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On March 12, 2018, the Minnesota Court of Appeals reversed denial of a request to modify spousal maintenance. The decision in Chadwick v. Chadwick is an interesting read; it’s been a while since we’ve reviewed a chain of opinions with such contrast among the lower and higher court.

Husband and Wife divorced in May 2015, after 22 years of marriage. In the 17 years leading up to dissolution, Husband worked as a field-service technician installing rooftop dryers for industrial printing operations. Husband’s annual earnings totaled approximately $155,000. He, sometimes, worked up to 90 hours per week.

The district court ordered Husband to pay $3,000 per month in spousal maintenance to Wife, with step reductions, through May 2021.

Husband continued his employment after the divorce, but fell from a ladder while working on a Texas job site in August 2015. Having landed on his neck and shoulder, an MRI revealed two herniated discs. He was offered light-duty work by his employer for about six months. By December 2015, however, the employer no longer had full-time light-duty work available for him.

Husband consulted with his physician and was referred to a spine specialist. The specialist opined that “[d]espite [Husband’s] reduced work hours and chiropractic care, [his] condition continues to deteriorate.” Consequently, the specialist noted that Husband should decrease his work hours and avoid, among other things, heavy lifting and climbing on ladders.

Husband’s employer concluded that his medical restrictions prevented them from scheduling him to provide onsite services to customers. Aside from participating in some specialized-training work during one week in January 2016 and two weeks in May 2016, Husband has been without work.

Husband moved the district court to temporarily modify his spousal maintenance obligation until he could return to work full time. His affidavit outlined the medical situation, and included notes from physicians and his employer. The affidavit, filed in April 2016, suggested that he had been out of work since December 2015.

Husband offered two paystubs at the hearing itself: (1) a December 2015 year end stub, showing income of $155,195 for the year; and (2) a May 2016 paystub, showing year-to-date income of $9,355.00.

The district court denied Husband’s motion, finding his April 2016 affidavit lacking credibility because he, in fact, worked for two weeks (the training referenced above) in May 2016. The court concluded that he “failed to establish an actual and substantial decrease in his long-term gross income.” Income of $155,000 per year was imputed by the court.

Husband moved for amended findings, arguing that the court’s order was based on legal and factual errors.

In a curious move, the district court “granted” the motion for amended findings by adding the following finding: “[Husband] has continually acted in bad faith regarding the disclosure of requested documentation, his delayed payment of spousal maintenance, and his self-limitation of income by refusal to document efforts made to seek employment outside of his former field of work.”

Husband appealed.

Judge Ross began with a recitation of the “abuse of discretion” standard of review following a district court’s denial of a motion to modify spousal maintenance — fact findings for clear error, and legal conclusions de novo.

He also opined that “a party seeking to modify a spousal maintenance award bears the burden of showing both a substantial change in circumstances… and that the changed circumstances render the terms of the existing award unreasonable and unfair.”

The court of appeals noted that “[t]he district court used [Husband’s] earning capacity rather than his actual income as his gross income because it found that he unjustifiably self-limited his income.” The appellate court found both legal and factual errors in the district court’s reasoning.

As to the district court’s finding that Husband unjustifiability self-limited his income by refusing to document efforts made to seek employment outside of his former field of work, the court of appeals noted that “[t]he district court did not cite any legal authority for its premise that an obligor’s failure to provide this sort of documentation necessarily demonstrates that he has unjustifiably self-limited his income, and we are aware of none.”

Although the district court did not make a specific finding of bad faith underemployment on the part of Husband, Judge Ross noted that “one inevitably infers the finding from the court’s reasoning.” Accordingly, the court of appeals next addressed whether the evidence before the district court would support a bad faith finding.

In agreeing with Husband that the finding of bad faith was clearly erroneous, the court of appeals noted that “[t]he district court’s underemployment-in-bad-faith finding rests on [a number of] underlying findings, all of which appear to be premised on errors of law or are manifestly contrary to the weight of the evidence.”

First, Judge Ross took issue with the district court’s finding that Husband “has not provided anyevidence of his efforts to increase his income.” The court of appeals pointed out that Husband had, in fact, applied for workers’ compensation and disability benefits.

Second, Judge Ross took issue with the district court’s finding that Husband “refused” to document efforts to seek employment. The court of appeals suggested that for Husband to “refuse” to do something, the record should have revealed a request or order to do so. No such request or order existed.

Third, Judge Ross took issue with the district court’s credibility finding, noting that the court’s reasoning “misses an essential fact and key circumstance” in Husband’s training activities in May 2016. The court of appeals found two fatal flaws: (1) in the district court overlooking the relevant dates (April affidavit v. May work activity); and (2) in the district court’s disconnect between mere training activities and an ability to work at the level he was working prior to his injury.

Finally, Judge Ross pointed out that the district court’s finding that Husband has the ability to earn an income similar to his income in 2015 lacks evidentiary support. The court of appeals noted that “[w]ithout explaining why or identifying supporting evidence, the district court’s order seems to summarily reject the evidence showing this 57-year-old laborer has a generative spinal condition that restricts his hours and limits him to lifting less than ten pounds…”

Husband sought instruction to the district court to reduce his maintenance obligation to zero. Ultimately, however, the court of appeals reversed and remanded for findings “adequately supported by the evidence presented.”

It is often suggested that no good deed goes unpunished. It appears Husband was trying to do the “right thing” by presenting updated information at the time of the hearing. Transparency met with ridicule? Given the district court’s obvious, and seemingly unjust, disdain for Husband (read between the lines of Judge Ross’ opinion), it will be interesting to see what happens on remand.

Need help with an appeal?  Call the law firm of Barna, Guzy & Steffen, Ltd. for a confidential consultation: (763) 783-5146.  Our seasoned attorneys want to help you.