This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
STATE OF MINNESOTA
IN COURT OF APPEALS
In Re the Marriage of:
Nancy Elaine Robinson, petitioner,
Max Bailey Robinson,
Filed March 6, 2001
Affirmed in part, reversed in part, and
Carver County District Court
File No. F0981856
Roselyn J. Nordaune, Nordaune & Friesen, 1140 Interchange Tower, 600 South Highway 169, St. Louis Park, MN 55426 (for respondent)
Maury D. Beaulier, Elizabeth H. Strand, The Beaulier Law Office, 5001 West 80th Street, Suite 745, Bloomington, MN 55437 (for appellant)
Considered and decided by Anderson, Presiding Judge, Klaphake, Judge, and Harten, Judge.
ROGER M. KLAPHAKE, Judge
On appeal from the judgment dissolving his marriage, appellant Max Robinson alleges that the district court incorrectly determined the extent of the parties’ nonmarital interests in various accounts, overvalued his business, and improperly awarded the parties the unequal amounts in their respective checking accounts. Because the findings do not explain the district court’s division of one account and show that the business was improperly valued, we reverse and remand on these issues. We affirm on the remaining issues because the district court’s rulings are supported by the record.
Absent a motion for a new trial, review is limited to whether the evidence supports the findings and whether the findings support the conclusions and the judgment. Gruenhagen v. Larson, 310 Minn. 454, 458, 246 N.W.2d 565, 569 (1976). Findings of fact are not set aside unless clearly erroneous. Minn. R. Civ. P. 52.01. When reviewing findings of fact, we view the evidence in the light most favorable to those findings. Kennedy v. Kennedy, 403 N.W.2d 892, 897 (Minn. App. 1987).
Generally, property acquired during a marriage is presumed to be marital. Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997); see Minn. Stat. § 518.54, subd. 5 (2000) (defining “marital property”). Whether property is actually marital or nonmarital is a legal question, but, when reviewing a district court’s ruling on the question, we defer to the underlying findings of fact unless they are clearly erroneous. Olsen, 562 N.W.2d at 800. Commingling of marital and nonmarital property is not fatal to a claim that property is nonmarital if the party claiming it to be nonmarital shows, by a preponderance of the evidence, that the property in question is the proceeds of his or her nonmarital property. Carrick v. Carrick, 560 N.W.2d 407, 413 (Minn. App. 1997).
Appellant alleges he is entitled to an additional $3,000 nonmarital interest in account 5511. The record shows that the $3,000 appellant transferred from his checking account to an account later “rolled over” into account 5511 was not necessarily his nonmarital property. Appellant’s checking account balance was less than $1,000 between the date of the marriage and the date of the first relevant transfer out of that account. Also, the nonmarital amounts allegedly transferred into appellant’s checking account from his business seem to exceed the nonmarital debt owed appellant by the business. Appellant also challenges the district court’s refusal to award him a nonmarital interest in account 5515. The burden is on appellant to actually trace his interest. See Coffel v. Coffel, 400 N.W.2d 371, 374 (Minn. App. 1987). Here, however, when asked about account 5515, appellant testified in a noncommittal fashion and simply alleged his purported interest could be traced. Under these circumstances and in light of appellant’s inconclusive tracing and documentation, we defer to the district court’s handling of accounts 5511 and 5515.
Appellant alleges he traced an additional $21,000 of his nonmarital funds into account 5617. Account 5617 is a substantial account, and the district court did not identify which $21,000 in the account could not be traced or why. Therefore, we cannot review the question. See Bliss v. Bliss, 493 N.W.2d 583, 590 (Minn. App. 1992) (stating findings and conclusions must be adequate to allow meaningful review), review denied (Minn. Feb. 12, 1993). We note, however, that appellant claims that much of the account was funded with gifts from his parents. See Minn. Stat. § 518.54, subd. 5 (a) (defining “[n]onmarital property” to include property “acquired by gift”). Therefore, we reverse the district court’s apportionment of marital and nonmarital interests in account 5617 and remand for the district court to readdress the question and explain whatever decision it makes.
The district court found that respondent traced a nonmarital interest from her premarital retirement accounts to the parties’ SEP account. That nonmarital interest included amounts earned by respondent’s premarital retirement accounts after the marriage but before the commingling of those accounts with the SEP account. Appellant alleges that these amounts are marital and cannot be respondent’s nonmarital property. See Wiegers v. Wiegers, 467 N.W.2d 342, 344-45 (Minn. App. 1991) (reversing ruling that interest earned during marriage by premarital certificate of deposit was nonmarital property). Amounts earned during a marriage on nonmarital funds kept separate from marital funds can be nonmarital. See Ranik v. Ranik, 383 N.W.2d 431, 435 (Minn. App. 1986) (where party deposited nonmarital funds into joint account used by party and party’s spouse, and party’s spouse deposited nonmarital inheritance into separate account not used for other purposes, this court affirmed rulings that amounts earned by party’s funds were marital but that interest earned by funds of party’s spouse were nonmarital, stating “[the] inheritance was always maintained in a separate account and the interest on the inheritance is readily traceable to [the] nonmarital property”), review denied (Minn. May 22, 1986). A similar analysis can be applied to retirement accounts. See White v. White, 521 N.W.2d 874, 878-79 (Minn. App. 1994) (affirming award to party of nonmarital interest in retirement account representing value account would have had if, at party’s marriage, party stopped working and stopped contributing to account but account continued earning interest). Here, as in Ramik and White, the contested amounts awarded to respondent were the amounts earned by her retirement funds at a time when they were separate from any marital funds and had not been impacted by any significant marital investment or spending decisions. Therefore, we affirm the district court’s treatment of the SEP account.
Apparently based on evidence from respondent’s expert, the district court stated that it valued appellant’s business at $92,000, assuming appellant would enter a noncompete agreement. The parties assume that the $92,000 figure does not represent the value of the business, but the value of the marital portion of the business. Appellant alleges the valuation violates Rogers v. Rogers, 296 N.W.2d 849, 852-53 (Minn. 1980), which precludes use of an income-based business valuation if the business’s income includes salaries of its employees and officers, other than as a distribution of profits. Respondent’s expert assumed a purchase price of 100 percent of the business’s gross commissions for the year ending in February 1999.
The business’s tax returns for the year ending in February 1999 show a gross revenue figure equal to the figure respondent’s expert used as the gross-commissions figure. The tax returns also show, however, that this figure had not been reduced for officer compensation, salaries, or wages. Additionally, the valuation does not separately value the noncompete agreement or apportion the agreement’s value between its nonmarital portion (compensating appellant for restriction of his postmarital personal services) and its marital portion (securing transfer of goodwill or intangible property of the business). See Sweere v. Gilbert-Sweere, 534 N.W.2d 294 (Minn. App. 1995) (discussing marital and nonmarital portions of noncompete agreement). Therefore, we reverse the valuation of appellant’s business.
On remand, the district court shall value the business consistently with Rogers and Sweere and shall explain its valuation. Also, the district court shall address whether the consideration of tax consequences is appropriate and explain its decision on that issue and whether its decision regarding the tax treatment of appellant’s business is consistent with its decision regarding the tax treatment of respondent’s business. See Aaron v. Aaron, 281 N.W.2d 150, 153 (Minn. 1979) (stating considering tax consequences is discretionary with district court). We reject appellant’s claim that the valuation is defective because it was not made as of the stipulated valuation date. Both parties’ experts valued the business as of the end of its fiscal year, February 28, 1999, and appellant alleges no prejudice as a result of the February valuation date.
After reducing the amounts in respondent’s checking accounts for various legitimate expenses, any disparity in the parties’ accounts is insufficient to require remand. See Rohling v. Rohling, 379 N.W.2d 519, 522 (Minn. 1986) (stating property division is discretionary with the district court and will be affirmed if it “has an acceptable basis in fact and principle even though [the appellate court] might have made a different disposition of the problem”) (quotation omitted); Ruzic v. Ruzic, 281 N.W.2d 502, 505 (Minn. 1979) (indicating division of marital property need not be mathematically equal, only just and equitable).
On remand, whether to reopen the record shall be discretionary with the district court. We express no opinion on how to resolve the remanded issues.
Affirmed in part, reversed in part, and remanded.