Opinion
No. CX-00-1869.
Filed June 5, 2001.
Appeal from the District Court, Otter Tail County, File No. F0-97-1236.
Samuel S. Johnson, Johnson Law Office, Ltd., (for appellant)
Jeffrey D. Skonseng, Krekelberg Skonseng, PLLP, (for respondent)
Considered and decided by Amundson, Presiding Judge, Klaphake, Judge, and Willis, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
In this dissolution matter, the district court ordered ex-husband to accept ex-wife's bid on 145 acres of a 160 acre parcel, awarded ex-wife interest on her lien on the property, required ex-husband to pay half of the costs of the survey to separate ex-wife's 145 acres from the 160 acre parcel, and denied husband's request to list the entire parcel with a real estate agent. We affirm.
FACTS
On May 18, 1998, after forty years of marriage, Donald Baumgartner and Ardeth Baumgartner were granted a marital dissolution. As part of the judgment and decree, Ardeth was awarded $105,000 to be paid by Donald within 90 days of entry of the judgment. The money was secured by a lien on real estate awarded to Donald, consisting of 160 acres (the quarter), of which approximately 145 acres are tillable farmland (the farm) and 15 acres that contain Donald's homestead, outbuildings, and yard (the homestead). The farm and the homestead are identifiable as distinct areas of the property because a tree belt and a road border the homestead.
On appeal, we reduced this amount to $101,889.50. Baumgartner v. Baumgartner, No. CI-98-1502, 1999 WL 31161, at *2 (Minn.App. Jan. 26, 1999).
After the 90-day period for paying the $190,000 expired, the district court ordered Donald to list the quarter for sale for $190,000 in order to satisfy the judgment and lien. Because only one person expressed an interest in buying the land from January 1999 to March 1, 2000, Ardeth moved the court to order a public sale of the quarter to satisfy her lien. The district court ordered that the quarter was to be immediately offered for sale by public auction and that the seller had the right to negotiate the terms and to reject all bids if no reasonable offer was received. However, Donald was required to accept any reasonable offer and, if no reasonable offer was received, the property would again be listed for sale with a reputable realtor.
Donald, Ardeth, Ardeth's attorney, and five other potential bidders appeared for the June 30, 1999 sheriff's sale, but, initially, nobody placed a bid. Ardeth's attorney then submitted a written bid on Ardeth's behalf offering $130,000 for the farm only. Payment was proposed as $28,110.50 in cash with the balance paid by release of the lien. The homestead would be separated from the farm by survey paid for by Donald. Donald rejected this bid.
Ardeth then moved the court to order that Donald: (1) accept the bid, (2) pay interest on her lien, (3) pay for a survey to separate the 145 acres from the 15-acre building site, and (4) convey the 145 acres to her. Donald opposed this motion and moved for the court to order that the entire quarter be listed with a reputable realtor.
At the hearing on this motion, Ardeth testified that she based her bid on the appraisal done at the time of the dissolution ($190,000 for the entire quarter less $60,000 for the homestead). Believing the homestead was more marketable without the farm attached, she testified that Donald had told her before the dissolution that the homestead alone was worth $120,000. She also testified that she would allow Donald to retain all of the property if he would satisfy her lien.
Milton T. Paulson, an appraiser and licensed realtor, testified that the value of the farm was very close to $900 an acre (which comes to $130,500), that $60,000 for the homestead was on the low side (although he had been unable to get $70,000 for it), and that splitting the land into two parcels would make it more marketable.
Donald testified that the farm could sell for more than $900 per acre because it had soil suitable for beet farming, and that recent sales indicated that the property was worth between $1,280 and $1,400 per acre. He also opined that selling the farm and homestead separately would greatly diminish the price because of the long distance from town. In his opinion, the entire quarter was worth $252,000.
Shannon Maack was farming the farm under a lease agreement. Maack testified that, at the sheriff's sale, he thought only the whole quarter was for sale and that, if he had known that bids would be accepted on portions of the quarter, he would only have been able to bid on 20 acres.
Paulson then rebutted Donald's testimony by noting that most of the properties that Donald used to estimate the value of his land were in a different area that generally was of higher value. When questioned whether all of the properties near the quarter were of lesser value, Paulson stated that good properties near the quarter might be of higher value than poor properties in the area that Donald used for comparison.
The district court denied Donald's motion to list the entire quarter for sale for another year and ordered that Donald accept Ardeth's bid on 145 acres, pay six percent interest on Ardeth's lien, and pay one-half the costs of a survey to separate the farm from the homestead. This appeal followed.
DECISION
Donald first argues that the district court improperly altered his substantive rights by requiring him to accept Ardeth's offer. A lien on property is a division of property. Kerr v. Kerr, 309 Minn. 124, 126, 243 N.W.2d 313, 314 (1976). The district court is accorded broad discretion in marital dissolution property divisions, and will be upheld unless its conclusions are clearly erroneous and against the logic and facts. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
Although the district court may not subsequently modify a division of property, it may issue orders implementing or enforcing provisions of the division, Erickson v. Erickson, 452 N.W.2d 253, 255 (Minn.App. 1990), so long as doing so does not "change the parties' substantive rights." Ulrich v. Ulrich, 400 N.W.2d 213, 218 (Minn.App. 1987) (citation omitted).
This court has distinguished between public sales and private sales in terms of altering the parties' substantive rights. Compare Ulrich 400 N.W.2d at 218 (parties' substantive rights were altered when, after the parties had agreed to a private sale between them, when each had a 50% interest in the property, the court ordered the husband to pay child support arrearages out of the proceeds of the sale because the district court action effectively eliminated the wife's sole competition from the sale) with Potter v. Potter, 471 N.W.2d 113, 114 (Minn.App. 1991) (parties' rights were not substantively affected by a public sale which thus eliminated "the danger of an artificially low or unfair sale price.")
Donald first argues that, unlike the sale in Potter,the sale here was not really "public" because Ardeth alone "was allowed to partake" in the bidding process. Although the district court's order did not specifically provide for sales of less than the full quarter, the sale was, nevertheless, public. There is no evidence that other buyers were not permitted to make bids at the auction, whether for the full quarter or some portion thereof. Furthermore, there is no evidence that Ardeth alone was privy to the possibility of bidding on only a portion of the property.
Donald argues that, because it was not made clear that partial bids were to be considered, this situation presents, as in Ulrich, the danger that the market price was suppressed. Regardless of whether such conditions might normally suppress a market, the price of the bid was consistent with substantial evidence in the record as to the value of the land, including Donald's own valuations. Furthermore, Donald did not produce any evidence that would indicate that anybody present at the auction was prepared to bid for any portion of the land other than speculation that Maack might have bid on twenty acres. While, ideally, it might have been preferable for the order to have clarified that partial bids would be accepted, Donald's substantive rights were not affected by the sale conditions. Ardeth's bid price was consistent with both the amount at which the quarter was initially listed, and several valuations of the land.
There was no evidence in the record that, unlike Ardeth's 145-acre bid, this portion was easily subdivided from the rest of the quarter.
Donald also argues that the district court erred in awarding interest on Ardeth's lien. An award of interest where the original decree does not provide for an interest-bearing lien represents a modification of the original property division. Erickson, 452 N.W.2d at 256. In Erickson, the lien granted in the original property division was not for a fixed amount, but for 50% of the value of the land, and did not provide for interest. Id. at 254, 256. After several years where the party without the lien failed to sell the property, the court converted the lien into a fixed value and assigned interest. Id.at 254-55. On appeal, this court approved of the district court's conversion of the lien, but disapproved of the addition of interest. Id. at 256. Here, however, the lien was always for a fixed amount, and in the findings of fact, the district court specifically noted,
There is a gap between [Ardeth's] monthly income and her necessary living expenses of $1,203.40 per month. However, [she] will earn interest on the money awarded to [her] in the Conclusions of Law herein and will be able to earn rent on the real estate awarded to [her] in the Conclusions of Law, which will reduce this gap substantially.
Thus the original order also provided for interest.
Donald argues that this provision for interest should not have effect because it was in the district court's findings and not expressly in its order. But we do not look to whether the original decree expressly ordered interest, but whether it provided for an interest-bearing lien. Id. at 256. Clearly the intent of the district court was to provide interest on the lien regardless of whether that intent was expressed in the order itself. Furthermore, where the court orders a fixed lien, interest is provided for by law. See Minn. Stat. § 334.01, subd. 1 (2000) (providing for interest on any legal indebtedness).
Finally, Donald argues that the district court erred in ordering him to pay one-half the costs of a survey to divide the land because it is a modification of the original property division. The original decree did not provide for the division of the property, but the order directing the property to be sold at auction expressly required appellant to bear all costs associated with the sale and was never appealed. The district court, in later ordering the property to be sold as divided, has necessitated additional survey costs, and has divided them between the parties.
The district court has the authority to apportion costs associated with that division. This authority, like the authority to divide the property in the first place, flows from the district court's authority to issue orders implementing and enforcing the provisions of the dissolution decree. See Erickson, 452 N.W.2d at 255.
Affirmed.