This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

CX-96-1431

In Re the Marriage of:

Gweneth P. Wieneke, petitioner,

Appellant,

vs.

Joseph B. Wieneke,

Respondent.

Filed February 4, 1997

Reversed and remanded

Crippen, Judge

Nobles County District Court

File No. F095136

Eugene D. Mailander, Malone & Mailander, 2605 Broadway Avenue, Slayton, MN 56172 (for Appellant)

Patrick J. Leary, Quarnstrom, Doering, Pederson, Leary & Murphy, P.A., 109 South Fourth Street, Marshall, MN 56258 (for Respondent)

Considered and decided by Kalitowski, Presiding Judge, Crippen, Judge, and Harten, Judge.

U N P U B L I S H E D O P I N I O N

CRIPPEN, Judge

Citing what she believes is compelling evidence in the record, appellant Gweneth Wieneke contends that respondent Joseph Wieneke had an ownership interest in livestock valued at $1,521,977 and that $620,952 of this asset disappeared without explanation between the time the parties separated and the completion of an appraisal seven months later. Because the trial court's rationale on this fact issue conflicts with its observations on the record about the evidence, we remand for an ultimate resolution of this issue by the trial court.

FACTS

The parties were married for 19 years before divorce proceedings began in February 1995. The parties owned a one-third share of Wieneke Farms Partnership, a farming operation run by respondent and his two brothers. The trial court valued the parties' net one-third share at $103,125. This calculation was consistent with an October 1995 appraisal of the partnership's personal and real property assets, which included livestock valued at $767,025.

At trial, appellant did not contest the accuracy of the appraisal itself, but she questioned the livestock numbers that respondent's brother had provided to the appraisers. Appellant introduced a financial statement filed by the partnership in March 1995 that listed livestock assets of $1,521,977. A bank official testified that the March statement appeared accurate and that the livestock market did not excessively fluctuate in 1995. The parties agreed that $134,000 in proceeds from livestock sales were applied to reduce the partnership's debt and that this liquidation of animals partially accounted for the difference in livestock values between the March statement and the October appraisal. This reduction in debt reduced the discrepancy to $620,952. Considering the parties' one-third interest in the partnership's assets, the parties' share of the discrepancy is $206,984.

Respondent testified that although he lacked personal knowledge of the exact figures, he assumed that his brother had prepared the March financial statement accurately and provided the appraisers a reliable accounting of the livestock in October. Respondent attributed the discrepancy between the March financial statement and the October appraisal to a possible change in the market, but the trial judge acknowledged on the record that he had trouble believing this explanation. When asked by the court whether the livestock market actually fluctuated to a sufficient degree to explain a $620,952 drop in value, respondent replied, "probably not." After respondent suggested that a miscalculation on the financial statement may have caused the decrease, the trial judge replied that this explanation was unacceptable because respondent's banker attested to the accuracy of the statement. Again, the court noted that it did not believe the proffered explanation.

The trial court's original order disregarded the March valuation, observing that the "valuation of the partnership fluctuates daily as a result of market changes in the value of grain, cattle and real estate." Appellant then brought a motion for a new trial or, in the alternative, for amended findings and conclusions, alleging that the court had not addressed the discrepancy between the March financial statement and the October appraisal. The trial court denied the motion for a new trial but partially amended its findings of fact to justify its refusal to adjust the value of the partnership. Noting that appellant had the burden to show a dissipation of assets, the court observed that appellant furnished no evidence showing that livestock transactions occurred outside of the "usual course of business."

D E C I S I O N

Appellant does not dispute that the October appraisal accurately reflected the partnership's assets at that time or that she had the burden of proving that the value of the livestock dropped between March and October without explanation. Minn. Stat. § 518.58, subd. 1a (1996). Rather, she claims that the trial court faulted her for failing to prove a dissipation of assets in the intervening months when the trial court's observations during trial apparently indicated that she had proven that the partnership's livestock value was $754,952 more in March and that respondent had accounted for only $134,000 of this discrepancy through proceeds of livestock sales. Appellant contends that it would have appeared an imprudent use of judicial time to introduce additional evidence after the trial court indicated that she successfully had demonstrated a problem of missing assets. Although the trial court's observations on the record are not part of its findings of fact, they create a conundrum for appellant when she rests on the record and does not submit further proof.

The record leaves us unequipped to determine whether respondent should be required to account for the parties' $206,984 share of the $620,952 difference between the October and March valuations of the partnership's livestock, as adjusted by recorded sales. Were we to overlook the earlier valuation, we would have to dismiss uncontradicted evidence despite no basis in the record to permit such a conclusion. And were we to require the accounting, we would have to give respect to the weight of the evidence on the earlier valuation but disregard the trial court's decision to ignore that figure. Because we think the trial court ultimately should decide this issue, we remand for that purpose.

We have examined the several possible theories permitting disregard of the earlier financial statement, but we can find none that would let us affirm. In its initial findings, the trial court observed that livestock is subject to market fluctuations in value. As the court later observed in its amended findings, there was no evidence concerning the level of market fluctuations between March and October 1995. And the record shows that the market experienced little fluctuation and that a piece of evidence elicited from respondent by the trial court confirmed this fact. Without supplementing the record, neither this court nor the trial court properly could find a $620,952 decline in market value.

We might speculate that the initial statement contained mistakes due to either a reporting error, calculated or otherwise, or inflation, and that the statement reflects a practice mutually beneficial for bank customers in their quest for credit and bankers in their quest for records to justify the extension of credit. Still, no evidence in this record indicates an error by respondent's brother or any such tendencies by bank customers or bankers. Furthermore, the trial court rebuffed respondent's suggestion of a miscalculation. The trial court is free to reverse its observations on the record, but this depends on the existence of evidence to sustain a finding that the March report is erroneous.

Appellant notes that the trial court openly doubted respondent's denial that his brother had estimated the livestock numbers provided for the October appraisal, thereby raising an inference of concealment. Both the October appraisal and the March statement list cattle and hogs in groups sorted by type and weight and provide the quantity and price of each group. Twelve of the thirteen quantity listings on the appraisal have numbers ending in zero, but only nine of the eighteen quantity listings on the earlier financial statement have numbers ending in zero. Despite the trial court's skepticism on the record concerning the livestock numbers provided to the appraisers, it found the October valuation fair and reasonable.

In its amended findings, the trial court observed that appellant could not meet her burden without showing transactions between March and October that demonstrate an acquisition of funds that respondent subsequently misapplied. Appellant correctly observes that this additional proof is not required if in fact appellant successfully has demonstrated that the partnership had $1,521,977 in livestock assets in March and failed to account for the $620,952 decrease in value. Appellant cannot be expected to prove what she could not know regarding the time and manner that livestock assets were dissipated. It is the respondent's burden to account for any discrepancy proven by the evidence in the March financial statement.

Our narrow standard of review requires deference to the trial court, but the court's only definite findings were on the October value. The record does not bear out prospective explanations of the March value. For this reason, we remand the case for further proceedings consistent with this opinion.

Reversed and remanded.