In Re the Marriage of: Connie Lynn Glazier, petitioner, Appellant, vs. Gregory Ward Glazier, Respondent.

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. §subd. 3 (1994).

STATE OF MINNESOTA
IN COURT OF APPEALS
C6-96-194

In re the Marriage of:
Patricia Michele Schumacher, petitioner,
Respondent,

vs.

Terry Lee Schumacher,
Appellant.

Filed August 20, 1996
Affirmed as modified
Willis, Judge

Ramsey County District Court
File No. F5943045

Daniel J. Goldberg, Messerli & Kramer, P.A., 1800 Fifth Street Towers, 150 South Fifth Street, Minneapolis, MN 55402 (for Respondent)

Nancy Zalusky Berg, Gary A. Debele, Walling & Berg, P.A., Suite 650, 701 Fourth Avenue South, Minneapolis, MN 55415 (for Appellant)

Considered and decided by Willis, Presiding Judge, Davies, Judge, and Harten, Judge.
U N P U B L I S H E D O P I N I O N

WILLIS, Judge
Terry Lee Schumacher (husband) appeals from the amended judgment dissolving his marriage to respondent Patricia Michele Schumacher (wife), arguing that the district court erred by (1) refusing to credit husband's uncorroborated testimony regarding the financial issues of the case and precluding husband from presenting evidence at trial regarding certain assets, (2) dividing the parties' marital assets in an inequitable way and mischaracterizing some of the parties' assets as marital, rather than nonmarital, (3) failing to reserve the issue of spousal maintenance, and (4) granting wife's request and denying husband's request for attorney fees. We affirm as modified.
FACTS

The district court, in a pretrial order, prohibited husband from introducing any testimony at trial regarding a 1937 Ford panel truck and a 1967 Chevrolet Malibu. In its amended judgment, the district court made the following finding of fact:
[Husband] has interfered with the orderly process of this Court by failure to cooperate with discovery, with the real estate and automobile appraisers, and has unlawfully disposed of marital assets in violation of the automatic stay. [Husband] has also distorted his actions during testimony. In view of these and similar actions and after having had an opportunity to hear and observe [husband] during his testimony at trial, the court is not prepared to accept [husband]'s [uncorroborated] testimony on the financial issues in this case.

In dividing the parties' marital assets, the district court awarded the parties' Tanglewood Drive homestead, their Dawn Avenue house, and a Wisconsin cabin to husband, subject to liens in favor of wife. The district court's order requires husband to pay wife's lien on the Tanglewood homestead within 60 days of the occurrence of the first of five events, one of which is husband's remarriage. The district court determined the amount of wife's liens without accounting for costs of selling the properties. In addition to dividing the real estate described above, the court divided retirement assets, bank accounts, automobiles, and personal property between husband and wife.
The district court determined that certain assets were marital property, including the Wisconsin cabin, a $35,000 treasury bill, a 1940 Ford sedan, and a 401(k) account. At the beginning of trial, the district court orally entered into the record the stipulations reached by the parties, including that "[t]hey have agreed that spousal maintenance as to both parties will be reserved." In the amended judgment, however, the district court held that "[n]either party is granted spousal maintenance from the other." Finally, the district court awarded wife $2825 in attorney fees and denied husband's request for attorney fees.
D E C I S I O N

I. Credibility Determinations
The district court stated in its amended judgment that it did not accept husband's testimony regarding the financial issues of the case. A district court's "[f]indings of fact *shall not be set aside unless clearly erroneous." Minn. R. Civ. P. 52.01. Reviewing courts must give "due regard *to the opportunity of the trial court to judge the credibility of the witnesses." Minn. R. Civ. P. 52.01. Deference to the district court is necessary because district courts "stand in a superior position to appellate courts in assessing the credibility of witnesses." In re Welfare of M.D.O., 462 N.W.2d 370, 374-75 (Minn. 1990).
The district court made findings of fact in support of its decision not to credit husband's testimony. The court found that due to husband's lack of cooperation with wife's appraiser, the appraiser had to visit the Tanglewood Drive homestead on two occasions and then only had limited access to vehicles located there. The district court also found that husband did not show the appraiser one vehicle located on the property. The appraiser's testimony supports the findings regarding husband's lack of cooperation. The district court also found that husband failed to disclose in his answers to interrogatories one of his Unisys retirement plans, a motor home, the cash value of a Johnson and Higgins life insurance policy, a motorcycle, snowmobiles, and boats. Husband's answers to interrogatories support the district court's finding.
The district court also found that husband "unlawfully disposed of marital assets in violation of the automatic stay." The record shows that husband "gifted" two vehicles to his nephews in September 1994, shortly before the dissolution action was filed in October 1994. Husband testified that these vehicles remained in his possession until February 1995. Minnesota law requires that
in contemplation of commencing a marriage dissolution, *each party owes a fiduciary duty to the other for any profit or loss derived by the party, without the consent of the other, from a transaction or from any use by the party of the marital assets.

Minn. Stat. § 518.58, subd. 1a (1994). From the record, the district court could have concluded that husband made the gifts to his nephews in contemplation of the commencement of the marriage dissolution action and the gifts, therefore, were unlawful dispositions of marital assets.
In sum, the district court's findings of fact are supported by the record, and the court, therefore, did not clearly err by refusing to credit husband's testimony.
Husband argues that the district court denied him a fair trial by precluding him from introducing any testimony at trial regarding a 1937 Ford panel truck and a 1967 Chevrolet Malibu. In light of the district court's refusal to credit husband's testimony, however, the testimony would not have affected the trial had the court allowed it. Even if the district court erroneously precluded husband's testimony, therefore, any error was harmless. See Minn. R. Civ. P. 61 ("The court at every stage of the proceeding must disregard any error or defect in the proceeding which does not affect the substantial rights of the parties.").
II. Division of Marital Assets/Classification As Marital or Nonmarital
In a dissolution case, the district court must make a "just and equitable division" of the parties' marital property. Minn. Stat. § 518.58, subd. 1 (1994). The statute does not require the division to be mathematically equal. Ruzic v. Ruzic, 281 N.W.2d 502, 505 (Minn. 1979). Reviewing courts must defer to the district court's division of marital assets. Rohling v. Rohling, 379 N.W.2d 519, 522 (Minn. 1986). An appellate court "`will and must affirm the decision made if it has an acceptable basis in fact and principle even though [the appellate court] might have made a different disposition of the problem.'" Id. (quoting Bollenbach v. Bollenbach, 285 Minn. 418, 426-27, 175 N.W.2d 148, 154 (1970)). A reviewing court will overturn a district court's valuation of assets only if the district court's valuation is clearly erroneous. Peterson v. Peterson, 367 N.W.2d 90, 92 (Minn. App. 1985), review denied (Minn. July 17, 1985).
Property acquired during a marriage by either spouse is presumed to be marital property regardless of whether the title is held individually or by both spouses. Minn. Stat. § 518.54, subd. 5 (1994). A party asserting that a particular asset is nonmarital must prove that assertion by a preponderance of the evidence. Freking v. Freking, 479 N.W.2d 736, 738 (Minn. App. 1992). Although this court need not defer to the district court's conclusion regarding the marital or nonmarital classification of an asset, "this court must affirm the findings of fact supporting that conclusion unless they are clearly erroneous." Burns v. Burns, 466 N.W.2d 421, 423 (Minn. App. 1991).
A. Tanglewood Homestead
Husband argues that the district court erred by requiring payment of wife's lien on the Tanglewood homestead within 60 days after his remarriage. He argues that there is no legal basis for such a condition. In Thomas v. Thomas, 356 N.W.2d 76 (Minn. App. 1984), however, this court explained that postponement of a party's receipt of his or her lien interest in the parties' homestead until the other party's death or remarriage operates "to encourage the continued occupancy of the homestead by the parties' minor children." Id. at 78. Here, the court granted sole physical custody of the parties' two minor children to husband. The district court, therefore, did not abuse its discretion by ordering payment of wife's lien on the Tanglewood property within 60 days after husband's remarriage.
Husband argues that the district court abused its discretion by determining wife's lien interest in the Tanglewood homestead without first deducting costs of selling the property. This court has stated that "[i]t is generally held that speculative or contingent liabilities should not be considered in determining the net marital estate." Nolan v. Nolan, 354 N.W.2d 509, 513 (Minn. App. 1984), review denied (Minn. Dec. 20, 1994). In Flynn v. Flynn, 402 N.W.2d 111 (Minn. App. 1987), this court held that the district court properly deducted the estimated commissions and sale costs from the homestead valuation where the home had been, and continued to be, listed for sale. Id. at 117. The court concluded, in that case, that "[e]stimation and inclusion of these costs was not speculative." Id. In this case, the record does not show that the Tanglewood homestead has been or presently is listed for sale. Calculation of commissions and sale costs, therefore, would be speculative here, and the district court did not abuse its discretion by refusing to deduct these costs when valuing the homestead.
B. Dawn Avenue House
Husband argues that the amended judgment requires him to pay off wife's lien on the Dawn Avenue house if he remarries and there is no legal basis for such a condition. The district court required, however, that husband must pay wife's lien within 60 days of the occurrence of any of the following events: (1)death of husband's mother, (2)termination of husband's mother's use of the property as her residence, and (3)sale of the property. Husband's remarriage would not trigger payment of wife's lien on the Dawn Avenue house.
Husband also argues that the district court abused its discretion by determining wife's lien interest in the Dawn Avenue residence without first deducting costs of sale of the property. As with the Tanglewood homestead discussed above, the record does not show that the Dawn Avenue residence has been or presently is listed for sale. Calculation of commissions and sale costs, therefore, would be speculative, and the district court did not abuse its discretion by refusing to deduct these costs when valuing the residence.
C. Wisconsin Cabin
Husband again argues that the court required payment of wife's lien interest if he remarries and that there is no legal basis for such a condition. The amended judgment, however, requires payment of wife's lien on the Wisconsin cabin within 60 days of the first occurrence of any of the following events: (1)of the property, (2)of the youngest of the parties' minor children, and (3)death. Husband's remarriage would not trigger payment of wife's lien on the Wisconsin cabin.
Husband also argues that the district court abused its discretion by determining wife's lien interest in the Wisconsin cabin without first deducting costs of sale of the property. As with the Tanglewood homestead and the Dawn Avenue house, the record does not show that the Wisconsin cabin has been or presently is listed for sale. Calculation of commissions and sale costs, therefore, would be speculative and the district court did not abuse its discretion by refusing to deduct these costs when valuing the cabin.
Husband argues that the district court erred by characterizing the Wisconsin cabin entirely as a marital asset. The court found that husband "did not establish by a preponderance of creditable evidence that he has a non-marital interest in the property." The record shows that the cabin was purchased in April 1993, 20 years after the parties' marriage. The cabin, therefore, is presumed marital property and husband must prove that it is nonmarital property by a preponderance of the evidence. See Minn. Stat. §subd. 5; Freking, 479 N.W.2d at 738. Husband testified that he paid for the cabin with money from his checking account, which money came from a treasury bill that he bought after his father paid back a premarital loan. As discussed below, however, the treasury bill was a marital asset because husband failed to show by a preponderance of the evidence that it was nonmarital. As a result, the district court did not err by concluding that the cabin was a marital asset.
Husband asserts that his son owns a one-half interest in the cabin, and therefore the district court should have distributed only the remaining half of the cabin's value as a marital asset. As noted earlier, Minnesota law requires that
in contemplation of commencing a marriage dissolution, *each party owes a fiduciary duty to the other for any profit or loss derived by the party, without the consent of the other, from a transaction or from any use by the party of the marital assets.

Minn. Stat. § 518.58, subd. 1a. If the court finds that a party breached his or her fiduciary duty, 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.

Id. Here, the district court found that
[husband]'s conveyance of a one half undivided interest in the property to the parties['] son was an attempt to assign assets to keep them beyond the reach of [wife] and this Court's property division in contemplation of this proceeding.

Wife testified that husband did not discuss with her giving their son a title interest in the cabin. From wife's testimony, the court could have concluded that husband breached his fiduciary duty by disposing of an interest in the cabin in contemplation of the dissolution proceeding. The district court, therefore, did not err by treating the entire cabin as a marital asset.
D. Retirement Assets and Bank Accounts
Husband argues that the district court erred by characterizing his entire Unisys 401(k) retirement plan as a marital asset. He argues that the record shows that the 401(k) plan was started at the same time as his Unisys pension plan and his Unisys Executive Life Benefit plan, both of which the district court found contained a nonmarital portion. Husband does not point to any evidence in the record, however, showing that the 401(k) plan existed at the time of the parties' marriage.
Husband asserts that the district court erred by awarding too many of the parties' retirement assets and bank accounts to wife. He argues that the district court awarded wife all of the parties' First Bank IRAs, TCF IRAs, and National Home Life IRAs. The amended judgment, however, shows that husband and wife each received one or more accounts from each of these institutions. Additionally, they received comparable amounts of their retirement assets. The record contains no evidence that the district court abused its discretion when dividing the parties' retirement assets and bank accounts.
E. Vehicles and Heavy Equipment
Husband argues that the district court abused its discretion by awarding all of the classic automobiles to him. He asserts that the court's award is inequitable because he does not have sufficient resources to maintain these assets. In light of husband's extensive involvement with, and wife's disinterest in, the automobiles during the parties' marriage, the district court's award of the vehicles to husband is not a "clearly erroneous conclusion that is against logic and the facts on record." Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
Husband argues that the district court erred by characterizing the 1940 Ford sedan as a marital asset. The court concluded that husband did not establish by a preponderance of credible evidence that he has a nonmarital interest in the car. Wife's testimony that the automobile in question was not purchased with proceeds from the sale of an automobile that husband owned before the parties' marriage supports the district court's conclusion.
Husband argues that there is no basis in the record for the court's valuation or assignment of a bulldozer and a backhoe. The record contains wife's testimony that these assets were stored on husband's Wisconsin farm. Husband testified that he paid $4000 for the bulldozer and that it now would probably be valued as scrap iron. The district court's valuation of the bulldozer at $2000 was within the range of values in the record and not an abuse of discretion. See Hertz v. Hertz, 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975) (holding that reviewing courts must sustain valuations if they are within the limits of credible estimates presented at trial). The record contains no evidence regarding the value of the backhoe. The district court, therefore, abused its discretion by valuing the backhoe at $1500. We modify the amended judgment and decree to award the backhoe to husband with a value of $0. Although this modification will make the property distribution unequal, it will not change the distribution to such an extent as to make it inequitable. See Ruzic, 281 N.W.2d at 505 (holding that a property distribution must be equitable, but not mathematically equal).
F. Treasury Bill
Husband argues that the district court erred by concluding that husband had failed to establish by a preponderance of the evidence that he had a nonmarital interest in the $35,000 treasury bill. Husband testified that he purchased the treasury bill with funds received from his father as repayment for a premarital loan and proceeds from the sale of a 1958 Impala and a 1965 LeMans that he owned prior to the parties' marriage. Wife, however, testified that she understood that husband's father never repaid the premarital loan. Further, husband's mother testified that although she remembered husband making a loan to his father, she did not remember the amount or whether it was ever paid back. Wife testified that husband owned a Camaro and two motorcycles before the parties' marriage, but that she did not recall a 1958 Impala or a 1965 LeMans. The district court, therefore, did not err by concluding that husband failed to show by a preponderance of the evidence that he had a nonmarital interest in the treasury bill.
III. Reservation of Spousal Maintenance Issue
District courts have broad discretion when awarding spousal maintenance. Maeder v. Maeder, 480 N.W.2d 677, 679 (Minn. App. 1992), review denied (Minn. Mar. 19, 1992). This court will not disturb a district court's maintenance award unless the court abused its discretion. Id. The supreme court has stated that "[t]here must be a clearly erroneous conclusion that is against logic and the facts on record before this court will find that the trial court abused its discretion." Rutten, 347 N.W.2d at 50. If a district court "neither awards alimony nor retains jurisdiction to award alimony at some future time, its jurisdiction to do so is lost following the dissolution of marriage." Berger v. Berger, 308 Minn. 426, 428, 242 N.W.2d 836, 837 (1976).
Here, the district court read the parties' stipulation into the record at the beginning of trial: "They have agreed that spousal maintenance as to both parties will be reserved." Nevertheless, the court held that "[n]either party is granted spousal maintenance from the other." During the hearing on posttrial motions, the following exchange occurred:
THE COURT: I don't believe the Court[s] should be in the business of divesting themselves of jurisdiction. I find that concept to be absolutely incredible. I understand that the Supreme Court, for reasons that are totally unclear to me, allows parties to divest the Court of jurisdiction by agreement, but I'm not in the business of going around divesting myself of jurisdiction. So if you want to appeal me on that I would be happy if somebody would straighten that out.

[WIFE'S ATTORNEY]: Sounds like what you intended to do was reserve jurisdiction.

THE COURT: Well, whatever it is.

[WIFE'S ATTORNEY]: I would ask the Court, and I think counsel will stipulate, if you could express that clearly because that might -- if we are arguing about whether or not there was a reservation or not because it doesn't say it's reserved.

THE COURT: It doesn't need to be in view of my view. If you think it's ambiguous I will change it.

[WIFE'S ATTORNEY]: That's my point, just with the hope that it would save the parties possible future litigation expenses fighting over whether or not it's ambiguous in the future.

THE COURT: Okay.

After the hearing, the district court filed its amended judgment in which it again held that "[n]either party is granted spousal maintenance from the other."
The record shows that the district court intended to retain jurisdiction over the issue of maintenance. Consequently, the district court's order denying spousal maintenance was a "clearly erroneous conclusion that is against logic and the facts on record." Rutten, 347 N.W.2d at 50. We, therefore, modify the amended judgment to provide that the spousal maintenance issue is reserved.
IV. Attorney Fees
Husband argues that the district court erred by granting wife's motion and denying his motion for attorney fees. A district court may award attorney fees "against a party who unreasonably contributes to the length or expense of the proceeding." Minn. Stat. §subd. 1 (1994). A court can award attorney fees based on a party's contribution to the length of the proceeding "regardless of the relative financial resources of the parties." Dabrowski v. Dabrowski, 477 N.W.2d 761, 766 (Minn. App. 1991). A district court's award of attorney fees is within the district court's discretion, and this court will not disturb the award unless the court abused its discretion. Id.
The district court found that
[husband] has engaged in a course of conduct that has contributed significantly to the costs and length of this litigation.

As a result, the court ordered husband to pay $2825 toward wife's attorney fees. The record supports the district court's finding that husband contributed to the length and cost of the proceeding by failing to cooperate with discovery and with wife's appraisers. As a result, the trial court did not clearly abuse its discretion by awarding wife $2825 in attorney fees.
Affirmed as modified.