Hietpas v. Reed

In re the Marriage of: Terry John Hietpas, petitioner, Appellant, v. Barbara Elizabeth Reed f/k/a Barbara Elizabeth Reed Hietpas, Respondent

A14-0105

STATE OF MINNESOTA IN COURT OF APPEALS

December 8, 2014

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2012).

Affirmed in part and reversed in part

Worke, Judge

Ramsey County District Court

File Nos. 62-F6-07-000592, 62-F4-07-300423, 62-FX-07-300409, 62-DA-FA-09-906

Linda S.S. de Beer, Jenna Kraemer Monson, Lake Elmo, Minnesota (for appellant)

Ellen Weinberg, Albert Lea, Minnesota (for respondent)

Considered and decided by Worke, Presiding Judge; Kirk, Judge; and Reyes, Judge.

UNPUBLISHED OPINION

WORKE, Judge

Appellant-husband argues that the district court erred by exercising jurisdiction over a motion to modify spousal maintenance when the parties' judgment and decree purported to have a Karon waiver. Alternatively, he argues that if the court hadjurisdiction, the court abused its discretion by modifying spousal maintenance, failing to consider newly discovered evidence, and limiting appellant's ability to bring a future spousal-maintenance-modification motion. Because the judgment and decree did not include a proper Karon waiver, the district court properly exercised jurisdiction and did not abuse its discretion in modifying spousal maintenance; thus, we affirm in part. But, because the district court abused its discretion by restricting appellant's ability to bring a future spousal-maintenance-modification motion, we reverse in part.

FACTS

Appellant Terry John Hietpas and respondent Barbara Elizabeth Reed, f/k/a Barbara Elizabeth Reed Hietpas, dissolved their marriage in May 2008. Their decree provided that:

[C]ommencing December 1, 2007, [Hietpas] shall pay [Reed] $3,650 per month . . . until December 31, 2012. . . .

Either party may request a modification of the spousal maintenance payments pursuant to the statutory language. However, the parties agree that [Hietpas's] spousal maintenance payments to [Reed] shall never be higher than $3,650 per month.

[Reed] expressly waives her right to receive any spousal maintenance from [Hietpas] after December 31, 2012. [Reed's] waiver is based on a Karon waiver, the length of the marriage and [Reed's] ability to earn a level of income sufficient to support herself and the minor children.

The parties stipulated that Reed had the potential to earn $30,000 in 2008, $40,000 in 2009, and $50,000 in 2010. The parties were required to attempt mediation prior to requesting spousal-maintenance modification.

On December 28, 2012, three days before Hietpas's original spousal-maintenance obligation expired, Reed moved to extend it. The district court waived the decree's mediation requirement and held a hearing. The district court found that the decree did not include a valid Karon waiver and that Reed met her burden showing a substantial change in circumstances. The court extended Hietpas's maintenance obligation for an additional five years, but allowed him to move to modify maintenance after Reed secured employment for 12 continuous months at an income of more than $75,000 per year.

Hietpas then moved for amended findings and a new trial claiming that Reed failed to show a substantial change in circumstances and there was newly discovered evidence regarding Reed's employment. The district court denied Hietpas's requests, but changed Reed's threshold earning requirement to $50,000. Hietpas appeals.

DECISION

Jurisdiction

Karon waiver

Hietpas argues that the district court lacked jurisdiction over Reed's motion to modify spousal maintenance because the judgment and decree included a Karon waiver. "[We] review[] questions of law related to spousal maintenance de novo[,]" Melius v. Melius, 765 N.W.2d 411, 414 (Minn. App. 2009), including questions regarding jurisdiction and statutory interpretation. Gossman v. Gossman, 847 N.W.2d 718, 721 (Minn. App. 2014).

The courts are without authority to modify spousal maintenance when parties execute what is commonly called a Karon waiver. Id. at 722. A Karon waiver is morethan an agreement between the parties. Id. at 724. It divests the court of jurisdiction over spousal maintenance when the following requirements are met:

1) the stipulation must include a contractual waiver of the parties' rights to modify maintenance; 2) the stipulation must expressly divest the district court of jurisdiction over maintenance; 3) the stipulation must be incorporated into the final judgment and decree; and 4) the court must make specific findings that the stipulation is fair and equitable, is supported by consideration described in the findings, and that full disclosure of each party's financial circumstances has occurred[.]

Butt v. Schmidt, 747 N.W.2d 566, 573 (Minn. 2008) (quotation and citations omitted); see Minn. Stat. § 518.522, subd. (2012) (addressing statutorily-required elements for a Karon waiver). Reed claims that the Karon waiver was invalid because the stipulation lacked language divesting the court of jurisdiction and the court did not make specific findings that the stipulation was fair and equitable.

A Karon waiver must contain two elements to properly divest the court of jurisdiction: "(1) a contractual waiver of the statutory right to move for modification of maintenance" and "(2) express language divesting the court of jurisdiction to consider motions for modification of spousal maintenance." Gossman, 847 N.W.2d at 723 (quotation omitted).

In Loo v. Loo, the supreme court concluded that the following waiver contained a contractual waiver, but not express divestiture language:

That the Petitioner shall pay to the Respondent . . . spousal maintenance . . . for a total period of payment of nine years. After the last of the payments required above, the obligation for spousal maintenance shall terminateirrevocably. Thereafter neither of the parties shall be entitled to [maintenance] then or in the future.

520 N.W.2d 740, 745 (Minn. 1994). The court noted that courts "should not assume that parties specifically bargained to supplant the statutory modification procedure without a clear or express statement divesting the court of jurisdiction[,]" id., and that "the better approach is to require both a contractual waiver and express language divesting the court of jurisdiction." Id. at 745 n.5 (emphasis added).

Here, it is undisputed that the judgment and decree contains a contractual waiver. And the parties placed the following agreement on the record prior to the entry of the judgment and decree:

[Reed's attorney]: [Y]ou [Reed] understand that you'll be receiving . . . temporary maintenance for a term of five years at a set amount, but after that five years you won't be able to receive anymore maintenance for whatever reason whatsoever, and the [c]ourt wouldn't even have jurisdiction to entertain a claim for maintenance; is that correct?

[Reed]: Correct.

[Reed's Attorney]: And you understand and agree to be bound by it?

[Reed]: Yes.

But the judgment and decree does not contain specific divestiture language or language incorporating this on-the-record stipulation. Therefore, the judgment and decree does not meet the express-divestiture-language requirement.

Hietpas concedes that there are no specific findings in the judgment and decree stating that the agreement is fair and equitable as required for a Karon waiver. But, he contends that by approving the judgment and decree, the district court necessarily found it fair and equitable. "However, a stipulated divestiture of jurisdiction is effective only ifthe [district] court, in adopting the stipulation, makes specific written findings that the stipulation is fair and equitable and supported by specified consideration, and that both parties have made full financial disclosures." Santillan v. Martine, 560 N.W.2d 749, 751 (Minn. App. 1997) (emphasis added). The Loo court was also "concerned that there [was] little indication in the record that the [district] court . . . took an active role in determining that the decree at issue was fair and equitable." 520 N.W.2d at 745. Here, there is no indication that the district court assumed that role. Therefore, the Karon waiver also fails on this prong.

Hietpas claims that even with the deficiencies the Karon factors are incorporated because the judgment and decree names their agreement a Karon waiver. But a "label or title is not determinative." Grachek v. Grachek, 750 N.W.2d 328, 333 (Minn. App. 2008), review denied (Minn. Aug. 19, 2008) (stating use of the heading "Karon waiver" did not support argument that parties intended to preclude cost-of-living adjustment). And both the caselaw discussed above and Minn. Stat. § 518.552, subd. 5 require specific language and incorporation into a judgment and decree. Because of the significant limitations a Karon waiver places not only on a party's ability to modify spousal maintenance but also on a court's jurisdiction, merely titling the agreement a "Karon waiver" is insufficient to remedy language missing from the judgment and decree.

Mediation

Hietpas next argues that because Reed did not attempt mediation prior to moving to modify maintenance, the district court lost jurisdiction as it had no proper motion before it when the original spousal-maintenance term expired. However, the failure tomediate does not raise a jurisdictional issue. See Moore v. Moore, 734 N.W.2d 285, 287 n.1 (Minn. App. 2007) (stating that courts and parties often use concepts and language associated with "jurisdiction" imprecisely to refer to nonjurisdictional limits on a court's authority to address a question), review denied (Minn. Sept. 18, 2007).

Hietpas cites Buntje v. Buntje for the proposition that Reed should have served her motion and requested an abeyance for mediation. 511 N.W.2d 479, 481-82 (Minn. App. 1994). In Buntje, this court held that a child-support modification can only be made retroactive to the date a motion is served,...