This opinion will be unpublished and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

A03-1460

 

 

Louise C. Indritz, petitioner,

Respondent,

 

vs.

 

Richard N. Indritz,

Appellant.

 

 

Filed May 4, 2004

Affirmed in part, reversed in part, and remanded

Robert H. Schumacher, Judge

 

Hennepin County District Court

File No. DC258195

 

Charles M. Goldstein, Goldstein Law Office, P.A., 601 Carlson Parkway, Suite 1050, Minnetonka, MN 55305 (for respondent)

 

David Gronbeck, Law Offices of David Gronbeck, One Financial Plaza, Suite 1100, 120 South Sixth Street, Minneapolis, MN 55402 (for appellant)

 

            Considered and decided by Wright, Presiding Judge; Schumacher, Judge; and Willis, Judge.

U N P U B L I S H E D   O P I N I O N

ROBERT H. SCHUMACHER, Judge

Appellant husband Richard N. Indritz contends the district court erred in ordering the proceeds from the sale of his nonmarital property be used to pay marital debt.  We affirm in part, reverse in part, and remand with further instruction.

FACTS

            Husband and respondent wife Louise C. Indritz were married in 1990, and their marriage was dissolved in 2002.  Prior to the marriage, husband owned a parcel of real property in Cook County, Minnesota.  The realty was purchased by husband for $30,000, a sum received by him as an inheritance from his father.

            A pretrial referee's order found the parties had an estimated $45,000 in marital debt.  With regard to the realty, the referee found husband was in the process of selling it, was "not objecting to an [o]rder requiring that the first $45,000 or similar amount be used to make the parties debt free," but was objecting "to an escrow order as to any excess of proceeds from the sale" pursuant to his claim that the property was his nonmarital asset.  The referee reserved the issue of the realty's classification as marital or nonmarital.  Husband did not file objections to this order.

The property was sold and, pursuant to the referee's order, the net proceeds of approximately $100,000 were placed in escrow.  Wife then sought an order directing $43,184 in debts be paid from the escrow account.  Husband sought an order directing $95,202 in debts be paid from the escrow account.  Husband further requested that the funds remaining in the escrow account, after payment of his proposed debts, be released to him.  It appears neither party identified the debts each proposed would be paid as marital or nonmarital.

The referee directed disbursement of $52,952 from the escrow holdings for payment of debts and $5,000 for payment of wife's attorneys fees.  The referee also ordered that upon husband's retaining an attorney he could obtain a supplemental distribution of $5,000 for his attorneys fees.  This order did not identify whether the itemized debts to be paid were marital or nonmarital.  An order directing the disbursement of $5,000 for husband's attorneys fees followed.

Husband requested review of some, but not all, of the ordered disbursements.  In doing so, husband did not object to the use of the funds held in escrow to pay debts, only to the selection and amount of debts to which those funds were applied.  For various reasons, the district court denied relief.

After a two-day trial, the district court found that the remaining escrow balance, less any sum due for real estate taxes on the parcel sold, was husband's nonmarital property.  The district court did not identify the portion of the escrow proceeds already disbursed to pay debts as marital or nonmarital property.  Husband moved for amended findings crediting him for payment of marital debt with what he claimed were his nonmarital funds.  The district court denied this motion.  Husband appealed.

This court determined the district court had made an "implicit finding in the original judgment" that conflicted with an "explicit statement in the amended judgment" regarding whether the realty was marital or nonmarital.  Indritz v. Indritz, No. C2-02-1367, 2003 WL 1813827, at *2 (Minn. App. April 8, 2003).  This court's opinion provided, "we cannot affirm what appears to be an apportionment of nonmarital property" absent both an explicit finding as to the marital or nonmarital status of the realty and findings as to unfair hardship.  Id.  We reversed and remanded with instructions that the district court determine "whether the real property was marital or nonmarital and, if the property was nonmarital, whether [wife] will experience unfair hardship if the proceeds from the sale of that property are apportioned."  Id.

On remand, the district court stated it was "[h]onoring" this court's "indicat[ion]" that the property should have been classified as husband's nonmarital asset.  The district court noted that the parties had agreed before the referee to pay "$45,000 in joint debts from the proceeds of the sale" but had not agreed to the additional $17,953 in disbursements.  The district court then entered judgment of $17,953 in favor of husband and against wife.

D E C I S I O N

1.         Husband argues the district court's characterization of the "agreement" and the resulting property division went beyond the scope of the remand.  He contends that without any findings regarding undue hardship, he should have received an amount equal to one half of the marital debt paid with proceeds from the sale of his nonmarital property.  He submits that this amount is $28,977.

The district court’s duty on remand is to execute the mandate of an appellate court according to its terms.  Halverson v. Vill. of Deerwood, 322 N.W.2d 761, 766 (Minn. 1982).  If the appellate court does not specifically direct the district court on how to proceed, the district court has broad discretion to handle the matter so long as it exercises its discretion consistent with the remand order.  Duffey v. Duffey, 432 N.W.2d 473, 476 (Minn. App. 1988) (citing John Wright & Assocs., Inc. v. City of Red Wing, 256 Minn. 101, 102, 97 N.W.2d 432, 434 (1959)). 

This court's instruction on remand provided that the district court, if it found the realty was husband's nonmarital property, should determine whether wife will experience unfair hardship if the proceeds from the sale of that realty "are apportioned."  We note this instruction may have led to some confusion.  The standard for apportionment is whether a party will experience hardship if property is not apportioned.  See Minn. Stat. § 518.58, subd. 2 (2002) (providing, "[i]f the court finds that either spouse's resources or property . . . are so inadequate as to work an unfair hardship . . . the court may, in addition to the marital property, apportion up to one-half of the [non-marital property]").

Additionally, this court's previous order did not consider nor determine the issue of an agreement regarding the use of the realty's sale proceeds because the issue was not raised.  Law of the case ordinarily applies, precluding reconsideration of an issue, where an appellate court has ruled on the issue and has remanded the case to the lower court for further proceedings.  Mattson v. Underwriters at Lloyds of London, 414 N.W.2d 717, 719-20. (Minn. 1987).  Nevertheless, issues not determined in the first appeal may be considered on a second appeal.  Id. at 720.  For these reasons, we conclude that the district court's order after remand did not impermissibly go beyond the scope of our remand instruction.  Cf. Alevizos v. Metro. Airports Comm'n, 317 N.W.2d 352, 360 (Minn. 1982) (recognizing that achieving a "fair" result is appropriate where remand instructions "may" have misled parties).

2.         Husband contends there is no factual basis for the conclusion that he intended to pay marital debt "without receiving any benefit therefrom."  In order to successfully challenge a district court's finding of fact, the party challenging the findings "must show that despite viewing the evidence in the light most favorable to the trial court's findings . . . the record still requires the definite and firm conviction that a mistake was made."  Vangsness v. Vangsness, 607 N.W.2d 468, 474 (Minn. App. 2000).

Here, the record shows the referee made a pretrial finding that husband was not objecting to an order requiring the first $45,000, or similar amount, from the realty sale be used "to make the parties debt free."  The referee noted husband's contention that the realty was his nonmarital asset and further noted husband's objection to an escrow order as to those sale proceeds remaining after payment of the parties' debts.  Husband did not contest these findings.

After sale of the realty, both parties sought orders directing debts be paid from the sale proceeds.  Husband argued for debt payments totaling a sum significantly larger than $45,000 to pay off all of the parties' unsecured debt.  After the referee directed disbursements from the sale proceeds, husband requested review by the district court of some, but not all, of the ordered debt payments.  Husband's objections focused on the parties' net financial situation, arguing that disbursements did not improve the parties' economic circumstances or undid the intended economic effects of temporary relief orders.  Husband did not contest his agreement that proceeds of the realty sale be used to pay debt.

Finally, as observed by husband, there is no indication in the record that the parties contemplated that husband would not receive credit in the final division of property for the nonmarital funds used to satisfy marital debt.  But there is also no indication that the parties contemplated that husband would receive such a credit.  See Vangsness, 607 N.W.2d at 474 (providing that "record might support findings other than those made by the trial court does not show that the court's findings are defective").

We conclude that this record supports the district court's finding on remand that husband agreed to use $45,000 from the realty sale to pay debts owed by the parties.  Moreover, none of the cases cited by husband indicate that a court must give a party credit for debts he agreed to pay prior to trial.  See Dahlberg v. Dahlberg, 358 N.W.2d 76, 80 (Minn. App. 1984) (finding that district court was not required to give husband credit for paying credit card debt incurred solely by wife, where such payment was made voluntarily by husband).  A party to a dissolution may be held liable for debts even though the other party receives the benefit of payment.  Lynch v. Lynch, 411 N.W.2d 263, 266 (Minn. App. 1987), review denied (Minn. Oct. 30, 1987).  Therefore, we affirm the district court's conclusion that husband should be held to his agreement to pay $45,000 from the realty sale to pay debts owed by the parties without receiving credit for such payment in the final property division.

3.         Wife argues the judgment against her of $17,953 represents marital debt for which each party should be responsible for one-half, or $8,977.  Husband claims he should have received a judgment in his favor for one-half of the marital debts paid.  We note that neither party contests the district court's determination that the judgment against wife represents "marital debt."  Thus, as to the amount complained of by wife, the parties appear to agree that each is responsible for paying half.  On this record, we conclude that each party should be responsible for one-half of the $17,953 paid from the realty's sale proceeds that exceeded the agreed on amount of $45,000.  See Jones v. Jones, 402 N.W.2d 146, 149 (Minn. App. 1987) (noting that apportionment of debts in dissolution proceeding is guided by equitable considerations).  Accordingly, we reverse this portion of the district court's order and remand with instruction that judgment in favor of husband and against wife be entered in the amount of $8,977.

Affirmed in part, reversed in part, and remanded.