Source: http://mn.gov/law-library-stat/archive/ctapun/0612/opa060300-1205.htm
Timestamp: 2017-10-18 05:57:49
Document Index: 369004848

Matched Legal Cases: ['§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 588', '§ 588', '§ 588', '§ 588']

In re the Marriage of: Mary Melissa Martin, petitioner, Respondent, vs. Kurt Wayne Martin, Appellant. A06-300, Court of Appeals Unpublished, December 5, 2006.
A06-300
File No. F0-01-250
Mary Melissa Martin, 605 Southwest 6th Street, Brainerd, MN 56401 (pro se respondent)
Donald F. Ryan, Crow Wing County Attorney, Candace Prigge, Assistant County Attorney, 213 Laurel Street, Suite 31, Brainerd, MN 56401 (for Crow Wing County)
Kurt Wayne Martin, 109 Second Avenue Northeast, Brainerd, MN 56401 (pro se appellant)
Appellant, a self-employed business owner, moved to decrease his child-support obligation. A child support magistrate (CSM) denied appellant’s motion, finding that it was not possible to determine appellant’s income and that, therefore, appellant did not meet his burden of producing sufficient information to warrant a modification. Appellant sought district court review of the CSM’s ruling, and the district court affirmed the CSM. Appellant now argues that (1) the district court is legislating from the bench by requiring verifiable proof of income from tax returns rather than statements of gross receipts and expenses, (2) the district court did not make adequate findings of fact, and the findings that were made were insufficient or contradicted by the evidence, (3) the conclusions and order are not supported by adequate findings, (4) the district court made an unfounded challenge of an alleged business expense and depreciation deduction after the close of the record, and (5) Crow Wing County has de facto established appellant’s proffered evidence of income as credible by citing to it in its memorandum of law after the district court failed to acknowledge and recognize the evidence. Appellant also appeals the district court’s order granting Crow Wing County’s motion to impose stayed contempt sanctions against him. We affirm.
The marriage of appellant Kurt Martin and respondent Mary Martin was dissolved in November 2002. The parties have two children, one of whom is a minor born on June 24, 1992. They share joint legal custody of their minor child, while respondent has sole physical custody.
By the terms of a June 2004 order, appellant was ordered to pay child support of $1,147 per month based on his net monthly income of $4,583. In June 2005, appellant moved the CSM, pursuant to Minn. Stat. § 518.64 (2004), for an order modifying his child-support obligation. Appellant alleged a substantial decrease in his net monthly income. Respondent brought a countermotion for an increase in child support. In support of his motion, appellant submitted a W-2 form which showed a total 2004 gross annual income of $67,108.[1] But appellant did not provide any verification of his 2004 income other than the W-2 form and certificates of rent paid. At that time, appellant had not filed his 2004 tax returns. In addition, appellant “specifically stated that he d[id] not wish to provide any information on his monthly household expenses.”
In an order filed August 4, 2005, the CSM found it “impossible to determine [appellant’s] actual gross and net monthly income for purposes of child support as there [was] no way to analyze his receipts, expenses, and deductions for such items as depreciation and use of personal residence for office purposes.” As a result, the CSM denied appellant’s motion to modify his child-support obligation, concluding that “any party making such a motion has the burden of producing evidence which would justify the relief requested in their respective motions” and that appellant did not “provide[] sufficient information to grant the relief requested in [his] motion[].” Respondent’s motion was also denied.
In October 2005, appellant renewed his motion for child-support modification. In support, appellant submitted an income statement for 2004, in addition to the documents previously submitted; but appellant still had not filed his 2004 income tax returns. Appellant also stated that he did not know what his 2005 income was. The CSM denied appellant’s request to modify his child-support obligation, again finding that it was impossible to determine appellant’s monthly income for child-support purposes without income tax returns and verification of actual income and expenses, especially with regard to his claim of his use of his home for business purposes and depreciation deductions.
In November 2005, appellant moved for review of the CSM’s decision. Appellant contended that “he should not be required to produce copies of his income tax returns or other verification of his actual income and expenses.” The district court denied appellant’s motion for review and affirmed all provisions of the CSM’s findings of fact, conclusions of law, and order. The district court found that the CSM’s decision was supported by the record and was not contrary to law. The district court stated that
the documents produced by [appellant] d[id] not provide adequate proof of his reduced income and expenses. Although Minnesota Statute § 518.551, subd. 5b(a), does not mandate the production of income tax returns in every case, the Child Support Magistrate was justified in requiring them in this case, given the size of the claimed decrease in income, the scanty supporting documentation, and the contentious history between the parties.
Imposition of Penal Provision for Contempt
Appellant’s child-support obligation has been adjusted several times. By the terms of a July 2001 order, appellant was ordered to pay monthly child support of $1,514 based on his net monthly income of $5,048.02. The district court adjusted appellant’s child support on November 1, 2001, ordering appellant to pay child support of $1,353.60 per month based on his net monthly income of $4,512.02. Appellant’s child-support payment was adjusted again on May 22, 2003, to $1,375.90 per month, based on his net monthly income of $4,583. The child-support amount was adjusted for the final time in June 2004 to $1,147 per month because of the emancipation of the parties’ older child.
On April 15, 2004, Crow Wing County moved for an order finding appellant in contempt because of his failure to comply with his child-support obligations. The motion was accompanied by an order to show cause and an affidavit of a Crow Wing County child-support officer, stating that appellant was $8,921.00 in arrears. By the time a hearing was conducted on November 17, 2004, the total amount appellant owed was $14,232.40. In February 2005, appellant was found in contempt of court for failing to make his court-ordered child-support payments. As a result, the district court ordered that appellant serve 180 days in the Crow Wing County jail. But the court stayed appellant’s sentence on the condition that he pay his current monthly support plus an additional monthly payment to be applied to existing arrearages. The order further provided
[t]hat in the event [appellant] fail[ed] to meet promptly all the conditions herein provided for and upon the filing of a motion and an affidavit by the Public Authority, setting forth such default on the part of [appellant], a hearing shall be held to determine why the stay of execution ordered herein should not be revoked and vacated and the provisions of this Order executed.
In August 2005, Crow Wing County moved for an order revoking the stay of execution of the penal provisions ordered by the district court in February 2005. The motion was supported by the affidavit of a Crow Wing County child-support officer. The affidavit stated that, as of July 26, 2005, appellant was in default of the court’s February 4, 2005 order in the amount of $4,225.
On December 13, 2005, the district court filed an order, finding that appellant had failed without excuse to comply with the conditions for the stay of sentence, despite the fact that appellant had the ability to pay the purge conditions. The district court ordered appellant to serve 180 days in the Crow Wing County jail, to be released if he posted $6,019 as a purge condition. Appellant moved for a stay of the penal provisions until he had exhausted all actions of appeal and related post-appeal proceedings. The district court granted appellant’s motion. This appeal follows.
Appellant challenges the district court’s denial of his motion for review of the CSM’s order. Specifically, appellant argues that the CSM erred when it determined that appellant had offered insufficient evidence of his claimed decrease in income. Appellant contends that he should not be required to produce copies of his income tax returns and other verification of his actual income and expenses.
When a district court affirms a CSM’s ruling, the CSM’s ruling becomes the ruling of the district court, and an appellate court reviews the district court’s decision. Kilpatrick v. Kilpatrick, 673 N.W.2d 528, 530 n.2 (Minn. App. 2004). This court reviews “the district court’s decision confirming the CSM’s order under an abuse-of-discretion standard.” Davis v. Davis, 631 N.W.2d 822, 826 (Minn. App. 2001). The district court may modify the terms of a child-support obligation upon a showing that a party’s earnings or needs have substantially increased or decreased such that the child-support obligation has become unreasonable and unfair. Minn. Stat. § 518.64, subd. 2(a)(1), (2) (2004); O’Donnell v. O’Donnell, 678 N.W.2d 471, 475 (Minn. App. 2004). When considering a motion to modify a party’s child-support obligation, the district court must apply the guidelines set forth in Minn. Stat. § 518.551, subd. 5 (2004), as “the support obligation calculated under the guidelines helps a magistrate ascertain whether a modification is warranted.” Putz v. Putz, 645 N.W.2d 343, 348 (Minn. 2002). The moving party has the burden of proof in support modification proceedings. Bormann v. Bormann, 644 N.W.2d 478, 481 (Minn. App. 2002). Whether to modify support is discretionary with the district court, and its decision will be altered on appeal only if it resolved the matter in a manner that is against logic and the facts on record. Putz, 645 N.W.2d at 347; Moylan v. Moylan, 384 N.W.2d 859, 864 (Minn. 1986).
“Income from self employment is equal to gross receipts minus ordinary and necessary expenses.” Minn. Stat. § 518.551, subd. 5b(f). The district court has broad discretion to determine the income of a self-employed parent because “the opportunity for a self-employed person to support himself yet report a negligible net income is too well known to require exposition.” Ferguson v. Ferguson, 357 N.W.2d 104, 108 (Minn. App. 1984). Minn. Stat. § 518.551, subd. 5b(a), provides:
The parties shall timely serve and file documentation of earnings and income. When there is a prehearing conference, the court must receive the documentation of income at least ten days prior to the prehearing conference. Documentation of earnings and income also includes, but is not limited to, pay stubs for the most recent three months, employer statements, or statement of receipts and expenses if self-employed. Documentation of earnings and income also includes copies of each parent’s most recent federal tax returns, including W-2 forms, 1099 forms, unemployment benefits statements, workers’ compensation statements, and all other documents evidencing income as received that provide verification of income over a longer period.
Here, appellant argues that his child-support obligation should be modified because of a substantial decrease in his net monthly income due to his failing business. In support of his first motion, appellant submitted a W-2 form and certificates of rent paid. But appellant did not provide any other verification of his alleged income and failed to produce his 2004 income tax returns, which he had not yet filed. In support of his second motion, appellant also submitted an income statement for 2004, but again failed to submit his tax returns. Further, when questioned, appellant did not know what his income for 2005 was and offered no information regarding his expenses.
Appellant contends that section 518.551, subdivision 5b(a), does not require the disclosure of his tax returns and that by requiring such, the district court is “legislating law from the bench.” In support of his position, appellant cites Stephenson v. Stephenson, 258 Minn. 435, 104 N.W.2d 517 (1960),[2] and Otte v. Otte, 368 N.W.2d 293 (Minn. App. 1985),[3] for the proposition that “tax returns are not conclusive evidence of appellant’s income” and, thus, he should not be forced to produce the documents.
Although the appellate court in both of those cases noted that tax returns and taxable income alone are not always an accurate indication of one’s income, the cases do not stand for the proposition that the district court can never require a party to prove net income by producing income tax returns, or, at the very least, simply decline to determine net income when a party will not volunteer such documents. To be sure, Minn. Stat. § 518.551, subd. 5b(a), states that a district court may consider a “parent’s most recent federal tax returns” when determining that parent’s income. Further, appellant, as the moving party, has the burden of proof in support-modification proceedings. Bormann, 644 N.W.2d at 481. This court has previously stated that
[o]n appeal, a party cannot complain about a district court’s failure to rule in her favor when one of the reasons it did not do so is because that party failed to provide the district court with the evidence that would allow the district court to fully address the question.
Eisenschenk v. Eisenschenk, 668 N.W.2d 235, 243 (Minn. App. 2003), review denied (Minn. Nov. 25, 2003); see also Farrar v. Farrar, 383 N.W.2d 436, 440 (Minn. App. 1986) (stating “[a] trial court is not required to make findings where the interested party fails to meet his burden to produce evidence on the issue”), review denied (Minn. May 22, 1986). Because the district court was unable to determine appellant’s income based on the evidence offered and without the aid of appellant’s income tax returns, it was not an abuse of the court’s discretion to deny appellant’s motion for review and affirm the CSM’s denial of appellant’s motion for modification.
Finally, appellant argues that the district court did not make any findings or that the findings that were made are insufficient or contradicted by the evidence provided. This court will not alter a finding of fact regarding an obligor’s income for purposes of child support unless that finding is clearly erroneous. Ludwigson v. Ludwigson, 642 N.W.2d 441, 446 (Minn. App. 2002). A finding of fact is clearly erroneous when, viewing the record in the light most favorable to the district court’s findings and considering our deference to the district court’s credibility determinations, we are left with “the definite and firm conviction that a mistake was made.” Vangsness v. Vangsness, 607 N.W.2d 468, 474 (Minn. App. 2000).
Ordinarily, detailed factual findings are required to demonstrate that the district court considered the relevant statutory factors. Tuthill v. Tuthill, 399 N.W.2d 230, 232 (Minn. App. 1987). Insufficient findings render meaningful appellate review impossible. Stich v. Stich, 435 N.W.2d 52, 53 (Minn. 1989). But the district court’s findings are sufficient if they demonstrate that the court considered the statutory factors relevant to its conclusion. See Tuthill, 399 N.W.2d at 232.
The district court determined that appellant did not sufficiently demonstrate that he suffered a decrease in earnings to render his child-support obligation unreasonable and unfair. See Minn. Stat. § 518.64, subd. 2(a)(1). The district court reached this conclusion based on the following findings: (1) appellant did not provide sufficient verification of his wages and rents received and did not offer any evidence or explanation regarding the amount of dividends received; (2) appellant declined to produce his tax returns; (3) appellant stated that he did not know what his income for 2005 was; and (4) appellant offered no information to “analyze his receipts, expenses, and deductions for such items as depreciation and use of personal residence for office purposes.” These findings are supported by the record and are sufficient to demonstrate that the district court considered the relevant statutory factors in its conclusions.
Appellant further challenges the district court’s order dated December 13, 2005, imposing stayed contempt sanctions. But appellant fails to set forth any specific reason or authority indicating why the district court’s revocation of the stay should be reversed.
In reviewing a district court’s decision whether to hold a party in contempt, the factual findings are subject to reversal only if clearly erroneous, while the district court’s decision to invoke its contempt powers is subject to reversal only for an abuse of discretion. Mower County Human Servs. v. Swancutt, 551 N.W.2d 219, 222 (Minn. 1996); see also In re Marriage of Crockarell, 631 N.W.2d 829, 833 (Minn. App. 2001) (stating “[t]he district court has broad discretion to hold an individual in contempt. This court reviews a district court’s decision to invoke its contempt power under an abuse-of-discretion standard” (citation omitted)), review denied (Minn. Oct. 16, 2001). In reviewing a contempt order, appellate courts consider whether the order “‘was arbitrary and unreasonable or whether it finds support in the record.’” Gustafson v. Gustafson, 414 N.W.2d 235, 237 (Minn. App. 1987) (quoting Meisner v. Meisner, 220 Minn. 559, 560-61, 20 N.W.2d 486, 488 (1945)).
When a contempt order is remedial and its purpose is to coerce compliance with an existing order, it is civil in nature, rather than criminal. Mower County, 551 N.W.2d at 222. “Civil contempt sanctions are intended to operate in a prospective manner and are ‘designed to compel future compliance with a court order.’” Id. Here, the form of the proceeding indicates that it was intended to be civil in nature because the Crow Wing County attorney brought a motion on behalf of respondent, a private citizen, and not as the representative of Crow Wing County in a criminal prosecution. See id. (noting that the form of the proceeding may indicate whether it is intended as either a civil or criminal matter). In addition, the contempt order includes a purge provision, rather than a determinate sentence. See id. Finally, the district court in its order specifically stated that “[r]espondent’s conduct constitutes civil contempt.” We therefore conclude that the contempt proceedings here are civil in nature.
There are two types of civil contempt—direct and constructive. Minn. Stat. § 588.01, subd. 1 (2004). Direct contempt is an outgrowth of an act that occurs in the presence of the court, such as disorderly conduct or breach of the peace, tending to interrupt the business of the court. Id., subd. 2 (2004). Constructive contempt is an act that does not occur in the presence of the court and is something that the court has no first-hand knowledge of, such as disobedience of a lawful order. Id., subd. 3 (2004).
There are procedural requirements that a district court must follow before it may hold an individual in constructive civil contempt. Minn. Stat. § 588.04 (2004). Section 588.04 states, in relevant part, that
[i]n cases of constructive contempt, an affidavit of the facts constituting the contempt shall be presented to the court . . . who may either issue a warrant of arrest to bring the person charged to answer or, . . . upon notice, or upon an order to show cause . . . may commit the person to jail, impose a fine, or both . . . .
In addition, “[w]hen the contempt consists in the omission to perform an act which is yet in the power of the person to perform, the person may be imprisoned until the person performs it . . . .” Minn. Stat. § 588.12 (2004). Minn. Stat. § 588.02 (2004) further states that “[e]very court and judicial officer may punish a contempt by fine or imprisonment, or both.” The Minnesota Supreme Court has outlined the minimum requirements that a civil-contempt proceeding must meet:
Mower County, 551 N.W.2d at 223 (citing Hopp v. Hopp, 279 Minn. 170, 174-75, 156 N.W.2d 212, 216-17 (1968)); see also Mahady v. Mahady, 448 N.W.2d 888, 890 (Minn. App. 1989) (noting the two stages to a contempt proceeding and stating “[f]irst, the contempt finding depends on a determination that the obligor had the ability to [comply with] the obligations . . . . Second, the court must set purge conditions and determine whether the contemnor has the ability to meet those conditions.” (citation omitted)).
Here, the Crow Wing County attorney brought a motion on behalf of respondent to find appellant in contempt of court for failing to pay his child-support obligation. By order filed on February 4, 2005 (amended on February 10, 2005), appellant was found in civil contempt of court. The district court stated that appellant owed $14,232.40 in child support and that he had “failed to provide sufficient proof that he ha[d] experienced a reduction in income.” The district court further found that appellant “had the ability to comply with the [c]ourt’s [o]rder to a greater extent than evidenced by him,” and that “[c]onditional confinement [was] likely to produce compliance by [appellant] with his child support obligations.” Consequently, the court ordered that appellant be imprisoned in the Crow Wing County jail for a period of up to 180 days, execution of the sentence to be stayed if appellant made current monthly child-support payments of $1,147, plus an additional monthly payment of $229 to be applied to the existing arrearage. Therefore, the district court’s procedure met the requirements of the initial phase as outlined by the supreme court in Mower County. 551 N.W.2d at 223-24 (noting that where “application has been made by a party seeking enforcement setting forth specific grounds for relief, jurisdiction is determined, and the contemnor goes forth fully aware and knowledgeable about what must be done to stay out of jail and with reasonable time permitted to comply—the first stage of the procedural requirements are in place.”).
In August 2005, Crow Wing County filed a motion alleging nonperformance and seeking an order revoking the stay of execution of the penal provisions ordered by the district court. At the hearing in September 2005, appellant was given an opportunity to show compliance or his reasons for failing to comply. Based on its findings that appellant “failed without excuse to comply with the purge conditions,” despite the fact that appellant had “the ability to pay the purge conditions set by the [c]ourt,” the district court granted the county’s motion to revoke the stay but provided appellant the opportunity to gain release from jail by posting $6,019 as a purge condition. As the supreme court stated in Mower County:
At th[is] point, the court may order confinement upon such terms and conditions as meet the Hopp requirements, including providing to the contemnor the opportunity to gain release through compliance or a good faith effort to comply. All the protective measures of Hopp will have been met and no additional hearing is thereafter required with respect to the then pending effort to enforce the support obligation.
551 N.W.2d at 224.
Appellant does not articulate any grounds for reversal of the district court’s order. Because all of the procedures and factors set forth in Mower County have been met, the district court’s decision to impose penal provisions was not an abuse of the court’s discretion. Appellant has the ability to comply, and his future is completely within his control—“in the civil contempt vernacular, . . . [appellant] has the keys to the jail.” Id. at 224.
[1] Appellant’s W-2 indicated wages of $30,000, rents of $11,755, and dividends of $25,353.
[2] In Stephenson, a husband appealed an alimony award, arguing that the award exceeded one-half of his future earnings and income and thus was in excess of that allowed by statute. 258 Minn. at 436, 104 N.W.2d at 518. In support of his claim, the husband introduced into evidence his income tax returns. Id. In denying the husband’s claim, the court stated that tax returns “are not conclusive as to the amount of [husband’s] income. They are evidence of [husband’s] income and may be considered by the court along with other evidence in the record in making its determination.” Id. at 436, 104 N.W.2d at 518-19.
[3] In Otte, a husband challenged the district court’s child-support award. 368 N.W.2d at 296. In reversing the district court’s decision, the court of appeals noted that “taxable income is not always a reliable indication of net income.” Id.