This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2006).
IN COURT OF APPEALS
re the Marriage of:
Victor Anthony Kreuziger, petitioner,
Patricia Evelyne Kreuziger,
In re the Marriage of:
Victor Anthony Kreuziger, petitioner,
Patricia Evelyne Kreuziger,
Filed August 7, 2007
Crow Wing County District Court
File No. F0-04-1212
Debra E. Yerigan, Jodi M. Terzich, Messerli & Kramer P.A., 1800 Fifth Street Towers, 150 South Fifth Street, Minneapolis, MN 55402-4218 (for appellant)
Due, Susan A. Daudelin, Katz, Manka, Teplinsky, Due & Sobol, Ltd.,
Considered and decided by Shumaker, Presiding Judge; Peterson, Judge; and Ross, Judge.
U N P U B L I S H E D O P I N I O N
On appeal in this marital dissolution, appellant-husband argues that (1) certain real property awarded to husband was overvalued because the valuation (a) was based on the speculative assumption that the property could be rezoned; and (b) misstated the value of the marital improvements to the property; (2) the value of the overvalued real property should have been reduced by the amount of loans secured by the property; (3) the distribution of the marital property was inequitable; and (4) the district court should have granted husband’s motion to reopen the judgment for fraud. We affirm.
The 43-year marriage of appellant-husband Victor Anthony Kreuziger and respondent-wife Patricia Evelyne Kreuziger was dissolved by a judgment and decree entered December 28, 2005. The primary dispute on appeal concerns the district court’s valuation of lakeshore property consisting of four parcels, acquired sequentially and totaling 8.76 acres, with 1,110 feet of frontage on Clamshell Lake in the Lower Whitefish Chain in the Brainerd Lakes area, an area undergoing rapid development where lakeshore property is in extremely high demand. Husband began acquiring the property before the marriage. In addition to the lakeshore property, the parties acquired during the marriage interests in two undeveloped islands in the lake, which total .23 acres.
Improvements to the
Frank McLean, who testified as an expert for wife, opined
that it was highly probable that the Clamshell Lake property could be rezoned
from the current, more-restrictive shoreland residential 2 (SR2) classification
to shoreland residential 1 (SR1). Under
an SR1 classification, the property could reasonably be subdivided into eight
lots, which would maximize the property’s value.
[The use] must be legally permissible, the use must be physically possible, and the use should be financially feasible, and the use should be maximumly productive.
I addressed the legally permissible in that the -- I find that there were no deed restrictions or environmental regulations, no restrictive building code that would preclude specific uses. I note that the property is in a rural residential district, and I go on to discuss that in my opinion that the zoning could be changed to residential to allow for denser development of the property. That addressed the legally permissible use, in my opinion, of highest and best [use].
Then I discussed briefly the site characteristics, having nearly nine acres and 1,100 plus feet of frontage, and stated that I thought that eight sites would each include one acre or more and have 130 to 140 feet of frontage, both of those statistics being in excess of county minimum requirements under the residential zoning that existed at that time. And I stated that in my opinion there was no unique physical characteristics of the property that would preclude residential development. . . .
And then I addressed the feasibility of it and discussed the demand in the area for lakeshore properties and discussed the -- the challenges that would face a developer. And in the subject case, they would be minimal. There’s a road fronting the entire length of the property. There’s public utilities along the road. None of this infrastructure would be required for a developer to put in. His costs would be primarily surveying and soft costs associated with all the legal hoops and jump-through to get the plat approved. That addressed the feasibility.
The fourth and final element is the maximumly productive. And the demand for waterfront lots in this area is again strong and continues to be strong, and that I felt like there was an adequate market, that there would be a premium pay for these properties, and they would sell out relatively quickly.
Using a discounted-cash-flow
approach, McLean determined the value of the
Laura Lorek, a licensed real-estate agent who was trained
as an appraiser and had experience selling lakeshore properties in the
Janie Lapka, a licensed real-estate broker with 18 years
of experience selling real estate in the
David Goedker, who testified as an expert for husband,
district court adopted McLean’s valuation of the
On April 24, 2006, husband filed a motion to reopen the judgment and decree. By order filed May 23, 2006, the district court denied husband’s motion in its entirety. On June 21, 2006, husband filed a notice of appeal from the May 23, 2006 order. This court ordered the two appeals consolidated.
D E C I S I O N
valuations are findings of fact, and we will not set them aside unless they are
market value in the context of eminent domain, the court may consider any
competent evidence if it legitimately bears upon the market value.
[S]pecific numerical, analytical and illustrative evidence supporting the developmental cost approach appraisal will be allowed only if the party introducing such evidence can lay a proper foundation to show that (a) the land is ripe for development; (b) the owner can reasonably expect to secure the necessary zoning and other permits required for the development to take place; and (c) the development will not take place at too remote a time.
N.W.2d at 922. Because the development-cost
approach is complex and susceptible to manipulation, “it should be employed
judiciously, when the other traditional methods for valuing property are not
wholly reliable and only after a proper foundation has been laid.” Hansen
v. County of Hennepin, 527 N.W.2d 89, 94 (
district court adopted McLean’s $4,345,000 valuation of the
Citing Kitchar v. Kitchar, 553 N.W.2d 97 (Minn. App. 1996), review denied (Minn. Oct. 29, 1996), husband argues that “[t]his court has signaled that when valuing real property in a dissolution proceeding, district courts are not to assume that the property can and will be rezoned.” Husband’s argument misconstrues Kitchar. In Kitchar, this court affirmed the district court’s adoption of a valuation that did not involve rezoning, but this court did not indicate that rezoning was an impermissible assumption. 553 N.W.2d at 102.
also relies on Stageberg v. Stageberg,
695 N.W.2d 609 (Minn. App. 2005), review
argues that using the development-cost method in this case was contrary to Buzick v. City of Blaine, 505 N.W.2d 51
(Minn. 1993). The Buzick court stated, “Property is ripe for development when the
improvements are completed making possible the development of the property at
its highest and best use.” 505 N.W.2d at
was a special-assessment case, and the term “improvements” referred to the
paving of city streets and construction of city waste and sewer mains.
valuation argument disregards the valuation opinions of three qualified experts
who testified at trial. This court
defers to the district court’s determinations regarding the weight and
credibility of expert evidence. Alstores Realty, Inc. v. State, 286
argues that the value of marital improvements to the
Mr. McLean was . . . assigned the task of determining the hypothetical value the property would have if [husband] had acquired the entire property before the marriage and had done nothing to it during the 43-year marriage – specifically, if [husband] had not cleared the land, landscaped the property, planted the trees, built the cabin, boathouse, and pole barn, or constructed the Swiss-style chalet. He concluded that the property would have been worth $3,530,000 under that hypothetical. The difference of $815,000 would be marital property, and to that figure must be added the value of the island parcels acquired during the marriage, $10,000 according to [husband].
. . . .
[Husband] . . . argues that the marital component of value should be limited to the depreciated cost of reproducing the structures on the property – estimated variously by the appraisers at $334,000 to $355,000. But that approach ignores the synergistic effects of locating the chalet on the shore of a lake (a marital decision requiring marital effort and funds), as opposed to locating the chalet on a former cornfield or Brainerd city street. While Mr. McLean estimated the depreciated cost of reproducing the chalet at $284,059 including the well and septic system . . . and the cost of acquiring similar lakeshore for a 133 frontage foot lot at $3,200 per foot or $425,600, he has valued the chalet and a 133 frontage foot lot together at $1,047,600. In other words, the whole is greater than the sum of its parts because of the incredibly high demand created by combining a Swiss chalet with scenic lakeshore.
We affirm the district court’ determination of the marital
interest in the
Husband argues that the district court erred in failing to reduce the value of the Clamshell Lake property by $175,333, the amount of loans and accrued interest owed by VFE to the parties’ daughter, son, and granddaughter and to husband’s inheritance account. The district court explained that its decision to disregard the loans to the parties’ daughter and granddaughter was due to inconsistent representations by husband about the purported loans, the lack of documentation of the purported loans and their terms, and the lack of evidence corroborating husband’s testimony. The district court also noted that at the same time VFE was purportedly borrowing money from the parties’ daughter in increments of $10,000, husband was gifting substantial sums of money to the daughter, also in increments of $10,000. Although the district court did not specifically address the money allegedly borrowed from the parties’ son and husband’s inheritance account, in addressing the purported loans from the daughter and granddaughter, the court found “that there has been insufficient proof of the existence of any loans.”
argues that the district court incorrectly understood that as a matter of law,
it could not consider loans between family members. But the district court’s statements show that
it was exercising its discretion when it declined to deduct the amount of the
purported loans from the value of the
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.” Sirek
v. Sirek, 693 N.W.2d 896, 898 (
The district court awarded wife a 60% share of the marital estate, explaining the disproportionate award as follows:
Given the extraordinary length of the marriage, given the fact that both parties have passed normal retirement age, and given that [wife] should be able to retire from teaching piano, just as [husband] has retired from the practice of law, and be self-sufficient on the basis of the assets awarded to her, and taking into account the substantial nonmarital property [husband] will retain after the dissolution of the marriage, the Court finds that the following disproportionate division of marital property is fair and equitable after consideration of all of the factors set forth in Minn. Stat. § 518.58 . . . .
While the above division gives [wife] approximately 60% [ ] of the marital property, it gives [husband] 70 percent of the total marital and nonmarital assets after a 43-year marriage. [Wife] is also awarded more than 50% of the marital assets because of the following:
(1) Given the extraordinary length of the marriage and the ages of the parties, it would constitute unfair hardship for [wife] not to be awarded sufficient property to render her self-sufficient, apart from her income as a piano teacher. Given [wife’s] age and health problems . . ., she should not be forced to continue teaching piano well past her normal retirement age.
(2) [Husband] has substantially more property available to him and a likely sale of a portion of the lakeshore real estate will allow him greater opportunity to acquire assets in the future.
The factors considered by the district court in awarding wife a disproportionate share of the marital estate are permissible factors to consider in the division of marital property. See, e.g., Kaste v. Kaste, 399 N.W.2d 128, 130 (Minn. App. 1987) (upholding division of marital property awarding wife 57% of marital estate considering wife’s health and occupational and financial difficulties), review denied (Minn. Mar. 13, 1987). The district court did not abuse its discretion in dividing the marital property.
argues that the district court erred in denying his motion to reopen the
judgment based on fraud. A dissolution
judgment may be reopened for ordinary fraud.
Minn. Stat. § 518.145, subd. 2(3) (2006). A motion to reopen for ordinary fraud must be
treated as a complaint in an independent fraud allegation. Doering
v. Doering, 629 N.W.2d 124, 130 (
Wife failed to disclose an asset that she owned that was worth about $50,000, which is less than one percent of the total assets divided by the court. The asset is a remainder interest in real property owned by wife’s mother. Husband submitted no discovery requests specifically addressing the omitted asset, and wife stated in an affidavit that she did not understand that the future interest was relevant to the dissolution proceeding. It is understandable that a layperson would not understand that a future interest in real estate is a present asset for purposes of a dissolution proceeding, particularly when, as here, the layperson was not involved in the details of the estate planning that resulted in the creation of the future interest and the interest was created many years earlier. Husband argues that he should have been permitted discovery on the issue, but he has made no showing that discovery would likely lead to relevant evidence. The district court did not err in finding that the lack of disclosure did not affect the fairness of the property division and denying husband’s motion to reopen the dissolution judgment without an evidentiary hearing.
record on appeal consists of “[t]he papers filed in the trial court, the
exhibits, and the transcript of the proceedings.”
moves to strike from the appendix to wife’s brief a letter written by
 Husband’s argument that the district court awarded
wife 85% of the marital estate is based on his claim that the district court
erred in valuing the