In re the Marriage of: Marcus LeRoy Siewert, petitioner, Appellant, vs. Janet Marie Holst, f/k/a Janet Marie Siewert, Respondent. A05-2349, Court of Appeals Unpublished, June 27, 2006.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).

STATE OF MINNESOTA

IN COURT OF APPEALS

A05-2349

In re the Marriage of:

Marcus LeRoy Siewert, petitioner,

Appellant,

vs.

Janet Marie Holst,

f/k/a Janet Marie Siewert,

Respondent.

Filed June 27, 2006

Affirmed

Kalitowski, Judge

Wabasha County District Court

File No. 79-F3-01-000212

Susan A. Daudelin, Katz, Manka, Teplinsky, Due & Sobol, Ltd., 225 South Sixth Street, Suite 4150, Minneapolis, MN 55402 (for appellant)

Steven C. Youngquist, Youngquist Law Office, 421 First Avenue Southwest, Suite 301W, Rochester, MN 55902 (for respondent)

Considered and decided by Hudson, Presiding Judge; Kalitowski, Judge; and Worke, Judge.

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

KALITOWSKI, Judge

On appeal in this property-division dispute, appellant Marcus LeRoy Siewert challenges an order issued by the district court following this court’s remand. Appellant argues that the district court erred by (1) denying his request to present additional evidence on remand; (2) classifying his retirement assets and farm equipment as marital property; and (3) crediting appellant with the receipt of certain dissipated funds. We affirm.

D E C I S I O N

Appellant argues that the district court erred by denying his request to present additional evidence to trace his nonmarital assets on remand. We disagree.

Generally, it is the duty of the district court on remand to execute the mandate of the reviewing court strictly according to its terms. Halverson v. Village of Deerwood, 322 N.W.2d 761, 766 (Minn. 1982). But “[w]hen the trial court receives no specific directions as to how it should proceed in fulfilling the remanding court’s order, the trial court has discretion in handling the course of the cause to proceed in any manner not inconsistent with the remand order.” Duffey v. Duffey, 432 N.W.2d 473, 476 (Minn. App. 1988) (citing John Wright & Assocs., Inc. v. City of Red Wing, 256 Minn. 101, 102, 97 N.W.2d 432, 434 (1959)). We “review a district court’s compliance with remand instructions under the deferential abuse of discretion standard.” Janssen v. Best & Flanagan, LLP, 704 N.W.2d 759, 763 (Minn. 2005).

Here, appellant and respondent Janet Marie Holst, f/k/a Janet Marie Siewert, entered into an antenuptial agreement before they were married. After over 18 years of marriage, the parties separated and appellant filed for divorce in 2001. The district court held that the agreement was valid and enforceable. The case proceeded to trial, and the district court dissolved the parties’ marriage and divided their property.

Appellant challenged the district court’s decision, and this court held that the agreement was invalid and unenforceable because it lacked the requisite signatures from two witnesses. Siewert v. Siewert, 691 N.W.2d 504, 506-07 (Minn. App. 2005) (Siewert I), review denied (Minn. May 17, 2005). This court reversed and remanded “for a division of the parties’ property in accordance with Minnesota law.” Id. at 507.

On remand, the district court requested written submissions and held a hearing on the issue of whether additional testimony was necessary in order to comply with this court’s order. Ultimately, the district court decided that it was not necessary to take additional testimony in the case, explaining that only two pieces of property, the home farm and the Otter Tail property, were originally distributed pursuant to the antenuptial agreement. Although appellant sought to introduce additional evidence to establish the nonmarital character of certain assets, the court stated that it had already made detailed findings regarding the claims. In its order on remand, the district court distributed the home farm and Otter Tail properties as it did in its original order but stated for each disposition that “[t]he Court makes this determination based upon the fact that the [property] is properly considered the [party’s] nonmarital property and not because this is what was provided for in the parties’ antenuptial agreement.”

Appellant argues that the district court erred by denying his request to present additional evidence on remand because commingling was not a relevant consideration at trial, when the parties considered the antenuptial agreement controlling, but commingling was at issue on remand when Minnesota law controlled. Thus, appellant asserts, the district court should have allowed him to present evidence to trace his assets on remand. We disagree.

When the district court originally upheld the antenuptial agreement, it stated that “the contract unambiguously requires that all property owned by a party at the time of the parties’ marriage together with any improvements made during the marriage retain its nonmarital character.” And Minnesota law defines “nonmarital property” as property

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), (d), and (e);

(d) is acquired by a spouse after the valuation date; or

(e) is excluded by a valid antenuptial contract.

Minn. Stat. § 518.54, subd. 5 (2004). Both the court’s reading of the agreement and the applicable portions of the statute compelled appellant to establish his ownership of the property at the time of the marriage and any improvements he had made to that property. Although appellant interpreted the agreement to signify that anything to which his farming money contributed was automatically deemed nonmarital property, he had no authoritative reason to believe that commingling was not at issue at trial.

Appellant also relies on Haefele v. Haefele, 621 N.W.2d 758 (Minn. App. 2001), review denied (Minn. Feb. 21, 2001), to support his argument that the district court violated his right to due process by denying his request to present new evidence upon remand. In Haefele, the respondent sought to reopen a dissolution judgment based on mistake and fraud. 621 N.W.2d at 761. The district court ordered a hearing on mistake to be followed by hearings on the value and distribution of the property, explaining that respondent needed to show mistake before the court would accept additional valuation evidence. Id. at 764. Then the court conducted combined evidentiary hearings on the issues of whether to reopen the judgment and valuation. Id. On appeal, this court held that the district court had violated appellant’s due process rights because it was unclear when the hearing changed from one on the issue of reopening to one on the issue of valuation, which was a critical transition given that the hearings entailed different burdens of proof. Id. at 765.

Appellant’s reliance upon Haefele is misplaced because Haefele is both procedurally and factually distinguishable. In Haefele, the district court considered a motion to reopen the judgment, whereas here, the district court received the matter on remand from this court without specific instruction as to how it should proceed. In addition, unlike Haefele, there was no significant difference between the issues being addressed at trial and on remand here.

In Siewert I, this court did not offer the district court specific instructions other than requiring it to divide the parties’ property “in accordance with Minnesota law.” 691 N.W.2d at 508. As such, the district court was not required to hold any particular proceedings and, as long as it did not divide the property pursuant to the antenuptial agreement, was free to reconsider the issue based on the record. See Duffey, 432 N.W.2d at 476. Nonetheless, the district court held a hearing on whether further evidence was needed, concluded that the evidence received at trial was sufficient to allow classification of the parties’ property, and divided the parties’ property according to Minnesota law. We conclude that the district court did not abuse its discretion when it denied appellant’s request to present additional evidence upon remand.

II.

Appellant contends that the district court erred by understating the extent of appellant’s interests in nonmarital property. Specifically, appellant asserts that the district court erroneously classified his retirement assets and farm equipment as marital property. We disagree.

Following the dissolution of a marriage, all marital property is subject to an equitable division between the former spouses. Minn. Stat. § 518.58, subd. 1 (2004). “Marital property” is property acquired by either spouse during a marriage. Minn. Stat. § 518.54, subd. 5. “Nonmarital property” is property acquired by one spouse either before the marriage, after the valuation date, in exchange for nonmarital property, or by gift, bequest, devise, or inheritance. Id., subd. 5(a)-(d). Any property acquired after the marriage commences but before the valuation date is presumed to be marital property. Id., subd. 5.

“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 standard required is not “strict tracing” but a preponderance of the evidence). A party seeking to trace an asset to a nonmarital source must establish by a preponderance of the evidence that the asset was “acquired in exchange for” nonmarital property. Doering v. Doering, 385 N.W.2d 387, 390 (Minn. App. 1986).

Whether an asset is marital or nonmarital property is a question of law, which this court reviews de novo. Gottsacker v. Gottsacker, 664 N.W.2d 848, 852 (Minn. 2003). This court defers to the district court’s findings of fact unless they are clearly erroneous such that this court is “left with the definite and firm conviction that a mistake has been made.” Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997) (quotation omitted).

a. Retirement accounts

Appellant argues that the district court erroneously classified his retirement accounts as marital property. Specifically, he asserts that his Morgan Stanley and Thrivent accounts were nonmarital property because he established them before the marriage and made little or no contributions to them during the marriage.

The district court found that appellant owned retirement plans with Thrivent and Morgan Stanley, that contributions were made to the accounts during the marriage, and that appellant “failed to establish the non-marital portion with any documentation.” Accordingly, the district court held that the retirement accounts were marital property.

The record supports the district court’s findings. Appellant testified that he opened both accounts in 1974 and contributed to them after he married respondent. And the increase in the value of nonmarital property is marital if “attributable to the efforts of one or both spouses during their marriage.” Nardini v. Nardini, 414 N.W.2d 184, 192 (Minn. 1987). Because the district court did not clearly err by finding that appellant contributed to the accounts after he married respondent and because appellant did not establish that the contributions were funded by nonmarital property, we conclude that he failed to meet his burden to show tracing. See Crosby v. Crosby, 587 N.W.2d 292, 296-97 (Minn. App. 1998) (finding that appellant did not meet burden when funds were extensively commingled and appellant only showed her funds were “primary source” to acquire assets), review denied (Minn. Feb. 18, 1999). Therefore, the district court did not err by classifying the retirement accounts as marital property.

b. Farm machinery and equipment

Appellant also argues that the district court erred by classifying his farm equipment as marital property. The district court found that appellant was the owner of various items of farm machinery and equipment at the time of the marriage. But the court added that “[c]ontrary to [appellant’s] testimony asserting that he had most equipment prior to the marriage, his 2002 tax return lists numerous items of farm equipment in the attached depreciation schedule as having been purchased throughout the years of marriage.” The court listed the reasonable value of the items of equipment acquired during the marriage and determined that the total marital value of the equipment was $101,533. The court credited appellant with the value of the farm machinery.

The record confirms that appellant’s 2002 tax return indicated that most of appellant’s farm equipment was purchased during the marriage. Appellant testified that at the time of marriage he owned all but two pieces of machinery mentioned on a handwritten list. But respondent testified that all of the items on the list were acquired during the marriage, and she submitted photographs of various pieces of equipment to support her claim. Thus, in concluding that the property was marital, the district court implicitly determined that respondent’s testimony was more credible than appellant’s as to the date they acquired the farm equipment. See Vang v. A-1 Maint. Serv., 376 N.W.2d 479, 482 (Minn. App. 1985) (stating that an actual determination regarding credibility is necessarily implicit in a fact-finder’s decision when there is conflicting witness testimony); see also Haefele, 621 N.W.2d at 763 (stating that where evidence relevant to a factual issue consists entirely of conflicting testimony, the trial court’s decision is necessarily based on the credibility of the witnesses). Furthermore, the court explicitly stated elsewhere in the order that it attributed “very little credibility to [appellant’s] assertions concerning nonmarital property.” And this court defers to the district court’s credibility determinations. Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988).

Because appellant submitted no formal documentation to support his claim that the farm machinery and equipment constituted nonmarital property and because this court defers to the district court’s credibility determinations, the district court did not clearly err by finding that the items of farm machinery and equipment were acquired during the parties’ marriage. Therefore, we conclude that the district court did not err by classifying the items of farm machinery and equipment as marital property for distribution purposes.

III.

Appellant argues that the district court improperly credited him with the receipt of certain funds in its division of the parties’ property. Specifically, appellant argues that the court erred by crediting him with funds that he (1) withdrew from a Brandywine account; (2) withdrew from a Morgan Stanley account; and (3) received through crop sales. We disagree.

If a party to a dissolution proceeding disposes of, transfers, encumbers, or otherwise conceals a portion of the marital estate outside the usual course of business or for the necessities of life, “the court shall compensate the other party by placing both parties in the same position that they would have been in had the transfer, encumbrance, concealment, or disposal not occurred.” Minn. Stat. § 518.58, subd. 1a (2004). The district court “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.

District courts have broad discretion over the division of marital property, and appellate courts will not alter a district court’s property division absent a clear abuse of discretion or an erroneous application of the law. Chamberlain v. Chamberlain, 615 N.W.2d 405, 412 (Minn. App. 2000), review denied (Minn. Oct. 25, 2000); Ebnet v. Ebnet, 347 N.W.2d 840, 842 (Minn. App. 1984). Appellate courts “will affirm the trial court’s division of property if it had an acceptable basis in fact and principle even though [the appellate court] might have taken a different approach.” Antone v. Antone, 645 N.W.2d 96, 100 (Minn. 2002).

Here, the parties owned a joint account with Brandywine Blue mutual funds. At trial, appellant initially testified that he invested $100,000 to fund the account in 1998, but that it was currently worth $5,000. He attributed the loss solely to market conditions, explicitly stating that there had been “no withdrawals.” But on cross-examination, appellant admitted that he withdrew $100,000 from the fund in November 2000 and $70,000 in February 2001. In its distribution, the district court credited appellant with receipt of $170,000 from the Brandywine funds, explaining that appellant changed his testimony throughout the trial and that the timing of his withdrawals coincided with the parties’ separation and with the commencement of the dissolution proceedings.

Similarly, the district court found that appellant liquidated funds from a Morgan Stanley account without respondent’s knowledge in 2001. The court stated that appellant testified that a margin call resulted in loss of that amount, “but provided no documentation confirming that to be the case.” The court credited appellant with $49,351.30 in income from the Morgan Stanley account.

Additionally, the district court credited appellant with the proceeds of a crop sale in 2000. The court noted that appellant listed farm sales of $42,607.71 on a 2001 tax return, but the record reflected sales of at least $78,784.36 for that year.

The record supports the district court’s findings relating to appellant’s withdrawals and his receipt of crop-sale proceeds. Appellant correctly notes that the burden of proof is on the party alleging the dissipation. Minn. Stat. § 518.58, subd. 1a. But given that appellant failed to completely disclose his withdrawals, that the district court found that appellant’s testimony lacked credibility, and that the district court’s property division has an acceptable basis in fact, we cannot say that the district court clearly abused its discretion by attributing the dissipated funds to appellant.

Affirmed.