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.