning capacity and her opportunity to increase that earning capacity. In paragraph 24a of the dissolution decree, the dissolution court found as follows:

[Judy] is capable of sustained occupational activity within the regional economy. She has a college degree in business administration, and seven years' experience working full-time doing accounts payable, accounts receivable, and staff accounting. She has also been working part-time at [Mark's] dental practice, earning $14, 000 per year from 2006 through 2010. She is qualified to continue working in these types of positions, but would require a period of three months to learn relevant software programs, specifically the Microsoft Office Suite. These types of jobs are common as they are the kind of jobs that exist in many businesses. The average income for these positions is $14.28 per hour, or $29, 702 per year. [Judy] is a bright woman who is capable of acquiring fresh credentials in the accounting field designed to update and advance her skill level. With a two-year education commitment either at the baccalaureate or graduate level, she could expect to earn $43, 534 to $50, 419 per year.

         In paragraph 25d of the dissolution decree, the dissolution court found as follows:

[Judy] is capable of working full-time and earning an income in an amount discussed more fully below. Her earning ability is not sufficient to meet her monthly expenses. The parties have a child with special needs. However, after extensive testimony at trial, [Judy] failed to prove that the child's condition requires her to not seek employment outside the home. Rather, it is simply [Judy's] personal preference to stay home. The child attends school full-time, and could easily be cared for in an after-school program.

         And in paragraph 26b of the dissolution decree, the dissolution court found as follows:

[Judy] is capable of obtaining employment as an accounting clerk, billing clerk, customer service representative, and general office clerk, within a three month period to allow her time to learn the Microsoft Office Suite. She can earn $14.28 per hour, or $29, 702 per year. [Judy] is a bright woman who is capable of acquiring fresh credentials in the accounting field designed to update and advance her skill level. With a two-year education commitment either at the baccalaureate or graduate level, she could expect to earn $43, 534 to $50, 419 per year. [Judy] is capable of becoming partially self-supporting.

         The dissolution court also found, in paragraph 26c of the dissolution decree, that Mark's and Judy's reasonable monthly expenses, exclusive of expenses related to their children, were $10, 703 and $8, 500, respectively. After considering additional statutory factors, the dissolution court ordered Mark to pay Judy $10, 000 per month in permanent spousal maintenance.

         In June 2017, Mark moved to modify his spousal-maintenance obligation. Mark asked the district court to terminate his spousal-maintenance obligation or, in the alternative, to reduce it. He introduced evidence that his income had decreased as a result of health problems, which required him to sell a 50-percent interest in his dental practice and to reduce his workload by 30 percent. Judy did not attempt to rebut Mark's evidence of decreased income. Mark argued that the district court should consider Judy's ability to earn income through full-time employment, even though she then was unemployed. Disputes arose concerning Mark's efforts to engage in discovery concerning Judy's financial assets and investment income. A motion hearing was rescheduled after Judy's counsel failed to appear. The district court conducted a hearing on Mark's motion at which it granted Mark leave to take Judy's deposition. After the hearing, Mark submitted a transcript of Judy's deposition, in which Judy testified that she had not pursued additional education or vocational training since the dissolution decree and did not believe that she had an obligation to do so.

         In February 2018, the district court granted Mark's motion to modify spousal maintenance. With respect to Mark's income, the district court found that his salary had been reduced by 30 percent (from $265, 000 to $185, 500) and that his income from the profits of his dental practice had been reduced by 50 percent (from $197, 119 to $98, 560). With respect to Judy's earning capacity, the district court found that she "remains unemployed" but "has not presented sufficient evidence that she is not able-bodied and not capable of employment."

         The district court further found that Judy "has failed to make a reasonable effort to obtain employment." Accordingly, the district court found that Judy's "potential earned income" is $50, 419 "based on Finding of Fact 26(b) of the Judgment and Decree," and the district ...


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