This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2006).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-1579

 

In re the Marriage of:

 

Gwenne Melisa Olsen, petitioner,

Respondent,

 

vs.

 

Chad Eric Olsen,

Appellant.

 

Filed August 21, 2007

Affirmed as modified

Shumaker, Judge

 

Dakota County District Court

File No. F5-05-14654

 

 

Jenny L. Ryan, Katie Trotzky, Legal Assistance of Dakota County, Ltd., 15025 Glazier Avenue, Suite 201, Apple Valley, MN 55124 (for respondent)

 

Nathan M. Hansen, Peggy L. Stevens, 2440 Charles Street, Suite 224, North St. Paul, MN 55109 (for appellant)

 

            Considered and decided by Ross, Presiding Judge; Shumaker, Judge; and Parker, Judge.*

 

U N P U B L I S H E D   O P I N I O N

SHUMAKER, Judge

            Appellant challenges the district court’s dissolution judgment and decree, arguing that the district court abused its discretion by (1) overvaluing and improperly dividing his 401(k) account; (2) undervaluing his nonmarital interest in the parties’ home; (3) overvaluing his interest in two vehicles and mischaracterizing the parties’ trailer as marital property; (4) not rejecting all of respondent’s testimony after being impeached; and (5) ordering compliance with discovery requests after the discovery deadline.  We affirm the district court’s judgment but modify the value of appellant’s interest in the two vehicles. 

FACTS

            Appellant Chad Eric Olsen and respondent Gwenne Melisa Dykoff (f/k/a Gwenne Melisa Olsen) married in March 2003 and had one child together.  The marriage was dissolved in July 2006.  The parties’ marriage was tumultuous, marked by multiple instances of domestic violence. 

As a result of the domestic abuse, Olsen was convicted of making terroristic threats.  Olsen took out a $10,000 loan from his 401(k) account to help pay for his criminal defense.  Dykoff co-signed for the loan, as required by company policy.  The retirement account had a value of $14,559.04 when the parties married and a value of $22,619.11 on the valuation date for property-division purposes.  The account statement shows that the account value decreased $10,000 due to the loan.

The district court issued a scheduling order directing that all discovery be complete by January 1, 2006.  Dykoff’s attorney served document requests and interrogatories on Olsen’s attorney on December 9, 2005.  Olsen’s attorney refused to respond “[d]ue to lack of timeliness.”  Dykoff’s attorney moved to compel and the district court granted the motion on February 1, 2006, and provided Olsen an additional nine days to comply.  Olsen’s attorney did not comply with the February 1 order, causing additional trial delays.

The evidence at trial shows that Olsen purchased a home in Bloomington before the marriage in February 2002.  Dykoff moved in after the marriage and the parties used marital funds to maintain the home.  The parties sold the Bloomington home in July 2004 and used the $36,956.08 in net proceeds from the sale to purchase a home in Eagan. 

The parties stipulated that they purchased a trailer during the marriage, although Olsen later testified that he used some nonmarital funds to purchase it.  Olsen also testified that he purchased an all-terrain vehicle (ATV) and snowmobile before the marriage.  After the marriage, Dykoff spent $11,300 in nonmarital funds to pay off encumbrances on those vehicles, and they had a combined value of $8,380 at the valuation date. 

The district court issued a final order for judgment and amended it on Olsen’s motion.  The district court found the marital portion of Olsen’s 401(k) to be worth $18,060.07.  The district court arrived at this figure by adding the actual value of the account ($22,619.11) to the loan ($10,000) and subtracting Olsen’s nonmarital interest of $14,559.04. 

The district court found that the Eagan home was valued at $206,000, with an outstanding mortgage balance of $162,198.  The court calculated Olsen’s nonmarital interest in the home to be $24,587 after applying the Schmitz formula, leaving the remaining $4,615 as the parties’ marital value in the home.

The district court awarded Olsen: (1) Dykoff’s nonmarital interest of $11,300 in the ATV and snowmobile; (2) $2,150 marital interest in the trailer; and (3) $9,303.03 of the marital interest in his 401(k).  The court awarded Dykoff: (1) Olsen’s nonmarital interest in the Eagan residence of $24,587; and (2) Olsen’s marital interest in the home of $2,307.50.  The difference of $4,414.47 in favor of Dykoff “represents the balance of [Olsen’s] nonmarital funds which are being awarded to [Dykoff].”  This appeal followed.

D E C I S I O N

“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.”  Sirek v. Sirek, 693 N.W.2d 896, 898 (Minn. App. 2005).  “We 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).  “We defer to the trial court’s findings of fact and will not set them aside unless they are clearly erroneous.”  Id.

            “Whether property is marital or non-marital is a question of law, but we defer to the district court’s underlying findings of fact.”  Senske v. Senske, 644 N.W.2d 838, 840 (Minn. App. 2002).  All property acquired by either spouse during the marriage is presumed to be marital property, regardless of the form of ownership.  Minn. Stat. § 518.003, subd. 3b (2006).  To overcome the presumption that property is marital, a party must show by a preponderance of the evidence that the property is nonmarital.  Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997).  Nonmarital property includes property acquired before marriage, property acquired in exchange for property acquired before marriage, and the increase in value of property acquired before marriage.  Minn. Stat. § 518.003, subd. 3b(b)-(c) (2006).

The district court may award nonmarital property if the division of marital property is “so inadequate as to work an unfair hardship.”  Minn. Stat. § 518.58, subd. 2 (2006).  The court must make findings to support an apportionment of nonmarital property due to unfair hardship, and may divide only up to one-half of nonmarital property in such cases.  Id.  Here, the district court awarded substantial portions of the parties’ nonmarital property, but neither party challenges the adequacy of the district court’s findings, and, therefore, we do not address it.  See Melina v. Chaplin, 327 N.W.2d 19, 20 (Minn. 1982) (stating that issues not briefed on appeal are waived).

1.         401(k) loan

            Olsen argues that the district court abused its discretion by apportioning the 401(k) loan entirely to him and by characterizing the loan as a withdrawal.

            Debt apportionment is part of property division, and district courts are “not required to apportion marital debts but [are] only required to meet the just and equitable standard of property divisions.”  Berenberg v. Berenberg, 474 N.W.2d 843, 848 (Minn. App. 1991), review denied (Minn. Nov. 13, 1991).  Marital property must be divided equitably, but it need not be divided equally.  Minn. Stat. § 518.58, subd. 1 (2006); Riley v. Riley, 369 N.W.2d 40, 43 (Minn. App. 1985), review denied (Minn. Aug. 29, 1985). 

            Olsen contends that the loan is a marital debt and that the district court inequitably apportioned the debt entirely to him.  The district court found that the loan paid for Olsen’s attorney fees and that he “is liable alone to pay the loan incurred for his legal defense . . . .”

            We hold that the record supports the district court’s finding that the parties incurred the debt to pay for Olsen’s legal defense stemming from charges relating to domestic violence.  Furthermore, the record shows that Olsen has a substantially greater ability to pay the debt; Dykoff earns $1,376.53 per month with $3,328 in monthly living expenses, while Olsen makes $2,193.06 per month with $1,450 in expenses.  Therefore, we conclude that the district court did not abuse its discretion by apportioning the debt entirely to Olsen.  See Dahlberg v. Dahlberg, 358 N.W.2d 76, 80 (Minn. App. 1984) (affirming apportionment of debt to husband with greater ability to pay, the debt was amassed by him, and the district court’s decision was guided by fairness and equity).

            Next, Olsen argues that that district court erred by finding that the loan was taken from his 401(k) account.  Olsen contends that his 401(k) was merely collateral for the loan and that the district court improperly added back the loan to calculate the value of the account.  We disagree.

            The record shows that Olsen’s 401(k) account balance decreased $10,000 due to the loan.  Additionally, Olsen’s “participant loan policy” shows that his account was the source of the loan and not simply collateral.  Once the loan is repaid in full, the $10,000 account liability will disappear, so in effect Olsen is not paying twice on the loan, as he argues.  Therefore, the district court did not abuse its discretion by adding back the loan from Olsen’s 401(k) to determine the value of the account.

2.         Marital home

            Olsen also argues that the district court undervalued his nonmarital interest in the parties’ home.  Olsen contends that the district court improperly applied the Schmitz formula in calculating his nonmarital interest in the marital homestead.

            The Minnesota Supreme Court summarized the formula for calculating marital and nonmarital interests in property acquired during the marriage using nonmarital funds:

The present value of a nonmarital asset used in the acquisition of marital property is the proportion the net equity or contribution at the time of acquisition bore to the value of the property at the time of purchase multiplied by the value of the property at the time of separation.  The remainder of equity increase is characterized as marital property . . . .

 

Brown v. Brown, 316 N.W.2d 552, 553 (Minn. 1982).  This formula is commonly referred to as the Schmitz formula because it was adopted by the supreme court in Schmitz v. Schmitz, 309 N.W.2d 748, 750 (Minn. 1981). 

The supreme court has subsequently recognized that “the Schmitz formula may be used to determine marital and nonmarital interest in property acquired during the marriage with a nonmarital down payment . . . as well as property acquired before the marriage.”  Antone, 645 N.W.2d at 102.  When calculating the nonmarital interest in property acquired before the marriage, “the formula uses the time of the marriage instead of the time of the purchase.”  Id.  Accordingly,

[t]he present value of a [nonmarital interest in property acquired before the marriage] is the proportion the net equity . . . at the time of [the marriage] bore to the value of the property at the time of [the marriage] multiplied by the value of the property at the time of separation.  The remainder of equity increase is characterized as marital property . . . .

 

Id. (alterations in original) (quotation omitted).

Here, the district court purported to apply the Schmitz formula to determine Olsen’s nonmarital interest in the parties’ marital home.  To do so, the court needed to calculate Olsen’s nonmarital interest in the Bloomington home when the parties sold it in 2004 and rolled the net proceeds into the Eagan home.  The court divided Olsen’s initial down payment on the Bloomington home ($18,500) by the purchase price of that home ($155,000), and multiplied that value by the present value of the marital Eagan home ($206,000).  Olsen argues that the district court abused its discretion by not considering his equity and the value of the Bloomington home at the time of marriage.  See id.  We disagree based on the evidence produced at trial.

The parties purchased the Eagan home during marriage, and it is, therefore, presumed to be entirely marital property.  Minn. Stat. § 518.003, subd. 3b.  In order to rebut the presumption, Olsen had to prove his nonmarital interest in the home by a preponderance of the evidence.  Olsen, 562 N.W.2d at 800.  But Olsen did not produce any evidence regarding his nonmarital equity or the value of the Bloomington home as of the parties’ March 2003 wedding.  The only evidence presented concerned the value of the Bloomington home when Olsen purchased it in 2002.  Because Olsen failed to enter the evidence required for the district court to calculate the extent of Olsen’s nonmarital interest in the Eagan home, the district court did not abuse its discretion by estimating his nonmarital interest in the Eagan home based on the 2002 values that were produced to the district court.  See Eisenschenk v. Eisenschenk, 668 N.W.2d 235, 243 (Minn. App. 2003) (stating that “[o]n appeal, a party cannot complain about a district court’s failure to rule in her favor when one of the reasons it did not do so is because that party failed to provide the district court with the evidence that would allow the district court to fully address the question”), review denied (Minn. Nov. 25, 2003).

3.         Vehicles and trailer

            Olsen contends that the district court clearly erred by overvaluing the ATV and snowmobile, and erred by finding that the trailer purchased during marriage is marital property.

            The court awarded Olsen the ATV and snowmobile and valued them at $11,300 for purposes of the distribution—Dykoff’s nonmarital contribution to their purchase.  The court found, however, that the combined current value of the vehicles is $8,380.  The difference between the value of the vehicles found by the district court and the amount awarded by the district court is $2,920, and we therefore modify the value of the award to account for this difference.  We note that this difference does not practically affect the result because the district court did not order the property sold.

            The district court also found that the parties’ trailer, purchased during the marriage, was marital property and divided its value equally.  Olsen argues that he used nonmarital funds to purchase the trailer and that Dykoff waived any interest in the property.

            The record shows that the parties stipulated that Olsen used all of the proceeds from the sale of the Bloomington home to purchase the Eagan home.  He later testified that he spent some of his nonmarital proceeds from the Bloomington home to purchase the trailer.  Therefore, there is conflicting evidence in the record as to the source of the funds for the trailer, and the district court did not err by accepting the parties’ stipulation and finding that the trailer is marital property.  See Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn. 1999) (stating that it is not this court’s role to reconcile conflicting evidence, and the court gives great deference to the district court’s findings of fact).  Consequently, Olsen failed to produce sufficient evidence to overcome the marital-property presumption regarding the trailer.  Minn. Stat. § 518.003, subd. 3b; Olsen, 562 N.W.2d at 800.  This is consistent with the district court’s calculation of Olsen’s nonmarital interest in the Eagan home, which assumed all of Olsen’s nonmarital proceeds from the sale of the Bloomington home were rolled over into the Eagan home.

            Similarly, it is not clear from the record that Dykoff waived her marital interest in the trailer.  Olsen argues that Dykoff “conceded any marital claim to the Haulmark Trailer.”  But the record shows that Dykoff’s attorney stated that “[Dykoff] asserts [the trailer] is marital” and did not make an unequivocal waiver of any marital interest in the trailer.  Accordingly, the district court did not abuse its discretion by dividing the trailer equally between the parties. 

4.         Witness credibility

            Olsen argues that the district court abused its discretion by not excluding all of Dykoff’s testimony.  Olsen alleges that Dykoff made an intentional misrepresentation of a material fact at trial, and, therefore, “no credence need be given to [her] testimony.”  Segerstrom v. Nelson, Mullen & Nelson, 198 Minn. 298, 301, 269 N.W. 641, 643 (1936).

            Olsen contends that Dykoff knowingly misrepresented the date when Olsen last saw the parties’ child.  But the record shows that Dykoff’s testimony was not definitive regarding Olsen’s parenting-time schedule and that she was tired and nervous during her testimony.  Although the district court was free to disregard testimony it deemed unreliable, it did not do so in this case, and we defer to the district court’s credibility determinations.  Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988).

5.         Discovery

            Finally, Olsen argues that the district court abused its discretion by granting Dykoff’s motion to compel discovery.  Olsen contends that the district court did not comply with its own scheduling order and contravened the rules of civil procedure because Dykoff’s discovery requests were untimely.

            The district court has broad discretion to determine the procedural calendar of the case.  Rice v. Perl, 320 N.W.2d 407, 412 (Minn. 1982).  Similarly, the district court “has wide discretion to issue discovery orders and, absent clear abuse of that discretion, normally its orders with respect thereto will not be disturbed.”  Shetka v. Kueppers, Kueppers, Von Feldt & Salmen, 454 N.W.2d 916, 921 (Minn. 1990).

            The record shows that the scheduling order closed discovery on January 1, 2006, and that Dykoff’s attorney served document requests and interrogatories on December 9, 2005.  Olsen’s attorney did not answer because the rules provide 30 days to respond, which could have extended discovery beyond January 1.  Dykoff moved to compel discovery on January 13, and the district court granted her motion.

            The rules provide 30 days to respond to document requests and interrogatories, but it does not mandate that parties must wait 30 days before responding.  Minn. R. Civ. P. 33.01(b), 34.02.  Although Dykoff’s requests did not provide Olsen with the entire 30 days to respond, the discovery requests were not per se unreasonable.  Olsen fails to show that he could not reasonably respond by January 1, or that he was prejudiced by the district court’s order to compel.  And even if answering the discovery by January 1 would have been unreasonable, any prejudice was alleviated by the district court’s order providing Olsen with nine additional days to comply, and a total of 60 days from the date of the original request.  On this record, we hold that the district court did not abuse its discretion by ordering Olsen to comply with Dykoff’s discovery requests.

            Affirmed as modified.