Gully v. Gully

• Decision Date: 02 September 1999
• Docket Number: No. C6-97-2277.,C6-97-2277.
• Citation: 599 N.W.2d 814
• Parties: In re the Marriage of Benita A. GULLY, n/k/a Benita Fjerstad, petitioner, Appellant, v. Edward R. GULLY, Jr., Respondent.
• Court: Minnesota Supreme Court

599 N.W.2d 814

In re the Marriage of Benita A. GULLY, n/k/a Benita Fjerstad, petitioner, Appellant, v. Edward R. GULLY, Jr., Respondent.

No. C6-97-2277.

Supreme Court of Minnesota.

September 2, 1999.

Jennifer R. Wellner, Circle Pines, for appellant.

Christopher E. Brevik, Brooklyn Center, for respondent.

Considered and decided by the court en banc without oral argument.

OPINION

PAUL H. ANDERSON, Justice.

Benita Fjerstad, formerly Benita A. Gully, asks us to reverse a decision of the Minnesota Court of Appeals and reinstate a district court order directing her ex-husband, Edward R. Gully, Jr., to pay $23,335.28 in retroactive child support and $1,500 in attorney fees. Fjerstad contends that the district court's order retroactively modifying Gully's child support obligation was proper under the provision of Minn.Stat. § 518.64, subd. 2(d)(1) (1998), governing retroactive modification of child support orders. She asserts that the district court properly concluded: (1) that Gully made material misrepresentations concerning his financial situation, (2) that Gully's material misrepresentations precluded her from bringing a motion for modification at an earlier time, and (3) that she promptly brought a motion for modification once she was no longer precluded from doing so. Fjerstad further contends that the district court acted within its discretion when it awarded her $1,500 in attorney fees. We reverse the court of appeals and reinstate the district court's awards of retroactive modification and attorney fees.

The marriage of respondent Edward R. Gully, Jr. and appellant Benita Fjerstad, formerly Benita Gully, was dissolved by judgment and decree on October 31, 1989, pursuant to a marital termination agreement. Under the terms of the judgment and decree, Gully was to pay $320 per month in child support, $20 of which was to be placed in an interest-bearing college savings account for the couple's minor son, then age two. Gully was to deposit an additional $20 per month into their son's college savings account. For the year prior to and the year subsequent to the couple's marital dissolution, Fjerstad obtained an order for protection against Gully. Pursuant to that order, Gully's visitation with his son was supervised until he completed domestic abuse counseling.

A year and a half after the dissolution, on March 29, 1991, Gully filed a motion for modification in district court seeking a reduction in the amount of his monthly child support obligation. At the April 15, 1991 hearing on his motion, Gully produced his income tax returns for 1988, 1989, and 1990 and represented to the court that he was "on the verge of bankruptcy." In a later affidavit, Fjerstad stated that at the time of the April 15 hearing she suspected Gully was working on a cash basis for Three Way Electric and was concealing from the court what she believed to be a substantial part of his income. Fjerstad contends that she did not advise the court of these suspicions because at that time she was not represented by counsel and could not confirm what she believed to be true.

Based on Gully's income tax returns and representations, the court, on April 24, 1991, ordered Gully's child support obligation reduced to $106 per month, plus $20 per month to his son's college savings account. In addition, the court specifically ordered Gully to provide to Anoka County Child Support Enforcement (the county) paystubs or other verification of his income on a monthly basis and income tax returns on an annual basis.¹ The court did not order Gully to provide any of his financial information to Fjerstad.

Gully never provided any paystubs or tax returns to the county as was required by the 1991 child support modification order, and it appears that the county never took steps to obtain this information from him. Thus, for the next five years, Gully's monthly child support obligation remained unchanged except for statutorily-mandated cost of living adjustments that were automatically instituted. In September 1996, Gully was paying $120 per month to support his son.

Fjerstad learned that in 1994 Gully built a new home valued at $110,000 and purchased a 50% ownership interest in a boat that was docked on Lake Minnetonka. The boat was valued at between $20,000 and $30,000. On September 24, 1996, Fjerstad wrote to the county, requesting that her case be reviewed. The following day, the county received Fjerstad's letter and instituted a review.

To facilitate its review of Fjerstad's case, the county sent income and expense statement forms to both Fjerstad and Gully, requesting that each complete and return the forms. While Fjerstad completed and returned these forms, Gully did not return them or provide the county with any other verification of his income or expenses. As a result, the county determined Gully's income through a state wage match. On the basis of the state wage match, the county proposed that Gully's child support obligation be modified upward to $648.81 per month in child support, plus $110.54 per month in child care expenses.

Upon receiving the county's proposed modification of his child support obligation, Gully immediately requested an administrative hearing, which was subsequently held on January 14, 1997. Appearing at the hearing were Fjerstad, who was represented by counsel, Gully, who appeared pro se, and a representative from the county. Under questioning by Fjerstad's attorney, Gully admitted that he had been employed at Three Way Electric since at least 1993 at wages ranging from $15 to $17.50 per hour and that his income included some overtime. He further admitted that his employer gave him a $1,000 cash bonus in 1995 and a snowmobile at the end of 1996. When Fjerstad's attorney questioned Gully concerning the circumstances under which he received the snowmobile, he stated, "I received a used snowmobile for Christmas—or it was a five-year bonus for working for him for—for—fifth year coming up, fifth year coming on." Gully did not admit to working for Three Way Electric in 1991, the year he had sought the reduction in his child support payments.

Gully admitted that he had never provided any paystubs or tax returns to the county as required by the 1991 modification order. When asked why he had failed to comply with the order, Gully first stated that he did not know he was required to do so, and then said, in reference to the 1991 order, "I don't read everything I get." However, Gully did follow the instructions accompanying the notice granting the administrative hearing because, as requested in those instructions, he brought his last three months' paystubs and his income tax returns for 1994 and 1995 to the hearing. Although Gully brought his income tax returns to the hearing, he refused to provide copies to the court or to Fjerstad, stating that he thought the paystubs, which were handwritten, should be enough documentation to properly calculate his income. Under cross-examination, he did admit that his gross income for 1995 had been $47,255 in wages, plus a $1,000 cash bonus.

The administrative law judge (ALJ) issued an order on February 25, 1997, adopting the modification figures the county had proposed. This order was subsequently reviewed twice, both times at Gully's request, and was eventually modified downward to bring the amounts originally ordered into compliance with amounts allowable under the Minnesota Child Support Guidelines. The child support order in effect at the time the district court record was transmitted to this court requires Gully to pay $620.06 per month in child support and $94.55 per month in child care expenses.

On May 6, 1997, Fjerstad filed a motion seeking arrearages for unpaid child support and nonpayment of monies into the college savings account from 1989 to 1996. The motion was set for an administrative hearing before an ALJ on May 27. Gully responded with a motion for change of custody. At the hearing on Fjerstad's motion, the ALJ referred the parties to the district court for consideration of any child custody issues. In a written order issued June 27, 1997, the ALJ ordered Gully to pay arrearages of $5,333.54—$3,493.54 in back child support and $1,840 for their son's college savings account. This order has been reviewed at least four times, each time at Gully's request. The amount of arrearages was still in dispute at the time the district court record was transmitted to this court.

In a motion filed in district court on June 11, 1997, Gully sought custody of his son or, alternatively, a specific visitation schedule. Fjerstad filed a response requesting that the court deny Gully's motion. At the hearing on Gully's motion, the court orally ordered a specific visitation schedule. Due to a misunderstanding of this oral order, the court later issued a written visitation schedule.

On June 20, 1997, the same day she filed her response to Gully's motion for custody, Fjerstad filed a separate motion requesting that the district court: (1) retroactively modify Gully's child support obligation for the period of 1991-1996 and award her the amount retroactively modified, and (2) award her attorney fees in the amount of $2,500. In this motion, Fjerstad noted that Gully had directly violated the 1991 modification order in that he had never provided any paystubs or income tax returns to the county. In an attempt to gain financial information pertinent to her motion, Fjerstad served interrogatories and a request for the production of documents on Gully. Gully did not serve responses to the interrogatories and requests for documents until July 31, 1997, eight days before the scheduled August 8 hearing on Fjerstad's motion and 12 days past the date the responses were due. Thus, July 31, 1997 marks the first date on which Fjerstad obtained physical control of Gully's 1991-1996 tax returns and information on the purchase and subsequent sale of the home he built in 1994.

Four days before the hearing, Fjerstad...