Schwensow v. Bartnicki

1

32 Neb.App. 798

Nicole M. Schwensow, appellee and cross-appellant, v. Paul N. Bartnicki appellant and cross-appellee.

No. A-23-593

Court of Appeals of Nebraska

April 9, 2024

1. Divorce: Appeal and Error. 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.

2. Divorce: Property Division. In a divorce action, the purpose of a property division is to distribute the marital assets equitably between the parties.

3. Property Division. Equitable property division under Neb. Rev. Stat. § 42-365 (Reissue 2016) is a three-step process. The first step is to classify the parties' property as marital or nonmarital. The second step is to value the marital assets and determine the parties' marital liabilities. The third step is to calculate and divide the net marital estate between the parties in accordance with the principles contained in § 42-365.

4. Divorce: Property Division. As a general rule, all property accumulated and acquired by either spouse during the marriage is part of the marital estate, unless it falls within an exception to the general rule.

5. Divorce: Property Division: Proof. Where there is nothing on the record to show the source of premarital funds, they should be considered part of the marital estate.

6. Property Division: Proof. The burden of proof rests with the party claiming the property is nonmarital.

7. Property Division. Generally, the date on which a court values the marital estate should be rationally related to the property composing the marital estate.

8. Divorce: Property Division: Equity. The purpose of assigning a date of valuation in a dissolution decree is to ensure that the marital estate is equitably divided.

9. Divorce: Property Division: Appeal and Error. The date of valuation is reviewed for an abuse of discretion.

10. Divorce: Property Division: Pensions. Investment earnings accrued during the marriage on the nonmarital portion of a retirement account may be classified as nonmarital where the party seeking the classification proves: (1) The growth is readily identifiable and traceable to the nonmarital portion of the account and (2) the growth is due solely to inflation, market forces, or guaranteed rate rather than direct or indirect effort, contribution, or fund management of either spouse.

11. Divorce: Property Division: Words and Phrases. Appreciation caused by marital contributions is known as active appreciation, and it constitutes marital property.

12. __ __: __. Passive appreciation is appreciation caused by separate contributions and nonmarital forces.

13. Divorce: Property Division. Marital assets dissipated by a spouse for purposes unrelated to the marriage should be included in the marital estate in dissolution actions.

14. Divorce: Attorney Fees. In awarding attorney fees in a dissolution action, a court shall consider the nature of the case, the amount involved in the controversy the services performed, the results obtained, the length of time required for preparation and presentation of the case the novelty and difficulty of the questions raised, and the customary charges of the bar for similar services.

Appeal from the District Court for Hall County: Andrew C. Butler Judge. Affirmed in part, and in part vacated and remanded with directions.

David V. Chipman, of Monzón, Guerra & Chipman, for appellant.

Katheryn L. Harouff, of Harouff Law, P.C., L.L.O., and Sean M. Reagan, of Reagan, Melton & Delaney, L.L.P., for appellee.

Pirtle, Chief Judge, and Riedmann and Welch, Judges.

Riedmann, Judge.

I. INTRODUCTION

Paul N. Bartnicki (Paul) appeals, and Nicole M. Schwensow (Nicole) cross-appeals, the order of the district court for Hall County, which dissolved the parties' marriage and valued and divided the marital estate. For the reasons that follow, we vacate the district court's decree regarding the classification and valuation of certain property as set forth herein and remand the matter with directions to recalculate the marital estate consistent with this opinion and provide an equitable division.

II. BACKGROUND

Paul and Nicole were married on June 24, 2017. There were no children born during the marriage. Prior to their marriage, the parties signed a prenuptial agreement. In the agreement, Paul listed $38,000 in premarital investments and "[g]uns" as his separate property, and Nicole listed over $169,000 in premarital assets as her separate property. Nicole filed a complaint for dissolution of marriage in February 2022. Paul filed a counterclaim shortly thereafter.

Trial was held in May 2023 to determine, inter alia, the extent and value of the marital estate and whether either party merited dissipation funds. The evidence presented will be described in more detail as needed in the analysis section below.

Paul and Nicole did not have any real estate, and the district court divided their personal property aligned with their agreed division of items of property. Paul and Nicole were awarded their respective checking accounts, savings accounts, and life insurance policies.

During the marriage, Nicole transferred her premarital investment accounts to two new accounts, an Ameriprise IRA and a Principal 401K. The district court awarded Nicole the entirety of these two accounts, which was composed of $179,598 in the Ameriprise IRA and $139,502 in the Principal 401K. It found that the evidence revealed $58,518 of the Ameriprise IRA and $7,946 of the Principal 401K should be included in the marital estate. The district court awarded Paul all four of his retirement accounts. It allocated a total of $36,206.72 from Paul's accounts and $66,464 from Nicole's two retirement accounts to the marital estate.

Nicole had three premarital debts that she paid off during the marriage. She owed a total of $91,742.18 on two student loans. She also had a car loan valued at $18,600 for a 2015 Audi. The district court found that Nicole "solely" paid her debts, that Paul "desired to keep financial issues separate," and that Nicole made efforts to reduce these debts on her own. The district court concluded that based on these findings, Nicole's debts should not be included in the marital estate.

Nicole was awarded her vehicle, a 2019 Mercedes sport utility vehicle, which was valued at $40,550, and Paul was awarded his vehicle, a 2019 Toyota Tacoma, which was valued at $30,098. Paul also assumed the remaining car loan for the Tacoma, which had a balance of $11,808.64 at the time of separation, but which he had paid off at the time of trial.

At issue are three additional bank accounts owned by Nicole: a Barclays savings account, a Discover savings account, and a Wells Fargo checking account. The district court did not include the Barclays savings account in the marital estate because "it is a dedicated account to cover 1099 employment." The district court valued the Discover savings account at $240.54 and included it in the marital estate. Finally, it valued the Wells Fargo checking account at $1,750, as "evidence shows the account having an average balance of that value," and included it in the marital estate.

To equalize property, the district court ordered a judgment against Nicole, in favor of Paul, for $20,000. It found that the evidence did not warrant a "complete equal division of the marital estate." It determined the value of the marital estate was $197,061.73 and awarded approximately 41 percent to Paul. It also found that Paul did not provide an "accurate picture" of his full financial position in the prenuptial agreement and would not invest with Nicole until she achieved a debt-free status. Neither party was awarded alimony.

Both parties requested attorney fees. The district court explained that Paul "created some concerning issues by not following the Court's Order on the Motion to Compel, to which the Court questions whether a full and accurate picture of his financial situation was shown." Because of Paul's concerning issues, the district court denied his request for attorney fees, but awarded Nicole $8,000 for attorney fees. Paul appeals, and Nicole cross-appeals.

III. ASSIGNMENTS OF ERROR

Paul assigns five errors. He assigns the district court abused its discretion (1) by not including Nicole's student loan debt and the 2015 Audi car loan debt in the marital estate, (2) by excluding one of Nicole's bank accounts from the marital estate and incorrectly valuing two other bank accounts, (3) in its determination of the marital value of Nicole's retirement accounts, (4) in its division of the marital estate, and (5) by awarding Nicole $8,000 in attorney fees.

Nicole cross-appeals and assigns two errors. She assigns the district court erred by finding that the parties did not meet their burden to establish when the irretrievable breakdown of the marriage occurred and by finding Nicole failed to prove dissipation of marital assets.

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. Burgardt v. Burgardt, 304 Neb. 356, 934 N.W.2d 488 (2019).

V. ANALYSIS

1. Marital Estate

Four of Paul's five assignments of error address how the district court classified, valued, and ultimately divided the marital estate. He argues the district court erred in classifying Nicole's student loans, a 2015 Audi car loan, and Nicole's "tax savings account" as nonmarital property. He also argues the district court erred in its valuations of Nicole's Wells Fargo checking account Discover savings account, and her retirement accounts. He argues that because the district court erred in its...