may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
In re the
Edward E. Greco, petitioner,
Leslie J. Albrecht-Greco,
Affirmed in part, reversed in part
Dakota County District Court
File No. F3036709
Merlyn L. Meinerts,
John R. Hill, Larkin, Hoffman, Daly & Lindgren, Ltd., 1500 Wells Fargo Plaza, 7900 Xerxes Avenue South, Minneapolis, MN 55431-1194 (for appellant)
Considered and decided by Schumacher, Presiding Judge; Peterson, Judge; and Wright, Judge.
U N P U B L I S H E D O P I N I O N
In this appeal from a marital-dissolution judgment, wife argues that the district court abused its discretion by ordering her to pay husband (1) $24,964 for credit-card debts that were paid with proceeds from a mortgage loan obtained during the marriage; and (2)$25,340.57 for interest, late fees, and taxes incurred because of delinquent mortgage payments. We affirm in part and reverse in part.
Appellant-wife Leslie J. Albrecht-Greco and respondent-husband Edward E. Greco were married in May 2000, and divorced in April 2004. The parties stipulated to the resolution of child-custody and support issues, and issues related to the division of property and debts were tried.
In April 1998, husband bought a home for $270,000. He made a $54,000 cash down payment and obtained a mortgage loan for $216,000. In the summer of 1999, husband obtained a second mortgage loan for $40,000, and in November 1999, he obtained a third mortgage loan for approximately $26,300. The proceeds of the third mortgage loan were used to finish basement space in the home and make other improvements. The improvements were completed during the first quarter of 2000. The parties married on May 25, 2000. Husband testified that the home was worth $400,000 at the time of the marriage.
In November 2000, wife obtained a loan for $170,000 that was secured by a mortgage on the home. Part of the loan proceeds were used to pay off the third mortgage on the home, and part were used to pay off wife’s $24,964 credit-card debt.
The parties adopted a son from the
Husband commenced the divorce proceeding and sought temporary relief, including a request for an order to immediately sell the house. Wife opposed the request and told the court that she could continue making the house payments with her salary. In a March 2003 order for temporary relief, the district court denied husband’s request to sell the house, granted wife temporary and exclusive use and possession of the house, ordered wife to pay the mortgage, taxes, and insurance for the house, and ordered husband to move out of the house and pay child support and a portion of day-care expenses. Despite the order for temporary relief, husband remained in the house while the parties attempted to reconcile.
While attempting to reconcile, husband rented alternative housing. Husband moved out of the home in November 2003. Husband brought a second motion to compel the immediate sale of the home, the parties agreed to sell the home, and the home was sold for $448,000. As a result of the sale, all but the last mortgage were satisfied. The parties agreed to be equally responsible for the outstanding amount of the last mortgage loan. Because wife had not made all of the mortgage and tax payments when due, there were amounts due at closing for interest, late fees, foreclosure fees, and taxes totaling $25,340.57.
In the dissolution judgment, the district court ordered wife to pay husband (1) $24,946 for wife’s non-marital credit-card debt that was paid from the proceeds of the $170,000 mortgage loan; and (2) $25,340.57 for interest and other fees incurred because of delinquent mortgage payments. The district court denied wife’s motion for amended findings or a new trial, and this appeal followed.
D E C I S I O N
courts have broad discretion over the division of
marital property, and appellate courts will not alter a
district court’s property division absent a clear abuse
of discretion or an erroneous application of the
v. Chamberlain, 615 N.W.2d 405, 412 (Minn. App. 2000) (clear abuse of
discretion), review denied (
property is marital or nonmarital
is a question of law, and this court exercises independent judgment when
reviewing the district court’s classifications.
1. Credit-Card Debt
Wife argues that the district court abused its discretion by ordering her to pay husband $24,964 for the credit-card debts that were paid with proceeds from the $170,000 mortgage loan obtained after the parties married. The district court found that “$24,964 of [husband’s] pre-marital home equity was used to ‘buy’ [wife’s] pre-marital credit card debt” when the mortgage-loan proceeds were used to pay the credit-card debts. Wife contends that the district court erred in determining the amount of husband’s home equity at the time of the marriage and that husband did not meet his burden of proving that her credit-card debts were nonmarital debts.
Wife argues that the district court erroneously valued the home at $400,000 at the time of marriage. Wife contends that the district court should have valued the home using an equal monthly appreciation amount from the time husband purchased the home for $270,000 until it was sold 69 months later for $448,000, which would produce a $331,913 value at the time of marriage. Wife claims that if this value is used, the amount of equity in the home is less than wife’s credit-card debt, and the equity could not have been used to “buy” her credit-card debt.
But even if the home’s value was $331,913 at the time of the marriage, husband’s equity exceeded wife’s credit-card debt. At the time of the marriage, the home was subject to three mortgages. The first mortgage loan was for $216,000; the second was for $40,000; and the third was for $26,300. This produces a total mortgage debt of $282,300, which leaves $49,613 of equity if the home was worth $331,913. Therefore, wife is not correct that the equity could not have been used to “buy” her credit-card debt.
Wife also argues that the district court erred in determining that her credit-card debts were nonmarital debts. In the memorandum accompanying the order denying wife’s motion for amended findings or a new trial, the district court acknowledged that there was no affirmative evidence demonstrating the amount of wife’s credit-card debts at the time of the marriage. But the court noted that at her pretrial deposition, wife said that she would be able to produce documentation regarding the disputed credit-card debt. However, wife did not produce such documentation at trial, and she did not provide a credible explanation for her failure to produce it. The district court found it telling that despite the large amount of the debt, wife did not produce any credit-card billing statement or any correspondence from any credit-card company. Because wife did not produce any of the documentation that a credit-card holder would ordinarily be able to produce, the district court drew the negative inference that the credit-card debt existed before the marriage, and, therefore, it was nonmarital debt.
that this negative inference is not sufficient to meet husband’s burden of
proving that the credit-card debt is nonmarital. But wife does not argue that the inference is
impermissible. Essentially, wife argues
that the inference should not be given more weight than her testimony that the
credit-card debt was incurred paying marital expenses. But “[t]he finder of fact is not required to
accept even uncontradicted testimony if the surrounding facts and circumstances
afford reasonable grounds for doubting its credibility.” Varner
v. Varner, 400 N.W.2d 117, 121 (
dissolution of a marriage, . . . the court shall make a just and equitable
division of the marital property of
the parties without regard to marital misconduct, after making findings
regarding the division of the property.” Minn. Stat. § 518.58, subd. 1 (2004) (emphasis
are treated the same as assets for purposes of property division. Korf v. Korf, 553 N.W.2d 706, 712 (
There is no evidence in the record that indicates that when the parties used husband’s equity to buy wife’s credit-card debt, they intended the transaction to be a loan from husband to wife. There was no loan agreement, and there is no evidence that wife made any payments to husband or that any kind of loan records were kept. When the credit-card debt was paid, wife’s debt ceased to exist; it was not replaced by a debt to husband. Consequently, the marital estate did not include a $24,964 debt, and there was no $24,964 debt for the district court to divide in the dissolution. In effect, the district court resurrected a transaction that the parties entered into more than three years before the dissolution and treated the transaction in a manner that it had not been treated by the parties. In doing so, the district court created a debt, rather than dividing a marital debt. Because the record would not support a finding that the parties intended to enter into a loan arrangement when wife’s credit-card debt was paid, and we are not aware of any authority the district court has to treat the transaction as a loan when the parties did not treat it as a loan, we conclude that the district court erred when it ordered wife to pay husband $24,964 for her credit-card debt. Therefore, we reverse that part of the judgment.
2. Delinquent Mortgage Payments
Wife argues that the district court erred in ordering her to pay husband $25,340.57 for interest and other fees incurred because of delinquent mortgage payments. Wife contends that because the district court found that the parties lived as a family unit during the attempt to reconcile, their expenses should have been treated as family expenses, and she should “only be responsible for the interest and fees that are attributable for the period after November 19, 2003, when the parties finally separated.”
Under Minn. Stat. § 518.131, subd. 5 (2004), “[a] temporary order shall continue in full force and effect until the earlier of its amendment or vacation, dismissal of the main action or entry of a final decree of dissolution or legal separation.” The temporary order required wife to make all “payments of principal, interest, taxes and insurance relative to the homestead” and required husband to pay monthly child support of $787.50 and a percentage of child-care costs. The district court found that while the parties attempted to reconcile, husband made payments in excess of $11,000 per month from a checking account and a stock account and that the great bulk of these expenditures were attributable to family expenses. The district court also found that the amounts husband paid substantially exceeded the parties’ housing expenses and that husband “contributed more than his share towards the family unit’s expenses.”
During the hearing on husband’s request for temporary relief, wife opposed husband’s request for an order to immediately sell the house and told the court that she could continue making the house payments with her salary. The district court denied husband’s request for an immediate sale, but ordered wife to pay the mortgage, taxes, and insurance for the house. In the dissolution judgment, the district court found that $25,340.57 in interest, late fees, and taxes “would not have been due and payable had the mortgage and property taxes been paid in a timely manner by [wife] as ordered in the Order for Temporary relief.” Because wife failed to make the payments as required by the temporary order, and husband contributed more than his share towards the family unit’s expenses during the attempt to reconcile, we conclude that the district court did not abuse its discretion in ordering wife to pay the $25,340.57 in interest, late fees, and taxes.
Affirmed in part, reversed in part.
 It appears that in calculating husband’s equity at the time of the marriage, wife made the same error that the district court made in finding of fact number 18 when calculating husband’s equity based on a $400,000 value. The district court calculated total mortgage debt using a first-mortgage amount of $270,000. But $270,000 was the purchase price; the amount of the first mortgage was $216,000.
 Husband claimed that monthly housing expenses totaled $4,690, and wife claimed that monthly housing expenses totaled $4,126.