In re the Marriage of: Patrick Vollhaber, petitioner, Respondent, vs. Jacqueline Pastoret (Vollhaber), Appellant.

In re the Marriage of: Patrick Vollhaber, petitioner, Respondent, vs. Jacqueline Pastoret (Vollhaber), Appellant. A04-1764, Court of Appeals Unpublished, September 20, 2005.

This opinion will be unpublished and

may not be cited except as provided by

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

 

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A04-1764

 

 

In re the Marriage of:

Patrick Vollhaber, petitioner,

Respondent,

 

vs.

 

Jacqueline Pastoret (Vollhaber),

Appellant.

 

Filed September 20, 2005

Affirmed

Parker, Judge*

 

Ramsey County District Court

File No. DM-F9-01-1335

 

 

B. William Ekstrum, Newquist & Ekstrum, Chartered, 6401 University Avenue N.E., Suite 301, Fridley, MN  55432 (for respondent)

 

Dianne Wright, Wright Family Law & Mediation P.L.L.P., White Pine Building, 342 Fifth Avenue North, Bayport, MN  55003 (for appellant)

 

 

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

U N P U B L I S H E D   O P I N I O N

PARKER, Judge

            On appeal from the district court's division and valuation of the parties' real and personal property and allocation of debt, wife claims that the district court erred by denying her claim for relief.  We affirm.

D E C I S I O N

I.          Division and valuation of property

 

Determining the specific value of an asset is a finding of fact.  Hertz v. Hertz, 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975).  "Such findings of fact, when made without a jury, shall not be set aside unless clearly erroneous on the record as a whole."  Id.  Such broad deference is appropriate because "valuation is necessarily an approximation in many cases."  Id.  Accordingly, the value arrived at by the trial court need only fall "within a reasonable range of figures." Id.

The district court has broad discretion in the division of property.  Bollenbach v. Bollenbach, 285 Minn. 418, 426, 175 N.W.2d 148, 154 (1970).  A district court abuses discretion regarding a property division if the findings of fact are "against logic and the facts on [the] record."  Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984) (citation omitted).  Even if this court would have done things differently, we will affirm the district court's division of property if it has an acceptable basis in fact and principle.  Servin v. Servin, 345 N.W.2d 754, 758 (Minn. 1984).  The property division need not be mathematically equal, but it must be equitable.  Thomas v. Thomas, 383 N.W.2d 727, 728 (Minn. App. 1986).

This court has consistently held that the district court is in the best position to determine witness credibility.  Fontaine v. Hoffman, 359 N.W.2d 692, 694 (Minn. App. 1984).  We also defer to the district court's determination regarding the credibility and weight of evidence that expert witnesses provided.  See State ex rel. Trimble v. Hedman, 291 Minn. 442, 456, 192 N.W.2d 432, 440 (1971) ("The weight and credibility to be given to the opinion of an expert lies with the factfinder.").

The record must be reviewed in the light most favorable to the district court's findings.  Lossing v. Lossing, 403 N.W.2d 688, 690 (Minn. App. 1987).

A.        Ten-acre Aitkin parcel

Wife first argues that the district court erred by classifying as nonmarital certain real property and in distributing it as such.  Whether property is marital or nonmarital is a question of law subject to de novo review.  Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997).  But we review the district court's findings of fact underlying this determination for clear error.  Id. 

All property acquired during marriage is presumed to be marital property.  Minn. Stat. § 518.54, subd. 5 (2004).  Nonmarital property is property acquired before the marriage, property that is acquired in exchange for property acquired before the marriage, or the increase in the value of property that was acquired before the marriage.  Id.  The supreme court has held that

the increase in the value of nonmarital property attributable to the efforts of one or both spouses during their marriage, like the increase resulting from the application of marital funds, is marital property.  Conversely, an increase in the value of nonmarital property attributable to inflation or to market forces or conditions, retains its nonmarital character.

 

Nardini v. Nardini, 414 N.W.2d 184, 192 (Minn. 1987).  The party seeking to establish the nonmarital character of an asset must do so by a preponderance of the evidence. Wopata v. Wopata, 498 N.W.2d 478, 484 (Minn. App. 1993).

Wife concedes that the net equity in the ten-acre parcel at the time of the parties' marriage is husband's nonmarital property.  However, wife contends that the property was paid for partially with marital assets, and thus the district court erred in finding the property entirely nonmarital.  Further, wife argues that the district court erred in not applying the Schmitz formula.  See Schmitz v. Schmitz, 309 N.W.2d 748 (Minn. 1981).  The Schmitz formula determines the appreciation of a nonmarital interest in an asset with marital and nonmarital components.  Schmitz, 309 N.W.2d at 750.[1]  And wife argues that husband failed to meet the burden that requires husband to provide evidence of the fair market value of the property as of the date of marriage and the amount of any debt owed.

Here, the record shows that the ten-acre parcel was encumbered at the time of the marriage.  Husband supplied evidence that showed that the property was purchased for $5,000 in 1988 and that there was a small balance of $578.02 due on the property at the time of the parties' marriage.  Wife provided a receipt for the warranty deed and a single check from the bank, which were dated into the next year.  The district court determined husband's evidence to be credible and found the property to be nonmarital.  The district court also found husband's property appraisal to be credible and adopted the $10,000 valuation at the time of the parties' 2003 dissolution.  Ultimately, the court awarded husband the property, without a calculation of marital interest.

Based upon the 2003 valuation of the property, it appears that the valuation at the time of the parties' 1993 marriage had not increased greatly from the 1988 purchase price of $5,000.  Further, based on the district court's credibility determination, the amount that husband owed at the time of the parties' marriage was minimal.  Though there was no evidence of market value at the time of the parties' marriage, this court declines to remand for de minimis technical errors.  Wibbens v. Wibbens, 379 N.W.2d 225, 227 (Minn. App. 1985).  We conclude that the district court did not err in awarding husband the entire ten-acre parcel.

B.        Other Aitkin parcels

Wife argues that the district court erred when it accepted husband's appraised value of the marital property located in Aitkin County.  Specifically, wife claims that the district court erred in using the husband's appraisal, which valued the property in individual tracts, and in ignoring the potential for commercial development, which reflected the highest and best use of the property.

Highest and best use is defined as "the reasonably probable and legal use of vacant land or an improved property that is physically possible, legally permissible, appropriately supported, financially feasible, and that results in the highest value."  The Appraisal of Real Estate, 305 (12th ed. 2001).  The physical possibility, legal permissibility, and financial feasibility must first be determined before maximum value is considered.  Id. at 314.

            Here, the district court reviewed appraisals from both husband's appraiser and wife's appraiser.  The court also heard oral testimony from husband's appraiser, who valued parcel #2 (40-acre parcel) at $19,000 and parcel #3 (20-acre parcel) at $14,000.  Wife's appraiser did not testify.  Based on the testimony and appraisal, the court adopted the valuation provided by husband's expert witness.  Wife does not argue that the expert was not qualified to state a valuation.  Therefore, the credentials of the expert are not at issue. 

Though wife argues that because the district court based part of its decision to award husband the Aitkin County property on the fact that husband had commercial plans for the property, wife fails to show how the appraisal is flawed in not allocating a value for the property in its current state, which does not include the improvements.  There is nothing in the record to show that the property is commercially zoned.  And any commercial development requires time and money.  Therefore, the district court did not abuse discretion in accepting the appraised value of husband's bona fide appraiser.  The value assigned is within the limits of estimates made by the parties' witnesses.  Accordingly, we conclude that the district court did not err in its valuation and distribution of the remaining Aitkin properties and affirm that determination.  See Hertz, 304 Minn. at 145, 229 N.W.2d at 44.

C.        Personal property

Wife challenges the district court's distribution and valuations of a list of personal items, including three computer software programs, which were valued at $5,000 each.  Wife argues that there is insufficient evidence to support the valuation of the computer software and that the district court's amended findings are incompatible with its final conclusion.  A review of the amended order reflects that the district court's findings support the conclusion.

In the amended order's findings, the district court specifically addressed the computer software, stating,

[a]lthough she testified and otherwise stated several times that she could not locate after diligent search and did not have the five computer programs sought by [husband], [wife] was able, after entry of the Decree, to locate two of the programs and to locate other computer programs.  [Wife] has made a good faith effort to locate the computer programs sought by [husband].  [Wife] is in substantial compliance with the provision of the Judgment and Decree that she deliver the five computer programs to [husband].  It is no longer just that the financial penalty imposed on [wife] in the Decree for failure to deliver the programs have prospective application.  Although she testified and otherwise stated that she could not locate and did not have other items of personal property which were either [husband's] non-marital property or belonged to [his] daughter, [wife] was able, after entry of the Decree, to locate some of the personal property items and deliver them to [husband].  Findings of Fact 18 and 25 and Conclusions of Law 8 and 9 should be amended. 

 

Then, in the Conclusions section, the court assigned the Aitkin County properties to husband as an offset for wife's failure to return a number of personal property items to husband.  Specifically, the court stated,

4. Finding of Fact 18 is amended to add the following sentence:  "The award to [husband] of the Aitkin County Parcel 2 and Aitkin County Parcel 3 reflects off-set of the missing personal property of [husband] . . . (approximately $14,000) as well as the three (of orginal five) computer programs which remain missing (valued by [husband] at $15,000).

 

5. Finding of Fact 25 is amended.  The final sentence of the finding[[2]] is changed and an additional sentence is added, as follows:  From [husband's] estimates alone, the values of which were not disputed, [wife] used or disposed of or withheld or hid or failed to make a diligent search for $25,000 worth of business programs, and an additional $14,410 worth of personal property.  Through post-trial diligent search, [wife] successfully located two of the five business programs and successfully located a number of items of personal property, although many items remain missing.

 

Though the court mentions the computer software in its conclusion, there is no indication that the court awarded husband the $15,000 value for the software.  Instead, the court accepted husband's appraisal of the Aitkin county parcelsvalued at $33,000.  A division of this real property would entitle each party to one-half of the value, which is $16,500.  The court concluded that $16,500, the wife's share, would be offset against husband's personal property, which was valued at approximately $14,410.

The $14,410 valuation of the other personal property is also supported by the record.  Husband introduced a list and valuations of a number of personal property items.  Wife did not object to the estimated valuations.  The district court found husband's valuations to be credible.  See Fontaine, 359 N.W.2d at 694 (holding that district court is in best position to determine witness credibility).  Ultimately, the district court accepted husband's valuations, which were "within a reasonable range of figures."  See Johnson v. Johnson, 277 N.W.2d 208, 211 (Minn. 1979).  Because the district court assigned values to the property that are supported by testimonial or documentary evidence, or both, the district court did not clearly err in valuation of the parties' marital property.

II.        Division of debt

Finally, wife argues that the district court abused discretion in requiring her to pay the parties' marital debt.  The district court has broad discretion in apportioning the parties' debt.  Dahlberg v. Dahlberg, 358 N.W.2d 76, 80 (Minn. App. 1984).  Although the apportionment must be just and equitable, it need not be equal.  Justis v. Justis, 384 N.W.2d 885, 888 (Minn. App. 1986), review denied (Minn. May 29, 1986).  Therefore, even if the debts are marital, the district court may apportion to one party a substantial amount of the marital debt or the debt in its entirety. See, e.g., Lynch v. Lynch, 411 N.W.2d 263, 266 (Minn. App. 1987) (affirming requirement that husband pay all marital debts), review denied (Minn. Oct. 30, 1987).  But in reviewing whether the debt division is equitable, this court often considers the parties' ability to pay the debt.  See Maher v. Maher, 393 N.W.2d 190, 194 (Minn. App. 1986).  This court also considers the party responsible for incurring the debt and the nature of the debt when reviewing the equity of the division.  See Jones v. Jones, 402 N.W.2d 146, 149 (Minn. App. 1987) (apportionment of debt to husband upheld when husband voluntarily incurred exorbitant debts and failed to show any reason why wife should be forced to pay for half); Dahlberg, 358 N.W.2d at 80 (finding no abuse of discretion in assigning entire marital debt to husband when he was awarded greater share of assets, had high-paying job, and had incurred most of marital debt without consulting his wife); Filkins v. Filkins, 347 N.W.2d 526, 529 (Minn. App. 1984) (apportionment of majority of parties' debt to husband upheld when debts were made by him for his own purposes and he had greater ability to pay those debts).

Wife argues that the district court abused discretion in not crediting her for payments that she made against the mortgage on the homestead while the parties were separated and for making her responsible for the parties' entire credit card debt.

The district court specifically addressed wife's payments toward the mortgage, stating that, "[s]ince the parties' separation, [r]espondent has made payments which have reduced the amount of the mortgage by an unknown amount.  [Wife] should be given credit for these payments in the property distribution."  Thus, it is clear that the district court addressed wife's claim and actually gave her credit toward the payments that she made toward the mortgage. 

Regarding the credit card debt, the district court determined that

[t]he parties have a credit card obligation to Commerce Bank MasterCard, with a current balance of $3,718.51.  The [r]espondent has been paying on this obligation during the pendency of the marriage dissolution.  The parties also have an approximated balance of $2,000 on a Sears credit card, most of which paid for property in [r]espondent's possession.

 

[T]he [r]espondent presented testimony as to the payment of various obligations during the pendency of this marriage dissolution, and particularly since the separation of the parties.  During this period of time, [p]etioner has not been able to earn substantial income, and it would not be appropriate for the [c]ourt to make any retroactive order regarding reimbursement for debts paid.

 

As a result, the district court determined that husband should not be responsible for the debt paid by wife during the parties' separation and wife should be responsible for the entire debt after the dissolution.  According to the record, husband was out of work as a result of a medical condition.  The court also noted that at the time of the dissolution, wife provided health and medical insurance coverage for husband through her employer and that "[w]ithout agreement from the [husband] or authorization of the [c]ourt, [wife] canceled [husband's] health and medical coverage."  And, as a result, "[husband] has not had the funds to seek needed medical care since that time."  The district court relied on these facts when making the decision regarding the parties' joint marital debt.  We conclude that the district court did not abuse discretion in the distribution of marital debt. 

            Affirmed.

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[1]As summarized, the Schmitz formula states that

 

[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.

 

Antone v. Antone, 645 N.W.2d 96, 102 (Minn. 2002).

[2]  The 2003 finding of fact 25 final sentence read: "From the [husband's] estimates alone, the values of which were not disputed, [wife] has either used, disposed of, withheld, or hidden $25,000 worth of business programs, and an additional $14,410 worth of personal property."