may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
In Re the Marriage of:
Robert Everett Sherman, petitioner,
Donna May Sherman,
Filed April 27, 1999
Affirmed in part, reversed in part, and remanded; motion denied
Red Lake County District Court
File No. F9-98-19
Timothy W. McCann, Lindquist, Jeffrey, & Jensen, P.A., 306 American Federal Building, 124 DeMers Avenue Northwest, East Grand Forks, MN 56721 (for respondent)
Considered and decided by Randall, Presiding Judge, Harten, Judge, and Shumaker, Judge.
Appellant argues that the district court erred in refusing to grant him $20,000 in nonmarital assets. Appellant also contends the district court abused its discretion in valuing a farm and by failing to offset a debt against the valuation and distribution of the parties' personal property. On appeal, respondent asks this court to grant her an award of reasonable attorney fees. We affirm in part, reverse in part, and remand, and deny respondent's motion for fees.
Appellant received a property settlement in the form of a certificate of deposit worth $20,000 from his previous marriage. Appellant testified that he used the $20,000 to purchase a trailer home for respondent and him to live in right after they were married. After living in the trailer for one-and-a-half years, they sold it for $21,000 and used half of the money as a down payment to build a new home and the other half to purchase furniture. They lived in the new home for two-and-a-half years.
After appellant lost his job, the parties decided to sell the new home and jointly purchase a business in Oklee, Minnesota. They used the $31,000 profit from the sale of the new home and $9,000 from the sale of a mini-home to invest in a NAPA auto parts and bulk fuel delivery franchise in Oklee. The couple purchased Bob's NAPA Auto Parts Store with the $40,000 as down payment and a Small Business Administration (SBA) loan. They both participated in the daily operation of the business while holding outside employment driving buses.
Appellant decided to begin a farming operation in the late 1980s. The parties purchased the Sweno and Nelson farms. In the early 1990s, the NAPA business took a turn for the worse, and the parties decided to sell the business. While respondent's work as a bus driver contributed towards the parties' household expenses, appellant's farming did not because the farms always operated at a loss. At the time of trial, the NAPA business was still on the market. The parties have had difficulty finding a buyer with a sufficient down payment. In order to secure operating funds for the NAPA business, the parties took out a second mortgage on the Sweno farm on July 18, 1997, for the principal sum of $36,254.26. The Sweno farm's first mortgage has a principal balance due of $6,704. The parties believe that the proceeds from the sale of NAPA business will be enough to pay off all secured debt, thereby avoiding the sale of the Sweno farm.
When the parties separated, respondent took a majority of the furniture from their residence. On their separation, but before the valuation of assets by the court, appellant charged roughly $5,000 for furniture on his Mastercard.
The district court ordered that the NAPA business remain in the parties' names as tenants-in-common, with each owning an undivided one-half interest. On sale of the business, the parties will share equally in the profit or loss. In determining whether there is a loss or gain, payment of the $36,250.26 mortgage on the Sweno farm shall be included in that determination. The $6,704 first mortgage on the Sweno farm will not be included. There is to be no profit unless the second Sweno mortgage is paid in full. The district court valued the Sweno farm at $29,700. The court also ordered that the pickup be sold and the proceeds, after payment of the balance due on the truck, be applied to the SBA loan.
The district court valued the parties' personal property at $6,000 and divided it equally between the parties, while allowing appellant to have all right, title, and interest in his $5,000 of furniture. The court did not deduct the appellant's $5,000 credit card debt for furniture from the value of the assets attributed to appellant in the distribution scheme.
Under Minnesota law, the presumption of marital property may be overcome by demonstrating that the property is nonmarital property. Minn. Stat. § 518.54, subd. 5 (1998). Nonmarital property is defined as
property real or personal, acquired by either spouse before, during, or after the existence of their marriage, which
(a) is acquired as a gift, bequest, devise or inheritance made by a third party to one but not to the other spouse;
(b) is acquired before the marriage;
(c) is acquired in exchange for or is the increase in value of property which is described in clauses (a), (b).
The district court concluded that appellant could only trace $10,000 of his original $20,000 of nonmarital property to Bob's NAPA. The district court then concluded that because he failed to trace the entire $20,000 to the final point of Bob's NAPA, he was not entitled to any portion of the $20,000 as a nonmarital asset. We reverse on this issue. A party is entitled to prevail on what he can adequately trace. See e.g. Carrick, 560 N.W.2d at 413 (upholding district court's finding that party properly traced $14,000 nonmarital asset to financing of homestead improvements); Danielson v. Danielson, 392 N.W.2d 570, 572 (Minn. App. 1986) (noting intricate detail not necessary to show nonmarital assets properly traced to paying for home improvements); Kottke v. Kottke, 353 N.W.2d 633, 636 (Minn. App. 1984) (holding district court properly viewed "as non-marital property a portion of the homestead 'readily traceable' to an earlier inheritance"), review denied (Minn. Dec. 20, 1984). The failure to trace an entire nonmarital claim does not destroy the portion that the court found was traced.
Here, appellant traced half of his original nonmarital asset through the course of his marriage to respondent. Appellant used $20,000 from his previous divorce settlement to purchase the parties' mobile home. The court found that on the sale of the mobile home for $21,000, after investing $1,000 in an air conditioning unit for the home, appellant applied one-half of this sum ($10,500) as the down payment for construction of a new home and the other half for furniture. The court also found that after the parties sold the new home ($31,000) and a mini-home ($9,000), they used the combined money from these sales ($40,000) as the down payment for the purchase of Bob's NAPA.
While appellant claims all the $20,000 is nonmarital, it is clear that he traced at least half of the original property ($10,000) to the NAPA business. When questioned about whether appellant traced his $20,000 nonmarital claim, respondent testified that she did not dispute that appellant traced his nonmarital asset into the initial investment of Bob's NAPA. The district court erred in denying him half of his nonmarital asset. We reverse and remand so the district court can make appropriate recalculations and amended findings on this issue.
Next, appellant argues that the district court abused its discretion in valuing the Sweno farm. The district court has broad discretion in determining the value of assets. Wopata v. Wopata, 498 N.W.2d 478, 485 (Minn. App. 1993).
An appellate court does not require the trial court to be exact in its valuation of assets, "it is only necessary that the value arrived at lies within a reasonable range of figures."
Kitchar v. Kitchar, 553 N.W.2d 97, 102 (Minn. App. 1996) (quoting Hertz v. Hertz, 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975)), review denied (Minn. Oct. 29, 1996). "[T]he trial court's valuation must be 'supported by either clear documentary or testimonial evidence or by comprehensive findings issued by the court.'" Wopata, 498 N.W.2d at 485 (quoting Ronnkvist v. Ronnkvist, 331 N.W.2d 764, 766 (Minn. 1983)). Such findings will not be set aside unless clearly erroneous. Id.
The district court found respondent's testimony that the assessor's market value of $29,700 in 1997, as opposed to the assessor's value of $23,600 in 1998, was a more accurate reflection of the value of the farm. The district court's valuation at $29,700 falls within a reasonable range of figures presented at trial and is supported by record evidence. The district court's valuation is not clearly erroneous, and the court did not abuse its discretion in its valuation of the farm.
Regarding the distribution of property, a district court has
broad discretion in making a property division and will not be overturned absent a clearly erroneous conclusion that is against logic and the facts on the record.
Kitchar, 553 N.W.2d at 102 (citation omitted). "In dissolution actions, debts are apportioned as part of the property settlement and are treated in the same manner as the division of assets." Lynch v. Lynch, 411 N.W.2d 263, 266 (Minn. App. 1987) (citation omitted), review denied (Minn. Oct. 30, 1987). "[T]he court has discretion to award debts to one party only." Lenz v. Lenz, 409 N.W.2d 68, 69 (Minn. App. 1987) (citation omitted). In apportioning debt, the district court "will be reversed only upon a clear showing of an abuse of * * * discretion." Jones v. Jones, 402 N.W.2d 146, 149 (Minn. App. 1987) (citation omitted). The district court's determination is guided by equitable considerations. Id. "Where evidence supports the trial court's division, this court must affirm even if it would have reached a different conclusion in the first instance." Yackel v. Yackel, 366 N.W.2d 382, 384 (Minn. App. 1985) (citation omitted).
Here, the district court valued the parties' marital property at $6,000 and divided it equally between appellant and respondent. Because the district court is given discretion in the valuation and distribution of property and its valuation is within the range of values presented at trial, the $3,000 assignment of property to each party is reasonable. The district court did not abuse its discretion in apportioning the parties' marital property.
Respondent claims inadequate funds to pay the fees and costs incurred in this appeal and requests the court award her attorney fees and costs on appeal. Attorney fees can be awarded if they are necessary for a party to assert rights and will not exacerbate the litigation, and the party seeking the fees, unlike the other party, lacks the means to pay for them. Minn. Stat. § 518.14, subd. 1 (1998). Current income information is necessary for determination of a need-based attorney fees award. See Gales v. Gales, 553 N.W.2d 416, 423 (Minn. 1996) (denying motion for attorney fees on appeal where current income and expenses information not provided). Based on the information provided by the parties regarding their present financial situations, we decline to award respondent attorney fees on appeal.
Affirmed in part, reversed in part and remanded; motion denied.