This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1994).
STATE OF MINNESOTA
IN COURT OF APPEALS
Wendell Frederick Ploetz,
Dixie Sue Ploetz,
Filed August 20, 1996
Winona County District Court
File No. F894263
George F. Restovich, Richard W. Kimlinger, George F. Restovich & Associates, Suite 15, Riverside Building, 400 South Broadway, Rochester, MN 55904-6498
Laura J. Seaton, Mary Anne Kircher, Bosshard & Associates, P.O. Box 966, Suite 334, 505 King Street, LaCrosse, WI 54602-0966
Considered and decided by Klaphake, Presiding Judge, Crippen, Judge, and Huspeni, Judge.
U N P U B L I S H E D O P I N I O N
In this dissolution action, appellant Dixie Ploetz contests the trial court's division of the parties' marital and nonmarital property, the court's valuation of the parties' marital property, and its maintenance award. Because of matters of law governing the marital character of property conveyed to the parties as joint tenants, we reverse the trial court's division of marital and nonmarital property and remand for reconsideration of this and the other financial issues.
The parties were divorced in October 1995 after 22 years of marriage. During their marriage, they farmed on respondent's parents' property. In 1983, respondent's parents decided to give the farm and various pieces of farm equipment to the couple. Because respondent's father was in poor health and the elder Ploetzes wished to transfer the farm before his death and with minimal tax consequences, the Ploetzes consulted an estate attorney for the best method of passing on the farm. They were advised to make gifts of the land and equipment in portions of $40,000 per year to respondent and appellant as joint tenants, thus giving the maximum amount of property permitted per year before incurring gift taxes. Had the Ploetzes gifted the property to respondent alone, they would have been forced either to transfer half as much property per year or to pay gift tax on half of the gift each year. The yearly gifts continued until 1991, at which point appellant and respondent held the entire farm and the farm equipment in joint tenancy.
Despite the fact that both the deed and the other evidence indicated that the parties held the farm and equipment in joint tenancy, the trial court found that the property was a gift to respondent alone, relying on the testimony of respondent, his mother, and his siblings that respondent "was always meant to have the farm." Respondent's father died before the dissolution trial, but respondent offered testimony from other family members that it was also the father's intent that respondent receive the farm. Based on this testimony, the trial court found:
The court then determined that a list of marital property worth $812,400 should be awarded to respondent and that respondent should assume the parties' debts of $328,516.93. Thus, the court arrived at a "net marital property to husband" figure of $483,883.07. The court designated marital property of $76,578 that should be awarded to appellant. The court then added the net martial property awards and divided by two to determine the inequality of the property division. Because respondent had been awarded $280,230 more in marital property, the court ordered him to pay appellant that sum within 60 days of the judgment.
- The deed notwithstanding, the elder Ploetzes * * * did not intend to gift over their farm, the equipment or any part of it to Dixie Ploetz except in her capacity as wife of their son in an intact marriage, or as his widow should he die during the course of the marriage.
D E C I S I O N
The issue in this case is whether the trial court erred in determining that the farm property given to the parties between 1983 and 1991 by respondent's parents was respondent's nonmarital property. It is similar to the central issue recently decided in Olsen v. Olsen, ___ N.W.2d ___ (Minn. App. Aug. 13, 1996), where this court reversed a trial court's ruling that property gifted jointly to a married couple during their marriage was the nonmarital property of one spouse. In Olsen, the contested gift was given to the married couple by one spouse's uncle. The uncle testified that he intended to give the land to his niece, to "k[eep] it in the * * * family." Id. at ___. But the uncle also testified that he understood that the deed conveyed the property to both spouses as joint tenants and that he knew he would avoid some amount of gift tax by transferring the land to both spouses rather than to his niece alone.
The trial court in Olsen held that the land was the niece's nonmarital property because the uncle's intent "was to transfer the property to [his niece alone], notwithstanding the form of title." Id. at __. This court held that where a gift is given jointly to a married couple during the marriage and has never been the nonmarital property of one spouse, the joint form of that gift is material and creates a strong presumption that the gift is marital property. In short, while a trial court may rearrange title as part of a tracing of ownership to an initial nonmarital property right, it may not "summarily confiscate property from a true owner, and give it to somebody else merely because the donor has a change of heart * * * years down the road." Id. at __. This court found that the evidence in Olsen was insufficient to overcome the presumption that the gift was marital, observing several indications that the uncle intentionally and knowingly gave the land to both spouses, including (1) the joint form of the conveyance, (2) the deliberate choice of that form for tax advantages, (3) the lack of evidence that the donor misunderstood his chosen form of conveyance or the consequences of choosing that form, and (4) the lack of evidence that the donor wished to exclude his niece's husband from the gift.
Here, as in Olsen, the property at issue was never nonmarital and "tracing" cases holding that "the form of property is not necessarily dispositive of whether it is marital or nonmarital" are therefore inapplicable. Id. at ___ ("Th[e] statement [quoted above, pertaining to tracing cases] was never meant to be read as a statement that the form of the deed * * * is meaningless. The form of a recorded deed is always strong evidence of the transferor's intent and strong evidence of the identity of the transferee owner(s)."). The Minnesota Supreme Court has said:
La Cook Farm Land Co. v. Northern Lumber Co., 159 Minn. 523, 527, 200 N.W.801, 802 (1924).
- Deeds come within the scope of the accepted rules for the construction of contracts. They differ from ordinary contracts, for they not only fix the rights of the immediate parties, but affect those of every one who subsequently acquires an interest in the land. It is, therefore, of the highest importance that the legal effect of a deed should not be a matter of doubt, or that a court's surmise as to the intention of the parties should not be allowed to have greater weight than the canons of construction to which bench and bar habitually turn when in doubt as to the meaning and effect of the language of the grant.
We also reject respondent's similar argument that Minn. Stat. § 518.54 somehow weakens appellant's interest here by reducing it to a more readily rebutted presumption. To use the presumption of marital property contained in Minn. Stat. § 518.54 as a tool for converting an entirely marital transaction into nonmarital property would turn that presumption on its head. Minn. Stat. § 518.54 presumes acquisitions during marriage are marital even if not co-owned; this presumption in no way diminishes the effects of co-ownership. The statute lends no support for the notion, outside of the circumstances of tracing ownership to an initial nonmarital form, that property can be designated nonmarital without regard for the form of ownership.
Respondent relies heavily on dictum in Melina v. Melina, 411 N.W.2d 204 (Minn. App. 1987), that suggests, he asserts, that courts may disregard the form of a joint gift to a married couple and designate the gift nonmarital property. But the Melina court ultimately upholds the trial court's determination that the joint gift was marital property, finding no evidence adequate to rebut the import of the joint form of the gift. 411 N.W.2d at 207. Similarly in this case, the evidence does not permit a nonmarital finding. The record demonstrates that the elder Ploetzes understood the joint form of the gift and intentionally selected that form for its tax advantages. Cf. Olsen, __ N.W.2d at __ (joint conveyance of property and evidence of intent to take advantage of joint form for tax purposes, is "strong evidence" of intent to give gift to both parties). Further, the record contains no indication that either of respondent's parents attempted to exclude appellant from the property. Cf. id. at __ (court found it important that the donor "never testified specifically that he intended to give the * * * property to [his niece] only, and not to [her husband]"). In fact, the trial court did not find that the elder Ploetzes intended to exclude appellant from the farm gift; rather, the court found the Ploetzes intended to give appellant the farm "in her capacity as [respondent's] wife * * * in an intact marriage." But there is no evidence that the parties discussed divorce as a condition to appellant's gift and the court's finding essentially permits the Ploetz family to change its mind about appellant's gift long after it was made and after the Ploetzes have benefitted financially by reaping the gift's tax benefits. See id. at __ (courts do not have the power to convert marital property to nonmarital property to accommodate donor's "change of heart" years after a gift).
Based on these and other similarities between this case and Olsen, we follow that decision and reverse the trial court's award of the farm property to respondent as his nonmarital property. On remand, the trial court should redetermine the division of property between the parties, recognizing that the farm property is marital. Because the remand of this issue may alter the court's determination of the other issues raised on appeal, we decline to address those additional issues at this time.
Reversed and remanded.