In re the Marriage of: Michelle Beth Kremer v. Robbie Michael Kremer

STATE OF MINNESOTA
IN COURT OF APPEALS
A15-2006
In re the Marriage of:
Michelle Beth Kremer, petitioner,
Respondent,
vs.
Robbie Michael Kremer,
Appellant.
Filed January 9, 2017
Affirmed in part, reversed in part, and remanded
Smith, Tracy M., Judge
Concurring in part, dissenting in part, Hooten, Judge
Nobles County District Court
File No. 53-FA-10-425
William J. Wetering, Steven R. Forrest, Hedeen, Hughes & Wetering, Worthington,
Minnesota (for respondent)
Kay Nord Hunt, Mark A. Johannsen, Lommen Abdo, P.A., Minneapolis, Minnesota (for
appellant)
Considered and decided by Johnson, Presiding Judge; Hooten, Judge; and Smith,
Tracy M., Judge.
SYLLABUS
The procedural fairness of an antenuptial agreement that covers or includes marital
property is assessed under the common law, using the multifactor test outlined in In re
Estate of Kinney, 733 N.W.2d 118 (Minn. 2007).
OPINION
SMITH, TRACY M., Judge
In this family-law case, appellant husband challenges the district court’s order
declaring invalid the antenuptial agreement he executed with respondent wife. Husband
also challenges the district court’s subsequent order awarding wife (1) $750,000 as her
share of marital property, (2) temporary rehabilitative and permanent spousal maintenance,
and (3) need-based attorney fees. We conclude that the district court did not err in
determining that the antenuptial agreement is invalid and did not abuse its discretion in
awarding marital property, temporary rehabilitative spousal maintenance, and attorney fees
to wife. However, we conclude that the district court abused its discretion in its award of
permanent spousal maintenance. We therefore affirm in part, reverse in part, and remand.
FACTS
Appellant Robbie Kremer and respondent Michelle Kremer began living together
in 1997 and, in August 2000, agreed to get married. While they were living together before
their marriage, husband informed wife that he would not marry her without an antenuptial
agreement, but they did not discuss any terms. When they agreed to marry, husband was
the owner of a farming operation with equity of $643,756. Wife worked at a gas station
and later on husband’s farm. This was husband’s first marriage, and wife was previously
married and divorced. When the parties married, wife had children.
The parties planned a March 6, 2001 destination wedding in the Cayman Islands,
together with family and friends. The parties planned to travel from their home in Nobles
County to the Twin Cities on March 1, in anticipation of their March 2 flights. Beginning
2
in late January or February, unbeknownst to wife, husband began meeting with his lawyer
to draft an antenuptial agreement. Husband had a minimum of six contacts with his
attorney to create the document. On February 26, husband met with his attorney and signed
the agreement; sometime later that day, husband gave the signed agreement to wife and
told her to talk to an attorney. Husband made clear that there would be no wedding if she
did not sign the agreement. By this time, family and friends had paid for their lodging and
airfare to the Cayman Islands, and some of them had started their travels.
Wife attempted but failed to secure an appointment with her attorney from her
previous divorce, but she was able to consult with a different attorney on February 28. The
attorney reviewed the agreement with wife, and wife signed the agreement at that meeting
and returned it to husband the same day. The agreement foreclosed any claims to spousal
maintenance and provided that marital property would be divided “in proportion to the
actual monetary consideration provided by each [party].”
The next day, the parties traveled to the Cayman Islands, and they were married on
March 6. After the wedding, wife worked less on the farm than she had prior to getting
married. After the parties’ child was born in 2008, wife’s time spent working on the farm
further decreased, but she still contributed to the farm operation. Wife’s contributions to
the farm included driving the combine, bringing seed out to the field, making meals for
farm workers, and mowing the lawn. Wife also maintained the house, purchased groceries,
and cared for the children. While the parties were married, wife at times worked part-time
outside the home.
3
By December 2009, husband’s equity interest in the farming operation had
increased by $1,896,516. That year, husband signed wife up for a federal farm program,
and, although he testified that wife was not contributing to the farm, husband represented
to the government that they were in a 70/30 joint venture.
Wife petitioned for marriage dissolution in April 2010. During the dissolution
action, wife moved to set aside the antenuptial agreement on the grounds that it “was a
product of duress and coercion” and that she did not have “sufficient legal advice” to fully
understand the agreement. Wife further claimed that the agreement was unfair at inception
and that it was unfair at enforcement due to wife’s change in financial circumstances. The
district court bifurcated the dissolution action, separating the property issues from the other
issues for later resolution. After a hearing in 2011, the district court concluded that the
agreement was invalid.
The parties’ marriage was dissolved on January 10, 2012, and they agreed to that
date as the valuation date of assets. Husband claims that the dissolution affected his ability
to obtain financing and that he had to downsize his farming operation in 2012. Husband
farms land that he rents; he does not own tillable land. Husband’s father also farms. From
2009 to 2011, husband farmed approximately 2,500 acres, and his father farmed
approximately 500 acres. During 2012, husband downsized his farming operation to 172
acres. Husband also sold $1.5 million of stored grain, paid off a debt, and purchased new
equipment, which he used to custom farm his father’s land for no pay.1 That year,
1
Expert testimony valued husband’s work for his father at $354,558 to $430,218. The
expert also testified that 2012 was the most successful year in grain farming in a lifetime.
4
husband’s father farmed the balance of the land previously farmed by husband in the
operation, totaling about 3,000 acres.
After a two-day trial on the property issues in December 2014 and January 2015,
the district court filed an order requiring husband to pay both temporary rehabilitative and
permanent spousal maintenance. In addition, the district court found husband’s claim that
he was forced to reduce his farm operation not credible and concluded that husband
dissipated $1.5 million in assets during the dissolution proceeding in violation of Minn.
Stat. § 518.58, subd. 1a (2016). The district court ordered husband to pay $750,000 as an
equitable distribution of marital property. The district court also ordered husband to pay
$168,000 toward wife’s need-based attorney fees. Husband appeals.
ISSUES
I. Did the district court err in concluding that the parties’ antenuptial agreement is
invalid?
II. Did the district court abuse its discretion in its division of the marital estate?
III. Did the district court abuse its discretion in awarding spousal maintenance?
IV. Did the district court abuse its discretion in awarding respondent need-based
attorney fees?
ANALYSIS
I. The district court did not err in invalidating the antenuptial agreement.
Wife contested the validity of the parties’ antenuptial agreement. The agreement
addresses the disposition of nonmarital and marital property, as well as spousal
maintenance, upon dissolution of the marriage. The district court awarded husband his
nonmarital property, and wife does not challenge that decision. However, the district court
5
concluded that the antenuptial agreement was invalid and awarded wife marital property
and spousal maintenance without regard to the agreement. Husband argues that the district
court erred in invalidating the agreement.
“Statutory construction is a question of law, which this court reviews de novo.” In
re Estate of Rutt, 824 N.W.2d 641, 645 (Minn. App. 2012) (quotation omitted), review
denied (Minn. Jan. 29, 2013). Where the relevant facts are undisputed, the application of
a statute to those facts is a question of law we undertake de novo. Id. Where facts are in
dispute, appellate courts will defer to the findings of the district court, unless those findings
are clearly erroneous. Rasmussen v. Two Harbors Fish Co., 832 N.W.2d 790, 797 (Minn.
2013). We defer to the district court’s credibility determinations. Sefkow v. Sefkow, 427
N.W.2d 203, 210 (Minn. 1988).
A. Standard of law
The critical initial issue is identifying the appropriate legal standard for evaluating
the validity of antenuptial agreements that, like the one at issue here, are entered into after
the effective date of Minn. Stat. § 519.11 (2016), and that address marital property. Section
519.11 states that it “shall apply to all antenuptial contracts and settlements executed on or
after August 1, 1979.” Minn. Stat. § 519.11, subd. 6. Here, it is undisputed that the parties’
antenuptial agreement was executed after August 1, 1979. Therefore, the statute applies to
the parties’ agreement.
Under subdivision 1 of the statute,
[a] man and woman of legal age may enter into an antenuptial
contract or settlement prior to solemnization of marriage which
shall be valid and enforceable if (a) there is a full and fair
6
disclosure of the earnings and property of each party, and
(b) the parties have had an opportunity to consult with legal
counsel of their own choice. An antenuptial contract or
settlement made in conformity with this section may determine
what rights each party has in the nonmarital property, defined
in section 518.003, subdivision 3b, upon dissolution of
marriage, legal separation or after its termination by death and
may bar each other of all rights in the respective estates not so
secured to them by their agreement. This section shall not be
construed to make invalid or unenforceable any antenuptial
agreement or settlement made and executed in conformity with
this section because the agreement or settlement covers or
includes marital property, if the agreement or settlement would
be valid and enforceable without regard to this section.
The first sentence of this subdivision states that an antenuptial agreement “shall be valid”
if the parties made full disclosure and had access to counsel. Id., subd. 1. This sentence
does not otherwise limit itself. Generally, “‘[s]hall’ is mandatory.” Minn. Stat. § 645.44,
subd. 16 (2016). Therefore, if this sentence is read in isolation, it could be argued that it
applies to all antenuptial agreements entered into after the effective date of the statute. But
we conclude that the Minnesota Supreme Court’s decisions in McKee-Johnson v. Johnson,
444 N.W.2d 259 (Minn. 1989), and In re Estate of Kinney, 733 N.W.2d at 118, direct
otherwise.
McKee-Johnson addressed an antenuptial agreement executed after the effective
date of Minn. Stat. § 519.11. 444 N.W.2d at 262. That agreement covered both marital
and nonmarital property, but it was challenged only with respect to marital property. Id. at
261. The district court ruled that section 519.11 rendered the portion of the agreement
addressing marital property void and unenforceable as a matter of law. Id. at 262. This
court affirmed the district court’s ruling, concluding that section 519.11 excluded, as a
7
matter of law, marital-property rights from the scope of rights able to be addressed by an
antenuptial agreement. McKee-Johnson v. Johnson, 429 N.W.2d 689, 692-94 (Minn. App.
1988), rev’d 444 N.W.2d at 261. The supreme court disagreed, concluding that Minn. Stat.
§ 519.11 does not preclude antenuptial agreements from addressing marital property.
McKee-Johnson, 444 N.W.2d at 264-65.
Critical to the supreme court’s ruling in McKee-Johnson was the court’s
interpretation of the third sentence of subdivision 1: “This section shall not be construed
to make invalid or unenforceable any antenuptial agreement or settlement made and
executed in conformity with this section because the agreement or settlement covers or
includes marital property, if the agreement or settlement would be valid and enforceable
without regard to this section.” Id. at 263 (quoting Minn. Stat. § 519.11, subd. 1 (1988)).
The supreme court reasoned that this sentence was ambiguous, and resorted to the
legislative history of section 519.11 to discern the meaning of the sentence. Id. After
reviewing the legislative evolution of what became Minn. Stat. § 519.11, the supreme court
stated, “[t]he thrust of the bill was directed to codification of procedural fairness
requirements in the execution of a valid antenuptial contract and, with respect to nonmarital
property, to make it more difficult to subsequently challenge the validity of an antenuptial
agreement covering nonmarital property.” Id. at 264. The court explained that the
legislative history showed no hostility to antenuptial contracts addressing marital property.
Id. at 265. “To the contrary,” the court wrote, “the statute recognizes the validity of such
a contract so long as ‘it would be valid and enforceable without regard to this section.’”
Id. at 264-65. “Therefore,” the supreme court concluded, “to determine whether the
8
provisions of this contract relating to ‘after acquired’ [i.e., marital] property are valid and
enforceable, we must look to our common law for guidance.” Id. at 265. McKee-Johnson
thus decided that if an antenuptial agreement addresses marital property, its validity is
assessed under the common-law standard rather than the statutory standard.2
McKee-Johnson then reviewed Minnesota antenuptial-agreement cases decided
under common law and stated that those cases show that antenuptial agreements, “if fairly
arrived at, following full disclosure of financial condition, and with opportunity to consult
independently with counsel, have been favored in the common law of Minnesota—even
2
The dissent argues that the third sentence of Minn. Stat. § 519.11, subd. 1, operates as a
savings clause to validate agreements that would otherwise be invalid under the statute.
According to the dissent, the savings clause thus operates in one direction, toward validity:
Agreements that satisfy statutory procedural fairness would not be invalid even though
they fail common-law procedural fairness, while agreements that fail statutory procedural
fairness would not be invalid as long as they satisfy common-law procedural fairness. We
do not believe that this interpretation squares with McKee-Johnson, which, after noting that
Minn. Stat. § 519.11 did not preclude antenuptial agreements from addressing marital
property, stated that “[t]herefore” the court “must look to our common law for guidance”
regarding whether the antenuptial agreement was “valid and enforceable” regarding marital
property. McKee-Johnson, 444 N.W.2d at 265. Alternatively stated: It was because the
McKee-Johnson antenuptial agreement addressed marital property that McKee-Johnson
invoked the common law.
The dissent also argues that the “plain language” of the first sentence of Minn. Stat.
§ 519.11, subd. 1, requires application of statutory procedural fairness to all antenuptial
agreements executed after the statute’s effective date, and to do otherwise is to rewrite the
sentence or render it meaningless. But that sentence states that “an antenuptial
[agreement] . . . shall be valid and enforceable” if there was full disclosure and access to
counsel. Minn. Stat. § 519.11, subd. 1 (emphasis added). Clearly that “plain language”
does not hold, because McKee-Johnson requires evaluation of substantive fairness before
an antenuptial agreement addressing marital property is determined to be valid and
enforceable. If the first sentence of subdivision 1 applies to all antenuptial agreements,
and if that sentence is satisfied, why a court must also address the substantive fairness of
an agreement that is already valid and enforceable becomes unclear.
9
though marital property was included within their scope.” Id. The supreme court went on
to explain that the common-law standard for assessing the validity of antenuptial
agreements includes separate inquiries addressing the agreement’s procedural and
substantive fairness. Id. McKee-Johnson also stated that (a) “Minn. Stat. § 519.11 did not
alter common law rules of procedural or substantive fairness applicable to provisions
relating to the allocation of marital property;” and (b) “[t]he procedural review focuses on
determining whether at the inception the agreement was fairly procured, and, under the
common law, relevant factors to be considered are substantially identical to those which
the legislature codified in Minn. Stat. § 519.11, subd. 1 (1988).” Id.Thus, McKee-Johnson ruled that the two-part disclosure-and-access-to-counsel
standard in the first sentence of Minn. Stat. § 519.11, subd. 1, is “substantially identical”
to the common-law standard for procedural fairness. Apparently as a result of what
McKee-Johnson identified as the symmetrical requirements of the statute and the common
law for the procedural fairness of an antenuptial agreement, McKee-Johnson then stated
that “[u]nder the common law, and, as well, the statute,” procedural fairness requires full
financial disclosure and the opportunity to consult counsel. Id. at 265-66. Critical for
purposes of this appeal is the idea that, according to McKee-Johnson, both the statutory
and common-law standards for assessing the validity of an antenuptial agreement require
that the parties to that agreement have had the opportunity to consult independent counsel.3
3
Portions of McKee-Johnson arguably could be read to suggest that its assessment of the
procedural fairness of the antenuptial agreement was somehow based on the statute. See,
e.g., 444 N.W.2d at 265 (stating that “[u]nder the common law, and, as well, the statute,
10
In 2007, the supreme court decided Kinney. Because Kinney involved an
antenuptial agreement entered into in 1969, the agreement was not governed by Minn. Stat.
§ 591.11. 733 N.W.2d at 122. This court’s unpublished decision ruled the agreement in
Kinney invalid under the common law because the wife had not had the opportunity to
consult independent counsel. In re Estate of Kinney, No. A05-1794, 2006 WL 1806386,
at *3 (Minn. App. July 3, 2006), rev’d 733 N.W.2d at 120. The supreme court disagreed,
concluding that “the opportunity to consult with independent counsel is a relevant factor in
the analysis,” but it is not “a requirement for a valid antenuptial agreement under common
law.” Kinney, 733 N.W.2d at 124.
The supreme court laid out a multifactor test for assessing whether an antenuptial
agreement was equitably and fairly made:
(1) whether there was fair and full disclosure of the parties’
assets; (2) whether the agreement was supported by adequate
consideration; (3) whether both parties had knowledge of the
material particulars of the agreement and of how those
provisions impacted the parties’ rights in the absence of the
agreement; and (4) whether the agreement was procured by an
abuse of fiduciary relations, undue influence, or duress.
Id. Further, Kinney states both that (a) “[w]e hold that the opportunity to consult with
independent counsel is not a requirement, but is one of several relevant factors that courts
may consider when determining whether an antenuptial agreement is fair and equitable and
one standard relative to the procedural fairness requirement is met whenever the proponent
has established . . .”). We believe, however, that a fair reading of McKee-Johnson shows
that these references to the statute arise from what McKee-Johnson identified as the
symmetrical requirements of the statute and the common law, not any dependence on the
statute.
11
therefore enforceable under common law;” and (b) “[t]o the extent that McKee-Johnson . . .
could be read to indicate otherwise, [it is] overruled on that issue.” Id. at 125-26. Thus,
after Kinney, if the validity of an antenuptial agreement is assessed under the common law,
that agreement may be valid even if a party lacked the opportunity to consult independent
counsel.
Integrating these two supreme court decisions, we conclude that the district court,
in accordance with McKee-Johnson, should have evaluated the antenuptial agreement
under the common-law standards of procedural and substantive fairness and that Kinney
articulates the common-law standard of procedural fairness.4
4
The dissent argues that our reading of McKee-Johnson creates a potential for confusion.
The dissent asserts that, under our reading, a single antenuptial agreement addressing both
marital and nonmarital property could be subject, simultaneously, to multiple (different)
tests for determining its validity, thereby creating the possibility of inconsistent results
under those different tests. To be clear, we conclude that the validity of an antenuptial
agreement addressing marital property is determined solely by the common-law
procedural-and-substantive-fairness test, whether or not that agreement also addresses
nonmarital property.
We believe that this conclusion is compelled by the third sentence of subdivision 1 of the
statute, as that sentence was interpreted by the supreme court in McKee Johnson: That
sentence refers to antenuptial agreements that “cover[] or include[] marital property.”
Minn. Stat. § 519.11, subd. 1. After finding the sentence ambiguous, the supreme court
interpreted the sentence to require application of the common law to determine the validity
of such agreements. And, after identifying the common-law standard for procedural
fairness, which the statute “did not alter,” the supreme court ruled that the agreement in
McKee-Johnson was procedurally fair, and remanded the case to the district court for
“review of the substantive fairness of the agreement” at inception and, if necessary, its
fairness at enforcement. McKee-Johnson, 444 N.W.2d at 265, 267 (emphasis added).
Based on McKee-Johnson’s construction of the statute, there is only one test that applies
to antenuptial agreements addressing marital property, and that one test is the common-law
procedural-and-substantive-fairness test. In contrast, under the dissent’s analysis, if an
agreement including marital property fails the statutory test for procedural fairness, that
12
B. Application to this case
The district court’s order analyzed the antenuptial agreement for procedural and
substantive fairness. Regarding procedural fairness, the district court equated procedural
fairness with satisfaction of the statutory provisions of full and fair disclosure and
opportunity to consult with legal counsel, and found the agreement procedurally defective
because wife did not have a meaningful opportunity to consult counsel of her choice.
To the extent that the district court relied on the statute for the standard for
evaluating procedural fairness, the district court erred. As noted above, Kinney identifies
the common-law analysis as:
(1) whether there was fair and full disclosure of the parties’
assets; (2) whether the agreement was supported by adequate
consideration; (3) whether both parties had knowledge of the
material particulars of the agreement and of how those
provisions impacted the parties’ rights in the absence of the
agreement; and (4) whether the agreement was procured by an
abuse of fiduciary relations, undue influence, or duress.
Id. at 124. The opportunity to consult independent counsel is a relevant factor in making
that analysis. Id. at 125.
same agreement must then be analyzed under the common-law procedural fairness test,
with the possible result that the same agreement could be procedurally unfair under the
statute but procedurally fair under the common law. We believe this reading of Minn. Stat.
§ 519.11 introduces more, not less, confusion and uncertainty into the process of assessing
the validity of antenuptial agreements. We also believe it unlikely that this two-step
assessment of procedural fairness was contemplated by McKee-Johnson. According to
McKee-Johnson, the statutory procedural-fairness test and the common-law procedural-
fairness test were identical; there would have been no reason to apply the same test twice.
13
The parties agree that wife bears the burden of proving that the agreement is
invalid.5 The parties do not dispute that there was full and fair disclosure of assets. The
district court’s findings do not touch on the adequacy of consideration for the agreement.
With respect to the parties’ knowledge of the particulars of the agreement and how they
affected their rights, the district court found that wife consulted counsel but did not make
findings regarding whether wife had knowledge of provisions of the agreement and how
they impacted her rights. The record shows, however, that wife acknowledged in testimony
that her attorney explained her rights as a married person and the effect of the agreement
in the event of divorce, and wife affirmed that her attorney made no suggestions or
recommendations regarding the agreement. Finally, although the district court analyzed
the agreement under a different framework, it in essence found that the agreement was
procured by duress and, with respect to consultation with counsel, that wife’s opportunity
was not meaningful because of the short timeframe and because it was not the counsel of
her choice.
5
Kinney states:
[U]nder common law the burden of proof is on the proponent
of an antenuptial agreement when (1) the parties stand in a
confidential relationship and (2) the agreement is not supported
by adequate consideration. But when . . . the parties stand in a
confidential relationship and the district court finds that the
antenuptial agreement is supported by adequate consideration,
we conclude that under common law the burden is on the party
challenging the agreement.
733 N.W.2d at 127 (footnote omitted). Kinney also notes that “[a] confidential or fiduciary
relationship between the parties to an antenuptial agreement is usually presumed.” Id. at
124 n.7.
14
The district court based its determination that wife did not have a meaningful
opportunity to consult independent counsel on a number of facts. First, husband gave wife
the agreement only three days before the parties’ departure for the Cayman Islands for their
wedding, despite wife’s mixed reactions to the requirement of an agreement in the parties’
prior discussions. Second, the parties’ families had already paid for, and some had already
started, their travels to the wedding site. Third, husband was clear in conversations with
wife that if wife did not sign the agreement there would be no wedding, and the district
court found husband’s testimony that the agreement was negotiable not credible. Fourth,
wife tried to meet with her attorney from a previous matter but was unable to do so. Fifth,
wife was previously unaware of husband’s net worth or assets as husband had intentionally
kept financial information from her.
As found by the district court, husband “used the wedding deadline to create an
atmosphere of pressure that resulted in the [wife] not having an adequate opportunity to
negotiate any of the terms of the premarital agreement.” And the record shows that
husband did so even though he had spent a month communicating with his lawyer and
revising the agreement before presenting it to wife. The findings of fact supporting the
district court’s determination that wife was subject to coercion and duress are supported by
the record.
Certainly, the fact that wife was advised of her rights by a lawyer (even if not her
preferred lawyer) weighs in favor of validity of the agreement. However, the issue of unfair
influence or duress is also relevant, and the district court’s findings touching on that issue
are supported by the record. Under Kinney’s multifactor procedural-fairness test, we are
15
not left with the firm and definite conviction that the district court erred. See Goldman v.
Greenwood, 748 N.W.2d 279, 284 (Minn. 2008) (“Findings of fact are clearly erroneous
where an appellate court is left with the definite and firm conviction that a mistake has
been made.” (quotation omitted)). And because a lack of procedural fairness is fatal to the
validity of the agreement, we affirm the district court’s decision invalidating the antenuptial
agreement.
II. The district court did not abuse its discretion in its award of marital property.
Husband argues that the district court abused its discretion in awarding wife
$750,000 as part of its equitable division of the marital estate. The district court has broad
discretion over the division of marital property. Sirek v. Sirek, 693 N.W.2d 896, 898 (Minn.
App. 2005). We will not alter a property division “absent a clear abuse of discretion or an
erroneous application of the law,” even if we would have taken a different approach. Id.This court will affirm a district court’s division of property if that division has “an
acceptable basis in fact and principle.” Antone v. Antone, 645 N.W.2d 96, 100 (Minn.
2002).
Minn. Stat. § 518.58, subd. 1 (2016), provides that a district court “shall make a just
and equitable division of the marital property of the parties” after considering several
factors. Those factors include “the length of the marriage, any prior marriage of a party,
the age, health, station, occupation, amount and sources of income, vocational skills,
employability, estate, liabilities, needs, opportunity for future acquisition of capital assets,
and income of each party.” Id. The district court must consider the value of services
provided by either spouse “as a homemaker.” Id. Additionally, for purposes of equitable
16
division of the marital estate, “[i]t shall be conclusively presumed that each spouse made a
substantial contribution to the acquisition of income and property while they were living
together as husband and wife.” Id.The district court found that the value of the marital estate was $1,898,516. The
court found that the best evidence of the estate’s value was a December 2009 balance sheet
dated shortly before the parties separated in 2010 and signed by both parties, identifying
the parties’ assets and liabilities. From that balance sheet, the court determined the parties’
net worth. The court then subtracted from that amount the value of nonmarital assets
husband had brought to the marriage. The net result was the value of the marital estate.
Husband argues that “the best evidence of the value of the parties’ marital estate is not the
December 2009 balance sheet,” but he does not identify better evidence to determine the
marital estate’s value. We conclude that the district court’s finding is supported by the
record.
The district court also determined that in 2012, during the pendency of the divorce
proceedings, husband liquidated approximately $1.5 million in stored grain,
claiming that he lost financing and had to reduce his operation
from 3100 acres to 172, but avoided characterizing that as
income for taxes due to accelerated depreciation on equipment
that obviously used [sic] to farm ground for his father, as it was
not necessary for farming a reduced sized operation of 172
acres or so.
The district court found husband’s explanation for downsizing his farming operation in
2012 not credible and not supported by the evidence. The court concluded that husband
violated Minn. Stat. § 518.58, subd. 1a, by “transferring or disposing of marital assets not
17
in the usual course of business by liquidating $1,500,000.00 in grain in 2012 and converting
a portion of the proceeds to equipment and building, and using inputs in the sum of
$1,600,000.00 to grow, cultivate, and harvest the crops of another in 2012,” without the
consent of wife.
The district court additionally concluded that “[husband] shall pay [wife] as and for
equitable division of marital property the sum of $750,000.00.” In its memorandum
attached to its order, the court explained that wife “is entitled to half of the fraudulently
transferred or disposed of grain sales, or $750,000, as a fair and equitable division of the
marital property of the parties, and as compensation to [wife] for [husband’s] diversion of
marital assets without her permission or consent.”
While the record contains conflicting evidence as to whether husband’s 2012
conduct constituted a dissipation of marital assets, we need not decide whether the district
court’s finding of dissipation was clearly erroneous. Husband argues that the district
court’s dissipation determination was error, but he does not demonstrate how the value of
the marital estate would materially change without the dissipation determination. As
explained by the dissent, if this transaction is not dissipation, it is zero-sum, and therefore
has no effect on the value of the marital estate. As the appellant, it is husband’s burden to
demonstrate not only that the district court’s resolution of the dissipation issue was error,
but also that this error resulted in a prejudicial change to value of the marital estate. See
Minn. R. Civ. P. 61 (requiring appellate courts to ignore harmless error); Johnson v.
Johnson, 277 N.W.2d 208, 211 (Minn. 1979) (“Exactitude is not required of the [district]
18
court in the valuation of assets in a dissolution proceeding; it is only necessary that the
value arrived at lies within a reasonable range of figures.”).
The district court concluded that wife was entitled to $750,000 as a fair and
equitable division of marital assets and as compensation for husband’s diversion of assets.
We need not examine the validity of the district court’s underlying reasons for choosing
$750,000 as the exact figure if we determine that husband failed to prove that the figure
does not represent an equitable division of the marital estate. See Katz v. Katz, 408 N.W.2d
835, 839 (Minn. 1987) (“[Appellate courts] will not reverse a correct decision simply
because it is based on incorrect reasons.”). Based on the conclusive statutory presumption
that wife substantially contributed to the acquisition of income and property during the
marriage, and the district court’s findings that wife worked throughout the marriage both
on the farm and as a homemaker, we cannot conclude that a division of the marital estate
that awards wife approximately 40% of the marital estate is a clear abuse of discretion with
no basis in fact or principle.
III. The district court did not err in awarding temporary rehabilitative spousal
maintenance, but did err in determining its award of permanent spousal
maintenance.
Husband argues the district court also abused its discretion by awarding wife both
temporary rehabilitative and permanent spousal maintenance. Minn. Stat. § 518.552, subd.
2 (2016), authorizes a district court to grant maintenance to either spouse “in amounts and
for periods of time, either temporary or permanent, as the court deems just.” The statute
explicitly rejects a presumption for temporary awards, instead instructing that in the case
of “uncertainty as to the necessity of a permanent award, the court shall order a permanent
19
award leaving its order open for later modification.” Minn. Stat. § 518.552, subd. 3 (2016).
The district court “has broad discretion in deciding whether to award maintenance and
before an appellate court determines that there has been a clear abuse of that discretion, it
must determine that there must be a clearly erroneous conclusion that is against logic and
the facts on record.” Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997).
As a threshold matter, husband argues that wife waived her rights to spousal
maintenance during her testimony at the 2011 hearing on the validity of the antenuptial
agreement. However, from our review of the record, it does not appear that husband raised
this issue during the trial. Thus, the issue of waiver of spousal maintenance is not properly
before us. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (“A reviewing court
must generally consider only those issues that the record shows were presented and
considered by the [district] court in deciding the matter before it.” (quotation omitted)).6
The district court awarded wife temporary rehabilitative spousal maintenance in an
amount of $1,725 per month for the period from the parties’ separation until the court’s
order. Because five years had already passed, the monthly award was converted to a
liquidated payment of $103,500. In addition to the lump-sum rehabilitative maintenance,
the district court also awarded wife $862 per month in permanent maintenance, starting the
6
To the extent that husband believes he raised the issue to the district court, the district
court, by virtue of awarding spousal maintenance, implicitly found that wife did not waive
it, and our review of the 2011 testimony of wife would support such an implicit finding.
Wife’s 2011 testimony may be fairly read as merely acknowledging that the antenuptial
agreement, which she was contesting, included waiver of spousal maintenance, not that
wife was waiving her claim to spousal maintenance going forward, irrespective of the
agreement.
20
month of the court’s order. The court explained, “[A]lthough [wife] has established a basis
for a permanent award of maintenance, she has not demonstrated justification for the figure
asserted. The Court has awarded approximately ½ of the temporary amount, or $862.00
per month, as a permanent maintenance amount.”
There is ample evidence in the record demonstrating that the district court weighed
the appropriate statutory factors and determined that wife met her burden in demonstrating
her need for temporary rehabilitative spousal maintenance. The district court addressed
the eight factors listed in Minn. Stat. § 518.552, subd. 2(a)-(h), making specific findings
for each. For instance, regarding the statutory factor of the financial resources of the
parties, the district court found that husband “has significant financial resources due to his
successful grain farming operation, and [wife] has limited ability to meet her needs
independently.” Regarding the statutory standard-of-living factor, the district court found
“that the parties lived a high standard of living during their marriage, with living expenses
approaching $9,000 a month.” In considering the statutory factors of length of marriage
and loss of earnings, the district court found that wife “credibly testified that [husband] did
not want her working outside the home,” causing her “diminishment in some work skills
outside the farm.” Considering the statutory factors of age and the physical and emotional
condition of the spouse seeking maintenance, the district court noted that wife was “44
years old and in reasonable physical and emotional condition.” Because the district court
exercised its discretion in a manner consistent with the requirements of section 518.552,
and because the facts cited in the court’s discussion of each of the eight factors have support
21
in the record, we cannot conclude that the award of temporary rehabilitative maintenance
from 2010 through the date of the order is clearly erroneous.
With respect to the award of permanent spousal maintenance on a going-forward
basis from the date of the order, however, we conclude that the district court’s findings are
insufficient. Minn. Stat. § 518.552, subd. 1 (2016), allows a district court, in its discretion,
to award spousal maintenance if the spouse seeking maintenance:
(a) lacks sufficient property, including marital property
apportioned to the spouse, to provide for reasonable needs of
the spouse considering the standard of living established
during the marriage, especially, but not limited to, a period of
training or education, or
(b) is unable to provide adequate self-support, after
considering the standard of living established during the
marriage and all relevant circumstances, through appropriate
employment, or is the custodian of a child whose condition or
circumstances make it appropriate that the custodian not be
required to seek employment outside the home.
(Emphasis added.)
As part of the equitable distribution of the marital estate, the district court awarded
wife $750,000 in liquid assets. While a spouse is not expected to invade the principal of
investments to meet his or her monthly living expenses, Minnesota has “long recognized
that a district court must consider all income of the requesting spouse, including income
generated from marital property received in the dissolution.” Curtis v. Curtis, 887 N.W.2d
249, 252 (Minn. 2016). The district court did not include any findings indicating that it
took into consideration the income from this liquid asset in its computations of wife’s
earning potential for purposes of permanent spousal maintenance. It is therefore unclear
whether the district court took this income into account.
22
Therefore, we remand to the district court the issue of permanent spousal
maintenance with instructions to recalculate wife’s earning potential, taking into
consideration potential investment income generated from the marital property
distribution, and to adjust the permanent-spousal-maintenance award, if appropriate.
IV. The district court did not abuse its discretion in awarding attorney fees.
Finally, husband argues that the district court abused its discretion when it awarded
wife need-based attorney fees.
We review a district court’s award of need-based attorney fees for an abuse of
discretion. Gully v. Gully, 599 N.W.2d 814, 825 (Minn. 1999); but see Minn. Stat.
§ 518.14, subd. 1 (2016) (stating that the district court “shall” award need-based attorney
fees if the statutory requirements are met). A district court “shall award attorney’s fees,
costs, and disbursements in an amount necessary to enable a party to carry on or contest
the proceeding” where it finds:
(1) that the fees are necessary for the good faith
assertion of the party’s rights in the proceeding and will not
contribute unnecessarily to the length and expense of the
proceeding;
(2) that the party from whom fees, costs, and
disbursements are sought has the means to pay them; and
(3) that the party to whom fees, costs, and
disbursements are awarded does not have the means to pay
them.
Minn. Stat. § 518.14, subd. 1.
Here, the record supports the finding by the district court that wife’s attorney fees
were necessary for the good-faith assertion of her rights because wife needed to assert her
rights to custody, marital property, and spousal maintenance throughout the proceedings.
23
In addition, based on wife’s low wages and reliance on government assistance, it was not
clear error for the district court to conclude that wife could not pay her own attorney fees.
Finally, husband’s successful career as a grain farmer, with annual gross income near or
greater than $100,000 between 2009 and 2013, indicates that the district court did not err
in determining that he could pay attorney fees. As a result, the district court did not abuse
its discretion when it awarded wife $168,000 in attorney fees.
DECISION
Although the district court did not evaluate the procedural fairness of the antenuptial
agreement using the proper common-law standard, because the district court’s findings of
fact support the conclusion that the agreement is invalid under the common-law standard,
we affirm the district court’s order declaring the antenuptial agreement procedurally
invalid. We also conclude that the district court did not abuse its discretion in its equitable
division of the marital estate, its determination of temporary rehabilitative spousal
maintenance, or its award of need-based attorney fees to wife. However, we remand for
additional findings as to wife’s earning potential, taking into consideration the marital-
property division, and an adjustment of permanent maintenance, if appropriate.
Affirmed in part, reversed in part, and remanded.
24
HOOTEN, Judge (concurring in part, dissenting in part)
Because the majority’s decision ignores the plain language of Minn. Stat. § 519.11(2016) and applies a standard that creates a level of uncertainty that is contrary to
Minnesota’s long history of public policy favoring the validity of antenuptial agreements,
McKee-Johnson v. Johnson, 444 N.W.2d 259, 265 (Minn. 1989), and because the district
court erred in determining that husband dissipated assets, I respectfully dissent in part.
I.
McKee-Johnson instructs that the validity of an antenuptial agreement executed on
or after August 1, 1979, requires “a review of both the procedural and substantive fairness
of the contract.” 444 N.W.2d at 265. Generally, when the legislature acts to modify the
common law, a court interpreting the resulting statute should not assume that the legislature
intended to modify the common law “any further than that which is expressly declared or
clearly indicated.” Do v. Am. Family Mut. Ins. Co., 779 N.W.2d 853, 858 (Minn. 2010)
(quotation omitted). After an extensive review of the legislative history of section 519.11,
McKee-Johnson determined that the statute addresses only procedural fairness. 444
N.W.2d at 264 (“The purpose of the bill was codification of procedural fairness
requirements precedent to the execution of a valid antenuptial agreement.”). As recognized
by the court in McKee-Johnson, the statute does not address substantive fairness of the
terms of an antenuptial agreement, which must be analyzed under common law principles
of contract.1
1
The supreme court specifically identified unconscionability as the appropriate standard
for substantive fairness review, determining that such a standard “affords proper weight to
C/D-1
“The goal of statutory interpretation is to effectuate the intent of the [l]egislature.”
Staab v. Diocese of St. Cloud, 853 N.W.2d 713, 716 (Minn. 2014). If that intent is clear
from the unambiguous language of the statute, we apply the statute according to its plain
meaning. Id. at 716–17. In the absence of ambiguity, “statutory construction is neither
necessary nor permitted.” Am. Tower, L.P. v. City of Grant, 636 N.W.2d 309, 312 (Minn.
2001). Appellate courts may not “rewrite a statute under the guise of statutory
interpretation.” Laase v. 2007 Chevrolet Tahoe, 776 N.W.2d 431, 438 (Minn. 2009).
The first sentence of Minn. Stat. § 519.11, subd. 1, provides that an antenuptial
agreement executed on or after August 1, 1979, “shall be valid and enforceable if there is
. . . a full and fair disclosure of the earnings and property of each party” and “the parties
have had an opportunity to consult with legal counsel of their own choice.” There is no
language in this first sentence that limits its application to antenuptial agreements
governing nonmarital property or excludes antenuptial agreements governing marital
property from the scope of the statute.
Rather, the expansive nature of the statute—and its application to all antenuptial
agreements—is further illustrated by the third sentence of the statute, which provides, “This
section shall not be construed to make invalid or unenforceable any antenuptial agreement
or settlement made and executed in conformity with this section because the agreement or
settlement covers or includes marital property, if the agreement or settlement would be
valid and enforceable without regard to this section.” (Emphasis added). As indicated by
the freedom of contract concept by indication that mere or slight unfairness or one-
sidedness is insufficient to justify invalidation.” Id. at 267 n.7.
C/D-2
the emphasized language in the first clause, this sentence operates as a savings provision
that a court should only turn to in circumstances where the statute would otherwise
invalidate an antenuptial agreement—when the circumstances underlying the execution of
the agreement fail to conform to the disclosure-and-access-to-counsel standard in the first
sentence. As is clear from the plain language of the statute, when the statutory
requirements of procedural fairness are not met, a court must apply the common law to
determine the procedural fairness of an antenuptial agreement.
Nothing in McKee-Johnson undermines this reading of the plain language of the
statute. In order to understand the supreme court’s decision in McKee-Johnson, it must be
read in context with this court’s decision in that case. In McKee-Johnson, this court held
that section 519.11 operated to void provisions of antenuptial agreements addressing
marital property. 429 N.W.2d 689, 693–94 (Minn. App. 1988). The supreme court rejected
that legal premise and vacated this court’s opinion. 444 N.W.2d at 261, 264–65. In so
doing, the supreme court highlighted the public policy in favor of enforcement of
antenuptial agreements, including agreements containing provisions relating to marital
property, both under the common law and in the legislative history of section 519.11. Id
at 264–65. In reaction to this court’s opinion, the supreme court answered the question of
whether the provisions of an antenuptial agreement relating to marital property are void as
a matter of law, but did not directly address the question presented in this case: whether
the procedural fairness of provisions relating to marital property are evaluated under the
disclosure-and-access-to-counsel standard provided by the statute or under the common
law.
C/D-3
The supreme court did not decide this issue because it believed that the factors to be
evaluated under the statute and under the common law were “substantially identical” and
that the statute embodied the common law.2 Id. at 265. In determining that the provisions
of the antenuptial agreement governing marital property were executed in a manner that
was procedurally fair, the supreme court considered whether there was full financial
disclosure between the parties and whether the parties each had access to advice from
independent counsel, the same factors that are provided by section 519.11. Id. at 265–66.
Importantly, contrary to the position of the majority, the supreme court, by applying the
two statutory factors, did not hold that only the common law applies when determining
whether the provisions of an antenuptial agreement relating to marital property are
executed in a procedurally fair manner.
The majority notes that the supreme court stated that “to determine whether the
provisions of this contract relating to ‘after acquired’ property are valid and enforceable,
we must look to our common law for guidance.” Id. at 265. The majority is mistaken in
believing that this quote reflects the holding of the case; if this were the holding, the
supreme court would not have addressed the issue of whether the criteria for evaluating
procedural fairness were identical under the statute and the common law. Two of the
2
Unlike in the instant case, where there is no dispute that wife consulted with independent
counsel of her own choosing, there was a question as to whether the wife in McKee-
Johnson had “an opportunity” to consult with independent counsel. By deciding that there
was no difference in the statutory and common law requirements of procedural fairness,
the supreme court, by simply holding that she waived her opportunity to consult with
counsel, did not need to address the issue of whether it was proceeding under the first
sentence or the third sentence of the statute in determining whether the antenuptial
agreement was procedurally fair.
C/D-4
supreme court’s syllabi points set forth its holding in McKee-Johnson: (1) “[p]rovisions in
an antenuptial agreement [are] not void and unenforceable as a matter of law solely because
they relate[] to distribution of marital property upon termination of the marriage”; and
(2) “[an] [a]ntenuptial agreement voluntarily entered into by competent adult parties
following full financial disclosure and opportunity to consult with independent counsel
[meets] common law and statutory standards of procedural fairness.” Id. at 260.
The quote relied on by the majority must be read within the context of the issue that
was presented to the court, i.e., whether the provisions of an antenuptial agreement entered
into after the enactment of section 519.11 purporting to address marital property were void
as a matter of law. In response to that issue, the supreme court explained immediately
following the quote that such antenuptial agreements were valid even under the common
law, as long as they were procedurally fair. Id. at 265.
The majority’s reading of section 519.11 and the supreme court’s decision in
McKee-Johnson, requiring that the procedural fairness of provisions of an antenuptial
agreement relating to marital property be evaluated under the common law, implicates
three possible analyses. One possible analysis is that the statute governs nonmarital
property, while the multifactor balancing test from the common law as provided in In re
Estate of Kinney, 733 N.W.2d 118, 124 (Minn. 2007), governs marital property, creating
two separate standards governing procedural fairness for a court to apply if the agreement
contains both marital and nonmarital property. Under such an analysis, it would be
possible for a court, evaluating the same circumstances surrounding the creation and
execution of the same agreement, to determine that a spouse had been afforded procedural
C/D-5
fairness regarding the provisions of the agreement relating to nonmarital property but not
those relating to marital property, or vice versa. This standard for determining procedural
fairness could lead to illogical results, and would be unnecessarily confusing and
unworkable.
Another possible analysis indicated by the majority’s interpretation of section
519.11 and McKee-Johnson is that the common law applies in evaluating the procedural
fairness of the agreement, regardless of whether the agreement addresses marital property,
nonmarital property, or both. However, such an analysis would render the statute’s decree
that an antenuptial contract “shall be valid” as long as there was disclosure and access to
counsel meaningless, eviscerating the statute and violating the statutory provision that in
determining legislative intent courts are to presume that the legislature intended “the entire
statute to be effective and certain.” Minn. Stat. § 645.17(2) (2016).
This analysis would also be an absurd reading of McKee-Johnson, as that decision
did not address nonmarital property. 444 N.W.2d at 262 n.2. The McKee-Johnson court
noted that “[t]he thrust of the bill [that became section 519.11] was . . . to make it more
difficult to subsequently challenge the validity of an antenuptial agreement covering
nonmarital property.”3 Id. at 264. There is nothing in McKee-Johnson that dictates the
application of the common law to all antenuptial agreements, even those containing only
provisions addressing nonmarital property, to the exclusion of the application of the statute.
3
Though recognizing that part of the “thrust of the bill” related to nonmarital property, the
supreme court “[found] nothing in the legislative history which indicates that the statute
was hostile towards agreements which contained provisions relative to the disposition of
marital property.” Id. at 264.
C/D-6
In fact, as indicated by the McKee-Johnson court’s examination of the legislative history,
the legislature specifically intended that section 519.11 govern the procedural fairness
analysis of agreements pertaining to nonmarital property. Id.
A third possible analysis, apparently adopted by the majority, is that the common
law applies to all of the provisions in an antenuptial agreement if the agreement contains
any provision addressing marital property. However, this analysis suffers from many of
the same flaws as the previous analyses. Such an analysis rewrites the statute to say that
“an antenuptial contract that does not contain any provisions addressing marital property”
shall be valid if the disclosure-and-access-to-counsel standard is met. As described above,
nothing in McKee-Johnson indicates that the supreme court interpreted the statute to
require that the common law be consulted to determine the procedural fairness of any
antenuptial agreement addressing marital property, much less provisions of an antenuptial
agreement pertaining to nonmarital property. Furthermore, this analysis would also
eviscerate section 519.11, as the statute would only apply to antenuptial agreements solely
addressing nonmarital property. Such agreements are likely uncommon, given that
nonmarital property owned by one spouse is generally not awarded to the other spouse.
See Minn. Stat. § 518.58, subd. 1, 2 (2016) (providing that, while a district court “shall
make a just and equitable division of the marital property,” a district court may only
apportion up to one-half of a spouse’s nonmarital property to the other spouse if the
spouse’s resources or property, including the spouse’s portion of the marital property, “are
so inadequate as to work an unfair hardship”).
C/D-7
Any of the analyses implicated by the majority’s reading of the statute and McKee-
Johnson would invite parties to litigate every antenuptial agreement addressing marital
property, in contravention of the legislature’s intent in enacting the statute. As stated
above, “[t]he goal of statutory interpretation is to effectuate the intent of the [l]egislature.”
Staab, 853 N.W.2d at 716. Given the long history of public policy in Minnesota favoring
the enforceability of antenuptial agreements covering both marital and nonmarital
property,4 I cannot support an interpretation of section 519.11 that implies the legislature
intended to create this level of uncertainty for attorneys, courts, and most importantly,
couples preparing for marriage.
The statutory interpretation adopted by the majority effectively eviscerates or
rewrites the first sentence of the statute. Because we may not “rewrite a statute under the
guise of statutory interpretation,” Laase, 776 N.W.2d at 438, I would apply the statute as
written. As dictated by the plain language of the statute, I would apply the procedural
fairness standard in the first sentence of section 519.11 to all antenuptial agreements
executed on or after August 1, 1979. I would only resort to the common law when the
third sentence of the statute is invoked—when application of the first sentence would
otherwise invalidate an agreement.
4
See McKee-Johnson, 444 N.W.2d at 265 (stating, after extensive review of cases, that
“premarital agreements, if fairly arrived at, following full disclosure of financial condition,
and with opportunity to consult independently with counsel, have been favored in the
common law of Minnesota—even though marital property was included within their
scope”).
C/D-8
Applying the statutory procedural fairness standard to all antenuptial agreements,
regardless of the type of property covered, affords a higher degree of certainty to both
parties seeking to structure their financial affairs in advance of their marriage and the
attorneys who advise them. See Minn. Stat. § 645.17 (2) (providing that courts should
assume legislature intends statutes to be “effective and certain”). It also offers a much
easier standard for courts to apply in evaluating the procedural fairness of antenuptial
agreements and discourages speculative litigation. Finally, this interpretation avoids the
possibility of unreasonable and inconsistent results, such as would result from the
application of two different standards regarding the procedural fairness of an antenuptial
agreement. See id. (1) (2016) (providing that courts should assume legislature does not
intend results that are unreasonable).
Because the district court considered factors other than those required by section
519.11 and the undisputed facts of this case demonstrate that the antenuptial agreement
meets the requirements of section 519.11, I would reverse the district court’s determination
that this antenuptial agreement was executed in a procedurally unfair manner. Further,
because substantive fairness of an antenuptial agreement must be evaluated based on the
terms of the agreement and the district court did not consider the terms when it found the
agreement was substantively unfair, I would reverse the district court’s substantive fairness
determination and remand with instructions to evaluate the agreement’s terms and enforce
the terms that are substantively fair.
C/D-9
I.
I also cannot concur with the majority’s decision to affirm the district court’s
equitable division of property because the district court erred in determining that husband
dissipated assets during the divorce proceedings.
Minn. Stat. § 518.58, subd. 1a (2016) provides that:
If the court finds that a party to a marriage, without consent of
the other party, has in contemplation of commencing, or during
the pendency of, the current dissolution . . . disposed of marital
assets except in the usual course of business or for the
necessities of life, the court shall compensate the other party
by placing both parties in the same position that they would
have been in had the . . . disposal not occurred.
Here, the district court made a factual finding that in 2012 husband “liquidated his crop
inventory,” which was worth approximately $1.5 million, and with the proceeds “paid off
his operating loan, and converted the balance of the proceeds to new equipment, which he
used to farm the same property with his father being the farmer of record.” Based on this
finding, the district court concluded that the liquidation of stored crops was a dissipation
of marital assets and that wife was “entitled to half of the fraudulently transferred or
disposed of grain sales, or $750,000, as a fair and equitable division of the marital property
of the parties, and as compensation . . . for [husband’s] diversion of marital assets.”
We have defined dissipation as “frivolous, unjustified spending of marital assets.”
Volesky v. Volesky, 412 N.W.2d 750, 752 (Minn. App. 1987). The statute exempts
spending “in the usual course of business.” Minn. Stat. § 518.58, subd. 1a. Thus, to the
extent that husband used the proceeds from the sales of an asset from the farm operation to
C/D-10
pay off the liabilities of the farm operation or to purchase equipment or farm inputs5 owned
by the farm operation, I see this as a zero-sum transaction, which has no effect on the
overall net value of the farm operation. See Bollenbach v. Bollenbach, 285 Minn. 418,
435, 175 N.W.2d 148, 159 (1970) (“If the transaction is to be overlooked for purposes of
establishing defendant’s net worth, both asset and liability must be deleted to avoid
punitive consequences.”).
However, the district court also made findings of fact that husband used some of the
proceeds of the 2012 crop liquidation to purchase farm inputs that were then provided to
his father without compensation. While use of the proceeds of the 2012 crop liquidation
that were used to pay legitimate farm debts or used to purchase equipment owned or farm
inputs utilized by the farm operation was not a dissipation of marital assets, to the extent
that those proceeds were used to purchase farm inputs that were expended by appellant to
farm his father’s land without compensation, those expenditures were a dissipation of
marital assets.
While it is true that a district court is not required to be exact in its valuation of the
marital estate, Johnson v. Johnson, 277 N.W.2d 208, 211 (Minn. 1979), it is impossible to
determine from the district court’s findings what effect its error in determining dissipation
had on the valuation of the marital estate. Therefore, even if I agreed with the majority
that the antenuptial agreement was invalid, I would nevertheless reverse the district court’s
5
According to wife’s expert, farm inputs include seeds, fertilizer, pesticides, and other
consumable products that are essential in any farm operation.
C/D-11
property division and remand for a recalculation and equitable division of the marital
estate.
III.
Assuming arguendo that the district court properly determined that the antenuptial
agreement is invalid, I concur with the majority’s conclusions regarding spousal
maintenance. Regardless of the validity of the antenuptial agreement, I concur with the
majority’s conclusion regarding need-based attorney fees.
C/D-12