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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1991 

                        CHAPTER 266-H.F.No. 317 
           An act relating to marriage dissolution; clarifying 
          procedure for modification of certain custody orders; 
          providing for additional child support payments; 
          providing an alternative form of satisfaction of child 
          support obligation; imposing a fiduciary duty and 
          providing for compensation in cases of breach of that 
          duty; clarifying certain mediation procedures; 
          providing for attorneys' fees in certain cases; 
          clarifying language concerning certain motions; 
          imposing penalties; modifying provisions dealing with 
          cost-of-living adjustments; providing for interest on 
          family law orders; amending Minnesota Statutes 1990, 
          sections 518.18; 518.551, subdivision 5; 518.57, by 
          adding a subdivision; 518.58, subdivision 1, and by 
          adding a subdivision; 518.619, subdivision 6; 518.64, 
          subdivision 2; 518.641, subdivisions 1 and 2; and 
          549.09, subdivision 1. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
     Section 1.  Minnesota Statutes 1990, section 518.18, is 
amended to read: 
    518.18 [MODIFICATION OF ORDER.] 
    (a) Unless agreed to in writing by the parties, no motion 
to modify a custody order may be made earlier than one year 
after the date of the entry of a decree of dissolution or legal 
separation containing a provision dealing with custody, except 
in accordance with paragraph (c). 
    (b) If a motion for modification has been heard, whether or 
not it was granted, unless agreed to in writing by the parties 
no subsequent motion may be filed within two years after 
disposition of the prior motion on its merits, except in 
accordance with paragraph (c). 
    (c) The time limitations prescribed in paragraphs (a) and 
(b) shall not prohibit a motion to modify a custody order if the 
court finds that there is persistent and willful denial or 
interference with visitation, or has reason to believe that the 
child's present environment may endanger the child's physical or 
emotional health or impair the child's emotional development. 
    (d) If the court has jurisdiction to determine child 
custody matters, the court shall not modify a prior custody 
order unless it finds, upon the basis of facts that have arisen 
since the prior order or that were unknown to the court at the 
time of the prior order, that a change has occurred in the 
circumstances of the child or the custodian parties and that the 
modification is necessary to serve the best interests of the 
child.  In applying these standards the court shall retain the 
custodian custody arrangement established by the prior order 
unless: 
    (i) the custodian agrees both parties agree to the 
modification; 
    (ii) the child has been integrated into the family of the 
petitioner with the consent of the custodian other party; or 
    (iii) the child's present environment endangers the child's 
physical or emotional health or impairs the child's emotional 
development and the harm likely to be caused by a change of 
environment is outweighed by the advantage of a change to the 
child. 
    In addition, a court may modify a custody order under 
section 631.52.  
     (e) In deciding whether to modify a prior joint custody 
order, the court shall apply the standards set forth in 
paragraph (d) unless:  (1) the parties agree in writing to the 
application of a different standard, or (2) the party seeking 
the modification is asking the court for permission to move the 
residence of the child to another state. 
    Sec. 2.  Minnesota Statutes 1990, section 518.551, 
subdivision 5, is amended to read: 
    Subd. 5.  [NOTICE TO PUBLIC AUTHORITY; GUIDELINES.] (a) The 
petitioner shall notify the public authority of all proceedings 
for dissolution, legal separation, determination of parentage or 
for the custody of a child, if either party is receiving aid to 
families with dependent children or applies for it subsequent to 
the commencement of the proceeding.  After receipt of the 
notice, the court shall set child support as provided in this 
subdivision.  The court may order either or both parents owing a 
duty of support to a child of the marriage to pay an amount 
reasonable or necessary for the child's support, without regard 
to marital misconduct.  The court shall approve a child support 
agreement of the parties if each party is represented by 
independent counsel, unless the agreement is not in the interest 
of justice.  In other cases the court shall determine and order 
child support in a specific dollar amount in accordance with the 
guidelines and the other factors set forth in paragraph (b) and 
any departure therefrom.  The court may also order the obligor 
to pay child support in the form of a percentage share of the 
obligor's net bonuses, commissions, or other forms of 
compensation, in addition to, or if the obligor receives no base 
pay, in lieu of, an order for a specific dollar amount. 
    The court shall derive a specific dollar amount by 
multiplying the obligor's net income by the percentage indicated 
by the following guidelines:  
Net Income Per            Number of Children 
Month of Obligor 
                   1      2      3      4      5      6    7 or 
                                                           more 
$400 and Below          Order based on the ability of the 
                        obligor to provide support  
                        at these income levels, or at higher  
                        levels, if the obligor has 
                        the earning ability. 
$401 - 500        14%    17%    20%    22%    24%    26%    28% 
$501 - 550        15%    18%    21%    24%    26%    28%    30% 
$551 - 600        16%    19%    22%    25%    28%    30%    32% 
$601 - 650        17%    21%    24%    27%    29%    32%    34% 
$651 - 700        18%    22%    25%    28%    31%    34%    36% 
$701 - 750        19%    23%    27%    30%    33%    36%    38% 
$751 - 800        20%    24%    28%    31%    35%    38%    40% 
$801 - 850        21%    25%    29%    33%    36%    40%    42% 
$851 - 900        22%    27%    31%    34%    38%    41%    44% 
$901 - 950        23%    28%    32%    36%    40%    43%    46% 
$951 - 1000       24%    29%    34%    38%    41%    45%    48% 
$1001- 4000       25%    30%    35%    39%    43%    47%    50% 
      Guidelines for support for an obligor with a monthly income 
of $4,001 or more shall be the same dollar amounts as provided 
for in the guidelines for an obligor with a monthly income of 
$4,000.  
         Net Income defined as: 
         Total monthly 
         income less           *(i) Federal Income Tax 
                              *(ii) State Income Tax 
                              (iii) Social Security
                                     Deductions 
                               (iv) Reasonable
                                     Pension Deductions 
         *Standard 
         Deductions apply-      (v) Union Dues 
         use of tax tables     (vi) Cost of Dependent Health
               recommended           Insurance Coverage  
                              (vii) Cost of Individual or Group
                                     Health/Hospitalization
                                     Coverage or an        
                                     Amount for Actual 
                                     Medical Expenses   
                             (viii) A Child Support or  
                                     Maintenance Order that is
                                     Currently Being Paid. 
     "Net income" does not include: 
     (1) the income of the obligor's spouse, but does include 
in-kind payments received by the obligor in the course of 
employment, self-employment, or operation of a business if the 
payments reduce the obligor's living expenses; or 
     (2) compensation received by a party for employment in 
excess of a 40-hour work week, provided that: 
     (a) support is nonetheless ordered in an amount at least 
equal to the guidelines amount based on income not excluded 
under this clause; and 
     (b) the party demonstrates, and the court finds, that: 
     (i) the excess employment began after the filing of the 
petition for dissolution; 
     (ii) the excess employment reflects an increase in the work 
schedule or hours worked over that of the two years immediately 
preceding the filing of the petition; 
     (iii) the excess employment is voluntary and not a 
condition of employment; 
     (iv) the excess employment is in the nature of additional, 
part-time or overtime employment compensable by the hour or 
fraction of an hour; and 
     (v) the party's compensation structure has not been changed 
for the purpose of affecting a support or maintenance obligation.
     (b) In addition to the child support guidelines, the court 
shall take into consideration the following factors in setting 
or modifying child support: 
     (1) all earnings, income, and resources of the parents, 
including real and personal property, but excluding income from 
excess employment of the obligor or obligee that meets the 
criteria of paragraph (a), clause (2)(b); 
     (2) the financial needs and resources, physical and 
emotional condition, and educational needs of the child or 
children to be supported; 
     (3) the standards of living the child would have enjoyed 
had the marriage not been dissolved, but recognizing that the 
parents now have separate households; 
     (4) the amount of the aid to families with dependent 
children grant for the child or children; 
     (5) which parent receives the income taxation dependency 
exemption and what financial benefit the parent receives from 
it; and 
      (6) the parents' debts as provided in paragraph (c).  
      (c) In establishing or modifying a support obligation, the 
court may consider debts owed to private creditors, but only if: 
      (1) the right to support has not been assigned under 
section 256.74; 
      (2) the court determines that the debt was reasonably 
incurred for necessary support of the child or parent or for the 
necessary generation of income.  If the debt was incurred for 
the necessary generation of income, the court shall consider 
only the amount of debt that is essential to the continuing 
generation of income; and 
      (3) the party requesting a departure produces a sworn 
schedule of the debts, with supporting documentation, showing 
goods or services purchased, the recipient of them, the amount 
of the original debt, the outstanding balance, the monthly 
payment, and the number of months until the debt will be fully 
paid. 
     Any schedule prepared under paragraph (c), clause (3), 
shall contain a statement that the debt will be fully paid after 
the number of months shown in the schedule, barring emergencies 
beyond the party's control.  
     Any further departure below the guidelines that is based on 
a consideration of debts owed to private creditors shall not 
exceed 18 months in duration, after which the support shall 
increase automatically to the level ordered by the court.  
Nothing in this section shall be construed to prohibit one or 
more step increases in support to reflect debt retirement during 
the 18-month period.  
     Where payment of debt is ordered pursuant to this section, 
the payment shall be ordered to be in the nature of child 
support.  
     (d) Nothing shall preclude the court from receiving 
evidence on the above factors to determine if the guidelines 
should be exceeded or modified in a particular case.  
     (e) The above guidelines are binding in each case unless 
the court makes express findings of fact as to the reason for 
departure below or above the guidelines. 
    Sec. 3.  Minnesota Statutes 1990, section 518.57, is 
amended by adding a subdivision to read: 
     Subd. 3.  [SATISFACTION OF CHILD SUPPORT OBLIGATION.] The 
court may conclude that an obligor has satisfied a child support 
obligation by providing a home, care, and support for the child 
while the child is living with the obligor, if the court finds 
that the child was integrated into the family of the obligor 
with the consent of the obligee and child support payments were 
not assigned to the public agency under section 256.74. 
    Sec. 4.  Minnesota Statutes 1990, section 518.58, 
subdivision 1, is amended to read: 
    Subdivision 1.  [GENERAL.] Upon a dissolution of a 
marriage, an annulment, or in a proceeding for disposition of 
property following a dissolution of marriage by a court which 
lacked personal jurisdiction over the absent spouse or lacked 
jurisdiction to dispose of the property and which has since 
acquired jurisdiction, the court shall make a just and equitable 
division of the marital property of the parties without regard 
to marital misconduct, after making findings regarding the 
division of the property.  The court shall base its findings on 
all relevant factors including the length of the marriage, any 
prior marriage of a party, the age, health, station, occupation, 
amount and sources of income, vocational skills, employability, 
estate, liabilities, needs, opportunity for future acquisition 
of capital assets, and income of each party.  The court shall 
also consider the contribution of each in the acquisition, 
preservation, depreciation or appreciation in the amount or 
value of the marital property, as well as the contribution of a 
spouse as a homemaker.  It shall be conclusively presumed that 
each spouse made a substantial contribution to the acquisition 
of income and property while they were living together as 
husband and wife.  The court may also award to either spouse the 
household goods and furniture of the parties, whether or not 
acquired during the marriage.  The court shall value marital 
assets for purposes of division between the parties as of the 
day of the initially scheduled prehearing settlement conference, 
unless a different date is agreed upon by the parties, or unless 
the court makes specific findings that another date of valuation 
is fair and equitable.  If there is a substantial change in 
value of an asset between the date of valuation and the final 
distribution, the court may adjust the valuation of that asset 
as necessary to effect an equitable distribution.  During the 
pendency of a marriage dissolution or annulment proceeding, each 
party owes a fiduciary duty to the other for any profit or loss 
derived by the party, without consent of the other, from a 
transaction or from any use by the party of the marital assets. 
    Sec. 5.  Minnesota Statutes 1990, section 518.58, is 
amended by adding a subdivision to read: 
     Subd. 1a.  [TRANSFER, ENCUMBRANCE, CONCEALMENT, OR 
DISPOSITION OF MARITAL ASSETS.] During the pendency of a 
marriage dissolution, separation, or annulment proceeding, or in 
contemplation of commencing a marriage dissolution, separation, 
or annulment proceeding, each party owes a fiduciary duty to the 
other for any profit or loss derived by the party, without the 
consent of the other, from a transaction or from any use by the 
party of the marital assets.  If the court finds that a party to 
a marriage, without consent of the other party, has in 
contemplation of commencing, or during the pendency of, the 
current dissolution, separation, or annulment proceeding, 
transferred, encumbered, concealed, or disposed of marital 
assets except in the usual course of business or for the 
necessities of life, the court shall compensate the other party 
by placing both parties in the same position that they would 
have been in had the transfer, encumbrance, concealment, or 
disposal not occurred.  The burden of proof under this 
subdivision is on the party claiming that the other party 
transferred, encumbered, concealed, or disposed of marital 
assets in contemplation of commencing or during the pendency of 
the current dissolution, separation, or annulment proceeding, 
without consent of the claiming party, and that the transfer, 
encumbrance, concealment, or disposal was not in the usual 
course of business or for the necessities of life.  In 
compensating a party under this section, the court, in dividing 
the marital property, may impute the entire value of an asset 
and a fair return on the asset to the party who transferred, 
encumbered, concealed, or disposed of it.  The absence of a 
restraining order against the transfer, encumbrance, 
concealment, or disposal of marital property is not available as 
a defense under this subdivision. 
    Sec. 6.  Minnesota Statutes 1990, section 518.619, 
subdivision 6, is amended to read: 
    Subd. 6.  [MEDIATOR RECOMMENDATIONS.] When the parties have 
not reached agreement as a result of the mediation proceeding, 
the mediator may recommend to the court that an investigation be 
conducted under section 518.167, or that other action be taken 
to assist the parties to resolve the controversy before hearing 
on the issues.  The mediator may not conduct the 
investigation or evaluation unless:  (1) the parties agree in 
writing, executed after the termination of mediation, that the 
mediator may conduct the investigation or evaluation, or (2) 
there is no other person reasonably available to conduct the 
investigation or evaluation.  The mediator may recommend that 
mutual restraining orders be issued in appropriate cases, 
pending determination of the controversy, to protect the 
well-being of the children involved in the controversy. 
    Sec. 7.  Minnesota Statutes 1990, section 518.64, 
subdivision 2, is amended to read: 
    Subd. 2.  [MODIFICATION.] (a) The terms of a decree 
respecting maintenance or support may be modified upon a showing 
of one or more of the following:  (1) substantially increased or 
decreased earnings of a party; (2) substantially increased or 
decreased need of a party; (3) receipt of assistance under 
sections 256.72 to 256.87; or (4) a change in the cost of living 
for either party as measured by the federal bureau of 
statistics, any of which makes the terms unreasonable and unfair.
    (b) On a motion for modification of maintenance, including 
a motion for the extension of the duration of a maintenance 
award, the court shall apply, in addition to all other relevant 
factors, the factors for an award of maintenance under section 
518.552 that exist at the time of the motion.  On a motion for 
modification of support, the court: 
    (1) shall take into consideration the needs of the children 
and shall not consider the financial circumstances of each 
party's spouse, if any; and 
    (2) shall not consider compensation received by a party for 
employment in excess of a 40-hour work week, provided that the 
party demonstrates, and the court finds, that: 
    (i) the excess employment began after entry of the existing 
support order; 
    (ii) the excess employment is voluntary and not a condition 
of employment; 
    (iii) the excess employment is in the nature of additional, 
part-time employment, or overtime employment compensable by the 
hour or fractions of an hour; 
     (iv) the party's compensation structure has not been 
changed for the purpose of affecting a support or maintenance 
obligation; 
     (v) in the case of an obligor, current child support 
payments are at least equal to the guidelines amount based on 
income not excluded under this clause; and 
     (vi) in the case of an obligor who is in arrears in child 
support payments to the obligee, any net income from excess 
employment must be used to pay the arrearages until the 
arrearages are paid in full. 
     (c) A modification of support or maintenance may be made 
retroactive only with respect to any period during which the 
petitioning party has pending a motion for modification but only 
from the date of service of notice of the motion on the 
responding party.  However, modification may be applied to an 
earlier period if the court makes express findings that the 
party seeking modification was precluded from serving a motion 
by reason of a significant physical or mental disability or a 
material misrepresentation of another party and that the party 
seeking modification, when no longer precluded, promptly served 
a motion.  
    (d) Except for an award of the right of occupancy of the 
homestead, provided in section 518.63, all divisions of real and 
personal property provided by section 518.58 shall be final, and 
may be revoked or modified only where the court finds the 
existence of conditions that justify reopening a judgment under 
the laws of this state, including motions under section 518.145, 
subdivision 2.  The court may impose a lien or charge on the 
divided property at any time while the property, or subsequently 
acquired property, is owned by the parties or either of them, 
for the payment of maintenance or support money, or may 
sequester the property as is provided by section 518.24. 
     (e) The court need not hold an evidentiary hearing on a 
motion for modification of maintenance or support. 
     (f) Section 518.14 shall govern the award of attorney fees 
for motions brought under this subdivision.  
     Sec. 8.  Minnesota Statutes 1990, section 518.641, 
subdivision 1, is amended to read: 
    Subdivision 1.  [REQUIREMENT.] An order for maintenance or 
child support shall provide for a biennial adjustment in the 
amount to be paid based on a change in the cost of living.  An 
order that provides for a cost-of-living adjustment shall 
specify the cost-of-living index to be applied and the date on 
which the cost-of-living adjustment shall become effective.  The 
court may use the consumer price index for all urban consumers, 
Minneapolis-St. Paul (CPI-U), the consumer price index for wage 
earners and clerical, Minneapolis-St. Paul (CPI-W), or another 
cost-of-living index published by the department of labor which 
it specifically finds is more appropriate.  The court may 
specify that the housing component be excluded from the 
cost-of-living adjustment.  Cost-of-living increases under this 
section shall be compounded.  The court may also increase the 
amount by more than the cost-of-living adjustment by agreement 
of the parties or by making further findings.  The adjustment 
becomes effective on the first of May of the year in which it is 
made, for cases in which payment is made to the public 
authority.  For cases in which payment is not made to the public 
authority, application for an adjustment may be made in any 
month but no application for an adjustment may be made sooner 
than two years after the date of the dissolution decree.  A 
court may waive the requirement of the cost-of-living clause if 
it expressly finds that the obligor's occupation or income, or 
both, does not provide for cost-of-living adjustment or that the 
order for maintenance or child support has a provision such as a 
step increase that has the effect of a cost-of-living clause.  
The court may waive a cost-of-living adjustment in a maintenance 
order if the parties so agree in writing.  The commissioner of 
human services may promulgate rules for child support 
adjustments under this section in accordance with the rulemaking 
provisions of chapter 14.  
    Sec. 9.  Minnesota Statutes 1990, section 518.641, 
subdivision 2, is amended to read: 
    Subd. 2.  [CONDITIONS.] No adjustment under this section 
may be made unless the order provides for it and until the 
following conditions are met:  
    (a) the obligee or public authority serves notice of its 
application for adjustment by mail on the obligor at the 
obligor's last known address at least 20 days before the 
effective date of the adjustment; 
    (b) the notice to the obligor shall inform informs the 
obligor that an of the date on which the adjustment in payments 
shall will become effective on the first of May; and 
    (c) after receipt of notice and before the effective day of 
the adjustment, the obligor fails to request a hearing on the 
issue of whether the adjustment should take effect, and ex 
parte, to stay imposition of the adjustment pending outcome of 
the hearing. 
    Sec. 10.  Minnesota Statutes 1990, section 549.09, 
subdivision 1, is amended to read: 
    Subdivision 1.  [WHEN OWED; RATE.] (a) When the judgment is 
for the recovery of money, including a judgment for the recovery 
of taxes, interest from the time of the verdict or report until 
judgment is finally entered shall be computed by the court 
administrator as provided in clause (c) and added to the 
judgment.  
    (b) Except as otherwise provided by contract or allowed by 
law, preverdict or prereport interest on pecuniary damages shall 
be computed as provided in clause (c) from the time of the 
commencement of the action, or the time of a written settlement 
demand, whichever occurs first, except as provided herein.  The 
action must be commenced within 60 days of a written settlement 
demand for interest to begin to accrue from the time of the 
demand.  If either party serves a written offer of settlement, 
the other party may serve a written acceptance or a written 
counteroffer within 60 days.  After that time interest on the 
judgment shall be calculated by the judge in the following 
manner.  The prevailing party shall receive interest on any 
judgment from the time the action was commenced or a written 
settlement demand was made, or as to special damages from the 
time when special damages were incurred, if later, until the 
time of verdict or report only if the amount of its offer is 
closer to the judgment than the amount of the opposing party's 
offer.  If the amount of the losing party's offer was closer to 
the judgment than the prevailing party's offer, the prevailing 
party shall receive interest only on the amount of the 
settlement offer or the judgment, whichever is less, and only 
from the time the action was commenced or a written settlement 
demand was made, or as to special damages from when the special 
damages were incurred, if later, until the time the settlement 
offer was made.  Subsequent offers and counteroffers supersede 
the legal effect of earlier offers and counteroffers.  For the 
purposes of clause (3), the amount of settlement offer must be 
allocated between past and future damages in the same proportion 
as determined by the trier of fact.  Except as otherwise 
provided by contract or allowed by law, preverdict or prereport 
interest shall not be awarded on the following:  
    (1) judgments, awards, or benefits in workers' compensation 
cases, but not including third-party actions; 
    (2) judgments, decrees, or orders in dissolution, 
annulment, or legal separation actions; 
    (3) judgments for future damages; 
    (4) (3) punitive damages, fines, or other damages that are 
noncompensatory in nature; 
    (5) (4) judgments not in excess of the amount specified in 
section 487.30; and 
    (6) (5) that portion of any verdict or report which is 
founded upon interest, or costs, disbursements, attorney fees, 
or other similar items added by the court. 
    (c) The interest shall be computed as simple interest per 
annum.  The rate of interest shall be based on the secondary 
market yield of one year United States treasury bills, 
calculated on a bank discount basis as provided in this section. 
     On or before the 20th day of December of each year the 
state court administrator shall determine the rate from the 
secondary market yield on one year United States treasury bills 
for the most recent calendar month, reported on a monthly basis 
in the latest statistical release of the board of governors of 
the federal reserve system.  This yield, rounded to the nearest 
one percent, shall be the annual interest rate during the 
succeeding calendar year.  The state court administrator shall 
communicate the interest rates to the court administrators and 
sheriffs for use in computing the interest on verdicts. 
    When a judgment creditor, or the judgment creditor's 
attorney or agent, has received a payment after entry of 
judgment, whether the payment is made voluntarily by or on 
behalf of the judgment debtor, or is collected by legal process 
other than execution levy where a proper return has been filed 
with the court administrator, the judgment creditor, or the 
judgment creditor's attorney, before applying to the court 
administrator for an execution shall file with the court 
administrator an affidavit of partial satisfaction.  The 
affidavit must state the dates and amounts of payments made upon 
the judgment after the most recent affidavit of partial 
satisfaction filed, if any; the part of each payment that is 
applied to taxable disbursements and to accrued interest and to 
the unpaid principal balance of the judgment; and the accrued, 
but the unpaid interest owing, if any, after application of each 
payment. 
    Presented to the governor May 29, 1991 
    Signed by the governor June 1, 1991, 3:29 p.m.