Opinion
No. A05-673.
Filed December 6, 2005.
Appeal from the District Court, Norman County, File No. F8-01-81.
Timothy J. McLarnan, McLarnan, Hannaher Skatvold, (for respondent).
Susan L. Ellison, Ohnstad Twichello, P.C., (for appellant)
Considered and decided by Hudson, Presiding Judge; Klaphake, Judge; and Wright, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
On appeal after remand in this dissolution matter, appellant-wife argues that the district court (a) misvalued the parties' investment account; (b) improperly apportioned all account margin debt to wife; (c) improperly denied wife's motion for maintenance without adequate findings; (d) miscalculated respondent-husband's property-equalization payment to wife; (e) should have granted wife's motion for a new trial; and (f) should have awarded wife attorney fees. Because the district court did not abuse its discretion in asset valuation, property division, maintenance award, and refusal to award attorney fees, we affirm.
FACTS
Appellant Gwendolyn Jamison (wife) and respondent Fred Jamison (husband) were married in 1971. They have three children, all of whom are over the age of 18 and are no longer in high school. Husband and wife were both born in 1950 and are 55 years old. Husband is a farmer. Wife attended college for three years and has been employed as a substitute in the school system as a census worker and as a volunteer coordinator, but wife had not worked full time outside of the home since the birth of the parties' first child. Husband petitioned for dissolution of the marriage in March 2001.
Following a hearing, the district court's judgment in May 2002 dissolved the marriage and divided the parties' assets, setting the valuation date at December 31, 2001. The parties had acquired a substantial number of assets that were in a variety of retirement and non-retirement accounts. Among these accounts was a joint, non-retirement account from Fidelity (joint Fidelity account) with a total value of roughly $745,000. The district court awarded approximately $465,000 to wife and $280,000 to husband. Following the division, both parties received an approximately equal amount of the marital estate in excess of $1,000,000 each.
The district court denied wife's request for spousal maintenance, noting that wife was to receive income-producing assets in excess of one million dollars and rental income from her share of jointly owned real estate. The district court found that wife's monthly living expenses were approximately $3,425, and that wife was capable of full-time, sedentary employment, producing an annual compensation of $13,228. Both parties moved for amended findings and/or a new trial, and the district court, except for correcting a mathematical error, denied both motions.
Wife appealed. With respect to the district court's denial of maintenance, this court reversed the denial and remanded for further findings after concluding that the district court failed to address (a) either party's net monthly employment income; (b) the fact that wife's property award includes nearly $430,000 in retirement assets to which she currently has no access; (c) wife's (projected) net monthly income from investment or how that investment income is calculated; (d) wife's monthly need for maintenance; or (e) husband's ability to pay maintenance. Jamison v. Jamison, No. C5-02-1430 (Minn.App. June 24, 2003). This court remanded for a new valuation and property distribution.
In January 2004, husband moved the district court for an order dividing the Fidelity joint account. According to husband, wife had not responded to repeated requests for a division of the account and had continued to make withdrawals and/or borrow from the account from February 27, 2002 to November 13, 2003, resulting in a margin debt of over $150,000. Husband noted that the market value of the assets in the Fidelity joint account had declined as a result of market forces and that wife had refused to cooperate in either dividing the account or selling certain stocks to minimize market risk. Husband acknowledged that there were liquidated financial assets not yet transferred to wife by him because wife had refused to cooperate in dividing the joint Fidelity account.
By order of March 10, 2004, the district court required the immediate division of the joint Fidelity account. Pursuant to the parties' stipulation, the court reiterated that any margin debt shall be assigned to the party who incurred the debt. The court retained jurisdiction over the ultimate accounting of the joint Fidelity account in connection with other financial asset division issues to be decided.
The district court held a hearing in May 2004 to discuss post-divorce financial conduct by the parties. At this hearing, wife sought permission to articulate her objections to the district court's proportionate division of the joint Fidelity account. Over husband's objection, the district court permitted wife's testimony. Wife testified that as of April 2004, the balance on the joint Fidelity account was roughly $550,278, due to market forces. In addition, wife acknowledged borrowing against the joint Fidelity account to meet living expenses, buy a house, and pay attorney fees, resulting in a margin debt of approximately $206,000. Because of the decline in value of the joint Fidelity account and the margin debt, wife requested that the court award each party one half of the joint Fidelity account, rather than use the joint Fidelity account as an equalizer in the property division. Then, husband would pay wife in cash for the difference between their property awards because of husband's non-financial assets such as the home and the farm machinery.
In September 2004, the district court issued its order amending findings of fact based upon the remand from the court of appeals. The district court found that wife was awarded (a) non-retirement financial assets totaling $540,380 based on the December 31, 2001 valuation date; (b) an additional non-retirement cash asset of $44,377 following the sale of the 2001 crop; and (c) rental property producing $2,080 annually. Applying a five percent rate of return, the district court concluded that wife would have an investment income of $31,698. Adding wife's anticipated annual income from employment of $13,228, the district court found that wife's annual, combined income totaled $44,545. The district court concluded that this amount was sufficient to meet her monthly expenses of $3,425 or $41,100 annually. The district court noted that husband has the ability to pay maintenance, but did not order maintenance because wife's income exceeded her expenses and she had no need for maintenance.
We note that the district court's order contains mathematical errors. The district court found that wife had a total of $548,010 in non-retirement assets. Using the district court's figures, the correct figure is $540,381. The district court also found that wife was capable of earning $13,600 annually, when the record reflects that wife is capable of earning $13,228. Because these minor errors do not affect the substance of the district court's order, it is not necessary to reverse the judgment or remand for additional findings. We have adjusted the district court's calculations and use the correct figures in this opinion.
With respect to the property division, the district court reaffirmed its March 10, 2004 order implementing the May 2002 division of the joint Fidelity account. Relying on husband's request for admissions and supporting documentation submitted on March 26, 2004, the district court concluded that post-dissolution financial activities by both parties resulted in a net property settlement payment owed by husband to wife of $13,438.
Wife moved for a new trial in October 2004. Following a hearing, the district court denied wife's motion. Wife appeals from the February 2005 order denying a new trial.
DECISION I
Wife first challenges the district court's valuation of the parties' joint Fidelity account. Minnesota law requires the district court to make a "just and equitable" division of marital property. Minn. Stat. § 518.58, subd. 1 (2004). "District courts have broad discretion over the division of marital property, and we will not disturb the division on appeal absent a clear abuse of discretion." Chamberlain v. Chamberlain, 615 N.W.2d 405, 412 (Minn.App. 2000), review denied (Minn. Oct. 25, 2000). The valuation of an asset is a fact question which this court will not set aside unless clearly erroneous. Hertz v. Hertz, 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975). A valuation is not clearly erroneous if it is "within the limits of credible estimates." Id.
Wife contends that the district court should have calculated the value of the joint Fidelity account on May 20, 2004, rather than on the December 31, 2001 valuation date in order to reflect the diminished value of the account due to market forces. The district court "is required to value marital assets for the purposes of division between the parties as of the day of the initially scheduled prehearing conference unless the parties agree to a different date or the trial court makes a specific finding that another date is fair and equitable." Wopata v. Wopata, 498 N.W.2d 478, 485 (Minn.App. 1993); see also Minn. Stat. § 518.58, subd. 1 (stating that "[i]f there is a substantial change in value of an asset between the date of valuation and the final distribution, the court may adjust the valuation of that asset as necessary to effect an equitable distribution.").
Citing Bollenbach v. Bollenbach, 285 Minn. 418, 175 N.W.2d 148 (1970), wife argues that the district court must consider the fluctuation in market value when dividing stocks when the market value is readily ascertainable. Bollenbach provides:
Where property, such as common stock, having a value which may fluctuate greatly from day to day is involved, and where the market value of such property is readily ascertainable (as, for example, by reference to published stock market quotations), and where the decree of the district court authorizes or directs payment of a given percentage of the value of such property to the wife in cash, the decree should be phrased as to permit such modification as might be required to prevent the inequities resulting from marked changes in market value of the property between the date of the decree and a timely execution of the plan of distribution contemplated by it, at least to the extent that modification is possible before the judgment and decree became final. We do not believe that the trial court intended market losses to fall entirely on defendant. This would be inconsistent to a prejudicial degree with the basic principle of equal division adopted by the trial court.
Id. at 436, 175 N.W.2d at 159 (emphasis added).
Wife's reliance on Bollenbach is misplaced. Rather than compel revaluation upon a substantial market fluctuation, the Bollenbach court examined the intent of the district court and whether a new valuation was necessary to prevent inequities. Even if the market value of an asset fluctuates, the district court retains discretion to set the valuation date, so long as the ultimate valuation is "just and equitable." See also Grigsby v. Grigsby, 648 N.W.2d 716, 720 (Minn.App. 2002) ("The district court has broad discretion in setting the marital property valuation date."), review denied (Minn. Oct. 15, 2002).
Wife further argues that the district court's failure to adjust the valuation date results in an inequitable division of marital property and constitutes an abuse of discretion because she bears a disproportionate burden of the loss in market value. We disagree. In a dissolution proceeding, the property division need not be mathematically equal. Thomas v. Thomas, 383 N.W.2d 727, 728 (Minn.App. 1986). Here, the district court explicitly stated in its September 2004 amended judgment, "The Court finds that any consequence resulting from the decline in the value of the stocks in the joint Fidelity Account, and any increase in the margin debt, both result solely from [wife's] failure and refusal to cooperate in a division of the Fidelity Account." Thus, the record reflects that the district court considered the disproportionate effects of market fluctuation in its division of property and concluded that those effects were equitable. Given this court's deference to the district court's credibility determinations, the district court's division was not an abuse of discretion. See Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988) (noting that the district court is in the best position to judge the credibility of the witnesses and make determinations in the face of conflicting testimony and must be given due deference).
Finally, wife argues that the district court abused its discretion by not taking into account the tax consequences of liquidating the joint Fidelity account in order to invest the funds in an account with a higher rate of return. It is within a district court's discretion to consider the tax consequences of its award. Aaron v. Aaron, 281 N.W.2d 150, 153 (Minn. 1979). But "[t]he court must have sufficient information that the actual tax liability resulting from the property division can be calculated with a reasonable degree of certainty." Miller v. Miller, 352 N.W.2d 738, 744 (Minn. 1984). The record does not reflect that wife submitted evidence of tax consequences with respect to liquidation of the joint Fidelity account. Accordingly, the district court did not abuse its discretion by failing to provide a speculative assessment of tax consequences.
II
Wife next argues that the district court abused its discretion by applying all of the margin debt accumulated against the joint Fidelity account against her property award.
In its September 2004 amended findings, the district court stated:
The Court finds that the parties were informed, on the record July 3, 2002, that the Court had ordered a division of the joint account, that it was made clear to both parties that what they borrow against that account and any margin loan interests that accrued as a result of their borrowing is the problem of that party. The Court said, "That's a deduct from their award." Mr. Mollin, attorney for [wife] at that time, agreed and indicated that was stipulated to after the trial.
Moreover, in the district court's order of March 2004 ordering a division of the joint Fidelity account, the district court explicitly notes that "[a]ny margin debt, margin account or interest expense attributed to any margin debt or expense shall be assigned to the party who incurred the margin debt." Wife made no motion to amend this order. Thus, wife stipulated to the district court's allocation of the margin debt.
Citing Keithahn v. Keithahn, 392 N.W.2d 8 (Minn.App. 1986), wife argues that debts incurred by one spouse to meet living expenses during the pendency of a divorce proceeding should be considered marital when the other spouse has control over all of the marital assets. In Keithahn, this court held that debts incurred by one party to meet living expenses during separation, but prior to dissolution, could be marital debt. Id. at 10. Here, wife incurred her debts after the valuation date and the property division. The debts are nonmarital. See Minn. Stat. § 518.54, subd. 5 (2004) (defining marital property as property acquired by the parties to a dissolution "at any time during the existence of the marriage relation between them, . . . but prior to the date of valuation"); cf. Ronnkvist v. Ronnkvist, 331 N.W.2d 764, 766 (Minn. 1983) (holding that the marital estate is determined at the time of the dissolution decree, which for all practical purposes is the time of the dissolution hearing). The district court did not abuse its discretion in allocating the nonmarital debt to the responsible party.
In addition, wife argues that the district court erred by not considering the reasons wife incurred the post-judgment debt prior to the district court's allocation of debt in violation of Minn. Stat. § 518.58, subd. 1a (2004), which provides that one party's transfer, encumbrance, concealment, or disposal of marital assets during the pendency of the dissolution must be considered in determining the division of property and debts. Wife suggests that the district court should have considered husband's admitted withholding of roughly $60,000 in liquidated assets awarded to her when it allocated the margin debt.
Section 518.58, subdivision 1a, is not implicated in this instance, however, because husband did not attempt to reduce the marital estate by manipulating marital assets; the district court had already valued and distributed the marital estate when husband withheld portions of wife's award. We do not condone husband's conduct of withholding these assets while wife was accumulating additional margin debt to meet expenses, but section 518.58, subdivision 1a does not afford a remedy under these circumstances.
Finally, wife argues that the district court erred by allocating to her margin debt accrued prior to the valuation date. The record reflects that the district court did allocate this debt to wife, but that it also determined that husband had made sufficient post-dissolution contributions to the marital estate to cover his half of this marital debt.
Accordingly, the district court did not abuse its discretion by concluding that the post-dissolution margin debt would offset wife's property award.
III
Wife next challenges the district court's decision denying her request for spousal maintenance. The standard of review on appeal from a district court's determination of maintenance is whether that court abused the broad discretion accorded it. Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982). Minn. Stat. § 518.552 (2004) provides that the court may grant a maintenance order for either spouse if it finds that the spouse seeking maintenance:
(a) lacks sufficient property, including marital property apportioned to the spouse, to provide for reasonable needs of the spouse considering the standard of living established during the marriage, especially, but not limited to, a period of training or education, or
(b) is unable to provide adequate self-support, after considering the standard of living established during the marriage and all relevant circumstances, through appropriate employment, or is the custodian of a child whose condition or circumstances make it appropriate that the custodian not be required to seek employment outside the home.
"Effective appellate review of the exercise of [the district court's] discretion is possible only when the [district] court has issued sufficiently detailed findings of fact to demonstrate its consideration of all factors relevant to an award of permanent spousal maintenance." Stich v. Stich, 435 N.W.2d 52, 53 (Minn. 1989).
Wife first argues that the district court abused its discretion by denying her request for maintenance because the district court failed to make a finding of wife's net income. Wife accurately characterizes the record. The district court determined that wife would have a "combine[d] income" of $44,545 after examining wife's expected annual salary, investment return, 2001 crop sale, and rental income. "Combined income" is not net income.
Wife argues that this income finding is incomplete because it fails to consider the tax consequences of (a) her salary, (b) liquidating her assets to invest at a higher rate of return, and (c) selling the crops. Wife does not, however, demonstrate that tax consequence information was available to the district court. In fact, wife acknowledges that the district court lacked "sufficient information to calculate tax liability on any of [wife's] income." Alternatively stated, wife admits that she did not provide the district court with the information she now argues that it should have considered. "On appeal, a party cannot complain about a district court's failure to rule in her favor when one of the reasons it did not do so is because that party failed to provide the district court with the evidence that would allow the district court to fully address the question." Eisenschenk v. Eisenschenk, 668 N.W.2d 235, 243 (Minn.App. 2003) (citing Tuthill v. Tuthill, 399 N.W.2d 230, 232 (Minn.App. 1987) (reciting this rule in maintenance-modification context)), review denied (Minn. Nov. 25, 2003).
Finally, wife argues that the district court abused its discretion by failing to consider the reduction in wife's non-retirement assets as a result of market fluctuation and margin debt. As noted above, the district court did not err by retaining the December 31, 2001 valuation date or by allocating the margin debt against wife's award. Therefore, the district court did not abuse its discretion by failing to take these factors into account when calculating wife's income.
IV
Wife next challenges the district court's calculation of the property-equalization payment owed to her from husband, arguing that the figure constitutes an error because the district court relied on evidence submitted by husband. The marital expenses that wife claims were wrongly attributed to her total roughly $4,300. Given that the marital estate in question is over two million dollars, $4,300 is not a sufficient amount to render the district court's distribution inequitable. See Ruzic v. Ruzic, 281 N.W.2d 502, 505 (Minn. 1979) (concluding that the district court's division of marital property need not be mathematically equal, but need only be just and equitable); cf. Wibbens v. Wibbens, 379 N.W.2d 225, 227 (Minn.App. 1985) (refusing to remand for de minimis error). Moreover, the district court was entitled to make its decision on the division of marital expenses and assets based on evidence submitted by husband, which the court determined to be credible.
V
Wife next challenges that district court's order denying her motion for a new trial under Minn. R. Civ. P. 59.01, arguing that the district court should have held a new trial to permit the introduction of additional evidence on (a) the tax consequences of the property award; (b) the conduct of the parties in spending marital monies; (c) the sale of stock to reinvest in a higher-yielding rate of return; and (d) post-dissolution payments husband received from elevators and from grain sales. This court will not reverse a district court's decision to deny a new trial absent an abuse of discretion. Hertz, 304 Minn. at 146, 229 N.W.2d at 44.
Wife's argument is flawed in several respects. First, rule 59.01 permits a district court to grant a new trial in light of, among other things, newly discovered evidence. Evidence of the tax consequences of the property award and the sale of non-retirement assets was available to wife at the time of trial; she simply neglected to submit it. Second, the record reflects that the district court opened discovery and permitted additional testimony at the May 20, 2004 hearing on the conduct of the parties in spending marital monies. Wife has not alleged any irregularity with these proceedings sufficient to warrant a new trial. Finally, wife submitted evidence of payments husband received from elevators and grain sales in her October 2004 affidavit. Wife's own calculations demonstrate that these payments were received between 2000 and 2002. Thus, evidence of these payments was available to wife at the time of the May 20, 2004 hearing.
VI
Lastly, wife argues that the district court abused its discretion by failing to award wife attorney fees and, therefore, wife should be allowed to move for attorney fees under Minn. Stat. § 518.14, subd. 1 (2004). In its original order for judgment in May 2002, the district court determined that the parties bore the responsibility for their own attorney fees and costs. The record does not reflect that wife moved for attorney fees in the district court. Wife is therefore prohibited from raising the issue of fees before this court. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (stating that this court will generally not consider matters not argued and considered in the district court).