Snow v. Snow , 32 Neb. Ct. App. 513 ( 2023 )


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    Nebraska Court of Appeals Advance Sheets
    32 Nebraska Appellate Reports
    SNOW V. SNOW
    Cite as 
    32 Neb. App. 513
    Stephanie L. Snow, appellee, v.
    Ronald L. Snow, appellant.
    ___ N.W.2d ___
    Filed December 26, 2023.   No. A-22-897.
    1. Divorce: Child Custody: Child Support: Property Division:
    Alimony: Attorney Fees: 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. This standard of review applies to the trial court’s determinations
    regarding custody, child support, division of property, alimony, and
    attorney fees.
    2. Judges: Words and Phrases. A judicial abuse of discretion exists if the
    reasons or rulings of a trial judge are clearly untenable, unfairly depriv-
    ing a litigant of a substantial right and denying just results in matters
    submitted for disposition.
    3. Divorce: Property Division: Equity. 
    Neb. Rev. Stat. § 42-365
     (Reissue
    2016) authorizes a trial court to equitably distribute the marital estate
    according to what is fair and reasonable under the circumstances.
    4. Divorce: Property Division. In a marital dissolution action, the pur-
    pose of a property division is to distribute the marital assets equitably
    between the parties.
    5. ____: ____. In a marital dissolution action, there is no mathematical
    formula by which property awards can be precisely determined, but 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 deter-
    mined by the facts of each case.
    6. ____: ____. Generally, all property accumulated and acquired by either
    spouse during a marriage is part of the marital estate. Exceptions
    include property that a spouse acquired before the marriage, or by gift
    or inheritance.
    7. Divorce: Property Division: Proof. The burden of proof rests with the
    party claiming that property is nonmarital.
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    8. Divorce: Property Division: Presumptions. Accrued investment earn-
    ings or appreciation of nonmarital assets during the marriage are pre-
    sumed marital unless the party seeking the classification of the growth
    as nonmarital proves: (1) The growth is readily identifiable and trace-
    able to the nonmarital portion of the account and (2) the growth is not
    due to the active efforts of either spouse.
    9. Divorce: Property Division. The appreciation or income of a nonmari-
    tal asset during the marriage is marital insofar as it was caused by the
    efforts of either spouse or both spouses.
    10. ____: ____. The active appreciation rule sets forth the relevant test to
    determine to what extent marital efforts caused any part of an asset’s
    appreciation or income.
    11. Property Division: Words and Phrases. Appreciation caused by mari-
    tal contributions is known as active appreciation, and it constitutes
    marital property.
    12. ____: ____. Passive appreciation is appreciation caused by separate con-
    tributions and nonmarital forces.
    13. Divorce: Property Division. Any given property can constitute a mix-
    ture of marital and nonmarital interests; a portion of an asset can be
    marital property while another portion can be separate property.
    14. ____: ____. The original value of an asset may be nonmarital, while all
    or some portion of the appreciation of that asset may be marital.
    15. ____: ____. The oft-cited three-step process of a marital property divi-
    sion must account for appreciation, which may be treated separately
    from the original capital or value of an asset.
    16. ____: ____. In a marital dissolution action, the equitable division of
    property is a three-step process. The first step is to classify the parties’
    property as either marital or nonmarital, setting aside the nonmarital
    property or nonmarital portion of the property to the party who brought
    the property to the marriage. The second step is to value the marital
    assets and marital liabilities of the parties. And the third step is to calcu-
    late and divide the net marital estate equitably between the parties.
    17. ____: ____. The active appreciation rule applies to agricultural land
    or farmland.
    18. ____: ____. The term “Grace award” has been described as a device to
    fairly and reasonably divide a marital estate where the prime asset in
    contention is one spouse’s gifted or inherited stock or property in a fam-
    ily agriculture organization.
    19. Alimony. The purpose of alimony is to provide for the continued main-
    tenance or support of one party by the other when the relative economic
    circumstances and the other criteria enumerated in 
    Neb. Rev. Stat. § 42-365
     (Reissue 2016) make it appropriate.
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    20. Alimony: Appeal and Error. In reviewing an alimony award, an appel-
    late court does not determine whether it would have awarded the same
    amount of alimony as did the trial court, but whether the trial court’s
    award is untenable such as to deprive a party of a substantial right or
    just result.
    21. Alimony. In determining whether alimony should be awarded, in what
    amount, and over what period of time, the ultimate criterion is one of
    reasonableness.
    22. ____. There are four factors that are relevant to alimony: (1) the circum-
    stances of the parties, (2) the duration of the marriage, (3) the history of
    contributions to the marriage, and (4) the ability of the supported party
    to engage in gainful employment without interfering with the interests of
    any minor children in the custody of each party.
    23. ____. In determining whether alimony should be awarded, a court
    should consider the income and earning capacity of each party and the
    general equities of the situation.
    24. ____. Alimony should not be used to equalize the incomes of the parties
    or punish one of the parties, but disparity in income or potential income
    may partially justify an award of alimony.
    Appeal from the District Court for Adams County: Morgan
    R. Farquhar, Judge. Affirmed in part, and in part reversed and
    remanded with directions.
    Adam R. Little, of Nebraska Legal Group, for appellant.
    Jack W. Besse, of Parker, Grossart & Bahensky, L.L.P., for
    appellee.
    Pirtle, Chief Judge, and Moore and Arterburn, Judges.
    Pirtle, Chief Judge.
    I. INTRODUCTION
    The district court for Adams County dissolved the marriage
    of Stephanie L. Snow and Ronald L. Snow and divided the
    parties’ property and debts. On appeal, Ronald challenges the
    district court’s division of property and its award of alimony
    to Stephanie. Based on the reasons that follow, we affirm in
    part, and in part reverse and remand with directions.
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    II. BACKGROUND
    Stephanie and Ronald were married in June 1981. They
    had two children who are no longer minors and, therefore, are
    not affected by these proceedings. When the parties married,
    Ronald was farming with his father, and they raised hogs. The
    farm ground was owned by Ronald’s parents. Stephanie testi-
    fied that she worked on the farm and worked at the grain ele-
    vator during harvest time. Around 1985, Ronald and his father
    stopped farming. Ronald opened a mechanic shop located in
    a building on his parents’ land and Stephanie helped him in
    the shop. He had the shop for about 15 to 20 years, but it was
    never profitable.
    Ronald’s father had an antique store that he started almost
    40 years prior to trial. The antique store was also located in a
    building on Ronald’s parents’ property. Stephanie helped with
    the store by arranging and displaying the antiques, as well as
    pricing the items. She would also go with Ronald’s father to
    auctions to purchase antiques for the store.
    In the late 1980s, Stephanie opened her own business that
    repaired and restored wicker furniture. This business was also
    located on Ronald’s parents’ property.
    In the mid-1990s, Stephanie started a residential and com-
    mercial cleaning business. At the time of trial, she was still
    running the cleaning business and it was her only source of
    income. She was earning $400 to $500 per week.
    During the parties’ marriage, they lived in a home owned
    by Ronald’s parents and located on 10 acres of their property,
    referred to as “the cabin.”
    In December 2006, Ronald’s parents titled two parcels of
    real property in Ronald’s name, reserving a life estate for
    themselves. The first parcel was 176 acres of cropland that
    was cash-rented by a third party. This parcel included the
    cabin; the house where Ronald’s parents lived; the buildings
    that housed the mechanic shop, the antique store, and the fur-
    niture repair business; and a building where Ronald’s father
    displayed his own antique collection. The second parcel was
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    57 acres that consisted primarily of pasture ground, which was
    also rented to a third party. Ronald’s mother died in 2016 and
    his father died in 2019, thereby ending the life estate.
    Stephanie filed a complaint for dissolution of marriage in
    May 2021. Trial was held in September 2022. At the time of
    the trial, Stephanie was 60 years old and Ronald was 61 years
    old. Stephanie and Ronald both testified, as well as Michael
    Paul Wilken, a certified general appraiser.
    Stephanie testified that since 2006, she had spent time and
    effort improving the cabin, as well as Ronald’s parents’ house.
    She testified that she installed ponds around the cabin, did
    landscaping, and remodeled Ronald’s parents’ bathroom. She
    also presented photographs indicating that she hand painted
    a ceiling and tiled the kitchen in the cabin. She also had a
    washhouse moved into the yard by the cabin and spent time
    fixing it up and decorating it. Stephanie also testified that
    after Ronald’s father died in 2019, she did other landscaping,
    including moving large rocks and planting flowers and bushes.
    She also repainted a fence. She believed that the improvements
    she made increased the value of the property at the time. She
    testified, however, that at the time of trial, the area around
    the cabin was covered in weeds and there was nothing left
    of the flowers and bushes she planted. Stephanie stated she
    did not want to be awarded the cabin because it needed too
    much work.
    In January 2022, a broker from an auction and realty com-
    pany conducted a broker price opinion of the cabin and the
    10 acres where it is located. The broker concluded that “[t]his
    10-acre parcel would carry as much or more value as a new
    build site versus evaluating the older house and garage as it is
    today and the cropland on a per-acre basis.” The broker opined
    that the value of the property at that time was $125,000 to
    $150,000. Stephanie agreed that the broker indicated that the
    ground itself was worth more than it was with the house as far
    as it being used as a new build site.
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    Stephanie and Ronald agreed that Ronald’s father received
    the cash rent payments from the tenant farming the land
    until he died. After his father died, Ronald started receiving
    the cash rent payments, which totaled around $20,000 per
    year. Ronald testified that he had to pay around $10,000 in
    taxes each year, so he only received $10,000 in net income
    per year from cash renting the farm ground. Ronald’s other
    income of $2,200 per year came from renting the pasture
    ground. He testified that his monthly expenses total $2,859.
    He stated that he is “getting by,” but it is difficult to meet
    his monthly obligations based on his income. Robert testified
    that he would not be able to provide any financial support
    to Stephanie.
    Ronald testified that the real property and the two houses
    located on the property gifted to him by his parents should
    all be classified as nonmarital property. He also testified that
    there had not been any substantial improvements made to the
    property or the houses. He contended that the antique store,
    the furniture repair business, and the mechanic shop were
    also nonmarital property. Ronald had no objection to treating
    Stephanie’s cleaning business as nonmarital and awarding it to
    her. There was also a small piece of land valued at $1,500 that
    Ronald’s father had purchased and gave to both Stephanie and
    Ronald. Ronald testified that Stephanie could have it.
    Wilken testified regarding an appraisal he performed on
    the two parcels of land Ronald received from his parents.
    Ronald asked Wilken to complete an appraisal of the total
    property on two retroactive dates: January 7, 2019, the date
    Ronald’s father died and Ronald gained complete ownership
    of the property, and May 12, 2021, the date the complaint
    for dissolution was filed. In addition to the farm and pasture
    ground on the two parcels, the appraisal included Ronald’s
    parents’ former residence, which is where Ronald was living
    at the time, and the other buildings on the property. It did not
    include the cabin located on the 176-acre parcel.
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    Wilken testified that he conducted his appraisal using three
    different methods of valuation: the sales comparison approach,
    the cost approach, and the income approach. He explained each
    method of valuation, and it was also set forth in his report,
    which was entered into evidence. He then reconciled those val-
    ues as the most accurate way to value real estate. In utilizing
    this approach, he valued the real estate (both parcels minus the
    cabin) on January 7, 2019, at $860,000.
    Wilken used the same process for May 12, 2021. His opin-
    ion as to the value of the real estate on May 12 was $950,000.
    Wilken testified that in his professional opinion, the $90,000
    in appreciation of value between the two dates was due
    entirely to external market forces. He stated that he was not
    given any information regarding any improvements that had
    been made and that based on his inspection of the property,
    it did not appear there had been any recent improvements on
    the property.
    Following trial, the court entered a decree dissolving the
    parties’ marriage and dividing their assets and debts. Citing
    Grace v. Grace, 
    221 Neb. 695
    , 
    380 N.W.2d 280
     (1986), the
    trial court found that Stephanie should receive some credit for
    the value of the real estate, which included the 1-acre tract
    given to Stephanie and Ronald by Ronald’s father and the
    two parcels gifted to Ronald by his parents. It stated that both
    personal and business property were comingled between the
    parties and Ronald’s parents for the length of the marriage.
    The court found that it was “impossible for [it] to unwind
    the comingling of land, homes, antiques, business assets, per-
    sonal property, and farm real estate. There is no doubt that
    [Stephanie] contributed significantly to the various businesses
    engaged in by her nuclear family and her inlaws.” It awarded
    all real estate to Ronald and found that law and equity sup-
    ported a finding that the cabin was a marital asset with a
    value of $163,870. The court concluded that because the cabin
    could not be partitioned from the remaining real estate, it
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    awarded an equalization payment to Stephanie by Ronald for
    half the value of the cabin, or $81,935.
    The trial court further found that law and equity demanded
    an equalization of the other real estate and that a division based
    upon a percentage of value was appropriate. The court found
    that 25 percent of the value of the remaining real estate should
    be paid by Ronald to Stephanie. The court took the value of
    all the real estate, $946,500, and subtracted the value of the
    cabin, resulting in $782,630 as the value of the remaining
    real estate. It then calculated 25 percent of $782,630, which
    is $195,657.50. The two equalization payments in favor of
    Stephanie and against Ronald totaled $277,592.50 and were to
    be paid in 6 months. It also awarded Stephanie spousal support
    in the amount of $1,000 per month for 120 months, as well as
    attorney fees in the amount of $5,000.
    III. ASSIGNMENTS OF ERROR
    Ronald assigns the trial court erred in (1) making an appar-
    ent “Grace award,” rather than setting aside premarital and
    nonmarital property; (2) failing to properly classify certain
    nonmarital assets; (3) including a marital value on nonmarital
    property, rather than setting it aside; (4) improperly valuing
    and dividing the marital estate; (5) ordering a “massive” cash
    equalization payment; and (6) awarding Stephanie alimony.
    IV. STANDARD OF REVIEW
    [1,2] 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.
    Novotny v. Novotny, 
    32 Neb. App. 142
    , 
    995 N.W.2d 64
     (2023).
    This standard of review applies to the trial court’s determina-
    tions 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 unten-
    able, unfairly depriving a litigant of a substantial right and
    denying just results in matters submitted for disposition. 
    Id.
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    V. ANALYSIS
    1. Relevant Law Regarding Division
    of Marital Estate
    [3-5] 
    Neb. Rev. Stat. § 42-365
     (Reissue 2016) authorizes a
    trial court to equitably distribute the marital estate according to
    what is fair and reasonable under the circumstances. Parde v.
    Parde, 
    313 Neb. 779
    , 
    986 N.W.2d 504
     (2023). In a marital dis-
    solution action, the purpose of a property division is to distrib-
    ute the marital assets equitably between the parties. 
    Id.
     There
    is no mathematical formula by which property awards can be
    precisely determined, but 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.
    [6,7] Generally, all property accumulated and acquired by
    either spouse during a marriage is part of the marital estate.
    Novotny v. Novotny, supra. Exceptions include property that a
    spouse acquired before the marriage, or by gift or inheritance.
    Id. The burden of proof rests with the party claiming that prop-
    erty is nonmarital. Id.
    [8] In Stephens v. Stephens, 
    297 Neb. 188
    , 
    899 N.W.2d 582
     (2017), the Nebraska Supreme Court held that accrued
    investment earnings or appreciation of nonmarital assets dur-
    ing the marriage are presumed marital unless the party seeking
    the classification of the growth as nonmarital proves: (1) The
    growth is readily identifiable and traceable to the nonmarital
    portion of the account and (2) the growth is not due to the
    active efforts of either spouse.
    [9] Prior to the decision in Stephens, the Nebraska appel-
    late courts treated separate property as remaining nonmarital
    unless both spouses contributed to the improvement or opera-
    tion of the property or the spouse not owning the property,
    or not receiving the inheritance or gift, significantly cared
    for the property during the marriage. See Parde v. Parde,
    
    supra.
     But in Stephens, the court held that the appreciation or
    income of a nonmarital asset during the marriage is marital
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    insofar as it was caused by the efforts of either spouse or both
    spouses. See Parde v. Parde, 
    supra.
    [10-12] The active appreciation rule sets forth the relevant
    test to determine to what extent marital efforts caused any part
    of an asset’s appreciation or income. 
    Id.
     Appreciation caused
    by marital contributions is known as active appreciation, and
    it constitutes marital property. 
    Id.
     Passive appreciation is
    appreciation caused by separate contributions and nonmarital
    forces. 
    Id.
    [13,14] After Stephens, appellate courts have adhered to the
    framework that 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 prop-
    erty. See Parde v. Parde, 
    supra.
     The original value of an asset
    may be nonmarital, while all or some portion of the apprecia-
    tion of that asset may be marital. 
    Id.
    [15,16] The oft-cited three-step process of a marital prop-
    erty division must account for appreciation, which may be
    treated separately from the original capital or value of an
    asset. 
    Id.
     Thus, in a marital dissolution action, the equitable
    division of property is a three-step process. The first step is to
    classify the parties’ property as either marital or nonmarital,
    setting aside the nonmarital property or nonmarital portion
    of the property to the party who brought the property to the
    marriage. The second step is to value the marital assets and
    marital liabilities of the parties. And the third step is to cal-
    culate and divide the net marital estate equitably between the
    parties. 
    Id.
    [17] In Parde v. Parde, 
    313 Neb. 779
    , 
    986 N.W.2d 504
    (2023), the court determined that the active appreciation rule
    applied to agricultural land or farmland.
    2. Equitable Lump-Sum Awards
    In the present case, Ronald was gifted two parcels of land
    from his parents. One parcel was 176 acres of primarily
    cropland, but it also contained the cabin, the house where
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    Ronald’s parents lived, and the buildings that housed the
    mechanic shop, antique store, wicker repair business, and
    Ronald’s father’s antique collection. The other parcel was 57
    acres of pasture ground.
    In evaluating the marital estate, the trial court treated the
    cabin separately from the rest of the property and buildings.
    It determined that the cabin was a marital asset and awarded
    Stephanie 50 percent of the value of the cabin. The court also
    awarded Stephanie 25 percent of the value of the remaining
    real estate.
    [18] Ronald argues that the trial court erred in its division
    of property because it gave Stephanie an equitable lump-sum
    award or a “Grace award.” A “Grace award” became a com-
    mon term of art in dissolution cases, particularly involving
    farms and ranches, and derived from the Supreme Court’s
    opinion in Grace v. Grace, 
    221 Neb. 695
    , 
    380 N.W.2d 280
    (1986). A Grace award has been described as a device to
    fairly and reasonably divide a marital estate where the prime
    asset in contention is one spouse’s gifted or inherited stock
    or property in a family agriculture organization. See Charron
    v. Charron, 
    16 Neb. App. 724
    , 
    751 N.W.2d 645
     (2008). The
    Supreme Court expressly abrogated Grace v. Grace, 
    supra,
    and its related line of cases in Stephens v. Stephens, 
    297 Neb. 188
    , 
    899 N.W.2d 582
     (2017).
    The Stephens court explained that it found inapplicable to
    the modern dual classification system any statements in prior
    cases that failed to recognize as a marital asset appreciation
    through the active efforts of the owning spouse. It further
    stated that for purposes of the active appreciation rule, there
    was no reason to treat appreciation of a nonmarital asset differ-
    ently from income derived from a nonmarital asset during the
    marriage. It concluded that the principles set forth in Grace v.
    Grace, 
    supra,
     were no longer applicable under the dual clas-
    sification system.
    We conclude that the trial court abused its discretion in
    awarding Stephanie an equitable lump sum, or Grace award,
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    rather than setting aside nonmarital property and applying the
    active appreciation rule. Ronald argues that under the proper
    analysis, he met his burden to show that the real property
    gifted to him was nonmarital and that any growth or apprecia-
    tion was passive and, therefore, nonmarital. We agree.
    The evidence showed that the property at issue was gifted
    to Ronald by his parents. In 2006, Ronald’s parents trans-
    ferred title to two parcels of land to Ronald but maintained a
    life estate so they could continue to live on the property and
    receive the cash rent from the tenants farming the land and
    using the pastures. Stephanie testified that when the land was
    deeded to Ronald, she understood that it was a gift made spe-
    cifically to him. Accordingly, the evidence is undisputed that
    the property was gifted to Ronald by his parents, making it
    nonmarital property that should be set aside to Ronald.
    We must next determine whether any appreciation of the
    property after it was gifted to Ronald was active or pas-
    sive and, therefore, whether the appreciation was marital or
    nonmarital.
    Ronald presented evidence from a certified general appraiser
    regarding the appraised value of the property on two different
    dates: January 7, 2019, the day Ronald fully inherited the
    property, and May 12, 2021, the day the complaint for dis-
    solution was filed and the parties separated. Wilken valued
    the property at $860,000 as of January 7, 2019, and $950,000
    as of May 12, 2021. Wilken testified that in his professional
    opinion, the $90,000 in appreciation of value between the
    two dates was due entirely to external market forces. We
    conclude that Ronald met his burden of proof to show that
    the appreciation in value of the nonmarital real property was
    entirely passive.
    It then became Stephanie’s burden to rebut Ronald’s evi-
    dence that the appreciation of his nonmarital real property
    was passive. She failed to do so. Stephanie did not present
    evidence to rebut Ronald’s appraised value of the property on
    either date. She presented limited evidence of improvements
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    she made over time and argued they increased the value, but
    the improvements were primarily made inside and around the
    cabin and do not meet the definition of active marital apprecia-
    tion. Further, Wilken’s appraisal did not include the cabin.
    Stephanie also argues that in determining the appreciation
    in value of the property, it should be assessed as of December
    12, 2006, the day the property was deeded to Ronald, rather
    than January 7, 2019, when his father died. She contends that
    while Ronald’s father’s death ended the life estate, Ronald was
    given an interest in the property on December 12, 2006.
    Although Ronald’s name was put on the title in 2006 and
    he received an interest in the property at this time, he did not
    inherit or receive the ground free and clear until 2019, when
    his father died. Before his parents died, they maintained a
    life estate on the property, including full rights to occupy
    the property and rights to receive income from the property.
    Further, Ronald did not pay inheritance tax on the property
    until 2019, after his father’s death.
    In addition, there is no evidence that any appreciation in
    the property between 2006 and 2019 was caused by the active
    efforts of either spouse. Ronald and his father stopped farm-
    ing in 1985. After that, the farm ground was rented by a third
    party. The pasture ground was also rented by a third party.
    There was no evidence that any of the businesses that were
    operated on the property contributed to any appreciation in the
    property. As a result, any appreciation in value to the property
    between 2006 and 2019 was passive.
    We conclude that the district court erred in awarding
    Stephanie a Grace award, specifically, an equitable lump-sum
    award equal to 25 percent of value of the real estate. While
    we recognize that application of the active appreciation rule
    to the facts of this case produces what could be viewed as an
    inequitable division of property, particularly given the length
    of time Stephanie lived on the property, the pertinent case law
    does not provide for any exceptions to the rule’s application.
    Here, the evidence is clear that the appreciation in value was
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    due to external market forces and not to any significant efforts
    by either party. The real estate consisting of the two parcels
    Ronald was gifted by his parents and its passive appreciation
    should have been set off to Ronald as nonmarital property and
    not included in the marital estate. We reverse that portion of
    the court’s decree awarding Stephanie $195,657.50 and remand
    the matter to the district court for a division of the marital
    estate, setting off the two parcels of real estate and its apprecia-
    tion to Ronald as nonmarital property.
    3. Classification of Certain Assets
    Ronald next assigns that the trial court abused its discre-
    tion by failing to properly classify certain assets as nonmari-
    tal assets.
    (a) Inherited Real Property
    Ronald first argues that the trial court erred in failing to
    classify and set aside the real property he was gifted as his
    nonmarital property. As set forth above, Ronald proved, and
    Stephanie did not dispute, that Ronald’s parents gifted the
    property at issue to Ronald. The property should have been
    classified as nonmarital property.
    (b) The Cabin
    The trial court found the cabin was a marital asset with
    a value of $163,870 and awarded Stephanie an equalization
    payment equal to half the value of the cabin, or $81,935. The
    court’s value of the cabin was based on its insured value as of
    June 2022. Ronald argues that the cabin was part of the total
    real property he was gifted and should not have been treated
    separately or classified as a marital asset. We agree.
    The cabin is located on the property Ronald was gifted and,
    therefore, is part of the nonmarital property. Although the par-
    ties lived in the cabin for most of their marriage, it was owned
    by Ronald’s parents until it was gifted with the property to
    Ronald. There was no mortgage on the cabin and no evidence
    that the parties paid any rent. We conclude that the trial court
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    erred in classifying the cabin as a marital asset and awarding
    Stephanie an equalization payment equal to one-half of the
    value. Upon remand, the trial court is to treat the cabin as part
    of Ronald’s nonmarital property.
    (c) Miscellaneous Assets
    Ronald next argues that other various assets were classi-
    fied as marital when they should have been classified as non-
    marital. The district court attached a “Settlement Statement”
    to the decree, which is a spreadsheet detailing how it valued
    and awarded the parties’ assets and debts. Ronald points out
    several items that he claims were undisputedly nonmarital,
    yet the court listed them on the spreadsheet and awarded them
    to Ronald.
    The court’s spreadsheet states a value for each asset or
    debt and which party is to receive each item. It does not indi-
    cate whether the court found that all the items listed on the
    spreadsheet are marital or whether some of the items awarded
    to Ronald were nonmarital. Further, although the spreadsheet
    assigns values to the assets and debts, it does not calculate the
    division of the marital estate. In other words, it does not con-
    tain a balance sheet showing the total value of marital assets
    and debts each party was awarded, or a division of the net
    marital estate.
    Upon remand, the district court is ordered to use the three-
    step process set forth above to classify the parties’ property as
    marital or nonmarital, setting aside Ronald’s nonmarital real
    property and appreciation; to produce a balance sheet valuing
    the marital assets and liabilities; and to calculate and divide
    the net marital estate equitably. See Parde v. Parde, 
    313 Neb. 779
    , 
    986 N.W.2d 504
     (2023).
    4. Valuation and Division
    of Marital Estate
    Ronald next assigns that the trial court abused its discre-
    tion in valuing and dividing the marital estate. He argues that
    the court “incons[iste]ntly or arbitrarily valued several items
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    of marital property.” Brief for appellant at 26. He suggests
    that the court adopted Stephanie’s inflated valuations only on
    property that was awarded to Ronald, despite Ronald’s testify-
    ing he did not want such property at Stephanie’s values. In
    contrast, when awarding property to Stephanie, the court often
    gave her the benefit. This argument is also based on the court’s
    “Settlement Statement” attached to the decree, as discussed
    above. As stated above, upon remand, the district court is to
    produce a balance sheet dividing the parties’ assets and debts
    and calculating any equalization payment needed.
    5. Equalization Payment
    Ronald assigns that ordering him to pay an equalization
    payment of $277,592.50 was an abuse of discretion because he
    lacks sufficient cash or liquid assets to make the equalization
    payment. Because the trial court abused its discretion in the
    method used to divide the marital estate and we are remanding
    the matter to the trial court, we need not address this assign-
    ment of error.
    6. Alimony
    Ronald also assigns that the trial court erred in award-
    ing Stephanie alimony. He argues that the alimony award of
    $1,000 per month for 120 months is “untenable and deprives
    [him] of a substantial right” because there was no evidence
    demonstrating Stephanie had a need for support. Brief for
    appellant at 29.
    [19,20] The purpose of alimony is to provide for the contin-
    ued maintenance or support of one party by the other when the
    relative economic circumstances and the other criteria enumer-
    ated in § 42-365 make it appropriate. See Dooling v. Dooling,
    
    303 Neb. 494
    , 
    930 N.W.2d 481
     (2019). In reviewing an ali-
    mony award, an appellate court does not determine whether it
    would have awarded the same amount of alimony as did the
    trial court, but whether the trial court’s award is untenable such
    as to deprive a party of a substantial right or just result. 
    Id.
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    [21-24] In determining whether alimony should be awarded,
    in what amount, and over what period of time, the ultimate
    criterion is one of reasonableness. See 
    id.
     There are four fac-
    tors that are relevant to alimony: (1) the circumstances of the
    parties, (2) the duration of the marriage, (3) the history of con-
    tributions to the marriage, and (4) the ability of the supported
    party to engage in gainful employment without interfering with
    the interests of any minor children in the custody of each party.
    Simons v. Simons, 
    312 Neb. 136
    , 
    978 N.W.2d 121
     (2022).
    In addition, a court should consider the income and earning
    capacity of each party and the general equities of the situation.
    See 
    id.
     Alimony should not be used to equalize the incomes
    of the parties or punish one of the parties, but disparity in
    income or potential income may partially justify an award of
    alimony. See Marcovitz v. Rogers, 
    267 Neb. 456
    , 
    675 N.W.2d 132
     (2004).
    In considering the four factors set forth above, Ronald was
    61 years old at the time of trial and Stephanie was 60 years
    old. The parties had been married for 41 years. Ronald earns
    his income by renting the farm ground and pasture ground
    that he inherited from his parents. Although he presented evi-
    dence to show that he struggles “to meet [his] monthly obliga-
    tions,” he does not work and there was nothing to indicate he
    cannot work. During the marriage, there were three businesses
    operated on his inherited land, but at the time of trial, he was
    not operating any of these businesses.
    During the marriage, Stephanie worked on the farm and at
    the grain elevator during harvest time, helped Ronald’s father
    operate the antique store, and ran the wicker furniture repair
    business. At the time of trial, Stephanie had her own cleaning
    business. She testified that she was able to pay her expenses
    with her current income but struggled at times. She did not
    produce evidence that she needed to or would pursue further
    education to improve her employment prospects, nor did she
    produce evidence that her income was lower due to career
    interruptions during the marriage.
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    Based on the totality of the evidence before us, the trial
    court did not abuse its discretion in awarding Stephanie ali-
    mony. This assignment of error fails.
    VI. CONCLUSION
    We conclude that the trial court abused its discretion in its
    division of the marital estate. We remand the matter to the
    trial court to recalculate and divide the marital estate con-
    sistent with this opinion. The court’s award of alimony to
    Stephanie is affirmed.
    Affirmed in part, and in part reversed
    and remanded with directions.
    

Document Info

Docket Number: A-22-897

Citation Numbers: 32 Neb. Ct. App. 513

Filed Date: 12/26/2023

Precedential Status: Precedential

Modified Date: 1/2/2024