Jensen v. Jensen

RANDALL H. JENSEN, APPELLEE,

v.ROCHELLE L. JENSEN, APPELLANT.

No. A-11-906

NEBRASKA COURT OF APPEALS

Filed September 11, 2012

MEMORANDUM OPINION AND JUDGMENT ON APPEAL

NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION

AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).

Appeal from the District Court for Buffalo County: WILLIAM T. WRIGHT, Judge. Affirmed.

John A. Kinney and Jill M. Mason, of Kinney Law, P.C., L.L.O., for appellant.

Heather Swanson-Murray and John M. Jensen, of Yeagley Swanson Murray, L.L.C., for appellee.

INBODY, Chief Judge, and MOORE and RIEDMANN, Judges.

MOORE, Judge.

INTRODUCTION

Rochelle L. Jensen appeals from the decree entered by the district court for Buffalo County, Nebraska, dissolving Rochelle's marriage to Randall H. Jensen. Rochelle challenges the district court's treatment of the equity in the marital home and Randall's premarital investments, its failure to find value in Randall's business, and its failure to find that Randall dissipated the marital estate. Because we find no merit to Rochelle's assignments of error, we affirm.

BACKGROUND

Randall and Rochelle were married May 8, 1999. No children were born of the marriage. This was Randall's second marriage, and he has two adult children. The parties separated in December 2009, although Rochelle was in and out of the marital residence on a regular basis. Randall filed his complaint for dissolution on February 23, 2010.

Randall graduated from college in 1975 and began employment with an insurance company in 1976, which company is now known as Principal Financial Group (Principal). He started as an agent or representative and sold life, health, and disability insurance. Randall worked out of his home and eventually moved into an outside office. Randall has continued to work exclusively for Principal through the time of trial. According to Randall, Rochelle did not contribute to Randall's employment, solicit clients, or improve his position with the insurance company.

Rochelle received her undergraduate degree in education in 1998. At the time of trial, Rochelle was working as a full-time elementary school teacher. Rochelle earned her master's degree in curriculum and instruction in 2003. Her graduate school tuition was paid out of the parties' joint checking account and with a teacher core grant. Rochelle continued to work full time as she earned her degree.

Rochelle submitted the deposition testimony of William Kennedy, a certified public accountant with an accreditation in business valuation, as evidence of the value of Randall's insurance business. Kennedy did not receive any information directly from Randall, but Rochelle provided him with their 2005 through 2009 income tax returns, which included Randall's business income and expenses. Kennedy researched sales data and revenues of similarly sized insurance brokerages over the past 5 years, including agencies that sold automobile insurance or property and casualty insurance. Based on these calculations, Kennedy opined that Randall's business should be valued at $190,400.

Kennedy described Randall as a "statutory employee" who is self-employed but with the employer portion of his FICA taxes paid for by the company. Kennedy described Randall's insurance business as consisting of a customer base with an ongoing revenue stream.

Randall categorized himself as a career agent for Principal with a contract. He is compensated through commission and service fees for maintaining products, and Principal provides him with health insurance and a retirement plan. Principal controls what Randall sells and how he sells it. Principal has the authority to terminate Randall's employment. Randall employs secretaries, and he pays other business expenses that are deducted from his tax returns.

Randall did not agree with Kennedy's valuation of the business. Randall indicated that he does not have an insurance agency as characterized by Kennedy; rather, he stated that he is a captive agent for Principal, as opposed to having "brokerage ability" that a property and casualty agency would have, and that therefore, there is no agency to value. Randall testified that he does not have an ownership interest in the accounts that he sells, the accounts do not belong to him, and he does not have the ability to "sell" the accounts to other agents. During the marriage, Randall compensated another agent for a list of names of clients, but Randall testified that this did not amount to purchasing the other agent's "business" as Rochelle suggested he had done. The value of Randall's office equipment, furniture, and supplies was included in the division of the marital estate and awarded to Randall.

When they married, Rochelle moved into the home that Randall owned and had lived in for 30 years. At the time of the marriage, the assessed value of the home was approximately $150,000 and there was a mortgage of $70,000. Rochelle was not added to the deed to the home or included on the mortgage debt. Randall's mortgage debt increased during the marriage due to refinancing the home. Throughout the marriage, the parties continuously made payments on themortgage out of their joint account. Repairs and remodeling were done to the home during the marriage. Rochelle testified that they put in wood cabinets and wood floors, added on to the living room, converted a shed into an outdoor bathroom, and replaced the front porch. They also added a new roof, new siding, new fencing, new carpet, new paint, new furniture, and custom curtains.

Rochelle obtained an appraisal of the home which valued it at $210,000. Rochelle disagreed with the appraisal because she was concerned that several aspects of the home were not photographed or included in the appraisal. Rochelle believed that the house should be valued at $240,000 to account for the amount of money that was put into the various renovations. Rochelle did not offer evidence concerning the cost of the improvements or how such improvements affected the value of the home. Randall testified that the increase in value shown by the appraisal would include those improvements. Randall accepted the $210,000 appraised value of the home.

Although Rochelle and Randall shared some joint accounts, Rochelle's name was not on their primary checking account. Randall testified that Rochelle never complained about this, that she had her own checking account he was not listed on, and that Rochelle could spend freely with their credit cards. The primary checking account was used to pay the parties' personal expenses, including the credit card debt, as well as Randall's business expenses.

Rochelle questioned several withdrawals made by Randall during the early part of 2010, after their separation. Although he was not able to specifically recall each transaction, Randall testified that both he and Rochelle incurred a lot of expenses during that period of time due to a tax audit and their separation. As a result, Randall testified that their joint credit card bills totaled approximately $45,000 between January and April 2010, some of which was incurred by Rochelle in setting up her own household. In early 2010, Randall learned that his 2007 and 2008 income taxes were being audited by the Internal Revenue Service. Randall was informed that there were some duplicated deductions which resulted in an additional tax liability of approximately $21,000. Randall also incurred significant accountant and attorney fees as a result of the audit. Due to these inflated expenses, Randall took distributions from some of his investment accounts. It appears from the record that the distributions were from Randall's premarital accounts; however, given the number of accounts owned by Randall and the parties, and the lack of specificity of the questions asked by counsel, it is not entirely clear. Randall testified that he was not hiding money from Rochelle and that the withdrawals were used for living expenses and the payment of debt.

Evidence was adduced that Randall also had a home equity line of credit from which he was able to draw funds when needed. Randall testified that a large part of the present debt was the result of the $40,000 purchase of a vehicle that was included in the marital estate. The line of credit was also used for other purposes over the course of the marriage due to the fluctuation in Randall's commission-based income, including paying for some of the improvements made to the home.

Randall brought significant investment and retirement accounts into the marriage, and both parties own various investment accounts, retirement accounts, and life insurance policies. Only a handful of these accounts were not agreed upon prior to the trial and are at issue in this appeal. These funds include an annuity account and a mutual fund account owned by Randall.Randall's annuity account had a present value of $106,866. According to Randall's testimony, this annuity was funded with money from two other premarital accounts--$27,798 from another annuity and $74,978 from a mutual fund account. Randall testified that he did not make any additional contributions to the annuity during the marriage. Randall's mutual fund account mentioned above was worth $191,186 at the time of the marriage. Although there was some testimony that additional monthly contributions may have been made into this account, the funds had a current balance of $93,787 at the time of trial, which is less than the premarital amount after the withdrawal that went into the annuity.

On September 26, 2011, the district court entered a decree dissolving the parties' marriage, distributing the parties' assets, and awarding Rochelle alimony. In connection with the division of household goods, the court noted that its "general policy is to award an item of marital property to that party who places the higher value upon it, regardless of who possesses it or wants it," but due to "a significant amount of gamesmanship in the...