This opinion will be unpublished and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
Kenneth Robert Smigelsky,
Wendy Sue Smigelsky,
Reversed and remanded
Becker County District Court
File No. F405398
John G. Westrick, Kirk M. Anderson, Westrick & McDowall-Nix, P.L.L.P., 450 Degree of Honor Building, 325 Cedar Street, St. Paul, MN 55101 (for respondent)
Charles A. Krekelberg, Krekelberg, Skonseng & Hastings, P.L.L.P., 10 North Broadway, Box 353, Pelican Rapids, MN 56572-0353 (for appellant)
Considered and decided by Halbrooks, Presiding Judge; Klaphake, Judge; and Stoneburner, Judge.
Appellant wife challenges the property division in this dissolution matter, asserting that the district court erred in (1) determining that an investment account and an automobile were marital property; (2) failing to consider a $20,000 loan from wife’s parents as marital debt; (3) concluding that a credit-card debt incurred by respondent husband after the parties’ separation was a marital debt; and (4) determining husband’s net income for purposes of calculating child support. We reverse the district court’s determinations on the marital character of the investment account, car, and credit-card debt, and the award of an equitable offset for husband’s labor against the loan from wife’s parents. Because the findings are inadequate for meaningful review of the marital or non-marital character of that loan, husband’s credit-card debt, and calculation of husband’s net income for child-support, we remand for additional findings on those issues.
At trial in this dissolution action, the parties submitted the issues of custody, child-support, and property division to the district court. Appellant Wendy Smigelsky (wife) works as a registered nurse. Respondent Kenneth Smigelsky (husband) owns and operates a small landscaping business and works during the offseason at electrical and construction businesses. The parties have one minor child.
Wife argued that an Edward Jones investment account, which she opened at the time of the parties’ separation, and a Volkswagen Passat are her nonmarital property because they were traced to annuity payments she received during the marriage from a settlement for a childhood injury. The district court concluded that neither the investment account nor the Volkswagen were nonmarital property because they were not sufficiently traced to the annuity payments, which the district court found were commingled with marital funds in the parties’ joint account.
The district court also concluded that a $20,000 loan from wife’s parents for the parties’ home remodeling project is wife’s nonmarital debt based on findings that husband did not know about the loan until trial, only wife signed the promissory note to her parents, and that it was “equitable” to offset the value of husband’s extensive labor on the remodeling project against the loan. The district court assigned as marital a credit-card debt of $8,045.76, which was incurred solely by husband during the parties’ separation. And the district court found that husband’s net monthly income for child-support is $1,000.
The district court denied wife’s motion for amended findings or a new trial, and this appeal followed.
During the marriage, wife received annuity payments of $41,850 and $62,775 from a settlement for a childhood injury. Wife argues that she appropriately traced funds in an investment account and funds used to purchase a Volkswagen Passat to the annuity payments to establish that the investment account and vehicle are nonmarital. We agree.
The determination of whether property is marital or
nonmarital is reviewed de novo, but an appellate court must defer to the
district court’s findings of fact unless they are clearly erroneous. Gottsacker
v. Gottsacker, 664 N.W.2d 848, 852 (
The district court found that the annuity funds were “gifted”
to husband and lost their nonmarital character when they were commingled with
other funds in the parties’ joint bank accounts. See
Crosby v. Crosby, 587 N.W.2d 292, 296-97 (
Tracing of Volkswagen to annuity funds
Wife testified, and exhibits confirm, that in March 2004, wife deposited an annuity payment in the amount of $62,756.41 into the parties’ joint savings account, which at that time contained only a nominal sum. In late April 2004, wife transferred $14,600 from the savings account into the parties’ joint checking account and immediately wrote a check for that amount to purchase a Volkswagen Passat. Husband testified that he knew that the money for the Passat came from wife’s annuity payment, acknowledging that those funds were the only possible source of money for the vehicle purchase. Because wife has shown by a preponderance of the evidence that the Volkswagen Passat was acquired in exchange for nonmarital funds, we conclude that the district court erred in characterizing the vehicle as marital property and reverse that holding.
Tracing of investment account to annuity funds
When the parties separated, wife closed the joint savings account, which had a balance of approximately $37,000. She initially placed the money into a savings account in her name only, then transferred the funds to the Edward Jones investment account at issue in this appeal. Because a preponderance of evidence shows that the investment account was purchased solely with wife’s nonmarital funds, the district court erred in holding that wife had failed adequately to trace this asset, and we reverse the district court’s determination that this fund is marital.
A district court apportions debt as
part of the marital property division and treats the division of marital debt
in the same manner as the division of assets.
Justis v. Justis, 384 N.W.2d
885, 889 (
Loan from wife’s parents
During the marriage, the parties were remodeling their home. Wife testified that her parents, with husband’s knowledge, loaned wife $20,000 for home improvements and that the loan was a marital debt, although the promissory note contains only wife’s signature. The district court credited husband’s testimony that he was not aware of this loan until trial. The district court also found that it was “equitable” to “offset” husband’s labor on the home against this loan and did not include the debt in the property division.
Because we cannot determine from the
district court’s findings whether the district court considered the debt
marital or nonmarital, we remand for additional findings and a clear
determination of the character of the debt.
See Stich v. Stich, 435 N.W.2d
52, 53 (
Husband’s credit-card debt
Wife argues that the district court
erred in determining that an $8,045.76 credit-card debt incurred by husband
after the parties’ separation was a marital debt. Debt acquired during the marriage and before
the valuation date, which is generally the date of the initially scheduled
prehearing conference, is presumed to be marital. See
Wife argues that the district court
clearly erred in its determination of husband’s net monthly income for
child-support purposes. A district court
has broad discretion to provide for the support of the parties’ children. Putz v.
Putz,645 N.W.2d 343, 347 (
The district court found that
husband’s average net monthly income from his landscaping business and
off-season employment is approximately $1,000 per month, but gave no
explanation of how it arrived at that figure.
For child-support purposes, “[i]ncome from self-employment is equal to
gross receipts minus ordinary and necessary expenses.”
Reversed and remanded.
 The district court implicitly held that the annuity payments were wife’s non-marital property. Because husband did not file a notice of review on this issue, the determination that the payments are wife’s non-marital property is not before us and is not subject to relitigation on remand. See Minn. R. Civ. App. P. 106; Martin v. Martin, 401 N.W.2d 107, 108 n.1 (Minn. App. 1987) (declining to review challenge to property division when no notice of review was filed).