Opinion
No. C4-00-1933.
Filed May 8, 2001.
Appeal from the District Court, Dakota County, File No. F49712024.
Wayne A. Jagow, (for respondent)
Ann M. Lentner, (for appellant)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Appellant-husband Thomas Simonsen challenges the district court's second amended dissolution judgment, arguing that the district court made findings unsupported by the record when it found (1) respondent-wife Susan Simonsen purchased certain certificates of deposit with premarital assets; (2) wife used those certificates of deposit to make a loan to husband; (3) wife contributed $48,893.13 of her premarital assets to the marital homestead; and (4) husband had the ability to contribute to wife's attorney fees. We affirm.
FACTS
The parties were married on February 21, 1987. Respondent wife filed a petition for dissolution on January 6, 1997. At trial, wife claimed a nonmarital interest in the parties' home and certain certificates of deposit, arguing the certificates of deposit were the funding source behind her $25,000 loan to appellant husband. Wife testified that (1) she owned a home prior to the marriage and that she received $40,802.48 in cash proceeds from the sale of her home; (2) her nonmarital checking account had a balance of $8,478.28 on January 31, 1987, prior to the parties' marriage; (3) she withdrew $70,304.51 from her savings account as the parties incurred construction expenses related to the marital homestead; (4) she purchased three certificates of deposit prior to the parties' marriage; and (5) the certificates of deposit were the source of the $25,000 loan to husband.
The district court found that wife adequately traced her nonmarital interest in the disputed property. Accordingly, the property was characterized solely as nonmarital property. Husband moved for amended findings, or alternatively, a new trial. Wife also moved for amended findings. The district court denied husband's motion for a new trial and granted husband's motion for amended findings. The amended judgment and decree determined that wife had contributed $67,304.51 of nonmarital assets to the purchase of the marital homestead and awarded wife the homestead, ordered husband to pay wife $25,000 for a loan wife made to husband using nonmarital assets, and ordered husband to pay $15,000 in attorney fees.
Husband appealed. The matter was affirmed in part, reversed in part, and remanded. Simonsen v. Simonsen, No. C8-98-2064 (Minn.App. June 15, 1999), review denied (Minn. Aug. 25, 1999). This court determined that there were insufficient findings supporting the district court's conclusions that (1) wife had $67,304.51 in nonmarital assets, (2) wife's nonmarital assets were the source of the $25,000 loan to husband, and (3) husband was able to pay the court-awarded $15,000 in attorney fees.
The second amended judgment and decree determined that (1) wife's nonmarital checking account had a balance of $48,893.13; (2) wife's certificates of deposit were nonmarital assets and were the funding source for her $25,000 loan to husband; and (3) husband, after paying all monthly expenses, has additional monthly income of $2,316.25, and is able to pay $15,000 towards wife's attorney fees.
The district court denied husband's motion for amended findings of fact, conclusions of law, or, alternatively, a new trial. This appeal followed.
DECISION I. Nonmarital Property
Husband claims that the district court erred in concluding that wife had a $48,893.13 nonmarital interest in the parties' homestead, and that the $25,000 loan was funded by wife's nonmarital certificates of deposit.
The characterization of property as marital or nonmarital is a question of law, which this court independently reviews de novo. Campion v. Campion, 385 N.W.2d 1, 4 (Minn.App. 1986) (citation omitted). However, the district court's findings of fact underlying the determination will not be disturbed unless clearly erroneous. Minn.R.Civ.P. 52.01; Kornberg v. Kornberg, 542 N.W.2d 379, 386 (Minn. 1996).
A finding of fact is clearly erroneous if the reviewing court is "left with the definite and firm conviction that a mistake has been made." Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn. 1999) (quotation omitted). When determining whether findings of fact are clearly erroneous, an appellate court views the record in the light most favorable to the district court's findings. Frauenshuh v. Giese, 599 N.W.2d 153, 156 (Minn. 1999). In general, if the district court had reasonable evidence to support its findings of fact, the reviewing court should not disturb those findings. Fletcher, 589 N.W.2d at 101.
Property acquired by either spouse during a marriage is presumed to be marital property regardless of the form of title. Minn. Stat. § 518.54, subd. 5 (2000). This presumption may be overcome by showing that the property is nonmarital. Id. "Nonmarital property" includes property acquired by either spouse before their marriage which is acquired in exchange for property or used to increase the value of property acquired during the marriage. Minn. Stat. § 518.54, subd. 5(c). A spouse claiming that property is nonmarital must prove the necessary facts by a preponderance of the evidence. Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997).
a. The Homestead
Husband contends that the district court erred in finding that wife had a nonmarital interest of $48,893.13 in the parties' marital homestead. He argues that "the premarital savings account was hopelessly commingled with marital deposits and should have been found to be a marital asset." Alternatively, he argues that wife has not met her burden of tracing.
This court has consistently held that "strict tracing" is not necessary, but instead, a party need only show by a preponderance of the evidence that the asset was "acquired in exchange for nonmarital property." Carrick v. Carrick, 560 N.W.2d 407, 413 (Minn.App. 1997); Doering v. Doering, 385 N.W.2d 387, 390 (Minn.App. 1986).
In this case, wife testified that she deposited $40,802.48 into her nonmarital savings account. Wife provided documentation that on March 30, 1987 she deposited the proceeds from her home ($40,802.48) into her savings account, and subsequently transferred this amount into her nonmarital checking account. She provided further documentation that her nonmarital savings account balance was $8,478.28 on January 31, 1987, $7,510.25 on February 28, 1987, and $48,893.13 on March 31, 1987. Therefore, according to the evidence wife had $48,893.13 in nonmarital funds in her savings account.
The district court concluded that wife's check register accurately reflected $68,904.51 in house-related withdrawals for the period of March 30, 1987 through December 31, 1987. Further, the district court noted that wife "clearly expended all of her nonmarital deposits and nonmarital home proceeds in the construction of the [parties'] homestead."
Wife provided canceled checks and testified that she wrote seven checks, totaling $70,304.51, for house-related expenses. According to wife, payments were made directly from her nonmarital account as the parties incurred construction expenses. Husband argues that he deposited money into wife's account and that the account lost its nonmarital character shortly after the marriage. Husband testified that he deposited approximately $25,000 in real estate commissions into his wife's savings account. He reasoned that because the construction on the parties' home began two days after the parties' marriage, it was more efficient for him to deposit money into wife's savings account because "she was writing a lot of checks out of [her account] to purchase the home." Husband provided documentation, which reflected that from the date of the parties' marriage through December 31, 1997, $82,020.51 was deposited into wife's checking account. Husband concedes that wife deposited $40,802.48 in proceeds from the sale of her home. He argues that the miscellaneous deposits totaling $39,724.17 were marital in nature, and that wife did not prove that she contributed all of her nonmarital funds towards the construction of the parties' homestead.
Commingling of nonmarital and marital property is not fatal to a party's claim that property remained nonmarital. Swick v. Swick, 467 N.W.2d 328, 330 (Minn.App. 1991), review denied (Minn. May 16, 1991). However, commingled property must be readily traceable. Wiegers v. Wiegers, 467 N.W.2d 342, 344 (Minn.App. 1991) (citation omitted).
Here, the court specifically found that "[wife] has met her burden of proof in tracing these [home-related] expenses to her nonmarital account deposits and the proceeds from the sale of her premarital home." Further, the court noted that "[husband's] claims that he deposited money into [wife's] savings and/or checking account are not credible." See General v. General, 409 N.W.2d 511, 513 (Minn.App. 1987) (noting that evaluating credibility of witnesses and the weight given to their testimony rests within the province of the finder of fact). Based on wife's testimony and supporting documentation, the district court found that wife traced her nonmarital interest in the homestead to premarital interests in a home. Cf. Doering, 385 N.W.2d at 390-91 (holding oral testimony sufficient to support tracing of nonmarital interest). The finding is not clearly erroneous, and sufficiently supports the conclusion of the court.
b. The Loan
Husband contends that the court erred in determining that wife purchased certificates of deposit before the marriage, and that these certificates were the funding source of the $25,000 loan from wife to husband. Husband argues that wife's testimony was speculative, and that she did not state with certainty that (1) she used nonmarital assets to purchase the certificates of deposit, and (2) the certificates of deposit were the funding source of the $25,000 loan.
The district court determined that wife purchased the certificates of deposit before the parties' marriage, and that wife's testimony was credible. Additionally, the court concluded that the $25,000 came from wife's certificates of deposit, and that the promissory note executed by husband memorialized husband's obligation to repay these nonmarital funds.
Wife's submission of her May 19, 1998, bank statement reflected that the certificates had a combined value of $22,123.25. Wife testified (1) she did not recall when the certificates were purchased, but is certain they were purchased before the parties' marriage; (2) the certificates were three-year certificates of deposit, renewable in July, 1988 and April, 1989; (3) she loaned husband $25,000 during the marriage; (4) husband borrowed the money to fund a real estate development project; (5) she did not recall specifically, but believes the originating source of the loan was either her nonmarital certificates of deposit or her nonmarital savings account; (6) in 1996, wife discovered that husband forged her signature on home equity loan payments; and (7) after this discovery, husband signed a promissory note memorializing the $25,000 loan. Wife introduced a copy of the promissory note husband had signed. The note contained the following language, "When lot 1, block, 3, Lake Villa sixth addition sells, [husband] will pay to Susan Simonsen's savings account the amount borrowed, $25,000."
Husband testified that (1) in 1988 he gave wife $20,000 — $25,000 to purchase a certificate of deposit; (2) the $20,000 — $25,000 came from the proceeds of his premarital home, which was sold in December, 1987; (3) the parties "cashed out" the certificate of deposit to finance the Lake Villa development project; (4) the parties "borrowed the money to ourselves, to Eva Development;" (5) he signed a promissory note in November 1996; (6) the $20,000 — $25,000 was marital funds, which he intended to pay back to wife's savings account once the specified lot was sold.
Husband was the sole shareholder in Eva Development, an entity created in 1989 to purchase and develop tracts of land in the city of Lakeville.
Because testimony conflicted regarding the source of the loan, the ultimate issue was one of witness credibility. The district court heard the testimony on this issue, and we must defer to the district court's credibility determination that wife's nonmarital funds were the originating source of the loan. See Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1998) (stating appellate court defers to district court credibility determinations); see also Minn.R.Civ.P. 52.01 (requiring "due regard" to be given to district court's ability to judge witness credibility). The court expressly ruled on the credibility dispute in the conflicting testimony of husband and wife, resolving the credibility in favor of wife. The court noted that it did not find credible husband's claim that he gave wife $20,000 — $25,000 to purchase a certificate of deposit. The record reflects that the court did not simply believe wife because it disbelieved husband, as husband contends. Rather, it considered evidence that corroborated wife's testimony. Wife submitted bank statements detailing deposit activity, and there was not a deposit amount matching husband's alleged contribution. Based on the record as a whole, we hold that the finding of the court is not clearly erroneous.
II. Attorney Fees
Husband contends that the district court erred in requiring him to pay $15,000 towards wife's attorney fees because the court failed to accurately determine his income. Husband argues that "[h]ad the [d]istrict [c]ourt appropriately deducted federal and state income taxes, it would have found that [my] income is not sufficient to contribute toward [wife's] attorney's fees."
The decision to award attorney fees in dissolution cases rests almost entirely within the discretion of the district court. Maeder v. Maeder, 480 N.W.2d 677, 680 (Minn.App. 1992), review denied (Minn. Mar. 19, 1992). An award of attorney fees is proper when the court finds the fees are necessary for the good-faith assertion of the party's rights in the proceeding, the party from whom fees are sought has the means to pay them, and the party to whom fees are awarded does not have the means to pay them. Minn. Stat. § 518.14, subd. 1 (1996). "If attorney fees are warranted, the court's order must be accompanied by appropriate findings." Courey v. Courey, 524 N.W.2d 469, 473 (Minn.App. 1994).
The district court made the following findings regarding husband's ability to pay:
[Husband] has very substantial income. Based upon his expenditures for certain defined items only, this [c]ourt previously found he had net monthly income of at least $9,000.00. * * * His monthly living expenses do not exceed $2,700.00. This leaves him with additional monthly income of $2,316.25, over and beyond his maintenance, support, and living expenses. [Husband's] attorney' fees, through trial, were fully paid. [Husband] is able to contribute toward [wife's] attorney's fees while retaining the ability to pay his own counsel, including post-trial fees. [Husband] should contribute $15,000.00 toward [wife's] attorney's fees incurred herein.
This court previously affirmed the district court's determination of husband's net income and noted that
Husband's testimony indicated that during the 18-month period, he spent $156,440, or $8,691.11 per month, on attorney fees, living expenses, temporary maintenance, house payments, loan payments, his daughter's school tuition, and a country-club membership. Based on the determination that husband spent this amount on just these purposes, the [district] court determined that his net monthly income was $9,000. Because the [district] court's finding that husband's net monthly income is $9,000 is supported by husband's testimony regarding payments he made during the 18-month period, the finding has a reasonable basis in fact and was not clearly erroneous.
Simonsen v. Simonsen, No. C8-98-2064 (Minn.App. June 15, 1999), review denied (Minn. Aug. 25, 1999). Accordingly, husband fails to recognize that the district court reached its income determination by examining expenditures, not income. There is no need to deduct federal and state taxes because they were not included in the expenses the court recognized to determine income. Because this court previously determined that the district court's finding of husband's income was not clearly erroneous, it is unnecessary to revisit this issue. The district court made sufficient findings supporting its conclusion that husband has the means to pay the court-awarded portion of wife's attorney fees.