In re the Marriage of Beverly ABUZZAHAB, Petitioner, Respondent, v. Faruk Said ABUZZAHAB, Appellant.
No. C1-84-890
Court of Appeals of Minnesota
Dec. 18, 1984.
359 N.W.2d 329
Leo Dorfman, Dorfman, Hauge & Dorfman, Ltd., Minneapolis, for appellant.
Heard, considered and decided by WOZNIAK, P.J., and FORSBERG and LESLIE, JJ.
OPINION
LESLIE, Judge.
The marriage of appellant Dr. Faruk Said Abuzzahab and respondent Beverly Abuzzahab was dissolved by a judgment entered August 2, 1982. Appellant appеaled to the Minnesota Supreme Court challenging, inter alia, the spousal maintenance award. On November 30, 1984, the Supreme Court affirmed the trial court‘s property distribution but reversed the trial court‘s award of permanent spousal maintenance. The supreme сourt remanded the matter to the trial court for determination of the appropriate period of maintenance.1
In April 1983, while his first appeal was pending in the supreme court, appellant moved for an order modifying the district court‘s award of sрousal maintenance. The family court referee denied the motion and appellant sought review in district court. The district court vacated the order because the referee failed to make findings of fact, conclusions of law, and failed to hold an evidentiary hearing. Upon remand
FACTS
Appellant is a 51-year-old physician practicing psychiatry and psychopharmacology. At the time of the dissolution hearing appellant received an annual salary of $160,475.00 from Clinical Pharmacologicаl Consultants, P.A. (CPC), a business owned by respondent. Appellant also received income from other sources including $12,000.00 annually from CPC for its use of part of his personal residence. Respondent is a 49-year-old registered nurse. During most of the parties’ 20 years of marriagе she was a housewife with no independent source of income.
Following the dissolution respondent obtained a real estate agent‘s license. In its dissolution decree the trial court found that respondent has a maximum earning capacity of $18,000.00 to $22,000.00. From Jаnuary 1, 1983 until October 1983, the time of the modification hearing, respondent earned $5,124.12 in real estate commissions. Of that amount, however, $2,764.80 arose from her purchase of a home in St. Paul for $230,400.00. Respondent also received interest income of $3,300.00 on deposits she made from a $200,000.00 settlement payment from appellant.
During 1983 appellant‘s income from CPC fell to approximately $120,000.00. To offset that loss appellant raised CPC‘s rent for his home to $24,000.00 per year. Appellant also drew approximately $6,300.00 per month, or $75,000.00 annually, from Psychopharmacology Fund, a sole proprietorship operated by appellant for research. Appellant‘s income from other sources did not change substantially.
Appellant‘s expenses have increased since thе decree. Appellant now pays $30,000.00 annually on a mortgage he gave on his $400,000.00 residence to borrow money to pay respondent her share of the homestead. To pay taxes on the homestead and other real estate respondent borrowed an additional $30,000.00 in October 1983. His monthly payments on that loan total $2,775.00. Education expenses for the parties’ five children have increased from $18,000.00 per year to $32,000.00 per year. Finally, appellant still must pay respondent just over $100,000.00 to complete thе property settlement. Appellant concludes his annual expenses have increased over $77,300.00 not including anticipated new loan expenses and the costs of supporting his new wife and daughter of his second marriage.
In the findings supporting the dissolution dеcree the trial court found respondent‘s monthly living expenses were $5,051.00. Part of that anticipated expense was $1,200.00 per month in income taxes on respondent‘s monthly maintenance from appellant. At the evidentiary hearing on the motion to modify, the triаl court found respondent‘s monthly expenses increased to approximately $6,350.00. That increase arose largely from the higher cost of the house respondent purchased. At the dissolution hearing respondent testified that she planned to purchasе a $160,000.00 house with property settlement funds. When she received those funds from respondent, the house had been withdrawn from the market. She then purchased a house for $230,400.00. Appellant estimates the purchase of the more expensive house increased rеspondent‘s monthly expenses by $1,060.00.
ISSUES
1. Have circumstances substantially changed since the divorce decree making the respondent‘s spousal maintenance award of $4,000.00 per month unreasonable and unfair?
ANALYSIS
1. Spousal Maintenance
An award of spousal maintenance may be modified when circumstances have substantially changed. The standard for modification is codified:
The terms of a decree respecting maintenance or support may be modified upon a showing of one or more of the following: (1) substantially increased or decreased earnings of a party; (2) substantially increased or decreased need of a party * * *, any of which makes the terms unreasonable and unfair. On a motion for modification of support, the court shall take into consideration the needs of the children and the financial circumstances of each party‘s spouse, if any.
As
The parties takе widely divergent views of the changes in their financial circumstances in the year following their dissolution. Although appellant claims his income has fallen, the facts support respondent‘s position that his income has actually risen substantially. The source of appellant‘s financial difficulties is that his income has not risen enough to cover his increased expenses. Most of his increased expenses, however, result from appellant‘s attempts to maintain his home and other holdings despite loss of a substantial portion of his resources in the property division. The referee and the trial court concluded that changes directly resulting from the property division are not the type of changes contemplated in
Appellant claims the changes in respondent‘s financial circumstances also justify modifying spousal maintenance. After reviewing the record we disagree. Aside from the commissions respondent earned when she purchased her own hоme, respondent earned an average of $250.00 per month as a real estate agent in 1983. The trial court properly found that this change, given the circumstances, was not so substantial that it made the spousal maintenance of $4,000.00 per month unfair. Respоndent also earned $3,300.00 in interest on property settlement money she temporarily placed in a money market account. At the time of the hearing most of those funds had been depleted. The trial court was within its discretion when it disregard
Finally, appellant contends respondent‘s expenses have fallen substantially. The trial court found that respondent‘s monthly expenses rose by over $1,000.00. This rise is due largely to respondent‘s choicе of a home substantially more expensive to purchase and to maintain than the home she originally planned to buy. We agree with appellant that he should not bear that additional expense which respondent voluntarily assumed. Respondent, however, has not requested an increase in support payments.
Appellant further contends that respondent‘s other expenses decreased because her tax liability on the maintenance payments was extinguished by paper losses on rental property awarded under the decree. While the rental property sheltered respondent‘s income from tax liability, the trial court refused to consider that reduction because it found respondent intended to sell the property in the near future, thus eliminating the shelter. Given that finding we cannot conclude the trial court abused its discretion.
In summary, we find that appellant fell short of showing a substantial change in circumstances. While appellant may suffer financial problems, those difficulties result largely from the propеrty division which are not the type of changes contemplated in
2. Attorney‘s Fees
In a proceeding brought either for dissolution or legal separation under [chapter 518], the court, from time to time, after considering the financial resources of both parties, may require one party to pay a reasonable amount necessary to enable the other spouse to carry on or to contest the proceeding, and to pay attorney‘s fees, including sums for legal services rendered and costs incurred prior to the commencement or after entry of judgment.
Appellant challenges the award claiming the respondent failed to show justification under
The trial court made the following finding concerning attorney‘s fees:
That by reason of these proceedings, [respondent] hаs incurred additional attorney fees and costs in excess of $2,500.00 solely and exclusively on [appellant‘s] account and is entitled to contribution toward the same from [appellant], at least in said sum.
This finding does not indicate that respondent needs financiаl assistance to enable her to contest this matter. Accordingly the trial court‘s award is reversed.
DECISION
The trial court did not abuse its discretion in denying appellant‘s motion for a reduction in spousal maintenance. The trial court‘s findings do not support an award оf attorney‘s fees under
Affirmed in part and reversed in part.
FORSBERG, Judge, dissenting:
I respectfully dissent and would affirm the trial court as to attorney‘s fees. The awarding of attorney‘s fees in this case was within the discretion of the trial court.