This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).






In re the Marriage of:  Alice Anne Brown, petitioner,


Darrell Wayne Brown,


Filed July 5, 2005


Minge, Judge


Hennepin County District Court

File No. DC 274 307



Carla C. Kjellberg, 333 West Parkdale Plaza, 1660 South Highway 100, St. Louis Park, MN 55416 (for respondent)


Valerie Downing Arnold, Tuft & Arnold, PLLC, 1703 Cope Avenue East, Suite 1, St. Paul, MN 55109 (for appellant)


            Considered and decided by Lansing, 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 challenges the district court’s dissolution judgment alleging improper division of the parties’ property and departure from child support guidelines.  Because the district court did not abuse its discretion in dividing the parties’ property and deferring the effective date of the child support obligation, we affirm.



Appellant Darrell Wayne Brown and respondent Alice Anne Brown were married in May 1979.  In 1985, the parties’ first son was born and respondent stayed home to raise the child.  The parties’ second son was born in 1989.  In February 2002, respondent commenced this marriage dissolution action; the court ordered a legal separation on May 28, 2002. 

The parties have had substantial assets.  Appellant claimed that he had over $500,000 in various investment accounts, including a $16,000 IRA at the time of marriage.  According to respondent, for most of the marriage appellant supported the family through his business of managing and trading his own investment portfolio.  And, according to appellant, his stock portfolios would fluctuate by as much as $250,000 in a single day.  Respondent had a teaching degree, but was working as a self-employed artist.  After the parties were married, appellant opened a joint investment account at the same financial institution where he had his premarital accounts and began depositing and managing money in that joint account.  In 1986 the parties sold a marital telecommunications business for $450,000 and appellant put half of the money from the sale into his personal investment account.  Appellant opened another joint investment account with the remainder of the money.  In 1998 appellant had $500,000 in the investment accounts, all of which he invested on a margin basis.  In 1998, appellant’s father gave appellant a cabin as a gift, and in 2001, after appellant’s father passed away, appellant inherited $160,000.  He invested a portion of the inheritance in the stock market.

In February 1980, nine months after the marriage, the parties purchased their home.  Appellant claimed at least $44,000 in value as his nonmarital assets on the ground  that the entire $44,000 down payment came from his premarital investment account.  Appellant produced a copy of the check used for the closing to establish the source of funds, but did not produce any documentary evidence to show the amount he had in these accounts prior to the marriage or the fluctuation in the account up until the date of the home purchase. 

When the parties separated the value of appellant’s investment accounts had dropped to $75,000 and at the time of the marriage dissolution proceedings the only money left was $47,000.  Appellant asserted that this balance was part of his inheritance.  In March 2002, appellant signed a listing agreement, in which he agreed to list the homestead for $314,000.  At the time of the marriage dissolution proceedings, respondent was working as an assistant teacher making about $1,200 a month, and needed to renew her teaching license before she could get a full-time teaching position.  Appellant was earning about $15 an hour helping his son remodel homes.  

In January 2003, respondent arranged for an appraisal of the home.  The appraiser concluded that the value was $315,000.  Respondent also requested a real estate agent to perform a fair market value analysis of the home.  The agent estimated that the home would sell for about $250,000.  Appellant had an appraisal performed.  The home was subject to a mortgage securing a then balance of $60,000.

The parties tried the issue of maintenance and property distribution to the district court.  Respondent’s appraiser and the real estate agent testified as to the value of the property.  Because appellant’s appraiser was unavailable to testify, appellant sought to admit his appraiser’s report into evidence based on the testimony of a vice-president of the appraisal firm.  The district court admitted the appraisal report for its analysis of comparable properties, but excluded the portion of the report setting forth the value of the home. 

On January 5, 2004, the district court entered judgment dissolving the marriage.  It awarded the homestead to appellant as a marital asset, valued the home at $240,000 net of the mortgage, and ordered appellant to pay respondent $129,000 for her marital share.  Respondent was ordered to pay $350 month in child support with the first payment due a month after she receives her portion of the homestead allocation.  Appellant filed a motion to amend the district court’s findings and in the alternative moved for a new trial.  The district court denied appellant’s motion and this appeal followed. 





            The first issue is whether the district court erred in finding that appellant did not have a nonmarital interest in the homestead or his IRA.  The district court has broad discretion over the division of marital property, and this court will not disturb the division on appeal absent a clear abuse of discretion.  Bogen v. Bogen, 261 N.W.2d 606, 609 (Minn. 1977).  Whether property is marital or nonmarital is a question of law, but reviewing courts defer to the district court’s findings of fact unless they are clearly erroneous.  Olson v. Olson, 562 N.W.2d 797, 800 (Minn. 1997).  The party claiming a nonmarital interest in property must prove the necessary facts by a preponderance of the evidence.  Campion v. Campion, 385 N.W.2d 1, 5 (Minn. App. 1986).  Whether respondent met his burden is a question of fact, which we review for clear error.  Doering v. Doering, 385 N.W.2d 387, 391 (Minn. App. 1986).  When the evidence consists entirely of conflicting oral testimony, the district court’s findings rarely will be disturbed.  Wehner v. Wehner, 374 N.W.2d 569, 572 (Minn. App. 1985).

A. Homestead

            The district court found that appellant failed to satisfy his burden in establishing nonmarital claims to the homestead.  All property acquired during the marriage is presumed to be marital.  Minn. Stat. § 518.54, subd. 5 (2004).  A party overcomes this presumption by showing that the property is nonmarital.  Id.  Nonmarital property includes property that “is acquired in exchange for or is the increase in value of property” acquired before the marriage.  Id.  A party seeking to trace an asset to a nonmarital source must establish by a preponderance of the evidence that the asset was “acquired in exchange for” nonmarital property.  Doering, 385 N.W.2d at 390; see also Nash v. Nash, 388 N.W.2d 777, 781 (Minn. App. 1986) (party met burden by introducing receipts for home improvements two weeks after receiving inheritance), review denied (Minn. Aug. 20, 1986).  A party fails to meet its burden to show tracing, however, if the nonmarital property was extensively commingled and there was little evidence establishing how the nonmarital funds were spent.  See, e.g., Crosby v. Crosby, 587 N.W.2d 292, 296-97 (Minn. App. 1998) (finding that appellant did not meet burden when funds were extensively commingled and appellant only showed her funds were “primary source” to acquire assets), review denied (Minn. Feb. 18, 1999); Wopata v. Wopata, 498 N.W.2d 478, 484 (Minn. App. 1993) (finding money was marital because record showed only that funds were commingled without any evidence of tracing).

Here, the parties purchased the homestead after they were married.  Although appellant claims that he used funds in his nonmarital investment account for the down payment, he testified that his account balances fluctuated greatly, sometimes by as much as $250,000 in one day.  The record also indicates that during this time investing was appellant’s occupation.  Although appellant’s premarital investment portfolio is a nonmarital asset, his profits from trading after marriage would be his earnings after his marriage and marital property.  Based on appellant’s testimony regarding the dramatic fluctuations in the value of his investments and appellant’s failure to produce any documentation regarding the value of the accounts prior to the marriage and such values up until the time of the home purchase, the district court found that appellant did not meet his burden.  The district court’s finding that appellant failed to meet his burden of proof is not clearly erroneous.

            Appellant also claims that he has nonmarital interest in the homestead based on his $30,000 payment of the mortgage from money that he inherited from his father.  Because appellant did not raise this as a contested issue in the district court, we decline to consider it on appeal.  See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (reviewing court may only consider issues presented to district court). 



            Appellant also argues the district court erred in finding that his entire $87,000 IRA was marital property and awarding respondent $24,000 of his account.  Appellant testified that he had $16,000 in this IRA account prior to marriage, but produced an account statement from February 1980, nine months after the marriage.  Appellant also claimed that he deposited $1,000 from other nonmarital funds into his IRA and argued that a total of $17,000 in the IRA account was nonmarital.  Appellant conceded that in 1986 he commingled marital with the nonmarital funds in the IRA account. 

Credible testimony can be sufficient to prove a nonmarital claim.  See Chamberlain v. Chamberlain, 615 N.W.2d 405, 414 (Minn. App. 2000), review denied (Minn. Oct. 25, 2000).  However, that does not mean that testimony alone is always adequate.  “As the trier of fact, the district court has the opportunity to observe the parties and to appraise their testimony, credibility, general character, and disposition.”  Doering, 385 N.W.2d at 391; see Wilson v. Wilson, 229 Minn. 126, 128, 38 N.W.2d 154, 156 (1949).  Here, the district court found that appellant’s testimony absent corroborating documentary evidence was insufficient to meet his burden of proof.  Given evidence of the dramatic fluctuation of appellant’s account balances, we conclude that the district court’s finding that appellant’s IRA was marital property was not clearly erroneous.  In any event, he received $63,000 of his IRA.  This is far more than the $17,000 of contributions he claimed to have traced to nonmarital sources.



The second issue is whether the district court abused its discretion in excluding as hearsay the opinion of appellant’s appraiser regarding the value of the homestead.  Absent an erroneous interpretation of the law, whether to admit or exclude evidence is a question within the district court’s broad discretion.  Kroning v. State Farm Auto. Ins. Co., 567 N.W.2d 42, 45-46 (Minn. 1997).  A new trial will be granted because of an improper evidentiary ruling only if the complaining party demonstrates prejudicial error.  Id. at 46.  Appellant fails to argue that any error was prejudicial but maintains that this court should remand the issue of valuation of the homestead for retrial because appellant’s appraiser’s opinion as to the value of the homestead was erroneously excluded. 

Although generally inadmissible, hearsay statements may be admissible under one of several exceptions to the general rule, including the business-records exception.  Minn. R. Evid. 802 (general rule), 803(6) (business-records exception to hearsay rule).  Business records generally qualify for admission even if they include opinions or diagnoses.  Minn. R. Evid. 803(6); see Brown v. St. Paul City Ry. Co., 241 Minn. 15, 26, 62 N.W.2d 688, 696 (1954) (concluding that properly identified hospital records admissible to prove matters related to patient’s hospitalization and treatment but hearsay and self-serving statements contained in records not admissible to prove how injury occurred); see also Lindstrom v. Yellow Taxi Co., 298 Minn. 224, 232-33, 214 N.W.2d 672, 678-79 (1974) (concluding that hospital records were admissible). 

A business record containing an opinion on an ultimate issue is admissible only if the witness offering the opinion is available to permit the factfinder to test the weight and credibility of the opinion through cross-examination.  See Barnes v. Northwest Airlines, Inc., 233 Minn. 410, 433, 47 N.W.2d 180, 193 (1951) (concluding that report of plane-crash investigation containing expression of opinion inadmissible under public-records exception to hearsay rule “not on the ground that it was not properly certified or exemplified, but upon the more serious ground that . . . [d]efendant had no opportunity to cross-examine with reference to the report nor anyone making it”); see also Skogen v. Dow Chem. Co., 375 F.2d 692, 704-05 (8th Cir. 1967) (concluding that opinion contained in hospital record inadmissible under business-records exception because, among other things, admission would deny defendant opportunity to cross-examine).

            Here, the district court allowed the appraisal report into evidence, but excluded the appraiser’s opinion as to value because appellant’s appraiser who prepared the report was not available to testify.  Appellant sought to admit the report’s opinion as to the value of the home based on testimony of an executive of the appraisal firm.  This senior employee did not have any personal involvement in the preparation of the appraisal report and conceded that he has not appraised a home in that vicinity in a long time.  The value of the homestead was one of the ultimate issues in the trial and the absence of appellant’s appraiser prevented respondent from cross-examining the appraiser to determine how the appraiser reached the opined value.  We conclude that the district court did not abuse its discretion in excluding the opinion testimony of appellant’s appraiser.  



            The third issue is whether certain factual findings made by the district court constitute reversible error.  These findings are that the comparables used in appellant’s appraiser’s report were not useful and that the down payment on the homestead was $55,000.  On appeal this court will not set aside the district court’s findings of fact unless they are clearly erroneous.  Minn. R. Civ. P. 52.01; Kornberg v. Kornberg, 542 N.W.2d 379, 386 (Minn. 1996).  Also, harmless error is not a basis for a reversal.  Minn. R. Civ. P. 61.

The district court found that the comparable sales in appellant’s appraisal were not helpful in establishing the value of the homestead because the properties were not similar to the homestead.  Appellant argues that the validity of the comparables was supported by testimony from respondent’s real estate agent.  However, the real estate agent testified that appellant’s comparables consisted of lower priced homes which were one story or one-and-a-half stories and adjusted up to compare to the parties’ two-story homestead.  Additionally, the district court pointed out that the parties’ lot was three times the size of the closest comparable in appellant’s appraiser’s report.  A review of the record indicates that the district court’s finding that appellant’s comparables were not helpful is not clearly erroneous.

            Appellant also argues that the district court erred in finding that the parties made a $55,000 down payment on the homestead.  Appellant is correct that the record established that the parties paid $44,000 at closing for a down payment.  However, this factual error is harmless because we are affirming the district’s conclusion that the homestead is marital property.



The fourth issue is whether the district court abused its discretion in awarding respondent a portion of appellant’s nonmarital assets.[1]  The district court has broad discretion when dividing property from a marriage.  See Schmitz v. Schmitz, 309 N.W.2d 748, 750 (Minn. 1981).  An appellate court will not overturn the district court’s decision regarding distribution of property upon dissolution of a marriage except for a clear abuse of discretion.  Aaron v. Aaron, 281 N.W.2d 150, 152 (Minn. 1979).  As to marital property, Minn. Stat. § 518.58, subd. 1 (2004) requires the division to be “just and equitable” based on consideration of all the relevant factors. 

A district court can award up to one-half of a spouse’s nonmarital property to the other spouse if it finds undue hardship based on all relevant factors, including the length of the marriage, the health, age, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, needs and opportunity for future acquisition of capital assets and income of each party.  Minn. Stat. § 518.58, subd. 2 (2004).  Awards of nonmarital property are within the discretion of the district court.  Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).  But “[a] very severe disparity between the parties is required to sustain a finding of unfair hardship necessary to apportion nonmarital property.”  Ward v. Ward, 453 N.W.2d 729, 733 (Minn. App. 1990), review denied (Minn. June 6, 1990).

Appellant argues that the district court abused its discretion by invading his nonmarital assets.  The district court concluded that it was just and equitable to give respondent a portion of appellant’s nonmarital assets based on the fact that the parties were married over twenty years; respondent is over fifty years old; respondent abandoned her career to be a homemaker; respondent must return to school to become recertified as a teacher; appellant received the homestead and respondent must find a place to live; and it is extremely unlikely that respondent will acquire any additional assets.  The record indicates that appellant has substantially greater earning potential than respondent, even with his medical problems.  On these facts, it does not appear that the district court abused its discretion in giving respondent a portion of appellant’s nonmarital assets.


The final issue is whether the district court disregarded the child support guidelines in delaying respondent’s obligation to pay child support until respondent receives her share of the homestead.    

The child support guidelines establish a rebuttable presumption which must be used in all child support cases.  Minn. Stat. § 518.551, subd. 5(i) (2004).  If the district court deviates from the guidelines, it is required to make written findings regarding the amount of support calculated under the guidelines, the reasons for the deviation and how the deviation serves the best interests of the child.  Id.; McNulty v. McNulty, 495 N.W.2d 471, 473 (Minn. App. 1993), review denied (Minn. Apr. 12, 1993).  The court must consider all relevant factors, including the parties’ financial circumstances and needs, and the financial, educational and emotional needs of the child.  Minn. Stat. § 518.551, subd. 5(c).  Within this framework, a district court has broad discretion to provide for the support of the parties’ children.  Putz v. Putz, 645 N.W.2d 343, 347 (Minn. 2002); Rutten, 347 N.W.2d at 50.  A district court abuses its discretion when it sets support in a manner that is against logic and the facts on record or misapplies the law.  Putz, 645 N.W.2d at 347; Ver Kuilen v. Ver Kuilen, 578 N.W.2d 790, 792 (Minn. App. 1998) (improper application of the law).

The district court ordered respondent to pay $350 a month in child support, but delayed the payment obligation until after she received her share of the equity in the homestead.  Appellant claims that this delay violates the child support guidelines.  At the outset, we note that appellant did not challenge in the district court the delay in paying child support on the theory that it constituted a deviation from the child support guidelines.  Unless the interests of justice compel consideration, we do not address theories that are not presented to the district court.  Thiele, 425 N.W.2d at 582 (“Nor may a party obtain review by raising the same general issue litigated below but under a different theory”).

Even if this issue had been properly raised, we note that by not promptly refinancing the property to pay respondent her $129,000 share of the homestead, appellant was saving money each month in interest payments.  At even a 5% interest rate, this savings would exceed $500 per month and would more than offset the $350 child support obligation.  The district court did not abuse its discretion.


[1] We note that there may be minor inconsistencies between the district court’s findings and order.  But, neither party raised the particular discrepancies and we do not further address them.