Opinion
No. C2-02-1367
Filed: April 8, 2003.
Appeal from Hennepin County District Court, File No. DC258195
David Gronbeck, Law Offices of David Gronbeck, (for appellant)
Charles M. Goldstein, Goldstein Law Office, P.A., (for respondent)
Considered and decided by Harten, Presiding Judge, Peterson, Judge, and Halbrooks, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Appellant argues that the district court erred in failing to award him the proceeds of certain land as his nonmarital property. Because we see an abuse of discretion in the district court's failure to make appropriate findings, we reverse and remand.
DECISION
Appellant Richard Indritz and respondent Louise Indritz were married in 1990; their marriage was dissolved in 2002. This appeal arises out of the district court's apportionment of the proceeds from the sale of a parcel of property.
"Whether property is marital or nonmarital is a question of law, but a reviewing court must defer to the trial court's underlying findings of fact." Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997) (citation omitted).
Minn. Stat. § 518.54, subd. 5 (2002), provides that
"[n]onmarital property" means property real or personal, acquired by either spouse before, during, or after the existence of their marriage, which
(a) is acquired as a gift, bequest, devise or inheritance made by a third party to one but not to the other spouse;
(b) is acquired before the marriage * * * .
The district court found:
Prior to the parties marriage [appellant] owned two parcels of real property located in Cook County, Minnesota. These properties are unencumbered. One such parcel was purchased by [appellant] for $30,000, a sum received by [appellant] as an inheritance from his father.
Thus, the district court implicitly if not explicitly found that the property was nonmarital.
Minn. Stat. § 518.58, subd. 2 (2002), provides that
[i]f the court finds that either spouse's resources or property * * * are so inadequate as to work an unfair hardship, considering all relevant circumstances, the court may, in addition to the marital property, apportion up to one-half of the property otherwise excluded under section 518.54, subdivision 5, clauses (a) to (d), to prevent the unfair hardship. If the court apportions property other than marital property, it shall make findings in support of the apportionment. The findings shall be based on all relevant factors including the length of the marriage, any prior marriage of a party, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, needs, and opportunity for future acquisition of capital assets and income of each party.
The district court found:
This parcel of property [that appellant had purchased with his inheritance and that is the subject of this appeal] was sold over a year ago pursuant to Court Order of [the referee] and marital debts were paid therefrom. The following marital debts were paid: * * * TOTAL = $62,953.37. [Of this, $5,000 went to each party for attorney fees.] * * * [The referee found that appellant] "is not objecting to an Order requiring that the first $45,000 or a similar amount be used to make the parties debt free." * * *
The proceeds [of the sale] were placed in an escrow account pursuant to the [referee's] Temporary Order in this matter. As of September 10, 2001 there remained a balance of $38,524.81. There are currently capital gains owing to the Internal Revenue Service. * * *
Payments of real estate taxes on this parcel * * * were paid on a regular basis during the course of the marriage. These total $2,381.00 paid to Cook County. * * *
This Court finds the balance of the escrow account is [appellant's] nonmarital property and should be distributed to him in full after payments of the taxes * * * are made from the escrow funds.
Appellant then asserted that the district court had found the parcel of real property sold to pay the parties' debts to be his nonmarital property and moved to amend the division of property by crediting him with payment of $52,953.37 of marital debts and $5,000 of respondent's attorney fees from his nonmarital funds. In the amended judgment, the district court denied his motion, stating:
The Court did not make a finding that the Cook County property and all proceeds therefrom were [appellant's] non-marital property. Rather, the Court stated * * *, "This Court finds that the balance of the escrow account is [appellant's] non-marital property[.]" * * * The Court finds that to rule in [appellant's] favor would constitute an undue hardship on the parties.
(Emphasis added). But by finding that appellant had owned the parcel of real property before the marriage and had purchased it with money inherited from his father, the district court had implicitly if not explicitly found that real property was appellant's nonmarital property. Thus, the implicit finding in the original judgment conflicts with the explicit statement in the amended judgment.
The district court's statement does not meet the requirement of Minn. Stat. § 518.58, subd. 2, which allows the apportionment of nonmarital property only when the district court finds that one party experiences unfair hardship. The apportionment must be accompanied by appropriate findings. The district court stated that granting appellant's motion "would constitute an undue hardship on the parties" without making findings to explain either what hardship would accrue to respondent or why any harm would accrue to appellant.
Absent both an explicit finding as to the marital or nonmarital status of the real property and findings as to the unfair hardship imposed on respondent, we cannot affirm what appears to be an apportionment of nonmarital property. We therefore reverse and remand for a hearing to determine whether the real property was marital or nonmarital and, if the property was nonmarital, whether respondent will experience unfair hardship if the proceeds from the sale of that property are apportioned. The district court has discretion to determine whether or not to reopen the record.