In re Marcine LeRae Scanlan, petitioner, Respondent, vs. Peter M. Scanlan, Appellant.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A03-731

 

In re Marcine LeRae Scanlan, petitioner,

Respondent,

 

vs.

 

Peter M. Scanlan,

Appellant.

 

 

Filed January 27, 2004 Affirmed Randall, Judge

 

Itasca County District Court

File No. F5-01-352

 

Mark W. Benjamin, Amy J. Reed-Hall, Parker, Satrom, O'Neil & Benjamin, P.A., 123 South Ashland, Cambridge, MN  55008 (for appellant)

 

Ronald S. Cayko, Fuller, Wallner, Cayko & Pederson, Ltd., 514 America Avenue, P.O. Box 880, Bemidji, MN  56619-0880 (for respondent)

 

            Considered and decided by, Schumacher, Presiding Judge, Randall, Judge, and Stoneburner, Judge.

U N P U B L I S H E D   O P I N I O N

RANDALL, Judge

            On appeal from the property distribution in this dissolution matter, appellant-husband argues that the district court abused its discretion by not retaining jurisdiction over the property distribution pending resolution of a lawsuit against appellant and the family business.   We affirm.

FACTS

            In February 2001, respondent Marcine Scanlan (respondent) commenced this dissolution proceeding against appellant Peter Scanlan (appellant) in Itasca County District Court.  The parties, who had been married since April 28, 1984, disagreed over the custody of their three minor children.  A lengthy dissolution proceeding ensued, and the parties eventually agreed to bifurcate the matter in order to dissolve the parties' marriage and hold a hearing with respect to custody and parenting-time issues.  A hearing was held on June 14, 2002, and shortly thereafter, the district court issued an order dissolving the marriage and awarding custody of the three children to respondent.  In the meantime, the parties continued negotiations with respect to the remaining property issues and respondent's request for spousal maintenance.

            During the parties' dissolution proceeding, a union, that was in place at SBS, Inc., brought a lawsuit in federal court against appellant individually, and SBS, Inc., a business venture started by both appellant and respondent.  A trial was held on the matter, and the plaintiff was awarded a large judgment, but only against the corporate entity, SBS, Inc.  The plaintiffs appealed, attempting to hold appellant personally liable by piercing the corporate veil of SBS, Inc.  The outcome of that appeal is still pending.

                        In February 2003, appellant and respondent finally reached an agreement regarding the distribution of the marital assets.  The only issue left before the district court was appellant's request that the district court retain jurisdiction over the property settlement pending the outcome of the SBS, Inc. appeal.  Appellant wanted the district court to retain jurisdiction over the property settlement until the resolution of the federal appeal so that in the event his share of the property settlement was completely wiped out by the outcome of the pending federal appeal, the district court could make necessary adjustments to the property division.  In contrast, respondent opposed keeping jurisdiction open because she wanted closure and finality, and also because she had virtually no input in the federal litigation.

            On April 16, 2003, the district court issued its order refusing to retain jurisdiction over the parties' property settlement pending the outcome of the appeal in the lawsuit against SBS, Inc. and appellant.  This appeal followed.

D E C I S I O N

            The distribution of property in a dissolution proceeding will not be overturned absent a clear abuse of the trial court's discretion.  Aaron v. Aaron, 281 N.W.2d 150, 152 (Minn. 1979).  "There must be a clearly erroneous conclusion that is against logic and the facts on record before this court will find that the district court abused its discretion."  Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).

            Appellant asserts that the intent of the federal appeal is to gain access to appellant's personal assets by piercing SBS, Inc.'s corporate veil.  If the corporate veil is pierced, appellant contends that he will lose everything, while respondent's share of the property distribution would remain untouched.  Appellant argues that, because of the potential for such disparity, the district court should have retained jurisdiction to ensure a just and equitable outcome. 

            In support of his argument, appellant argues that Minnesota courts routinely reserve jurisdiction in matters involving dissolution proceedings.  But, as respondent points out, most of the cases cited by appellant concern issues of maintenance awards where it is not uncommon for a trial court to retain jurisdiction.  Property division is different from maintenance awards, and property divisions are final upon expiration of the appeal period.  See Angier v. Angier, 415 N.W.2d 53, 55 (Minn. App. 1987).

            Here, there is no dispute that appellant agreed to the property division, and to its finality in terms of dollars and cents.  The only issue the parties disputed was whether the district court should retain jurisdiction over the property division pending the outcome of the SBS, Inc. matter.  In light of this basic disagreement, appellant could have protected himself by doing any number of things.  For example, appellant could have agreed to the property settlement only on the condition that one (or more) of the parties' parcels of land be held in escrow pending the outcome of the SBS, Inc. litigation.  Under this type of agreement, if SBS, Inc.'s corporate veil were pierced, appellant would be entitled to some portion of the proceeds when that particular parcel of land is sold.  If the corporate veil were not pierced, respondent would then be entitled to clear title of the land.    

            By way of background, appellant got SBS, Inc. and all its assets, some personal property, and some real estate and respondent got some personal property and several pieces of real estate, and no part of SBS, Inc.  Both parties were assigned certain responsibility for debts and that was all done by negotiation and by mutual consent.  Appellant could have refused to settle any part of the property dispute if jurisdiction was not going to be reserved, and could have tried everything to the court and made arguments for continuances until the appeal was settled and until the value of the estate would better be known.  Instead, appellant agreed to a final division of the property and then his counsel and respondent's counsel and both parties agreed to submit to the district court to decide whether it should retain jurisdiction over the matter.  Appellant obviously knew that a court can decide any disputed matter submitted to it in favor of either party.  Appellant and his attorney chose to settle the dollar amounts and simply leave up to the district court the decision of whether or not to retain jurisdiction.

            We can only note that it would not have been improper for the district court to retain jurisdiction over the property settlement pending the outcome of the lawsuit in federal court.  The two parties had agreed that if either party filed bankruptcy, the court would retain jurisdiction of the settlement to take action in the event that the filing of bankruptcy necessitated a different division of property to insure that both parties were treated fairly.  But the district court did not, and unlike the issue of bankruptcy that both parties agreed to, here the issue of retained jurisdiction remained in dispute.  So our issue is narrow.  Although the district court could have found reason to retain jurisdiction, did it abuse its discretion or commit a substantial error of law by not retaining jurisdiction?  We can find none.  Both parties to this lawsuit got what they wanted.  They mutually bargained a settlement that included 100% of the property.  They mutually agreed that the retention of jurisdiction by the district court was in dispute.  Then, they mutually agreed to submit letter briefs to the court and argue for their respective side, retention or no retention, and let the district court decide.  The district court did, but in a way not favorable to appellant.  We can find no error or abuse of discretion.

            Affirmed