Opinion
No. A-12-352
01-15-2013
BETH LOUISE HULTINE, APPELLEE AND CROSS-APPELLANT, v. BRUCE LYNN HULTINE, APPELLANT AND CROSS-APPELLEE.
Richard L. Alexander, of Alexander Law Office, for appellant. Nicholas D. Valle, of Langvardt, Valle & James, for appellee.
MEMORANDUM OPINION AND JUDGMENT ON APPEAL
NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION
AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).
Appeal from the District Court for Adams County: TERRI S. HARDER, Judge. Affirmed as modified.
Richard L. Alexander, of Alexander Law Office, for appellant.
Nicholas D. Valle, of Langvardt, Valle & James, for appellee.
IRWIN, MOORE, and PIRTLE, Judges.
IRWIN, Judge.
I. INTRODUCTION
Bruce Lynn Hultine appeals an order of the district court for Adams County, Nebraska, dissolving his marriage to Beth Louise Hultine, distributing the marital estate, and awarding Beth alimony. On appeal, Bruce challenges the district court's conclusion that money he received through an inheritance during the marriage was a marital asset and the court's award of alimony. On cross-appeal, Beth challenges the portion of the inheritance money that the court awarded her, asserts that the court's alimony award was insufficient, challenges the court's reduction of the value of the marital home by a Realtor fee, and challenges the court's denial of attorney fees. We find merit only in Beth's challenge to the court's reduction of the value of the marital home by a Realtor fee, and we affirm the decree as modified.
II. BACKGROUND
The parties were married in 1970. After nearly 40 years of marriage, Beth filed a complaint for dissolution of the marriage in March 2010.
1. HISTORY OF EMPLOYMENT
At the time of the marriage, Bruce was not employed and was attending school. After completing college, Bruce was engaged in farming with his family. In approximately 1978, he began working for a residential homebuilder. In January 1987, Bruce began his own general contracting business, which served as his employment throughout the duration of the marriage.
At the time of the marriage, Beth was employed as a teller at a bank. The parties' first child was born in 1973, and from then until approximately 1987, Beth stayed at home with the children. She returned to minimum-wage work at a convenience store. In 1990, she began working in a school cafeteria dishroom on a part-time basis for minimum pay. In 2005, she accepted the head baker position for the school and began working full time and earning approximately $10.80 per hour. In addition, throughout the marriage, Beth maintained the books for Bruce's contracting business.
2. INHERITANCE
In 1998, Bruce's mother passed away and he received an inheritance. The inheritance was placed into an investment account. In the parties' joint property statement prepared for the dissolution trial, Bruce valued the investment account at $163,283 as of February 27, 2010; Beth valued the account at $194,406 as of December 31, 2011.
Bruce testified that he spoke with an attorney before placing the money in the account and that the attorney communicated to Bruce it would not matter whether he made the account a joint account with Beth's name on it, because the money would still be his. Beth accompanied Bruce to the meeting with the investment broker, and both Bruce and Beth testified that when they were asked how they wanted the investment account titled, Beth told Bruce, "I don't care, it's your money" or "it's up to you, it's your money." Bruce then told the broker to put the account in both of their names. As a result, the account was a joint account with rights of survivorship, and it remained that way throughout the remaining 12 years of marriage.
The evidence uniformly indicated that both Bruce's and Beth's names were on the account at all times, that both had to sign for any money to be withdrawn from the account, and that both attended all meetings with the investment broker concerning the account. Beth testified that both parties had equal say in investment decisions concerning the account and that the parties always made joint decisions about what to do with the investment account. She testified that Bruce always referred to the account as "our" money and indicated that it was "theirs."
The evidence adduced at trial also indicated that marital funds were used to pay any tax liabilities on the investment account and that annual "family balance sheets" used for credit purposes listed the investment account as a joint marital asset. Any dividends paid out from the account were simply reinvested.
Bruce testified that he consulted an attorney before putting the money into the investment account and that he thought the money remained his throughout the marriage. He testified that he thought that if the parties ever divorced, the money was still his. Beth, on the other hand, testified that the parties had been married for 28 years when Bruce received the inheritance, that he indicated the money was "theirs," and that she thought he titled the investment account jointly as a gesture to make up for alleged extramarital affairs. She testified that the account was treated by the parties as a marital asset at all times and that she would have handled the marital money and savings much differently if she had thought that the investment account was not their joint marital asset.
At some point, a portion of the money in the investment account was withdrawn and placed into separate individual retirement accounts in each party's individual name. The annual "family balance sheets" listed those individual retirement accounts separately as each party's individual asset. Bruce testified that he believed that the money placed into the individual retirement account in Beth's name remained his money and that it was placed in such account in Beth's name solely for tax purposes.
3. EARNING ABILITIES
At the time of the dissolution hearing, Bruce was 62 years of age. Bruce testified that he was "retired," although he intended to continue performing light work. Bruce testified that he was receiving Social Security benefits of approximately $1,000 per month and that he was not able to earn more than approximately $1,000 per month without risking losing his Social Security benefits. Bruce also testified that his income had fluctuated significantly over the years. He testified that his business lost money in 2010 and 2011.
Bruce also testified about a variety of health issues that he alleged prevented him from being able to continue performing strenuous work, including issues with his knees, his shoulder, his heart, and his bowel. He testified that he had been in a lot of pain since October 2006, that he had been scheduled to undergo a knee replacement surgery but had "chickened out," and that he did undergo surgeries related to his knees in both 2006 and 2009.
Beth was also 62 years of age at the time of the dissolution hearing. Beth testified that she was in good health, but that her employment did not include any opportunity for advancement beyond minimal cost-of-living adjustments. She testified that there was a possibility that her position with the school would be cut as a result of outsourcing. Beth estimated her net income at approximately $1,100 per month and her expenses at approximately $3,800 per month.
Beth testified that she believed that Bruce was capable of continuing to work and that she felt he could still work and minimize the impact on his health. She also testified that Bruce's health seemed to become an issue for him continuing to work when she requested temporary support. She did, however, acknowledge that he had health problems, including a bowel problem and a need for knee replacement surgery.
4. MARITAL RESIDENCE
At the time of the dissolution hearing, Beth had moved out of the marital home and into an apartment. Bruce testified that he wanted the real estate sold, that he intended to sell it and move somewhere else, and that he had an appraisal performed on the house. He testified that he actually wanted the house to be sold at auction. On the parties' joint property statement, Bruce valued the real estate at $108,000 and Beth valued it at $115,000.
5. DECREE
On March 21, 2012, the district court entered a decree dissolving the parties' marriage, dividing the marital estate, and awarding Beth alimony.
With respect to the inheritance, the court concluded that the investment account had been a "gift from [Bruce] to the marriage." The court noted that both parties attended the meeting with the investment broker to establish the account, that Bruce instructed the investment broker to put the money in both parties' names, that the account had been a joint account with rights of survivorship from the beginning, that the parties had additionally stipulated that withdrawals would require both of their signatures, that both parties attended subsequent meetings concerning the account and its investments and both made decisions regarding the accounts, that the account was listed as a marital asset on the parties' annual "family balance sheets," and that marital funds were used to pay taxes associated with the account. The court also indicated that at the initial meeting with the broker, "[Beth] recalls [Bruce] looking at her and saying something to the effect of 'it is up to you, it's your money too.'" The court awarded 60 percent of the investment account to Bruce and 40 percent to Beth, under its "equitable power" and in recognition of the origin of the funds.
The court awarded each party its own individual retirement account, finding that the account in Beth's name was "a gift from [Bruce] to [Beth]."
The court awarded Bruce the marital home. The court valued the real estate at $103,695 and noted that the value was the "average of appraisals, less commission." The court noted that it had "not ordered . . . real property sold, at auction or privately as requested by [Bruce]," but noted that it had "given [Bruce] a reduction in value for realtor fees."
The court awarded Beth alimony in the amount of $250 per month for a period of 84 months. The court discussed the statutory factors concerning alimony, set forth at Neb. Rev. Stat. § 42-365 (Reissue 2008), and concluded that alimony was appropriate and that "[t]he more difficult issue is the ability of [Bruce] to pay alimony to [Beth]." The court noted Bruce's receipt of Social Security benefits, as well as his health concerns, but concluded that he had the ability to generate some income from contracting and that he testified that he had the ability to continue doing some light-duty consultant or contracting work. The court also noted that both parties would have investment income.
These appeals followed.
III. ASSIGNMENTS OF ERROR
On appeal, Bruce has assigned two errors: that the district court erred in awarding Beth a portion of the investment account that was created from his inheritance and that the court erred in awarding alimony to Beth. On cross-appeal, Beth has assigned several errors: that the court erred in awarding her only 40 percent of the investment account, that the court erred in awarding her insufficient alimony, that the court erred in deducting a Realtor fee from the marital estate, and that the court erred in not awarding her attorney fees.
IV. ANALYSIS
1. BRUCE'S APPEAL
(a) Investment Account/Inheritance
Bruce first asserts that the district court erred in treating the investment account as a marital asset and in awarding a portion of it to Beth. He asserts that it was undisputed that the money in the investment account was received by him as an inheritance and that there was no evidence adduced to demonstrate that he intended to make a gift of the inherited money to the marriage. We find no reversible error by the court.
The division of property is a matter entrusted to the discretion of the trial judge, which will be reviewed de novo on the record and will be affirmed in the absence of an abuse of discretion. Schuman v. Schuman, 265 Neb. 459, 658 N.W.2d 30 (2003). A judicial abuse of discretion exists when a judge, within the effective limits of authorized judicial power, elects to act or refrains from acting, and the selected option results in a decision which is untenable and unfairly deprives a litigant of a substantial right or a just result in matters submitted for disposition through the judicial system. Id.
In a review de novo on the record of an action for dissolution of marriage, an appellate court reappraises the evidence as presented by the record and reaches its own independent conclusions with respect to the matters at issue. Id. However, when evidence is in conflict, the appellate court may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another. Id.
As a general rule, all property accumulated and acquired by either spouse during the marriage is part of the marital estate, unless it falls within an exception to the general rule. Id. The burden of proof to show that property is a nonmarital asset remains with the person making the claim. Id. If the inheritance can be identified, it is to be set off to the inheriting spouse and eliminated from the marital estate. Id.
The Nebraska Supreme Court has held that how property inherited by a party during the marriage will be considered in determining the division of property or an award of alimony must depend upon the particular case and the equities involved. Id. A review of the evidence in this case demonstrates that there is no dispute that the money used to create the investment account was received by Bruce as an inheritance; Beth does not dispute that. However, once Bruce received the money, he took Beth with him to meet an investment broker, discussed with Beth and the broker how to title the investment account, placed the money into a joint account with rights of survivorship, and included a specific requirement that both parties' signatures were required for withdrawal of any money from the account. The testimony also establishes that during the following 12 years of marriage, both parties went to meetings with the broker to discuss the account and investments within the account, both parties participated in determining how to invest the money with the broker, and Bruce referred to the money in the account as the parties' money, not as his own separate property. The parties also used marital money to pay the taxes associated with the account, and the account was listed as a marital asset on the parties' yearly "family balance sheets." We do not find error with the district court's conclusion that, although Bruce inherited the money, he and Beth treated the investment account created with the money as a marital asset throughout the remaining 12 years of the marriage.
In addition, as noted above, the burden is on the party alleging that an asset is nonmarital to demonstrate its nonmarital status. See Sughroue v. Sughroue, 19 Neb. App. 912, 815 N.W.2d 210 (2012). In this case, although everyone agreed that Bruce inherited money and that the investment account was initially started with his inherited money, a review of the documents associated with the investment account demonstrates that the value of the account fluctuated significantly from month to month over the years, sometimes rising in value and sometimes lowering in value. All dividends that might have been paid out were reinvested into the account. Some of the account was withdrawn to create separate individual retirement accounts in each party's name.
We do not find error in the district court's implicit conclusion that Bruce did not meet his burden in demonstrating that the investment account should have been considered nonmarital, despite his treatment of the account throughout the marriage. At most, the evidence adduced at trial presented an issue of credibility about whether Bruce intended to keep his inheritance as separate property or treat it as a marital asset, and the trial court clearly found Beth's testimony more credible, and we give weight to that fact. See Heald v. Heald, 259 Neb. 604, 611 N.W.2d 598 (2000) (where credible evidence is in conflict, appellate court considers and gives weight to fact that trial court heard and observed witnesses and believed one over another).
We find no merit to Bruce's first assignment of error.
(b) Alimony Award
Bruce next asserts that the district court erred in awarding Beth alimony. He points to his health issues, his income level, and his monthly expenses to argue that the court should not have awarded any alimony. We find no merit to this assertion.
In reviewing an alimony award, an appellate court does not determine whether it would have awarded the same amount of alimony as did the trial court, but whether the trial court's award is untenable such as to deprive a party of a substantial right or just result. Kalkowski v. Kalkowski, 258 Neb. 1035, 607 N.W.2d 517 (2000). In determining whether alimony should be awarded, in what amount, and over what period of time, the ultimate criterion is one of reasonableness. Id.
Section 42-365 provides for the award of alimony when a marriage is dissolved and indicates that the court should consider a variety of factors, including the circumstances of the parties, duration of the marriage, and the history of contributions to the marriage by each party.
In the decree, the district court specifically referenced the statutory factors set forth in § 42-365 and specifically held that its "[e]valuation of the factors in the statute [caused] the Court to conclude that this is an appropriate case for alimony." The court recognized Bruce's health issues, but specifically held that "[d]espite [his] medical issues, the Court believes that he is still able to generate income from contracting." The court noted Bruce had testified that he had been successful working on jobs as a consultant or general contractor and that he had the ability to continue doing "'light' contracting jobs or handy-man work." A review of the record and the testimony supports this conclusion.
This was a marriage of more than 40 years. Both parties were 62 years of age at the time of trial. Bruce was the primary source of income throughout the marriage, even after Beth began working at minimum-income jobs midway through the marriage. We find no abuse of discretion by the district court in its conclusion that this case merited an award of alimony.
We also find no merit to Bruce's urging that this court conclude that alimony was inappropriate based on testimony that Beth may inherit some real property from her mother when her mother passes away. Beth's testimony indicated that her mother remains in good health, and the possibility of her inheriting or not inheriting property at some point in the future was mere speculation, not justifying the striking of the court's alimony award.
2. BETH'S CROSS-APPEAL
(a) Investment Account
Beth first asserts that the district court erred in awarding her only 40 percent of the investment account. She argues that she should have received 50 to 70 percent of the account. This assertion is meritless.
The record reflects that the district court specifically awarded Beth 40 percent of the investment account and awarded Bruce 60 percent in recognition that, although the investment account was a marital asset, the money that was used to create the account was an inheritance received by Bruce during the marriage. Moreover, the court's total distribution of the marital estate resulted in each party's being awarded approximately 50 percent of the total estate; the court awarded Beth, in addition to 40 percent of the investment account, an equalization payment of nearly $60,000.
Beth argues that she lacks the earning capacity and ability to increase her earning potential that Bruce has. We do not agree that this demonstrates an abuse of discretion by the district court. Rather, the court specifically considered the parties' earning capacities and the limitations on Beth's ability to earn in the future, and granted her an alimony award, which we have affirmed above.
The court's distribution of the marital estate in this case resulted in each party's receiving approximately 50 percent of the estate. This was a reasonable award, as determined by the facts of this case, and is well within the typical guidelines of each party's receiving between one-third to one-half of the marital estate. See Liming v. Liming, 272 Neb. 534, 723 N.W.2d 89 (2006). This assigned error is meritless.
(b) Alimony Award
Beth next asserts that the district court erred in awarding her an alimony award that was insufficient in both amount and duration. This assertion is also without merit.
Beth argues that Bruce's earning potential is significantly higher and that it justifies "[a]n award significantly higher than $250.00 per month . . . ." Brief for appellee on cross-appeal at 10. As discussed above, the district court properly considered the relevant factors when determining its alimony award, including the length of the marriage, the age of the parties, and their relative economic circumstances. Despite Beth's assertions that Bruce's health concerns are not as significant as he alleges, the court appropriately considered the testimony and the evidence of both parties' relative economic circumstances and did not abuse its discretion in making its award. The court also specifically considered that, because of its treatment of the investment account as a marital asset, each party was being awarded an investment asset to further supplement his or her income. There is no merit to this assignment of error.
(c) Realtor Fee
Beth next asserts that the district court erred in reducing the valuation of the marital home, awarded to Bruce, by a Realtor fee when the court specifically found that it was not ordering the real estate to be sold. We agree.
In Walker v. Walker, 9 Neb. App. 694, 618 N.W.2d 465 (2000), this court said that to be credited for the deductibility of a real estate commission, the proponent must adduce evidence that a sale of the real estate is imminent or would occur in the foreseeable future, as well as evidence of the amount of the commission for the property in question. We held that failure to adduce such evidence would dictate a finding that there should be no deduction for the real estate commission. Id.
In the present case, Bruce testified that he would prefer to sell the home at auction. His opinion was that "[b]y the time you pay a realtor and all the fees and stuff, we might come out ahead auctioning it off." He then testified that he believed the commission that would have to be paid to either a Realtor or an auctioneer would be "seven percent." He testified, "I think I want to sell it. I don't think [Beth] wants it, and I sure don't want to live in there anymore."
The above testimony was the only testimony concerning the future of the house. Bruce did not adduce testimony to establish that a sale of the real estate was "imminent." As such, when the court specifically held that it was not ordering the real estate sold and was awarding it to Bruce, the court abused its discretion in reducing the value of the real estate by a Realtor commission.
On the parties' joint property statement, Bruce valued the real estate at $108,000 and Beth valued it at $115,000. The court specifically held that it was valuing the real estate at the "average" of these values, which would have placed the court's value of the real estate (without considering the commission) to be $111,500. Because the court deducted a real estate commission, it valued the real property awarded to Bruce at only $103,695. The difference between the value the court should have used and the value it did use is $7,805. Because the court awarded each party a 50-percent interest in the marital estate, we adjust the equalization payment by one-half of this difference in value, increasing Bruce's equalization payment obligation by $3,902.50, to a total equalization payment of $63,450.50.
(d) Attorney Fees
Finally, Beth asserts that the district court erred in not awarding her attorney fees. We find no merit to this assertion.
An award of attorney fees is discretionary and will not be disturbed on appeal absent an abuse of discretion. See Emery v. Moffett, 269 Neb. 867, 697 N.W.2d 249 (2005). The award of attorney fees depends on multiple factors that include the nature of the case, the services performed and results obtained, the earning capacity of the parties, the length of time required for preparation and presentation of the case, customary charges of the bar, and the general equities of the case. Id.
As discussed previously, we have concluded that the district court appropriately considered the general equities of this case and the relevant economic circumstances of the parties when making its awards of marital property and alimony. Those appropriate considerations of the general equities of the case and the relevant economic circumstances of the parties also demonstrate that the court did not abuse its discretion in ordering each party to pay its own attorney fees. This assignment of error is without merit.
V. CONCLUSION
We find no merit to Bruce's challenges on appeal to the court's determination that the investment account was a marital asset or to the court's alimony award. We also find no merit to Beth's challenges on cross-appeal to the court's awarding her 40 percent of the investment account, not awarding a larger or lengthier alimony award, or denial of attorney fees. We do find merit to Beth's assertion that the court should not have reduced the value attributed to the real estate awarded to Bruce by a Realtor fee, and we modify the decree as set forth above in recognition of that abuse of discretion. The decree is otherwise affirmed as modified.
AFFIRMED AS MODIFIED.