STATE OF MINNESOTA

IN COURT OF APPEALS

C9-99-1225

In Re the Marriage of:

Jane Deborah Edelston, petitioner,

Respondent,

vs.

Gary Steven Edelston,

Appellant.

Filed April 11, 2000

Affirmed

Randall, Judge

Hennepin County District Court

File No. 221 672

Michael Ormond, Ormond Law Offices, 3000 Sexton Building, 529 South Seventh Street, Minneapolis, MN 55415 (for respondent)

Lorraine S. Clugg, Kissoon, Clugg, Linder, & Ditberner, Ltd., 3205 West 76th Street, Edina, MN 55435 (for appellant)

Considered and decided by Randall, Presiding Judge, Davies, Judge, and Foley, Judge.^*

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

RANDALL, Judge

In an appeal in a dissolution proceeding, appellant challenges the district court's rulings on property, including (a) its determination that certain trust contents were marital property; (b) its determination that renewal commissions were property; and (c) its valuation of certain marital assets. Appellant also challenges the award of maintenance, contending that the district court erred in ordering that the maintenance should be paid from commissions and in determining the amount and duration of maintenance. We affirm.

FACTS

Appellant Gary S. Edelston and respondent Jane D. Rockler, f/k/a Jane D. Edelston, separated in December 1995, after 25 years of marriage. The parties had three children during the marriage, all of whom were adults at the time of the dissolution.

During the marriage, Edelston was the primary wage earner, selling insurance products. In the five years before the dissolution, his gross income ranged between $146,693 and $241,779. In 1998, Edelston submitted a budget, listing $7,453 in monthly living expenses. This amount did not include his credit-card payments or court-ordered temporary maintenance payments in the amount of $1,100. Edelston lives in the parties' marital homestead.

Rockler was a homemaker responsible for caring for the children. In 1984, she began working part-time, earning $500 per month. At the age of 46, Rockler obtained full-time employment with the Minneapolis School District as a special-education teacher. She attended the University of Minnesota and in 1994 completed her coursework for a master’s degree in education. She has yet to complete her master's thesis. At the time of trial, Rockler was tenured and received $39,751 per year, plus an additional $3,000 per year from teaching summer school and tutoring. In her affidavit dated April 23, 1997, she listed monthly expenses of $3,548. She currently resides in a two-bedroom townhome purchased by her father.

The parties' homestead has been appraised at between $415,000 and $470,000. The City of Golden Valley last valued the home at $365,000. On March 7, 1980, the parties created the Gary S. Edelston Irrevocable Trust. The trust res consists of four life-insurance policies taken on Edelston's life. The parties' children are the beneficiaries of the trust, and Rockler is the trustee.

The district court awarded Rockler permanent spousal maintenance of $2,200 per month; approximately $1,000 from her checking account; and $148,931 in cash to equalize the property division. Edelston was awarded the marital homestead; three limited partnerships valued at $98,623; his renewal commissions, valued at approximately $197,993; and approximately $12,000 from his checking account. The district court found that Edelston was in constructive possession of one-half of the irrevocable trust in the amount of $54,331. The court used this amount to calculate the value of Edelston's life insurance, an asset valued by the court at $70,412.

The judgment and decree was entered on January 15, 1999. The district court denied Edelston's motion for amended findings of fact and conclusions of law. Edelston appeals from the initial judgment and decree and the order denying his motion for amended findings and conclusions of law.

D E C I S I O N

Edelston argues that the district court erred when it ruled that he was in constructive receipt of one-half of the irrevocable trust and awarded this amount to him as part of the property division. He contends that the court's findings have no support in the record and are clearly erroneous.

On appeal, the district court's findings of fact, whether based on documentary or oral evidence, will not be set aside unless clearly erroneous, and "the record is reviewed in a light most favorable to the findings." Frauenshuh v. Giese, 599 N.W.2d 153, 156 (Minn. 1999) (citations omitted). The district court has broad discretion in valuing and dividing property, and a reviewing court will affirm the district court's property division if it has an acceptable basis in fact and principle even though the reviewing court might have reached a different result. Rohling v. Rohling, 379 N.W.2d 519, 522 (Minn. 1986).

The parties to a marriage owe each other a fiduciary duty for any transaction that involves marital property occurring during or in contemplation of dissolution. Minn. Stat. § 518.58, subd. 1a (1998). If, during or in contemplation of a dissolution, the marital property is "transferred, encumbered, concealed, or disposed of * * * except in the usual course of business or for the necessities of life," the district court shall put the parties in the position they would have been in had the transfer, encumbrance, concealment, or disposal not occurred. Id. In compensating a party under this section, "the court, in dividing the marital property, may impute the entire value of an asset and a fair return on the asset to the party who transferred, encumbered, concealed, or disposed of it." Id.

The district court found that on April 3, 1996, five months after the parties' separation and just days before the commencement of the dissolution proceeding, an application for a policy loan in the amount of $25,039.04 was taken out in Rockler's name against a life-insurance policy owned by her. The proceeds were used to repay a policy loan taken out on a life insurance policy in Edelston's name and owned by the irrevocable trust. Rockler did not sign the application form, and the court found that Edelston knowingly converted the face value of Rockler's life-insurance policy and transferred it to the policy owned by the irrevocable trust. The court found that Edelston funded the life-insurance policies owned by the irrevocable trust with marital property and, through a series of loans, made personal use of the assets owned by the trust. The court determined that Edelston was in constructive possession of an amount equal to one-half of the assets owned by the irrevocable trust, or $54,331.

Viewing the record in the light most favorable to the district court's findings, we conclude they are supported by the evidence and are not clearly erroneous. Further, although Edelston is not entitled to draw the $54,331 from the irrevocable trust, under Minn. Stat. § 518.58, subd. 1a, the district court was allowed to impute this amount to Edelston as part of the property division. See Minn. Stat. § 518.58, subd. 1a (allowing district court to impute value of an asset that was transferred, encumbered, concealed, or disposed of during or in contemplation of dissolution). The district court did not err when it concluded that Edelston was in constructive receipt of one-half of the amount of the irrevocable trust and awarded it to him as part of the property division.

Next, Edelston argues that the district court abused its discretion because the renewal commissions awarded to him as part of the property division should not be used as income to support the district court's award of permanent spousal maintenance.

Edelston relies on this court's decision in Kruschel v. Kruschel, 419 N.W.2d 119 (Minn. App. 1988). In Kruschel, the court held that where obligor had been awarded the sole right to and interest in his pension plan as part of the property division, it was an improper modification of the property division to require him to pay spousal maintenance from his pension benefits. Id. at 123. Applying Kruschel, this court has held that "[p]ension benefits awarded as property in a dissolution cannot be included in the income of a party when determining that party's maintenance obligation." Walker v. Walker, 553 N.W.2d 90, 94 (Minn. App. 1996) (citation omitted).

In denying Edelston's post-trial motion, the district court stated that it awarded Edelston "only the present value of past renewal commissions as property." The court ruled that any renewal commissions accruing after December 31, 1997, "would be income, subject to spousal maintenance." The district court, thus, did not improperly award the pre-December 31, 1997, renewal commissions as property and then also include them as income for the purposes of determining Edelston's spousal-maintenance obligation.

Edelston argues the district court abused its discretion in determining the duration and amount of spousal maintenance. After considering the factors set forth in Minn. Stat. § 518.552, subd. 2 (1998), the district court awarded Rockler $2,200 per month in permanent spousal maintenance.

The district court has broad discretion in determining whether to award spousal maintenance and will not be reversed absent a clear abuse of that discretion. Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997). A spouse seeking maintenance must demonstrate that, in light of the standard of living established during the marriage, he or she lacks sufficient property, including marital property apportioned as part of the dissolution, to provide for reasonable needs or is unable to provide adequate self-support through appropriate employment. Minn. Stat. § 518.552, subd. 1(a), (b) (1998). In determining whether an award of spousal maintenance is appropriate, the

basic consideration is the financial need of the spouse receiving maintenance and the ability to meet that need balanced against the financial condition of the spouse providing the maintenance.

Krick v. Krick, 349 N.W.2d 350, 352 (Minn. App. 1984) (citation omitted). "[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." Minn. Stat. § 518.552, subd. 3 (1998).

Although Rockler was primarily a homemaker during the parties' marriage, the record shows that she was able to complete coursework for a master's degree from the University of Minnesota. She was also able to secure full-time employment with the Minneapolis School District as a tenured teacher. Rockler, therefore, has attained a degree of self-sufficiency not commonly found among older spouses who were homemakers during a long, traditional marriage. But Rockler is 50 years of age and did not establish her career until late into the marriage. By entering the work force later in life, she has diminished earning capacity, she has lost the opportunity to establish full seniority and retirement benefits, and she has foregone other employment opportunities.

The district court's detailed findings in determining its award of maintenance demonstrate a meaningful and reasoned consideration of the factors set forth in Minn. Stat. § 518.552, subd. 2. The district court did not abuse its discretion in determining the amount and duration of spousal maintenance in the present case.

Edelston contends the district court abused its discretion in valuing and dividing certain marital assets and liabilities. Edelston challenges the district court's valuation of his checking account, the marital homestead, and certain limited partnerships he owned. He also insists the district court treated the parties' liabilities inconsistently.

A district court's division of assets must be just and equitable and need not be mathematically equal. Nazar v. Nazar, 505 N.W.2d 628, 635 (Minn. App. 1993), review denied (Minn. Oct. 28, 1993). The district court need not be exact in its valuation of assets; "it is only necessary that the value arrived at lies within a reasonable range of figures." Hertz v. Hertz, 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975).

Edelston contends that the district court treated the parties' debt inconsistently. See Korf v. Korf, 553 N.W.2d 706, 711-12 (Minn. App. 1996) (holding district court must be consistent in valuing parties' debt at the time of valuation). Unlike the present case, the parties in Korf agreed that the district court inconsistently valued the debt on each party's vehicle awarded as part of the dissolution. Id. Here, the debt at issue is not similar and is contested by the parties.

The district court was also not required to accept as true the evidence and testimony presented by Edelston on the issue of his debt, even if his testimony was uncontroverted. See Costello v. Johnson, 265 Minn. 204, 211, 121 N.W.2d 70, 76 (1963) (holding trier of fact is not compelled to believe a witness simply because his or her testimony is uncontroverted). The court is also not required to accept uncontroverted evidence if it is evasive, equivocal, confused, or otherwise uncertain or is incredible in light of the surrounding circumstances. In re Estate of Sandstrom v. Wahlstrom, 252 Minn. 46, 58, 89 N.W.2d 19, 26 (1958). In its order denying Edelston's motion for amended findings and conclusions of law, the district court stated that its decision was based on the evidence presented and the credibility of the witnesses. The court specifically noted that Edelston's "testimony was impeached on several issues." Although Edelston claimed certain amounts as debt, the district court was not required to accept Edelston's testimony or evidence, nor was the court required to apportion the claimed debt as part of the property division. See Meyer v. Meyer, 375 N.W.2d 820, 828 (Minn. App. 1985) (holding district court has discretion to award debts to one party only), review denied (Minn. Dec. 30, 1985).

Given the broad discretion afforded a district court in apportioning the marital debt, we conclude that the district court did not abuse its discretion here in dividing debt.

Edelston contends the district court abused its discretion in valuing his checking account at $12,000. The parties stipulated to use June 30, 1997, as the valuation date for non-investment accounts. Edelston introduced a bank statement listing the amount of his checking account on the date of valuation at $170.

But the district court called into question the reliability of the evidence and testimony presented by Edelston, stating that on several occasions that Edelston's testimony had been impeached. Given the discrepancy between the value of Edelston's bank accounts in the months just before and after the date of valuation and its value nearly one year later, it can be inferred that the district court was concerned that these accounts were depleted to reduce their balance at the time of valuation. Under the circumstances, the district court did not abuse its discretion in valuing Edelston's bank accounts.

Edelston argues that the district court abused its discretion in valuing the marital homestead because it did not comport with the appraisal figures he presented. But he concedes that the district court's figure is based on the appraisal submitted by Rockler during trial. Because the district court's valuation falls within the range of figures presented at trial, it is supported by the evidence in the record and is not clearly erroneous. See Hertz, 304 Minn. 144 at 145, 229 N.W.2d at 44 (holding district court's valuation of asset need not be exact; "it is only necessary that the value arrived at lies within a reasonable range of figures").

Finally, Edelston argues that the district court abused its discretion in valuing three limited partnerships he owned because they had been rendered worthless by the tax liabilities that would be associated with any sale of the partnerships.

The district court used Edelston's own trial exhibit to value the limited partnerships. No evidence was presented that Edelston was planning to sell his interest or that he would immediately incur any tax consequences associated with the sale of his interest. Generally, tax consequences may be considered by the district court in determining the valuation of the property to be divided in a dissolution proceeding if: "(1) the tax consequences are immediate, and (2) the tax consequences are readily calculable." Kriesel v. Gustafson, 513 N.W.2d 9, 14 (Minn. App. 1994) (citation omitted). The district court "may not consider the tax consequences of a property award when to do so would force the court to speculate." Pekarek v. Pekarek, 362 N.W.2d 394, 397 (Minn. App. 1985) (citation omitted). Because the tax consequences alleged in the present case are not immediate, not readily calculable, and would require the district court to engage in speculation, the district court did not abuse its discretion in valuing Edelston's limited partnership holdings.

Affirmed.

^* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. Art. VI, § 10.