This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
IN COURT OF APPEALS
In Re the Marriage of:
Denise Affeldt-Boetcher, petitioner,
Polk County District Court
File No. FX98942
John D. Jeffrey, 610 Second Avenue NE, PO Box 329, East Grand Forks, MN 56721 (for respondent)
Shirley A. Dvorak, Moosbrugger, Dvorak & Carter, P.L.L.P., 311 South 4th Street, Suite 101, Grand Forks, MN 58201-4708 (for appellant)
Considered and decided by Kalitowski, Presiding Judge, Willis, Judge, and Halbrooks, Judge.
Appellant challenges the trial court’s dissolution judgment, arguing: (1) the trial court’s findings do not support its determinations regarding the parties’ marital and nonmarital interests in their property; (2) the trial court erred in valuing appellant’s business; (3) the trial court abused its discretion in setting appellant’s child-support obligation; and (4) the trial court abused its discretion in awarding respondent permanent maintenance. Respondent also filed a notice of review challenging: (1) the trial court’s valuation of the parties’ home and household goods; and (2) the trial court’s maintenance award of $1,000 per month. Because the trial court’s findings were not clearly erroneous and because it did not abuse its discretion in setting child support and maintenance, we affirm.
The parties were married on December 10, 1983. Respondent filed a petition for dissolution on July 27, 1998. The parties had four children during the marriage, two of whom died prior to the dissolution. The parties agreed that respondent would have physical custody of their two remaining children. At trial, appellant claimed a nonmarital interest in the parties’ home, condominium, and several investment accounts. The parties presented estimates of the value of the home, appellant’s business, and the household goods to assist the court in making an equitable division of the property. Respondent sought child support and maintenance and presented evidence of her needs and appellant’s income.
The trial court found that appellant failed to adequately trace his nonmarital interest in much of the disputed property. Accordingly, the property was characterized solely as marital property. The court also ordered appellant to pay the maximum amount of $1,780 per month in child support and $1,000 per month in permanent maintenance. The maintenance award was $1,000 less than the amount requested by respondent.
D E C I S I O N
As a preliminary matter, appellant argues that “[t]he trial court’s wholesale adoption and incorporation of [respondent’s] argument” constitutes reversible error. But a court’s adoption of a party’s proposed findings is not, by itself, reversible error. Kohn v. City of Minneapolis Fire Dept., 583 N.W.2d 7, 14 (Minn. App. 1998), review denied (Minn. Oct. 20, 1998). And, although findings adopted wholesale by the trial court may be subject to closer scrutiny by an appellate court, the findings remain subject to review under the “clearly erroneous” standard. Id.; Bliss v. Bliss, 493 N.W.2d 583, 590 (Minn. App. 1992), review denied (Minn. Feb. 12, 1993).
1. Nonmarital property
Ordinarily, nonmarital property is not divided between the parties to a dissolution. See Minn. Stat. § 518.58 (1998). Characterization of property as marital or nonmarital is a question of law, which this court independently reviews. Campion v. Campion, 385 N.W.2d 1, 4 (Minn. App. 1986). The trial court’s findings of fact underlying the determination, however, will not be disturbed unless clearly erroneous. Rosenberg v. Rosenberg, 379 N.W.2d 580, 582-83 (Minn. App. 1985), review denied (Minn. Feb. 19, 1986).
Property acquired by one spouse prior to marriage is nonmarital property. Minn. Stat. § 518.54, subd. 5(b) (1998). Property acquired subsequent to marriage is presumed to be marital property. Id., subd. 5. Moreover, if nonmarital property is commingled with marital property, it will lose its nonmarital character unless it can be traced. Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997). The trial court found that appellant had not adequately traced his nonmarital interest in the parties’ home and a number of investment accounts.
The Home. The parties purchased their first home in 1988. Appellant claimed that one-fourth of the purchase price was paid from savings he acquired prior to marriage. The parties’ home was later sold and the proceeds were used to purchase the parties’ present home.
The record contains no documentary evidence of the savings account and is unclear as to the origin of the purchase funds. Likewise, there is no indication whether the savings account contained any marital funds. Because the parties’ first house was not purchased until they had been married for four years, we conclude that the trial court’s finding that appellant did not sustain his burden of tracing was not clearly erroneous.
The Investment Accounts. Appellant challenges the trial court’s characterization of three investment accounts as wholly marital property. One of the accounts, a mutual fund, was opened after the parties were married. The record is unclear as to the origin of the money used to establish the fund and, therefore, the court did not err in concluding that the fund was marital property. The other two accounts present different considerations.
Both investment accounts were fully funded by appellant prior to marriage. During the marriage, however, appellant received dividends that were reinvested in the fund. The record is unclear as to whether these were cash dividends, but appellant admitted that the funds were available to him during the marriage and that he declared them as income on his tax returns.
The passive appreciation in value of nonmarital property is likewise nonmarital in nature. White v. White, 521 N.W.2d 874, 878 (Minn. App. 1994). On the other hand, income accrued during marriage from nonmarital property is marital property. Wiegers v. Wiegers, 467 N.W.2d 342, 344 (Minn. App. 1991). For example, this court has held that interest accrued during marriage on a nonmarital certificate of deposit was income and, thus, marital property. Swick v. Swick, 467 N.W.2d 328, 332 (Minn. App. 1991), review denied (Minn. May 16, 1991). In determining the interest was income, the Swick court noted that interest is taxable as income and that the interest was available as a liquid asset during marriage. Id.
Like the interest in Swick, appellant’s dividends were taxed as income and they were available as a liquid asset during the marriage. Accordingly, the dividends were marital property. Because the dividends were commingled with any other gains the fund may have had and because the record does not reflect any attempt to differentiate between different types of gains, all increases in the fund during the marriage were properly characterized as marital.
The question that remains is whether appellant should have been awarded, as nonmarital property, the value of the accounts at the time the parties were married. The trial court found that appellant failed to trace the nonmarital aspect of the fund. Because the record relating to the value of the accounts at the time of marriage lacks clarity, the claim that a mistake has been made is unsupported. Hence, we will not disturb the trial court’s findings.
The Annuity. Appellant established an annuity in 1976. By the time of the parties’ marriage, appellant had placed $13,000 in the annuity. Appellant testified that the parties invested $16,000 in the annuity during the marriage. Appellant’s accountant calculated appellant’s nonmarital share to be $100,199, based on a flat percentage rate of return of 9.2% for the entire period.
A spouse is generally entitled to receive his nonmarital property along with any passive appreciation of the property. White, 521 N.W.2d at 878. But, in the present case, the trial court could have reasonably concluded that appellant had not adequately traced the increases attributable to his nonmarital contribution. Specifically, the trial court could have rejected the calculations of appellant’s accountant. Based on those considerations, we decline to disturb the trial court’s findings.
The Condominium. The trial court found that appellant’s nonmarital interest in the parties’ condominium was $7,271, based on a percentage of the equity. Appellant argues that his nonmarital interest should have been based on a percentage of the value of the condominium as opposed to the equity. Respondent concedes that appellant is correct and that he should have been awarded the $8,800 he requested as nonmarital property. But appellant did not raise the issue in a posttrial motion and, in failing to do so, appellant failed to preserve the issue for appeal. See Novack v. Northwest Airlines, Inc., 525 N.W.2d 592, 596-97 (Minn. App. 1995).
Valuation of an asset is a question of fact and will not be set aside unless clearly erroneous. Danielson v. Danielson, 392 N.W.2d 570, 573 (Minn. App. 1986). The trial court’s valuation need not be “mathematically exact” as long as the amount “lies within a reasonable range of figures.” Thedens v. Thedens, 400 N.W.2d 821, 824 (Minn. App. 1987); see also Hertz v. Hertz, 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975) (“[V]aluation is necessarily an approximation in many cases.”).
Both parties challenge the trial court’s findings relating to the valuation of appellant’s business, the parties’ home, and their household goods. The parties presented estimates for the three items. The court accepted respondent’s estimate of the value of the business, appellant’s estimate of the home’s value, and chose a figure in between the two estimates for the household goods. In assessing the parties’ arguments, we are mindful of the deference given trial courts presented with conflicting testimony. Thedens, 400 N.W.2d at 824. Hence, we conclude that the court’s findings on valuation are not clearly erroneous.
3. Child support
The trial court has broad discretion in setting child support. Marden v. Marden, 546 N.W.2d 25, 27 (Minn. App. 1996). Child-support obligations are premised on the obligor-parent’s ability to pay. Schneider v. Schneider, 473 N.W.2d 329, 332 (Minn. App. 1991).
Appellant argues that the trial court erred in computing his income by averaging his income for the three years prior to the dissolution. Appellant does not challenge the propriety of averaging his income, but contends that the years of 1993-1997, as opposed to 1996-1998, should have been used.
Appellant argues that the time period chosen by the trial court distorted his income because 1997 and 1998 were unusually good years due to flood-related work. But his net monthly income in the non-flood years of 1993 ($5,448) and 1996 ($5,258) was fairly close to the flood year of 1997 ($5,768).
Appellate courts have not set any standard time period for averaging income. See, e.g., Veit v. Veit, 413 N.W.2d 601, 606 (Minn. App. 1987) (three-and-a-half years); Roehrdanz v. Roehrdanz, 410 N.W.2d 359, 363 (Minn. App. 1987) (five years), review denied (Minn. Oct. 28, 1987). Moreover, an inclusion of an unusually good or bad year in the time frame is not necessarily erroneous. See Veit, 413 N.W.2d at 606 (holding trial court did not err in including “financially disasterous year” in calculating obligor’s net monthly income). Accordingly, the trial court did not abuse its discretion in averaging appellant’s income from the three most recent years.
Appellant challenges the inclusion in his income of a $50,000 bonus he paid to himself in 1998. Appellant pays himself a salary of $60,000 per year. At some point in each year, appellant and his accountant meet to determine whether additional amounts should be paid as “bonuses.” Respondent testified that appellant regularly receives these annual bonuses.
Bonuses may be properly included in calculating income. Novak v. Novak, 406 N.W.2d 64, 68 (Minn. App. 1987), review denied (Minn. July 22, 1987). This court has held, however, that where bonuses vary in amounts and are not guaranteed, they might not be income for purposes of setting support. Haasken v. Haasken, 396 N.W.2d 253, 261 (Minn. App. 1986). But see Derosier v. Derosier, 551 N.W.2d 507, 509 (Minn. App. 1996) (affirming an award of child support based on bonuses that were variable in amount and were not guaranteed).
The Haasken “bonus” rationale simply does not apply in the present case. Because appellant is paying himself and has complete control over the bonuses, they are more like regular wage income, the variability of which has been taken into consideration by averaging appellant’s income. Thus, the bonus was properly considered in setting child support.
Appellant also challenges the trial court’s use of dividend and interest income in calculating his income. Appellant argues that some of the property producing the income would belong to respondent after the marriage. While the court’s attribution of all of the dividend and interest income to appellant may have slightly inflated his income, any resulting error is de minimis. See Wibbens v. Wibbens, 379 N.W.2d 225, 227 (Minn. App. 1985) (declining to remand for error with de minimis effect).
Finally, appellant challenges the trial court’s use of North Dakota tax rates in calculating his net income. Because appellant admitted he would probably be a North Dakota resident in 1999, the application of North Dakota rates was not erroneous.
The trial court has broad discretion in setting spousal maintenance. Thedens, 400 N.W.2d at 826. Appellant argues that the trial court abused its discretion by awarding permanent maintenance. Respondent argues that the trial court abused its discretion by awarding only $1,000 per month in maintenance.
A court may order maintenance if it finds that a spouse is unable to support herself adequately through employment or marital property in view of the standard of living established during the marriage. Minn. Stat. § 518.552 (1998). The maintenance issue essentially involves balancing the “recipient’s need against the obligor’s financial condition.” Crosby v. Crosby, 587 N.W.2d 292, 298 (Minn. App. 1998), review denied (Minn. Feb. 18, 1999).
Minn. Stat. § 518.552, subd. 2, sets forth the factors used to determine the duration of maintenance. The statute provides that “[n]othing in this section shall be construed to favor a temporary award of maintenance over a permanent award, where the factors under subdivision 2 justify a permanent award.” Minn. Stat. § 518.552, subd. 3. In Gales v. Gales, 553 N.W.2d 416, 419 (Minn. 1996), the supreme court noted that the legislature has established “with unmistakable clarity a presumption in favor of awarding permanent maintenance” as long as the district court considers each of the specific statutory criteria.
Here, the parties were married for 15 years and respondent was 41 at the time of the dissolution. Five years into the marriage, respondent stopped working full-time so that she could be at home with the parties’ terminally ill children. For the last ten years of the marriage, respondent was a homemaker and worked only part-time. Although respondent is a fully qualified teacher, she testified that her efforts to find full-time employment have been unsuccessful and that the potential for finding such employment is not promising. The record reflects that respondent has a need for maintenance and that appellant is able to pay $1,000 per month in addition to his child-support obligation. Given the presumption for permanent maintenance in doubtful cases and given the broad discretion of the trial court in setting maintenance, the award of permanent maintenance was not an abuse of discretion.
Respondent argues that the trial court erred in failing to award her $2,000 per month in maintenance. We disagree. The trial court reached the $1,000 figure after weighing the evidence and it is not this court’s role to reweigh the evidence and find its own facts. See Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997). Based on the record, the amount of the award is not an abuse of discretion.