Xiong v. Xiong

364 Wis.2d 528

868 N.W.2d 199 (Table)

In re the marriage of Kang T. XIONG, Joint–Petitioner–Respondent

v.Saidang D. XIONG, Joint–Petitioner–Appellant.

No. 2014AP2491–FT.

Court of Appeals of Wisconsin.

June 23, 2015.

Opinion

¶ 1 PER CURIAM.

Saidangim Xiong appeals a judgment of divorce from Kang Xiong.¹ He argues the trial court: (1) erroneously concluded his annual income was approximately $70,000 for purposes of determining maintenance; (2) erroneously ordered an equal division of the parties' real estate assets after concluding Kang had not committed marital waste; and (3) erroneously ordered him to pay Kang's attorney fees in this action. We affirm.

BACKGROUND

¶ 2 Saidang, fifty, and Kang, fifty-four, were married in 1981 and have eight adult children. They jointly petitioned for divorce on February 26, 2013. A final divorce hearing was held on June 2, 2014. The only issues remaining at the time of the hearing were maintenance and the division of two parcels of real property.

¶ 3 Following the evidentiary hearing, the circuit court ordered Saidang to pay Kang $1,500 per month in maintenance. The court found that Kang did not have a high school education and had a limited understanding of the English language, and that her earning capacity was $1,591 per month based on her ability to work as a laborer. Saidang, on the other hand, graduated from college and owned an insurance agency. Kang supported Saidang's efforts to further his education and launch his insurance business, and she cared for the children and maintained the household while Saidang was in school. The court found that, given Kang's lack of education and difficulty with the English language, it was not feasible that she would become self-supporting at a standard of living reasonably comparable to that which the parties enjoyed during their marriage.

¶ 4 Saidang's income was a primary focus at the final hearing. Following the hearing, Saidang argued that, based on his tax returns between 2011 and 2013, his total income for purposes of the maintenance calculation, consisting of both his salary and distributions from his S–Corporation, should be between $25,000 and $35,000.² The circuit court concluded these amounts grossly understated the amount of Saidang's actual personal income. In particular, the court found Saidang ignored in his calculation significant, additional income, presumably derived from his business revenue, that he used to pay for personal expenses, including approximately $16,000 that Saidang spent per year supporting a girlfriend in Laos and traveling to see her. It also concluded Saidang overstated the amount of his claimed automobile business expenses by approximately $5,000 per year. From these facts, and the fact that Saidang had paid for all of the parties' living expenses since their separation in 2011, the circuit court inferred that Saidang had a substantial amount of unreported income. It ultimately concluded Saidang's income was approximately $70,000 annually for maintenance purposes.

¶ 5 With respect to the property division, the court found reasonable the parties' agreement to retain the vehicle and personal property in their possession. The only disputed property for division was the parties' residences: one in Eau Claire, Wisconsin, occupied by Kang; and the other in Lake Elmo, Minnesota, occupied by Saidang. Saidang sought an unequal division of the property based upon Kang's alleged marital waste of significant cash assets, but the circuit court concluded the loss of the cash was not intentional and ordered an equal division. As the parties generally agreed the homes were of equal value, the court awarded each party the residence in which they resided.

¶ 6 A judgment of divorce adopting these maintenance and property division determinations was entered on October 31, 2014. Given the parties' “disparity in incomes and earning potential,” the judgment required Saidang to pay Kang's attorney's fees in this action as set forth in an affidavit from Kang's counsel. The affidavit contained a “ledger report” indicating the number of hours spent on each date, but it did not indicate the particular or even general activities for which the fees were charged. The total fee was $5,952.50.

¶ 7 Saidang filed a motion to reconsider. Saidang argued the circuit court erred when it determined he had an annual income of $70,000. Attached to his motion were tax returns from the years 2007 through 2010, which Saidang asserted showed his four-year average income to be approximately $45,000. Saidang also urged the court to reconsider the award of attorney's fees, asserting there was no income disparity justifying the award and no evidence that the award was reasonable. The circuit court denied the motion for reconsideration, concluding Saidang failed to demonstrate either newly discovered evidence or a manifest error of law or fact.³ See Koepsell's Olde Popcorn Wagons, Inc. v. Koepsell's Festival Popcorn Wagons, Ltd., 2004 WI App 129, ¶ 44, 275 Wis.2d 397, 685 N.W.2d 853.

DISCUSSION

¶ 8 Saidang presents three arguments on appeal. First, he argues the circuit court erred when calculating the maintenance award by “imputing” approximately $21,000 of income to him so as to find that he earned approximately $70,000 per year. Second, Saidang argues the court erred by ordering an equal property division despite what he contends is evidence that Kang committed marital waste. Third, Saidang argues the court erroneously required him to pay all of Kang's attorney's fees related to the divorce proceeding.

¶ 9 We review each of these matters for an erroneous exercise of discretion. See Hokin v. Hokin, 231 Wis.2d 184, 190, 605 N.W.2d 219 (Ct.App.1999) (amount of maintenance and property division); Popp v. Popp, 146 Wis.2d 778, 798, 432 N.W.2d 600 (Ct.App.1988) (award of attorney fees). “We affirm a trial court's discretionary decision if the court makes a rational, reasoned decision and applies the correct legal standard to the facts of record.” Hokin, 231 Wis.2d at 190, 605 N.W.2d 219. A trial court's findings of fact will not be overturned unless they are clearly erroneous. Id. at 190–91, 605 N.W.2d 219.

I. Maintenance

¶ 10 Maintenance awards upon a divorce are governed by Wis. Stat. § 767.56. McReath v. McReath, 2011 WI 66, ¶ 43, 335 Wis.2d 643, 800 N.W.2d 399. Courts are to begin with the proposition that the dependent partner is entitled to fifty percent of both parties' total earnings. Id., ¶ 45. The court then makes any necessary adjustments after considering the factors enumerated in Wis. Stat. § 767.56(1c). McReath, 335 Wis.2d 643, ¶ 45, 800 N.W.2d 399. Any maintenance award should aim to achieve two goals: (1) support of the payee spouse at the predivorce standard of living; and (2) fairness to the parties. Id., ¶ 44 (citing LaRocque v. LaRocque, 139 Wis.2d 23, 33, 35–36, 406 N.W.2d 736 (1987) ).

¶ 11 Saidang challenges the amount of income the trial court imputed, or more accurately, attributed, to him. He concedes that, based on his tax records, the circuit court could properly conclude that he was earning approximately $49,000 per year through a combination of salary and pass-through business income. However, Saidang contends the circuit court wrongly attributed an additional $21,000 in annual income to him.

¶ 12 The circuit court concluded Saidang's income was “probably closer to at least $70,000 annually,” not because it imputed income to Saidang, but because it concluded he underreported or failed to report income. It reached this conclusion by adding: (1) an annual salary of $24,000; (2) ordinary business income of $25,000; (3) annual transfers to his Laotian girlfriend of approximately $10,000, paid using unreported income; (4) annual travel expenses to Laos of $6,000, again paid using unreported income; and (5) an additional $5,000 in income attributable to overstated automobile business expenses on Saidang's tax returns. The court indicated it doubted both Saidang's credibility and the validity of the total income Saidang reported in the tax filings.

¶ 13 There was sufficient testimony to demonstrate that Saidang spent at least $16,000 annually supporting his Laotian girlfriend and traveling to see her. Kang testified Saidang would travel to Laos to see his girlfriend every year. He would bring up to $6,000 with him on these trips. Saidang's plane tickets were admitted into evidence. There was evidence in the form of wire-transfer receipts that Saidang sent at least $4,100 to Laos between January and May 2013. That is approximately $820 per month, which supports the circuit court's approximate $10,000 finding if extrapolated over a full year.⁴

¶ 14 Saidang argues that even if the circuit court's finding as to the amount of these expenditures was not clearly erroneous, it was nonetheless error to impute additional income to him under the circumstances. Saidang asserts that it can be inferred from the evidence that he earned a sufficient amount of money to fund these expenditures without underreporting his actual personal income. He argues there was “no evidence showing that [he] had claimed the trips to Laos or the transfers of money as deductions from gross income on his taxes, even assuming he transferred or withdrew the funds from his [business] account.”

¶ 15 Saidang also challenges the circuit court's finding that he overstated his automobile expenses by approximately $5,000. Saidang argues there was no direct evidence showing that he was inflating his automobile expenses, and highlights his testimony that he traveled extensively around the country to generate sales for his insurance business. The circuit court observed, and Saidang concedes, that he provided no documentation supporting his claimed vehicle expenses of $27,000 in 2011 and $25,000 in 2012. The court also noted Saidang claimed additional personal monthly automobile expenses of approximately $450 on a recent financial statement.⁵ Saidang refused to state during cross-examination...