Opinion
No. A06-340.
Filed February 13, 2007.
Wilkin County District Court, File No. F3-04-150.
Robert V. Dalager, Fluegel, Helseth, McLaughlin, Anderson Brutlag, Chartered, Morris, MN 56267 (for appellant).
John Bullis, Lies Bullis, Wahpeton, ND 58074-0275 (for respondent)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2006).
UNPUBLISHED OPINION
In this appeal from a dissolution judgment, appellant wife challenges her spousal-maintenance award and argues also that the district court abused its discretion when it allowed respondent husband to testify regarding the present value of husband's insurance agency and when it adopted that value in its findings of fact. Both parties challenge the district court's treatment of husband's insurance agency in its property division. We affirm.
FACTS
Appellant wife Julie Miller and respondent husband Gary Miller were married on June 22, 1974. Wife is a licensed practical nurse and was when the parties married, although she stopped working as a nurse from 1978 to 1996 to raise the parties' four children. Husband is the sole shareholder in LKS Properties, Inc., a company that was formed to invest in and manage rental properties, and is also an insurance agent under an exclusive contract with American Family Insurance Company (American Family).
Husband's insurance agency, under husband's contract with American Family, cannot be sold to a third party. But American Family will pay husband "termination benefits" should husband ever wish to terminate his business. Under the contract, if husband had terminated his agency at the time of trial, American Family would have paid husband a total of $338,672 in 60 equal monthly installments, without interest. But the benefit amount is recalculated yearly and increases or decreases based on the preceding year's production. Husband will collect nothing until he terminates his relationship with American Family, and he testified that he intends to work at least until he reaches age 65, which will occur in January 2016.
Wife filed a petition for dissolution, a trial was held, the district court issued a dissolution decree, and judgment was entered on September 27, 2005. Wife moved for a new trial or amended findings of fact and conclusions of law, and the district court issued amended findings of fact and conclusions of law, and an amended judgment was entered on December 16, 2005. In the amended judgment, as in the original judgment, wife was awarded $1,000 per month in permanent spousal maintenance. The district court ordered that husband make property-division-equalization payments to wife to make up the difference between the value of the property that husband was awarded and the value of the property that wife was awarded, resulting in each spouse receiving one-half of the value of the marital estate. Wife appeals from the amended judgment. Husband filed a notice of review of the amended judgment as well.
DECISION I.
Wife first challenges her spousal-maintenance award. We review a district court's spousal-maintenance award under an abuse-of-discretion standard. Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997). A district court abuses its discretion regarding maintenance if its findings of fact are unsupported by the record or if it improperly applies the law. Id. at 202 n. 3. We review the district court's findings of fact for clear error. Minn. R. Civ. P. 52.01.
Husband points out that wife appeals only from the district court's amended judgment of December 16, 2005. He asserts that when "an original judgment is not appealed and an issue is left undisturbed in an amended judgment, that issue is not reviewable on appeal from the amended judgment." Therefore, husband argues, because wife's maintenance award did not change in the amended judgment, she cannot challenge it on appeal, citing Swartwoudt v. Swartwoudt, 349 N.W.2d 600, 602 (Minn.App. 1984), review denied (Minn. Sept. 12, 1984). But in Kelly v. Kelly, the supreme court rejected a similar argument, explaining that because it was clear that the appellant intended to appeal from the entire judgment as amended and because the appellant's notice of appeal was not misleading, the appellant should not have been barred from challenging issues that were left unchanged in the district court's amended judgment despite the fact that the appellant failed to identify both the original judgment and the amended judgment in the notice of appeal. 371 N.W.2d 193, 195-96 (Minn. 1985). Here, wife's statement of the case that was filed with her notice of appeal put husband on notice that wife would challenge on appeal the spousal-maintenance award, and we will review the issue.
Wife argues that the district court failed to adequately consider the parties' "standard of living established during the marriage," which included the financial ability to invest, when it calculated the amount of maintenance husband should pay to wife. Wife's assertion that the district court failed to consider the parties' standard of living is unsupported. The district court made specific findings on each of the applicable factors listed in Minn. Stat. § 518.552, subd. 2 (2006), including the standard of living established during the marriage, when it concluded that wife should receive $1,000 per month in maintenance payments from husband. And when the district court determined the amount of wife's maintenance award, it noted specifically that the award was necessary because wife's income would "make no provision for future asset acquisition in the form of further increases in cash surrender value in life insurance, business investments, vacations, vehicle purchases and other reasonable future expenses." The district court did not clearly err when it determined wife's expenses for the purpose of awarding spousal maintenance.
Wife argues also that the district court abused its discretion when it calculated husband's monthly expenses for the purpose of evaluating his ability to pay maintenance because it included expenses that husband would incur because of the property division, including the payments that he would make to wife for her interest in husband's insurance agency as well as property-division-equalization payments, which amounted to "double-counting them." Improperly including these expenses, wife argues, resulted in an overestimation of husband's monthly expenses and a corresponding under calculation of husband's ability to pay maintenance and thus of wife's maintenance award.
When determining the proper amount and duration of a spousal-maintenance award, the district court is to consider "all relevant factors including":
(a) the financial resources of the party seeking maintenance, including marital property apportioned to the party . . .
. . .
(g) the ability of the spouse from whom maintenance is sought to meet needs while meeting those of the spouse seeking maintenance. . . .
Minn. Stat. § 518.552, subd. 2. It is well established that a district court should consider the consequences of the property division for the spouse seeking maintenance. Id., subd. 2(a); Rask v. Rask, 445 N.W.2d 849, 853-55 (Minn.App. 1989). Although the maintenance statute does not expressly provide that a district court must consider the consequences of the property division for the spouse from whom maintenance is sought, payments and losses arising out of the property division do appear to fall within the contemplation of Minn. Stat. § 518.552, subd. 2(g), because they affect "the ability of the spouse from whom maintenance is sought to meet needs." It was not an abuse of discretion for the district court to include such expenses in its calculation of husband's monthly expenses for the purpose of evaluating his ability to pay maintenance.
II.
Wife next argues that the district court clearly erred in valuing husband's insurance agency. She contends that the district court abused its discretion when it admitted husband's testimony regarding the present value of his agency-termination benefits because that testimony was based on inadequate foundation, and she further argues that the district court erred when it adopted husband's present-value testimony in its findings of fact.
A district court's decisions regarding the admission or exclusion of evidence are reviewed for an abuse of discretion. Kroning v. State Farm Auto. Ins. Co., 567 N.W.2d 42, 45-46 (Minn. 1997). Wife introduced evidence that if husband terminated his agency relationship with American Family at the date of trial, he would receive approximately $338,000 in termination benefits. Husband confirmed on redirect examination that if he terminated his agency that day, he would receive approximately $338,000 in termination benefits over five years but added that the "present value" of his termination benefits was $290,000. See generally DuBois v. DuBois, 335 N.W.2d 503, 506 (Minn. 1983) (explaining that a present-value calculation "discounts an award to that amount which, if presently received, could be invested in order to yield the future sum"). Husband testified that he determined the present value by using an on-line present-value calculator. Wife objected to the admission of husband's testimony, arguing that the testimony, specifically the method that husband used to arrive at the present value of his termination benefits, lacked foundation. The district court allowed husband to testify over wife's objection. Wife argues that admission of husband's testimony was an abuse of discretion. Husband argues that "[t]here is no rigid formulation of what showing is needed in order for a particular item of evidence to be admissible," and he points out that wife was free to cross-examine him regarding his testimony or to produce contrary evidence but chose not to do so. We agree and conclude that the district court did not abuse its discretion when it allowed husband to testify regarding his calculation of the present value of his termination benefits.
Wife also argues that the district court erred when it incorporated into its findings of fact husband's testimony that the then-present value of husband's termination benefits was $290,000. The district court's finding of fact will be upheld unless clearly erroneous. Antone v. Antone, 645 N.W.2d 96, 100 (Minn. 2002). To successfully challenge a district court's findings of fact, the party challenging the findings "must show that despite viewing that evidence in the light most favorable to the trial court's findings . . ., the record still requires the definite and firm conviction that a mistake was made." Vangsness v. Vangsness, 607 N.W.2d 468, 474 (Minn.App. 2000). It does not appear from the record that wife provided any evidence of the present value of husband's termination benefits to contradict husband's testimony. She provided evidence that the value of husband's termination benefits over the five years that American Family would have to pay them would be approximately $338,000, and this evidence was undisputed, but it was not evidence of the present value of those benefits had they been received in one lump sum at the time of trial. A party may not find fault with a district court's determination when the party failed to provide the district court with the evidence that it needed to fully address the issue. Eisenschenk v. Eisenschenk, 668 N.W.2d 235, 242 (Minn.App. 2003), review denied (Minn. Nov. 25, 2003). Here, wife provided no evidence of the present value of the termination benefits. It was not clear error for the district court to rely on the only evidence before it and conclude that the then-present value of the termination benefits was $290,000.
III.
Both parties challenge the district court's treatment of husband's insurance agency in its property division. The district court awarded the agency to husband but provided for the payment to wife of one-half of the value of the agency, which the district court determined to be the termination benefit that husband would receive if he closed the agency at the time of trial. Wife concedes that, in the ultimate property division, she received "one-half the net marital estate as the trial court determined it to be."
"District courts have broad discretion over the division of marital property, and appellate courts will not alter a district court's property division absent a clear abuse of discretion or an erroneous application of the law." Sirek v. Sirek, 693 N.W.2d 896, 898 (Minn.App. 2005). A district court's division of marital property need only be "just and equitable." Minn. Stat. § 518.58, subd. 1 (2006). "An equitable division of marital property is not necessarily an equal division." Crosby v. Crosby, 587 N.W.2d 292, 297 (Minn.App. 1998), review denied (Minn. Feb. 18, 1999). But upon dissolution of a long-term marriage, an equal division is presumptively equitable. Miller v. Miller, 352 N.W.2d 738, 742 (Minn. 1984). The division of property will be affirmed if it has "an acceptable basis in fact and principle," even if this court might have resolved the matter differently. Rohling v. Rohling, 379 N.W.2d 519, 522 (Minn. 1986).
Acknowledging that "there exists some uncertainty about the future value of the termination benefit," the district court determined that it was "fair and equitable" to award to wife one-half of the then-present value of the amount husband would receive in termination benefits from American Family if he had ended his relationship with American Family and closed his insurance agency at the time of trial. Based on husband's testimony, the district court determined that the present value of the termination benefits was $290,000 and that wife should receive $145,000. The district court gave husband the option of either paying wife in one lump sum or making installment payments for 120 months with interest compounded at the rate of 5% per annum and with the option of prepaying all or part of the principal amount owed to wife. The district court also granted wife a lien on husband's real property until payment is made in full.
Wife argues that the district court erred when it "present valued" the termination benefits and allowed husband ten years to pay wife her share. She urges this court to determine that the fair market value of the insurance agency is $338,000 and to direct that husband pay wife one-half of that sum immediately or in five equal annual payments with interest and secured by a lien. Husband argues that the district court erred when it awarded to wife her share of termination benefits that husband will receive at some future date because it placed all of the risk on husband that his termination benefits might decrease under the contract or might never be received at all. Husband's concern is unwarranted because Minn. Stat. § 518.58, subd. 1 (2006), allows a district court to adjust its valuation of an asset "to effect an equitable distribution" if the value of the asset changes substantially. Husband contends nonetheless that a more appropriate disposition — the district court's disposition as it stood in the original judgment — would have awarded each party his or her "full share of the agency's value if and when the amount is paid." Husband requests that this court remand with instructions to reinstate that portion of the district court's original judgment.
Both parties treat husband's termination benefits like pension benefits. Wife argues that, under DuBois, 335 N.W.2d at 503, "[i]t is not just or equitable to determine the present value of future pension rights, award the non-employee spouse one-half that value and then delay receipt of [that] share until the employee spouse retires or reaches the age of 65." Id. at 506. Husband argues, and we agree, that DuBois is distinguishable. Here, the district court directed that either husband would pay wife her share in one lump sum or, if husband chose to make installment payments to wife, the sum would be paid by a specific date, it would be guaranteed by a lien, husband would pay wife interest on the outstanding amount, and husband would begin to make payments to wife less than two months after the district court's amended decree was entered. But in DuBois, the husband and pension recipient was 46 years old at the time of the appeal; the wife would not have received any of her share of the husband's pension benefit for as long as 19 years. See id. at 504, 506.
Husband asserts that the district court should have applied one of the two methods described in Taylor v. Taylor, 329 N.W.2d 795, 798-99 (Minn. 1983), which have been used by courts to value and divide pension benefits. The "present cash value method" awards the pension to the employee spouse and awards the nonemployee spouse assets of a value equal to an equitable portion of the present value of the pension benefits. DuBois, 335 N.W.2d at 505. And in the event that a present-value determination is unduly speculative, the "reserved jurisdiction method" divides the actual monetary benefit of the pension if and when it is received. Id.
Although the district court did not employ precisely either of the methods described in Taylor, it also was not determining the value of pension benefits. Instead, it was valuing a unique business that had no fair market value because, under husband's contract with American Family, it could not be sold. We conclude that the method that the district court used was not an abuse of its discretion. The fact that this court may have resolved the matter differently does not warrant remand as long as the district court's valuation and division had "an acceptable basis in fact and principle," Rohling, 379 N.W.2d at 522, and are "supported by findings setting forth the court's rationale." Dick v. Dick, 438 N.W.2d 435, 437 (Minn.App. 1989). The district court's division of the parties' property was well reasoned and supported by sufficient findings. Neither party successfully rebuts the presumption that the equal division here is an equitable division. See Miller, 352 N.W.2d at 742. The district court did not abuse its discretion in its property valuation and division.