Opinion
No. A-11-271
02-14-2012
CAROLYN JEAN SPADY, APPELLEE, v. ROGER PAUL SPADY, APPELLANT.
Kent A. Schroeder and Mindy L. Lester, of Ross, Schroeder & George, L.L.C., for appellant. Mitchel L. Greenwall, of Greenwall, Bruner & Frank, L.L.C., and, on brief, John M. Jensen, of Yeagley, Swanson & Murray, L.L.C., 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: STEPHEN R. ILLINGWORTH, Judge. Affirmed.
Kent A. Schroeder and Mindy L. Lester, of Ross, Schroeder & George, L.L.C., for appellant.
Mitchel L. Greenwall, of Greenwall, Bruner & Frank, L.L.C., and, on brief, John M. Jensen, of Yeagley, Swanson & Murray, L.L.C., for appellee.
INBODY, Chief Judge, and CASSEL and PIRTLE, Judges.
CASSEL, Judge.
I. INTRODUCTION
The marriage of Roger Paul Spady (Paul) to Carolyn Jean Spady was dissolved by a judicial decree that also divided the marital estate. Paul now appeals various aspects of this property division, including the selection of valuation dates, identification and valuation of marital property, division of assets in kind, adjustments made in making the division, and the share, including an equalization amount, ultimately awarded to Carolyn. Because the district court did not abuse its discretion in any of the ways that Paul asserts, we affirm.
II. BACKGROUND
Carolyn initially filed a complaint for dissolution of marriage in 2004 in the district court for Adams County, Nebraska. At that time, Paul and Carolyn had been married 38 years and all three children from the marriage had reached the age of majority.
Neither Paul nor Carolyn entered the marriage with any significant assets. Carolyn worked as a cashier briefly at the start of their marriage, but stayed at home as a homemaker and housewife for the majority of the marriage. Paul worked as a car dealer throughout the marriage.
By the time of the dissolution proceedings, Paul and Carolyn had accumulated a significant marital estate. In addition to owning the marital home located in Hastings, Nebraska, the couple also owned six other pieces of real estate in Hastings. They also held a majority interest in two car dealerships, Paul Spady Motors, Inc., and Frontier Ford Lincoln Mercury, Inc. (Frontier Ford); a majority interest in Spady Rent-A-Car, Inc.; and a minority interest in LCL Truck Equipment, Inc. (LCL). The parties also possessed other miscellaneous assets and investments. With the exception of the marital home, Paul was in control of these assets throughout the marriage and during the dissolution proceedings.
Early in the proceedings, the parties stipulated that each of them should be restrained from "transferring, encumbering, hypothecating, concealing or in any way disposing of the property of the parties except in the usual course of business or for the necessaries of life." On March 4, 2005, the district court issued a temporary order approving this stipulation and ordering the parties so restrained.
Later in 2005, Carolyn filed a motion for temporary alimony, attorney fees, expert witness fees, and other costs. On January 25, 2006, the district court awarded Carolyn temporary alimony in the amount of $13,500 per month "during the pendency of this action" and $100,000 for temporary attorney fees and expert witness fees. In this order, the court again stated that both parties "are restrained and enjoined from transferring, encumbering, hypothecating, concealing or in any way disposing of the property of the parties except in the usual course of business or for the necessaries of life."
Throughout the dissolution proceedings, the parties focused on the valuation date for the marital property, which date was addressed on five occasions. First, at a hearing in November 2006, the parties agreed to a valuation date of December 31, 2006, and the district court subsequently ordered the parties to use that valuation date for all assets.
However, after the case had not yet gone to trial almost 2 years later, the court reconsidered the valuation date because Paul filed a motion asking the court to reexamine the valuation date and determine a new valuation date that would "more accurately be indicative of the current marital estate." The district court held a hearing in October 2008, at which time Paul offered the affidavit of Walter Hall, a consultant in the automotive industry. Hall testified that "[t]he automotive industry has dramatically changed since December 31, 2006," and recommended that August 31, 2008, be used as the valuation date for the two car dealerships. After considering the matter, the court ruled that the valuation date should be changed to August 31, 2008, for purposes of valuing Paul Spady Motors and Frontier Ford only. When valuing all other assets, the parties were still to use the original valuation date of December 31, 2006.
A few months later, Paul again petitioned the district court to reconsider the valuation date to be used when valuing the automobile dealerships, citing the "monumental and unprecedented circumstances that have arisen in the automobile industry since the [c]ourt last heard this matter." After a hearing on the matter, at which arguments were made but no evidence was received, the court moved the valuation date for the two automobile dealerships to December 31, 2008, but left the valuation date for all other assets at December 31, 2006, as originally agreed.
Paul asked the district court to reconsider the valuation date two more times, but the district court declined to make any further changes. In February 2009, he asked the court to reconsider the valuation date for all assets because "[t]his case has been on file since November of 2004, and since that time, substantial and unexpected financial events have occurred in the United States and abroad, which markedly effect the current financial status of the parties." A hearing was held, at which no evidence was received as to the valuation date, and the court overruled his motion.
Finally, Paul filed a motion for reconsideration of the valuation date in July 2009, approximately 1 month before the trial finally would begin. He asked the court to "reconsider its previous order as to the valuation date and permit [his] experts to testify as to current values." At a hearing held on August 13, Paul offered the affidavits of Hall and Robin Hendricksen, a certified general real estate appraiser, as evidence of the decline in the value of automobile dealerships and real estate, respectively. Hall also testified that Paul Spady Motors had been informed that it probably would not hold a General Motors franchise past October 2010, which he claimed "reduced the value of this dealership to nothing more than liquidation value." In response, Carolyn offered the affidavit of David Malone, a certified general real property appraiser, who testified that he has "not seen evidence to indicate a decline in the value of automobile dealership real estate." She also presented the affidavit of her attorney, who testified that Paul Spady Motors, Frontier Ford, and Spady Rent-A-Car had been merged into a single corporation effective January 1, 2009. He argued that, as a result, "[t]he valuation date for Frontier Ford and Paul Spady Motors cannot possibly be later than December 31, 2008, because after that date Frontier Ford ceased to exist and the character, assets and liabilities of Paul Spady Motors has utterly and profoundly changed." Upon receiving these exhibits, the court took the matter under advisement.
In a journal entry and order filed August 14, 2009, the court overruled Paul's motion to change the valuation date, but expounded upon the situation as follows:
The [c]ourt finds the [m]otion should be [o]verruled. If the [c]ourt were to sustain this [m]otion it would only be fair and equitable to [Carolyn] to continue the trial and move this [d]issolution into its sixth year of litigation. If this were sustained[,] it would trigger another [6] months of discovery. It is clear from the evidence and common knowledge that the automobile industry is in the doldrums. It is also clear that [Paul] will most probably no longer have a new car dealership on his Buick Operation after December 31, 2009. So on the surface it would seem that the valuation date should be moved. The problem is that only one with a crystal ball could fathom what that date should be. . . . Both sides have prolonged this case to the point that it would be impossible to set a valuation date that should not be changed due to the volatility of the economy and the automobile industry. The car business could rebound in [6] months and then we would be looking at changing the date again and continuing the trial again.The district court further noted:
There is nothing to prevent [Paul's] expert in testifying as to a decrease in value of the auto assets since December 31, 2008[,] if proper foundation is laid. There is nothing to prevent [Carolyn's] expert to testify to the contrary if proper foundation is laid. Counsel should also take into consideration that if one party greatly overvalues an asset he or she probably will receive it. In addition, based on the evidence and circumstances, the [c]ourt can make a one-third to two-thirds division of marital property or a [50-50] division. The [c]ourt has the latitude in the property division to make up for the current economy fluctuations.
The final hearing on the dissolution consumed 5 trial days spanning from August to December 2009. The main issues as identified by the district court were alimony, the value of the marital estate, and the disappearance or dissipation of marital property. As alimony is not an issue on appeal, we summarize the evidence only as it relates to the other two issues.
Both parties called expert witnesses to testify to the value of the four corporations in which Paul and Carolyn owned stock. Carolyn's expert, William Reed Samson, was a certified public accountant who was accredited in business valuation by the American Institute of Certified Public Accountants. Paul called Hall, his expert on the automobile industry, to value Paul Spady Motors and Frontier Ford. To testify to the value of the businesses that were not automobile dealerships, Paul called Dehn Renter, a certified public accountant and certified valuation analyst. The experts agreed in the valuation of Paul and Carolyn's interest in Paul Spady Motors only; they disagreed as to the value of the other three corporations. Since only the value of the interests in Frontier Ford and Spady Rent-A-Car are at issue in this appeal, we summarize the evidence only as it relates to those two corporations.
As previously decided by the district court, Paul and Carolyn's interest in Frontier Ford was to be valued as of December 31, 2008. On that date, they owned a 55-percent interest in Frontier Ford. Although Samson determined that Frontier Ford had a negative book value and adjusted equity value as of the valuation date, he calculated the value of their interest to be $0 because corporate shareholders are not liable beyond their investment in the corporation. Hall, however, assigned a negative value to Paul and Carolyn's interest because he argued that the dealer would be responsible for any obligations the dealership itself could not pay. He valued their interest at a negative $528,000.
The interest in Spady Rent-A-Car was to be valued as of December 31, 2006. On that date, Paul and Carolyn owned a 55-percent interest in Spady Rent-A-Car. Samson determined that their interest was worth $357,000. In making this calculation, he took into account the value of the condominium in Mexico owned by the corporation. Renter found Paul and Carolyn's interest to be valued at $121,107. He applied a discount for lack of marketability because he believed it would be difficult to acquire loans secured by the foreign condominium and also included the value of the rental house at 603 East B Street because he was under the impression that it was owned by Spady Rent-A-Car. Later testimony revealed that the house was in fact owned by Carolyn personally and not by Spady Rent-A-Car, which Renter admitted made his valuation wrong.
Although it is unnecessary to summarize the evidence as to the value of Paul and Carolyn's interest in LCL, as the value awarded to this interest by the court is not in dispute, we briefly pause to note that there was testimony at trial indicating that Gary Jerman, the majority shareholder and president of LCL, preferred that Paul be awarded this marital asset. Both Paul and Carolyn expressed a desire to be awarded the stock.
In addition to Paul and Carolyn's significant interests in these corporations, their final property statements revealed that they also owned a single share of stock in 20 Grand Investment Club. Aside from Carolyn's brief acknowledgment that Paul purchased stock in 20 Grand Investment Club at some time and that the stock was no longer in existence, there was no testimony during the trial about this corporation.
Both parties called expert witnesses to testify to the value of the real estate held by Paul and Carolyn. As the parties stipulated to the value of the marital residence, the only values in question were those of the remaining six properties in the marital estate. Hendricksen and Malone, the experts who had previously provided evidence as to real estate values in the August 2009 hearing on the valuation date, were again called by Paul and Carolyn, respectively. All real estate was to be valued as of December 31, 2006.
Malone and Hendricksen disagreed as to the value of all six pieces of real estate, but the value of only four of the properties is in dispute in this appeal. Paul does not contest the value awarded by the court to the property located at 3005 Osborne Drive West or 602 East B Street. Therefore, we do not discuss the testimony offered as to the value of those two properties.
As to the remaining four pieces of real estate, Malone consistently placed a higher value on the property than did Hendricksen. Malone valued the real estate located at 2850 Osborne Drive East, which property is currently occupied by Paul Spady Motors, at $3 million, while Hendricksen valued the property at $1.2 million. Malone determined the value of the property at 3101 Osborne Drive West, occupied by Frontier Ford, to be $3.7 million, almost twice as much as Hendricksen's appraisal of $1.9 million. Finally, Malone valued the two vacant commercial lots on Osborne Drive West at $86,670 (Lot 2) and $102,000 (Lot 4); Hendricksen valued the lots at $87,000 and $93,000, respectively, taking into account any out-of-district water fee assessments. Hendricksen also valued the property located at 2850 Osborne Drive East and 3101 Osborne Drive West as of December 31, 2008, but these later valuations were received as offers of proof only and were not considered in the court's final decision.
Throughout the final dissolution hearing, the parties offered evidence about the various notes receivable held by Paul and Carolyn as of the valuation date of December 31, 2006. Of the five notes receivable listed on the parties' final property statements, four are in dispute in this appeal.
Carolyn introduced into evidence the contract showing a loan for $740,000 from Paul to Bonnevilla Plaza, a corporation wholly owned by Jerry Spady, in 2004. Jerry and Paul also testified to the making of this loan in 2004. Paul agreed with Carolyn that the balance due on the loan on December 31, 2006, was $701,400, but he claimed that additional amounts had been paid off since the valuation date, making the balance at the time of trial $530,000. According to Paul and Greg Spady, Greg assumed $210,000 of the original $740,000 and paid off that portion between December 2005 and June 2009. Although there is no documentary evidence to corroborate the fact that Greg assumed a portion of Bonnevilla Plaza's loan, Carolyn did introduce into evidence canceled checks showing Greg's payment of $210,000 plus interest to Paul between December 2005 and June 2009.
Carolyn also introduced into evidence the written contract for a loan of $1 million from Paul to Jerry Spady Pontiac-Cadillac in 2004, a loan both Paul and Jerry testified to making. As with the Bonnevilla Plaza loan, Paul agreed with Carolyn that the amount due as of December 31, 2006, was $1 million. However, he also testified that the note was paid off after December 31, 2006. Jerry specifically testified that the full $1 million was paid back in 2007.
Through canceled checks, Carolyn demonstrated that Paul had loaned a total of $35,000 to Spady Rent-A-Car between January 2005 and June 2006. However, Paul himself testified that he was unsure whether the loan was still outstanding on December 31, 2006, and that it had definitely been paid off by the time of trial.
Finally, the parties presented evidence as to the loan made by Paul to Matt Valentine. Carolyn presented canceled checks showing that Paul loaned a total of $148,500 to Valentine in 2005, a fact to which Paul stipulated. Paul and Carolyn also both presented evidence that Paul sold this note receivable to Frontier Ford in 2006 for $148,849.38. According to the canceled checks offered into evidence by Carolyn, the final payment from Frontier Ford to Paul regarding this note receivable was made on October 30, 2006.
In addition to these notes receivable, Paul also testified at trial that the certificates of deposit (CD's) listed on the parties' final property statements were no longer in existence. He testified that these CD's matured after the valuation date of December 31, 2006. But he did admit that he had a total of $1 million invested in CD's with US Bank and Edward Jones on December 31, 2006.
The trial also included evidence regarding the alleged dissipation of assets by Paul. Carolyn presented evidence that Frontier Ford paid Laura Sutter a total of $142,124.13 between June and September 2006. Sutter was allegedly employed at Frontier Ford as general manager during Paul's illness in 2006. According to Sutter's testimony, she also designed Frontier Ford's Web page and served as Web master. However, Valentine, who was sales manager at Frontier Ford during the time of Sutter's alleged employment, testified that Frontier Ford never had a general manager. While he did admit to seeing Sutter at the dealership taking pictures, he also testified that Sutter did not design the dealership's Web site.
In an attempt to show how much money Paul "put in his pocket" each year, Carolyn called Bruce Meister, the accountant who prepared tax returns for Paul, Paul Spady Motors, Frontier Ford, and Spady Rent-A-Car. Using Paul's personal tax returns and various canceled checks, Meister calculated that Paul received the following amounts of income: $1,389,432 in 2004; $355,101 in 2005; $1,315,951 in 2006; $1,238,302 in 2007; and $1,472,554 in 2008. At the prompting of Carolyn's attorney, Meister calculated these amounts by adding the cash received from matured CD's, investments sold during the year, depreciation, stock distributions, and loan repayments--which would not be reported for income tax purposes--to the adjusted gross income reported on Paul's tax returns and then subtracting the amount paid in federal and state income taxes. Meister questioned this methodology on several occasions during direct examination. And on cross-examination, he admitted that the funds received in these manners are "not necessarily cash that [Paul] has on hand for the purposes of supporting himself or supporting his wife."
Although several other witnesses testified throughout the trial, their testimonies did not pertain to issues raised on appeal and need not be summarized.
After an extensive briefing schedule, the district court issued a decree of dissolution on January 20, 2011, dissolving the marriage of Paul and Carolyn and dividing the marital estate. The court awarded to Carolyn the marital residence and all of the household furnishings and equipment housed therein, the 2006 Buick Lucerne provided by Paul throughout these proceedings, the rental house at 602 East B Street, the two checking accounts held in her name, two Farm Bureau life insurance policies, the minority interest in LCL, a coin collection valued at $20,000, and her jewelry. The court awarded to Paul certain household items in his possession; his jewelry; a 1966 Olds Toronado; the real estate located at 2850 Osborne Drive East, 3101 Osborne Drive West, and 3005 Osborne Drive West; the two vacant commercial lots on Osborne Drive West; a life insurance policy; the majority interests in Paul Spady Motors, Frontier Ford, and Spady Rent-A-Car; the one share of stock in 20 Grand Investment Club; the notes receivable from Frontier Ford, Spady Rent-A-Car, Bonnevilla Plaza, Jerry Spady Pontiac-Cadillac, and Valentine; the bank account in his name; and the US Bank and Edward Jones CD's.
After all the marital property was divided, Carolyn had received $1,103,815.23 of the marital estate and Paul had received $8,642,153.56. Because the court found that Paul had dissipated a portion of the marital estate by paying $142,123 to Sutter, it then added this amount to the marital estate. So that each party would receive 50 percent of the marital estate, the court ordered Paul to pay Carolyn an equalization payment of $3,840,230.67.
On January 31, 2011, Paul filed a motion to amend or alter the decree of dissolution because the court awarded him "nonexistent" and "over-valued" assets, entered a judgment against him for $3.8 million "which is not supported by the evidence," entered a judgment against him "which is impossible to pay," awarded Carolyn the stock in LCL, and assigned "inconsistent values" to real estate. At the hearing held on March 7, the district court orally overruled the motion to amend or alter. A corresponding journal entry overruling the motion was filed on March 8.
Paul timely appeals.
III. ASSIGNMENTS OF ERROR
Paul alleges, reordered and restated, that the district court erred (1) in selecting valuation dates which do not bear a rational relationship to the marital property, (2) in awarding nonexistent assets to Paul, (3) in awarding significantly overvalued assets to Paul, (4) in awarding the stock interest in LCL to Carolyn, (5) in classifying certain nonmarital property as marital property, (6) in awarding Carolyn one-half of the marital estate, (7) in failing to determine that Carolyn had already received a portion of the marital estate, and (8) in its determination of funds available to Paul.
The argument section of Paul's brief may be read as also asserting that the district court abused its discretion by awarding him significantly less than half of the marital estate. However, he did not assign such as error, and thus, we do not consider this argument. Errors argued but not assigned will not be considered on appeal. Shepherd v. Chambers, 281 Neb. 57, 794 N.W.2d 678 (2011).
IV. STANDARD OF REVIEW
In actions for dissolution of marriage, an appellate court reviews the case de novo on the record to determine whether there has been an abuse of discretion by the trial judge; this standard of review applies to the trial court's determinations regarding division of property, alimony, and attorney fees. Gangwish v. Gangwish, 267 Neb. 901, 678 N.W.2d 503 (2004). This standard of review also applies to the date of valuation of marital assets. See Walker v. Walker, 9 Neb. App. 694, 618 N.W.2d 465 (2000). An abuse of discretion occurs when a trial court bases its decision upon reasons that are untenable or unreasonable or if its action is clearly against justice or conscience, reason, and evidence. Davis v. Davis, 275 Neb. 944, 750 N.W.2d 696 (2008).
An appellate court is required to conduct a de novo review of dissolution cases and when the evidence is in conflict, may consider, and 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. Baratta v. Baratta, 245 Neb. 103, 511 N.W.2d 104 (1994).
V. ANALYSIS
1. VALUATION DATE
Paul has repeatedly challenged the district court's decision regarding the valuation date to be used when valuing the marital estate and again raises such a challenge on appeal.
We find no merit to this assignment of error for the main reason that Paul agreed to the valuation date of December 31, 2006, at a hearing early in the divorce proceedings. A party cannot complain of error which the party has invited the court to commit. Moyer v. Nebraska City Airport Auth., 265 Neb. 201, 655 N.W.2d 855 (2003). In the journal entry establishing the valuation date of December 31, 2006, the district court specifically noted that "[t]his date was set by the agreement of the parties." Because Paul agreed with Carolyn to establish the valuation date of December 31, 2006, which agreement the court adopted, he cannot now argue that the court committed error by setting that valuation date in accordance with their agreement.
Even if Paul had not agreed to the original valuation date of December 31, 2006, thereby barring his assignment of error as to that date, we find that the district court did not abuse its discretion in setting the valuation dates used in this case for several reasons.
There is no "hard and fast" rule concerning valuation dates so long as the selected date bears a rational relationship to the property to be divided, and the selected date is reviewed for an abuse of discretion. Myhra v. Myhra, 16 Neb. App. 920, 756 N.W.2d 528 (2008). Our case law does not clarify when this rational relationship between the valuation date and the marital property must exist. However, the purpose of assigning a date of valuation in a decree is to ensure that the marital estate is equitably divided. Blaine v. Blaine, 275 Neb. 87, 744 N.W.2d 444 (2008). And because the valuation and distribution of a particular asset rarely takes place in a vacuum, a specific, consistent, and enforceable date of valuation permits the trial court to allocate all the assets of the marital estate in an equitable and fair manner. Id. Because having a specific, consistent, and enforceable valuation date is crucial to fulfilling the purpose of a valuation date, it would be counterproductive to the goal of equitable division, not to mention judicial economy, to require trial courts to continually reassess the valuation date to determine whether it still bears a rational relationship to the marital property in question. Therefore, recognizing the merit in maintaining a set valuation date, we now hold that the rational relationship must exist at the time when the valuation date is initially set.
In the case before us, there were two valuation dates, both of which bore a rational relationship to the marital property at the time when the court set the dates. The valuation date of December 31, 2006, bore a rational relationship to Paul and Carolyn's marital property because at the time it was set, it was the date for which end-of-year financial statements would be available for purposes of preparing the parties' property statements. The Nebraska Supreme Court has previously affirmed the use of a valuation date that coincides with the most recent end-of-year financial statements prior to trial. See Davidson v. Davidson, 254 Neb. 656, 578 N.W.2d 848 (1998). In Davidson v. Davidson, supra, the trial court chose a valuation date that coincided with the husband's most recent financial statements and was approximately 5 months before trial. In affirming the use of this valuation date, the Nebraska Supreme Court said, "Considering the complexity of the financial information involved in this case, the valuation of [the husband's] December 31, 1995, financial statement is certainly rationally related to the property composing the marital estate." Id. at 668, 578 N.W.2d at 858. In the instant case, the valuation date of December 31, 2006, when set, was the date for which the most recent year-end financial information would be available from the relevant corporations. Therefore, it bore a rational relationship to the marital property when it was determined. Similarly, the valuation date of December 31, 2008, bears a rational relationship to the two car dealerships because it was the last date upon which the individual dealerships existed prior to the merger, effective on January 1, 2009.
Paul now contends that the valuation dates of December 31, 2006, and December 31, 2008, no longer bear a rational relationship to the marital property because certain property has decreased in value due to "the significant effects of the [economic] recession suffered not only by Paul and Carolyn, but by the nation as a whole." Brief for appellant at 18.
We acknowledge that there may be cases in which the values of marital assets so drastically change during the course of the proceedings that the valuation date may need to be altered to achieve a just result. For example, in Gohl v. Gohl, 13 Neb. App. 685, 695, 700 N.W.2d 625, 633 (2005), this court determined that the valuation date set by the trial court for the parties' interest in the company they founded was an abuse of discretion because the corporation was awarded "a nearly half-million-dollar judgment plus prejudgment and postjudgment interest and attorney fees" in an unrelated lawsuit after the valuation date but before trial.
But the district court did not abuse its discretion in maintaining the valuation dates of December 31, 2006, and December 31, 2008, because the circumstances of this case are distinguishable from Gohl v. Gohl, supra. In that case, the change in value to the company the parties founded was attributed to a single, one-time court judgment that occurred prior to trial. In the case before us, the change in value of the marital estate was hardly as straightforward. First, because the value of Paul and Carolyn's marital property was affected by the unique economic circumstances of the past few years, the change in value of the marital estate was ongoing and continued even beyond trial. As the district court stated:
Both sides have prolonged this case to the point that it would be impossible to set a valuation date that should not be changed due to the volatility of the economy and theSecond, the continual fluctuation in value was exacerbated by Paul's constant transferring of assets between the marital estate and the dealerships. Between the valuation date of December 31, 2006, and trial, Paul loaned at least $1.6 million to Frontier Ford, received at least $115,000 in loan repayments from Frontier Ford, and was continually receiving monthly rent from the dealership. The evidence also suggested that similar transactions occurred between Paul and Paul Spady Motors throughout the proceedings.
automobile industry. The car business could rebound in [6] months and then we would be looking at changing the date again and continuing the trial again.
Because the precise value and nature of Paul and Carolyn's marital estate was constantly changing, it was even more necessary for an equitable division of property that there be a known, certain valuation date. Furthermore, considering the prolonged history of this case and the amount of discovery that would have been required to comply with a new valuation date, judicial economy weighed heavily in favor of not changing the valuation date. Given the circumstances of this case, the district court's decision not to change the valuation dates in response to the decrease in value of certain marital assets was neither untenable nor unreasonable. The district court did not abuse its discretion in this regard.
Because Paul agreed to the original valuation date of December 31, 2006; because the valuation dates did bear a rational relationship to the marital property at the time they were established; and because we do not find that the district court abused its discretion in failing to change the valuation dates at a later time in the proceedings, this assignment of error lacks merit.
2. NONEXISTENT ASSETS
Paul's next assignment of error on appeal is that the district court abused its discretion in awarding him nonexistent assets, specifically the notes receivable from Spady Rent-A-Car, Jerry Spady Pontiac-Cadillac, and Valentine; the share of stock in 20 Grand Investment Club; and the US Bank and Edward Jones CD's. With the exception of the share of stock in 20 Grand Investment Club, Paul testified at trial that these marital assets were paid off or had matured by the time of trial. We note that in all of these instances, the assets became nonexistent because Paul received cash either in fulfillment of the note receivable or upon the maturity of the CD's. He did not testify that the value of any of these assets was lost, depreciated, or given away with no expectation of repayment. Neither did he present any evidence to that effect. On the contrary, with the majority of these assets, Paul was able to account for what he did with the cash received--some was deposited in his checking account, some was loaned to Frontier Ford, and some cash he admitted to still possessing. And because there was no evidence at trial to explain why the share of stock in 20 Grand Investment Club no longer existed at the time of trial, in the absence of evidence to the contrary, we assume that its value is somehow still retained in the marital estate. Therefore, the court did not err in concluding that these assets were still part of the marital estate. The fact remains that while these assets no longer existed in the form of notes receivable, shares of stock, and CD's at the time of trial, the funds they represented did still exist, albeit in other forms. The district court did not abuse its discretion in awarding Paul these so-called nonexistent assets.
3. OVERVALUED ASSETS
Paul asserts on appeal that the district court erred in overvaluing certain assets awarded to him, particularly the note receivable from Bonnevilla Plaza, the interests in Frontier Ford and Spady Rent-A-Car, the two vacant lots on Osborne Drive West, and the real property located at 2850 Osborne Drive East and 3101 Osborne Drive West.
(a) Note Receivable From Bonnevilla Plaza
In his final property statement, during his testimony at trial, and in his brief on appeal, Paul conceded that the value of the note receivable from Bonnevilla Plaza was $701,400 as of the valuation date of December 31, 2006. Yet he now claims that the court overvalued this asset because the balance had been paid down to $530,000 by the time of trial. In this sense, he is making the same argument as he made regarding the nonexistent assets awarded to him by the court. But, as was the case with those nonexistent assets, Paul still possesses the cash he received in repayment of this note receivable after the valuation date. He testified at trial that he put the cash from this note receivable in his bank account and still possesses those funds. Therefore, the court did not abuse its discretion in awarding the full value of the note receivable as of December 31, 2006, to Paul.
(b) Spady Rent-A-Car
The district court found the value of Paul and Carolyn's interest in Spady Rent-A-Car to be $357,500, the value provided by Carolyn's appraiser. Samson reached the value of $357,500 by using the income approach to come up with a value of $134,385 and then added the value of the company's nonoperating assets, including the condominium in Mexico, to reach a total value of $650,000 for the entire company, or $357,500 for a 55-percent interest.
Paul argues on appeal that the court abused its discretion in adopting Samson's valuation because Samson's valuation did not account for the liability associated with the condominium and did not consider that the location of the condominium made it "unlikely that the property could be used as collateral to secure a loan." Brief for appellant at 32. Paul bases this argument on the opinion of his own expert as to the faults of Samson's appraisal.
But Paul fails to account for the fact that the district court explicitly found Renter to be less credible than Samson. In explaining its judgment, the court stated, "The [c]ourt finds [that Carolyn's] expert's value as to [Spady Rent-A-Car] is more credible." Because Renter included no evidence in his report to support his claims that there was a liability against the condominium and that it would be hard to secure a loan using that property as collateral and because other aspects of Renter's valuation were found to be flawed during the trial, the court did not abuse its discretion in finding Samson's valuation to be more credible than Renter's.
Giving weight to the district court's assessment of credibility, as our standard of review permits, we find that the district court did not abuse its discretion in adopting the value of $357,500 presented by Samson.
(c) Frontier Ford
The district court found the value of Paul and Carolyn's interest in Frontier Ford to be $0, the value provided by Samson. Samson determined that the dealership had a negative book value prior to any equity adjustments, but because a corporate shareholder's liability is limited, he calculated the value of Paul and Carolyn's interest to be $0. Paul's expert testified that the value of the dealership should remain negative because the "dealer is going to be responsible for making up those expenses that plunge this dealership into a negative."
The district court did not abuse its discretion in adopting Samson's methodology for two reasons. First, Hall's explanation as to why a negative value should remain negative was based on the assumption that Paul would be responsible for the debts of Frontier Ford. Second, Samson testified that his approach was supported by industry standards. We address each reason in turn.
Hall's assumption that Paul would be responsible for the corporate debt is undercut by two circumstances. First, a corporation is viewed as a complete and separate entity from its shareholders and officers, who are not, as a rule, liable for the debts and obligations of the corporation. Christian v. Smith, 276 Neb. 867, 759 N.W.2d 447 (2008). Therefore, Paul would only be responsible for the debts of the corporation to the extent he personally guaranteed loans made to the corporation. Second, the district court found Paul unpersuasive. Paul did testify that he personally guaranteed loans by third parties to the dealership. But the district court explicitly found Paul not to be a credible witness, observing that he is "clearly not forth right [sic] in his financial dealings" and calling his testimony "suspect." Given the lack of other evidence to substantiate the claim that Paul guaranteed Frontier Ford's loans and considering the district court's assessment that Paul was not a credible witness, we are not persuaded that he was, in fact, personally liable.
The second reason supporting Samson's methodology rests upon his unrebutted recitation of the industry standard. Samson explained that the practice of rounding negative valuations to zero was based on "general valuation procedures," which Hall did not dispute or contradict with other evidence of the industry standard. Hall simply said, "I have always calculated negatives inasmuch as what I found." For these reasons, the district court's adoption of Samson's methodology and the resulting value of $0 for Frontier Ford was not an abuse of discretion.
Paul also argues that the court should not have adopted Samson's valuation because it did not include a discount for lack of marketability. We need not decide whether such a discount should have been applied because any discount would only yield a greater negative value for Paul and Carolyn's interest in the dealership, which would still be rounded to zero under Samson's methodology. The court did not abuse its discretion in assigning a value of $0 to Frontier Ford.
(d) Lot 4 on Osborne Drive West
The district court awarded Lot 4 on Osborne Drive West to Paul at a value of $102,000, which value it drew from the appraisal by Malone. Paul contests this value because it does not include an out-of-district water assessment that his expert claims existed against Lot 4. Hendricksen testified that he found an assessment against Lot 4 in the amount of $8,600, but neither he nor Paul produced any documentation to prove that an out-of-district water assessment did in fact exist against the property. Furthermore, Malone said that he was not aware of any assessments related to the property. Given the lack of definitive evidence that an out-of-district water assessment existed against Lot 4, the district court did not abuse its discretion in accepting Malone's value of $102,000.
(e) 2850 Osborne Drive East, 3101 Osborne Drive West,
and Lot 2 on Osborne Drive West
In assigning value to the real properties located at 2850 Osborne Drive East and 3101 Osborne Drive West, the district court accepted the values presented at trial by Paul's appraiser. And while the court did not explicitly adopt Paul's valuation of Lot 2 on Osborne Drive West, the value assigned by the court only differed from his value by $330 and was actually lower than his assigned value. Furthermore, Paul adopted the value assigned by the court in his final property statement. Considering the court awarded these three assets to Paul at or under his value, he cannot now contest these valuations. As we have already recalled once in this opinion, "a party cannot complain of error which the party has invited the court to commit." Moyer v. Nebraska City Airport Auth., 265 Neb. 201, 212, 655 N.W.2d 855, 865 (2003). The district court did not err in awarding 2850 Osborne Drive East, 3101 Osborne Drive West, and Lot 2 on Osborne Drive West to Paul at or under his own values.
(f) Conclusion as to Overvalued Assets
For the above reasons, the district court did not abuse its discretion in assigning values to the note receivable from Bonnevilla Plaza, the interests in Frontier Ford and Spady Rent-A-Car, the two vacant lots on Osborne Drive West, and the real property located at 2850 Osborne Drive East and 3101 Osborne Drive West. We affirm the court's award of these assets to Paul at the values listed in the decree of dissolution.
4. AWARD OF STOCK IN LCL TO CAROLYN
Weighing all the evidence presented at trial regarding the LCL stock, we find that the district court did not abuse its discretion in awarding this asset to Carolyn. We acknowledge that Paul testified that his involvement with LCL was significant and that it would be "important for the existence of the company" that he be awarded the stock. We also recognize that Jerman, the president of LCL, expressed a preference for working with Paul over Carolyn because they "worked very well together" and Paul has taught him "a lot of things." However, other portions of Jerman's testimony suggested that Paul played a smaller role in the operation of LCL than Paul claimed. Jerman testified that he consulted with Paul as the minority shareholder "part of the time, I guess, if I've got a question I want to talk to him about" in regard to strategic business decisions, but that he did not consult with him as to the day-to-day operation of the business. Given this evidence and the district court's judgment that Paul was not a credible witness, we are not persuaded that he was so vital to the running of LCL that the court abused its discretion in not awarding the LCL stock to him. Furthermore, Carolyn also expressed a preference for being awarded this stock. Therefore, we affirm the district court's award of the LCL stock to Carolyn.
5. CLASSIFICATION OF NONMARITAL PROPERTY AS MARITAL PROPERTY
Paul argues that the district court erred in determining that the $142,123 paid to Sutter by Frontier Ford was marital property. Even if we assume, without deciding, that this was error by the district court, it did not undermine the ultimate result.
Removing $142,123 from the marital estate does not significantly change the equities of the lower court's property division. The $142,123 was not awarded to either party—contrary to Paul's contention on appeal—it only came into the court's calculation when determining the amount of the equalization payment that needed to be paid to Carolyn. If it was error to include this amount in the overall value of the marital estate, the equalization payment as calculated by the court would be slightly inflated:
+----------------------------------------------------------------+ ¦Total marital estate calculated by district court¦$9,888,091.79 ¦ +-------------------------------------------------+--------------¦ ¦Payment to Sutter ¦(142,123.00) ¦ +-------------------------------------------------+--------------¦ ¦Adjusted marital estate ¦$9,745,968.79 ¦ +-------------------------------------------------+--------------¦ ¦Equal division of adjusted marital estate ¦$4,872,984.40 ¦ +-------------------------------------------------+--------------¦ ¦Property awarded to Carolyn ¦(1,103,815.23)¦ +-------------------------------------------------+--------------¦ ¦Adjusted equalization payment ¦$3,769,169.17 ¦ +-------------------------------------------------+--------------¦ ¦versus ¦ ¦ +-------------------------------------------------+--------------¦ ¦Equalization payment calculated by district court¦$3,840,230.67 ¦ +----------------------------------------------------------------+ But even with this slightly inflated equalization payment, Paul still received over 49 percent of the marital estate under the court's original decision:
+---------------------------------------------------------------------------+ ¦ ¦Carolyn ¦Paul ¦ +----------------------------------------------+-------------+--------------¦ ¦Property award ¦$1,103,815.23¦$8,642,153.56 ¦ +----------------------------------------------+-------------+--------------¦ ¦Equalization payment ¦3,840,230.67 ¦(3,840,230.67)¦ +----------------------------------------------+-------------+--------------¦ ¦Final property division ¦$4,944,045.90¦$4,801,928.89 ¦ +----------------------------------------------+-------------+--------------¦ ¦Percentage of adjusted total marital estate of¦ ¦ ¦ ¦ ¦50.7 ¦49.3 ¦ ¦$9,745,968.79 ¦ ¦ ¦ +---------------------------------------------------------------------------+
The division of property is not subject to a precise mathematical formula, but the general rule is to award a spouse one-third to one-half of the marital estate. Meints v. Meints, 258 Neb. 1017, 608 N.W.2d 564 (2000). Because Paul's award even after the inflated equalization payment is well within the one-third to one-half division that is appropriate, any error in including the $142,123 paid to Sutter in the marital estate did not rise to the level of an abuse of discretion. We find no merit to this assignment of error.
6. ONE-HALF AWARD TO CAROLYN
Because Paul assigns error to the district court's division of the marital estate, we briefly recall the applicable principles governing the division of property in dissolution proceedings. Generally, the division of property in a dissolution case is based on equitable principles, and its purpose is to divide the marital assets equitably. Medlock v. Medlock, 263 Neb. 666, 642 N.W.2d 113 (2002). Pursuant to Neb. Rev. Stat. § 42-365 (Reissue 2008):
When dissolution of a marriage is decreed, the court may order . . . division of property as may be reasonable, having regard for the circumstances of the parties, duration of the marriage, a history of the contributions to the marriage by each party,Additionally, a court may consider income and earning capacity of the parties, see Millatmal v. Millatmal, 272 Neb. 452, 723 N.W.2d 79 (2006), and "all facts pertinent in reaching an equitable property division," Shearer v. Shearer, 270 Neb. 178, 185, 700 N.W.2d 580, 586 (2005). Although the division of property is not subject to a precise mathematical formula, the general rule is to award a spouse one-third to one-half of the marital estate, the polestar being fairness and reasonableness as determined by the facts of each case. Millatmal v. Millatmal, supra.
including contributions to the care and education of the children, and interruption of personal careers or educational opportunities, and the ability of the supported party to engage in gainful employment without interfering with the interests of any minor children in the custody of such party.
Paul assigns as error the district court's award of half of the marital estate to Carolyn because "[he] contributed solely to the marital estate, though [she] was not prevented from working, and, indeed, could have pursued career opportunities after her youngest child completed school in 1988." Brief for appellant at 43-44.
Because Carolyn did contribute greatly to the marriage, albeit not financially, we do not find that the award of half of the marital estate to her was inequitable. Section 42-365 demands that we consider each party's contributions to the care and education of the children, and Carolyn's contributions in this regard were significant. She stayed at home with the three children throughout their marriage, raising them without any help from Paul aside from his financial support. Even after the children had grown up, Carolyn remained at home to be a housewife and homemaker. At the time of trial, Paul and Carolyn had been married 43 years. While we refrain from listing the plethora of jobs she regularly performed around the marital home, it is evident that she contributed to the marriage significantly, even if not financially.
Paul emphasizes that Carolyn did not contribute financially to the marriage even when she could have pursued a career after their youngest child graduated from high school. But this argument ignores her limited earning capacity. Carolyn never graduated from high school herself or received her diploma through the GED program, and she has no training that would qualify her for any particular type of work. Her work experience outside of the home is limited to a few months working as a store clerk and the management of a drive-up ice cream store for nine summers. At the time of trial, Carolyn was 65 years old. Given her lack of education and work experience and her age, we find Carolyn's earning capacity to be very low. Apart from her limited earning capacity and the income from the court's division of marital property, her only available income consists of Social Security payments of approximately $300 per month. Thus, the evidence of Carolyn's income and earning capacity also supported the court's division of property.
Ample precedent supports an award of half of the marital estate to a party even though he or she did not contribute financially to the marriage. In Walker v. Walker, 9 Neb. App. 834, 622 N.W.2d 410 (2001), we awarded the wife 52.15 percent of the marital estate even though the contributions to the economic success of the marriage were largely the husband's. And in Grams v. Grams, 9 Neb. App. 994, 1001, 624 N.W.2d 42, 51 (2001), where "[the wife] had primarily raised the children and maintained the household, while [the husband] primarily performed most of the farming responsibilities," we affirmed a 50-50 split of the marital estate.
Given Carolyn's contributions to the marital home, her earning capacity, and her limited opportunities for income, the district court did not err in its division of the marital estate. On the facts of this case and because of the length of the marriage, we find no abuse of discretion in the court's essentially equal division of the marital estate.
7. WHETHER CAROLYN ALREADY RECEIVED PORTION OF MARITAL ESTATE
THROUGH TEMPORARY ALIMONY AND ATTORNEY FEES
Paul argues on appeal that the district court should have considered the attorney fees and temporary alimony he paid to Carolyn prior to trial and accounted for those in the property division. In January 2006, the court ordered Paul to pay $100,000 in attorney fees to Carolyn and $13,500 per month in temporary alimony beginning January 1 and continuing "during the pendency of this action."
We find no merit to this assignment of error for two reasons—a lack of supporting precedent and a failure of proof.
First, Paul cites to no cases in which Nebraska courts have credited a party for attorney fees or temporary alimony paid prior to dissolution. Neither do we find any legal authority to support Paul's argument that the district court should have provided him with such credits. The law is clear in this state that alimony payments paid during the pendency of an appeal must be credited toward the payor's other alimony and property division payments. Davidson v. Davidson, 254 Neb. 656, 578 N.W.2d 848 (1998). But the same has not been held in regard to temporary alimony paid during original dissolution proceedings. Neither have we held that attorney fees paid during dissolution proceedings at the trial level should be credited against the recipient's property award. Absent legal authority sanctioning credit for attorney fees and temporary alimony paid before a decree is entered, we do not find that the district court abused its discretion in failing to credit Paul for the amounts he paid.
Second, even if credit for temporary alimony paid prior to dissolution were customary, Paul provided no evidence to establish the amount of temporary alimony he actually paid. In the absence of such evidence, the district court did not abuse its discretion in not subtracting the temporary alimony from Carolyn's award. This assignment of error lacks merit.
8. FUNDS AVAILABLE TO PAUL
Paul finally argues that the district court erred in determining the funds available to him and thereby overvalued the marital estate and entered a decree which placed upon him an obligation he is unable to meet.
Even if we assume without deciding that Carolyn's demonstration of the amount of cash Paul "put in his pocket" was a questionable calculation of the amount of money available to him each year, such error was harmless because it did not prejudice Paul in the valuation of the marital estate. The marital estate was determined based upon the assets in actual possession of Paul and Carolyn as of December 31, 2006, and December 31, 2008, as presented in their property statements, and did not take into account the previous or future cashflow of the parties. Therefore, even if the court somehow erred in calculating how much money Paul could access each year, the error did not prejudice him in regard to the ultimate valuation of the marital estate. Error without prejudice provides no ground for appellate relief. Betterman v. Department of Motor Vehicles, 273 Neb. 178, 728 N.W.2d 570 (2007).
Paul's remaining arguments that the district court erred in determining the funds available to him hold no weight unless we find his other arguments on appeal to be persuasive. Paul worries that he will be unable to sell the overvalued assets, but we have already determined that the court did not overvalue those assets. He argues that certain assets no longer exist, but we previously highlighted that he admitted to still possessing the funds he received when those assets were repaid or matured. And he argues that the court abused its discretion by not considering that many assets have been reinvested, returned to the corporations as loans, or moved to another asset. But because we affirmed the use of the valuation dates of December 31, 2006, and December 31, 2008, the parties are responsible for the marital property as it existed on those dates. To the extent that marital assets have been cashed in, transferred, reinvested, or reloaned since the valuation dates, Paul is expected to draw upon these transformed assets as necessary to satisfy his obligations under the decree.
We do not find that the district court abused its discretion in determining the funds available to Paul.
VI. CONCLUSION
Because Paul agreed to the original valuation date, because the valuation dates bore a rational relationship to the marital property when established, and because we do not find that the district court erred in failing to change the valuation dates at a later time in the proceedings, the district court did not abuse its discretion in selecting valuation dates. Our review of the evidence at trial indicates that the court did not abuse its discretion in valuing certain assets awarded to Paul, in awarding assets to him that no longer existed in the same form at the time of trial, in awarding the LCL stock to Carolyn, or in dividing the marital estate on an essentially equal basis. If the court's classification of the amounts paid to Sutter as marital property was error, we find that it did not rise to an abuse of discretion. And, finally, we hold that the district court did not abuse its discretion in failing to credit Paul with the attorney fees and temporary alimony he paid to Carolyn or in determining the funds available to him.
Given the circumstances of this case, we find the district court's property division to be both reasonable and equitable and, consequently, not an abuse of discretion. Accordingly, we affirm.
AFFIRMED.