Burgardt v. Burgardt

304 Neb. 356

934 N.W.2d 488

Harlan D. BURGARDT, appellee and cross-appellant,

v.Shirley L. BURGARDT, appellant and cross-appellee.

No. S-17-1116.

Supreme Court of Nebraska.

Filed November 1, 2019

Richard L. Alexander, of Richard Alexander Law Office, Hastings, for appellant.

Nicholas D. Valle, of Langvardt, Valle & James, P.C., L.L.O., Hastings, for appellee.

Heavican, C.J., Miller -Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

Cassel, J.

I. INTRODUCTION

On appeal from a district court’s dissolution of marriage, the Nebraska Court of Appeals reversed the determinations that a portion of the husband’s 401K and proceeds from an inheritance constituted nonmarital property.¹ We disapprove of two imperatives articulated by the Court of Appeals: nonmarital property must be proved by documentary evidence and its value must be "definitively" established. Because we cannot say the district court abused its discretion in setting off property as nonmarital in accordance with the husband’s testimony, we reverse the decision of the Court of Appeals and remand the cause with direction.

II. BACKGROUND

1. EVIDENCE AT TRIAL

Harlan D. Burgardt and Shirley L. Burgardt married in 1992. The district court dissolved their marriage in 2017. On further review, we focus on two items of property: the portion of a 401K accumulated before marriage and the proceeds from an inheritance. At this stage, neither party otherwise contests the division of property. We limit our recitation of evidence accordingly.

(a) 401K

In 1978, Harlan began working for a natural gas distribution company. Fourteen years later, he married Shirley. And 14 years after that, Harlan retired. Through his employment, he had a 401K account.

Harlan believed that he began contributing to the 401K in "about ’85." He testified that on the date of his marriage in 1992, his 401K was valued at $130,000. Upon questioning, he stated that the number "sticks out in my mind just plain as day." Although Harlan tried to obtain documentation from his former employer to support the value, the company did not keep records dating back to 1992.

Shirley testified that she was not aware of any 401K that Harlan had prior to marriage worth $130,000. Thus, she valued the premarital portion at $0 on the parties' joint property statement. She had no evidence to dispute that Harlan contributed to the 401K prior to marriage.

In 2010, Harlan withdrew the funds from the 401K and "moved it into an IRA into a cash fund" solely in his name. A bank statement shows a beginning balance for the IRA on January 1 to be $445,486.12. The money was later spent on four major purchases or projects. It was used to purchase the "other farm," which was titled in both parties' names. Money was used for improvements to the "home farm," which contained a house where the parties once lived. Harlan also used money from the IRA to buy equipment. The equipment was "all auctioned off" and the proceeds put in the bank. Finally, the money was used to buy gold and silver coins. In 2013, Harlan purchased 1,000 silver coins for $53,120, followed shortly thereafter by a purchase of 1,859 coins for $99,735.35. In 2014, Harlan exchanged silver coins to acquire 71 gold coins for $29,962. He testified that he currently had 51 gold coins in his possession, but that there should be 71 (i.e., one sheet containing 20 coins was missing).

(b) Inheritance

Harlan testified that after his father died in 2006 (during the marriage), he received an inheritance from the estate. Harlan received a 25-percent share, which amounted to $60,000. Instead of receiving money, Harlan used his share as a credit toward the purchase of the home farm from his siblings. The additional money needed to purchase the farm—approximately $100,000—came from a bank account.

Shirley testified that the funds to purchase the farm came from their joint bank account, which was funded by the sale of the parties' house in Colorado. The parties later sold the home farm for $348,800. The sale proceeds were placed in the parties' joint account at Great Western Bank, which had a balance of $358,000 in July 2015.

2. PROPERTY DIVISION IN DECREE

As part of the division of the marital estate, the decree awarded Harlan 71 gold coins valued at $19,330 (which placed the responsibility for the lost coins solely upon Harlan). In effect, the decree equally divided the proceeds from the 401K, but it separately set off to Harlan $130,000 for the value of the nonmarital proceeds from the 401K.

The decree awarded each party $179,000 (one-half of the balance) of the Great Western Bank account. But it separately set off $60,000 to Harlan as "[l]and inheritance."

Including both marital and nonmarital property, the decree awarded Harlan assets totaling $399,730 and Shirley assets amounting to $205,300. After deducting amounts representing nonmarital property ($190,000 at issue here, plus $4,000 attributable to a truck which is not now disputed), the ultimate division of property was an award of $205,730 to Harlan and an award of $205,300 to Shirley.

Shirley appealed, and Harlan filed a cross-appeal.

3. COURT OF APPEALS’ DECISION

The Court of Appeals found that Harlan did not meet his burden of proving that his 401K had a value of $130,000 at the time of marriage and that he did not prove the amount he inherited from his father.

Appeals in domestic relations matters are heard de novo on the record, and thus, an appellate court is empowered to enter the order which should have been made as reflected by the record.² But instead of affirming as modified, the Court of Appeals reversed in part and remanded to the trial court with directions. It directed the trial court to award Shirley half of the awards of $130,000 and $60,000 previously set off to Harlan as nonmarital property. It also found that the net tax liability of $27,494 should be divided evenly between the parties and deducted from the shares of each party’s marital property. The Court of Appeals' effective modification of the decree regarding the tax liability is not contested on further review and, thus, shall be carried out in a modified decree.

Harlan filed a petition for further review, which we granted.

III. ASSIGNMENTS OF ERROR

In his petition for further review, Harlan assigns two errors which we consolidate. He claims that the Court of Appeals erred in determining that because he offered no documentary evidence at trial to support his undisputed testimony, he failed to meet his burden of proof that he had $130,000 in a 401K at the time of marriage and that he received a $60,000 inheritance during the marriage.

IV. STANDARD OF REVIEW

In a marital dissolution action, an appellate court reviews the case de novo on the record to determine whether there has been an abuse of discretion by the trial judge. This standard of review applies to the trial court’s determinations regarding custody, child support, division of property, alimony, and attorney fees.³ In a review de novo on the record, an appellate court is required to make independent factual determinations based upon the record, and the court reaches its own independent conclusions with respect to the matters at issue.⁴ However, when evidence is in conflict, the appellate court considers and may give weight to the fact that the trial court heard and observed the witnesses and accepted one version of the facts rather than another.⁵ A judicial abuse of discretion exists if the reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in matters submitted for disposition.⁶

V. ANALYSIS

1. FOUNDATIONAL PRINCIPLES

We begin by recalling three foundational principles that, along with the standard of review, guide our decision.

The first principle is the burden of proof imposed in this case. In the realm of factfinding, the function of a standard of proof is to instruct the fact finder concerning the degree of confidence our society thinks he or she should have in the correctness of factual conclusions for a particular type of adjudication.⁷ Unless an exception applies, the burden of proof in civil cases requires only the greater weight of the evidence.⁸ The greater weight of the evidence means evidence sufficient to make a claim more likely true than not true.⁹ That burden of proof applies here.

Second, we are mindful that there is no hierarchy of evidence. " ‘[T]here is no general rule of evidence that a party must produce the best evidence which the nature of the case permits.’ "¹⁰ A witness' testimony, like a document, is a kind of evidence.¹¹ A trial court weighs the credibility of the witnesses and the evidence and determines what evidence should be given the greater weight in arriving at a factual determination on the merits.¹² In doing so, a trial court may choose to accord greater weight to a document. Given the frailties of memories, documentary evidence relating to a long past event and prepared by one not affected by it may be entitled to greater consideration than oral testimony.¹³ Ordinarily, a contemporaneous memorandum of an event is entitled to greater evidentiary weight than another recollection of it.¹⁴ But it does not follow that where there is no documentary evidence, a party’s testimony alone cannot satisfy a burden of proof.

Third, it is well settled that the first step in the equitable division of property is to classify the parties' property as marital or nonmarital, setting aside the nonmarital property to the party who brought that property to the marriage.¹⁵ Contributions to retirement accounts before marriage are not assets of the marital estate.¹⁶ Gifts and inheritances, even when received during the marriage, are presumed to be nonmarital.¹⁷ In a marital dissolution proceeding, the burden of proof rests with the party claiming that property is nonmarital.¹⁸

With these principles in mind, we turn to the two imperatives upon which the Court of Appeals relied.

2. NECESSITY OF DOCUMENTARY...