This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).






In re the Marriage of: Charles Reese Dunn, Jr., petitioner,


Lois Ann Dunn,


Filed June 8, 2004

Affirmed in part, reversed in part, and remanded

Minge, Judge


St. Louis County District Court

File No. F8-02-300564



James Perunovich, Law Offices of James Perunovich, 402 East Howard Street, Suite 7, Hibbing, MN 55746 (for appellant)


Richard E. Prebich, Law Offices of Richard E. Prebich, 1932 Second Avenue East, Suite 2, Hibbing, MN 55746 (for respondent)


            Considered and decided by Harten, Presiding Judge; Halbrooks, Judge; and Minge, Judge.

 U N P U B L I S H E D  O P I N I O N


MINGE, Judge


            Appellant husband challenges the district court’s classification and division of property, valuation of certain property, and reservation of spousal maintenance in favor of respondent wife.  Because the court did not abuse its discretion in dividing the property or reserving maintenance, we affirm in part.   Because the district court clearly erred in its finding regarding appellant’s non-marital interest in the parties’ home and because the district court failed to enumerate the specific factors supporting its division of the parties’ non-marital property, we reverse in part and remand for further proceedings.



Appellant Charles Reese Dunn, Jr. and respondent Lois Ann Dunn were married in 1986.  The parties have no children.   Appellant filed a petition for dissolution on April 9, 2002, and judgment was entered on July 11, 2003.  The district court denied appellant’s motion for amended findings or a new trial.   Appellant now appeals the district court’s classification and division of property, valuation of certain property, and reservation of spousal maintenance in favor of respondent.  


The first issue we address is whether the district court erred when classifying and dividing the parties’ house, South Carolina property, and investment accounts.  A district court has broad discretion in evaluating and dividing marital property and will not be overturned except for a clear abuse of discretion.  Maranda v. Maranda, 449 N.W.2d 158, 164 (Minn. 1989).  This court must affirm the district court’s division of property if it had an acceptable basis in fact and principle even though we might have taken a different approach.  Servin v. Servin, 345 N.W.2d 754, 758 (Minn. 1984).  We also must defer to the district court’s findings of fact and cannot set them aside unless they are clearly erroneous.  Mauer v. Mauer, 623 N.W.2d 604, 606 (Minn. 2001). 

Whether property is marital or non-marital, however, is a question of law subject to de novo review.  Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997).  All property acquired by a spouse during a marriage is presumed to be marital property without regard to the form of ownership.  Minn. Stat. § 518.54, subd. 5 (2002).  To overcome this presumption, a party must demonstrate by a preponderance of the evidence that the property is non-marital.  Olsen, 562 N.W.2d at 800. 

A.  House

            Appellant argues that the district court abused its discretion in limiting his non-marital interest in the house to $17,000.  The district court found that appellant had purchased the land prior to the marriage for $17,000, but concluded that the remaining equity in the home was marital “in light of the total efforts by both parties in their relationship as an economic partnership.”   Appellant contends that the $17,000 was used to construct the house and that he had an additional $15,000 investment in the land.

Appellant presented evidence that the land itself was worth $15,000.  While respondent objected to the testimony for lack of foundation, she offered no contradictory evidence.  Respondent testified that appellant already owned the land and used the $17,000 to construct the house.  Therefore, there was no evidence presented to refute appellant’s testimony, and the district court failed to explain why it discredited appellant’s valuation.  Therefore, the district court’s finding that appellant purchased the land for $17,000 is clearly erroneous.  Based on the $15,000 land value and the $17,000 investment in improvements, appellant had a $32,000 non-marital interest in the home.

Appellant further argues that the district court erred in dividing the home’s appreciation in value equally rather than applying the Schmitz formula.  See Schmitz v. Schmitz, 309 N.W.2d 748, 750 (Minn. 1981).  The Schmitz formula determines the marital and non-marital interest of appreciated property acquired in part with non-marital funds.  Id.  The party urging use of the formula has the burden of making sure that the record contains information needed for its application.  See Taflin v. Taflin,366 N.W.2d 315, 320 (Minn. App. 1985) (finding that in child support modification cases, the burden is on the movant to establish on a preliminary basis that a significant change in finances has occurred).  

In this case, it is undisputed that the homestead has both marital and non-marital aspects and that there was appreciation.  However, appellant did not provide any evidence whether the appreciation was active or passive.  He only testified to his opinion that the property was worth $75,000 at the time of the parties’ marriage.  Since this active-passive information is required to apply the Schmitz formula, appellant did not present the court with adequate information.  Because appellant did not meet his burden of proof, the court did not abuse its discretion in not applying Schmitz and in dividing the remaining interest between the parties.  See Olsen, 562 N.W.2d at 800.

B.  South Carolina Property and Investment Accounts

Appellant next appeals the classification of the money used to purchase certain of the parties’ assets.  During the marriage, appellant received a substantial amount for personal injury claims based on injuries prior to the marriage.  Appellant purchased property in South Carolina and opened investment accounts with part of those proceeds.   In dividing the marital interest in these assets, the district court concluded that two-thirds of the personal injury claims were marital because it represented lost earnings.  While appellant does not specifically articulate his claim of error with the South Carolina property division, he appears to argue that only 38% of the personal injury proceeds were marital. 

Characterization of personal injury awards is a question of law this court reviews de novo.  Van De Loo v. Van De Loo, 346 N.W.2d 173, 175 (Minn. App. 1984).  Such characterizations depend on the purpose of recovery, which allows for separate treatment of various components of the recovery.  Id. at 176.  If the money recovered is in exchange for property acquired before the marriage, such as the person’s good health, it is non-marital property.  Id.  If the money replaces property acquired or which would have been acquired during the marriage, such as the replacement of lost wages, it is marital.  Id.  The burden of proving the purpose of the recovery is on the party seeking the non-marital classification.  Id. at177.  The standard is a preponderance of the evidence.  Ward v. Ward, 453 N.W.2d 729, 732 (Minn. App. 1990), review denied (Minn. June 6, 1990).   Absent such proof, the personal injury award is treated as marital property.  Van De Loo, 346 N.W.2d at 177.

Appellant submitted to the court a copy of the personal injury award, which delineated the different amounts and purposes of the recovery.  The exhibit shows that plaintiff was awarded $128,784.59.  Appellant argues that only the $48,750 attributable to future loss of earnings is marital.  But other items are marital as well.  Part of the $3,854.59 the jury awarded as loss of earnings to date of trial is marital because, although the accident occurred before the parties were married, the trial occurred several years after the marriage.  Also, the jury awarded $16,250 for future medical expenses, which could be for expenses during the marriage and are marital property.  Because appellant did not meet his burden of proof in showing that these amounts were non-marital, they should be treated as marital.  See Van De Loo, 346 N.W.2d at 177.   Thus, adding together all possible marital amounts, not more than $68,854.59 of the personal injury settlement could be classified as marital. 

Property loss prior to marriage, pain and suffering, disability, and loss of the ability to lead a normal, healthy life are losses personal to the injured spouse and non-marital.  Ward, 453 N.W.2d at 729.  The remaining $59,930 of appellant’s award —automobile damage, current and future embarrassment, emotional distress, pain, disability and disfigurement — is personal to appellant and therefore non-marital.  Under these calculations, only 53% of the personal injury award was shown to be marital property rather than two-thirds as the district court found.  Therefore, respondent should only have received a 53% interest in these assets rather than two-thirds.  Under these calculations, there is a substantial discrepancy between the marital value of the South Carolina property and investments that the district court awarded to respondent and what was available as marital property and could have been awarded.

Minn. Stat. § 518.58, subd. 2 (2002), allows the court to award up to half of a party’s non-marital property to the other party to avoid “an unfair hardship.”  To do so, however, the court must make findings in support of this division based, in part, on the length of the marriage, any prior marriages of the parties, age, health, occupation, sources of income, and needs.  Id.  Here, in dividing the property, the district court noted that it was difficult to determine exactly what portion of the investment assets, personal-property assets, or real estate was attributed to non-marital funds and therefore, it divided potentially non-marital property equally between the parties.  But, the district court determined, albeit erroneously, that two-thirds of the proceeds were marital, thus suggesting that sufficient evidence existed to classify the personal injury proceeds as non-marital.  The evidence indicates that 47% was non-marital.  Therefore, in order to distribute any of appellant’s 47% non-marital interest, the district court needed to make specific findings relating to the above factors.  From the order and memorandum, it does not appear that the district court considered those factors that would support allocating part of the non-marital property to respondent.

Respondent argues that regardless of the classification of the non-marital versus marital property, the district court properly considered relevant factors in determining the division of marital property.  Respondent is partially correct.  Minn. Stat. § 518.58, subd. 1 (2002), directs the court to make a just and equitable division of marital property based on factors such as the length of marriage, sources of income, and the contributions of each in the acquisition and preservation of the marital property.  These factors are relevant to any division of marital property.  In this case, the district court considered the length of the marriage, the advanced age of both parties, the speculative health of respondent, and respondent’s lack of and limited ability to acquire substantial assets and determined that it was fair and equitable to equally divide the assets accumulated during the marriage.  However, the court’s analysis was directed at the marital property, not the non-marital, and the factors to be considered in dividing the two types of property are not the same.

We remand the case for application of required statutory findings on the factors for dividing the parties’ non-marital property.  See Minn. Stat. § 518.54, subd. 2.  In so doing, the district court may open the record or hear argument as it deems necessary.  We express no opinion as to what ultimate marital and non-marital property division is appropriate after application of the appropriate factors. 


Appellant also argues that the district court did not have an acceptable basis in fact when finding that appellant was in possession of personal property valued at $89,802 and the respondent in possession of property valued at $19,469.  He claims that the district court ignored certain appraisals submitted to the court and did not consider his non-marital interest in his truck.

Parties to a dissolution are presumptively familiar with the values of their property.  Ferguson v. Ferguson, 357 N.W.2d 104, 107 (Minn. App. 1984).  But the district court has discretion to choose one appraisal over another, and by choosing one, it cannot be said to have erred.  Mitterhauser v. Mitterhauser, 399 N.W.2d 664, 666-67 (Minn. App. 1987).  A district court’s method of valuation “must be affirmed if it has an acceptable basis in fact and principle even though the reviewing court may have adopted a different approach.” 666. 

Both parties submitted evidence on the property’s valuation.  There is no evidence that the district court abused its discretion in adopting the opinion of respondent’s appraiser.  The findings show that the district court examined all of the evidence before it and made adjustments as it deemed necessary. 

Appellant claims it was an abuse of discretion to include his 1999 pickup truck in the valuation of his property because it was not marital property.  Appellant did not meet his burden in proving that the truck was non-marital property.  The record shows only that portions of his personal injury award were used to purchase the truck but does not indicate what amount or from what accounts the money was withdrawn.  As discussed above, a portion of the personal injury award was marital.  Also its value was dependent on maintenance and repair during the marriage; expenses that may have been paid with marital funds.  We conclude that the truck was marital property.  See Van De Loo, 346 N.W.2d at 177.


The final issue is whether it was error for the district court to reserve determination of spousal maintenance in favor of respondent.   The decision whether to reserve jurisdiction over maintenance is within the district court’s discretion.  Prahl v. Prahl, 627 N.W.2d 698, 703 (Minn. App. 2001).  A district court abuses this discretion if its findings of fact are unsupported by the record or if it improperly applies the law.  Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997).  Minn. Stat. § 518.55, subd. 1 (2002), grants the district court jurisdiction to determine spousal maintenance at a later date.  “Reservation allows the court to later assess and address future changes in one party’s situation as those changes arise, without prematurely burdening the other party.”  Prahl,627 N.W.2d at 703.  Health issues have consistently been a proper basis for which to reserve jurisdiction over maintenance.  See id. at 704; Wopata v. Wopata, 498 N.W.2d 478, 485-86 (Minn. App. 1993); Tomscak v. Tomscak, 352 N.W.2d 464, 466 (Minn. App. 1984). 

Appellant first argues that if any determination of spousal maintenance should have been reserved, it should be maintenance for him.  But appellant did not request reservation of maintenance.  See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (refusing to address those issues not raised by the parties below).  Appellant also argues that respondent’s circumstances do not warrant the reservation.  The district court found that appellant had a net monthly income of $1,969.74 and reasonable monthly expenses of $2,086.11.  The district court further found that respondent had been employed with National Steel Pellet Company for more than 20 years, earning a net monthly income of $2,427.19, with reasonable expenses of $2,154.50. 

            Respondent is 46 years old and has worked almost her entire career in the mine.  She testified that her position there was at risk due to rumors that the plant might be shut down or sold.  Respondent also testified that while she is certified as a beautician, she has not worked in that capacity for more than 22 years.  Further, while she has some paralegal training, she has never completed any program or been employed as such.  Additionally, she noted many health problems, including a bad heart; neck, back, and rib pain; arthritis; and other work-related injuries.

While the district court did not cite appellant’s medical problems as a basis for its reservation, a lack of findings is insufficient to find an abuse of discretion.  See Prahl, 627 N.W.2d at 704.  While respondent is currently self-sufficient, and does not claim otherwise, she testified that she could not support herself if she lost her job at the mine.  In this situation, reserving maintenance allows the court to address any future problems involving her ability to provide for herself without prematurely burdening appellant.  Considering respondent’s medical issues, age, lack of marketable skills, and the uncertainty of her job, the district court was within its discretion by reserving maintenance. 

            Affirmed in part, reversed in part, and remanded.