A05-494

In re the Marriage of:

Dawn Marie Schwartz, petitioner,

Respondent,

vs.

Douglas Allan Schwartz,

Appellant.

Filed April 18, 2006

Affirmed

Worke, Judge

Ramsey County District Court

File No. F3-03-1545

Thomas K. Cambre, Merrigan, Brandt & Ostenso, P.A., 25 Ninth Avenue North, P. O. Box 458, Hopkins, MN 55343 (for respondent)

Michael Feist, W-1610 First National Bank Building, 332 Minnesota Street, St. Paul, MN 55101 (for appellant)

Considered and decided by Dietzen, Presiding Judge; Wright, Judge; and Worke, Judge.

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

WORKE, Judge

On appeal in this dissolution matter, appellant argues that the district court (a) erred in its division of property; (b) abused its discretion by striking the testimony of an expert witness; (c) was biased against appellant as shown by its adoption of respondent’s proposed findings; (d) failed to make findings supporting its award of attorney fees to respondent; and (e) used stale information to set appellant’s support obligation. We affirm.

D E C I S I O N

Division of Property

Appellant argues that the district court (1) failed to distribute and value the lot adjacent to the parties’ homestead; (2) failed to value the parties’ personal property; (3) abused its discretion by awarding respondent a lien for his interest in the marital property; and (4) erred in its mathematical calculations distributing the marital property. The district court has broad discretion in dividing property in marriage dissolution actions, and the decision will not be disturbed on appeal unless there has been an abuse of discretion, which will be found “only where the [district] court resolves the matter in a manner that is against logic and the facts on the record.” Lund v. Lund, 615 N.W.2d 860, 861 (Minn. App. 2000).

1. Adjacent Lot

Appellant argues that the district court failed to distribute and specifically value Lot 6, and simply awarded the homestead (Lot 5) to respondent. The district court found that “the parties homestead at 320 East Magnolia Avenue, St. Paul, Minnesota, and the adjacent lot legally described as: Vacated Alley Accruing & Lot 5 McMenemy’s Subdivision A is valued at $103,500.00 and is unencumbered.” (Emphasis added). This finding is supported by respondent’s testimony that based on property tax statements, her house and the adjacent lot was valued at $104,100. While this finding fails to set forth the legal description of the adjacent lot and includes an error in the value based on a mathematical error contained in respondent’s proposed findings of fact, it is apparent from the record that the district court considered the adjacent lot part of the homestead property. There was no abuse of discretion by the district court on this issue.

2. Value of Personal Property

Appellant also argues that the district court failed to value the personal property of the parties, and merely awarded each party the property in his or her possession without determining its value. The district court found that the parties owned in joint tenancy “certain items of household furniture, appliances, equipment, kitchen utensils and other items of household and personal property in the possession of each of the parties.” Neither party presented any evidence regarding the value of the personal property, nor did either party raise the issue of the valuation of personal property at trial. Because the record lacks any evidence regarding the value of the personal property, the district court did not abuse its discretion in not valuing the parties’ personal property.

3. Appellant’s Marital Lien Against the Homestead

Appellant argues that the district court abused its discretion by awarding respondent the unencumbered homestead subject to a lien in favor of appellant in the amount of $32,294. Appellant claims that it was inequitable to grant an interest-free lien against an unencumbered homestead. The district court awarded respondent the homestead “subject to [appellant’s] non-interest bearing lien of $32,294.00 which reflects the [appellant’s] award of the Otter Tail County property minus $7,000.00 reimbursement to [respondent] for the grandfather’s gift to the minor child, $660.00 reimbursement to [respondent] for vehicle insurance, and including [appellant’s] one-half interest in [respondent’s] pension of $2,976.77.” The district court ordered that the lien shall be payable to appellant upon: (1) respondent’s death, (2) respondent’s remarriage, (3) respondent’s refinancing of the property, or (4) the expiration of appellant’s child-support obligation. Considering that appellant’s child-support obligation is expected to cease on the minor child’s 18th birthday, October 22, 2008, or when the minor child completes high school, appellant’s lien will be paid off in approximately three years. Further, the award of an interest-free lien generally requires “explicit findings” by the district court explaining why payment will be delayed. Thomas v. Thomas, 407 N.W.2d 124, 127 (Minn. App. 1987). Here, while no findings pertaining explicitly to the decision not to award interest on the lien were provided, such findings may be easily inferred from other parts of the dissolution decree. Based on the record, the award of a marital lien against the homestead in favor of appellant was not an abuse of discretion.

4. Amount of Marital Lien

Appellant argues that the district court’s findings and computations are not sufficiently detailed to afford an appellate court the opportunity to conduct a meaningful review. The district court’s findings, however, set forth the exact calculations used to determine the amount of appellant’s lien. As respondent correctly points out, a mathematical error made by the district court in its findings would, if corrected, actually benefit respondent. The district court did not abuse its discretion in determining the amount of the marital lien awarded to appellant.

Nonmarital Claim

Appellant argues that the district court failed to make findings regarding the parties’ respective marital and nonmarital claims. Appellant claims that he proved a nonmarital interest in the parties’ homestead and lake property.

Whether property is marital or nonmarital is a question of law, but a reviewing court must defer to the [district] court’s underlying findings of fact. However, if we are left with the definite and firm conviction that a mistake has been made, we may find the [district] court’s decision to be clearly erroneous, notwithstanding the existence of evidence to support such findings.

Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997) (quotation and citations omitted).

All property, real or personal, is presumed to be marital if “acquired by the parties, or either of them . . . at any time during the existence of the marriage relation between them, or at any time during which the parties were living together as husband and wife[.]” Minn. Stat. § 518.54, subd. 5 (2004). Nonmarital property is real or personal property “acquired by either spouse before, during, or after the existence of their marriage, which (a) is acquired by gift, bequest, devise, or inheritance made by a third party to one but not to the other spouse; [or] (b) is acquired before the marriage . . . .” Id. By definition, nonmarital property includes “both property acquired before the marriage and the increase in value of that property.” Quinlivan v. Quinlivan, 359 N.W.2d 276, 279 (Minn. App. 1984).

“A party seeking to establish the nonmarital character of an asset must do so by a preponderance of the evidence. In order to maintain its nonmarital character, nonmarital property must be kept separate from marital property or, if commingled, must be readily traceable.” Wopata v. Wopata, 498 N.W.2d 478, 484 (Minn. App. 1993) (citation omitted); see also Carrick v. Carrick, 560 N.W.2d 407, 413 (Minn. App. 1997) (noting that the standard required is not “strict tracing,” but a preponderance of the evidence). The district court found that appellant maintained that he has a nonmarital interest in the homestead and attempted to trace that interest from the home on Cayuga Street he purchased in 1978. However, the district court found that the testimony by appellant’s real estate agent regarding the value of the Cayuga Street property was admittedly based solely on information from appellant; no independent evidence existed to support the value and the property was demolished soon after appellant sold it in 1997. The only evidence regarding the value of the Cayuga Street property presented to support appellant’s nonmarital claim was the testimony of appellant or his real estate agent, and the district court found that testimony to be not credible. If believed, ora l testimony is sufficient to trace a nonmarital interest. Doering v. Doering, 385 N.W.2d 387, 391 (Minn. App. 1986). This led to the district court finding that the real estate agent’s “opinion of the Cayuga property is seriously flawed, and the resulting trace of [appellant’s] claimed non-marital property not credible.” This court defers to the district court’s credibility determinations. Vangsness v. Vangsness, 607 N.W.2d 468, 472 (Minn. App. 2000). The district court’s findings reflect that it did not believe the testimony of appellant or his real estate agent. Further, regarding appellant’s nonmarital claim in the Otter Tail County property, the district court found that “[appellant’s] expert . . . did not offer an opinion as to the current value of this property or the value of the property as of the date of the parties’ marriage.” Again, this court defers to the district court’s credibility determinations. Vangsness, 607 N.W.2d at 472. Based on the record, the district court did not clearly err in finding that appellant’s nonmarital claims were not credible.

Homestead Valuation

Appellant argues that the district court’s finding on the value of the homestead was clearly erroneous. A district court’s valuation of an item of property is a finding of fact and will not be set aside unless it is clearly erroneous. Maurer v. Maurer, 623 N.W.2d 604, 606 (Minn. 2001); Hertz v. Hertz, 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975). “Clearly erroneous means manifestly contrary to the weight of the evidence as a whole or not reasonably supported by the evidence as a whole.” Kornberg v. Kornberg, 525 N.W.2d 14, 19 (Minn. App. 1994), aff’d, 542 N.W.2d 379 (Minn. 1996). An appellate court does not require the district 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.” Johnson v. Johnson, 277 N.W.2d 208, 211 (Minn. 1979). “[I]n Minnesota, the owner of property is presumptively knowledgeable about its value.” Ferguson v. Ferguson, 357 N.W.2d 104, 107 (Minn. App. 1984).

Neither party submitted an appraisal of the homestead property. Respondent submitted a recent property tax statement indicating a taxable market value of $103,500. The district court found that appellant provided no evidence supporting his claim that the value of the parties’ homestead and the adjacent lot was $200,000. Appellant argues that his testimony and documentary evidence support his valuation. The district court found, however, that appellant’s testimony was not credible and struck the testimony of appellant’s real estate agent. The adoption of respondent’s value of the homestead—via the property tax statement—was within the reasonable range of acceptable values for the homestead. The district court reviewed all of the evidence before arriving at a fair market value determination, and set forth detailed reasoning for its finding. The district court’s method of valuation for the homestead is reasonable and the finding is not clearly erroneous.

Real Estate Agent Testimony

Appellant argues that the district court abused its discretion in excluding the testimony of the real estate agent. When reviewing a district court’s ruling on the competency of a proffered expert witness, this court must apply a deferential standard, reversing only if there is an abuse of discretion, and may not conduct an independent review of the credentials of the witness. Gross v. Victoria Station Farms, Inc., 578 N.W.2d 757, 761 (Minn. 1998).

Appellant claims that the first and only indication from the court that it intended to exclude the real estate agent’s testimony was after the trial had adjourned. This claim is incorrect. Prior to trial, respondent brought two motions in limine seeking to exclude the testimony of the real estate agent. The first motion sought to exclude evidence relative to appellant’s valuation of the parties’ real property, including evidence from the real estate agent, due to appellant’s failure to comply with the scheduling order. The scheduling order required that property evaluations be completed no later than 45 days prior to the prehearing conference. Respondent claims that she received a fax from appellant’s attorney the day before trial which included written materials supposedly supporting appellant’s opinion as to the value of the parties’ homestead. Thus, respondent filed a motion to exclude the evidence due to appellant’s failure to comply with the scheduling order. The second motion, brought just prior to the second day of trial, sought to exclude the testimony of the real estate agent because he was not a licensed real estate appraiser and not entitled to testify as to property valuations. The district court stated that it would allow the real estate agent to testify and would make a decision on the motion following his testimony.

Consistent with Minn. R. Evid. 104, the district court allowed the real estate agent to testify prior to ruling on the relevance and admissibility of his testimony. By proceeding in this manner the district court insured that the motion would be decided after hearing all of the testimony from the witness, rather than by offers of proof and legal arguments by counsel. Further, the district court determined that the real estate agent had never entered the parties’ home and, therefore, his opinion was without foundation and not persuasive. Similarly, as the real estate agent had not viewed the home on Cayuga Street, his valuation of that property was seriously flawed. Based on the record, the district court’s exclusion of the real estate agent’s testimony was not an abuse of discretion.

Attorney Fees

Appellant argues that the district court’s award of attorney fees to respondent on two separate occasions was an abuse of discretion. An award of attorney fees under Minn. Stat. § 518.14, subd. 1 (2004), “rests almost entirely within the discretion of the [district] court and will not be disturbed absent a clear abuse of discretion.” Crosby v. Crosby, 587 N.W.2d 292, 298 (Minn. App. 1998), review denied (Minn. Feb. 18, 1999).

The first award of attorney fees occurred in February 2004. Respondent filed a motion to compel discovery and appellant filed multiple countermotions supported by an affidavit from appellant’s attorney, not appellant. At the hearing on the motions, the district court reminded appellant’s attorney that it was inappropriate for him to have brought an unsupported motion on behalf of his client. The district court denied appellant’s motions, ordered appellant to provide responses to respondent’s written discovery, and awarded respondent attorney fees. Because appellant’s countermotions did not comply with the rules of practice and the district court found that appellant had failed to cooperate with respondent’s requests for discovery, the award of attorney fees was not an abuse of discretion. The second award of attorney fees occurred in a posttrial order in January 2005. In the decree, the district court found that appellant had unreasonably contributed to the length and expenses of the litigation under Minn. Stat. § 518.14, subd. 1 (2004); however, the district court did not award attorney fees because respondent had not provided documentation of her attorney fees to make such an award. After the trial, respondent brought a motion for attorney fees which included an itemized accounting of her attorney fees, and requested an award of $7,000. Following a hearing, the district court awarded respondent $3,244. Because the district court found that appellant had unreasonably contributed to the length and expense of the litigation, thereby entitling respondent to conduct-based attorney fees, the district court’s posttrial award of attorney fees was not an abuse of discretion.

Child Support

Appellant argues that the district court abused its discretion in determining the amount of child support by overstating his income, using outdated financial information and failing to afford him the statutory deduction from his gross pay for health insurance he was ordered to carry. A district court has broad discretion to provide for the support of the parties’ children. Putz v. Putz, 645 N.W.2d 343, 347 (Minn. 2002); Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984). A district court abuses its discretion when it sets support in a manner that is against logic and the facts on record or misapplies the law. Rutten, 347 N.W.2d at 50. Following respondent’s opening statement on the first day of trial, appellant “stormed out of the courtroom.” The district court instructed appellant’s attorney to have his client back in court by 2:00 p.m. or face various sanctions. When appellant failed to appear by 2:00 p.m., the district court found appellant to be in default on the issues of legal and physical custody, parenting time, his claim for maintenance, and respondent’s request to extend the order for protection. Respondent was awarded sole legal and physical custody of the parties’ minor child, and the district court awarded respondent child support based on the Minnesota Child Support Guidelines.

Based on the information before the court, child support was set in an appropriate manner that is not against logic. While appellant claims that the district court used outdated information, he fails to specify how the information is outdated. Further, appellant argues that the district court abused its discretion by not allowing the statutory deduction for health insurance. The findings reflect, however, that prior to trial appellant had dropped the minor child from his insurance because he could no longer afford the cost of coverage. At the time of the child-support award, appellant was not paying for health care for the minor child, thus there was no evidence on which the district court could base a deduction for health insurance. After determining appellant’s net-monthly income, the district court set his child-support obligation according to the statutory guidelines. The district court did not abuse its discretion in the amount of child support ordered.

Bias

Appellant argues that the district court proceedings indicate bias by the court that deprived appellant of a fair trial. Appellant claims that the nearly verbatim adoption of respondent’s findings, the nearly absolute disregard for appellant’s witnesses, testimony and documentary evidence, and the district court’s award of attorney fees to respondent are all strong indications of bias. This court has stated that “the verbatim adoption of a party’s proposed findings and conclusions of law is not reversible error per se.” Bliss v. Bliss, 493 N.W.2d 583, 590 (Minn. App. 1992), review denied (Minn. Feb. 12, 1993). The district court “must scrupulously assure that findings and conclusions—whether they be the court’s alone, one or the other party’s, or a combination—are always detailed, specific and sufficient enough to enable meaningful review by this court.” Id.

Appellant argues that the fact that the mathematical error regarding the value of the homestead was adopted in the decree proves that the district court did not independently evaluate the evidence or do its own math. With the exception of several scrivener’s errors, the district court’s adopted findings are supported by the evidence and testimony presented at trial. Further, the findings and conclusions are detailed, specific, and sufficient to allow a meaningful review by this court. Nothing in the record supports appellant’s allegations of bias. Most of appellant’s concerns focus on the district court’s rulings against him. After reviewing the record, the district court’s findings are supported by the record. This court gives broad discretion to the district court because the district court is in the best position to weigh the evidence and determine which witnesses are credible. See In re D.L., 486 N.W.2d 375, 380 (Minn. 1992) (stating that “the [district] court retains broad discretion because of its opportunity to observe the parties and hear the witnesses”). We find no evidence to indicate that the district court was biased against appellant.

Affirmed.