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In re: Frank-Bretwisch v. Ryan: FAM - increase in child support obligors income; change in circumstances; presumption and benefits paid

STATE OF MINNESOTA
IN COURT OF APPEALS
A06-1864
In re the Matter of:
Lori Ann Frank-Bretwisch, petitioner,
Respondent,
vs.
William Ryan,
Appellant.
Filed December 4, 2007
Reversed and remanded
Crippen, Judge*
Dakota County District Court
File No. F7-00-8867
Patricia A. OGorman, Suite 207, 8750-90th Street South, Cottage Grove, MN 55016
(for respondent Frank-Bretwisch)
Kathy Krider Hart, Yankee Square Office III, 3460 Washington Drive, Suite 214, Eagan,
MN 55122 (for appellant)
Lisa D. Kontz, Dakota County Judicial Center, 1560 Highway 55, Hastings, MN 55033
(for respondent Dakota County)
Considered and decided by Ross, Presiding Judge; Kalitowski, Judge; and
Crippen, Judge.
S Y L L A B U S
An increase in a child support obligors income, when the obligor already enjoys
the benefits of an award deviating downward from statutory guidelines, often represents a
change in circumstance under the governing statute that is rebuttably presumed to justify
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, 10.
2
an increase in the amount of the obligation. When this presumption arises, it requires the
obligor to prove that the existing obligation remains fair and reasonable to avoid
modification of that obligation. In these circumstances, the district courts findings must
address the needs and resources of the parties but must also determine whether the
existing award currently remains in the best interests of the child(ren) for whom the
support obligation is being paid.
O P I N I O N
CRIPPEN, Judge
On appeal from the denial of his motion to increase respondent Lori Ann Frank-
Bretwischs stipulated sub-guideline child-support obligation, appellant William Ryan
challenges the determination of the district court that there was no substantial change in
circumstances rendering respondents existing support obligation unreasonable and
unfair. Because the findings of the district court are inadequate, particularly in failing to
address the childs best interests, we reverse and remand.
FACTS
A February 1997 parentage order adjudicated appellant the father of the parties
child, who was born in February 1991. At some point, not made clear in the record, the
child was in respondents sole physical custody, and appellant, who had joint legal
custody, enjoyed some parenting time. Between February 1997 and August 2004, the
parties litigated numerous child-support disputes. Appellant moved for physical custody
of the child and, in April 2005, the child moved into appellants home.
3
In May 2005 child-support proceedings, appellant sought to have respondents
bonus income included in her net monthly income for child-support purposes. The
CSMs order stated that, although respondent received bonuses in 2003 and 2004, the
bonus income was not guaranteed or regular and reliable, and would not be included in
her income for child-support purposes. The CSM also found that respondent had a net
monthly income of ,386, appellant was receiving net monthly unemployment
compensation of ,010, respondent had reasonable monthly living expenses of ,501,
and appellants reasonable monthly expenses were ,760. Setting appellants obligation
for the period between November 2004 and May 2005, the CSM determined that [t]he
parties comparative expenses and income do not warrant a departure from the
Guidelines.
Before an August 2005 evidentiary hearing on appellants motion to modify
physical custody, the parties read into the record an agreement regarding custody, child
support, and parenting time. Under the agreement, the child would be in appellants sole
physical custody and respondent would pay sub-guideline monthly child support of 0.
The agreement also stated that appellant and respondent then had net monthly incomes of
and ,386 (excluding bonuses), respectively. The district courts September order
adopted the parties agreement. For reasons that are unclear, this order does not
acknowledge that respondents support obligation is a significant downward deviation
from the child-support guidelines, states no reasons for the deviation, and cites as the
only basis for the award the circumstances of respondent earning ,386 monthly and
appellant having no income. Neither party sought review or appeal of the order.
4
In February 2006, appellant moved to increase child support, requesting again that
respondents bonuses be included in the calculation of her income and asking that a
support obligation be set at the guideline amount for her current, increased net monthly
income, effective September 1, 2005. He asserted that respondent had materially
misrepresented her income to the court in the proceedings generating the September 2005
order.
In an April 2006 order, the CSM detailed respondents income and bonus
histories, as well as the prior litigation, and found that respondents gross annual income
for 2006 was ,400, up 11% from the previous year, that respondent had not materially
misrepresented her income, and that appellant had neglected to seek inclusion of
respondents bonus income when support was set in September 2005. The CSM, in her
2006 order, expressed grave concerns over the propriety of the amount of support
ordered and the lack of justification for a downward deviation.
The district court, when reviewing the CSMs 2006 decision, found the CSMs
grave concerns notable and added that it shared those concerns. The court added that it
was very concerned about the reasonableness of the current child support obligation in
light of the costs for the basic necessities of the child and the substantial income of
[respondent], and that [i]n the end, it is the child who will suffer if there are insufficient
funds to meet her basic requirements. But the district court noted that both parties were
represented by counsel [in 2005] and fully advised of the situation and various
outcomes. Similarly, the CSM found that appellant has always known that
respondents compensation structure included bonuses and the approximate amount of
5
her income[,] that there were grave concerns about appellants candor to the court in
making his motion to include respondents bonuses in her income for support purposes
when he had recently stipulated to not including respondents bonuses in her income, and
that the primary reason for his motion to modify respondents support obligation is
because he feels he made a bad deal.
Noting the brief amount of time that passed between the parties stipulation and
appellants motion, the CSM ruled that there was not, at that time, a substantial change in
circumstances rendering respondents existing support obligation unreasonable and
unfair, and denied appellants motion. In August 2006, the district court affirmed the
CSM, noting that the 2005 decision could no longer be reviewed.
ISSUE
Did the district court abuse its discretion in denying appellants motion to modify
respondents child-support obligation?
ANALYSIS
Child-support orders may be modified upon a showing of substantially changed
circumstances making the terms of an existing support order unreasonable and unfair.
Minn. Stat. 518.64, subd. 2 (2004).1 If applying the child-support guidelines to the
1 Generally, courts apply the law in effect at the time they make their decision unless
doing so will alter vested rights or result in manifest injustice. Interstate Power Co. v.
Nobles County Bd. of Commrs, 617 N.W.2d 566, 575-76 (Minn. 2000); McClelland v.
McClelland, 393 N.W.2d 224, 226-27 (Minn. App. 1986), review denied (Minn. Nov. 17,
1986). Here, since the district court made its decision, the legislatures renumeration and
substantial alteration of the child-support statutes has become effective. See 2006 Minn.
Laws ch. 280, 44 (reciting effective date of amended child-support laws); compare
Minn. Stat. 518.551, .64 (2004) with Minn. Stat. 518A.26-.78 (2006). Although we
6
parties current circumstances produces a guideline support obligation that is at least 20%
and per month different from the obligation in the current order, it is presumed that
there has been a substantial change in circumstances, and there is an additional,
rebuttable presumption that the existing support order is unreasonable and unfair. Id.,
subd. 2(b)(1). When, as here, the support obligation sought to be modified was set below
the guideline amount, the change in circumstances necessary to justify increasing support
to the guideline amount is limited at best. See Murray v. Murray, 425 N.W.2d 315, 317
(Minn. App. 1988) (noting almost any change in circumstances would be substantial
when original support set at less than one-half of the recommended guidelines support);
Compart v. Compart, 417 N.W.2d 658, 662 (Minn. App. 1988) (stating that in
considering a substantial change, a court should consider the inequities of the original
child support order).
The district court has broad discretion regarding whether to modify support, and
its decision will not be altered on appeal absent an abuse of that discretion, which occurs
if the district court resolves the matter in a manner that is against logic and the facts on
the record. Putz v. Putz, 645 N.W.2d 343, 347 (Minn. 2002).
As often will be the case after a downward deviation, the statutory modification
presumptions are triggered because respondents current circumstances would produce a
support award much more than 20% higher and greater than the prior award. Minn.
Stat. 518.64, subd. 2(b)(1). Although the district court failed to find respondents
apply the prior law, we recognize that much of the language affecting this case is restated
in the later enactment.
7
current net monthly income, her gross income has increased and it is inescapable to
conclude that her current net monthly income is more than ,386 (the amount found in
May 2005) and well in excess of the amount that would produce the most recent support
award of 0. Under the guidelines, respondents income, even in 2005, would have
produced a support award of more than ,000. See Minn. Stat. 518.551, subd. 5(b)
(2004).
Thus, there is a statutory presumption that there has been a substantial change in
circumstances, and an additional, rebuttable statutory presumption that the terms of the
existing support order are unreasonable and unfair, under Minn. Stat. 518.64, subd.
2(b)(1). Although the parties 2005 stipulation is relevant to issues of fairness and
reasonableness, at least in terms of the interests of the parents, nothing in section 518.64
suggests that the presumptions are inapplicable in the aftermath of a stipulated award.
Determining whether the increase in respondents income actually renders the
existing support order unreasonable and unfair is unnecessarily complicated by the fact
that the September 2005 order setting respondents support obligation at a sub-guideline
amount lacks the statutorily required findings addressing the setting of support at an
amount deviating from the guideline amount. See Minn. Stat. 518.551, subds. 5(a)
(requiring adoption of a stipulated support obligation if each party is represented by
counsel, unless the stipulation does not meet the conditions of [Minn. Stat. 518.551,
subd. 5(i)]); 5(i) (requiring findings on the factors listed in Minn. Stat. 518.551, subd.
5(c) if support is set at a nonguideline amount); 5(c) (2004) (listing factors a decision
maker is to consider when addressing whether to set support at an amount deviating from
8
the guidelines and the amount of a non-guideline support obligation). Pertinent to the
facts in this case, the main factors the district court must consider in setting or modifying
child support are all of the earnings of both parents, including both real and personal
property, and the childs financial needs and resources, physical and emotional condition,
and educational needs. Minn. Stat. 518.551, subd. 5(c).
Consistent with precedent and the record respecting court adoption of the 2005
stipulation, both the CSM and the district court were understandably uncomfortable with
the continued effectiveness of the 2005 order. As this court has observed:
Whether there is a substantial change in circumstances
rendering an existing support obligation unreasonable and
unfair generally requires comparing the parties
circumstances at the time support was last set or modified to
their circumstances at the time of the motion to modify.
Unless a support order provides a baseline for future
modification motions by reciting the parties then-existing
circumstances, the litigation of a later motion to modify that
order becomes unnecessarily complicated because it requires
the parties to litigate not only their circumstances at the time
of the motion, but also their circumstances at the time of the
order sought to be modified.
Maschoff v. Leiding, 696 N.W.2d 834, 840 (Minn. App. 2005) (citations omitted).
Thus, respondents burden, created by presumptions favoring appellant, was
further enlarged by the defective and incomplete process that occurred when the support
obligation was previously determined. Having in mind this character of the issue in the
case, and having reviewed the findings of the district court, it is evident that the
determination against modification cannot be adequately reviewed without a remand for
9
additional findings. See, e.g., Erickson v. Erickson, 385 N.W.2d 301, 303-04 (Minn.
1986) (requiring findings adequate to permit review).
The current fairness and reasonableness of the 2005 award cannot be determined
without findings that address respondents net income; respondents needs, relevant to the
question of whether her ability to pay is hampered; appellants needs, showing the
deficiency of the current award, if any, in meeting those needs; other considerations
suggesting cause for a downward deviation; and changes in any of these circumstances
since September 2005. See Minn. Stat. 518.64, subd. 2(a) (stating the terms of a child
support order may be modified upon a showing of factors that include substantially
increased or decreased earnings of a party (or needs of a party or child), any of which
makes the terms unreasonable and unfair); see also Minn. Stat. 518.551, subd. 5(c)(i).
But the district court also must address a primary consideration, beyond the
interests of the parents, to permit our review of its exercise of discretion in determining
whether respondent has rebutted the presumption of unfairness and unreasonableness
prompted by the increase of her income. The orders denying appellants motion to
modify support fail to address whether a significantly sub-guideline obligation is in the
childs best interests. An extensive line of precedent shows long and unambiguous
judicial commitment to the precept that a childs best interests are the courts paramount
consideration in addressing child-related questions. See, e.g., Olson v. Olson, 534
N.W.2d 547, 549 (Minn. 1995) (stating [a]s in all matters involving court-established
family relationships of children, we begin with reference to our paramount commitment
to the best interests of the children. We said a century ago, The cardinal principle in
10
such matters is to regard the benefit of the infant as paramount . . . . Flint v. Flint, [],
and we have reiterated that premise in many recent cases); State ex rel. Flint v. Flint, 63
Minn. 187, 189, 65 N.W. 272, 273 (1895) (observing that a childs best interests
outweigh the interests of a parent, even if the parents interest is recognized by statute).
Thus, the fairness and reasonableness of the 2005 award goes to matters beyond
the interests of each parent, to the paramount consideration of the childs best interests.
This observation becomes critical in circumstances like these, when the primary
argument against modification regards the earlier stipulation of the parties and when the
order approving that stipulation does not address the paramount consideration of the
childs best interests or any consideration other than the income of each parent.
Taking into account the interests of the child, as well as those of both parents, a
determination of the current fairness and reasonableness of the 2005 award requires that
the district court address the needs of the child, ordinary and extraordinary, with an eye
toward the standard of living enjoyed by the child before the custody change, and
showing the deficiency of the current award, if any, in meeting those needs; reasons, if
any, from the childs vantage point, for a downward deviation; other considerations
insofar as they bear on the effect of the award on the best interests of the child; and
changes in any of these circumstances since September 2005. See Minn. Stat. 518.64,
.551, subd. 5(c)(i). In sum, we remand for the district courts further findings, especially
as it gives the court occasion to focus its attention on the best interests of the child.
Appellant also argues that the district court wrongfully overlooked respondents
bonus income. The CSM noted that appellant did not ask that bonus income be
11
considered when the stipulation was concluded in 2005. Although the parties stipulated
to respondents income in September 2005, this followed a CSMs decision earlier in the
same year that the bonus income was too irregular to be considered in determining a
support award. Among the circumstances occurring after the 2005 award, respondent
received still another bonus. On remand, it should be determined whether current
circumstances show regular bonus income. And as the CSM recognized, a separate
award, dependent on the actual receipt of a bonus, may be appropriate even when it is too
irregular to be calculated as income. Novak v. Novak, 406 N.W.2d 64, 68 (Minn. App.
1987), review denied (Minn. July 22, 1987). Such an award is within the scope of
considerations to be entertained on remand when the court determines if respondent has
adequately shown the fairness of the 2005 order in the aftermath of her further income
increase.
Appellants remaining arguments need not be addressed in light of the remand of
the case to the district court.
D E C I S I O N
The district court abused its discretion in finding that there had been no substantial
change in circumstances. Because the prior order and the orders denying the
modification motion lack adequate findings, it is impossible to assess the reasonableness
and fairness of the prior order under current circumstances. We reverse the denial of
modification and remand for further findings as provided in this opinion. The district
12
court has the discretion to determine whether it needs to reopen the record to make these
determinations.
Reversed and remanded.
 

 
 
 

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