This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
STATE OF MINNESOTA
IN COURT OF APPEALS
Ronald Arthur Bongard, petitioner,
Patricia Ann Bongard,
Affirmed in part, Reversed in part, and Remanded; Motion Granted
Ramsey County District Court
File No. F099489
Leland S. Watson, 836 Wells Fargo Midland Building, 401 South Second Avenue, Minneapolis, MN 55401; and
John F. Gilsdorf, Gilsdorf & Askvig, 1712 Firstar Center, 101 East Fifth Street, St. Paul, MN 55101 (for respondent)
M. Sue Wilson, Lymari J. Santana, M. Sue Wilson Law Offices, P.A., Two Carlson Parkway, Suite 150, Minneapolis, MN 55447 (for appellant)
Considered and decided by Kalitowski, Presiding Judge, Hudson, Judge, and Poritsky, Judge.*
U N P U B L I S H E D O P I N I O N
Appellant Patricia Ann Bongard argues that the district court (1) abused its discretion by setting the amount of permanent spousal maintenance at only $1,040 per month; (2) abused its discretion in its division of marital property; (3) abused its discretion in calculating the premarital value of respondent’s business; (4) erred by classifying certain shares of stock as nonmarital property; and (5) abused its discretion by issuing a decision on appellant’s motion to amend the judgment or for a new trial without reviewing the trial transcript. Respondent made a motion to strike parts of appellant’s brief. We affirm the award of maintenance, the property division, the valuation of the business, and the denial of appellant’s posttrial motions. We reverse and remand the classification of respondent’s two IRAs and Manulife stock as nonmarital property and grant respondent’s motion to strike.
Determination of spousal maintenance is within the district court’s broad discretion. Stich v. Stich, 435 N.W.2d 52, 53 (Minn. 1989). This court reviews a district court’s maintenance award 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). For this court to conclude the district court abused its broad discretion with respect to an award of spousal maintenance, the district court’s findings must be “against logic and the facts on [the] record.” Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984) (citation omitted). “Findings of fact concerning spousal maintenance must be upheld unless they are clearly erroneous.” Gessner v. Gessner, 487 N.W.2d 921, 923 (Minn. App. 1992) (citation omitted). A finding is clearly erroneous if the reviewing court is left “with the definite and firm conviction that a mistake has been made.” Gjovik v. Strope, 401 N.W.2d 664, 667 (Minn. 1987) (citation omitted). Evidence is viewed in the light most favorable to the district court’s findings, and this court defers to the district court’s credibility determinations. Vangsness v. Vangsness, 607 N.W.2d 468, 472 (Minn. App. 2000). Because the district court, as the fact-finder, is charged with reconciling conflicting evidence, the fact “[t]hat the record might support findings other than those made by the trial court does not show that the court’s findings are defective.” Id. at 474 (citations omitted).
Appellant argues that the district court abused its discretion by setting respondent’s permanent spousal maintenance payments at only $1,040 per month. Appellant contends that this amount is erroneous because the district court erred by (1) finding that respondent earned $95,000 in income per year; (2) finding that appellant’s monthly expenses were only $3,032 per month; and (3) erroneously imputing income to appellant.
Appellant contends the district court improperly failed to include payments that respondent received from other sources when the court calculated respondent’s yearly income. Appellant argues that if the district court had properly included these payments in its calculation, it would have found that respondent earned more than $95,000 a year.
Given the varying testimony provided by respondent, appellant’s expert, and the neutral court-appointed expert on this issue, the district court’s finding that respondent had a yearly income of $95,000 for 2001 was not clearly erroneous. Appellant’s expert witness calculated respondent’s income to be $113,250. But respondent testified that due to the loss of the company’s second largest income producing line, Aqua Glass, respondent’s income would only be $53,000. The neutral court-appointed expert calculated respondent’s income by projecting out a reasonable compensation for respondent based on respondent receiving 12.9% of the revenues of the corporation. He then calculated that the Bongard Corporation had earned $856,847 in sales for the year ending March 31, 2001. By multiplying that total by 12.9%, the court-appointed expert determined that respondent had an income of approximately $110,000. But based on the loss of Aqua Glass, the expert projected that the Bongard Corporation may lose approximately $120,000 in revenue, dropping sales revenue to $736,847. Multiplying that total by 12.9% would put respondent’s yearly income at approximately $95,000.
Thus, based on the conflicting evidence presented at trial, the court’s finding that respondent earned $95,000 in income was within a reasonable range of figures and therefore not clearly erroneous. See Schreifels v. Schreifels, 450 N.W.2d 372, 373 (Minn. App. 1990).
Appellant claimed monthly living expenses of $4,499 per month, but the district court reduced that total by $1,467 and found that reasonable living expenses for appellant were only $3,032 a month. The district court deducted (1) $1,000 per month for attorney fees; (2) $200 from appellant’s claim of $265 per month for church donations; (3) $100 per month for cigarettes; and (4) $167 per month for retirement savings. Appellant argues the district court abused its discretion by making these deductions. We disagree.
The district court must determine “reasonable expenses” for a party seeking maintenance. Even though appellant submitted a budget listing her monthly expenses, the district court was not required to accept those expenses as reasonable. See Maeder v. Maeder, 480 N.W.2d 677, 678, 680 (Minn. App. 1992) (affirming district court’s finding that respondent’s reasonable expenses were less than claimed expenses), review denied (Minn. Mar. 19, 1992).
Based on the testimony presented at trial, the district court did not abuse its discretion in determining appellant’s monthly expenses. First, there is evidence to support the district court’s finding that the $1,000 per month for attorney fees was unreasonable because the fees will stop accumulating after the completion of this litigation. Second, the court could properly reduce the $265 a month for church donations to $65 per month because there was evidence that in the past respondent and appellant gave only “a small amount to the church.” Third, it was not unreasonable for the district court to deduct the $100 claimed for cigarettes because appellant’s medical records show that appellant uses medication to help her quit smoking. Finally, because appellant was given $105,204 for her share of equity in the homestead, $18,075 as a cash equalizer for the property division, and approximately $108,000 in retirement accounts, it was not unreasonable for the district court to deduct appellant’s claim of $167 a month for retirement savings on the ground that appellant already has sufficient funds for retirement.
The district court imputed part-time income of $987 per month to appellant. The district court imputed income to appellant based on the fact that appellant worked during the marriage and based on the finding that appellant is still capable of obtaining employment.
Appellant contends the district court erred because (1) the district court failed to find that appellant was unemployed in bad faith; (2) appellant could not work part time; and (3) the district court failed to take into account that if appellant earned the wages imputed to her, she would no longer be able to collect any social security disability payments.
On the facts here, the district court was not required to find that appellant was unemployed in bad faith. In Robert v. Zygmunt, 652 N.W.2d 537, 545 (Minn. App. 2002), review denied (Minn. Dec. 30, 2002), this court required a finding of bad faith before a district court could impute income to a longtime homemaker. Appellant does not fit this category because she was continuously employed during her marriage to respondent. Because appellant was not a homemaker, the district court did not err by imputing income to appellant without a finding of bad-faith unemployment.
The district court also did not err by finding that appellant is still capable of working part time. Just weeks prior to the trial, appellant was terminated from a $30,000 a year job. But the termination was not related to appellant’s physical condition. Rather, appellant testified that she was fired because she made too many mistakes. Moreover, two doctors, including appellant’s personal physician, agreed that appellant’s physical condition did not prevent her from obtaining employment. Specifically, a rehabilitation psychologist testified that after talking with appellant about her illnesses, he felt that “she can work on a full-time basis.” And appellant’s personal physician testified that even though appellant will be limited in her ability to stand for more than 15 to 20 minutes at a time, he believed “there will be times when she can work eight-hour days on a regular basis.” Thus the district court did not error by imputing $987 a month in income to appellant based on a 20-hour workweek.
Finally, appellant contends that the district court erred by imputing both employment income and social security disability benefits to appellant. Appellant argues that this calculation is erroneous because appellant believes that if she earns more than $780 per month at a job, her disability benefits will be taken away.
There was testimony at trial indicating that appellant could receive both wages and social security benefits. Appellant testified that she worked at Promotion Resource Alliance, Inc. beginning in August 2000 and remained employed there until she was terminated in July 2001. Despite this employment at a job that paid appellant $30,000 a year, appellant continued to receive social security benefits. Therefore, we cannot say the district court erred by imputing both wages and social security benefits to appellant. Moreover, if in the future appellant gets a job that affects her social security benefits, appellant could at that time bring a motion to modify maintenance.
Because the findings of fact concerning spousal maintenance are not clearly erroneous, the district court did not abuse its discretion in calculating permanent spousal maintenance.
District courts have broad discretion over the division of marital property, and the division will not be disturbed on appeal absent a clear abuse of discretion. Rutten, 347 N.W.2d at 50. For the court to conclude that the district court abused its discretion, the district court’s fact-findings must be “against logic and the facts on [the] record.” Id. On appeal, the court will affirm the district court’s division of property “if it had an acceptable basis in fact and principle even though this court may have taken a different approach.” Servin v. Servin, 345 N.W.2d 754, 758 (Minn. 1984) (citations omitted). “A trial court’s division of marital property need not be mathematically equal; it need only be just and equitable.” Lynch v. Lynch, 411 N.W.2d 263, 266 (Minn. App. 1987) (citations omitted).
Appellant first contends that the district court abused its discretion by completely ignoring appellant’s claims to certain household goods. We disagree. At trial, appellant introduced Exhibit 164 to show how appellant believed the personal property should be divided. Appellant was asked by her own attorney whether the property was “roughly divided like this right now?” Appellant answered, “Yeah.” Therefore, based on the testimony presented at trial, the district court did not abuse its discretion by allowing the household goods to remain divided as they had been after appellant moved out of the homestead.
Appellant also contends that the district court abused its discretion by awarding the homestead to respondent. First, appellant contends that the court did not consider the factors mandated by Minn. Stat. § 518.58, subd. 1 (2002), in its decision. But the record indicates that the district court adequately addressed the required factors in its decision. The court discussed the length of the marriage; the age and health of the parties; the income and expenses of the parties; and the employability of the parties.
Appellant next claims that awarding the homestead to respondent prevented a just and equitable division of the assets because respondent was also awarded his interest in Bongard Corporation and all of the interest in Bongard Properties. But the record does not indicate that the court divided the marital property in an unfair or inequitable way. Although respondent was awarded the home, appellant was awarded $105,204 for her share of the equity in the home, a cash equalizer of $18,075, and approximately $108,000 in retirement accounts. We cannot say the district court abused its discretion.
Finally, appellant contends that by awarding the homestead to respondent, the district court improperly discriminated against appellant based on her physical disabilities. The district court stated that
it would be inappropriate to restore [appellant] to the homestead given the multi-level nature of the structure, the size of the yard and home, and [appellant’s] debilitating physical condition.
We reject appellant’s argument that the court’s stated reason for the award violates state and federal discrimination laws. Minn. Stat. § 518.58, subd. 1, states that when dividing marital property, a court shall base its findings, in part, on the age and health of each party. That is what the court did in this instance.
In addition, the court’s finding that appellant’s physical condition would make it difficult for her to live in the large homestead is supported in the record and is not inconsistent with the court’s finding that appellant could work part time. While appellant is capable of working, the testimony elicited from the doctors at trial indicates that any job appellant acquires cannot involve much physical exertion due to appellant’s physical condition. But the record indicates that if the court had awarded the homestead to appellant, appellant would have been responsible for maintaining a five-level home with an interior of almost 4,000 square feet, despite the fact that her personal physician stated that appellant’s knees bother her in “going up steps.” Thus, the evidence supports the court’s finding that the homestead’s size, coupled with appellant’s physical condition, made the home difficult for appellant to live in and maintain and the district court did not abuse its discretion in awarding the homestead to respondent.
Asset valuations are findings of fact and will be affirmed if they fall within the limits of credible estimates made by competent “witnesses even if it does not coincide exactly with the estimate of any one of them.” Hertz v. Hertz, 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975). An appellate court does not require the district court to be exact in its valuation of assets; “it is only necessary that the value arrived at lies within a reasonable range of figures.” Id. at 44. Nonetheless, exercise of the district court’s discretion “is not unlimited and should be supported by either clear documentary or testimonial evidence or by comprehensive findings issued by the court.” Ronnkvist v. Ronnkvist, 331 N.W.2d 764, 766 (Minn. 1983).
The district court found that the nonmarital component of the Bongard Corporation existing as of the end of the fiscal year ended March 31, 1992, was $83,000. Appellant contends the district court abused its discretion in its valuation of the nonmarital component of the corporation and that the court should have adopted the figure of $52,000, the value determined by appellant’s expert appraiser.
But the district court reached this $83,000 figure based on the testimony and findings of the neutral court-appointed expert. Therefore, the district court’s decision was supported by documentary and testimonial evidence that was presented at trial. Moreover, that evidence was verified by appellant’s own expert, who testified that the court-appointed expert’s valuation method was not incorrect and that the discounted cash flow method that the neutral expert used was very common in valuing a business. Appellant’s expert simply calculated a different value by using a different valuation method.
The district court has discretion to choose one appraiser over another and “by taking one of two proffered appraisals, the trial court cannot be said to have erred.” Kostelnik v. Kostelnik, 367 N.W.2d 665, 669 (Minn. App. 1985), review denied (Minn. July 26, 1985).
Nonmarital property includes property acquired before the marriage. Minn. Stat. § 518.54, subd. 5 (2002). 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 (defining “marital property”). An appellate court will not defer to a district court’s legal conclusion about the marital or nonmarital nature of property. White v. White, 521 N.W.2d 874, 877 (Minn. App. 1994). Whether property is marital or nonmarital is a question of law, which this court reviews with independent judgment. Id. A party asserting property to be nonmarital must show it to be so by a preponderance of the evidence. Olsen, 562 N.W.2d at 800. Facts underlying a finding that property is marital or nonmarital will be set aside only if clearly erroneous. Id.
Appellant disputes the district court’s classification of certain assets as nonmarital property. Appellant argues that part of two of the IRAs that respondent maintained during the marriage should have been classified as marital property. Appellant also argues that part of the 1,564 shares of common stock that were distributed to respondent in October 1999 should have been classified as marital property.
Prior to his marriage to appellant, respondent’s assets included two IRAs, one with First Bank and one with Matheson Financial. The premarital value of these IRAs was approximately $38,000 each. The First Bank IRA was opened as a self-directed IRA and is now held by U.S. Bank. The IRA with Matheson Financial was respondent’s retirement plan through Bongard Corporation. In 1994, after the parties’ marriage, respondent decided to roll over the funds in the Matheson IRA into the current Fidelity IRA. The district court found that the value of the U.S. Bank IRA as of June 29, 2001, was $69,521.71 and that the value of the Fidelity Investments IRA as of June 30, 2001, was $77,141.61.
The district court found that each of these IRAs was a premarital asset of respondent and that respondent sufficiently traced the accounts by a preponderance of the evidence from respondent’s premarital account to the current accounts as of the valuation date. Based on this finding, the district court awarded all right, title, and interest in respondent’s U.S. Bank IRA and Fidelity Investment IRA to respondent. Appellant argues that the district court finding was clearly erroneous because the evidence presented at the trial showed that respondent actively managed those IRAs.
In Swick v. Swick, 467 N.W.2d 328, 331 (Minn. App. 1991), review denied (Minn. May 16, 1991), this court stated that “[w]e have distinguished between the treatment of active and passive appreciation in considering an asset’s value.” And in White, this court affirmed the classification of the growth in a retirement plan as nonmarital property, stating that
increases in value during marriage attributable to efforts of the spouses, whether by financial investment, labor, or entrepreneurial decision-making, are marital property. On the other hand, increases in value of non-marital property remain non-marital if shown to be attributable solely to market forces or conditions, such as simple appreciation in value of an asset.
White, 521 N.W. 2dat 878. Since there was no active management of the husband’s account by either spouse during the marriage, the White court stated that the accretion in the retirement plan was properly characterized as nonmarital property. Id. at 879.
Unlike White, the monthly and yearly statements provided by respondent here showed that respondent made entrepreneurial decisions involving the IRAs during the marriage. For example, during the monthly period June 25 to July 29, 1994, appellant purchased Atlantic, City Corp., and 3M stock for respondent’s U.S. Bank IRA. An examination of the year-end statement for the period ending December 31, 1995, also showed trading involving the U.S. Bank IRA. Respondent admitted that this document showed that respondent sold 200 shares of Atlantic Corporation, 85 shares of IBM, 100 shares of 3M, and 78 shares of Storage Technology Corporation during that year. Further, the documents provided by respondent showed that respondent actively managed the Fidelity IRA. The annual statement for December 31, 1994, showed that the Fidelity IRA contained $39,000 in cash. The next statement that respondent provided for the Fidelity IRA was the yearly statement for December 31, 1996, that showed that all of the money that previously had been in cash was now invested in stock. Respondent testified that (1) he turned the cash into stocks because he wanted to get a higher rate of return; and (2) he was the one who chose what stocks to invest in. Respondent then provided yearly statements for 1999 and 2001. A comparison of the yearly statements for 1996, 1999, and 2001 showed that the stocks contained in the Fidelity IRA changed over the years. Respondent admitted that he was responsible for the changes.
Thus, the evidence introduced at trial indicated that respondent actively managed the IRAs. Moreover, respondent’s explanation that the IRAs merely increased in value because of an increase in the stock market is not accurate. The evidence indicates that throughout the marriage, respondent altered the contents of the IRAs by transferring money from cash to other investments, and buying and selling various stocks.
Therefore, based on the record and this court’s holdings in Swick and White, the entrepreneurial decisions that respondent made during the marriage in regard to both the U.S. Bank and Fidelity IRAs entitle appellant to some share of the increased value of these IRAs. We reverse the district court’s determination that the entire value of both IRAs is nonmarital property and remand for the court to determine what part of the IRAs is marital property and what part is nonmarital property.
B. Shares of Stock
Respondent acquired two insurance policies from Manulife Insurance Company in 1973 and 1979 and has owned each of these policies continuously since they were issued. At the time respondent purchased these insurance policies, respondent also received a member’s interest in the mutual insurance company.
On October 1, 1999, respondent received 1,564 shares of stock in Manulife Financial Corporation. Respondent received the subject shares as a result of the conversion of Manulife Insurance from a mutual insurer to a joint stock company. This process is known as demutualization, and the shares of stock were respondent’s demutualization benefit. The district court determined that the value of the stock as of June 30, 2001, was $42,368.76.
The district court made findings in regard to the two life insurance policies and the shares of stock. At trial, respondent claimed a nonmarital interest in all of those assets. But the district court found that the life insurance policies were marital property. The court based its decision on the finding that respondent used marital funds to make premium payments. Despite finding that the life insurance policies were marital property, the district court found that the 1,564 shares of stock were nonmarital property. The district court noted that the stock “appears to be a direct result of benefits acquired prior to the marriage.”
Respondent did not have the 1,564 shares of stock when the parties married in 1992. Because respondent acquired the shares during the marriage, the shares are presumed to be marital property. A party seeking to establish that property is nonmarital must do so by a preponderance of the evidence. Swick, 467 N.W.2d at 330. Without going into any detail, the district court concluded that respondent “traced the stock by a preponderance of the evidence” to a nonmarital source. Appellant argues that this finding is erroneous. We agree.
The life insurance policies existed prior to the marriage, but exhibit 18 shows that during the marriage, respondent made annual loan repayments from 1994 through 1998. At trial, respondent failed to show that these repayments were made with nonmarital funds. The fact that respondent used marital funds to make loan repayments on the insurance policies during the marriage does not necessarily mean the shares of stock were not nonmarital property. “Commingling of nonmarital and marital property is not fatal to a party’s claim that property remained nonmarital” if a party can, by a preponderance of the evidence, show that part of the asset in question is the proceeds of their property. Carrick v. Carrick, 560 N.W.2d 407, 413 (Minn. App. 1997). But here, respondent failed to show that the repayments made on the loan for the insurance policies from the time of the marriage to October 1999 had no impact on respondent receiving 1,564 shares of stock from Manulife.
Again, because respondent received the stock during the parties’ marriage, the stock is presumed to be marital property. Therefore, the burden was on respondent to trace by a preponderance of the evidence the nonmarital nature of the stock. But respondent admits that he does not know and cannot prove whether there had or had not been an increase or decrease in the value of respondent’s membership interest in Manulife between the date of his marriage and the date respondent received the shares of stock. Because the record does not indicate what criteria Manulife used when it calculated the number of shares to award respondent, respondent’s payments during the seven-year marriage may have affected the value of his membership interest with Manulife. Therefore these payments may have affected the amount of stock respondent was awarded in October 1999.
Thus, based on the record, we conclude that at least part of the value of the 1,564 shares of stock is marital. We therefore reverse the decision of the district court and remand for a determination concerning what part of the shares is marital property and what part of the shares is nonmarital property.
A district court’s denial of appellant’s motions for amended findings or, in the alternative, for a new trial will not be disturbed absent an abuse of discretion. See Bains v. Piper, Jaffray & Hopwood, Inc., 497 N.W.2d 263, 271 (Minn. App. 1993) (applying abuse of discretion standard when reviewing district court’s denial of appellants’ motion for a new trial or for amended findings and conclusions), review denied (Minn. Apr. 20, 1993).
The parties’ dissolution trial was heard by a referee and the judgment was approved by a district court judge. After issuing the judgment, the referee resigned from the bench, and appellant’s motion for a new trial and for amended findings was heard by a different district court judge that denied appellant’s motion without reviewing the trial transcript, and appellant contends that this was an abuse of discretion. We disagree.
Appellant cites no law to support her arguments. Further, the district court heard oral arguments concerning the issues on April 10, 2002, and provided each party 30 minutes to argue its positions. Therefore, on this record we cannot say the district court abused its discretion by denying appellant’s motion without reviewing the trial transcript.
Respondent made a motion to strike parts of appellant’s brief on the ground that certain matters referred to were not part of the appellate record. “Only matters before the trial court may be considered by the reviewing court.” In re Conservatorship of Foster, 535 N.W.2d 677, 684 (Minn. App. 1995), aff’d, 547 N.W.2d 81 (Minn. 1996). An appellate court “may not consider matters not produced and received in evidence below.” Thiele v. Stich, 425 N.W.2d 580, 582-83 (Minn. 1988) (citations omitted). “The court will strike documents included in a party’s brief that are not part of the appellate record.” Fabio v. Bellomo, 489 N.W.2d 241, 246 (Minn. App. 1992) (citation omitted), aff’d, 504 N.W.2d 758 (Minn. 1993). And an appendix to a brief may only contain portions of the record. Minn. R. Civ. App. P. 130.01.
Appellant concedes that pages 687 through 728 of appellant’s appendix contain materials that were not presented to the district court prior to the entry of judgment and decree. These documents could have been presented to the district court during the trial but were not. And page 25 of appellant’s brief contains arguments based on those pages in the appendix. Therefore, we grant respondent’s motion to strike pages 687 through 728 of appellant’s appendix and page 25 of appellant’s brief.
Affirmed in part, reversed in part, and remanded; motion to strike granted.
* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.