Opinion
No. C1-00-1713.
Filed May 29, 2001.
Appeal from the District Court, Pennington County, File No. F399885.
Jeffrey S. Remick, (for appellant)
Michael L. Jorgenson, (for respondent)
Considered and decided by Shumaker, Presiding Judge, Randall, Judge, and Peterson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
In a dissolution appeal, appellant Roger John Hoffman alleges the district court (1) failed to make the approximately equal distribution of property it intended to make and failed to make findings explaining its distribution of the property; (2) clearly erred in valuing various items of property; and (3) failed to adequately address appellant's nonmarital interests in certain real property. We affirm in part, reverse in part, and remand.
FACTS
The parties were divorced pursuant to Findings of Fact, Conclusions of Law, Order for Judgment, and Judgment and Decree dated August 24, 2000. The district court attempted to divide the parties' assets and liabilities nearly equally. The parties owned five parcels of real property, but only dispute the district court's division of two of the parcels, parcels A and B. Parcel B was owned by appellant before the marriage. Appellant contended that, based on a real estate appraisal current at the time of trial, Parcel A had a value of $108,500, while Parcel B had a value of $127,500. Respondent testified that Parcel A had a value of $135,000 and Parcel B had a value of $150,000. The district court stated in its findings of fact:
[Parcel A] was purchased on March 18, 1987 for $27,800.00. The current assessed valuation is $110,400. The Court finds the reasonable value of the property to be $121,500.00.
The current assessed valuation of [Parcel B] is $150,000.00. The Court finds the reasonable value of the property to be $150,000.00. This property is non-marital. Parcels A and B are currently mortgaged to Farm Credit Services with a current balance owing of $100,880.00. During the marriage relationship, $49,120.00 was paid on this debt. The net marital equity of the [appellant] in A and B above is $195,180.00.
The parties also dispute the value of a deferred compensation plan owned by respondent. An account statement dated June 30, 1999 valued the plan at $89,538.60 and another account statement dated March 31, 2000 valued the plan at $130,433. Respondent testified that the plan had a value of $123,000 on the date of trial. The district court assigned a value of $112,000 to the plan.
The court also found that the parties owned a plasma cutter and a John Deere lawnmower, and divided those items of personal property. After appellant testified that the plasma cutter had been sold at auction several years earlier, the court assigned it a value of $5,000 and awarded it to appellant. The court assigned a value of $3,500 to the John Deere lawnmower and awarded it to appellant. However, the lawnmower turned out to be stored at respondent's home in Thief River Falls, and the court awarded respondent all the marital property located at her home.
DECISION I. Valuation of Parcels A and B
Appellant argues that the district court improperly valued Parcels A and B. The district court has broad discretion with respect to the division of property. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984). For the reviewing court to conclude that the district court abused its discretion, the district court's fact-findings must be "against all logic and the facts on [the] record." Id. (citation omitted). A district court's method of valuation will be affirmed if it "has an acceptable basis in fact and principle even though [an appellate court] may have taken a different approach." Balogh v. Balogh, 356 N.W.2d 307, 312 (Minn.App. 1984). Valuations by the district court are sustained if they fall within the limits of credible estimates by competent witnesses. Hertz v. Hertz, 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975).
A. Parcel A
Appellant valued Parcel A at $108,500 based on a Complete Summary Appraisal Report. Respondent valued Parcel A at $135,000 based on the sales price of neighboring property, her own experience in shopping for similar real estate, and her own knowledge of the condition of the property. The district court adopted a value of $121,500.
Appellant argues that the district court should have deferred to his valuation of the Parcel A because it was based on an appraisal, while no expert testified to respondent's estimated value. First, respondent was not obligated to hire an expert on the issue of property values. Parties to dissolutions who are owners of real estate are presumptively knowledgeable about the property's value. Ferguson v. Ferguson, 357 N.W.2d 104, 107 (Minn.App. 1984) (citing Lehman v. Hansord Pontiac Co., Inc., 246 Minn. 1, 6, 74 N.W.2d 305, 309 (1955)). The district court's valuation of Parcel A fell within the range of values testified to at trial, and is supported by the record. We conclude the district court did not err when valuing Parcel A at $121,500.
Appellant did have an appraiser, but the appraiser did not testify at trial. Only the appraisal report went into evidence for whatever value the court would assign to it.
B. Parcel B
Parcel B contains two subparcels. One of the two subparcels is a ten-acre shop site (hereinafter "shop site") valued at approximately $10,000, and the other subparcel is a piece of property previously sold on a contract for deed (hereinafter "Horachek site") valued at approximately $14,500. Appellant assigned a value of $127,500 to Parcel B based on the Complete Summary Appraisal Report, which did not include the Horachek contract for deed. Respondent valued the property at $150,000, based on certain factors. First, a financial statement prepared by the parties on December 31, 1993 valued Parcel B at $149,900. Second, the parties paid $150,000 to FMHA in 1994 to have the agency release a lien it had on the property.
Respondent valued Parcel B based on her opinion of its value after "shopping the market" and a financial statement prepared by the parties in 1993. There is no direct evidence in the record to suggest that respondent valued the shop or Horachek site separately from Parcel B. In her testimony regarding her valuation of Parcel B, respondent was asked: "[T]he value of that shop site though is incorporated into your value of his alleged premarital property; is that correct?", to which respondent answered in the affirmative. However, there is no testimony to indicate whether respondent also included the value of the Horachek site in her valuation of Parcel B. In the 1993 financial statement valuing Parcel B at $149,900, there is no specific mention of either the shop site or the Horachek site.
When selecting a value for Parcel B, the court used the respondent's estimated value of $150,000. Based on the facts before the district court, it had a reasonable basis to assign a value of $150,000 to the property. We affirm the district court's valuation of Parcel B.
C. Net-Marital Equity
The district court found the values of Parcels A and B to be $121,500 and $150,000, respectively, for a total value of $271,500. The court subtracted a mortgage balance on Parcels A and B of $100,880. Appellant argues that $271,500 minus the mortgage of $100,880 leaves a net-marital equity in the two Parcels of $170,620. Appellant's math is correct. The district court found the net-marital equity to be $195,180. Appellant contends that this is a mathematical mistake on the part of the district court and must be reversed and remanded for correction. Respondent argues that the difference between the two figures can be explained by adding in the two subparcels, the shop site and the Horachek site, to the value of Parcel B. Respondent contends that even though the two subparcels are part of Parcel B, they were valued separately from Parcel B. The ten-acre shop site has an estimated value of $10,000. The Horachek site has a remaining contract for deed balance owing to the parties of $14,500. When these two subparcel values are added to the appellant's net-equity calculation of $170,620, the net equity of the Parcels A and B increases to $195,120, which is only a $60 variance from the court's stated net-equity valuation. Thus, it can be argued that the district court's valuation of the parties' net-marital equity includes an additional value for each of the two subparcels. However, there is no finding in the record to that effect.
This court understands that within Parcel B is a ten-acre shop site and the Horachek contract for deed site. What is unclear is whether the district court assigned a total value of $150,000 or $174,500 to Parcel B. On the one hand, if the court assigned a value of $150,000 and included the two sites in that value, then appellant is right that the net equity is $170,620, not $195,120. Thus, the district court would be required to reduce the net-equity amount and adjust the distribution of assets accordingly. On the other hand, if the district court assigned a value of $150,000 to Parcel B and did not include the two sites in that value, and then added in the two sites separately at $10,000 and $14,500, the district court then logically would find a net marital equity in the real estate of $195,120. Either way, the district court needs to make a finding as to which way it arrived at the $150,000 value. There appears to be no dispute that the Horachek site is valued at $14,500 and the shop site is valued at $10,000. No additional evidence of the two subparcels' values is necessary. We remand this issue to the district court to determine whether the two subparcels were valued separately from Parcel B. If they were, the court's determination of the net real estate equity of $195,000 is supported by the record. But if the court meant to value Parcel B at $150,000 total, including the two subparcels, again, then the net marital equity from real estate is only $171,000 and the district court will have to recalculate the marital distribution based on $24,500 less in assets.
II. Valuation of Other Marital Property
Deferred Compensation Plan. Appellant argues that the district court erroneously valued the respondent's deferred compensation plan at $112,000, because an account summary valued the plan at $130,433.40 as of March 31, 2000 and respondent testified that the plan had a value of $123,000 on May 30, 2000, at trial. In addition, based on information supplied to respondent by her employer, respondent testified that the plan had a value of $107,000 on September 4, 1999, the date of the parties' separation. Based on those facts, it appears that the district court averaged the values to determine the value of the plan.
Generally, a court is required to use the date of the pre-hearing conference as a valuation date. Minn. Stat. § 518.58, subd. 1 (2000). However, where there is no pre-hearing conference the district court has discretion to select a fair and equitable valuation date. Desrosier v. Desrosier, 551 N.W.2d 507, 510 (Minn.App. 1996). Although there was no pre-hearing conference in this case and the district court did not select a specific valuation date, it could have selected any of the three dates in the record, and therefore, its valuation of the plan falls within the acceptable range of figures. We therefore affirm the district court's valuation of the plan.
Plasma Cutter. Appellant presented testimony that the plasma cutter valued by the district court at $5,000 had been previously sold at an auction. Respondent offered no testimony that the parties still owned the plasma cutter. The only evidence of its value (if the parties still owned it) is an exhibit offered by respondent, which valued it at $1,100. There is no evidence at all in the record to support the $5,000 value assigned to the plasma cutter. Therefore, we remand to the district court to first decide whether the plasma cutter is even in the possession of the parties. If it had been disposed of years ago, as appellant maintains, it is not part of the parties' property and the $5,000 value assigned and then credited to appellant's column will have to be readjusted. If it does turn out that the plasma cutter is still alive and well and in the possession of one party or the other, the only evidence in the record of its value is the $1,100. That would still call for a redetermination of a fair split of the parties' property, as even if appellant has it, the $5,000 assigned value is too high and, thus, unfair to appellant.
John Deere Lawnmower. Appellant also points to a John Deere lawnmower valued at $3,500 that was awarded to him in the dissolution decree. However, the district court inadvertently awarded that same lawnmower to respondent because it awarded respondent all the personal property at her home, and the John Deere lawnmower was at her home in Thief River Falls. We remand to the district court to decide who should get the John Deere lawnmower.
We note that respondent argues that the errors made by the district court regarding the plasma cutter and the John Deere lawnmower did not disadvantage appellant overall because she claims the district court also made errors in favor of appellant that more than offset the errors he mentioned. However, if respondent wanted to argue about claimed errors that worked to her disadvantage, she had the option of filing a notice of review. She did not. The lack of a notice of review does not make the errors that disadvantaged appellant legally insignificant. We cannot decide the merits of other claimed errors by respondent that were not brought to the district court's attention by post-trial motions and were not brought to our attention by a notice of review.
III. Nonmarital Property
Appellant argues that the district court erred by failing to assign a value to his nonmarital portion of Parcel B. However, the district court valued Parcel B at $150,000, while appellant testified that he had premarital debt in the amount of $150,000, secured by a lien on the property. We conclude the district court did not err by finding that appellant's premarital equity in Parcel B was zero. The portion of the judgment and decree that addresses appellant's nonmarital interest in the property is affirmed.