Minn. Stat § 480A.08, subd. 3 (1996)
STATE OF MINNESOTA
IN COURT OF APPEALS
Mary Arnell Gosse, petitioner,
Thomas Henry Gosse,
File No. MF219656
Conrad J. Carr, 8011 Nicollet Avenue South, Minneapolis, MN 55420 (for appellant)
Robert W. Due, Katz & Manka, Ltd., 4150 First Bank Place, 601 Second Avenue South, Minneapolis, MN 55402 (for respondent)
Considered and decided by Lansing, Presiding Judge, Klaphake, Judge, and Norton, Judge.*
*Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 2.
In an appeal from judgment in a dissolution action, Mary Gosse challenges the computation of spousal maintenance and the determination that the Gosses' homestead is Thomas Gosse's nonmarital property. By notice of review, Thomas Gosse challenges the marital property distribution. We affirm the computation of spousal maintenance and the marital property division as within the district court's discretion, but reverse and remand the factually unsupported categorization of the total value of the homestead as nonmarital.In an appeal from judgment in a dissolution action, Mary Gosse challenges the computation of spousal maintenance and the determination that the Gosses' homestead is Thomas Gosse's nonmarital property. By notice of review, Thomas Gosse challenges the marital property distribution. We affirm the computation of spousal maintenance and the marital property division as within the district court's discretion, but reverse and remand the factually unsupported categorization of the total value of the homestead as nonmarital.
Mary and Thomas Gosse dissolved their 12-year marriage in August 1997 after a year-and-a-half separation. For seven of the previous ten and one-half years of marriage, the Gosses maintained separate households to enable Mary Gosse's daughter to complete her education in the Edina school system. Thomas Gosse lived in his home in Wabasha during the week and traveled to Mary Gosse's Edina house on most weekends. In the three and one-half years immediately preceding the separation, the Gosses lived in a house in Wabasha that they purchased as joint tenants.
The Gosses were unable to agree on issues of property distribution and spousal maintenance. After a two-day hearing, the district court issued findings of fact, conclusions of law, and a judgment and decree designating various properties as marital or nonmarital, determining Thomas Gosse's income, ordering permanent spousal maintenance of $130 a month for Mary Gosse, and distributing 83 percent of the marital property to Mary Gosse. Neither of the Gosses brought posttrial motions. In her appeal from judgment, Mary Gosse disputes the computation of Thomas Gosse's income, the amount of spousal maintenance, and the characterization of the Gosses' homestead as a nonmarital asset of Thomas Gosse. Thomas Gosse appeals the disproportionate division of marital assets.
In an appeal from the judgment in a dissolution action, when neither party has moved for amended findings or a new trial, the scope of appellate review is limited to whether the record supports the findings of fact and whether the findings support the conclusions of law and the judgment. See Hartman v. Blanding's, Inc., 288 Minn. 415, 423, 181 N.W.2d 466, 470 (1970).
The district court may award maintenance if a spouse lacks sufficient property to provide for his or her needs or is unable to adequately self-support. Minn. Stat. § 518.552 (1996). The district court's determination of a maintenance award will not be reversed on appeal absent an abuse of discretion. Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982). The exercise of that discretion is viewed in light of the statutory criteria contained in Minn. Stat. § 518.552 (1996). Id. Although section 518.552 lists a number of factors, the test primarily centers on the financial needs of the spouse seeking maintenance balanced against the ability of the other spouse to pay maintenance. See Erlandson, 318 N.W.2d at 39-40.
Mary Gosse challenges several of the district court's findings relating to the monthly maintenance amount. She first contends that the computation of Thomas Gosse's income is reversible error because it does not include monthly payments due him on personal loans to two friends. The district court found that both loans were funded by nonmarital assets of Thomas Gosse. The evidence supports that finding. Any payments on the loans would be primarily return of principal and thus unavailable for maintenance. See Minn. Stat. § 518.54, subd. 3 (1996) (defining maintenance as payments from future income or earnings). In addition, the loans, totaling approximately $30,000, were in default and there is evidence that supports Thomas Gosse's claim that collectibility is doubtful.
Mary Gosse's second challenge to Thomas Gosse's income is the court's failure to include the interest Thomas Gosse will earn on the $24,780 of nonmarital funds remaining in his savings account after the dissolution, which she calculates as $170 a month. Mary Gosse has not established how she arrived at the $170 figure, nor has she demonstrated that it was an abuse of discretion for the district court to calculate income without including interest on assets. In calculating her income, the court similarly disregarded any interest that she could earn on her $71,634 cash award. Under these circumstances, it was not an abuse of discretion for the district court to exclude interest on Thomas Gosse's nonmarital savings account.
Mary Gosse's final challenge on the spousal maintenance issue is to the district court's finding that she has a potential earning capacity of six dollars an hour, or $830.44 a month. She maintains that she is unable to work because she suffers from manic depression. The court found that she had been employed in the past as a mail clerk, general secretary, executive secretary, legal secretary, and very briefly as a lodge manager, but was currently unemployed. Mary Gosse's psychiatrist submitted a letter indicating that her depression, triggered by an unstable marriage, prevented employment. That opinion was contradicted by the testimony of Dr. Richard Ugland, a vocational expert called by Thomas Gosse. Ugland testified that Mary Gosse was capable of working at a variety of jobs. Despite Ugland's testimony, the district court stated that it had serious reservations about Mary Gosse's employability. But because of the dearth of income and assets available, the court found that she would either have to work, obtain financial help elsewhere, or drastically reduce her expenditures.
Although we agree that an award of $130 a month is minimal and that Mary Gosse's employment prospects are speculative, the parties shared expenses for less than four of the twelve years of marriage. Mary Gosse had one child in each of two previous marriages, but the Gosses had no children together. The evidence does not indicate that Mary Gosse had to forego any employment opportunities because of the marriage, and Thomas Gosse's retirement, four years before the dissolution, was a planned decision. The court addressed Mary Gosse's difficult financial circumstances by allocating to her a disproportionately large percentage of the marital property. Given the limited financial resources of the parties and the limited amount of time during which they commingled income, we cannot say the district court abused its discretion in setting spousal maintenance at $130 per month.
The district court has broad discretion in distributing property in marital dissolutions. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984). The court is required to make a just and equitable division of the marital property, but that does not necessarily require that the division be equal. Minn. Stat. § 518.58, subd. 1 (1996); Riley v. Riley, 369 N.W.2d 40, 43 (Minn.App.1985), review denied (Minn. Aug. 29, 1985). Before this court determines that the district court abused its discretion, there must be a clearly erroneous conclusion that is against logic and the facts in the record before the district court. Rutten, 347 N.W.2d at 50.
Thomas Gosse challenges the district court's marital property distribution that resulted in Mary Gosse's receiving 83 percent of the Gosses' marital property. The district court found this case was one of the rare cases in which it might be appropriate to award Mary Gosse a portion of Thomas Gosse's nonmarital property pursuant to Minn. Stat. § 518.58, subd. 2 (1996). Instead, the district court chose to award Mary Gosse a disproportionately large share of the marital property.
Thomas Gosse's pension allows him to meet his reasonable but modest monthly expenses, including the $130 maintenance payment. Mary Gosse is a 59-year-old individual who has not worked in any substantial capacity for almost 20 years. She suffers from bipolar disorder and has no other income. Because the district court specifically acted to prevent undue hardship, the award of a disproportionately large percentage of the marital property to Mary Gosse is not an abuse of discretion.
The property of each spouse is presumed to be marital property subject to distribution in a dissolution. Minn. Stat. § 518.54, subd. 5; Kottke v. Kottke, 353 N.W.2d 633, 635 (Minn. App. 1984), review denied (Minn. Dec. 20, 1984). Nonmarital property, however, includes all or part of an asset acquired through investment of nonmarital property. See Brown v. Brown, 316 N.W.2d 552, 553 (Minn. 1982). An asset may be traced to a nonmarital source if the owner "shows by a preponderance of the evidence that the asset was 'acquired in exchange' for nonmarital property." Kottke, 353 N.W.2d at 636.
Mary Gosse challenges the district court's finding that the Wabasha property purchased by the Gosses in 1992 as joint tenants was Thomas Gosse's nonmarital property. The property, valued in 1996 at $45,000, was purchased for $26,000 with Thomas Gosse's nonmarital savings. In his answer to the complaint Thomas Gosse alleged that he had a nonmarital interest in the property, but did not allege that it was entirely nonmarital. Mary Gosse claims that part of the value is attributable to her as inheritance. The house was built by Mary Gosse's parents, and her father resided there until his death in 1990. In administering her stepmother's estate, Mary Gosse, with the permission of the other heirs, arranged for the Gosses' purchase of the house for $26,000. The sale was not an arm's-length transaction, and the district court did not address Mary Gosse's claim to a portion of the homestead's value. We therefore remand for the district court to make specific findings on the division of the Wabasha homestead property.
Affirmed in part, reversed and remanded in part.