In re the Custody of M. M. L.

This opinion will be unpublished and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

STATE OF MINNESOTA
IN COURT OF APPEALS
A17-1240

In re the Custody of M. M. L.

Nathan James Sands, petitioner,
Appellant,

vs.

Sue Mae Lovick,
Respondent,

Dakota County,
Respondent.

Filed April 16, 2018
Reversed and remanded
Schellhas, Judge

Dakota County District Court
File No. 19HA-FA-08-907

Roxanne R. Karl, Roxanne R. Karl Law Office, Burnsville, Minnesota (for appellant)

James C. Lofstrom, Lofstrom Law Office, Eagan, Minnesota (for respondent Sue Mae
Lovick)

James C. Backstrom, Dakota County Attorney, Lisa D. Kontz, Assistant County Attorney,
West St. Paul, Minnesota (for respondent Dakota County)

Considered and decided by Schellhas, Pr esiding Judge; Halbrooks, Judge; and
Jesson, Judge.

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U N P U B L I S H E D O P I N I O N
SCHELLHAS, Judge
Appellant-father challenges the district court’s imputation of income and award of
conduct-based attorney fees to respondent-mother. We re verse and remand the district
court’s imputation of income and reverse the award of conduct-based attorney fees.
FACTS
Appellant-father Nathan Sands and resp ondent-mother Sue Mae Lovick are the
parents of one child, now 17 years old. In 2004, the district court granted Sands and Lovick
joint legal custody of M.M.L. and Lovick sole physical custody, and ordered Sands to pay
child support to Lovick. In December 200 8, respondent-Dakota County (county)
intervened to assist Lovick in enforcing Sands’s child-support obligations.
In 2014, Lovick moved the district court to find Sands in civil contempt. Sands and
Lovick reached an agreement, as follows in pertinent part:
[Lovick’s] request for attorney fees is reserved. If it is
later determined that [Sands’s] recent employment was started
and then terminated simply to avoid possible consequences of
[Lovick’s] contempt motion, the court can consider an award.
Consideration for [Lovick] withdrawing her contempt motion
is the assurance of regular, monthly support payment through
wage withholding through [Sands’s] employment.

Sands obtained hourly em ployment from June 2014 un til January 2015, when he
was involuntarily terminated. Following Sa nds’s employment termination, Lovick
renewed her contempt motion for Sands’s failure to pay child support and moved the court
for need- and conduct-based attorney fees. In March 2015, Sands moved the district court
to modify his child-support obligation and applied for unemployment benefits. Due to cost-

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of-living adjustments (COLA) from 2004 to May 2015, Sand s’s child-support obligation
increased to $685.
On May 15, 2015, the district court hear d Lovick’s contempt motion and issued a
contempt order and an amende d contempt order on July 9, 2015, to correct “substantive
and clerical errors.” The court ordered Sands confined to jail for a period not to exceed 90
days, but stayed the confinement for two years subject to the following purge conditions:
Sands was required, based on his agreement, to pay 100% of his un employment benefits
to Lovick and to make a good-faith effort to obtain employment. The court also reserved
Lovick’s motion for attorney fees.
On August 28, 2015, the district court acknowledged Sands’s compliance with the
purge conditions in the contempt order and heard his motion to modify his child-support
obligation. On September 4, due to the im pending expiration of Sands’s unemployment
benefits, the court issued “new conditions on Mr. Sands’s stayed sentence of contempt
from the amended order dated 7/9/2015,” and reduced Sands’s child-support obligation to
$528 per month, including payment on arrearages. The court also granted Lovick’s request
for attorney fees.
Sands appealed the September 4, 2015 order. This court reversed the child-support
and attorney-fee awards and remanded to the di strict court for further findings regarding
Sands’s income, the attorney-fee award, and for explanation about the statutory authority
for the court’s order. In re the Custody of M.M.L. , No. A15-1807, 2016 WL 7438705, at
*5 (Minn. App. Dec. 27, 2016) ( M.M.L. I). This court stated that the district court “has
discretion to . . . reopen the record” to make sufficient findings. Id. On remand, the district

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court conducted a non-evidentia ry hearing and issued an or der on June 8, 2017, finding
that the record supported its September 4, 2015 order, and noting that it had imputed
income to Sands in reliance on Minn. Stat. § 518A.32, subd. 2(1) (2016), and Sands’s
“probable earnings level base d on employment potential, r ecent work history, and
occupational qualifications in light of preva iling job opportunities.” The court also noted
that it had awarded conduct-based attorney fees to Lovick under Minn. Stat. § 518.14, subd.
1 (2016), based on Sands “unr easonably contributing to the length or expense of the
proceeding.”
Sands now appeals the June 8, 2017 order.
D E C I S I O N
I. Sands’s imputed income
Sands argues that the district court erred in its imputation of income to him because
the court’s findings of fact lack support in th e record. Sands also ar gues that the district
court erred in its reliance on Minn. Stat. § 518A.32, subd. 2(1), instead of subdivision 2(3),
which calculates imputed income on a multiplier of either the state or national minimum
wage.
An appellate court will reverse a district court’s order regarding child support only
if the district court abused its broad discre tion by reaching the question in a manner “that
is against logic and the facts on record.” Butt v. Schmidt , 747 N.W.2d 566, 574 (Minn.
2008) (quotation omitted). “A [district] court’s determination of income must be based in
fact and will stand unless clearly erroneous.” Newstrand v. Arend, 869 N.W.2d 681, 685
(Minn. App. 2015) (quotation omitted), review denied (Minn. Dec. 15, 2015). A district

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court’s finding is clearly erroneous if this c ourt has a “definite and firm conviction that a
mistake has been made.” Id. (quotation omitted).
A district court must make written findings in every case in which it computes child-
support obligations that include, in part, a parent’s gross income. Minn. Stat. § 518A.37
(2016). A district court must calculate child-support obligations based on potential income
if it finds that the parent is “voluntarily unemployed, underemployed, or employed on a
less than full-time basis, or [i f] there is no direct evidence of any income.” Minn. Stat.
§ 518A.32, subd. 1 (2016). A district court th at lacks sufficient inco me information for a
party presumes that a “party who has not provided the court w ith sufficient income
information is voluntarily unemployed or underemployed.” Butt, 747 N.W.2d at 576.
A district court must calculate potential income according to one of three methods:
(1) the parent’s probable earnings level based on
employment potential, recent work history, and occupational
qualifications in light of pr evailing job opportunities and
earnings levels in the community;

(2) if a parent is receiving unemployment compensation
or workers’ compensation, that parent’s income may be
calculated using the actual amount of the unemployment
compensation or workers’ compensation benefit received; or

(3) the amount of income a parent could earn working
30 hours per week at 100 percent of the current federal or state
minimum wage, whichever is higher.[
1]

1 The legislature amended Minn. Stat. § 518A.3 2, subd. 2(3), effective March 1, 2016, to
read “(3) the amount of income a parent could earn working 30 hours per week at 100
percent of the current federal or state mini mum wage, whichever is higher.” 2015 Minn.
Laws ch. 71, art. I, § 70, at 905 (emphasis added).

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Minn. Stat. § 518A.32, subd. 2 (2016). If a district court “lacks sufficient information about
[a party’s] income, work history, educatio n, and reasons for being unemployed that may
excuse [the party] from a finding that [he or] she is voluntarily unemployed under Minn.
Stat. § 518.551, subd. 5b(d), the court should impute income to [the party] based on
subdivision 5b(d) and (e).” Butt, 747 N.W.2d at 577.2
At Sands’s child-support modification h earing on August 28, 2015, the county
informed the district court that Sands’s prior wage was $13 per hour based on a wage-
match history. In its September 2015 order, the district court imputed income to Sands in
the amount of “$20/hour in a 40-hour work week, resulting in monthly imputed income of
$3,464.” In remanding to the district court, th is court stated that “the district court was
within its discretion to calculate Sands’s potential income” because it properly determined
that he was “voluntarily unemployed.” M.M.L. I, 2016 WL 7438705, at *3. But we also
stated that the district court was “limited to calculating Sands’s income potential based on
his probable earnings or minimum wage because, at the time of the August [2015] review
hearing, [Sands’s] unemployment-compensation benefits were nearly exhausted.” Id. We

2 In Butt, the supreme court analyzed the then applicable statute governing the imputation
of income for child-support obligations. 747 N.W.2d at 574. This stated in pertinent part:
(d) If the court finds that a parent is voluntarily
unemployed or underemployed . . . support shall be calculated
based on a determination of imputed income. . . .
(e) If there is insufficien t information to determine
actual income or to impute income pursuant to paragraph (d),
the court may calculate support based on full-time employment
of 40 hours per week at 150 percent of the federal minimum
wage or the Minnesota minimum wage, whichever is higher.
Minn. Stat. § 518.551, subd. 5b(d), (e) (20 04). Eventually, the legislature included
this language in Minn. Stat. § 518A.32. 2007 Minn. Laws ch. 118, § 3, at 775.

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also stated that “the district court likely erred if its calculation was based on probable
earnings because Sands’s imputed income does not reflect his recent work history.” Id.
(emphasis added). At the time of the August 15, 2015 child-support-modification hearing,
Sands’s most recent gross income on record —for 2014—was $12,5 67.60, or $6.04 per
hour ($12,567.60 ൊ 2080 hours = $6.04 per hour).
On remand, the district court cited Minn. Stat. § 518A.32, subd. 2(1), and imputed
income to Sands based on its calculation of his “probable earnings level based on
employment potential, recent work history, and occu pational qualifications in light of
prevailing job opportunities and earnings levels in the community.” The district court also
noted that Sands could secure employment at a higher wage than his most recent job based
on the prevailing job market and his prior qua lifications because he is “educated, able-
bodied, and previously made significantly more money prior to his lo sing his [real-estate
appraisal] license to work.” The district c ourt neither reopened the record nor made any
additional findings of fact to support its calculation of $20 per hour as imputed income.
Sands argues that the record does not su pport the district court’s imputation of
income under Minn. Stat. § 518A.32, subd. 2( 1), and that the court should have imputed
income under Minn. Stat. § 518A.32, subd. 2(3), using a minimum-wage based calculation.
In Butt, the supreme court stated that “if the [district] court cannot determine actual income
or imputed income because it lacks sufficient information, [Minn. Stat. § 518A.32, subd.
2] directs the court to calculate income for purposes of child support based on [the]
minimum wage,” and the court remanded to th e district court to determine whether the

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record contained insufficient income information for the mother and, if so, to impute her
income using a minimum-wage-based calculation. 747 N.W.2d at 576−77.
We agree with Sands that neither the district court’s findings of fact nor the record
evidence supports an imputation of income under Minn. Stat. § 518A.32, subd. 2(1). The
record contains no evidence to support an imputation of income of $20 per hour. The
court’s statement that “a wage of $20 an hour at full-time is an attainable wage . . . a little
bit above minimum wage, but perhaps not at [Sands’s] prior wages,” is not, on this record,
sufficient to support the imputation of income at $20 per hour. We conclude that the district
court abused its discretion by imputing Sands’s income under Minn. Stat. § 518A.32, subd.
2(1), because the record does no t contain sufficient information for the court to calculate
imputed income under that section. Nor coul d the court calculate imputed income under
subdivision 2(2) because Sands no longer receives unemployment benefits. We therefore
reverse the district court’s imputation of in come and remand for imputation of income to
Sands based on the minimum-wage calculation in Minn. Stat. § 518A.32, subd. 2(3).
Sands does not address which version of Minn. Stat. § 518A.32, subd. 2(3), is
applicable to the calculation of his imputed income. We nevertheless address the issue in
the interests of judicial economy. See Ryan Contracting Co. v. O’Neill & Murphy, LLP ,
868 N.W.2d 473, 481 (Minn. App. 2015) (addressing issue in case “in the interests of
judicial economy because it is likely to arise on remand”), aff’d as modified, 883 N.W.2d
236 (Minn. 2016); see also Minn. R. Civ. App. P. 103.04 (“The appellate courts may . . .
take any other action as the interest of justice may require.”).

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On remand, for the period preceding Marc h 1, 2016, the district court should
calculate Sands’s imputed income at 150% ti mes the applicable minimum wage times 40
hours per week under Minn. Stat. § 518A. 32 subd. 2(3) (2014). For the period from
March 1, 2016, to the present, the district court should cal culate Sands’s imputed income
at 100% times the applicable minimum wage times 30 hours per week under Minn. Stat.
§ 518A.32 subd. 2(3) (2016). See Interstate Power Co., Inc. v. Nobles Cty. Bd. of Comm’rs,
617 N.W.2d 566, 575 (Minn. 2000) (stating that “appellate courts apply the law as it exists
at the time they rule on a case,” but that “an exception to th is rule exists when rights
affected by the amended law were vested before the change in the law”).
II. Conduct-based attorney fees
Sands also argues that the district court abused its discretion by awarding Lovick
conduct-based attorney fees because the court did not make adequate factual findings. We
agree.
District courts may require a party who “unreasonably c ontributes to the length or
expense of the proceeding” to pay the other party’s attorney fees. Minn. Stat. § 518.14,
subd. 1 (2016). “[C]onduct-based attorney fees are to be based on the party’s behavior
occurring during the litigation process.” Baertsch v. Baertsch, 886 N.W.2d 235, 238 (Minn.
App. 2016). The party asking for fees bears the burden of establishing that the other party’s
conduct unreasonably contributed to the length or expense of the proceeding. Geske v.
Marcolina, 624 N.W.2d 813, 818 (Minn. App. 2001). The district court must make findings
that explain the basis for an award of conduct-based fees. Brodsky v. Brodsky, 733 N.W.2d
471, 477 (Minn. App. 2007). Specifically, the district court must identify the conduct that

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justifies the award and determine that it occurred during the litigation. Geske, 624 N.W.2d
at 819.
Appellate courts review an award of cond uct-based attorney fees for an abuse of
discretion. Gully v. Gully, 599 N.W.2d 814, 825 (Minn. 1999). An appellate court “will not
set aside a district court’s factual findings underlying an award of attorney fees unless they
are clearly erroneous.” County of Dakota v. Cameron, 839 N.W.2d 700, 711 (Minn. 2013)
(quotation omitted).
After Sands’s first appeal of the district court’s $9,952 attorney-fee award to Lovick,
this court stated:
The district court found that Sands’s parents are paying his
attorney fees, that Lovick’s attorney fees have been generated
due to Sands’s failure to pay child support, and that Sands “has
been voluntarily unemployed duri ng at least part of that time
period.” But the record does not identify which statutory
authority the district court relie d on to award Lovick attorney
fees.

. . . Moreover, it is unclear whether the district court
awarded conduct-based attorney fees or attorney fees to
enforce child-support payments because its justification
awarding attorney fees was lim ited to finding that Lovick’s
attorney fees have been genera ted “in response to Lovick not
getting child support.” . . .

Because it is unclear under which statutory authority
attorney fees were awarded, we remand the award of attorney
fees to the district court so it can make the requisite findings.

In re M.M.L. I, 2016 WL 7438705, at *4−5 (citation omitted).
On remand, the district court stated that it awarded the attorney fees as conduct-
based attorney fees under Minn. Stat. § 518.14, subd. 1, because Sands’s “conduct and lack

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of information provided, unnecessar[ily] cont ributed to the length and expense of the
proceeding.” The district court found that the parties were before the court due to Sands’s
failure to pay child support, his failure to find employment, and that he chose not to testify
when the court gave him the opportunity to do so.
We conclude that the district court’s fact ual findings are insufficient to support an
award of conduct-based attorn ey fees. The findings do not explain how Sands’s conduct
contributed unreasonably to the length of the proceedings. See Zentz v. Graber , 760
N.W.2d 1, 7–8 (Minn. App. 2009) (concl uding that mother un reasonably lengthened
proceedings by filing an appeal to harass father, to prevent him from having contact with
the child, and to gain advantage in future custody proceedings), review denied (Minn.
Mar. 31, 2009). Because the record does not support an award of conduct-based attorney
fees, we reverse the award of conduct-based attorney fees.
Reversed and remanded.