Opinion
No. C1-96-85.
Filed September 3, 1996.
Appeal from the District Court, Chisago County, File No. FX-94-1123.
Robert J. Lawton, (for Respondent)
William P. Kaszynski, (for Appellant)
Considered and decided by Norton, Presiding Judge, Schumacher, Judge, and Harten, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § subd. 3 (1994).
UNPUBLISHED OPINION
Appellant challenges the trial court's pretrial denial of her motion for a continuance, the denial of her motion for a new trial, the distribution of marital and nonmarital property, and the refusal to award her spousal maintenance and attorney fees. We affirm.
DECISION 1.
Appellant contends that the trial court abused its discretion by denying her motion for a continuance. The trial court's decision to deny a continuance is discretionary; this court will not reverse that decision "absent a showing of clear abuse of discretion." Dunshee v. Douglas , 255 N.W.2d 42, 45 (Minn. 1977).
First, the trial court did not abuse its discretion in denying a continuance for respondent's failure to provide tax returns and bank statements. He testified these documents were no longer in his possession, and he had previously offered to sign authorizations to allow appellant to obtain them, but appellant did not seek discovery by this alternative means.
Second, appellant claims the court should have granted her a continuance, because respondent failed to disclose a $50,000 promissory note in a timely fashion. At trial, appellant maintained the promissory note was a fraud and respondent testified to its validity and explained how the $50,000 was spent for the construction of the parties' homestead. After trial, the court appointed a handwriting expert who determined that the signature on the note was appellant's. Appellant was not prejudiced by the alleged untimely production of a promissory note that she herself had signed three years before. See Minn.R.Civ.P.(court disregards harmless error),
Finally, appellant argued for a continuance because respondent had not provided her with witness and document lists in a timely manner. Respondent's attorney explained to the trial court that, two weeks prior to trial, he provided appellant's attorney with all the documents respondent intended to introduce at trial. The trial court accepted this explanation. The court also determined that appellant was on notice that at least respondent would testify on his behalf at trial. Respondent testified and did not call other witnesses. The court properly concluded that there could be no harm to appellant from respondent's failure to provide a witness list if he called no other witness than himself at trial.
For these reasons, we hold that the trial court did not abuse its discretion in denying appellant's motion for a continuance.
2. trial
Appellant moved for a new trial under Minn.R.Civ.P. 59.01(a), (b), (c), (e) and (f). The decision to grant a new trial rests within the sound discretion of the trial court; this court will disturb that decision only when the trial court's exercise of discretion constitutes a clear abuse, or when the trial court exercises no discretion and bases its order on an error of law. Halla Nursery v. Baumann-Furrie Co. , 454 N.W.2d 905, 910 (Minn. 1990).
First, appellant sought a new trial on grounds of "[i]rregularity in the proceedings of the court *or prevailing party *Minn.R.Civ.P. 59.01 (a), because respondent failed to provide discovery and did not file witness/document lists prior to trial. This issue duplicates appellant's argument for a continuance and for similar reasons must fail.
Second, appellant sought a new trial based on "[m]isconduct of the *prevailing party." Minn.R.Civ.P. 59.01(b). She claimed that respondent destroyed documents and alleged that his attorney failed "to cooperate to any reasonable degree." This second basis appears to refer to appellant's allegation that her real estate appraiser was denied access to the homestead. But, as the trial court found, appellant improperly made this allegation for the first time in her posttrial motion for a new trial. See Minnesota Mut. Fire Cas. Co. v. Retrum , 456 N.W.2d 719, 723 (Minn.App. 1990) (trial court did not abuse its discretion in denying motion for a new trial based on party's new theory and new factual argument). Further, as the trial court noted, even though appellant moved before trial on other discovery issues, she did not move before trial to compel respondent to cooperate with her appraiser. The trial court did not abuse its discretion here.
The trial court explained that it refused to grant a new trial on the basis of destruction of documents because:
[Appellant] has failed to establish what documents were allegedly destroyed by [respondent], or the relevance of those documents, or how [appellant] was prejudiced thereby.
As noted previously, appellant had alternative means to obtain discovery, but failed to exercise them. Instead, she sought discovery only from one source, respondent, who testified at trial that he provided everything in his possession. On this record, the trial court did not abuse its discretion in refusing to grant a new trial on the ground of misconduct.
Third, appellant sought a new trial on grounds of "[a]ccident or surprise," Minn.R.Civ.P. 59.01(c), because respondent provided her with a copy of the promissory note only two weeks prior to trial. The posttrial handwriting analysis showing that appellant signed the promissory note in 1992 undermines her claim of surprise. Rule 59.01(c) applies only to "surprise which could not have been prevented by ordinary prudence." The trial court did not abuse its discretion when it refused to order a new trial on appellant's claim of surprise.
Fourth, appellant contends the trial court should have granted a new trial on grounds of "[e]xcessive or insufficient damages," Minn.R.Civ.P. 59.01(e), because the trial court awarded respondent all the real property. Assuming this provision may even be applicable in a dissolution proceeding, we disagree. The court actually awarded an unequal distribution of property in appellant's favor.
Finally, appellant sought a new trial on the basis of erroneous evidentiary rulings. See Minn.R.Civ.P. 59.01(f) (listing "[e]rrors of law occurring at the trial, and objected to at the time" as ground for new trial). She cites seven instances where she alleges the trial court erred in evidentiary rulings. "Entitlement to a new trial on the grounds of improper evidentiary rulings rests upon the complaining party's ability to demonstrate prejudicial error." Uselman v. Uselman , 464 N.W.2d 130, 138 (Minn. 1990). Appellant has failed to explain the basis for her claims of error, other than to make the following statement:
The trial court made many erroneous evidentiary rulings at trial during testimony of Appellant's witnesses on vital issues of her case. For example, the trial court consistently ruled as `hearsay' statements of [respondent] offered by witnesses on issues such as [respondent's] destruction of documents (T-214), circumstances surrounding the parties' purchase of [the double home] (T-187, 199), and made other clearly erroneous rulings at trial (T-178, 190, 270, 283) which prevented Appellant from having a fair trial.
Appellant failed to address the issue of how the alleged errors in evidentiary rulings prejudiced her. Further, we have reviewed each allegation and fail to see where error occurred.
We hold that the trial court did not abuse its discretion in denying appellant's motion for a new trial.
3.
Appellant has briefly outlined numerous errors she claims the trial court made in its valuation and division of marital and nonmarital property. The gravamen of her claim is that the trial court erred in its valuation of property and in awarding to respondent all real property (the double home and the parties' homestead).
The trial court has broad discretion in dividing marital property; the appellate court will not overturn the trial court's division of property absent a "clear abuse" of that discretion. Aaron v. Aaron , 281 N.W.2d 150, 152 (Minn. 1979). The trial court's conclusions regarding property division must be "against logic and the facts on record before this court will find that the trial court abused its discretion." Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984). We need not defer to the trial court's legal conclusions regarding the characterization of property as marital or nonmarital, but we must affirm the trial court's findings of facts supporting its conclusions unless the findings are clearly erroneous. Freking v. Freking , 479 N.W.2d 736, 739 (Minn.App. 1992). We will not reverse a trial court's valuation of property unless it is "clearly erroneous on the record as a whole." Hertz v. Hertz , 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975).
a.home
Appellant contends that the trial court erred in finding that respondent had a nonmarital interest in the double home, bought in 1988, two years prior to the parties' marriage. We disagree. We also disagree with her claim that respondent bears the burden to demonstrate a nonmarital interest in the double home. The statute provides a presumption that property acquired during the marriage is marital. Minn. Stat. § 518.54, subd. 5 (1994). The double home does not fall within the statutory presumption of marital property because respondent acquired it in 1988, prior to the parties' marriage. The statute defines nonmarital property, in part, as property that "is acquired before the marriage" or "is acquired in exchange for or is the increase in value" of property acquired before the marriage. Id.
Appellant argues the trial court erred when it found that the premarital increase in value of the double home was exclusively a nonmarital interest for respondent. She cites Andersen v. Andersen , 374 N.W.2d 499, 502 (Minn.App. 1985). But that case ordered a division of the equity in husband's homestead that he owned prior to the marriage, because the increase in equity was not solely attributable to inflation. Id. In contrast, the trial court here found the increase in value was attributed solely to inflation, explaining:
The parties jointly resided at 1080 Regency commencing April, 1988. They provided general maintenance for the properties and did painting and carpeting of said properties. There were no capital improvements made on said property. * [T]he increase over the purchase price is due solely to inflation over the 7 years [respondent] has owned the properties. The total appreciation for each property is thus $2,100, or $300 per year, pro-rated. For the 5 years the parties have been married, the pro-rated appreciation is $1,500 per property.
The record and law supports the trial court's determination of the marital and nonmarital values of this property. Further, appellant's claim that the trial court gave her no credit for premarital contribution is without merit. The court found that the parties had reduced the mortgage by $1,800 for each home since 1988. The court attributed the premarital reduction in principle as joint equity, rather than characterizing it as a nonmarital interest exclusively for respondent.
b. Note and loan due respondent's parents.
Appellant argues that the trial court should not have deducted from the equity in the double home the $14,000 downpayment respondent borrowed from his parents to purchase the property. She also contends that the court should not have deducted the $50,000 note payable to respondent's parents from the value of the parties' homestead. She contends that, in doing so, the trial court failed to follow cases holding that the court should not give consideration to loans to third parties, particularly family members, where no evidence shows an intent to collect such loans. She cites Wehner v. Wehner , 374 N.W.2d 569, 572 (Minn.App. 1985). But Wehner affirmed a division of property where the trial court had found that a creditor would not be actively enforcing the obligation. Id. The trial court here made no such finding and this court cannot do so on the conflicting facts contained in the record. See Sefkow v. Sefkow , 427 N.W.2d 203, 210 (Minn. 1988) (appellate court must defer to trial court's determination of credibility of witnesses and its weighing of evidence). The trial court did not clearly err when it reduced the equity in the double home and the homestead by the amount of unpaid loans due respondent's parents.
c. Baby Bumpers
Appellant contends the trial court, "on its own motion, decided that the Baby Bumper business was a marital asset subject to division." To the contrary, the record shows that valuation and distribution of this asset was a contested issue at trial. Appellant also challenges the valuation of this asset.
Respondent's counsel elicited testimony regarding valuation of this business when he cross-examined Jori Danna, appellant's partner in this business. Danna explained the nature of the business, testified that she and appellant were equal partners in the business, and stated that she believed that the business would sell for $50,000. After calculating a deduction of her initial investment of $14,000, Danna testified that appellant's interest in the business was worth $17,500. Appellant offered no testimony or evidence to contradict this business valuation. This record supports the trial court's finding that the value of the Baby Bumper business is $50,000, with appellant's interest at $17,500.
Appellant contends respondent stipulated that he would make no claim to Baby Bumpers. But, while respondent initially offered this stipulation at the beginning of Danna's testimony, he withdrew the offer when appellant failed to accept it. His counsel then elicited testimony regarding the value of the business.
Appellant claims the trial court erred in attributing the entire value of Baby Bumpers as a marital asset where testimony demonstrates that she and Danna started the business prior to the parties' marriage. This argument fails for two reasons. First, the record contains no evidence from which the trial court could have determined the business had a premarital value. Second, the record contains conflicting evidence regarding when appellant and Danna started the business. According to Danna's testimony, she and appellant started the business in 1990, the same year the parties were married.
Finally, noting the illiquidity of the Baby Bumper business, the trial court ordered an unequal division of property in appellant's favor, awarding her property with net equity of $19,500 and awarding respondent property with net equity of $12,077. The court also noted that if respondent had to sell the homestead, a result the court considered likely to occur, respondent would incur sales costs that would exceed the combined net equity of the homestead and the double home, making the property division even more disproportionate in favor of appellant.
On this record, appellant has failed to demonstrate the trial court abused its discretion in its valuation and division of property.
4.maintenance
Appellant argues that the trial court committed reversible error when it refused to grant her an award of temporary spousal maintenance. We disagree.
The trial court has "wide discretion" when determining an award of spousal maintenance. Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982) We examine the trial court's discretion "in light of the controlling statutory guidelines contained in Minn. Stat. § 518.552" and will not reverse the trial court's decision absent an abuse of that discretion. Id . We must uphold findings of fact concerning spousal maintenance unless they are clearly erroneous. Gessner v. Gessner , 487 N.W.2d 921, 923 (Minn.App. 1992).
Appellant contends that abuse of discretion occurred here when the trial court did not make detailed findings of all factors under Minn. Stat. § 518.552 (1994). This argument is without merit. First, the statute does not require the court to make detailed findings on all factors when determining an award of spousal maintenance. See Minn. Stat. § subd. 2 (court to calculate maintenance "after considering all relevant factors" from nonexclusive list of eight factors contained in statute). Second, the trial court's findings demonstrate that it considered the relevant factors of appellant's young age, the relative short duration of the marriage, appellant's work history, the fact that she has improved her employability by obtaining a high school equivalency decree after the parties were married, the fact that there were no children born to the parties' marriage, and the fact that respondent did not have the ability to pay maintenance, because his monthly needs exceed his monthly net income. See id. (listing factors). Appellant has failed to demonstrate an abuse of discretion occurred when the trial court denied her request for an award of temporary spousal maintenance.
5.fees.
Finally, appellant claims the trial court abused its discretion when it denied her request for an award of bad faith attorney fees. See Minn. Stat. § 518.14, subd. 1 (1994) (court has discretion to award fees, costs, and disbursements "against a party who unreasonably contributes to the length or expense of the proceeding"). We will not upset an award of attorney fees based on Minn. Stat. § 518.14 absent an abuse of the court's discretion. Katz v. Katz , 408 N.W.2d 835, 840 (Minn. 1987)
Appellant claims she is entitled to fees, because respondent attempted to evict her from the double home during the pendency of these proceedings even though she had a right to be there. But, as the trial court stated at trial when it prohibited appellant from submitting evidence on this claim, appellant should have sought attorney fees in the unlawful detainer action appellant brought against her, not in the dissolution proceeding.
Appellant also claims that respondent's discovery responses, or lack thereof, form the basis for an award of attorney fees. But the record shows that appellant served her request for discovery just three days prior to respondent's first deposition. Her failure to request timely discovery prior to that deposition, rather than any action of respondent, was at least part of the cause of her need for a second deposition. Further, respondent provided his discovery responses approximately 60 days after appellant served the request for production. He testified at trial that he provided all requested documents in his possession. The trial court's refusal to order bad faith fees on this record does not constitute an abuse of discretion.