Benson v. Peterson

In re the Marriage of: Joanna Brooks Benson, f/k/a Joanna Lee Brooks, petitioner, Appellant, v. Carl Grant Peterson, Respondent.

A15-1967

STATE OF MINNESOTA IN COURT OF APPEALS

March 6, 2017

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2016).

Affirmed in part, reversed in part, and remanded

Reyes, Judge

Concurring in part, dissenting in part, Johnson, Judge

Ramsey County District Court

File No. 62-FA-08-3227

Kristen C. Bullock, St. Paul, Minnesota (for appellant)

Susan A. Daudelin, Henschel Moberg Goff, P.A., Minneapolis, Minnesota (for respondent)

Considered and decided by Tracy M. Smith, Presiding Judge; Johnson, Judge; and Reyes, Judge.

UNPUBLISHED OPINION

REYES, Judge

In this appeal, the mother challenges three rulings of the district court. First, the district court determined that distributions the father received from an inherited individual retirement account were not part of his gross income and denied the mother's motion to modify the father's child-support obligation. Second, the district court ordered each of the parties to pay half of the travel expenses related to the father's unsupervised parenting time in California, where he resides. Third, the district court granted the father's motion for disclosure of the names and addresses of the child's school and medical providers. We affirm in part with respect to the second ruling, reverse in part with respect to the first and third rulings, and remand for further proceedings.

FACTS

Appellant-mother Joanna Brooks Benson and respondent-father Carl Grant Peterson were married in California in December 2007. They resided together in California until March 2008, when Benson moved to Minnesota. They have one child together, S.B., who was born in August 2008.

The marriage was dissolved by the Ramsey County District Court in January 2010. In the dissolution decree, the district court awarded Benson sole legal custody and sole physical custody of S.B. and awarded Peterson parenting time in an amount that increased incrementally with S.B.'s age. The parties stipulated that Peterson would pay Benson $385 per month in child support, based on his gross monthly income of $2,555.

The parties had a dispute concerning Peterson's parenting time in 2013, which was resolved by an agreement that was reflected in a stipulated order filed in July 2013. Additional issues arose in September 2014, which the parties were unable to resolve in mediation. Each of the parties sought relief from the district court in July 2015. After a referee conducted a hearing on the parties' respective motions in July 2015, the districtcourt issued an order in October 2015. Benson appeals from that order. The facts relevant to each of the issues raised by Benson are described in detail below.

DECISION

I. Child Support

Benson argues that the district court erred in denying her motion to modify Peterson's child-support obligation by failing to consider his IRA distributions as gross income and ordering her to pay half of the travel expenses related to Peterson's parenting time in California. We address each argument in turn.

To determine the existence and amount of a basic child-support obligation, a district court must determine the gross income of each parent. Minn. Stat. § 518A.29 (2016); Minn. Stat. § 518A.34(a), (b)(1) (2016). The district court must subtract certain credits from gross income to determine each parent's parental income for determining child support (PICS). Minn. Stat. § 518A.34(b)(1), (2). The district court then refers to statutory guidelines to determine each parent's proportional share of the total PICS amount. Minn. Stat. § 518A.35, subd. 2 (2016). The district court must also "consider certain statutory factors in addition to gross income and the child-support guidelines to determine whether to depart from the presumptive child-support obligation." Haefele v. Haefele, 837 N.W.2d 703, 708-09 (Minn. 2013) (citing Minn. Stat. § 518A.43 (2012)). The state has a strong interest in assuring that non-custodial parents provide for their children. Murphy v. Murphy, 574 N.W.2d 77, 81, 82 (Minn. App. 1998); see also Schaefer v. Weber, 567 N.W.2d 29, 33 (Minn. 1997) (noting "strong state policy of assuring that children have the adequate and timely economic support of their parents").

A district court may modify an existing child-support obligation if the moving party shows that a parent experiences "substantially increased or decreased gross income" that makes the existing support obligation unreasonable and unfair. Minn. Stat. § 518A.39, subd. 2(a) (2016). An irrebuttable presumption of a substantial change in circumstances arises if a new application of the child-support guidelines would result in a child-support obligation that is at least 20 percent more or less and at least $75 more or less than the amount specified in the prior child-support order. Id., subd. 2(b)(1); Rose v. Rose, 765 N.W.2d 142, 145 (Minn. App. 2009). The moving party bears the burden of showing a substantial change in circumstances and showing the resulting unreasonableness and unfairness of the existing child-support order. Bormann v. Bormann, 644 N.W.2d 478, 481 (Minn. App. 2002).

This court applies an abuse-of-discretion standard of review to a district court's ruling on a motion to modify a child-support order. Putz v. Putz, 645 N.W.2d 343, 347 (Minn. 2002); Brazinsky v. Brazinsky, 610 N.W.2d 707, 710 (Minn. App. 2000). We apply a de novo standard of review to a district court's ruling on such a motion to the extent it is based on an interpretation of the child-support statute. Hubbard Cty. Health & Human Servs. v. Zacher, 742 N.W.2d 223, 227 (Minn. 2007).

A. IRA Distributions

Benson argues that the district court erred by not considering Peterson's distributions from an inherited individual retirement account (IRA) when determining his "gross income" for purposes of the PICS calculation. The district court disagreed, reasoning that the distributions were not gross income and concluding that Benson hadnot established a substantial change in circumstances warranting a modification of Peterson's child-support obligation.

In 2012, Peterson inherited an IRA worth $307,914.97 from his mother after her death. Peterson, who has not been employed since 2011, received ten distributions from the inherited IRA in 2014 and 2015 at various intervals totaling $77,614 to pay for his living expenses, travel expenses, attorney fees, and to "purchase other assets."

Statutory interpretation is a question of law, which this court reviews de novo. Haefele, 837 N.W.2d at 708. The goal of statutory interpretation "is to ascertain and effectuate the intention of the legislature." Minn. Stat. § 645.16 (2016); Haefele, 837 N.W.2d at 708. "If the meaning of a statute is unambiguous, we interpret the statute's text according to its plain language. If a statute is ambiguous, we apply other canons of construction to discern the legislature's intent." Brua v. Minn. Joint Underwriting Ass'n, 778 N.W.2d 294, 300 (Minn. 2010) (citation omitted).

The definition of "gross income" for purposes of calculating child support is as follows:

Subject to the exclusions and deductions in this section, gross income includes any form of periodic payment to an individual, including, but not limited to, salaries, wages, commissions, self-employment income . . . , workers' compensation, unemployment benefits, annuity payments, military and naval retirement, pension and disability payments, spousal maintenance received under a previous order or the current proceeding, Social Security or veterans benefits provided for a joint child . . . , and potential income . . . . Salaries, wages, commissions, or other compensation paid by third parties shall be based upon gross income before participation in an employer-sponsored benefit plan that allows an employee to pay for a benefit or expense using pretax dollars, such asflexible spending plans and health savings accounts. No deductions shall be allowed for contributions to pensions, 401-K, IRA, or other retirement benefits.

Minn. Stat. § 518A.29(a) (emphasis added). This court has described the definition of income¹ as "broad." Sherburne Cty. Social Servs. v. Riedle, 481 N.W.2d 111, 112 (Minn. App. 1992).

Neither party argues that section 518A.29(a) is ambiguous; rather, they dispute how broadly or narrowly to interpret it. Benson argues for a broad interpretation of "gross income" that would include the periodic distributions Peterson receives from the IRA account, which are subject to income tax, and that would result in a substantial change in circumstances. Benson cites to Black's Law Dictionary defining "periodic payment" as "[o]ne of a series of payments made over time instead of a one-time payment for the full amount." Black's Law Dictionary 1310 (10th ed. 2014). Conversely, Peterson argues that the distributions are not gross income because he does not receive them from a third party and they are not regularly made, referring to "periodic" to mean "[r]ecurring at fixed intervals; to be made or done, or to happen, at successive periods separated by determined intervals of time, as periodic payments of interest on a bond, or periodic alimony payments." Black's Law Dictionary 1138 (6th ed. 1990). Under either definition his argument fails. Under operation of federal tax law, Peterson must receive yearly distributions from the IRA he inherited from his mother, athird party, and these distributions constitute "periodic payments" that qualify as "gross income" under section 518A.29(a).

Under Internal Revenue Service (IRS) regulations, Peterson is the beneficiary of the IRA he inherited from his deceased mother, who was the owner of the IRA, and he "cannot treat [it] as [his] own" and he "must include in [his] gross income any taxable distributions [he] receive[s]." See IRS, Publication 590-B: Distributions from Individual Retirements Arrangements (IRAs) 5 ...