Nos. C1-00-111, C5-00-483, C7-00-503
Filed October 17, 2000.
Appeal from the District Court, Ramsey County, File No. FX971841.
Doris C. McKinnis, (for Lisa Dickey Cashin)
Anthony R. Rossini, Raymond D. Rossini, Jonathan H. Adams, (for Jim Lee Cashin)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1998).
This is a consolidated appeal from a July 2, 1999, judgment, a November 22, 1999, order amending the judgment, and a November 22, 1999, amended judgment. We affirm in part, reverse in part, and remand.
The parties were married in 1983, and separated in 1997. They have two minor children. The judgment granted joint legal custody of the children. Wife was granted sole physical custody, subject to visitation by husband.
Wife moved for amended findings or a new trial. Husband also moved for amended findings, but his motion was found to be untimely. Husband later moved for posttrial relief. The trial court granted this motion over wife's objections and issued an order and an amended judgment.
1. An appellate court will not reverse a trial court's valuation of an asset unless it is "clearly erroneous on the record as a whole." Hertz v. Hertz, 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975). A trial court need not be exact in its valuation of assets; "it is only necessary that the value arrived at lies within a reasonable range of figures." Johnson v. Johnson, 277 N.W.2d 208, 211 (Minn. 1979) (citing Hertz, 304 Minn. at 145, 229 N.W.2d at 44).
Wife challenges the trial court's valuation of her interest in Dental Health Care Center, P.A. (DHCC), a dental practice, and her interest in Professional Dental Partnership (PDP), a partnership that owns the building where the dental practice is located. She contends that the findings are not sufficient to support these valuations.
Jerry Bremer, a certified public accountant, valued wife's interest in DHCC at $285,000. Ronald J. Szarznski, a certified public accountant, valued the interest at $128,000. The trial court adopted the higher value, which was based, in part, on an assumption that wife would not sign a noncompete agreement. The trial court expressly found that wife had not shown that her ability to practice dentistry would be substantially impaired were she to sign a noncompete agreement as a condition of a sale of her interest in DHCC; therefore, the trial court concluded that no adjustment to the higher value was appropriate.
Wife also argues that the trial court failed to consider compensation for her services when calculating the net income of the business to determine its value. But the record establishes that in Bremer's calculations, wife's compensation was treated as a business expense. See Rogers v. Rogers, 296 N.W.2d 849, 852-53 (Minn. 1980) (stating that for valuation purposes, corporation's income should not include salaries of employee and officers, except to reflect profit distributions).
The fair market value of wife's interest in PDP was also disputed. Bremer valued the interest at $188,000, and Szarznski valued it at $47,000. The $47,000 value was a stipulated value under a buy/sell agreement; it was not based on a real estate appraisal. The trial court specifically rejected the stipulated value and adopted the $188,000 value.
The trial court acted within its discretion in declining to accept the valuations submitted by wife's expert. See Alstores Realty, Inc. v. State, 286 Minn. 343, 353, 176 N.W.2d 112, 118 (1970) (stating weight and credibility of expert testimony is for fact-finder to determine).
Wife argues that Bremer was not a competent witness because he served as a mediator in the early stages of the dissolution action and participated in settlement efforts. The portion of the record cited by wife to support her argument that Bremer served as a mediator does not indicate that he was a mediator at any stage in the proceedings.
Finally, wife argues that Bremer's valuation of PDP did not take into account the proximity of the building to the Minneapolis/St. Paul international airport. But wife did not present any evidence that the proximity of the building to the airport affects the value of the building. Wife only testified that someone from the city said that the building would be condemned. Even if the building were condemned, the condemnee would be entitled to "just compensation" amounting to its fair market value. City of Rochester v. Northwestern Bell Tel. Co., 481 N.W.2d 874, 876 (Minn.App. 1988), review denied (Minn. Jan. 13, 1989).
Husband challenges the trial court's valuation of the parties' homestead. Husband submitted an appraisal that valued the homestead at $312,000. Wife estimated the fair market value of the homestead to be $290,000. See Johnson v. Johnson, 392 N.W.2d 922, 925 (Minn.App. 1986) (owner of property may testify to its value). Wife testified:
There are some joists in the flooring that have cracked in half. They have been inspected by both the city inspector and a private inspector and called failures. The builder would not replace them, but when the appraiser was out for this proceeding the appraiser stated that they would have to be removed and replaced to sell the property.
Wife also testified that there was a problem with the material used for the driveway, that the driveway had to be replaced once, and that the problem still exists.
The trial court found that husband's appraisal "did not take into account the serious structural problems that would have to be repaired to make the home marketable," and adopted wife's estimated value. Husband contends that his written appraisal took into account the structural problems. The comment addendum of husband's appraisal states:
IT APPEARS THERE IS A PROBLEM WITH THE FLOOR JOIST UNDER THE LIVING ROOM. TO PROPERLY INSPECT AND CORRECT THIS PROBLEM, PORTIONS OF THE FINISHED CEILING IN THE FINISHED FAMILY ROOM NEED TO BE REMOVED. THE PROPERTY OWNER TOLD ME THERE WAS A PROBLEM WITH THE LAWN, WHICH MAY REQUIRE SOME REMEDIAL ACTION. OTHER ITEMS NOTED WERE CONSIDERED AND TAKEN INTO ACCOUNT AS PART OF THE PHYSICAL DEPRECIATION FOR THE PROPERTY. AN ADDITIONAL $5,000.00 WAS ADDED TO REFLECT THE PROBLEMS NOT CONSIDERED AS NORMAL PHYSICAL DEPRECIATION.
Although husband's appraisal appears to refer to the same structural problem that wife described in her testimony, it describes the problem as an apparent problem that the appraiser could not properly inspect. It does not indicate that there are floor joists that will have to be replaced before the property can be sold. Because wife described a much more serious structural problem than the problem addressed in the appraisal, we cannot conclude that the trial court erred by concluding that the appraisal did not take into account the serious structural problems that would have to be corrected before selling the house.
The record as a whole supports the trial court's valuations. The values are not outside the reasonable ranges of values submitted at trial.
2. Wife argues that because there were sufficient assets in the marital estate to compensate her for her interest in husband's pension, a qualified domestic relations order (QDRO) was not appropriate. Although it might have been possible for the trial court to accomplish a comparable overall division of marital property without using a QDRO to award wife an interest in husband's pension, the fixed-percentage method applied to husband's pension
should be used where present value determinations are unacceptably speculative or there are not enough assets to equitably require that benefits due in the future be split presently.
Taylor v. Taylor, 329 N.W.2d 795, 799 (Minn. 1983). Because husband is only 46 years old, the value of his pension benefit at retirement is speculative. The trial court did not abuse its discretion by using a QDRO to divide husband's pension.
3. To accomplish an equal division of the marital property, the trial court ordered wife to pay husband $157,716 and imposed an eight-percent interest rate on any unpaid amount beginning on April 21, 1998, the valuation date. Wife contends that this interest rate "is outrageous and must be overturned," but she does not cite any authority or make any argument why the rate is improper.
An assignment of error based on mere assertion and not supported by any argument or authorities in appellant's brief is waived and will not be considered on appeal unless prejudicial error is obvious on mere inspection.
4. Wife argues that the trial court abused its discretion when it selected the valuation date for certain retirement accounts.
Minn. Stat. § 518.58, subd 1 (1998), provides:
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.
The first pretrial hearing was initially scheduled for April 21, 1998. In paragraph 35 of the findings of fact in both the original judgment and the amended judgment, the trial court referred to April 21, 1998, as the valuation date. But in the original judgment, the court valued husband's pension plan and wife's profit-sharing plan as of December 31, 1998. In the amended judgment, the trial court valued both retirement funds as of April 21, 1998.
The parties did not agree to a valuation date other than April 21, 1998, and the court made no finding that another date was fair and equitable. It appears that the court simply corrected the erroneous valuation date used for the pension and profit-sharing plans in the original judgment. The court properly used April 21, 1998, as the valuation date. See Wopata v. Wopata, 498 N.W.2d 478, 485 (Minn.App. 1993) (holding investment account should have been valued as of date of prehearing conference where parties did not agree to different date and court did not make required finding).
5. Wife contends that the parties' timeshare unit is worth nothing, and she should have been awarded the unit because she maintained it without assistance from husband since the time of their separation.
In the original judgment, conclusion of law nine directed that the timeshare be sold and the proceeds deposited in a custodial account for the children. This was apparently based on a determination that the timeshare was purchased with money from the children's college fund.
In wife's motion for amended findings, she requested:
18. Striking in its entirety Conclusions of Law paragraph 9 pursuant to Rule 59.01(g), and ordering that [wife] shall receive the Sol Caribe timeshare, as she has already repaid the children's other accounts over time for the moneys withdrawn to purchase the timeshare[.]
In his motion for amended findings, husband requested:
7. Similarly, amending Conclusion of Law 9 to award [wife] sole ownership of the Sol Caribe Vacation Club interest [the timeshare], striking the requirement that the interest be sold, and reflecting [wife's] receipt of such interest on Schedule A.
The trial court granted the request to strike conclusion of law nine, but it did not state what was to be done with the timeshare unit. In exhibit A in both the original and amended judgments, the timeshare is listed as an asset with no net equity and a zero appears in the list of assets awarded to wife. Because we cannot determine what the trial court intended with regard to the timeshare unit, we remand for its determination.
6. Husband contends that the trial court's findings with regard to child custody lacked the degree of particularity required when the trial court's custody determination contradicts recommendations in the child-custody study. Husband contends that the trial court disregarded the recommendations of Jane McNaught Stageberg, Ph.D., without making any findings regarding its reasoning. Husband also argues that the trial court treated the primary caretaker factor as a presumption in determining the best interests of the children.
A child's best interests serve as the focal point in a custody determination. Minn. Stat. § 518.17, subd. 1(a) (1998); Berndt v. Berndt, 292 N.W.2d 1, 2 (Minn. 1980). A trial court must make findings that reflect the trial court's consideration of the factors listed in Minn. Stat. § 518.17, subd. 1(a). Rosenfeld v. Rosenfeld, 311 Minn. 76, 82-83, 249 N.W.2d 168, 171-72 (1976). A court has discretion to reject a custody evaluator's recommendation, but it must make findings showing why it rejected the recommendation. See Roehrdanz v. Roerhdanz, 410 N.W.2d 359, 362 (Minn.App. 1987) (affirming custody determination when trial court made findings on statutory factors and explained why it rejected custody study recommendation), review denied (Minn. Oct. 29, 1987); Lawver v. Lawver, 360 N.W.2d 471, 472-73 (Minn.App. 1985) (remanding custody determination that was contrary to custody study recommendation when trial court made no findings on statutory factors).
It is sufficient if the findings as a whole reflect that the trial court has taken the statutory factors into consideration, in so far as they are relevant, in reaching its decision.
Rosenfeld, 311 Minn. at 83, 249 N.W.2d at 172; see also Rutanen v. Olson, 475 N.W.2d 100, 104 (Minn.App. 1991) (affirming custody determination that was contrary to custody study recommendation when trial court did not explain its rationale for rejecting recommendation but did provide detailed findings on statutory factors).
In her report, Stageberg noted that, since their separation, the parties "have had significant difficulty working together, particularly around the issues of scheduling." Stageberg also noted that "both parents have altered visitation arrangements when they are angry towards the other parent." The trial court concluded:
Having considered both reports, the visitation expeditor's recommendations, both parties' testimony, Dr. Stageberg's testimony, and the analysis required by statute, the Court finds that to promote the children's best interests, the parties should share legal custody of the minor children and that [wife] should continue to have primary physical custody. The Court finds that [wife's] purported somewhat rigid style of child rearing and her depression are not in any way injurious to the health, safety or welfare of the minor children. She is the primary care giver and should continue in that capacity. [Wife] meets all the criteria of Minnesota Statutes § 518.17. The Court will reinstate the reasonable and liberal visitation schedule it originally set with [husband] having alternating weekends and holidays. It is important to the children to have an ongoing relationship with both parents. Both parents have remedies for interference with scheduled visitation and for any conflict that may arise therefrom under statute.
This statement indicates why the trial court rejected Stageberg's recommendation. The trial court recognized that there had been problems with visitation. But the court also recognized that to deal with these problems, it was not necessary to change the custody arrangement as Stageberg recommended. Instead, the court concluded that both parents could use existing legal remedies to deal with these problems. The court ultimately concluded that maintaining the current custody arrangement and using existing remedies to deal with visitation problems was preferable to dealing with visitation problems by changing custody.
We also conclude that the trial court did not treat the primary-caregiver factor as a presumption. The trial court's custody findings indicate that either parent could provide a suitable home for the children, but the parents cannot cooperate to the extent necessary to share physical custody. Therefore, the trial court had to decide which of the parents would receive physical custody, and the primary-caregiver factor tipped the scale in favor of wife.
7. Husband argues that the trial court erred in applying Minn. Stat. § 518.54, subd. 5 (1998), to wife's nonmarital claims in an IRA, the homestead, and the stock in her dental practice.
"All property acquired by either spouse subsequent to the marriage and before the valuation date is presumed to be marital property." Minn. Stat. § 518.54, subd. 5. The presumption that property is marital property may be overcome by showing that the property is nonmarital. Id.
"Nonmarital property" means property real or personal, acquired by either spouse before, during, or after the existence of their marriage, which
(a) is acquired as a gift, bequest, devise or inheritance made by a third party to one but not to the other spouse;
(b) is acquired before the marriage;
(c) is acquired in exchange for or is the increase in value of property which is described in clauses (a), (b), (d), and (e);
(d) is acquired by a spouse after the valuation date; or
(e) is excluded by a valid antenuptial contract.
Id. "Whether property is marital or nonmarital is a question of law, but a reviewing court must defer to the trial court's underlying findings of fact." Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997).
Husband argues that wife failed to meet her burden of proving a nonmarital interest in the Fidelity IRA. The trial court found that wife established the IRA account before the marriage and that wife's interest in the IRA was worth $1,743.42 at the time of the marriage. The trial court then traced the increase in value of this $1,743.42 during the marriage to determine the value of wife's nonmarital interest in the IRA at the time of the dissolution. Husband contends that any amount in excess of the original $1,743.42 was "active" appreciation and therefore marital property.
"Active appreciation occurs when the parties contribute to the asset's increase in value during the marriage." Swick v. Swick, 467 N.W.2d 328, 331 (Minn.App. 1991) review denied (Minn. May 16, 1991).
[T]he increase in the value of nonmarital property attributable to the efforts of one or both spouses during their marriage, like the increase resulting from the application of marital funds, is marital property.
Nardini v. Nardini, 414 N.W.2d 184, 192 (Minn. 1987). "[I]ncreases in value during marriage attributable to efforts of the spouses, whether by financial investment, labor, or entrepreneurial decision-making, are marital property." White v. White, 521 N.W.2d 874, 878 (Minn.App. 1994). "Conversely, an increase in the value of nonmarital property attributable to inflation or to market forces or conditions, retains its nonmarital character." Nardini, 414 N.W.2d at 192.
Statements for the IRA account indicate that on the date of the marriage, the money in the IRA was invested in a cash account. Later statements, and wife's testimony, indicate that during the marriage, all of the money in the cash account was transferred into other investments, but remained in the IRA account. The increase in value of these other investments accounted for most of the increased value of the IRA. The increased value of the IRA attributable to decisions to transfer money from the cash account to other investments is attributable to the efforts of the spouses and is, therefore, marital property. Wife's nonmarital interest in the IRA is limited to the amount in the cash account on the date of the marriage plus any increase in that amount while the money remained in the cash account. Because the trial court included in wife's nonmarital interest in the IRA the increases in value that occurred after money was transferred out of the cash account, we reverse the determination of the nonmarital amount and remand for redetermination.
Husband argues that because the parties purchased the home they owned immediately before the present homestead for $92,300 and they took out a $93,100 loan to purchase the home, there was no nonmarital equity in the previous home to roll over into the present homestead. He contends, therefore, that the entire amount of equity in the present homestead resulted from appreciation during the marriage, and wife has no nonmarital interest in the homestead.
Husband's argument ignores the fact that although the purchase price of the parties' previous home was $92,300, that amount did not include the settlement charges they had to pay to close the sale. The total amount that they had to pay to complete the transaction was $101,316.16. To pay this amount, they used a $93,100 mortgage loan, $1,000 from an unidentified source, and $7,216.16 of nonmarital funds wife received from the sale of a condominium she owned before the marriage. This contribution of nonmarital funds gave wife a nonmarital interest in the previous homestead that grew to $8,533.20 when the parties sold the previous homestead for a gain. The $8,533.20 was then used to purchase the current homestead.
We affirm the trial court's determination of wife's nonmarital interest in the homestead.
Husband argues that wife failed to meet her burden of proving any nonmarital interest in her dental practice. Exhibit A, which is attached to the judgment and summarizes the property distribution, indicates that wife's interest in the dental practice is worth $285,000 and that the nonmarital portion of this amount is $18,800. The trial court awarded wife her entire interest in the dental practice. But neither the findings of fact nor the conclusions of law address any nonmarital interest in the dental practice. Because we cannot determine the basis of the statement in exhibit A that wife has a nonmarital interest in the dental practice, we remand for findings regarding the nonmarital interest.
8. In his trial brief, husband requested both need-based and conduct-based attorney fees. Husband argues that the trial court did not consider his request for conduct-based fees.
Except as provided in subdivision 2, in a proceeding under this chapter, the court shall award attorney fees, costs, and disbursements in an amount necessary to enable a party to carry on or contest the proceeding, provided it finds:
(1) that the fees are necessary for the good-faith assertion of the party's rights in the proceeding and will not contribute unnecessarily to the length and expense of the proceeding;
(2) that the party from whom fees, costs, and disbursements are sought has the means to pay them; and
(3) that the party to whom fees, costs, and disbursements are awarded does not have the means to pay them.
Nothing in this section precludes the court from awarding, in its discretion, additional fees, costs, and disbursements against a party who unreasonably contributes to the length or expense of the proceeding.
Minn. Stat. § 518.14, subd. 1 (1998) (emphasis added).
Husband argues that the trial court did not consider whether wife unreasonably contributed to the length of the proceeding. The trial court found:
Minn. Stat. § 518.14 provides that fees may be awarded only when the fees are necessary for the good-faith assertion of the party's rights, the party from whom fees are sought has the means to pay them, and the party seeking fees does not have the means to pay them. [Husband's] claim does not meet the requirements of the statute.
Because the trial court's findings indicate that it incorrectly believed that fees could not be awarded unless both need and an ability to pay were demonstrated, we remand to permit the trial court to consider husband's request for an award of conduct-based attorney fees. See Dabrowski v. Dabrowski, 477 N.W.2d 761, 766 (Minn.App. 1991) (fee award under Minn. Stat. § 518.14 may be based on impact party's behavior has had on litigation costs regardless of relative financial resources of parties).
9. Husband argues that the trial court erred when it denied him a spousal-maintenance award without addressing the factors in Minn. Stat. § 518.552 (1998) and without making findings that support the decision to deny maintenance. We review a trial court's maintenance determinations under an abuse-of-discretion standard. Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997); Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982). The trial court's resolution of the maintenance issue must be "against logic and the facts on record before this court will find that the trial court abused its discretion." Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
In a proceeding for dissolution of marriage * * * the court may grant a maintenance order for either spouse if it finds that the spouse seeking maintenance:
(a) lacks sufficient property, including marital property apportioned to the spouse, to provide for reasonable needs of the spouse considering the standard of living established during the marriage, * * * or
(b) is unable to provide adequate self-support, after considering the standard of living established during the marriage and all relevant circumstances * * *.
Minn. Stat. § 518.552, subd. 1. The trial court denied maintenance to either party because "both parties are economically self sufficient." The record supports this determination.
Husband claimed reasonable monthly expenses of $2,180, and the trial court found that this amount is reasonable. The trial court also found that husband's net monthly income is $3,227.71. With these expenses and this income, husband has a small monthly surplus after paying $968.13 in monthly child support. The amended judgment also awards husband a substantial amount of marital property, which includes a $157,716 payment within 180 days after the judgment. Given husband's ability to meet his needs with his current income and the substantial property award, the trial court did not abuse its discretion by not awarding husband maintenance. See Lyon v. Lyon, 439 N.W.2d 18, 22 (Minn. 1989) (maintenance depends on showing of need); Fink v. Fink, 366 N.W.2d 340, 342 (Minn.App. 1985) (noting income generated by maintenance recipient's liquid assets to be considered when determining need for maintenance).
Husband argues that Minn. Stat. § 518.552 requires that the court make findings supporting its decision not to award maintenance. But Minn. Stat. § 518.552 provides that the court may grant a maintenance order if it finds that the conditions of the statute are met; it does not require findings if no maintenance order is granted.
We express no opinion regarding how to resolve the remanded issues. Also, on remand, whether to reopen the record shall be discretionary with the district court. If any of the district court's rulings on remand require that the property division be adjusted to achieve an equitable property distribution, the district court shall have the discretion to adjust the property division accordingly.
Affirmed in part, reversed in part, and remanded.