may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
In Re the Marriage of:
Julie Ann Johnson, petitioner,
Harvey Scott Johnson,
Filed September 15, 1998
Wright County District Court
File No. FX961833
Judith L. Oakes, J. Oakes & Associates, Galtier Plaza, Suite 780, 175 East Fifth Street, Box 15, St. Paul, MN 55101 (for respondent)
David D. Himlie, 308 Edina Executive Plaza, 5200 Willson Road, Edina, MN 55424-1332 (for appellant)
Considered and decided by Kalitowski, Presiding Judge, Amundson, Judge, and Holtan, Judge.*
Appellant Harvey Scott Johnson challenges the district court's determinations with respect to: (1) the nonmarital nature of corporate stock, a commercial building, and the parties' homestead; (2) valuation of the parties' assets; (3) whether the property division resulted in "unfair hardship" to appellant; and (4) the division of certain items of personal property. We affirm.
Whether property is marital or nonmarital is a question of law upon which appellate courts exercise independent judgment. Johnson v. Johnson, 388 N.W.2d 47, 48-49 (Minn. App. 1986); see Minn. Stat. § 518.54 (1996) (defining nonmarital property). A spouse claiming that property is nonmarital must prove the necessary underlying facts by a preponderance of the evidence. Id. at 49. When nonmarital and marital property are commingled, the nonmarital investment loses that character unless it can be readily traced. Id. at 50.
Although this court need not give deference to a district court's legal conclusions about the marital or nonmarital nature of property, we must uphold the findings of fact supporting those conclusions unless the findings are clearly erroneous. Freking v. Freking, 479 N.W.2d 736, 739 (Minn. App. 1992). At the trial of this matter, respondent presented the expert testimony of Robert Carlson, CPA, for the purpose of tracing her nonmarital interests in the parties' homestead and for purposes of valuing the corporate stock of the Furniture Gallery by Julie Ann, Inc. (Furniture Gallery). Appellant did not present any expert testimony or evidence with respect to the tracing of nonmarital assets and property valuation. Regarding these issues, the district court found:
Petitioner and her witnesses, including Mr. Robert Carlson, presented the more credible evidence regarding valuation of the furniture store building, warehouse, outlot, homestead and the corporate shares of stock during trial. The petitioner adequately traced assets now [labeled] non-marital property from the exchange of earlier owned non-marital assets.
The weight and credibility of the testimony of witnesses, including expert witnesses, is for the trier of fact to determine. Alstores Realty, Inc. v. State, 286 Minn. 343, 353, 176 N.W.2d 112, 118 (1970). The testimony and evidence presented at trial supports the findings and determinations of the district court with respect to the nonmarital nature of the corporate stock, the Furniture Gallery store, and the parties' respective nonmarital portions of their homestead.
The record indicates that: (1) at all relevant times prior to, during, and after the parties' marriage, respondent was employed as the president and CEO of the Furniture Gallery; (2) prior to the marriage, respondent sold a home on a contract for deed; (3) funds from the sale of respondent's home were used towards the purchase of the Furniture Gallery store (purchased prior to the marriage) and the parties' marital homestead; (4) the Furniture Gallery store building did not increase in equity during the parties' marriage because the parties took out a second mortgage against the property in the amount of $75,000; and (5) respondent never transferred any of her stock in the Furniture Gallery to appellant. The record adequately supports the district court's findings with respect to the nonmarital nature of the corporate stock, the commercial building, and the nonmarital portion of the parties' homestead. We conclude the district court properly determined the marital and nonmarital nature of the parties' property.
Appellant challenges the valuation of: (1) Furniture Gallery stock; (2) the Furniture Gallery land, building, and outlot; (3) the parties' homestead; and (4) the parties' warehouse. We conclude the record supports the district court's valuations.
The district court adopted the valuation of the corporate stock provided by respondent's expert. The qualifications of the expert to render such a valuation are not in dispute. The expert testified that this stock had zero value at the time of valuation. Although offering no expert testimony or other documentary evidence, appellant asserts that the stock increased in value, partly due to his efforts while employed by the corporation during the course of the marriage. Appellant's argument fails to address the expert's conclusion that the liabilities of the corporation exceed its assets. Such liabilities were properly considered in this valuation because
[t]he value of a family business as marital property cannot be less than a sum equal to the net proceeds which could be realized from the forced sale of the tangible assets of the business and the collection or assignment of intangibles such as accounts receivable, and after payment of all liabilities.
Nardini v. Nardini, 414 N.W.2d 184, 189 (Minn. 1987) (emphasis added).
Additionally, the district court adopted reasonable appraisal values provided for the homestead and the Furniture Gallery store. The values assigned to these assets by the court are within the credible range of estimates given by witnesses and provided in the appraisals submitted into evidence. We cannot say that the assignment of these values was clearly erroneous.
Finally, appellant contests the district court's valuation of a warehouse built by the parties during their marriage. Part of this warehouse was leased to the Furniture Gallery. The warehouse's appraised value at the time of the dissolution was $200,000, which included approximately $30,000 in leasehold improvements paid for by the Furniture Gallery. Based on the evidence in the record, the district court considered the leasehold improvements paid for by the Furniture Gallery to be nonmarital property. The district court awarded the warehouse to respondent, assigning it a "marital" value reduced by the value of the leasehold improvements. Because there is evidence in the record to support the district court's valuation of the warehouse, we cannot say the valuation is clearly erroneous. We thus conclude the district court did not abuse its discretion in its valuation of the parties' assets.
This court has recognized that "[e]quity does not require an equal division" of property but requires an equitable division of property. Bury v. Bury, 416 N.W.2d 133, 136 (Minn. App. 1987). Appellant alleges that he received only $50,000 in assets whereas respondent received over $1,000,000 in assets. Appellant, however, fails to factor in the large amount of debt that was assigned to respondent. Further, appellant was awarded his farmland in Roseau outright with no claim by respondent. Based on the evidence in the record, we cannot say the district court erred by failing to invade respondent's nonmarital assets to prevent unfair hardship to appellant.
*Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. Art. VI, § 10.