Opinion
No. C6-99-1361.
Filed January 25, 2000.
Appeal from the District Court, Kanabec County, File No. F595410.
Frances Elizabeth Carlson, (pro se respondent)
Donald A. Hillstrom, (for appellant)
Considered and decided by Willis, Presiding Judge, Crippen, Judge, and Short, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1998).
UNPUBLISHED OPINION
Appellant husband challenges the district court's denial of his motion to terminate his maintenance obligation. We affirm.
FACTS
The parties' 25-year marriage was dissolved in June 1996. The district court awarded respondent $600 per month in permanent spousal maintenance, based on its finding that respondent had a net monthly income of $892.28 and necessary monthly expenses of $1,460, while appellant had a net monthly income of $2,558.95 and necessary monthly expenses of $2,323.50. In arriving at the maintenance award, the district court considered appellant's ability to work substantial amounts of overtime at Hoffman Engineering, where he had been employed since 1969. Appellant husband appealed from these determinations, and this court affirmed. Carlson v. Carlson, No. C2-96-2167, 1997 WL 327665 (Minn.App. June 17, 1997), review denied (Minn. Aug. 5, 1997).
On July 28, 1998, appellant was involved in an incident at work in which he became angry and abusive toward a Hoffman employee. He was escorted off the property and told he had to see a psychiatrist before he could return to work. On August 3, 1998, appellant consulted with psychiatrist Joan Webb. Dr. Webb's notes explain that appellant expressed anger toward his ex-wife, a judge, and his employer. Dr. Webb diagnosed appellant with a major depressive disorder and placed him on short-term disability leave. Appellant received short-term disability benefits yielding a net income of $1,372.82 per month.
In October 1998, appellant moved to terminate or suspend his maintenance obligation. The district court found that the decrease in appellant's earnings from $2,558.95 to $1,372.82 per month, and appellant's inability to work overtime while on disability leave, constituted a substantial change in circumstances within the meaning of Minn. Stat. § 518.64, subd. 2 (1998) (allowing modification of maintenance upon a showing of substantially decreased earnings of a party). The district court denied appellant's motion to terminate spousal maintenance but suspended maintenance payments from September 9, 1998, through December 1, 1998.
Rather than returning to work, appellant, who was then 58 years old, elected early retirement. In January 1999, appellant again moved to terminate maintenance based on his lack of wage income. The district court denied his motion to terminate maintenance payments but reduced his maintenance obligation from $600 per month to $335 per month. The district court concluded that the reduction was justified because, although appellant could still work, there was no evidence that the substantial overtime available at Hoffman would be available at a new job.
In May 1999, appellant moved the court to (1) allow the parties to present evidence of their incomes and monthly expenses; (2) amend the findings of fact to state that appellant had the right to retire early and that such retirement was not in bad faith to avoid maintenance; (3) amend the findings of fact to state that there was no evidence that appellant's retirement was in bad faith to avoid maintenance; and (4) make other appropriate findings to justify its conclusions of law. The district court found that appellant's income was not more than $900 per month, while his monthly living expenses were $1,244.56. The district court also found that respondent's income was $757 per month, and her reasonable monthly expenses were $1,460. The district court declined to find that appellant's early retirement was not in bad faith and ordered appellant to continue to pay respondent $335 per month in maintenance. This appeal followed.
DECISION
Appellant argues that the district court abused its discretion by failing to terminate spousal maintenance payments upon his early retirement. The district court has "substantial discretion" in deciding to modify a maintenance award. Kaiser v. Kaiser, 290 Minn. 173, 179, 186 N.W.2d 678, 683 (1971). This court will not find that the district court abused its discretion absent "a clearly erroneous conclusion that is against logic and the facts on record." Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
To obtain modification of maintenance, a party must show a substantial change in circumstances that makes the existing maintenance award unreasonable and unfair. Minn. Stat. § 518.64, subd. 2 (1998). When a party's income shifts from wage income to income from a previously awarded property right, such as a pension, there is a substantial change in circumstances justifying a reduction in maintenance. See Kruschel v. Kruschel, 419 N.W.2d 119, 122 (Minn.App. 1988). The district court determined that appellant's early retirement and the possible unavailability of overtime work constituted a substantial change in his circumstances. The record shows that appellant's net monthly income before his retirement was $2,558.95, and his monthly income after retirement was no more than $900. But because the court found that appellant could still work, it denied his request to terminate his maintenance obligation. The district court reduced the maintenance obligation from $600 to $335 per month on the ground that there was no evidence in the record that with another employer appellant could work the substantial overtime available at Hoffman.
Appellant argues that the district court had to make a finding that he retired in bad faith in order to require him to continue paying maintenance. Failure of a district court to make a finding on an obligor's motives for early retirement is legal error. In re Marriage of Richards, 472 N.W.2d 162, 165 (Minn.App. 1991). When an obligor voluntarily creates a change in circumstances, the district court should consider the obligor's motives. Id. at 164. "If the change was made in good faith, the [obligee] should share in the hardship as they would have had the [parties] remained together." Giesner v. Giesner, 319 N.W.2d 718, 720 (Minn. 1982).
Appellant submitted affidavits to the district court explaining that he believed if he had not retired, he would have been fired within a short time, and this might have delayed the date he would begin to collect his pension; that Hoffman was engaging in a course of conduct intended to force his resignation; and that he had consulted with an employment-law attorney who "suggested strongly" that appellant take early retirement.
By refusing to terminate appellant's maintenance obligation, the district court did not explicitly find that appellant had retired in bad faith, but the court made several specific findings bearing on the question. The district court found that (1) appellant's psychiatrist and employer told him that he could return to work; (2) appellant presented no evidence that he was physically or psychologically unable to work; (3) "`[t]o a great extent, [appellant] appears to have been placed on short-term disability based upon unresolved anger with [his ex-wife], with the [c]ourt, with his former attorney, and with the dissolution process in general.' That continues to be the case"; (4) appellant's proposal that he live on $900 per month, with $1,244.56 in monthly living expenses, and that respondent live on $757 per month, with reasonable monthly living expenses of $1,460, would reduce them both to abject poverty, "occasioned not by an inability to work, but by [appellant's] anger and depression with the dissolution"; and (5) appellant has the ability to work in addition to receiving his retirement benefits.
This court must defer to the district court's factual determinations regarding whether a party's employment decision was made in bad faith. See Devault v. Waller, 494 N.W.2d 92, 94 (Minn.App. 1992). Because the district court's findings are tantamount to a finding of bad faith, its findings on appellant's motives are sufficient. See Warwick v. Warwick, 438 N.W.2d 673, 678 (Minn.App. 1989) (stating that district court's finding that appellant unjustifiably limited his income was effectively a finding of bad faith). In addition, the district court specifically denied appellant's motions to amend its order to include a finding of good-faith retirement.
Appellant contends that he acted in good faith when he left his job due to problems with co-workers and his belief that he would be fired if he did not quit. But this court has consistently held obligors to have acted in bad faith when they have voluntarily left steady employment without alternate plans for income or with alternatives that are not likely to provide sufficient income. See Curtis v. Curtis, 442 N.W.2d 173, 177-78 (Minn.App. 1989) (holding that obligor acted in bad faith when he voluntarily left his job of ten years without alternate plans for employment); Warwick, 438 N.W.2d at 678 (holding that obligor acted in bad faith by unjustifiably limiting his income); Juelfs v. Juelfs, 359 N.W.2d 667, 670 (Minn.App. 1984) (holding that obligor acted in bad faith when he voluntarily left long-time job to run business that had little chance of success), review denied (Minn. Mar. 29, 1985). The obligor has no defense if he has the capacity to comply with the court-ordered obligation but has not made reasonable efforts to do so. See Giesner, 319 N.W.2d at 719-20. Here, appellant severely limited his income by electing to retire without alternate plans and without regard to his maintenance obligation. The district court did not abuse its discretion by denying appellant's motion to terminate maintenance.
Next, appellant argues that because he retired in good faith, and because his pension is a property settlement, the district court may not order him to pay maintenance from his pension benefits. Fifty percent of appellant's pension was awarded to him as property in the parties' 1996 dissolution decree. And as a general rule, pension benefits should not be treated as income for maintenance purposes. Kruschel, 419 N.W.2d at 122-23. But a maintenance obligation is not automatically terminated or reduced whenever it appears that it would be paid from previously awarded property. In re Marriage of Richards, 472 N.W.2d at 165. A property award may be invaded for the payment of maintenance where the obligor has reduced his income in bad faith. Sieber v. Sieber, 258 N.W.2d 754, 757 n. 2 (Minn. 1977); see also In re Marriage of Richards, 472 N.W.2d at 165 (holding that where obligor limits his income in bad faith, the district court may order that maintenance be paid from personal assets). Because the district court effectively found that appellant acted in bad faith, the court did not abuse its discretion in ordering him to pay maintenance even though it appears the obligation will be paid from his pension benefits.