This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2006).
STATE OF MINNESOTA
IN COURT OF APPEALS
In re the Marriage of:
Gregory Dean Naughton, petitioner,
Pamela Joanne Naughton,
Filed May 29, 2007
Beltrami County District Court
File No. F6-05-0864
George L. Duranske III, Duranske Law Firm,
Thomas L. D’Albani,
Considered and decided by Stoneburner, Presiding Judge; Dietzen, Judge; and Worke, Judge.
U N P U B L I S H E D O P I N I O N
On appeal in this dissolution matter, appellant argues that the district court erroneously categorized the increase in the value of certain nonmarital real property as marital property and, therefore, the division of that increased value was improper. We remand for findings in support of undue hardship.
D E C I S I O N
Appellant Gregory Dean Naughton argues
that the district court erred in giving respondent Pamela Joanne Naughton a
marital interest in the parties’ homestead because
In 2002, appellant received five acres from his parents and began building a house on the property. Prior to receiving the property, appellant began dating respondent. The parties were married in July 2004. The main issue at trial was the extent of respondent’s interest in appellant’s home. It is undisputed that respondent did not make any financial contributions to the home; however, the parties did dispute the extent of respondent’s labor contributions during the building of the home. It is also undisputed that very little, if any, improvements were made to the home following the marriage. Appellant argues that there is no marital interest in the home because respondent made no financial contributions either before or after the parties’ marriage, and no improvements were made to the home after the marriage.
Nonmarital property includes
property acquired before the marriage, acquired in exchange for property acquired
before the marriage, and the increase in value of property acquired before the
marriage. Minn. Stat. § 518.003, subd. 3(b)
(2006). Although the statutory
definition states that the increase in
value of nonmarital property is also
this includes passive appreciation only.
Swick v. Swick, 467 N.W.2d 328, 331 (Minn. App. 1991), review
denied (Minn. May 16, 1991). Active appreciation is generally considered
marital in nature and occurs as a result of an investment of time, effort, or money
or the active maintenance, management, or improvement of the
nonmarital assets during the marriage.
[T]he increase in the value of nonmarital property attributable to the efforts of one or both spouses during their marriage, like the increase resulting from the application of marital funds, is marital property. Conversely, an increase in the value of nonmarital property attributable to inflation or to market forces or conditions, retains its nonmarital character.
Nardini, 414 N.W.2d 184, 192 (
Under Minnesota law, however, a district court is
allowed to grant a party up to 50% of the value of the other party’s nonmarital
assets if one party’s resources or property, “including the spouse’s portion of
the marital property[,] . . . are so inadequate as to work an unfair hardship,
considering all relevant circumstances.”
Here, the district court found that
both parties contributed equally to the labor improvements to the property
beginning as early as 2002 in anticipation of marriage. Further, respondent “would not have put the
efforts into improving this homestead had there not been the anticipation of
marriage, and any award by this court that does not provide her a fair and
equitable share of the increase in equity of this property would create an
undue hardship on the respondent.” Based
on these findings, the district court awarded appellant a nonmarital credit of
$20,000 for the land and $20,000 for the financial contributions he could prove
that he made to the property. The
remaining value of the property was treated as marital and divided equally
between the parties. The district
court’s conclusion is not supported by