Opinion
No. C2-01-29.
Filed August 28, 2001.
Appeal from the District Court, Hennepin County, File No. DC231586.
Joe Anthony, Gena Anne Braaten, Fruth Anthony, P.A., and
Michael Perlman, Perlman Law Office, (for appellant)
Ben Henschel, Moss Barnett, P.A., (for respondent)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. §. 480.08, subd. 3 (2000).
UNPUBLISHED OPINION
On appeal from an amended judgment, appellant Robert M. Levine argues that the trial court (1) erred by disregarding prior orders and in construing the parties' antenuptial agreement; (2) erred in ruling appellant breached a fiduciary duty to respondent Caroline S. Levine; (3) improperly disregarded a summary of evidence; (4) inaccurately estimated the amount of assets that were unaccounted for; (5) underestimated and failed to explain its calculation of the return respondent could earn on the assets awarded to her; (6) erred by setting an interest rate on the property settlement that exceeds the judgment rate; and (7) improperly awarded respondent conduct-based attorney fees. Respondent requests attorney fees on appeal. Because the trial court gave careful consideration to the facts and law governing this case and neither made an error of law nor abused its discretion, except with regard to the applicable interest rate, we affirm in part and reverse in part. We also grant respondent's motion for attorney fees on appeal.
DECISION I.
The construction and effect of a contract are questions of law requiring de novo review. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn. 1979). An antenuptial agreement is a contract between two consenting adults. Minn. Stat. § 519.11 (2000). When it is unambiguous, its meaning should be determined according to its plainly expressed intent. In re Estate of Aspenson, 470 N.W.2d 692, 696 (Minn.App. 1991).
Section 2.2 of the parties' antenuptial agreement governs the property division and states that upon dissolution of the marriage:
2.2.2. Each party shall retain his or her property free of any right or claim of the other, except that any assets acquired during the marriage, whether by purchase, trade, sale, or exchange, which acquisition has, as its source, property of [appellant] excluded by this agreement, shall be divided between the parties or apportioned to each party, according to the following percentage: [appellant], 75%, [respondent], 25%.
Thus, by the agreement's express terms, the only property subject to division under this provision is property "acquired during the marriage" and having "as its source" property owned by appellant and excluded by the agreement.
Appellant argues that the cut-off date for assets acquired "during the marriage" should be the valuation date set by the court. In other words, any property acquired after the valuation date was not acquired "during the marriage" and should not be apportioned between the parties. Appellant's argument, however, relies on statutory language that is not referred to in the apportionment clause set out above. See Minn. Stat. § 518.54, subd. 5 (2000) (property acquired "during the existence of the marriage" is presumed marital and property acquired after the valuation date is non-marital property). The parties here chose to negotiate a property division scheme other than that set by statute, and they were free to do so. See McKee-Johnson v. Johnson, 444 N.W.2d 259, 265 (Minn. 1989).
We agree with the trial court's common meaning construction of the agreement. The court construed the phrase"during the marriage" to run from the date of marriage to the issuance of the judgement of dissolution — the period during which the parties were legally married. The trial court used the "date of trial" as the last practical date for which evidence of acquisitions could be considered for property division. As the trial court states in its findings, the agreement created a "type of `marital property' arising from nonmarital property, but provid[ed] for a fixed apportionment rather than equitable distribution." The agreement set up its own definition of "marital property" and expressly did not use the statutory term "marital." By contrast, other provisions of the agreement specifically refer to the statutory definitions of "non-marital" property and temporary maintenance. Because the parties created their own definition of "marital property" and did not adopt statutory definitions of "marital property," "valuation date," or "during the marriage," the trial court did not err in its reading of section 2.2.
Appellant also argues that the trial court made several inconsistent rulings in prior orders, on which appellant relied to treat the valuation date as the end of the marriage. The record provides no support for this argument. None of these prior rulings expressly or implicitly stated that the statutory valuation date would be deemed the end of the marriage for purposes of the apportionment clause.
Appellant further argues that the trial court's interpretation of the apportionment clause is inconsistent with and disregards the valuation date set by the court. Again, we disagree. The trial court used the valuation date only when that date did not conflict with the plain language of the parties' agreement. A trial court has broad discretion in the valuation and distribution of assets. See Rohling v. Rohling, 379 N.W.2d 519, 522 (Minn. 1986). By utilizing the valuation date in this matter, the trial court effected a property distribution that was "just and equitable." See Minn. Stat. § 518.58, subd. 1 (2000).
Because the trial court's construction of the antenuptial agreement was correct, its decisions regarding the property subject to the apportionment clause are affirmed.
II.
Both parties challenge the trial court's legal conclusions regarding the existence and extent of any common law or statutory fiduciary duties between spouses. Appellant contends that no fiduciary duties arise, while respondent argues that duties exist under both common law and statute, and that those duties were breached in this case.
The marriage relation is "not fiduciary by virtue of the relation alone, nevertheless it is so highly confidential * * * that taking advantage of it produces in effect the same consequences as though it were truly fiduciary." Knox v. Knox, 222 Minn. 477, 483 n. 4, 25 N.W.2d 225, 229 n. 2 (1946) (citation omitted). Despite this high standard, the duty does not prevent parties from entering into valid antenuptial agreements by which one party gives up substantial rights. See Gartner v. Gartner, 246 Minn. 319, 323-24, 74 N.W.2d 809, 813 (1956) (upholding agreement in which wife gave up shares in two farms and house in exchange for $3,000, household goods, and furniture). Although respondent questions the fairness of the property division, she does not attack the validity of the antenuptial agreement. See McKee-Johnson v. Johnson, 444 N.W.2d 259, 265 (Minn. 1989) (primary issue was validity of antenuptial agreement, which purported to allocate property between parties). Consequently, our review does not concern the procedural or substantive fairness of the agreement. Our review is limited to whether a fiduciary duty existed and was breached.
Respondent argues that absent a fiduciary duty, appellant could have made no investments, no acquisitions, and left her nothing under the agreement. She contends that evidence of a fiduciary duty provides the balance for a fair agreement. It is inconsistent, however, to conclude a fiduciary duty exists to use property "with a view toward [another's] reasonable expectations" on parties who have agreed that each party retains "exclusive control and use" of his or her non-martial property and have expressly denied the other party "any interest in, or right to control" that property. See Gartner, 246 Minn. at 323-24, 74 N.W.2d at 812-12 (antenuptial agreements are favored in the law). The antenuptial agreement provided respondent with no guarantee that she would receive any property upon dissolution of the marriage. See Affiliated Banc Group, Ltd. v. Zehringer, 527 N.W.2d 585, 588 (Minn.App. 1995) (by accepting specific bequest in lieu of right to elect against husband's will , appellant assumed risk that estate could have insufficient funds to satisfy bequest). Therefore, the trial court correctly concluded that the fiduciary duty imposed on spouses by the common law did not alter the language of the parties' agreement or create a duty regarding his assets during the marriage.
As for the fiduciary duty imposed by Minn. Stat. § 518.58, subd 1a (2000), we see no reason to exempt appellant. The statute prohibits all parties in a dissolution action from transferring, encumbering, concealing, or disposing of marital assets "except in the usual course of business or for the necessities of life. " Id. This prohibition is aimed at maintaining the status quo for the benefit of the court as well as both parties during the proceeding. This very specific duty prevents parties from unilaterally changing the status quo while the marriage dissolution is pending. A trial court has no discretion in enforcement of the duty; if the trial court finds assets have been wasted, the trial court "shall" compensate the other party. Id.; see Minn. Stat. § 645, 44, subd. 16 (2000) ("[s]hall is mandatory."). Therefore, once the court here found appellant had improperly wasted or disposed of assets, it did not err when it made appropriate findings regarding disposal of those assets and enforced the statute against appellant.
III.
Appellant argues that his summary evidence should have been admitted to show that he did not dissipate any assets during the marriage or during these proceedings. The trial court found that over $2.8 million in "unidentified investments" had disappeared from the marital estate and were presumed dissipated. For numerous reasons, this finding is supported by the record and is not clearly erroneous. See Peterson v. Johnston, 254 N.W.2d 360, 362 (Minn. 1977).
First, the trial court accepted the analysis of respondent's expert, Dana House, who concluded that a discrepancy existed between the parties' cash flow and income, but who was unable to account for the missing money because appellant failed to disclose all needed information. Second, the trial court found appellant's expert less credible because that expert acted as instructed by appellant. The trial court was entitled to choose between two competing analyses. Cf. Kitchar v. Kitchar, 553 N.W.2d 97 (Minn.App. 1996) (court had discretion to choose between two appraisals using different methods of evaluation), review denied (Minn. Oct. 29, 1996). Third, the trial court did not merely adopt respondent's proposed findings, but independently considered the evidence and made appropriate findings from the record to support its conclusions. See Bliss v. Bliss, 493 N.W.2d 583, 590 (Minn.Ct.App. 1992) (cautioning against wholesale adoption of one party's proposed findings), review denied (Minn. Feb. 12, 1993). Fourth, the trial court specifically found that appellant did not provide backup documentation for his summary evidence. See Minn. Rule Evid. 1006 (party introducing summary evidence "shall" make available originals or duplicates for examination). Fifth, numerous findings indicate that the trial court found that appellant's testimony regarding his finances lacked credibility. See Minn.R.Civ.P. 52.01. Finally, the trial court found no basis for appellant's claim that the "unidentified investments" constituted assets used "in the usual course of business" and were therefore exempt under Minn. Stat. § 518.58, subd. 1a.
IV.
Parties have a duty to make a full and fair disclosure of all assets and liabilities to facilitate the trial court's property distribution. Sanborn v. Sanborn, 503 N.W.2d 499, 503 (Minn.App. 1993 ), review denied (Minn. Sept. 21, 1993). Inferences drawn against a party due to his or her failure to be forthcoming with information are justified. See Solon v. Solon, 255 N.W.2d 395, 396 (Minn. 1977). Accordingly, respondent's expert and the trial court were entitled to use evidence of assets and liabilities from the one period of the marriage for which appellant provided information and extrapolate for the entire marriage.
From early in the proceedings, appellant knew that due to the antenuptial agreement, all assets "acquired during the marriage" would be traced back to their source. He thus necessarily knew that all documents relating to those assets were relevant to these proceedings. Several findings indicate that appellant failed to respond timely, or at all, to document requests. His failure to timely produce relevant documents at trial, if not before, cannot be blamed on the court or respondent. The trial court therefore did not err or abuse its discretion in holding appellant accountable and responsible for his failure to disclose.
V.
Whether a particular statute applies to an action is a question of law which this court decides de novo. Boubelik v. Liberty State Bank, 553 N.W.2d 393, 402 (Minn. 1996). In Riley v. Riley, 385 N.W.2d 883, 888 (Minn.App. 1986), this court clarified that there is no distinction between an award of money in a dissolution action and a judgment for recovery of money in any other type of case. The trial court therefore erred by imposing a nine-percent rate of interest on the judgment awarded to respondent. We reverse and remand with instructions to the court administrator to compute interest consistent with Minn. Stat. § 549.09, subd. 1 (1998).
VI.
The trial court has broad discretion in awarding maintenance. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984). This court will reverse that decision only if it is a clearly erroneous and "against logic and the facts on record ." Id. The court's findings regarding the rate of return on investments were specific and referenced credible evidence. See Stich v. Stich, 435 N.W.2d 52, 53 (Minn. 1989). We therefore affirm the maintenance award.
VII.
An award of attorney fees "rests almost entirely within the discretion of the trial court and will not be disturbed absent a clear abuse of discretion." Crosby v. Crosby, 587 N.W.2d 292, 298 (Minn.App. 1998) (quotation omitted), review denied (Minn. Feb. 18, 1999). Under Minn. Stat. § 518.14, subd. 1 (1998), the court "shall" award fees and costs "in an amount necessary to enable a party to carry on or contest the proceeding" if it finds (1) the fees are necessary for a good faith assertion of the party's rights without unduly lengthening or increasing expenses of the proceeding; (2) the payor has the means to pay; and (3) the payee does not have the means to pay. Additional fees may be awarded against a party who "unreasonably contributes to the length or expense of the proceeding." Id.
The trial court made many specific findings to support its award of fees, and the record supports those findings. Clearly, the court did not adopt respondent's findings wholesale when it determined that respondent's request for attorney fees of over $170,000 was too high, but that appellant should contribute one-half toward the more reasonable amount of $100,000. Unlike appellant, respondent was not herself an attorney or in complete control of all of the relevant financial records.
In addition, there is ample support in the record for the trial court's findings that appellant contributed to the length and expense of these proceedings. The trial court did not find respondent blameless, but it also did not find that respondent caused ongoing delay or obstruction. Clearly, the trial court considered appellant's lack of credibility to be the root of the litigation problems. The trial court's award of attorney fees is affirmed.
VIII.
Respondent moves for attorney fees on appeal. This court may allow suitable attorney fees and necessary disbursements on appeal. LaChapelle v. Mitten, 607 N.W.2d 151, 167 (Minn.App. 2000), review denied (Minn. May 16, 2000), cert. denied 121 S.Ct. 565 (2000). The award of fees on appeal lies within the discretion of this court . Katz v. Katz, 408 N.W.2d 835, 840 (Minn. 1987). Here, the financial records of the parties that are included in the trial court record are still fairly fresh and support an award of fees on appeal. As respondent's affidavit indicates, she has not yet benefited from any of her investments. We therefore grant respondent's motion for fees on appeal in the amount of $22,401.
With the exception of the interest rate on the property award, which is reversed and remanded for calculation by the court administrator pursuant to the statutory rate, we affirm. We further grant respondent's motion for attorney fees on appeal.