Court Opinion

ID: 2758369
Source: CourtListenerOpinion
Date Created: 2014-12-08 22:04:45.628948+00
Date Added: 2024-06-11T11:26:57.918196
License: Public Domain

This opinion will be unpublished and
                           may not be cited except as provided by
                           Minn. Stat. § 480A.08, subd. 3 (2012).

                                STATE OF MINNESOTA
                                IN COURT OF APPEALS
                                      A14-0105

                    In re the Marriage of: Terry John Hietpas, petitioner,
                                         Appellant,

                                             vs.

                                  Barbara Elizabeth Reed
                           f/k/a Barbara Elizabeth Reed Hietpas,
                                        Respondent

                                Filed December 8, 2014
                          Affirmed in part and reversed in part
                                     Worke, Judge

                               Ramsey County District Court
                       File Nos. 62-F6-07-000592, 62-F4-07-300423,
                            62-FX-07-300409, 62-DA-FA-09-906

Linda S.S. de Beer, Jenna Kraemer Monson, Lake Elmo, Minnesota (for appellant)

Ellen Weinberg, Albert Lea, Minnesota (for respondent)

         Considered and decided by Worke, Presiding Judge; Kirk, Judge; and Reyes,

Judge.

                          UNPUBLISHED OPINION

WORKE, Judge

         Appellant-husband argues that the district court erred by exercising jurisdiction

over a motion to modify spousal maintenance when the parties’ judgment and decree

purported to have a Karon waiver. Alternatively, he argues that if the court had
jurisdiction, the court abused its discretion by modifying spousal maintenance, failing to

consider newly discovered evidence, and limiting appellant’s ability to bring a future

spousal-maintenance-modification motion. Because the judgment and decree did not

include a proper Karon waiver, the district court properly exercised jurisdiction and did

not abuse its discretion in modifying spousal maintenance; thus, we affirm in part. But,

because the district court abused its discretion by restricting appellant’s ability to bring a

future spousal-maintenance-modification motion, we reverse in part.

                                          FACTS

       Appellant Terry John Hietpas and respondent Barbara Elizabeth Reed, f/k/a

Barbara Elizabeth Reed Hietpas, dissolved their marriage in May 2008. Their decree

provided that:

              [C]ommencing December 1, 2007, [Hietpas] shall pay [Reed]
              $3,650 per month . . . until December 31, 2012. . . .
                     Either party may request a modification of the spousal
              maintenance payments pursuant to the statutory language.
              However, the parties agree that [Hietpas’s] spousal
              maintenance payments to [Reed] shall never be higher than
              $3,650 per month.
                     [Reed] expressly waives her right to receive any
              spousal maintenance from [Hietpas] after December 31, 2012.
              [Reed’s] waiver is based on a Karon waiver, the length of the
              marriage and [Reed’s] ability to earn a level of income
              sufficient to support herself and the minor children.

The parties stipulated that Reed had the potential to earn $30,000 in 2008, $40,000 in

2009, and $50,000 in 2010. The parties were required to attempt mediation prior to

requesting spousal-maintenance modification.

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      On December 28, 2012, three days before Hietpas’s original spousal-maintenance

obligation expired, Reed moved to extend it. The district court waived the decree’s

mediation requirement and held a hearing. The district court found that the decree did

not include a valid Karon waiver and that Reed met her burden showing a substantial

change in circumstances. The court extended Hietpas’s maintenance obligation for an

additional five years, but allowed him to move to modify maintenance after Reed secured

employment for 12 continuous months at an income of more than $75,000 per year.

      Hietpas then moved for amended findings and a new trial claiming that Reed

failed to show a substantial change in circumstances and there was newly discovered

evidence regarding Reed’s employment. The district court denied Hietpas’s requests, but

changed Reed’s threshold earning requirement to $50,000. Hietpas appeals.

                                   DECISION

Jurisdiction

      Karon waiver

      Hietpas argues that the district court lacked jurisdiction over Reed’s motion to

modify spousal maintenance because the judgment and decree included a Karon waiver.

“[We] review[] questions of law related to spousal maintenance de novo[,]”   Melius v.

Melius, 765 N.W.2d 411, 414 (Minn. App. 2009), including questions regarding

jurisdiction and statutory interpretation. Gossman v. Gossman, 847 N.W.2d 718, 721

(Minn. App. 2014).

      The courts are without authority to modify spousal maintenance when parties

execute what is commonly called a Karon waiver. Id. at 722. A Karon waiver is more

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than an agreement between the parties. Id. at 724. It divests the court of jurisdiction over

spousal maintenance when the following requirements are met:

              1) the stipulation must include a contractual waiver of the
              parties’ rights to modify maintenance; 2) the stipulation must
              expressly divest the district court of jurisdiction over
              maintenance; 3) the stipulation must be incorporated into the
              final judgment and decree; and 4) the court must make
              specific findings that the stipulation is fair and equitable, is
              supported by consideration described in the findings, and that
              full disclosure of each party’s financial circumstances has
              occurred[.]

Butt v. Schmidt, 747 N.W.2d 566, 573 (Minn. 2008) (quotation and citations omitted); see

Minn. Stat. § 518.522, subd. (2012) (addressing statutorily-required elements for a

Karon waiver). Reed claims that the Karon waiver was invalid because the stipulation

lacked language divesting the court of jurisdiction and the court did not make specific

findings that the stipulation was fair and equitable.

       A Karon waiver must contain two elements to properly divest the court of

jurisdiction: “(1) a contractual waiver of the statutory right to move for modification of

maintenance” and “(2) express language divesting the court of jurisdiction to consider

motions for modification of spousal maintenance.”           Gossman, 847 N.W.2d at 723

(quotation omitted).

       In Loo v. Loo, the supreme court concluded that the following waiver contained a

contractual waiver, but not express divestiture language:

                      That the Petitioner shall pay to the Respondent
              . . . spousal maintenance . . . for a total period of payment of
              nine years. After the last of the payments required above, the
              obligation for spousal maintenance shall terminate

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              irrevocably. Thereafter neither of the parties shall be entitled
              to [maintenance] then or in the future.

520 N.W.2d 740, 745 (Minn. 1994). The court noted that courts “should not assume that

parties specifically bargained to supplant the statutory modification procedure without a

clear or express statement divesting the court of jurisdiction[,]” id., and that “the better

approach is to require both a contractual waiver and express language divesting the court

of jurisdiction.” Id. at 745 n.5 (emphasis added).

       Here, it is undisputed that the judgment and decree contains a contractual waiver.

And the parties placed the following agreement on the record prior to the entry of the

judgment and decree:

              [Reed’s attorney]: [Y]ou [Reed] understand that you’ll be
              receiving . . . temporary maintenance for a term of five years
              at a set amount, but after that five years you won’t be able to
              receive anymore maintenance for whatever reason
              whatsoever, and the [c]ourt wouldn’t even have jurisdiction to
              entertain a claim for maintenance; is that correct?
              [Reed]: Correct.
              [Reed’s Attorney]: And you understand and agree to be
              bound by it?
              [Reed]: Yes.

       But the judgment and decree does not contain specific divestiture language or

language incorporating this on-the-record stipulation.       Therefore, the judgment and

decree does not meet the express-divestiture-language requirement.

       Hietpas concedes that there are no specific findings in the judgment and decree

stating that the agreement is fair and equitable as required for a Karon waiver. But, he

contends that by approving the judgment and decree, the district court necessarily found

it fair and equitable. “However, a stipulated divestiture of jurisdiction is effective only if

                                              5
the [district] court, in adopting the stipulation, makes specific written findings that the

stipulation is fair and equitable and supported by specified consideration, and that both

parties have made full financial disclosures.” Santillan v. Martine, 560 N.W.2d 749, 751

(Minn. App. 1997) (emphasis added). The Loo court was also “concerned that there

[was] little indication in the record that the [district] court . . . took an active role in

determining that the decree at issue was fair and equitable.” 520 N.W.2d at 745. Here,

there is no indication that the district court assumed that role. Therefore, the Karon

waiver also fails on this prong.

       Hietpas claims that even with the deficiencies the Karon factors are incorporated

because the judgment and decree names their agreement a Karon waiver. But a “label or

title is not determinative.” Grachek v. Grachek, 750 N.W.2d 328, 333 (Minn. App.

2008), review denied (Minn. Aug. 19, 2008) (stating use of the heading “Karon waiver”

did not support argument that parties intended to preclude cost-of-living adjustment).

And both the caselaw discussed above and Minn. Stat. § 518.552, subd. 5 require specific

language and incorporation into a judgment and decree. Because of the significant

limitations a Karon waiver places not only on a party’s ability to modify spousal

maintenance but also on a court’s jurisdiction, merely titling the agreement a “Karon

waiver” is insufficient to remedy language missing from the judgment and decree.

       Mediation

       Hietpas next argues that because Reed did not attempt mediation prior to moving

to modify maintenance, the district court lost jurisdiction as it had no proper motion

before it when the original spousal-maintenance term expired. However, the failure to

                                             6
mediate does not raise a jurisdictional issue. See Moore v. Moore, 734 N.W.2d 285, 287

n.1 (Minn. App. 2007) (stating that courts and parties often use concepts and language

associated with “jurisdiction” imprecisely to refer to nonjurisdictional limits on a court’s

authority to address a question), review denied (Minn. Sept. 18, 2007).

       Hietpas cites Buntje v. Buntje for the proposition that Reed should have served her

motion and requested an abeyance for mediation. 511 N.W.2d 479, 481-82 (Minn. App.

1994). In Buntje, this court held that a child-support modification can only be made

retroactive to the date a motion is served, and not the date a request for mediation is

made. Id. at 482. The issue in Buntje was determining the date to which child-support

modification was retroactive; it is not applicable here as it does not address whether the

district court can waive a mediation requirement. Additionally, the district court found

that Hietpas declined to participate in mediation after Reed filed her motion, undermining

Hietpas’s proposition.

       The parties have had ongoing conflict for many years. The district court made

specific findings regarding the parties’ inability to resolve issues without court

intervention and deliberately waived the mediation requirement. We conclude that the

district court did not abuse its discretion or lose jurisdiction by waiving the mediation

requirement.

Spousal maintenance

       Hietpas next argues that the district court abused its discretion by extending

spousal maintenance because Reed did not demonstrate a substantial change in

circumstances that made the original award unreasonable and unfair. This court reviews

                                             7
the district court’s maintenance award for an abuse of discretion.           Erlandson v.

Erlandson, 318 N.W.2d 36, 38 (Minn. 1982). “A district court abuses its discretion

regarding maintenance if its findings of fact are clearly erroneous.” Kampf v. Kampf, 732

N.W.2d 630, 633 (Minn. App. 2007), review denied (Minn. Aug. 21, 2007). “Findings of

fact are clearly erroneous when they are manifestly contrary to the weight of the evidence

or not reasonably supported by the evidence as a whole.” Id. (quotation omitted). The

reviewing court views the record in the light most favorable to the district court’s

findings and defers to the district court’s credibility determinations.      Vangsness v.

Vangsness, 607 N.W.2d 468, 472 (Minn. App. 2000).

       A district court has broad discretion to modify a spousal-maintenance award.

Youker v. Youker, 661 N.W.2d 266, 269 (Minn. App. 2003), review denied (Minn. Aug.

5, 2003). To justify a modification, the moving party “bears the burden of showing a

substantial change of circumstances . . . since [maintenance] was originally set.” Id. Such

a change in circumstances must be sufficient to render the original award “unreasonable

and unfair.” Minn. Stat. § 518A.39, subd. 2(a) (2012). When the moving party fails “to

present clear proof of a substantial change in circumstances,” the district court is not

required to consider other statutory factors. Tuthill v. Tuthill, 399 N.W.2d 230, 232

(Minn. App. 1987). Changed circumstances can be established by showing a substantial

decrease in the gross income of the obligee. Minn. Stat. § 518A.39, subd. 2(a)(1).

       Hietpas argues that the district court abused its discretion in modifying spousal

maintenance by: (1) using Reed’s actual income, rather than her potential income stated

in the decree, to determine whether there had been a substantial change in circumstances;

                                            8
(2) miscalculating Reed’s income; and (3) improperly considering Reed’s mental health

as a change in circumstances.

       At the time of the judgment and decree, the parties stipulated that by the end of the

original maintenance period, Reed would be capable of earning at least $50,000 annually.

Reed asserts that her unsuccessful efforts to find a stable job paying this amount shows

that she does not have the earning capacity anticipated at the time of the judgment and

decree.

       Reed’s annual earnings, with the exception of 2012, fell significantly below her

anticipated earning capacity. At the time of her motion to modify spousal maintenance,

she was receiving $385 per week in unemployment benefits. Although Reed took some

time off beginning in 2009 to earn her MBA, she claimed her job credentials as an

attorney were otherwise stale. In 2012, she worked steadily for eight months earning

approximately $30,000 until she was laid off due to an insufficient workload. She

increased    her   total   2012     earnings       to   approximately   $48,400     through

unemployment-insurance benefits and short-term work. The district court found that

since being laid off Reed applied for numerous jobs and that she was registered with four

employment-search organizations. But see Hecker v. Hecker, 568 N.W.2d 705, 710

(Minn. 1997) (concluding it was appropriate to offset spousal-maintenance award by

wife’s ability to earn when she did not take any efforts to rehabilitate herself). While

Hietpas argues that the district court erred by analyzing Reed’s actual income, the district

court found that she did not have the ability to earn the amount contemplated in the

judgment and decree given her difficulty in finding and especially maintaining a job. The

                                               9
district court specifically stated that “[g]iven the struggles [Reed] experienced stabilizing

her mental health, it is not surprising that [she] has not been able to reach the parties’

anticipated earning capacity agreed to in the [d]ecree.”

       Hietpas argues that there was not a substantial decrease in Reed’s income based on

her actual earnings. Hietpas cites several ways for a court to calculate income. However,

Hietpas does not show that the district court’s chosen calculation method was improper.

The district court reviewed Reed’s annual income during the periods she received spousal

maintenance, and noted that “[e]ven [in 2012,] the year which [Hietpas] points to which

is the apex of her earning history since the [d]ecree, [Reed] combined two separate jobs

and receipt of unemployment[-]insurance benefits to earn $48,400.” Although at one

point Reed had a higher-income job, she was unable to maintain this job. Hietpas does

not establish that, contrary to the district court’s findings, Reed is capable of finding and

keeping a similar paying job.

       The district court considered Hietpas’s argument that Reed at one point had a

high-paying job, and made specific findings as to why Reed’s temporary earnings were

not representative of her ability to continue earning at that level. We conclude that the

district court did not abuse its discretion in finding that Reed’s potential annual income at

the time of her motion—based on her unemployment-insurance benefits and past earning

history—was $32,597. See Hecker, 568 N.W.2d 709-10 n.3 (stating that a party’s failure

to satisfy assumption underlying a district court’s ruling can constitute the substantial

change in circumstances allowing modification of that ruling).

                                             10
       Hietpas also argues that the district court clearly erred by finding that Reed’s

mental-health issues prevented her from maintaining employment. The district court

found that Reed “has appropriately focused on the services to improve her mental health

for herself and the children, at the expense of her ability to earn a living.” After Hietpas

moved for amended findings, the district court found that “[w]hile it is true that [Reed]

experienced mental[-]health issues at the time of the stipulation, the parties could not

have anticipated how the impact and continued persistence of her mental illness would

affect her earning capacity.”

       Hietpas claims that there is nothing in the record to support claims that Reed’s

mental health negatively impacted her ability to be employed. Although Hietpas again

points to the fact that Reed was able to obtain a high-paying job, the ability to obtain a

job and to keep a job are two different skills. Reed submitted an affidavit regarding her

financial need stating that her high-paying job was eliminated because of a lack of work,

not because of her performance. However, this does not exclude the possibility that her

mental health kept her from successfully meeting the billable-hours requirement of her

position or finding another job. It is undisputed that Reed suffered from significant

mental-health issues and after a careful review of the record, we conclude that the district

court did not clearly err in finding that these issues affected her earning capacity.

       Hietpas asserts that even if Reed showed a substantial change in circumstances,

she failed to show that any change made the original decree unreasonable and unfair. See

Minn. Stat. § 518A.39, subd. 2(a). One factor that makes the terms of an order unfair is

the substantially decreased gross income of an obligee.          Id., 2(a)(1). A substantial

                                             11
decrease in income makes the “terms of a current support order . . . rebuttably presumed

to be unreasonable and unfair” when “the gross income of an . . . obligee has decreased

by at least 20 percent through no fault or choice of the party.” Id., subd. 2(b)(5) (2012).

       While the parties dispute Reed’s income, we conclude that the district court’s

calculation of Reed’s potential annual income of $32,597 was not an abuse of discretion.

This is more than 20% less than the $50,000 the parties presumed Reed could earn at the

time of the judgment and decree, and under the statute constitutes an amount that creates

a presumption of a substantial change in circumstances, and a rebuttable presumption that

the existing maintenance award is unreasonable and unfair.           On this record, these

presumptions are unrebutted.

       Finally, Hietpas argues that the amount and duration of the spousal-maintenance

award is not supported by the record. The district court does not address why it chose to

extend spousal maintenance for an additional five years. But the district court is not

required to state with specificity why it chose a particular spousal-maintenance duration,

provided it addresses relevant factors required by statute, which it did. See Minn. Stat.

§ 518.552 (2012).

New Evidence

       Hietpas asserts that the district court abused its discretion by failing to consider

newly discovered evidence of Reed’s recent gain of employment.1 Hietpas claims that

1
  Hietpas also sought a new trial. But proceedings to modify support are “special
proceedings” and not trials. Angelos v. Angelos, 367 N.W.2d 518, 520 (Minn. 1985).
And, new trial motions are unauthorized for special proceedings. Huso v. Huso, 465

                                             12
after the hearing he became aware that Reed had obtained full-time employment earning

$52,000 per year. The district court chose not to consider this evidence because even if

Reed had begun working, she had not been employed in the same position long enough

that the information would have changed the outcome. The district court noted that

“[c]ommencement of employment is not the same as the ability to sustain employment,

which is the challenge for [Reed].” Because Reed had not been employed for a sufficient

period such that the information would have altered the findings, we conclude the district

court did not abuse its discretion by declining to consider the new information.

Restriction of motion

       Hietpas lastly argues that the district court abused its discretion by restricting his

ability to move to modify maintenance until Reed had maintained employment at the

income level contemplated in the judgment and decree for 12 months. Caselaw and

statutes do not address the restriction of motions not related to frivolous litigation or

improper communications with the court. See, e.g., In re Burns, 542 N.W.2d 389, 390

(Minn. 1996) (upholding limitations on pro se party’s excessive inappropriate

communications with district court). But the district court’s rationale can be easily

understood: the parties have extremely high conflict, and Reed has been able to secure

but not maintain several jobs. However, this is not enough to limit a motion to modify

spousal maintenance. Minn. Stat. § 518A.39, subd. 2 (2012) allows modification for

numerous reasons other than changes in Reed’s income, including a change in Hietpas’s

N.W.2d 719, 720-21 (Minn. App. 1991). Therefore, the district court did not abuse its
discretion in denying Hietpas’s motion for a new trial.

                                             13
income. Because of the factors that could lead to Hietpas properly moving to modify

spousal maintenance, we conclude that the district court abused its discretion by

prohibiting him from bringing any spousal-maintenance motion.      We reverse this

restriction.

       Affirmed in part and reversed in part.

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