Opinion
No. C6-02-44.
Filed September 10, 2002.
Appeal from the District Court, Scott County, File No. 2000-10561.
Jeffrey R. Arrigoni, Louis M. Reidenberg (of counsel), (for respondent)
Ronald L. Whitehead, Jori L. Whitehead, (for appellant)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
On appeal from a dissolution judgment, appellant-husband argues that it was an abuse of discretion for the district court to award his nonmarital interest in the parties' homestead to respondent-wife without making a finding of "unfair hardship" pursuant to Minn. Stat. § 518.58, subd. 2 (2000). We affirm.
DECISION
The district court's property division will be reversed only for a clear abuse of discretion. Reynolds v. Reynolds, 498 N.W.2d 266, 270 (Minn.App. 1993). We will affirm the district court's property division if it has "an acceptable basis in fact and principle," even though a different approach could have been used. Servin v. Servin, 345 N.W.2d 754, 758 (Minn. 1984). In this case, the district court, in an effort to make an equitable division of property, awarded husband's nonmarital interest in the parties' homestead to wife.
I.
Property division in divorce proceedings is regulated by statute and the applicable caselaw. Palmi v. Palmi, 273 Minn. 97, 102, 140 N.W.2d 77, 81 (1966). With respect to marital property, the court is required to "make a just and equitable division." Minn. Stat. § 518.58, subd. 1 (2000). With respect to nonmarital property, it is an unusual case where such property is distributed. Dammann v. Dammann, 351 N.W.2d 651, 653 (Minn.App. 1984). In order to award nonmarital property, the district court must make findings of "unfair hardship." Minn. Stat. § 518.58, subd. 2 (2000). In this case, the district court made no finding of "unfair hardship" when awarding husband's nonmarital interest in the parties' homestead to wife. On this record, however, the district court's failure to make the statutorily required "unfair hardship" finding is harmless. See Minn.R.Civ.P. 61 (directing harmless error to be ignored).
The district court made detailed findings with respect to the amount and nature of the parties' property. The court made a substantial award of real estate to husband. The court found that the property located on 170th Street East in Prior Lake, Minnesota, and valued at $335,000, was husband's nonmarital property even though the parties purchased it during the marriage. After hearing extensive testimony with respect to this property, the court concluded that it was purchased substantially with proceeds from the sale of property belonging to husband's parents. Therefore, the court awarded the property to husband for the benefit of his parents. Second, the court awarded the entire value of the parties' Strong Funds account to husband. The court specifically found that while there were "some monies in the account prior to the marriage," the entire $207,611.53 value of the account was marital due to substantial commingling of the funds during the marriage. Third, the court awarded the parties' homestead located on Lord's Street in Prior Lake, Minnesota, to wife. While the court found that husband's nonmarital interest constituted $101,500, based on his original down payment, the award of that interest to wife was justified in light of other property awards. The court specifically stated that
In an effort to equalize the assets of the parties, * * * [wife] was awarded $101,500 as [husband's] non-marital interest in the Lord's Street property. This makes sense to the Court since she was awarded the homestead and shall be able to take the same without any lien interest [husband] will have.
The district court further explained the property award in response to husband's motion for amended findings. The court stated:
While it may be true that the Court granted a non-marital interest to [wife], the Court reasoned this conveyance was appropriate for two reasons. First, the Court felt that the non-marital conveyance was accounted for in the overall distribution of assets, which was clearly fair and equitable between the parties. Secondly, giving the [wife] a non-marital interest in lieu of a lien on the homestead allows the [husband] to receive assets immediately and guarantees the [wife] the right to do as she pleases with the property. These considerations were paramount in the decision to grant the [wife] the non-marital interest in the Lord's Street property.
Whatever method the court uses to divide the marital property justly and equitably, "the goal is to place both parties in the optimum position." Nardini v. Nardini, 414 N.W.2d 184, 188 (Minn. 1987) (emphasis omitted). With that principle in mind, some courts have accepted an alternative explanation in lieu of a statutory finding of "unfair hardship" pursuant to Minn. Stat. § 518.58, subd. 2. See Haasken v. Haasken, 396 N.W.2d 253, 260-61 (Minn.App. 1986) (accepting a district court's alternative explanation in making an award of nonmarital property); Riley v. Riley, 369 N.W.2d 40, 43 (Minn.App. 1985) (affirming district court's award of nonmarital property without the requisite statutory findings), review denied (Minn. Aug. 29, 1985). In Haasken, the award of nonmarital property was approved because the property division was structured so that the parties would not have to share interests in various assets. 396 N.W.2d at 260. In addition, the court in Haasken considered the level of "animosity between the parties and their difficulty in mutually resolving issues." Id.
As in Haasken, the district court in this case was conscious of the animosity between the parties. The district court discussed this problem with the parties during a posttrial hearing. Specifically, the court made the following comments:
You people don't trust each other. You don't like each other. No matter what happens — I could throw a dart at a wall and come up with whatever decision I came up with and you wouldn't like it.
* * * *
The problem is you got yourselves to the situation where there is — between yourselves and between the family, there is that problem where it's difficult for you to communicate. You can't reconcile those differences.
Accordingly, the district court distributed the parties' assets so that both of them would not have an interest in the same property. Wife received the homestead, her car, her checking accounts, and various pension and stock accounts. All of these assets were distributed to her in their entirety. Similarly, husband received his car, his checking account, and various pension and stock accounts in their entirety. If the district court had followed husband's proposal to add up the marital assets and divide them in half, that method likely would have resulted in a series of posttrial motions compelling the sale of assets and payments from one party to the other. Therefore, considering the district court's explanations and meticulous consideration of each and every asset of the parties, we find that there was no abuse of discretion with respect to the property division. The district court acted in accordance with the court's inherent power to grant equitable relief in a dissolution proceeding "as the facts in each particular case and the ends of justice require." DeLa Rosa v. DeLa Rosa, 309 N.W.2d 755, 758 (Minn. 1981) (quotation omitted).
II.
Husband also argues that it was an abuse of discretion for the district court to make husband's child support obligation effective after the date of the trial but before the judgment was filed. However, the record indicates that this issue came up because, at the time the child support obligation became effective, husband still was required to make household payments to wife in accordance with a temporary order issued before the trial. In his posttrial motion on September 19, 2001, husband claimed that because his child support payments started July 1, 2001, the household payments to wife should have stopped at that time. In his motion on December 27, 2001, he asked the court to order wife to reimburse him for the household payments made in July, August, September, and October 2001.
Subsequent to these motions, wife agreed to reimburse husband for the household payments for July, August, September, and October. Because the parties agree that wife will reimburse husband for the household payments he made while he also was obligated to make child support payments, the issue of the effective date of the child support obligation has been resolved. At oral argument, attorneys for both parties assured this court that the agreement would be reduced to writing and executed forthwith; we, therefore, need not address the issue further.