STATE OF MINNESOTA

IN COURT OF APPEALS

A05-2194

In re the Marriage of:
Kelli Marie Anderson, petitioner,
Respondent,

vs.

Jeffrey Lynn Anderson,
Appellant.

Filed September 12, 2006

Affirmed in part, reversed in part, and remanded

Stoneburner, Judge

Becker County District Court

File No. F3041175

Paul Thorwaldsen, Thorwaldsen, Malmstrom, Sorum & Majors, P.L.L.P., 1105 Highway 10 East, Box 1599, Detroit Lakes, MN 56502-1599 (for respondent)

Charles A. Krekelberg, Krekelberg, Skonseng & Hastings, P.L.L.P., Box 353, Pelican Rapids, MN 56572-0353 (for appellant)

Considered and decided by Shumaker, Presiding Judge; Stoneburner, Judge; and Worke, Judge.

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

STONEBURNER, Judge

In this dissolution matter, appellant challenges the district court’s determination that the increase in his investment account was marital rather than non-marital property and the determination that appellant depleted funds from a joint savings account. Because the record supports the district court’s determination that the increase in the investment account was marital, we affirm in part. Because the record does not support the district court’s conclusion that appellant depleted funds from the savings account, we reverse in part.

FACTS

Appellant Jeffrey L. Anderson (husband) testified that his stepfather, Dennis Meyer, approached him and promised to place $500,000 in an investment account in husband’s name and to gift husband the increase on the account. Respondent Kelli M. Anderson (wife) testified that Meyer lent both parties $500,000 and that the increase earned on the loan was marital property. The parties agreed that the goal of the transaction was to provide sufficient funds to pay off their debts so that wife could quit working and stay home with the parties’ three children.

Meyer deposited $500,000 in an investment account in husband’s name. Meyer testified that it was his intent to gift the increase on the account to husband and not to wife. Meyer testified that husband had ultimate control over the money, but Meyer made all of the trading decisions. Husband testified that he did not feel that he had the right to touch the principal while it was in the account. Wife testified that Meyer and husband discussed the stocks, but Meyer was overseeing the account. Wife testified that she and husband did the final trading for the account and that she placed a sell order. When Meyer realized that the increase had reached $187,156.74, the account was closed, the $500,000 was returned to Meyer, and the increase was paid to husband in two checks that husband deposited into the parties’ joint checking account. Wife, at husband’s direction, wrote checks on that account to pay off wife’s student loan, wife’s vehicle, the home mortgage, and home improvements. A portion of the funds was used to pay the taxes on the increase. The parties filed a joint tax return listing the increase as income to them in 2002 and jointly paid taxes on their 2002 income. Meyer did not file a gift-tax return and testified that the parties paid interest to him on the $500,000.

The parties also had a $13,000 “savings account” with Meyer, secured with a demand note. Husband and Meyer testified that $1,564.49 of these funds were used by wife to purchase furniture from Meyer. Meyer gave the balance to husband while the dissolution was pending. Husband testified that he used the funds to purchase a GMC Yukon and pay the license fees on the vehicle. Wife testified that husband spent the money on the Yukon and attorney fees; however, during re-direct, wife testified she did not know how the proceeds of the account were used. The Yukon and the furniture were among the assets distributed by the district court in the overall property division.

The district court concluded that the $500,000 was a loan from Meyer to both parties and that the increase earned on the loan was marital. The district court also found that husband depleted $13,000 from the savings account and attributed that amount to husband in the property division. This appeal followed.

D E C I S I O N

I. Motion to strike

Husband moved to strike wife’s entire brief because of wife’s references to an order for protection, documents from the child-support proceeding before the Child Support Magistrate, the mediated settlement agreement, order for bifurcated judgment, and a counter-motion. Husband argues that the order for protection and child-support documents are outside the record and that all of the objected to documents are prejudicial and irrelevant to the issues on appeal. Wife asserts that the child-support magistrate’s findings are part of the district court file and relevant to husband’s credibility. She asserts that the order for protection was referred to in the dissolution trial, but does not explain how this order or the other objected-to documents is relevant to issues on appeal. This court does not make credibility determinations and none of the objected-to documents are relevant to issues on appeal, therefore, we have not considered those documents or references to those documents. Because we have not relied on the contested material in reaching our decision, we decline to address the merits of husband’s motion to strike. See Isaacs v. Am. Iron & Steel Co.,690 N.W.2d 373, 379 (Minn. App. 2004) (finding it unnecessary to address merits of motion to strike when appellate court did not rely on objected-to documents), review denied (Minn. Apr. 4, 2005).

II. Increase on investment account

“Whether property is marital or nonmarital is a question of law, but a reviewing court must defer to the trial court’s underlying findings of fact.” Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997). But “if we are left with the definite and firm conviction that a mistake has been made, we may find the trial court’s decision to be clearly erroneous, notwithstanding the existence of evidence to support such findings.” Id. (quotation omitted). “To overcome the presumption that property is marital, a party must demonstrate by a preponderance of the evidence that the property is non-marital.” Crosby v. Crosby, 587 N.W.2d 292, 296 (Minn. App. 1998), review denied (Minn. Feb. 18, 1999).

The district court made findings of fact supported by evidence in the record that the $500,000 was a loan to the parties, and the increase, acquired during the marriage, was marital property. Even if the loan was to husband alone, an increase in the value of non-marital property attributable to the efforts of one or both spouses during the marriage is marital property, while an increase in value attributable to inflation or market forces retains its nonmarital character. Nardini v. Nardini,414 N.W.2d 184, 193-94 (Minn. 1987). In this case, husband monitored the account, had the authority to use the principal and to trade on the account, but husband primarily deferred to Meyer’s management. There is evidence that husband and wife discussed the account and that wife was involved in placing at least one order to sell stock. The increase, therefore, was due in part to husband’s decision-making about how the account was to be managed and did not occur by inflation or market forces alone. The district court’s findings are not clearly erroneous and support the conclusion that the increase on the $500,000 was marital property.

III. Depletion of savings account

Minn. Stat. § 518.58, subd. 1a (2006) provides that if the district court finds that a party to a dissolution proceeding has transferred, encumbered, concealed or disposed of marital assets without consent of the other party, except in the usual course of business or for the necessities of life, the district 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.” “In compensating a party under this section, the court, in dividing the marital property, may impute the entire value of an asset . . . to the party who transferred, encumbered, concealed, or disposed of it.” Id.

Husband testified that funds from the savings account were used primarily to buy furniture, the Yukon, and a license for the Yukon. Wife argues that even if this is true, the fact that husband replaced cash with an encumbered vehicle justifies a finding that husband violated the statute. We disagree. The net value of the Yukon and furniture, as found by the district court, exceeds the amount in the savings account. Although the character of the marital asset was changed from cash to personal property, there was no “depletion” of a marital asset as found by the district court. We therefore reverse the district court’s finding that husband depleted funds from the savings account and remand for a recalculation of the property division accordingly.

Affirmed in part, reversed in part, and remanded.