Novotny v. Novotny

32 Neb.App. 142

995 N.W.2d 64

Timothy J. NOVOTNY, appellant and cross-appellee, v. Nicole M. NOVOTNY, appellee and cross-appellant.

No. A-22-226.

Court of Appeals of Nebraska.

Filed August 15, 2023.

Shane J. Placek, of Sidner Law, Fremont, for appellant.

Alex M. Lierz, of Rembolt Ludtke, L.L.P., for appellee.

Moore and Welch, Judges.

Bishop, Judge

INTRODUCTION

The Saunders County District Court dissolved the marriage of Timothy J. Novotny and Nicole M. Novotny and divided the parties’ property and debts. On appeal, Timothy challenges the district court's decision (1) determining that some or all of certain assets were not premarital, (2) imputing the gross value of the 2020 grain sold after the date of the parties’ separation, and (3) regarding the 2021 crop yield from the parties’ marital agricultural property. On cross-appeal, Nicole challenges the district court's division of the marital estate and its decision not to order Timothy to reimburse her for health insurance premiums, attorney fees, and expert fees. Although we find merit to some of Timothy's arguments related to premarital and nonmarital property, we nevertheless affirm the court's decree of dissolution for the reasons discussed below.

BACKGROUND

Timothy and Nicole married in June 2016. They have one child, a daughter, born in 2019.

On March 11, 2021, Timothy filed a complaint for dissolution of marriage and sought joint custody of the parties’ daughter, a determination of child support, and an equitable division of the parties’ property and debts. In her answer and counter-claim, Nicole sought the same, but she also sought an award of attorney fees and costs. Pursuant to a stipulated temporary order entered on May 17, the parties were awarded joint custody of their daughter with equal parenting time and Timothy was ordered to pay $100 per month in child support. Nicole was ordered to continue to provide health insurance coverage for Timothy during the pendency of the divorce proceedings so long as it remained available to her through her place of employment at a reasonable cost.

Trial was held on December 2 and 3, 2021. Timothy, then 32 years old, and Nicole, then 28 years old, both testified. Numerous exhibits were also received into evidence. The parties had already entered into a "50/50" joint legal and physical custody parenting plan regarding their daughter; therefore, custody and parenting time were not contested issues at trial. The parties’ date of separation was contested, as Timothy testified that the parties separated on March 1, 2021, whereas Nicole testified that the parties separated on February 20.

Timothy testified that he has been a farmer since 2009. The parties married on June 18, 2016, and in November of that year, they purchased 54 acres of land, 47.5 of which were "farmable," for approximately $327,000; Timothy described it as "a dryland farm" and said "it yields comparable to the other dry land in the area." Timothy valued that property at $329,000 as of March 1, 2021; he said he looked at the Saunders County assessor's 2020 value of $237,040, "and then their value is 72 to 73 percent." Nicole testified that she had the land appraised in November 2021 and that it was valued at $345,000. Timothy wanted the marital land awarded to him because it related to his agricultural production activities. The parties presented testimony and exhibits about various other assets and debts at trial. We will discuss the evidence related to the contested issues as necessary in our analysis.

Pursuant to the district court's decree entered on March 3, 2022, and its order nunc pro tunc entered on March 10, the parties’ marriage was dissolved, they were awarded joint custody of their daughter with equal parenting time, and Timothy was ordered to pay $44 per month in child support. As relevant to this appeal, the court used March 1, 2021, as the valuation date for the marital estate and divided the parties’ property and debts accordingly. As to the disputed property, the court valued the parties’ 54 acres of jointly owned farmland at $345,000 and the land was awarded to Timothy along with the associated loan debt. The court found that Jones Bank savings account No. xxx9529 (#9529) should be considered marital property and not Timothy's premarital funds. The court also found that the 2016 crops were marital property. The court determined that the total fair market value of the 2020 soybean crop stored with ADM was $41,107.15. It also determined that the 2021 grain associated with the jointly owned farmland was valued at $47,045 and should be included in the marital estate. Finally, the court determined that only $26,456 of the funds received from trading in Timothy's 2015 Chevrolet Silverado could be set off as a premarital asset. The court valued the marital estate at $515,000, attributing a net marital estate of $412,415 to Timothy and a net marital estate of $102,591 to Nicole. The court awarded 60 percent ($309,000) of the marital estate to Timothy ($515,000 × .60) and 40 percent ($206,000) of the marital estate to Nicole ($515,000 × .40). To achieve that 60-40 distribution, Nicole was awarded a property equalization payment of $103,409 ($103,409 + $102,590 = $206,000). The court ordered each party to pay his or her own attorney fees.

Timothy appeals, and Nicole cross-appeals.

ASSIGNMENTS OF ERROR

Timothy assigns, consolidated, reordered, and restated, that the district court erred in (1) failing to find that some or all of certain assets were premarital, including his Jones Bank savings account, the 2015 Chevrolet Silverado, and the 2016 net crop proceeds; (2) imputing the gross value of the 2020 grain generally sold after the date of separation without considering the tax consequences; and (3) imputing the yield from the parties’ marital agricultural property and disregarding the cost of inputs, taxes, and labor, as well as the risk in production of the 2021 crop.

Nicole assigns on cross-appeal that the district court erred by failing to (1) equitably divide the net marital estate, (2) order Timothy to reimburse her for the cost of his health insurance premium, and (3) order Timothy to reimburse her for attorney fees and expert fees.

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.

Eis v. Eis , 310 Neb. 243, 965 N.W.2d 19 (2021). This standard of review applies to the trial court's determinations regarding custody, child support, division of property, alimony, and attorney fees. Id. 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. Id.

ANALYSIS

GENERAL PRINCIPLES OF LAW

In a dissolution of marriage proceeding, " ‘[i]f the parties fail to agree upon a property settlement ... the court shall order an equitable division of the marital estate.’ " Dooling v. Dooling , 303 Neb. 494, 507, 930 N.W.2d 481, 495 (2019). Under Neb. Rev. Stat. § 42-365 (Reissue 2016), the equitable division of property is a three-step process. Dooling v. Dooling, supra . The first step 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. The second step is to value the marital assets and marital liabilities of the parties. The third step is to calculate and divide the net marital estate between the parties in accordance with the principles contained in § 42-365. Dooling v. Dooling, supra . As a general rule, a spouse should be awarded one-third to one-half of the marital estate, the polestar being fairness and reasonableness as determined by the facts of each case. Id.

Generally, all property accumulated and acquired by either spouse during a marriage is part of the marital estate. Dooling v. Dooling, supra . Exceptions include property that a spouse acquired before the marriage, or by gift or inheritance. Id.

Any given property can constitute a mixture of marital and nonmarital interests; a portion of an asset can be marital property while another portion can be separate property.

Marshall v. Marshall , 298 Neb. 1, 902 N.W.2d 223 (2017). Setting aside nonmarital property is simple if the spouse possesses the original asset, but can be problematic if the original asset no longer exists. Id. Separate property becomes marital property by commingling if it is inextricably mixed with marital property or with the separate property of the other spouse. Id. But if the separate property remains segregated or is traceable into its product, commingling does not occur. Id. The burden of proof rests with the party claiming that property is nonmarital. Id.

A nonmarital interest in property may be established by credible testimony. Burgardt v. Burgardt , 304 Neb. 356, 934 N.W.2d 488 (2019). A spouse's own testimony can establish a "tracing link," i.e., tracking an asset to a nonmarital source. Id. at 364, 934 N.W.2d at 495 (internal quotation marks omitted). See, also, Brozek v. Brozek , 292 Neb. 681, 874 N.W.2d 17 (2016). Of course, triers of fact have the right to test the credibility of witnesses by their self-interest and to weigh it against the evidence, or the lack thereof. Burgardt v. Burgardt, supra . Evidence not directly contradicted is not necessarily binding on the triers of fact, and may be given no weight where it is inherently improbable, unreasonable, selfcontradictory, or inconsistent with facts or circumstances in evidence. Id.

JONES BANK SAVINGS ACCOUNT

Timothy testified that he brought $106,804 into the marriage that he wanted set aside as his premarital asset. At the time of the parties’ marriage in June 2016, that amount was already in Timothy's savings account at Community State Bank, as evidenced in exhibit 48. On August...