A19-1332

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A19-1163
A19-1332

In re the Marriage of:
Joyce Marie Peterson, petitioner,
Respondent (A19-1163),
Appellant (A19-1332),

vs.

David Lee Peterson,
Appellant (A19-1163),
Respondent (A19-1332).

Filed September 21, 2020
Affirmed
Segal, Chief Judge

Ramsey County District Court
File No. 62-FA-08-3522

Joyce Marie Peterson, St. Paul, Minnesota (pro se appellant)

David Lee Peterson, Minneapolis, Minnesota (pro se respondent)

Considered and decided by Larkin, Presiding Judge; Segal, Chief Judge; and Reilly,
Judge.
U N P U B L I S H E D O P I N I O N
SEGAL, Chief Judge
In this appeal arising out of an order reducing respon dent/cross-appellant wife’s
spousal-maintenance award, a ppellant/cross-respondent husba nd argues that the district

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court abused its discretion because it did not make the reduction retroactive to 2012 and,
in a related appeal, respondent/cross-appe llant wife argues that the reduced award
constitutes an abuse of discretion and must be reversed. We affirm.
FACTS
Appellant/cross-respondent David Lee Pe terson (husband) and respondent/cross-
appellant Joyce Marie Peterson (wife) were married in 1980. The parties divorced in 2011
and, as relevant here, the marriage dissolutio n judgment and decree required husband to
pay wife $4,000 per month in permanent spousal maintenance. Husband appealed and this
court reversed and remanded to the district court for redetermination of the property
division and spousal-maintenance award. Peterson v. Peterson, No. A12-1657, 2013 WL
2926845, at *8 (Minn. App. June 17, 2013). Following remand, the district court issued
an amended judgment and decree in 2015 (2 015 judgment) that reduced the amount of
permanent spousal maintenan ce to wife from $4,000 to $2,500 per month due to the
reallocation of an investment and the terms of the parties’ agreement on dividing real estate.
Neither party appealed and the judgment became final.
Throughout 2016, the parties filed numerous motions in the district court regarding
husband’s spousal-maintenance obligation. Of relevance to this appeal, husband filed a
motion seeking a redetermination of spousal maintenance based on the evidence previously
submitted to the district court. Following an evidentiary hearing, the district court
determined that husband rema ined obligated to pay wife $2,500 per month in spousal
maintenance. The district court observed that, because husband did not appeal the 2015
judgment setting spousal maintenance at $2,500 per month, his only recourse to reduce his

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monthly spousal-maintenance payment was to file a motion to modify or terminate spousal
maintenance. The district court noted that it had “expressly” invited husband to make such
a motion previously, but he ha d not done so and therefore th e district court could not
modify the award. Wife had also file d a motion seeking a judgment for unpaid
maintenance, and the district court ultimatel y entered judgment ag ainst husband in the
amount of $128,426.23 on wife’s motion. Neither party appealed from the district court’s
orders on these motions.
On January 12, 2018, wife filed a motion to hold husband in contempt for failing to
pay spousal maintenance. Husband file d a responsive motion on January 30, 2018,
requesting any relief that “the Court deems fair, just, and equitable.” At the motion hearing,
also held on January 30, 2018, the district court stated that it would construe husband’s
motion as one to reduce or terminate spousal maintenance, sent the parties to mediation
and deferred ruling on the motion related to modification of spousal maintenance. Husband
ultimately filed a motion on Octo ber 9, 2018, explicitly reques ting that the district court
reduce or modify his spousal-maintenance obligation. Husband’s request was based on the
assertion that his income had substantially decreased since the district court’s 2015
judgment and he was no longer able to pay th e award. After an evidentiary hearing, the
district court ruled on husband’s motion an d reduced husband’s spousal-maintenance
obligation to $502 per month, retroactive to January 30, 2018, and entered another
judgment against husband for the balance of unpaid maintenance consistent with the
court’s modification ruling. This appeal follows.

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D E C I S I O N
I. The district court did not abuse it s discretion in reducing the spousal-
maintenance award.

We turn first to the question of whether the district court’s reduction in the spousal-
maintenance award was an abuse of discretion. After spousal maintenance has been
ordered, the district court may modify the maintenance award if there is a substantial
change in circumstances and that change renders the maintenance order “unreasonable and
unfair.” Minn. Stat. § 518A.39, subd. 2(a) (2018). This includes a substantial increase or
decrease in the “gross income of an obligor or obligee.” Id. We review a district court’s
decision to modify existing spousal main tenance for an abuse of discretion. Hecker v.
Hecker, 568 N.W.2d 705, 709-10 (Minn. 1997). Th e district court’s determination of a
party’s income for maintenance purposes is a finding of fact that is reviewed for clear error.
Peterka v. Peterka, 675 N.W.2d 353, 357 (Minn. App. 2004).
Here, the district court modified the ma intenance award after determining that
husband’s gross income had substantially decreased since the district court’s 2015
judgment. In the 2015 judgment, the district court dete rmined that husband had a gross
monthly income of $9,000. This determinat ion was based on husband’s tax returns from
2005-2009,
1 which listed a yearly salary of $166 ,000 in 2005, $171,000 in 2006, and
$96,000 in 2007-2009 and total income ranging from $180,781 to $459,846 per year. The

1 Wife petitioned for dissolution of marriage in December 2008, and the district court
received submissions from the parties until October 2011. Following this court’s remand
in June 2013 to redetermine spousal maintenance, neither party submitted new evidence to
the district court. As a result, the distri ct court had to base its findings on the prior
submissions of the parties.

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district court also made findings regardin g the financial circumstances of husband’s
business, Peterson’s Entertainment Designs, In c. (PED). Based on the tax returns, the
district court found that PED had an overa ll value of $84,074 and income, between 2005
and 2010, ranging from $86,883 to $250,241.
In the order modifying spousal maintenance, the district court found that husband’s
gross monthly income had decreased from $9,000 to $2,184 per month. The district court
noted that this amount is a five-year average of husband’s income based on information in
his tax returns for the years 2 013-2017. The district court also found that PED suffered
significant financial losses in each of the prior five years, ranging from a loss of $331 in
2013 to a loss of $56,172 in 20 17, and an overall net worth of negative $220,769.35 in
2018.2 Based on husband’s reduced income, the district court determined that the $2,500
spousal-maintenance award was unreasonable and unfair and warranted modification.
The district court then reviewed husband’s monthly expenses to determine the scope
of the modification. Husban d submitted a mont hly budget of $5,719. The district court
analyzed the claimed expenses and determ ined that many were unreasonable given
husband’s financial circumstances. The district court ultimately determined that husband’s
reasonable monthly expenses totaled $1,682 and, based on his monthly income of $2,184,
he had the ability to pay $502 per month in spousal maintenance and reduced the award to
that amount.

2 The district court also noted that the 2018 liabilities of PED included a personal loan by
husband to PED in the amount of $144,767.35.

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Wife argues that the district court a bused its discretion in reducing spousal
maintenance. She argues that the district court erred in determining that a significant
change in circumstances had occurred “because the documents and data [the district court]
reviewed were insufficient and incomplete to make an accurate judgment.” Wife appears
to be arguing that husband did not provide a complete overview of his finances, particularly
with respect to PED’s operations. The district court addressed wife’s argument and noted
that although she claimed husband manipulated the financial information, her assertion was
based on “unsupported suspicion” and th at the documents and husband’s testimony
regarding the documents were credible.
In this appeal, wife similarl y fails to base her claims on more than suspicion that
husband is concealing financial information. She argues, in particular, that the district
court failed to apply adequate scrutiny of PED’s financial information and that husband’s
true financial situation is hidden in PED’s co rporate accounting. Wife, however, fails to
cite to evidence in the record that contradicts the district court’s findings.
Here, the district court relied on the same type of evidence – husband’s tax returns
– to determine both the $2,500 spousal-maint enance award in the 2015 judgment and the
reduced award at issue here. Neither party appealed the 2015 judg ment. The district
court’s findings about a change in husband’s income are supported by both husband’s and
PED’s tax returns. In fact, husband’s tax returns reflect a decrease in income such that the
$2,500 spousal-maintenance award actually exceeded husband’s entire gross monthly
income.

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We also note that in reaching its reduced maintenance award, the district court
conducted a thorough analysis of husband’s claimed monthly expenses of $5,719 and found
that his reasonable monthly expenses should only be $1,682, reducing husband’s
reasonable expenses to less than a third of what he was claiming.
Finally, we note that the district cour t specifically found husband’s testimony
concerning his current financial condition to be credible and we defer to district court
findings on credibility. Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988).
On this record, we conclude that the dist rict court did not ab use its discretion in
reducing the spousal-maintenance award.
II. The district court did not abuse its discretion in its determination of the
effective date of the modification order.

We turn next to husband’s appeal that the order modifying his spousal-maintenance
obligation should have been retroactive to January 2012 instead of January 30, 2018. We
review the district court’s determination regarding the effective date of modification for an
abuse of discretion. Kemp v. Kemp, 608 N.W.2d 916, 920 (Minn. App. 2000).
By statute, a modification of spousal main tenance “may be made retroactive only
with respect to any period during which th e petitioning party has pending a motion for
modification.” Minn. Stat. § 518A.39, subd. 2(f) (2018). Husband argues that the district
court should have construed a motion that he made on January 26, 2012, as a motion for
modification of spousal maintenance and that the reduction, thus, should be retroactive to
that date. We disagree.

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As discussed above, after spousal maintena nce has been ordered, a district court
may only modify the award based on a substantial change in circumstances that renders the
award unreasonable and unfair. Id., subd. 2(a). The district court issued its initial judgment
and decree dissolving the parties’ marriage on December 21, 2011. But, as a result of the
subsequent appeal and remand, husband’s sp ousal-maintenance obligation of $2,500 per
month was not determined until the 2015 judgment. Thus, husband’s January 2012 motion
cannot be construed as a motion to modify the spousal-maintenance award because no final
award had yet been entered. The motion was no more than a request that the district court
amend the findings in the initial judgment and decree, not to modify an existing spousal-
maintenance award based on changed circumst ances. Husband’s argument is therefore
without merit, and the district court did not abuse its discretion in setting January 30, 2018,
as the effective date of the modification order.
Affirmed.