Opinion
No. A05-613.
Filed April 18, 2006.
Appeal from the District Court, Wright County, File No. F9-04-686.
Dennis M. Twiss, Gavin, Olson Winters, Ltd., (for appellant).
Brian M. Olsen, Tower Center Mall, (for respondent).
Considered and decided by Wright, Presiding Judge; Dietzen, Judge; and Worke, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
In this dissolution proceeding, appellant argues that the district court (a) erroneously characterized real estate as marital property; (b) abused its discretion in dividing the marital assets; and (c) improperly exercised jurisdiction over property owned by a third party. Respondent argues that the district court abused its discretion by failing to credit her for property she traced to her nonmarital assets, and she requests attorney fees on appeal. We affirm.
FACTS
Appellant Alan Juncewski and respondent Mary Yurek were married on May 20, 1989. During the marriage, they resided on the Juncewski family farm where they raised their four children.
The trial in their marriage dissolution was limited to the issues of property and debt division. Appellant now challenges the district court's characterization and apportionment of two parcels of real estate, and respondent challenges the district court's findings regarding a silo unloader.
Child support was determined in a separate proceeding, and the child-support judgment was incorporated into the parties' dissolution judgment and decree. Although respondent raised spousal maintenance as an issue at trial, she acknowledged that there was no income for spousal maintenance and does not contest the district court's conclusion that she waived spousal maintenance.
The Juncewski family farm is approximately 700 acres, including additional leased acreage. Two parcels referred to respectively as "Johnny's Farm" and "The Peterson Farm" were part of the farming operation. Johnny's Farm, an 80.5-acre parcel, was conveyed to appellant in 1992. Appellant's father, Kenneth Juncewski, stated that Johnny's Farm was "a gift to my son." Approximately two years later, both appellant and respondent signed a mortgage encumbering the property. The Peterson Farm, a 154-acre parcel, was deeded to appellant, respondent, and appellant's parents in 2001.
Kenneth Juncewski testified that he did not file gift tax returns or provide his son or daughter-in-law with W2 or 1099 forms.
Appellant argued at trial that both parcels were owned by his father because his father's funds were used to purchase and improve them. Kenneth Juncewski managed and controlled the finances of the farm and a trucking business. Throughout the marriage, appellant and respondent worked exclusively on the farm, and appellant also worked in the trucking business. But they did not receive salaries. Rather, they received 12 percent of the milk payments along with meat and housing at no cost. There were no formal or written arrangements regarding the parties' duties or compensation for their services. Appellant testified that the work was onerous, but he "hoped" he was doing it for pay.
Respondent testified regarding her nonmarital interest in the $25,000 that she received in 2002 when her father died. She testified that she used $6,000 for a "feed unloader" that appeared on their most recent tax return, but she had no opinion of the equipment's present value.
The district court determined that both parcels of real estate were marital property and apportioned them by granting Johnny's Farm to respondent and their interest in the Peterson Farm to appellant. Both parties moved for amended findings, which the district court denied. Appellant filed a notice of appeal regarding the two parcels of real estate, and respondent filed a notice of review regarding the silo unloader and requested attorney fees on appeal.
DECISION
When a marriage is dissolved, the district court "shall" make a "just and equitable" division of the parties' "marital property." Minn. Stat. § 518.58, subd. 1 (2004); see Ruzic v. Ruzic, 281 N.W.2d 502, 505 (Minn. 1979) (stating that district court's division of marital property need not be mathematically equal, only just and equitable). "Whether property is marital or nonmarital is a question of law, but a reviewing court must defer to the trial court's underlying findings of fact." Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997). District courts have broad discretion over the division of marital property, and we will not disturb the division on appeal absent a clear abuse of discretion. Chamberlain v. Chamberlain, 615 N.W.2d 405, 412 (Minn.App. 2000), review denied (Minn. Oct. 25, 2000).
Appellant disputes the trial court's characterization and division of Johnny's Farm and the Peterson Farm as marital assets. Appellant does not dispute the values accorded these two farms. Regardless of the form of ownership, property obtained by either spouse during the marriage is presumed to be marital property. Minn. Stat. § 518.54, subd. 5 (2004). A party seeking to overcome that presumption must demonstrate by a preponderance of the evidence that the property is nonmarital. Gottsacker v. Gottsacker, 664 N.W.2d 848, 853 (Minn. 2003); Crosby v. Crosby, 587 N.W.2d 292, 296 (Minn.App. 1998), review denied (Minn. Feb. 18, 1999). Nonmarital property includes property acquired by a spouse during the marriage by "gift, bequest, devise or inheritance made by a third party to one but not to the other spouse[.]" Minn. Stat. § 518.54, subd. 5(a).
Appellant stated in his brief that the values of the two parcels of real estate are not disputed, and he "brought the motion [for amended findings] not to contest the value of the property award to Respondent, but only to request that the court make the award in a form that was not so harmful to Appellant."
The warranty deeds for the two parcels of land established the presumption that the parcels are marital assets. The district court expressly found that the testimony that the tracts were actually owned by Kenneth Juncewski lacked credibility and concluded that the marital presumption was not overcome.
With regard to Johnny's Farm, the district court noted the direct conflict in appellant's testimony that his father actually owned the farm and his father's testimony that he gave it to his son as a gift. Although appellant had the burden to demonstrate the nonmarital character of Johnny's Farm, he refuted his father's testimony that it was given to him as a gift by claiming that it was owned by his father. The district court's determination of Johnny's Farm as marital also was supported by (1) delivery of the deed to appellant during his marriage, (2) the mortgage in appellant's and respondent's names, (3) appellant's testimony that he paid taxes on the land, (4) ample evidence that both parties had performed years of free labor for the farming operation, and (5) a lack of income or assets resulting from the parties' extensive labor. Based on the record, we conclude that the district court's reconciliation of the conflicting evidence was proper as is its conclusion that appellant did not meet his burden of proof to establish that Johnny's Farm was nonmarital property.
Both parties and Kenneth Juncewski testified about the extensive hours worked by appellant and respondent on the farm throughout the marriage. Respondent's daily hours milking the dairy herd and other farm responsibilities were coupled with raising the four children, two of whom are disabled.
The child support magistrate also found that appellant's "informal arrangement with his father may not reflect the actual contributions" of appellant.
With regard to the Peterson Farm, the district court specifically found evidence of payments by appellant and respondent to Dale Peterson, the prior owner, which contradicted appellant's and his father's contentions that only Kenneth Juncewski paid for the parcel. The record contains appellant's admission that he made some of the payments and also Kenneth Juncewski's testimony that he would provide steers to appellant so that appellant could use the proceeds to make farm payments. In conjunction with the findings regarding "free labor" and no formal wage arrangement, it is reasonably inferred that appellant received the steers as a wage, and the proceeds from their sale were his to pay for his interest in the farm. Appellant, therefore, failed to show by a preponderance of the evidence that his interest was nonmarital.
Appellant next argues that the district court's apportionment of the farms was in error under Nardini v. Nardini, 414 N.W.2d 184, 188-89 (Minn. 1987). Nardini set out three ways to divide marital property when the parties cannot agree. It did not mandate a particular method; it provided three distinct options. Id. The district court used the first Nardini method: dividing the assets and distributing them in kind. Johnny's Farm was awarded to respondent, the Peterson Farm was awarded to appellant. Appellant argues that the only proper method under the circumstances was the third method — ordering appellant to pay respondent the value of Johnny's Farm. Appellant's contention on appeal that he has the ability to pay respondent for Johnny's Farm stands in stark contrast to his position throughout the child-support and dissolution proceedings that he has no money, no income, and no assets. In light of these circumstances, the district court could not equitably divide the marital property by ordering a spouse with no assets to pay the other spouse a cash settlement. As such, the district court's apportionment of the farms utilizing the first Nardini method was not an abuse of discretion.
Appellant also argues that his father's "interests" were diminished by the judgment in this action and that the district court impermissibly exercised jurisdiction over a nonparty and "effectively took property from [Kenneth Juncewski]." Indeed the district court lacks authority to adjudicate the interests of third parties, see Sammons v. Sammons, 642 N.W.2d 450, 457 (Minn.App. 2002) (stating that "district court may not exercise jurisdiction over a nonparty" and "[lacked] personal jurisdiction to enter a judgment affecting [the property rights of a nonparty]"); see also Fraser v. Fraser, 642 N.W.2d 34, 38 (Minn.App. 2002) (noting that Minn. Stat. § 518.58 (2000) "does not authorize the district court to adjudicate the interests of third parties"), but the district court's judgment in this case adjudicated the parties' interests, not those of Kenneth Juncewski.
Apparently, Kenneth Juncewski now asserts in a separate lawsuit that appellant and respondent were "unjustly enriched" by the dissolution judgment and that they actually held the property in constructive trust for him. Neither the district court nor this decision addresses the merit of the claims alleged in that separate legal action.
In support of appellant's claim of an adverse impact on the interests of Kenneth Juncewski, appellant provides no factual support and relies only on his counsel's closing argument.
The district court made findings based on the record that appellant and respondent had a marital interest in Johnny's Farm and had marital interests as tenants in common in the Peterson Farm. This gave the district court jurisdiction to apportion those interests in this dissolution action. Minn. Stat. §§ 518.54, .58 (2004). Kenneth Juncewski's interests as a tenant in common with the other tenants in common in the Peterson Farm do not provide him with the exclusive right to possess or own the property. An interest as a tenant in common is the equal right to possess the whole property with the other co-tenants. Black's Law Dictionary 1478 (7th ed. 1999); see also Minn. Stat. § 558.01 (2004) (co-tenancy includes right to bring action against others for partition or for sale of property or part thereof); Schlag v. Gooding-Coxe Co., 98 Minn. 261, 264, 108 N.W. 11, 12 (1906) (co-tenant may sell or mortgage his undivided interest in common property to stranger). Thus, we conclude that the district court did not exceed its jurisdiction.
By notice of review, respondent argues that the district court abused its discretion in failing to credit her for the value of the silo unloader. The district court found that the silo unloader was purchased for $6,000 with respondent's inheritance from her father. It also found that the silo unloader was a fixture not located on marital real estate. It concluded that it "cannot be easily removed and is not subject to division in these proceedings." Nonmarital property can lose its nonmarital character when it is commingled with other property. Wiegers v. Wiegers, 467 N.W.2d 342, 344 (Minn.App. 1991). Here, respondent did not produce evidence that the silo unloader was personal property in respondent's possession. Because the district court was without jurisdiction to order removal of a fixture from real property owned by a third party, it properly concluded that the item was "not subject to division."
Respondent also seeks an award of attorney fees on appeal. This request is not properly before us. Pursuant to Minn. R. Civ. App. P. 139.06, subd. 1, respondent must make her request by motion under Minn. R. Civ. App. P. 127. See also Minn. R. Civ. App. P. 139.03 (setting time for taxation of costs by prevailing party). To date, she has not made a motion or provided supporting documentation justifying an award.