Opinion
No. A03-1235.
Filed March 23, 2004.
Appeal from the District Court, Dakota County, File No. FX-01-9974.
Richard D. Goff, Mary E. Cincotta, Richard D. Goff Associates, (for appellant).
A. Larry Katz, Susan A. Daudelin, Katz, Manka, Teplinsky, Due Sobol, Ltd., (for respondent).
Considered and decided by Klaphake, Presiding Judge, Harten, Judge, and Forsberg, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
On appeal in this dissolution proceeding, appellant-husband argues that (a) the record does not support the district court's valuation of certain property based on an expert's report when subsequent evidence showed the property to be worthless; (b) if the property in question has a value greater than $0, appellant traced a 22.93% non-marital interest to it rather than the 16% found by the district court; (c) the district court's calculation of the marital and non-marital interests in another piece of property is incorrect because it is based on a misunderstanding of the origin of certain funds used to acquire the property; and (d) the district court failed to make findings to support the award to respondent-wife of need-based attorney fees. Respondent filed a notice of appeal and contends that the district court abused its discretion by (a) ordering February 21, 2002, to be the date of valuation of appellant's marital judicial pension; (b) awarding respondent temporary maintenance in the amount of $500 a month; and (c) sealing portions of the district court file. We affirm.
FACTS
Appellant Harry Crump and respondent Alice Krantz were married on May 24, 1987. Appellant was born on December 20, 1937, and has been serving as a district court judge since December 1987. Respondent was born on February 2, 1949, and at the time of trial she was working as a sales associate at a store in the Mall of America. Both parties had been previously married, and the parties have no children as a result of this marriage.
In 1984, before the parties were married, appellant purchased a piece of land in Golden Valley (hereinafter the "Westbend" property). A few years later, in August 1991, the parties proceeded to build what would become the marital homestead on the Westbend property. Also prior to their marriage, in September 1986, the parties jointly purchased a parcel of property in Cass County for $50,000 (hereinafter the "Remer" property). The third parcel of property owned by the parties, which was located in Minneapolis (hereinafter the "Colfax" property), had been respondent's home prior to the parties' marriage, and the parties continued to own the property throughout the marriage.
On February 5, 2001, appellant petitioned the court for dissolution of the marriage. A trial was held on December 19 and 20, 2002, with the primary issues in dispute being division of property, spousal maintenance, and attorney fees. After the trial, the parties agreed that the district court could issue a bifurcated judgment with the understanding that an amended judgment would be entered at a later date to dispose of the matters that were reserved in the original judgment, those being division of property, spousal maintenance, and attorney fees. The amended judgment was later entered on March 3, 2003.
In the amended judgment, the district court concluded that the Westbend property had a value of $170,000, and appellant's non-marital percentage in the Westbend property was 16%. The court also concluded that respondent should be awarded 26% of the gross sale price of the Remer property as her non-marital contribution to the purchase. The court further awarded respondent temporary spousal maintenance in the amount of $500 per month, which is to cease on December 31, 2007, the date that appellant, as a judicial officer, is required to retire. Finally, the court ordered appellant to pay $6,000 toward respondent's attorney fees.
On April 24, 2003, appellant moved for amended findings or a new trial. The district court heard the motion on June 13, 2003, and shortly thereafter, the court issued an order partially amending the judgment. Appellant brought this appeal on August 28, 2003. Respondent filed her notice of review on September 15, 2003.
DECISION
A. Valuation of the Westbend Property
Appellant argues that the Westbend property should be valued at $0 because black mold has been found at the home, rendering the home unmarketable. A district court's valuation of property is a finding of fact and it will not be set aside unless it is clearly erroneous on the record as a whole. Maurer v. Maurer, 623 N.W.2d 604, 606 (Minn. 2001). An appellate court does not require the district court to be exact in its valuation of assets, "it is only necessary that the value arrived at lies within a reasonable range of figures." Johnson v. Johnson, 277 N.W.2d 208, 211 (Minn. 1979).
At trial, appellant offered the testimony of three expert witnesses that supported his claim that the Westbend property was unmarketable. Larry Tucker, a certified general real estate appraiser, testified that on April 19, 2000, he found the Westbend property to be valued at $171,000. Tucker testified that he appraised the property two years later and found the value of the home to be $170,000. Tucker testified further that seven months later, in November 2002, he visited the property again to perform an updated appraisal in preparation for trial. But this time, Tucker concluded that the property had no fair market value due to the extensiveness of black mold that had permeated the house. The other two experts, Dan Parotti of Envirobate and Stephen Boerboon of Kraus Anderson Construction Co., supported Tucker's testimony that the Westbend property should be valued at $0.
Appellant argues that the district court's valuation of the Westbend property was an error because respondent did not produce any credible documentation as to the value of the property, and the court ignored the testimony of appellant's expert witnesses. We disagree. At trial, Tucker provided the following testimony under cross-examination:
Katz: What did you find the value [of the Westbend property] to be in April of 2002?
Tucker: I found the value to be $170,000.
Katz: Now, would you read the sentence that begins with "due to"?
Tucker: Yes.
Katz: Read it slowly?
Tucker: "Due to subject conditions, the existing moisture, black mold, and soil problems, the appraiser was unable to find a comparable worth."
Katz: So then in April of 2002, you did know about the black mold?
Tucker: I did know about it.
Katz: And you claimed that in 2002, you were unable to find comparables?
Tucker: Correct.
Katz: And you did the same kind of analysis, basically six or seven months before your November report, correct?
Tucker: Correct.
Katz: And the conditions about the driveway and the front stoop were all the same?
Tucker: Correct.
Katz: And yet in April of 2002, you found a value of $170,000?
Tucker: Correct.
The weight and credibility of expert witness testimony is for the trier of fact to determine, and this court will not reassess the experts' opinions on appeal. DeSutter v. Township of Helena, 489 N.W.2d 236, 240 (Minn. App. 1992), review denied (Minn. Sept. 30, 1992). Here, the district court specifically found Tucker's April 2002 appraisal to be credible and his November 2002 appraisal to be incredible. The court noted that although Tucker testified that his current opinion was formed when he learned the full extent of the black mold problem, he admitted that when he appraised the Westbend property for tax purposes in April 2002, he knew about the home's problems with mold and moisture. Yet he had not done any different analysis of the property in November 2002 than he had done in April 2002. The district court made its decision by judging the credibility of the witnesses, a luxury this court does not enjoy. We conclude that the district court did not err by valuing the Westbend home at $170,000.
B. Non-marital Percentage of the Westbend Property
Appellant argues that if we determine that the Westbend property has a value greater than zero then his non-marital claim with respect to the Westbend property becomes an issue. Whether property is marital or non-marital is a question of law, but appellate courts must defer to the district court's underlying findings of fact. Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997).
Property acquired during marriage is presumed to be marital, and a party asserting that current assets are traceable to non-marital property has the burden of proof. Minn. Stat. § 518.54, subd. 5 (2002). Where the record is devoid of any evidence that explains what ultimately happened to asserted non-marital funds after they were received by the party making the non-marital claim, the trial court should characterize the present asset as marital property. Wopata v. Wopata, 498 N.W.2d 478, 484 (Minn. App. 1993).
Here, appellant claims that his non-marital interest in the Westbend property is $47,000. In reaching this figure, appellant contends that he purchased the Westbend property for $7,000. Appellant also contends that he received $40,000 from a previous divorce settlement, and that he used the entire $40,000 to pay for construction costs associated with the Westbend property. Appellant asserts that the $7,000 plus the $40,000 is his non-marital interest in the Westbend property.
In determining appellant's non-marital interest in the Westbend property, the district court accepted the testimony that appellant purchased the land on which the Westbend home was constructed before marriage for $7,000. The district court also found that appellant was able to produce $26,100 in receipts for payment of construction costs pertaining to the Westbend property. Because appellant overcame the presumption that marital funds were used with respect to the Westbend property, the district court determined appellant's non-marital interest in the Westbend property to be $33,100.
Appellant contends that his non-martial interest in the Westbend property should be $47,000 simply because his testimony with respect to this issue is uncontroverted. But, a trier of fact is not compelled to believe a witness simply because his or her testimony is uncontroverted. Costello v. Johnson, 265 Minn. 204, 211, 121 N.W.2d 70, 76 (1963).
Here, appellant produced evidence that he spent $26,100 in non-marital funds with respect to the construction of the Westbend home. But, other than his "uncontroverted" testimony, appellant failed to produce any evidence that he spent the remaining $13,900 from the $40,000 settlement amount on the construction of the Westbend home. The district court was apparently well aware that it could have found that appellant had satisfied his burden of proving his non-marital claim with credible testimony as demonstrated by its footnote citing Doering v. Doering, 385 N.W.2d 387, 390 (Minn. App. 1986), which stands for the proposition that strict tracing of a non-marital claim is not required as long as there is credible oral or documentary evidence that is sufficient to substantiate the non-marital claim. Nevertheless, Doering does not stand for the proposition that oral testimony, standing alone, is always sufficient to prove a non-marital claim. Without any evidence corroborating appellant's testimony, the district court did not err by concluding that appellant did not overcome the presumption that he is entitled to more than a 16% non-marital interest in the Westbend property.
C. Non-martial Interest in the Remer Property
Appellant argues that his non-marital interest in the Remer property is 35.31% because he contributed the money that was used as the down payment for the purchase of the Remer property. A party seeking to establish the non-marital character of an asset must do so by a preponderance of the evidence. Freking v. Freking, 479 N.W.2d 736, 738 (Minn. App. 1992). In order to maintain its non-marital character, non-marital property must be kept separate from marital property or, if commingled, must be readily traceable. Wopata, 498 N.W.2d at 484.
Here, the parties purchased the Remer property in September 1986. The total down payment on the property was $17,652.55, and the district court concluded that respondent contributed $13,000 toward the purchase of the property. The court reached this conclusion by finding that respondent produced documents that showed that she inherited $10,691.04 in April 1985, from her grandfather's estate. The court also found that in December 1985 respondent had $20,000 in savings and that respondent documented that on July 7, 1986, she withdrew funds from her own accounts and received a cashier's check for $13,000. Based upon the evidence submitted by respondent, and the lack of evidence submitted by appellant, the district court awarded respondent a 26% non-marital interest in the Remer property.
Appellant contends that the money produced by respondent in the form of the $13,000 cashier's check came from $22,000 that appellant had received as payment of a loan that he had made to a man named Ron Harp. Appellant asserts that he then gave the $22,000 to respondent to hold for him. Appellant also contends that he located and researched the Remer property and, at the time that the parties purchased the property, appellant had significantly more assets than respondent and double the income of respondent. Thus, appellant argues that the only logical conclusion is that he was the source of the $13,000.
We disagree. Respondent produced evidence at trial that documented the source of the $13,000 down payment. The evidence supports the district court's finding that respondent inherited $10,691.04 from her grandfather's estate. The evidence further supports the district court's findings that in December 1985 respondent had $20,000 in her savings account and that respondent withdrew $13,000 from her own account and received a cashier's check for $13,000 in anticipation of the purchase of the Remer property. Thus, the evidence produced by respondent sufficiently traced her non-marital claim in the Remer property.
In contrast, appellant produced no evidence tracing any of the non-marital claims he made to the Remer property. The only evidence supporting appellant's claim was his testimony that he had received $22,000 as repayment on a loan and that he gave the money to respondent to hold for him. But appellant had no bank records, receipts, or records pertaining to the loan that involved Harp. In addition, appellant failed to offer any explanation as to why he gave the money to respondent rather than simply deposit the money into one of his accounts. The district court found appellant's explanation of the source of the down payment to be incredible, and respondent's explanation to be reliable and credible. The record supports the district court's conclusion, and therefore the court did not err by concluding that respondent contributed $13,000 toward the purchase of the Remer property.
Because the down payment on the Remer property was $17,652.55 and the district court credited respondent with a $13,000 non-marital claim with respect to the down payment, the remaining $4,652.55 was unaccounted for. Appellant argues that if we conclude that he did not prove his claim with respect to the $13,000 down payment, appellant asserts that he must be credited with the remaining $4,652.55 of the down payment.
At trial, appellant claimed that with respect to the Remer property, he should be credited with a non-marital contribution of $2,000 because he claimed that he paid that amount to his secretary, Betty Woodhouse, as earnest money. In the March 3, 2003 amended decree, the district court denied appellant's claim and expressly found that as to his claim that he funded the $2,000 earnest money payment, "[appellant] has failed to trace this sum. He produced no records in order to trace this sum." Shortly thereafter, appellant asked the district court to amend its findings as to the non-marital claims to the Remer property. Appellant reasserted his claim that he should be credited with a non-marital contribution of $2,000 that was used as an earnest money payment for the Remer property. Appellant also claimed that because the parties were not married at the time they purchased the Remer property, he is entitled to the remaining $2,652.55.
On July 2, 2003, the district court issued an order concluding that appellant made the earnest money payment of $2,000. The court found that appellant's testimony that he gave his secretary the earnest money at work right after he and respondent looked at the property to be credible. With respect to the remaining $2,652.55, the court again found that neither party demonstrated by a preponderance of the evidence that they made the payment of the remaining $2,652.55.
Here, appellant basically contends that because respondent did not testify or produce any evidence that the remaining $2,652.55 was her non-marital property, the only logical conclusion is that it must be appellant's non-marital property. But, appellant also failed to provide any evidence that the remaining $2,652.55 was his non-marital property. As stated earlier, a party seeking to establish the non-marital character of an asset must do so by a preponderance of the evidence, and if commingled, the non-marital property must be readily traceable. Wopata, 498 N.W.2d at 484. Because neither party produced evidence tracing the remaining $2,652.55, the district court did not err by declining to credit appellant with the remaining $2,652.55.
Respondent argues that the district court erred by crediting appellant with providing the $2,000 earnest money payment because as with the remaining $2,652.55 amount, appellant failed to produce credible evidence tracing the property to the earnest money payment. We disagree. The district court ultimately ordered that appellant should be credited with the $2,000 earnest money payment because the court found appellant's testimony with respect to this issue to be credible. The district court has the ability to judge witness credibility, and this court does not. Therefore, the court did not err by crediting appellant with the $2,000 earnest money payment.
D. Attorney Fees
Appellant argues that the district court abused its discretion by ordering him to pay $6,000 toward respondent's attorney fees without making the necessary supporting findings of fact. An award of attorney fees under Minn. Stat. § 518.14, subd. 1 (2002), "rests almost entirely within the discretion of the trial court and will not be disturbed absent a clear abuse of discretion." Crosby v. Crosby, 587 N.W.2d 292, 298 (Minn. App. 1998), review denied (Minn. Feb. 18, 1999).
Minn. Stat. § 518.14, subd. 1 provides that in a proceeding under this chapter, the court shall award attorney fees, costs and disbursements in an amount necessary to enable a party to carry on or contest the proceeding, provided it finds:
(1) that the fees are necessary for the good-faith assertion of the party's rights in the proceeding and will not contribute unnecessarily to the length and expense of the proceeding;
(2) that the party from whom fees, costs and disbursements are sought has the means to pay them; and
(3) that the party to whom fees, costs and disbursements are awarded does not have the means to pay them.
In addition, the district court may award attorney fees "against a party who unreasonably contributes to the length or expense of the proceeding." Id.
Here, appellant contends that he does not have the means to pay respondent's attorney fees, and respondent has the means to pay all her fees. We disagree. The district court made detailed findings with respect to the parties' incomes. The court found appellant's net monthly income to be $4,406 and respondent's net monthly income to be $1,650. The court noted the disparity in the parties' incomes and determined that respondent's attorney fees in the amount of $28,297.89 were reasonable. Because the Remer property had been sold for an amount slightly in excess of the district court's value of $205,000, the district court concluded that appellant possessed the means to pay $6,000 toward respondent's attorney fees. Respondent did not unreasonably contribute to the length or expense of the proceeding. Thus, the district court made sufficient findings with regard to the award of attorney fees and it did not abuse its discretion by ordering appellant to pay $6,000 toward respondent's attorney fees.
E. Valuation of Marital Judicial Pension
Respondent argues that the district court abused its discretion by ordering February 21, 2002, to be the date of the valuation of appellant's marital judicial pension. Minnesota law requires the district court to make a "just and equitable" division of marital property after considering all relevant factors. Grigsby v. Grigsby, 648 N.W.2d 716, 720 (Minn. App. 2002). Minn. Stat. § 518.58, subd. 1 (2002) governs the determination of the valuation date and provides, in relevant part:
The court shall value marital assets for purposes of division between the parties as of the day of the initially scheduled prehearing settlement conference, unless a different date is agreed upon by the parties, or unless the court makes specific findings that another date of valuation is fair and equitable.
A trial court enjoys broad discretion in setting the marital property valuation date. Grigsby, 648 N.W.2d at 720.
Here, the district court found in its March 3, 2003 order that the fair market value of appellant's marital judicial pension (MSRSJ pension) was $461,703. The court then awarded respondent 50% of the pension plan as of January 1, 2003. Appellant subsequently moved the district court to amend the order to change the date of valuation from January 1, 2003, to February 21, 2002, because the February date was the first scheduled pretrial date. In its July 2, 2003 order, the district court agreed with appellant and concluded that:
[t]he court did err in awarding the respondent 50% of the pension plan as of January 1, 2003. The court in finding No. 60 found the value of [appellant's] pension plan to be $461,703 based on the testimony of [appellant's] expert James R. Bordewick. Also, the parties stipulated that the amount to be divided under the Jansen formula would be $461,703 see Finding No. 60. Therefore the cut-off date for the valuation and distribution is the first scheduled pretrial date of February 21, 2002.
Respondent argues that the district court made sufficient findings in its March 3, 2003 order to support a finding that the valuation date of the MSRSJ pension should be January 1, 2003. But, when the district court reversed itself in its July 2, 2003 order, respondent asserts that the district court failed to adequately explain its decision. Thus, respondent contends that the district court abused its discretion by changing the date of valuation to February 21, 2002.
Minn. Stat. § 518.58, subd. 1, clearly states that the district court shall value marital assets for purposes of division between the parties as of the day of the initially scheduled prehearing settlement conference. The first pretrial date in this proceeding was scheduled for February 21, 2002. Respondent does not dispute that fact. The figure the court used in its findings with regard to the pension plan was $461,703, which was the value of the pension plan as of February 21, 2002. There is no other evidence with regard to the value of the pension plan or an alternate valuation date. The district court realized that it made a mistake by ordering the valuation date to be January 1, 2003, and the district court corrected itself in its July 2, 2003 order. The district court did not abuse its discretion by ordering February 21, 2002, to be the valuation date of the MSRSJ pension plan.
F. Spousal Maintenance
Respondent argues that the district court abused its discretion by awarding respondent temporary spousal maintenance in the amount of $500 a month. Appellate courts review a district court's maintenance award under an abuse-of-discretion standard. Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997). A district court abuses its discretion regarding maintenance if its findings of fact are unsupported by the record or if it improperly applies the law. Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988). "Findings of fact concerning spousal maintenance must be upheld unless they are clearly erroneous." Gessner v. Gessner, 487 N.W.2d 921, 923 (Minn. App. 1992).
In determining maintenance, district courts must consider several statutory factors relating to the financial situation of the parties. Minn. Stat. § 518.552, subd. 2 (2002). But no single statutory factor is dispositive in determining the amount or duration of maintenance. Zamora v. Zamora, 435 N.W.2d 609, 611 (Minn. App. 1989). The primary consideration is the financial need of the party seeking maintenance and that person's ability to meet that need, balanced against the financial condition of the other party. Maeder v. Maeder, 480 N.W.2d 677, 679 (Minn. App. 1992), review denied (Minn. Mar. 19, 1992).
Here, respondent argues that the district court's temporary maintenance award was an error because $500 per month is insufficient to enable her to meet her reasonable needs in light of the fact that she may never become self-supporting. We disagree. The district court made specific findings with respect to the parties' incomes. The court found appellant's net monthly earnings to be $4,406 and his monthly expenses to be $5,374. The court also found that appellant's gross monthly income would be $11,280 if appellant elected to take Social Security. But regardless of whether appellant elected to take Social Security, the court found that appellant had the ability to pay some short-term spousal maintenance.
With respect to respondent's financial situation, the district court found respondent's net monthly earnings to be $1,650 and her reasonable monthly expenses to be $2,278.44, leaving respondent with a shortfall of $628.44. The court determined that $500 a month would be sufficient to cover the shortfall until the $1,700 monthly payments from her share of appellant's pension "kicked in." Although the district court did mention that respondent's ability to contribute a consistent amount to her support was uncertain due to her age (54) and health, the district court specifically found that permanent maintenance was not necessary due to the existence of appellant's pension.
Respondent argues that the pension was divided between the parties as part of the marital property division, and these property rights awarded to respondent should not also be viewed as income from which she is expected to pay her expenses. But, the cases relied upon by respondent do not support this proposition. See, e.g., Kruschel v. Kruschel, 419 N.W.2d 119, 123 (Minn. App. 1988) (stating that a district court could not order an obligor to pay maintenance out of his pension payments until he "received from the pension an amount equivalent to its value as determined in the original property distribution").
The district court's findings demonstrate that the court considered the parties' financial situations and the parties' ability to meet their financial needs. The court also considered appellant's ability to pay spousal maintenance. Based upon its findings, a temporary maintenance award of $500 is sufficient to help respondent meet her monthly expenses. Therefore, the district court did not abuse its discretion by awarding respondent temporary spousal maintenance in the amount of $500 per month.
G. Decision to Seal the File
Finally, respondent contends that there were no sufficient reasons to seal the district court file. We disagree. Appellant is a district court judge and therefore a public figure. Appellant cannot be re-elected because he is serving his last term on the judicial bench, and thus having the record sealed does not prejudice the public. In addition, both parties have access to the judgment and therefore having the record sealed prejudices neither party. Appellant requested that the file be sealed and the district court granted appellant's request. There is no valid reason to overturn the district court's decision.