This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. ß 480A.08, subd. 3 (1998).

STATE OF MINNESOTA
IN COURT OF APPEALS
C9-99-625

In Re the Marriage of:
Linda Marie Allpress, petitioner,
Respondent,

vs.

Layne Leon Allpress,
Appellant.

Filed December 7, 1999
Affirmed
Anderson, Judge

Lyon County District Court
File No. F3-98-346

 

Robert L. Gjorvad, Runchey, Louwagie & Wellman, PLLP, P.O. Box 1043, 533 West Main Street, Marshall, MN 56258-0843 (for respondent)

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

Considered and decided by Halbrooks, Presiding Judge, Klaphake, Judge, and Anderson, Judge.

U N P U B L I S H E D   O P I N I O N

ANDERSON, Judge

Appellant challenges the district courtís division of certain undisclosed assets, the district courtís order requiring appellant to pay respondentís attorney fees, and the district courtís order requiring appellant to secure respondentís permanent maintenance award with life insurance. Because the district court did not abuse its discretion, we affirm.

FACTS

After 31 years, the marriage of appellant Layne Allpress and respondent Linda Allpress was dissolved. The parties stipulated to the distribution of the marital assets in a partial marital termination agreement (MTA). The MTA did not resolve the issues of maintenance, attorney fees, or the need for insurance as security for maintenance. After the parties agreed to and signed the MTA, appellant revealed that he had an additional $31,500 in assets ($6,500 in Qualmark stock and $25,000 in American Telecare stock) that he had not previously disclosed.

The district court ordered appellant to pay respondent $15,750, one half the value of the undisclosed stock, as a further property equalization; to pay respondentís attorney fees; and to maintain a $100,000 life insurance policy as security for the spousal maintenance. Appellant now challenges the district court judgment.

D E C I S I O N

1. Property Distributions

The district court has broad discretion in distributing marital property. Carlson v. Carlson, 390 NW.2d 780, 783 (Minn. App. 1986), review denied (Minn. Aug. 20, 1986). The reviewing court must affirm the district court decision if it has an acceptable basis in fact and principle. Bollenbach v. Bollenbach, 285 Minn. 418, 426-27, 175 N.W.2d 148, 154 (1970).

a. Qualmark Stock

Appellant purchased 1000 shares of Qualmark stock for $6,500. Appellant financed the purchase from marital assets. Appellant does not dispute that respondent is entitled to a half-interest in the Qualmark stock, and offered to give respondent one-half of the Qualmark shares.

Appellant claims that the parties stipulated to the distribution of the Qualmark stock. According to appellant, the stipulation required that he would turn over 500 of the 1000 shares of Qualmark to the respondent. Appellant argues that the district court erred in awarding respondent one-half of the value of the Qualmark stock, $3,250, because the parties had already stipulated to its distribution.

"Normally, stipulations are carefully drawn compromises" between parties that affect the distribution of property and income. Karon v. Karon, 435 N.W.2d 501, 504 (Minn. 1989). In this case, the only formal stipulations are found in the MTA. The existence of the stock was not disclosed until after the parties had signed the agreement; therefore, there is no documented stipulation between the parties concerning the Qualmark stock. Further, the record does not support a finding that there was either a formal stipulation or even an informal agreement between the parties concerning the distribution of the Qualmark stock. The district court did not abuse its discretion in awarding respondent one-half the value of the Qaulmark stock instead of one-half the shares.

b. American Telecare Stock

Using $25,000 borrowed from the family business, Marshall Truck & Trailer, Inc., appellant bought $25,000 of American Telecare (AT) stock. After appellant revealed the existence of that stock, and recognizing that the MTA attempted to divide the marital estate equally, the district court ordered appellant to pay respondent $12,500 for a half-interest in the AT stock. Appellant challenges that decision.

Appellant argues that rewarding respondent half the stock purchased with the loan is inequitable because: (a) the $25,000 he borrowed from the corporation was an account receivable for the corporation, it is an asset to the corporation and, as an asset, added to the corporationís value; (b) respondent received credit for half the corporation in the property division, she received half that added value; and (c) the debt to the corporation is in appellantís name and was not considered in the property distribution, appellant is solely liable for that debt and, as a result, while respondent shared in the benefit to the corporation by getting half of its increased value, she did not share in the corresponding liability for the debt.

Appellant misunderstands the issue.

While the $25,000 receivable owed to the corporation is an asset to the corporation, the corporationís value was correspondingly reduced by the funds transferred out of the corporation and to appellant. Therefore, the net effect on the corporation was "a wash" and respondentís share of the property distribution attributable to the corporation was not affected by the corporationís loan to appellant. Because appellant borrowed the money and bought the stock before the valuation date, both the debt and the stock purchased with the borrowed money are presumptively marital property for distribution purposes. See Minn. Stat. ß 518.54, subd. 5 (1998) (defining "marital property" as property acquired during marital relationship); Justis v. Justis, 384 N.W.2d 885, 889 (Minn. App. 1986) (noting that, in dissolutions, debt is apportionable as part of property distribution), review denied (Minn. May 29, 1986). Thus, the question becomes whether the debt and the stock were treated as marital property.

The MTA was incorporated into the dissolution judgment. It states that the stipulated property settlement is a "full, final and complete property settlement between the parties" which "discharge[s]" the parties "from any liability, claims or obligations of any kind or character, whether arising out of the marriage relationship or otherwise[.]" Neither the MTA nor the judgment, however, specifically mention the debt. Therefore, they are not dispositive in determining whether the debt was considered as marital property.

Because appellant failed to disclose the existence of the stock, it could not have been considered in the property distribution. Respondent argues that appellant is solely responsible for the debt to the corporation and claims that both parties considered the debt in negotiating their property settlement and that appellant received other property to compensate him for his assumption of the debt.

Absent other evidence addressing whether the parties considered the debt as part of the marital estate, the district court was left with the credibility question created by the partiesí conflicting claims on that issue. Because considering the debt but not the stock, or the stock but not the debt, would artificially reduce or inflate the value of the marital estate (respectively), by awarding respondent a half-interest in the stock, the district court, as a practical matter, found that the parties had considered the debt in their stipulated property settlement and implicitly resolved the credibility question in respondentís favor. Appellate courts defer to district court credibility determinations. Minn. R. Civ. P. 52.01; see Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988) (applying rule 52.01). On this conflicting record, that determination is not clearly erroneous.[1]

2. Attorney fees

Appellant argues that the district court erred in awarding $4,652 to respondent for attorney fees. An order for attorney fees "rests almost entirely within the discretion of the trial court and will not be disturbed absent a clear abuse of discretion." Crosby, 587 N.W.2d at 298 (quotation omitted). A reviewing court will rarely reverse a district courtís decision to grant attorney fees. Reinke v. Reinke, 464 N.W.2d 513, 516 (Minn. App. 1990).

The district court shall award attorney fees to enable a party to carry on or contest the proceeding if it finds:

(1) that the fees are necessary for the good-faith assertion of the party's rights in the proceeding and will not contribute unnecessarily to the length and expense of the proceeding;
(2) that the party from whom fees, costs, and disbursements are sought has the means to pay them; and
(3) that the party to whom fees, costs, and disbursements are awarded does not have the means to pay them.

Minn. Stat. ß 518.14, subd. (1) (1998).

The district court determined that respondentís attorney fees were fair and reasonable and necessary for the good faith prosecution of this case. The court determined that respondent has reasonable monthly expenses in the amount of $1,785, but only $1,317 in potential monthly income. With income of $1,317, respondent is $468 short of meeting her monthly expenses. In comparison, appellant has an excess monthly income of $1,635. The district court concluded that respondent did not earn enough money to meet her current monthly bills and that appellant could afford to pay her $816 a month to equalize the disparity in their incomes. The district court determined that respondent is unable to meet her needs without appellantís financial assistance; this includes the payment of respondentís attorney fees as well as her monthly expenses.

The district court has made the appropriate findings and did not abuse its discretion in ordering appellant to pay respondentís attorney fees.

3. Life Insurance as Security for Permanent Maintenance

Appellant claims that the trial court abused its discretion in ordering appellant to secure permanent maintenance with a life insurance policy. The district court "has discretion to consider whether the circumstances justifying an award of maintenance also justify securing it with life insurance." Laumann v. Laumann, 400 N.W.2d 355, 360 (Minn. App. 1987), review denied (Minn. Nov. 24, 1987). Appellant argues that in order to require a party to secure permanent maintenance with life insurance, that the court must first determine if there are exceptional circumstances justifying the need for the security. See Obrien v. Obrien, 343 N.W.2d 850, 853 (Minn. 1984).[2]

Even if exceptional circumstances are required, this court has held that such factors as a long marriage and recipient spouseís age and lack of marketable skills justify an award of alimony. Walker v. Walker, 553 N.W.2d 90, 96 (Minn. App. 1996). In this case the parties were married for 31 years. In those 31 years, respondent has only held three part-time clerical positions with a total working time of less than one year. The court determined that it was unlikely that respondent would improve her work skills through continued education because of her age. Respondentís employability is also affected by her depression and health problems.

The court determined that a permanent spousal maintenance award was necessary because it was uncertain that respondent would ever become self-supporting due to her lack of marketable skills and her poor mental and physical health. Because of respondentís lack of self-sufficiency, life insurance was necessary to secure respondentís permanent maintenance. The evidence shows that respondent needs the security of continued support in the event that respondent predeceases her. While we have concerns about the insurance requirement, particularly given the absence of termination dates, on this record, the district court did not abuse its discretion in ordering appellant to secure the permanent maintenance award with a life insurance policy.

We conclude that the district court did not abuse its discretion in the division of undisclosed stocks, in ordering appellant to pay respondentís attorney fees, or in requiring appellant to secure the award of permanent maintenance with life insurance.

Affirmed.

[1] Furthermore, it should be noted that a district court's distribution of marital property must be equitable but it need not be equal. See, e.g., Crosby v. Crosby, 587 N.W.2d 292, 297 (Minn. App. 1998), review denied (Minn. Feb. 18, 1999). Here, the record suggests that $12,500 is less than 4% of the net marital estate. Therefore, even if husband is correct and the district court's ruling creates a $12,500 inequality in the property distribution, it is not clear that such an inequality renders this property distribution inequitable. See Reynolds v. Reynolds, 498 N.W.2d 266, 270 (Minn. App. 1993) (holding that the trial court did not abuse its discretion in awarding an unequal property distribution of 57.5% and 42.5%). Under this analysis, the property division could be affirmed without reaching the merits of appellant's allegations. See Wibbens v. Wibbens, 379 N.W.2d 225, 227 (Minn. App. 1985) (declining to remand for de minimis error); see also Minn. R. Civ. P. 61 (harmless error to be ignored); Midway Ctr. Assocs. v. Midway Ctr., Inc., 306 Minn. 352, 356, 237 N.W.2d 76, 78 (1975) (to prevail on appeal, appellants must show both error and that error caused prejudice).

[2] This court notes that the "exceptional circumstances test" for determining the necessity of secured maintenance originated as an extension of the "exceptional circumstances test" required for an award of permanent maintenance. Obrien v. Obrien, 343 N.W.2d at 853. However, in 1985 the maintenance statute, Minn. Stat. ß 518.552, was amended to read, "[w]here there is some uncertainty as to the necessity of a permanent award, the court shall order a permanent award leaving its order open for later modification." 1985 Minn. Laws ch. 266, ß 2 (codified at Minn. Stat. ß 518.552, subd. 3 (1998)). Because courts now construe doubts about the necessity of permanent maintenance in favor of the recipient spouse instead of using the "exceptional circumstances test," it is unclear whether the "exceptional circumstances test" still applies when determining if permanent maintenance should be secured by life insurance.