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.

Relocation of 6 Year Old Child Out of State Permitted and Child’s Preference Considered

In S.M.K.v.D.M.K.,A14-1070(Minn..App.March 2 2015) the court appeals affirmed a trial court decision permitting a mother to move and relocate the parties’ six year old child to Florida. The Court analyzed all the factors in Minnesota Statute 518.175,subd.3, and ruled the trial court did not abuse its discretion in finding the move was in the child’s best interest.

The father claimed it was ,in part, error to consider the six year old child’s desire to move to Florida.The court accepted mother’s assertion  that although the child is a young age, he has expressed a desire to move to Florida and understands he will see his father less, but wishes to continue to live with his mother and maternal grandparents. Father claimed it was error to accept mother’s claim without any inquiry due to possible manipulation by the mother. The Court of Appeals affirmed the trial court and accepted its finding that there was no evidence in the record to support that the minor child cannot comprehend the meaning of the move to Florida.

The court cited to Peterson v. Peterson, 394 N.W.2d 586,588(Minn.App.1986)(court accepts trial court’s ruling that a seven-year-old child could express a custodial preference)rev. denied(Minn.1986).

The court also rejected Father’s argument that the trial court erred by not awarding him 25% of parenting time, which is the minimum rebuttable presumption under Minnesota Statute 518.175,subd.1(g)(2014). Father claimed the court made no finding why 51 days a year is in the best interests of the child when he should have received 91 days a year. The court found since that argument was raised for the first time in the Motion for Amended Findings it was not properly before the court and the trial court acted within its extensive discretion in granting parenting time less than 25%.

Lastly father claimed the trial court court erred in making the parenting time subject to be agreed upon by the parties without a specific schedule,claiming this would be a cruel joke to try to work out the details of the parenting time, subject to the whim of the mother.The court noted to the extent practicable a court must include a specific schedule for parenting time,including the frequency and duration of visitation and visitation during holidays and vacations as required by Minnesota Statutes 518.175, subd.1(e)(2014).

The trial court ordered two periods of two weeks during the summer months as agreed upon by the parties,one week during the child’s winter break,every spring break,every other Thanksgiving and Christmas holiday, and two of the child’s long weekend breaks from school as set forth in the school calendar, as well as such other parenting time as mutually agreed upon. The Court of Appeals affirmed this schedule noting the father did not propose a specific parenting time schedule to the court and that if there were problems or issues he could seek relief from the trial court, and the schedule  was not an abuse of discretion.

Divorce Proceedings, the Death of a Spouse, and Marital Assets

Divorce Proceedings, the Death of a Spouse, and Marital Assets

In Nelson v. Nelson, A14-0200, (Minn. Ct. App. Oct. 6, 2014), the Minnesota Court of Appeals held that Minn. Stat. 518.58, subdivision 1a, which prohibits spouses contemplating divorce from transacting in or using marital assets so as to obtain a loss or profit without first getting consent from the other spouse’s consent, applies only to dissolution proceedings, and, therefore, do not apply when dissolution proceedings are terminated by a party’s death.

Nelson v. Nelson

In this case, the appellant, Kimberlee Nelson and her husband, Michael Nelson, were married in 1996. His will intentionally omitted his wife as a beneficiary of the estate. In 2007, he bought a life insurance policy with a million dollar benefit, naming his wife as the primary beneficiary, with the premiums being paid by his business. Then, in February 2012 he asked an attorney to prepare a joint petition and stipulation to dissolve his marriage to Kimberlee. Before he initiated the divorce proceedings, he changed the beneficiary of his life insurance policy to his parents and sister. After doing so, in May 2012 he served Kimberlee with a summons and petition for divorce. He died in September 2012, before the marriage could be dissolved.

After Michael died, his mother was appointed personal representative, and Kimberlee, his widow, asked for the rights of a surviving spouse despite the being excluded from her husband’s will, including homestead rights, a family allowance, household furnishings, and an elective share of his estate. She also brought a declaratory judgment action, claiming that the change of designated beneficiary of the life insurance policy constituted a transfer of marital assets in contemplation of divorce, which is barred by Minnesota Statute Section 518.58, subdivision 1a. The district court granted summary judgment to Michael’s parents and sister, and an appeal followed.

The Minnesota Court of Appeals affirmed the district court’s decision and held that the statutory prohibition on transferring assets did not apply in this case because there was no dissolution proceeding, as the husband died. The court held that the only remedy available under Section 518.58, subdivision 1a, is one imposed in a dissolution proceeding during the division of marital property. Thus, if one spouse has violated the provision, the court “may impute the entire value of an asset and a fair return on the asset to the party who transferred, encumbered, concealed, or disposed of it” in the dissolution proceeding. But, because Michael was dead, there was no dissolution proceeding available for a remedy. Under Minnesota law, when a party to a marriage dies during the pendency of a dissolution proceeding, the dissolution proceeding is terminated because the marriage, having been ended by death, no longer needs to be dissolved. Thus, when Michael died, his wife was his surviving spouse, and had no dissolution proceeding pending to obtain the requested relief.

The Minnesota Court of Appeals made clear that it frowns on “double-dipping,” namely using rights as a surviving spouse and as a party to a dissolution proceeding. Thus, Kimberlee was limited to her rights as a surviving spouse, and a spouse only vests in life insurance benefits if she is the beneficiary at the time of death.