This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
In re the Marriage of:
Gregory Edward Johnston,
Anna Carroll Johnston,
Hennepin County District Court
File No. DW 281611
David E. Zins,
Ellen M. Schreder, Carson, Clelland & Schreder, Suite 305, 6300 Shingle Creek Parkway, Minneapolis, MN 55430 (for respondent)
Considered and decided by Worke, Presiding Judge; Stoneburner, Judge; and Hudson, Judge.
Appellant challenges several property-division-related decisions of the district court and the award of conduct-based attorney fees in this dissolution action. Because most of the challenged decisions fall within the district court’s broad discretion, the findings supporting the decisions are not clearly erroneous, and the remaining challenged decisions do not rise to the level of reversible error, we affirm.
I. Property division
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 law. Chamberlain
v. Chamberlain, 615 N.W.2d 405, 412 (
of wife’s post-valuation-date debt to reduce value of
(husband) first argues that the district court erred by including wife’s post-valuation-date
expense in the calculation of the marital interest in wife’s current homestead,
described as the “
Almost three months after the
valuation date, wife incurred a refinancing charge of $6,912 when she
appears to argue that because she incurred the refinancing charge to pay
interest and fees on tax liability she incurred in 2001 when she withdrew
retirement funds to pay credit-card balances and her automobile lease, the
charge constitutes marital rather than non-marital debt. The district court found that wife used her
retirement funds to pay marital debt, but there is no finding that the refinancing
charge was a marital debt. The district
court stated that “[t]he refinancing charge is an appropriate deduction for determining
the marital equity [of the
b. Tax liability for revenue recapture on
their marriage, the parties sold a
the stipulation precluded consideration of the tax liability as a marital
debt. The district court found that “the
tax liability is partially speculative [and] there is no basis to assess it to
On appeal, husband acknowledges that
the district court has discretion when determining whether to consider the tax
consequences of a property distribution.
Maurer v. Maurer, 623 N.W.2d
604, 607 (
Husband’s accountant testified that the primary variable in his calculation of this tax liability is the amount of husband’s taxable income, which determines the rate of taxation. Although husband acknowledges that he can control the amount of his income, the uncontroverted testimony of husband’s accountant was that husband’s income has consistently exceeded $38,050 per year, the amount that triggers the maximum combined state and federal rate of 32%, which is what husband’s accountant used to calculate the tax. Based on this testimony, the district court would not have abused its discretion if it had chosen to consider this debt. But we cannot conclude that the district court abused its discretion by failing to apportion this debt because consideration of tax liability is discretionary and the district court’s statement that the calculation is “partially speculative” is not clearly erroneous. Because we conclude that the district court did not abuse its discretion by declining to apportion this debt, we do not reach wife’s argument that the parties’ stipulation precluded such consideration.
Husband purchased his homestead
d. Dissipation of assets
1. SEP/IRA accounts
Husband asserts that wife withdrew
$37,997 from marital SEP/IRA accounts without his knowledge or consent and used
the funds to pay credit-card debt and her automobile lease and to make the down
payment on the
The district court found that the
bulk of the withdrawals were not to be imputed against wife because she used
the funds to pay off marital debt. Whether
debts are marital or nonmarital presumptively depends on the date they were
2. Joint savings account
Husband also asserts that wife closed a jointly held bank account five months after the parties separated by withdrawing the entire balance of $2,655.59, which she used to pay her attorney’s retainer fee. Husband asserts that the funds in the joint savings account belonged to his children and himself. Wife testified that she believed the funds in the account were from the closing on her premarital homestead. The district court did not make any findings relating to the joint savings account and did not set off these funds against wife’s share of the property division. Even if the failure to include these funds in the property division was erroneous, because the failure to address this account does not significantly affect the overall fairness of the property division, we will not remand for additional findings. See Prahl v. Prahl, 627 N.W.2d 698, 704-05 (Minn. App. 2001) (holding that, although district court clearly erred in overvaluing a marital asset by as much as $6,773, the error did not render the property distribution an abuse of discretion “[i]n the context of the entire property award[.]”).
e. American Funds IRA/SEP valuation
Husband asserts that the parties stipulated that the value of wife’s American Funds IRA/SEP account as of the valuation date was $7,427.14 and that the trial court abused its discretion by disregarding this stipulation and valuing the account at $6,178. The referee implicitly rejected husband’s assertion that there was a binding stipulation regarding the amount of this account. The district court affirmed the referee’s determination of value that was based on an account statement issued on March 31, 2003, several weeks prior to the April 22, 2003 valuation date.
The alleged stipulation is the only evidence husband offers of the account value on April 22. The alleged stipulation consisted of a statement made by wife’s attorney on the record at a deposition when both parties were present. But there is no evidence that the parties acknowledged that they understood or agreed to be bound by the statement. Cf. Beach v. Anderson, 417 N.W.2d 709, 711-12 (Minn. App. 1988) (upholding an oral stipulation when the parties acknowledged on the record that they understood the terms of the stipulation and agreed to be bound by it), review denied (Minn. Mar. 23, 1988). We conclude that the district court did not err by rejecting the assertion that the parties stipulated to the value, and the court’s value, based on the only valuation evidence offered, is not clearly erroneous. See Snesrud v. Instant Web, Inc., 484 N.W.2d 423, 428 (Minn. App. 1992) (stating factual findings reversed only if appellate court is of “definite and firm conviction that a mistake has been made.”), review denied (Minn. June 17, 1992).
g. Division of marital interest in
Husband objects to the trial court’s
equal division of the marital appreciation in nonmarital property located on
II. Conduct-based attorney fees
The district court awarded wife
$3,900 in conduct-based attorney fees. An award of attorney fees is
discretionary and will not be disturbed absent an abuse of that
discretion. Dabrowski v. Dabrowski,
477 N.W.2d 761, 766 (
The district court specified that $900 of the fee award was attributed to husband’s September 2003 motion to compel discovery. The court found that husband improperly conditioned access to the Calhoun property on wife’s provision of additional discovery materials. Husband argues that the court clearly erred when it found that he canceled an already scheduled appointment to view the Calhoun property, because wife had not even requested access to the Calhoun property at that point. But even if that finding was erroneous, the record contains evidence that husband conditioned access to the property on wife’s compliance with husband’s discovery request for her checking-account records. The record further reflects that husband continued to condition his discovery responses on wife’s compliance with his discovery requests even after the referee specifically ordered the parties not to do so. We conclude that the court did not clearly err when it determined that husband did not cooperate in discovery, and the award of attorney fees in the amount of $900 for non-cooperation with discovery was not an abuse of discretion.
The district court also awarded $3,000 based on findings that husband failed to cooperate with the court and counsel and extended the trial by continuously focusing on “irrelevant” matters. From our review of the record, we cannot conclude that husband’s focus on wife’s dog-showing activities and her lack of contribution to marital expenses was entirely irrelevant. Husband had colorable claims that these issues were relevant to the equitable distribution in this case. Husband also had a non-frivolous argument that wife should be responsible for certain debts incurred during the marriage. Despite the district court’s rejection of husband’s theory of how the marital estate should have been divided, he was entitled to present his theory and make a thorough record of his case. But he was not entitled to make cumulative arguments on these issues.
The district court acknowledged that husband was successful in some of his motions and arguments. Nonetheless, the district court found that husband contributed to the length of the proceeding. We defer to those findings. We note the district court’s statement that she had the “experience and ability to make a reasoned analysis of the time necessary and appropriate to litigate a case such as this one,” and the district court’s statement of her “abiding and persistent conclusion that the fees escalated dramatically, and partly unnecessarily, due to [husband’s] non-cooperation with the Court and [wife’s] counsel, resulting in delay and lengthening the proceedings.” For purposes of review, it would have been more helpful for the district court to have more specifically identified instances of non-cooperative conduct, but given the reduction of wife’s request for fees from $12,000 to $3,000 and the specific finding of non-cooperation, we conclude that the attorney fee award does not constitute an abuse of discretion.
 The district court determined that the valuation date was April 22, 2003, the day of the initially scheduled prehearing settlement conference.
 Husband also raised the court’s failure to award the Lyndale property to him. He stated at oral argument that this issue has been addressed by agreement of the parties and is moot for purposes of this appeal.
 Husband’s accountant testified that the combined federal and state income tax liability incurred by the parties as a result of depreciation recapture on this property is $11,101.76, payable in installments as principal payments are received over the term of the contract for deed, or until it has been paid in full.
 Despite his argument that the funds were nonmarital, husband also argued that wife’s use of these funds to pay her attorney fees constituted a dissipation of marital assets.