Leslie E. Sheehy Lee v. Travis W. Kalis, County of Le Sueur

• Court: Court of Appeals of Minnesota
• Decided: March 18, 2024
• Docket: a230522
• Status: Unpublished

Opinion

This opinion is nonprecedential except as provided by Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA IN COURT OF APPEALS A23-0522

Leslie E. Sheehy Lee, petitioner, Appellant,

vs.

Travis W. Kalis, Respondent,

County of Le Sueur, Respondent.

Filed March 18, 2024 Affirmed Reyes, Judge

Le Sueur County District Court File Nos. 40-F5-02-000689; 40-FA-06-544

Michael D. Dittberner, Linder, Dittberner & McSweeney, Ltd., Edina, Minnesota; and

Tami L. Peterson, Saxton Peterson Law Firm, Mankato, Minnesota (for appellant)

Jacob M. Birkholz, Birkholz & Associates, LLC, Mankato, Minnesota (for respondent Travis W. Kalis)

Brent Christian, Le Sueur County Attorney, Le Center, Minnesota (for respondent County of Le Sueur)

Considered and decided by Reyes, Presiding Judge; Larson, Judge; and Ede, Judge. NONPRECEDENTIAL OPINION

REYES, Judge

Mother argues that the district court erred by determining that the parties entered

into a binding extrajudicial settlement agreement to reduce father’s child-support

obligation because (1) the agreement was not contractually sound and (2) the district court

failed to make findings that the agreement was fair and reasonable to all interested parties.

We affirm.

FACTS

In July 2006, the district court ordered respondent Travis W. Kalis (father) to pay

continuing child support to appellant Leslie E. Sheehy Lee (mother) to provide for the

divorced couple’s two children, I.K. (born September 2000) and V.S. (born November

2005). The district court’s most recent child-support order from 2013 requires father to

pay mother $1,139 in monthly child support.

Beginning in July 2015, the parties arranged that father would make his child-

support payments using Venmo, an application that facilitates electronic money transfers.

Each month, mother would send father a Venmo request for child-support payments, and

father would transfer the requested amount. Beginning in January 2016 and continuing

through May 2019, mother only requested $1,000 from father in monthly child support.

Then, following I.K.’s graduation from high school, mother reduced her Venmo requests

to $500 per month, which father paid from June 2019 until March 2022.

2 Mother’s action for unpaid child support and father’s motion to modify his child- support obligation.

Seven years after the parties’ Venmo arrangement began, mother filed an affidavit

of arrears in July 2022 alleging that father had underpaid his child-support obligation by

$32,259. Mother attested that, despite father owing $1,139 in monthly child support based

on the district court’s 2013 order, father had only paid $1,000 per month from November

2015 until May 2019, and only $500 per month from June 2019 through March 2022.

Mother further stated that father had failed to pay any child support from April 2022

through July 2022.

Father subsequently filed a motion to modify his child-support obligation both

prospectively and retroactively. In an accompanying affidavit, father attested that the

parties had reached an extrajudicial settlement agreement to limit his monthly child-support

obligation to $1,000 until I.K. graduated from high school and to $500 for each month

thereafter. As exhibits to his affidavit, father attached email exchanges between the parties

that included draft contracts to modify his child-support obligation, as well as a history of

the parties’ Venmo transactions which reflected his child-support payments since July

2015.

The exhibits to father’s affidavit showed that, in June 2015, father sent mother a

written agreement that called for him to pay $1,000 per month in child support, to pay for

health-insurance costs, and to visit the parties’ children at least five times per year in

exchange for mother requesting the district court to remove its 2013 child-support order.

In response, mother sent father a revised draft agreement in July 2015 that called for father

3 to pay $1,260 in monthly child support and to cover 50% of all co-pays and medical bills

outside of the children’s health insurance. The parties’ Venmo transactions reflect that

mother requested, and father paid, $1,150 in child support in November and December

2015, $1,000 per month from January 2016 until May 2019, and $500 per month from June

2019 until May 2022.

The district court determines that the parties entered into an agreement to reduce father’s child-support obligation.

A child-support magistrate (CSM) held an evidentiary hearing on father’s child-

support-modification motion in December 2022. During the hearing, father acknowledged

that the parties had no written agreement to modify his child-support obligation. Mother

testified that she had requested, and father had made, Venmo payments of $1,000 per

month between 2015 and summer 2019 and $500 per month thereafter until March 2022.

Both parties testified that they established the Venmo payment system to lower father’s

child-support obligation so that he could see their children more often. Father also testified

that both parties wanted to create their own child-support agreement to avoid county

involvement in the parties’ affairs, a claim that mother did not dispute.

Following the hearing, the CSM determined that (1) the parties’ Venmo transactions

established a binding agreement regarding the payment of basic support; (2) the parties

abandoned that agreement when father failed to pay mother’s April 2022 request; and

(3) the parties’ agreement did not modify the district court’s 2013 order but did limit what

father had to pay for past support. The CSM therefore ordered that the child-support

records reflect that father owed no additional support through March 2022, but that father

4 would be required to pay child support in accordance with the 2013 order moving forward.

The district court subsequently denied mother’s motion to review the CSM’s order,

determining that the CSM properly found that the parties had entered into a binding

extrajudicial agreement to reduce father’s child-support obligation.

This appeal follows.

DECISION

Mother argues that the district court should not have adopted the CSM’s

determination that father did not owe past-due child support before March 2022 because

(1) the parties’ Venmo transactions did not constitute a binding agreement to reduce

father’s child-support obligation and (2) even if the parties had reached a binding

agreement, the district court failed to make findings that the agreement was fair and

reasonable to all interested parties. We are not persuaded.

When a district court affirms a CSM’s decision, it implicitly adopts the CSM’s

decision, which then becomes part of the district court’s order that is subject to appellate

review. See Minn. R. Gen. Prac. 378.01 (noting review may be taken to this court from

final ruling of CSM “or” district court’s order deciding motion for review). This court

reviews determinations of past-due child support for an abuse of discretion. LaChapelle v.

Mitten, 607 N.W.2d 151, 166 (Minn. App. 2000), rev. denied (Minn. May 16, 2000). “A

district court abuses its discretion by making findings of fact that are unsupported by the

evidence, misapplying the law, or delivering a decision that is against logic and the facts

on record.” Woolsey v. Woolsey, 975 N.W.2d 502, 506 (Minn. 2022) (quotation omitted).

5 Under Minn. Stat. § 518A.39, subd. 2(f) (Supp. 2023), a district court cannot

retroactively modify child support before the period in which a petitioning party has served

the responding party with a modification motion. However, the district court’s adoption

of an alternative effective date is not considered a retroactive modification of support. Id.

The district court may select an alternative effective date for a support order if the parties

enter into a binding agreement for an alternative effective date. Id., subd. 2(l) (Supp. 2023).

Here, the district court did not approve the parties’ arrangement for father to pay

$1,000 in monthly child support using Venmo. While judicial approval is not required to

establish a binding agreement to reduce father’s child-support obligation, an extrajudicial

agreement regarding child-support payments is enforceable only if it is (1) contractually

sound and (2) otherwise fair and reasonable to all interested parties. Kielley v. Kielley, 674

N.W.2d 770, 776-77 (Minn. App. 2004).

I. The district court did not err by determining that the parties reached a contractually sound agreement to reduce father’s child-support obligation.

Mother asserts that the parties’ Venmo transactions do not constitute a contractually

sound extrajudicial agreement because (1) the parties did not memorialize their agreement

in writing or a tape recording; (2) the parties never agreed on the essential terms of the

agreement; and (3) father offered insufficient consideration to support the agreement. We

disagree.

6 A. Extrajudicial agreements are not required to be memorialized in a written stipulation or a tape recording.

Mother initially contends that no binding extrajudicial agreement existed between

the parties because they never completed a written stipulation or a tape recording that

established the agreement’s material terms.

Extrajudicial agreements are contractual in nature. Theis v. Theis, 135 N.W.2d 740,

744 (Minn. 1965). While ordinarily the terms of an agreement should be stated to the

district court or reduced to writing, it is not essential to their enforcement, as long as the

terms are definite. Id. at 745. Because extrajudicial agreements are not required to take a

specific form, mother’s first argument fails.

B. The district court did not clearly err by finding that the parties’ Venmo transactions created an implied-in-fact contract.

Mother next contends that the purported extrajudicial agreement was not binding

because the parties’ differing written drafts of the agreement lacked definite terms

regarding father’s monthly child-support obligation, how the parties would split insurance

copayments, and the agreement’s duration.

For an extrajudicial agreement to be enforceable, there must be such a definite offer

and acceptance to demonstrate an agreement on all essential terms. Tornstrom v.

Tornstrom, 887 N.W.2d 680, 686 (Minn. App. 2016), rev. denied (Minn. Feb. 14, 2017).

Whether the parties reached an objective agreement is a factual question that this court

reviews for clear error. Id.

Even when there is no express agreement, the law may imply a contract from the

circumstances or acts of the parties. Bergstedt, Wahlberg, Berquist Assocs., Inc. v.

7 Rothschild, 225 N.W.2d 261, 263 (Minn. 1975). For a court to find a valid implied-in-fact

contract, the circumstances must “clearly and unequivocally” indicate the intent of the

parties to the agreement to enter into a contract. Webb Bus. Promotions, Inc. v. Am. Elec.

& Ent. Corp., 617 N.W.2d 67, 75 (Minn. 2000). However, for implied-in-fact contracts,

“it is not expected that the elements of [the] contract will be as vividly portrayed as by

evidence of an express contract.” Gryc v. Lewis, 410 N.W.2d 888, 891 (Minn. App. 1987)

(quotation omitted).

The evidence in the record supports the district court’s finding that the parties agreed

to lower father’s obligation to $1,000. Father’s draft written agreement proposed $1,000

monthly payments, and mother in response proposed $1,260 monthly payments. Mother

subsequently sent father Venmo requests for $1,000 payments, which father paid from

January 2016 through May 2019, for a total of 41 consecutive payments. Then, from June

2019 to March 2022, father paid mother’s requests for $500 in monthly child support, for

a total of 33 consecutive payments. This prolonged and consistent arrangement between

the parties supports the district court’s determination that they reached an agreement to

reduce father’s child-support obligation. See, e.g., Bergstedt, 225 N.W.2d at 263

(concluding that parties maintaining an architect-client relationship for two years had

implied-in-fact contract).

Similarly, the record supports the district court’s determination that the parties

assented to the agreement’s durational term. Father testified that the parties agreed that he

would pay $1,000 through Venmo until I.K. graduated in June 2019, after which the

payments would be reduced to $500 per month. Father’s testimony is corroborated by both

8 the parties’ Venmo history and mother’s testimony that father always paid her Venmo

requests.

Furthermore, although mother and father’s written proposals differed regarding

father’s obligation to pay medical expenses not covered by the parties’ insurance, the

record supports the district court’s determination that the parties agreed on this term as

well. Father testified that he paid mother for unreimbursed medical expenses whenever

she requested those costs through Venmo. Father’s testimony is again corroborated by the

parties’ Venmo transactions, which reflect that he completed numerous requests that

mother made for medical expenses.

Because the record supports the district court’s determination that the parties agreed

on all material terms of their extrajudicial agreement, the district court did not clearly err

by finding that the parties’ Venmo transactions “clearly and unequivocally” provided

evidence of an enforceable implied-in-fact contract. See Webb, 617 N.W.2d at 75.

C. Adequate consideration supported the parties’ extrajudicial agreement.

Mother argues that, even if the district court relied only on the Venmo payments

rather than the parties’ written draft agreements to determine that the parties had a

contractually sound agreement, that agreement lacked consideration.

All binding agreements require consideration. Powell v. MVE Holdings, Inc., 626

N.W.2d 451, 463 (Minn. App. 2001), rev. denied (Minn. July 24, 2001). “Consideration

is something of value given in return for a performance or promise of performance.” Id.

(quotation omitted). Whether an agreement is supported by sufficient consideration is a

9 legal question that this court reviews de novo. Id. We “will not examine the adequacy of

consideration so long as something of value has passed between the parties.” Id.

At the child-support-modification hearing, both parties testified that they

established the Venmo payment system as a framework to lower father’s support so that

he could see their children more often. Father also testified that both parties wanted to

have an arrangement between themselves to avoid county involvement in the parties’

affairs. Indeed, during the seven-year period in which father paid mother’s Venmo requests

for child support, the parties avoided expending time and financial resources with further

litigation. Because eliminating county involvement and promising to increase his visits to

Minnesota was “something of value given” in return for mother lowering father’s support

obligation, we conclude that sufficient consideration supported the parties’ extrajudicial

agreement. Powell, 626 N.W.2d at 463.

We conclude that the district court did not err by determining that the parties reached

a contractually sound agreement to reduce father’s child-support obligation and that

adequate consideration supported the parties’ agreement.

II. The district court did not abuse its discretion by failing to make findings on whether the parties’ agreement was fair and reasonable.

Mother argues that, even if the parties’ entered into a contractually sound

extrajudicial agreement, the district court failed to make the findings required by Kielley

to demonstrate that the agreement was “fair and reasonable” to all interested parties. We

are not persuaded.

10 Under Kielley, when evaluating whether an extrajudicial agreement is fair and

reasonable, “the district court should consider and make findings” addressing whether the

agreement is unfair and unreasonable (1) to the parties’ children because the agreement

will adversely impact them; (2) to one of the parties because of overreaching, lack of full

disclosure, lack of an opportunity to consult with counsel, or some other reason; (3) to the

state because the stipulation would require one of the parties or their children to seek public

assistance; and (4) to the court because the agreement will unnecessarily complicate future

court proceedings. 674 N.W.2d at 778-79. Here, while the district court made some

relevant findings, it did not explicitly address each of the Kielley factors.

Reviewing courts, while recognizing that findings are legally insufficient, may

examine the record to determine whether a decision is objectively justified. In re Tanghe,

672 N.W.2d 623, 625 (Minn. App. 2003). This court may also examine whether the record

adequately supports a district court’s implicit findings of fact underlying its legal

determinations. Pechovnik v. Pechovnik, 765 N.W.2d 94, 99 (Minn. App. 2009).

Furthermore, if it is clear from the record and the district court’s findings that, on remand,

the district court would undoubtedly make findings that comport with the legal

requirements, then remand is not required. See Grein v. Grein, 364 N.W.2d 383, 387

(Minn. 1985).

Here, the district court found that father’s support obligation under the parties’

agreement was a “minimal change” to the court-ordered payments. It also found that

mother had a gross monthly income of over $16,000; mother was voluntarily

11 underemployed, with an imputed gross monthly income of over $24,000; and that V.S. is

anticipated to complete high school in May 2024.

These findings support that the parties’ extrajudicial agreement was fair and

reasonable under the Kielley factors. There is no evidence that the “minimal” $139

reduction in monthly child support materially impacted the children’s interests. The record

shows that, despite being voluntarily underemployed and working only two days a week,

mother made nearly $200,000 per year, an adequate income to provide for the parties’

children. Nor is there any evidence that either mother or the children received public

assistance during the seven-year period of reduced payments, demonstrating that the

agreement was not unfair to the state. Additionally, there is no evidence that the agreement

unnecessarily complicated the parties’ future court proceedings. Not only did the parties

abide by their agreement for seven years without court intervention, but the district court

determined that the agreement did not modify the 2013 support order, so there was a

sufficient baseline to decide future support-modification motions. Contra Maschoff v.

Leiding, 696 N.W.2d 834, 840-41 (Minn. App. 2005) (remanding for further findings when

district court’s order failed to address parties’ then-existing circumstances or provide

baseline for deciding future modification motions). Finally, although the record contains

some evidence that father failed to disclose his financial assets to mother, the agreement

was still fair to both parties.

12 Although it would have been preferable for the district court to have explicitly

addressed all of the Kielley factors, both the record and the district court’s findings support

that the parties reached an agreement that was fair and reasonable to all interested parties. 1

Affirmed.

1 Although appellants requested a precedential opinion reversing the district court, our decision applies well-established legal principles regarding contract interpretation to the unique factual circumstances presented in this case. We therefore conclude that a nonprecedential opinion is appropriate to resolve this matter.