Tag Archives: Need based Attorney Fees

New Minnesota Family Law Case – Rauworth v. Rauworth

In Rauworth v. Rauworth, A13-2104 (Minn. Ct. App. Feb. 2, 2015), the Minnesota Court of Appeals issued significant rulings on (1) post-trial motions; (2) permanent maintenance; and (3) attorneys’ fees.

Post-Trial Motions:  The court upheld the district court’s decision to award an increase of $570 in spousal maintenance, but reversed the district court’s decision to award retroactive maintenance.

The district court had awarded the additional $570 because of the tax consequences of spousal maintenance, which is taxable income to the spouse receiving maintenance and a deduction to the spouse paying spousal maintenance.  The court noted that the rule allowing for amendment of findings of fact requires courts “to apply the evidence as submitted during the trial of the case, and may neither go outside the record, nor consider new evidence.  The court found that the ex-wife’s post-trial exhibit should have been excluded, but that there were enough facts outside of the post-trial exhibit to support the change.  At trial, the ex-wife’s expert had testified about the tax consequences of spousal maintenance, so there was evidence from trial on the issue.  Further, the court found that the change did not unduly prejudice the ex-husband as his income was greater than his expenses, and he would be able to deduct the spousal maintenance from his income on his tax return. Symbol of law and justice in the empty courtroom, law and justice concept.

The court, however, held that the district court erred in awarding six months of retroactive maintenance, as this was a new issue filed for the first time on a motion for amended filings or a new trial.   The court noted that the ex-wife could have moved for the payment of interim maintenance under Minnesota Statute Section 518.131, subd. 1(b).

Permanent Maintenance:  The court upheld the district court’s decision in denying permanent maintenance, noting that the party seeking maintenance has the burden of proof.  In this case, the wife was awarded $600,000 in retirement funds, which would yield retirement income when she reached retirement age.  The court held that the award of rehabilitative maintenance, limited to twelve years, was fair and just because she would have access to retirement income at the end of twelve years.  The court did note that, if she were unable to meet her living expenses at that time, she would be able to bring a motion to modify the maintenance award later on.

Attorneys’ Fees:  The court held that the district had acted within its discretion in denying need-based attorneys’ fees.  The court held that the ex-wife did not show any need for attorneys’ fees as she has a full-time job, she got nearly $800,000 in marital property, and she was awarded substantial maintenance through 2025.   Based on this decision, courts are likely to deny need-based attorneys’ fees where a party has substantial income, including maintenance, and has been awarded substantial assets.

As this case illustrates, it is important to raise all relevant claims and request all relevant relief when you first file for divorce, or, at least, at trial, as it may be impossible to raise new claims after a divorce judgment is entered.  Therefore, if you are considering a divorce, consider hiring an experienced family law attorney to assist you.

Modifying Child Support and Spousal Maintenance, and Awarding Attorneys’ fees

Modifying Child Support and Spousal Maintenance, and Awarding Attorneys’ fees

The recent case of Ferris v. Szachowicz, #A12-2154, A13-0558 (Minn. Ct. App. Dec. 2, 2013) dealt with an ex-husband’s effort to reduce the amount of spousal maintenance and child support because his business, plastic surgery, allegedly suffered in the economic downturn. Because the statute provides for reducing spousal maintenance because of changed circumstances, he argued that the reduction in plastic surgeries, the recession, increasing tax arrearages, and business loan debt met the statutory criteria for changed circumstances.

The Court of Appeals began by noting that, on motions to modify child support, the court has broad discretion and its decision will only be reversed if it is against both the facts in the record and logic. Using this standard the court affirmed the district court’s decision. Finding it was supported by the record and the law. The court held that the district court acted within its discretion in calculating the husband’s income using a four-year average although the wife argued that including 2007 income was unreasonable. In this case, the husband had wanted to use a five-average and the wife preferred a three-year average, so the court’s decision to use a four-year average actually split the difference in the party’s position. The court noted that it would not include 2011 income because the data was incomplete. Although the wife argued that the income was on an upward trajectory, so included the year 2007 pulled the average down too far, the court held that the district within its discretion in choosing a time range for calculating an average when income fluctuates.

The court affirmed the district court’s decision denying the ex-husband’s first motion to modify spousal maintenance. Under Minnesota Statute 518 Section 39A, subd. 2 (2013), a party needs to show both a substantial change in circumstances and that the changed circumstances render the existing award both unreasonable and unfair. The court found the district court was within its discretion to find that the ex-husband failed to show a substantial change in circumstances because he did not produce loan documents to support his testimony about loan repayments.

The court then affirmed the district court’s decision granting the ex-husband’s second motion to modify spousal maintenance, finding the court made a correct decision despite procedural flaws. The court found that using a second motion to make the decision was an incorrect procedure because of the legal doctrine of res judicata. Nonetheless, the court found that the court could consider the evidence that should have been submitted with the first motion because rulings on support are not final decisions, and courts are required to respond to individual circumstances. The court emphasized that there had been substantial changes in the husband’s income from the time when the support order was first entered, so that the income was inadequate to support the parties’ lifestyle during marriage. The court also noted that the ex-wife was not working to her potential, in determining that continuing maintenance at the existing level was both unfair and unreasonable.

The court also upheld the district court’s denial of need-based attorney fees, provided in Minnesota Statute Section 518.14, subdivision 1 (2013). Although the court is required to consider the statutory factors, the lack of specific findings on each factor is not sufficient to reverse the decision as long as the decision indicates that the record included the parties’ finances and the court considered the relevant factors. The court noted that the district court had indeed made many findings on the parties’ finances, and had found that the wife had the ability to earn $42,500 annually, if she worked full-time.

The court also upheld the denial of attorney fees based on the husband’s conduct. Under the same fee provision, the court has discretion to award attorney’s fees on a party who unreasonably increases the length or expense of the proceeding. The court held that it was within the trial court’s discretion to consider the fact that the ex-wife’s refusal to agree to the appointment of “a neutral” in determining that her actions also increased the length or expense of the proceeding. Further, the ex-husband’s discovery requests related to the statutory grounds for modification, so they were not unreasonable.

Anyone who is considering moving for additional or reduced spousal maintenance should consult with an experienced family law attorney.

Stutler v Moreno

Stutler v Moreno

In Stutler v. Moreno, A13-0056, A3-0460 (Minn. Ct. App. Feb. 3, 2014), the Minnesota Court of Appeals issued several significant decisions regarding modifications of child support and spousal maintenance, including retroactive child support and child maintenance, life insurance requirements, and imputing spousal income.

Retroactive child support and spousal maintenance: The court held that an award of retroactive child support and spousal maintenance was impermissible. In this case, the court had reserved spousal maintenance and child support because the husband was unemployed at the time of the court order. Here, the husband began his new job on October 2nd, and the wife did no object to this employment and requested child support and spousal maintenance on November 18. The court held that child support and maintenance would begin on November 18, the day of the request, denying any child support and maintenance for the period prior to November 18th.

Child support in excess of guidelines: The court remanded the child support award because it was in excess of the net basic support guidelines and lacked the required findings for any child support in excess of those guidelines. The court held that the statute, Minnesota Statute 518A.43, sudivision 1(1) 58A.43, requires the court to consider factors including (1) each parent’s earnings, income and resources; (2) any extraordinary financial needs and resources, physical or emotional condition, and educational needs of the children; and (3) the standard of living the child would enjoy if the parents lived together. As a result, the district court was required to reconsider the child support award and issue specific findings.

Life Insurance: The court also reversed the district court’s order requiring the father to maintain $750,000 in life insurance. He had $200,000 in life insurance, as required by the original dissolution order, and obtained another $462,000 in life insurance from his employer, for a total of $662,000, leaving a balance of $88,000. The court held that the district court is required to make findings regarding the availability, insurability, and cost of insurance, and, reduce the insurance required, to “that available at a reasonable rate.”

Modification: The court upheld the district court’s decision granting the ex-wife’s motion to modify spousal maintenance and child support in light of the ex-husband’s new employment. Under Minnesota Statute 518.39A, subdivision. 2 (2013), a party needs to show both a substantial change in circumstances and that the changed circumstances render the existing award both unreasonable and unfair. The court held that a change in the circumstances of one party can be sufficient to justify a modification.

The court rejected the husband’s argument that the modification was beyond the parties’ marital standard of living. The husband had earned over $300,000 annually before the separation, but his income had declined to $140,000 when he started a new job in October 2011. However, by August 2012, he had started new employment paying $228,000 annually with a signing bonus and other potential bonuses. The court held that the district court did not abuse its discretion in finding that the earlier award of maintenance did not reflects the parties’ marital standard of living. However, the court found that the trial court erred in considering evidence from mediation regarding the parties’ marital standard of living without consideration of the mediation evidence although it could reopen the record for additional evidence.

The court held that the district acted within its discretion by awarding spousal maintenance of $6,500 base amount plus 25% of gross income, including cash bonuses earned over $228,000, up to a maximum of $20,000. The court noted that the bonuses had not been included in the base maintenance, and the ex-wife’s reasonable needs included parenting the parties ‘child with Down Syndrome, and the parties’ marital standard of living, as well as the cap on the amount and the fact it was contingent on the funds being paid.

The court did find that the district court erred in ‘calculating the father’s ability to pay the excluding the $668.97 monthly payment that the father paid for TEFRA, a form of medical assistance for children with disabilities. The court that this expense was so substantial that it could not be excluded.

Imputing income to an ex-spouse: The court upheld the trial court’s determination that, in calculating spousal maintenance and child support, $6,000 annual income would be imputed to the ex-wife. Although a vocational expert had found that she could earn $22,000, the court found that her responsibilities for caring for her eleven year old child with Down Syndrome precluded such full-time employment. However, the court rejected the ex-wife’s argument that no income should be imputed, noting that she could work at least four hours a day, given the child was in school for seven hours a day and also received personal care services.

Attorneys fees: The court also upheld the district court’s denial of need-based attorney fees, provided in Minnesota Statute Section 518.14, subdivision 1 (2013). The wife had $300,000 in her bank account and was expecting to receive $200,000 from the sale of the house. The court did uphold some conduct-based attorneys’ fees.

Anyone who is considering moving for additional or reduced spousal maintenance should consult with an experienced family law attorney.