Court Opinion

ID: 9883727
Source: CourtListenerOpinion
Date Created: 2023-10-06 02:14:45.506471+00
Date Added: 2024-06-11T07:48:29.775980
License: Public Domain

RANDALL, Judge,
dissenting
I respectfully dissent from the majority on the questions of property division, child support, and maintenance. I would remand on these issues for a more equitable property division, a recalculation of appellant’s net income and corresponding recaí-*893culation of child support, and a redetermi-nation of appellant’s ability to pay maintenance.
Although it is true that the trial court has broad discretion in property divisions, each case must be considered on its own facts. Krohn v. Krohn, 284 Minn. 95, 169 N.W.2d 389 (1969). Here the court made key monetary errors that cannot be overlooked.
The first error is the court’s valuation of appellant’s profit-sharing plan. While I acknowledge that the trial court apportioned slightly less than half of the value it assigned to the profit-sharing plan to respondent, the value assigned by the trial court to the profit-sharing plan is not supported by the evidence. Appellant entered into evidence the plan-holder’s statement of the present value of the plan, $77,468.58. The court added to that present value the amount of a profit-sharing loan, $30,000, that appellant had previously taken out against the plan and was obligated to repay. The court divided this inflated total ($107,468.58) between the parties, but did not apportion any part of the $30,000 debt to respondent. Yet, the plan can only be worth $107,000 if one of the parties repays the $30,000 loan.
The trial court’s apportionment of property and division of debt results in respondent’s receiving an even greater share of the marital property than the court’s figures indicate. The trial court compounded the erroneous division by failing to take into account uncontradicted testimony that the benefits from the $30,000 loan were shared equally between appellant and respondent. Respondent received $15,000 of the loan proceeds toward the purchase of her new Suburban and appellant applied approximately $6,000 toward his car and $9,000 toward his boat. By failing to apportion to respondent any share of the $30,-000 loan needed to get the plan up to the court-assigned present value of $107,000, and by giving appellant no credit for the $15,000 from the loan which inured directly to respondent’s benefit, the trial court compounded a harsh result.
When appellant sold his boat, the court originally ordered the proceeds from the sale, $12,325, to be applied to reduce the encumbrance on the boat, a debt assigned to appellant. The court then changed its temporary order in the final decree and ordered appellant to pay approximately $10,000 of the boat sale proceeds to respondent’s attorney for his fee, yet left the encumbrance on the boat solely appellant’s responsibility.
Although the law does not require an exactly equal division of property between spouses, it does require fairness. Minn.Stat. § 518.58 (1984); Johns v. Johns, 354 N.W.2d 564 (Minn.Ct.App.1984). The disproportionate property division must be closely scrutinized because in each of several decisions made by the trial court, the court found against appellant.
Another monetary error made by the trial court was in computing appellant’s net income. While the court was not limited to considering only the earnings guaranteed under the EPPA contract, as appellant argued, the factual findings are devoid of support for the court’s calculation of a monthly net income of $4,500.
The trial court was required to make a reasonable estimate of appellant’s net monthly income before applying the guidelines. Otte v. Otte, 368 N.W.2d 293, 296 (Minn.Ct.App.1985). Instead of reaching a reasonable estimate, the court merely listed appellant’s gross income for each of the past four years, approximately $80,000, and concluded somehow that his net income was $4,500 per month. In light of the large proportion of appellant’s disposable income obligated to child support ($1,935 per month), maintenance payments ($750 per month), and repayment of the profit-sharing loan ($700 per month), failure to make findings insuring the accuracy of the net income figure was erroneous.
Appellant claimed, and respondent did not contest, that a net monthly income based on his EPPA annual salary of $72,-301 was $3,393.34. On appellant’s $8,000 of yearly gross income over and above his salary, a conservative combined state and *894federal tax would total approximately 40 percent. That would leave approximately 60 percent or $4800 per year, or $400 per month net. Thus, his approximate total net per month is $3,800, not $4,500. That difference is crucial given court-ordered monthly payments totaling $3,385 per month. Excluding the profit-sharing loan repayment, appellant claimed a modest $1,200 per month living expense, and the trial court order leaves nowhere near that amount for appellant.
In addition to remanding for a more accurate finding on appellant’s net income, I would also remand to the court with instructions to reconsider maintenance and child support.
The trial court made no finding concerning appellant’s ability to pay maintenance and meet his monthly living expenses. These findings are required under Minn. Stat. § 518.552, subd. 2 (1984). Section 518.552, subd. 2(f) specifically requires the court to consider the ability of the obligor spouse to pay maintenance. The majority states that lack of a finding on appellant’s ability to pay is not fatal. I do not agree. The child support guidelines Minn.Stat. § 518.551, subd. 5 (1984) do not list profit-sharing loan repayments as an allowable deduction from gross income normally taken into account before applying the guidelines, but appellant’s ability to pay maintenance must be looked at in view of his total financial picture, including sources of income and all reasonable expenses. Minn.Stat. § 518.552, subd. 2(f); Knott v. Knott, 358 N.W.2d 493, 496 (Minn.Ct.App.1984).
Here the combined total of the property award, child support order, maintenance order, and debt repayment are patently unfair to appellant based on a net income of slightly less than $4,000 per month.
In addition to the above court-ordered payments, appellant was ordered to carry substantial life insurance for the benefit of respondent and children, the bulk of which is at his own expense. In addition, the court failed to consider appellant’s post-trial motion that he be awarded the dependency deductions for the five children. Common sense indicates that with respondent’s gross taxable income limited to $9,000 per year maintenance, those dependency deductions are virtually meaningless to her. Appellant’s attorney calculated the value of those five deductions at approximately $3,000-3,500 per year. If granted to appellant, the deductions would free up some disposable income for the benefit of himself and his family.
In previous dissolution cases, the Minnesota Supreme Court has affirmed disproportionately low property settlements for spouses when coupled with a high maintenance award. The supreme court has also affirmed disproportionately high property awards to a spouse when coupled with little or no maintenance. However, I know of no case where the supreme court has sanctioned a disproportionately low property settlement for the obligor spouse while at the same time requiring the spouse to pay a disproportionately high maintenance award and child support at 100% of the guidelines.
A remand to the trial court to correct the errors I have noted will not bar respondent from coming back to the trial court for an increase in child support once the profit-sharing loan is paid off or if appellant experiences other substantial increases in income and respondent can demonstrate changed circumstances which render the original decree unreasonable and unfair. Minn.Stat. § 518.64, subd. 2 (1984). I would find that appellant is entitled to relief from the present decree and would remand to the trial court to reconsider property division, maintenance, and child support.