§ 518.54

Minnesota Statutes

Source: 2025 Minnesota Statutes. For the official text, see revisor.mn.gov.

Citing Cases (220)

Showing 100 most recent of 220 citing cases.

Minnesota Supreme Court

Gill v. Gill · 2018 1 citation [Dissent]

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Kremer v. Kremer · 2018 1 citation [Dissent]

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In Re the Estate of Barg · 2008 1 citation

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Antone v. Mirviss · 2006 2 citations

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Marriage of Gottsacker v. Gottsacker · 2003 11 citations

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Marriage of Antone v. Antone · 2002 11 citations

In 1975, respondent and Greg Anderson purchased Filters Corporation, Inc. (FCI) as equal partners from Anderson’s parents. FCI was primarily a military contractor that manufactured fabric bags to hold explosive charges for tank shells. In 1993, FCI invested in a new business venture to manufacture underwear for in*100continent people. The underwear business experienced substantial losses. Because of the losses, FCI ceased operations. In 1995, respondent and Anderson formed EPI, each owning 50%. Like FCI, EPI was a military contractor. In 1997, respondent purchased Anderson’s 50% interest in EPI. The trial court concluded that this purchase created a marital interest in half of the EPI stock. Respondent claimed that his remaining interest in EPI was nonmarital property that he traced to the 50% interest in FCI he owned at the time of the marriage. The trial court found that EPI made the same products for the same customers as FCI had before the marriage, that there was no marital effort to create new products or to change how the business operated, and that no marital interest was created by the change in corporate form from FCI to EPI because it was not an arm’s-length transaction and no consideration was paid. The trial court concluded that respondent had a nonmarital interest in 50% of EPI. Respondent moved for amended findings of fact and conclusions of law. The trial court denied respondent’s motion. Appellant moved for amended findings of fact and conclusions of law or a new trial, and for a stay of the sale of the homestead. The trial court granted appellant’s motion in part, amending its conclusions of law to require respondent to satisfy any difference if the proceeds of the homestead’s sale were insufficient to pay appellant $803,376, and denied the remainder of appellant’s motion. Appellant appealed and respondent filed a notice of review to examine the spousal maintenance provision. The court of appeals affirmed. The court of appeals rejected appellant’s argument that the trial court erred by failing to use the formula we adopted in Schmitz v. Schmitz, 309 N.W.2d 748 (Minn.1981), to divide the marital and nonmarital interests in the 18 rental properties. The court of appeals stated that use of Schmitz is a presumptive, but not mandatory, method to determine the marital and nonmarital interests in an asset. The court of appeals held that the trial court had adequately considered the facts and the law to hold that the market-related appreciation was respondent’s nonmarital property. The court of appeals also affirmed the trial court’s holding that the appreciated value of the homestead was respondent’s nonmarital property. The court of appeals deferred to the trial court’s conclusion that appellant had not submitted any credible evidence that the homestead had been improved during the marriage. Finally, the court of appeals held that the record supported the trial court’s findings of fact and affirmed the trial court’s holding that respondent had a 50% nonmarital interest in EPI. I. A trial court has broad discretion in evaluating and dividing property in a marital dissolution and will not be overturned except for abuse of discretion. Maranda v. Maranda, 449 N.W.2d 158, 164 (Minn.1989). We will affirm the trial court’s division of property if it had an acceptable basis in fact and principle even though we might have taken a different approach. Servin v. Servin, 345 N.W.2d 754, 758 (Minn.1984). We defer to the trial court’s findings of fact and will not set them aside unless they are clearly erroneous. Maurer v. Maurer, 623 N.W.2d 604, 606 (Minn.2001). Whether property is marital or nonmarital, however, is a question of law subject to de novo review. Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997). All property acquired by either spouse during the marriage is presumed to be *101marital property, without regard to the form of ownership. Minn. Stat. § 518.54, subd. 5 (2000); Olsen, 562 N.W.2d at 800. To overcome the presumption that property is marital, a party must demonstrate by a preponderance of the evidence that the property is nonmarital. Olsen, 562 N.W.2d at 800; see also Minn. Stat. § 518.54, subd. 5. Nonmarital property includes property “acquired before the marriage,” property that is “acquired in exchange for” property acquired before the marriage, and “the increase in value of property” acquired before the marriage. Minn. Stat. § 518.54, subd. 5(b)-(c) (2000). II. We first address the trial court’s division of the 18 rental properties that respondent acquired before the marriage. Each property was subject to a substantial mortgage at the time of the marriage. Appellant concedes that the net equity at the time of the marriage is respondent’s nonmarital property. Appellant also concedes that a portion of the appreciation during the marriage is respondent’s nonmarital property. In addition, the trial court found, and respondent concedes, that the amount by which the mortgage balances were reduced during the marriage is marital property.1 Thus, the issue before us is whether the trial court properly characterized all of the market-related appreciation during the marriage as respondent’s nonmarital property. Appellant argues that the formula we adopted in Schmitz and its progeny is the proper method to determine the marital and nonmarital interests of appreciation of rental properties acquired before the marriage whose mortgages were reduced during the marriage with marital income. Respondent contends that the Schmitz formula applies only to property acquired during the marriage. For property acquired before the marriage, respondent maintains that appreciation due to marital efforts is marital, whereas appreciation due to market forces is nonmarital. Respondent further argues that even if the Schmitz formula was applicable to the 18 rental properties, its use by the trial court is discretionary. In Schmitz, a husband and wife purchased a duplex during their marriage. 309 N.W.2d at 748. They lived in one unit of the duplex and rented the other unit. Id. at 748-49. They made the down payment using the husband’s nonmarital funds and made mortgage payments using rental income from the unit in the duplex. Id. In an action for dissolution of the marriage, the husband argued that the duplex constituted nonmarital property because it was acquired in exchange for a down payment derived from his nonmarital funds. Id. at 750. He maintained, therefore, that he was entitled to the entire increase in equity. Id. We rejected his argument, holding that the duplex was, in part, a marital asset even though the down payment was made with nonmarital funds. Id. We approved the analysis of Woosnam v. Woosnam, 587 S.W.2d 262 (Ky.Ct.App.1979), and affirmed the trial court’s division of the duplex in Schmitz because of its “minimal discrepancy [from the result that would have been reached had the trial *102court strictly applied the Woosnam formula] in an area of law committed in large part to the discretion of the trial court.” Schmitz, 309 N.W.2d at 750. We have summarized the Schmitz formula as follows: The present value of a nonmarital asset used in the acquisition of marital property is the proportion the net equity or contribution at the time of acquisition bore to the value of the property at the time of purchase multiplied by the value of the property at the time of separation. The remainder of equity increase is characterized as marital property Brown v. Brown, 316 N.W.2d 552, 553 (Minn.1982). Although we stated in Brown that the Schmitz formula is one “by which a trial court might correctly apportion the increase in equity between marital and non-marital assets,” we reversed the trial court’s division of the homestead. Brown, 316 N.W.2d at 553. On remand, we instructed the trial court to reexamine its property distribution in accordance with the Schmitz formula. Brown, 316 N.W.2d at 553; cf. Kelly v. Kelly, 371 N.W.2d 193, 197 (Minn.1985) (affirming trial court’s division of homestead because it showed “due allowance” for the guidelines established in Schmitz). Respondent contends that we limited the applicability of the Schmitz formula to property acquired during the marriage with nonmarital funds in Nardini v. Nardini, 414 N.W.2d 184 (Minn.1987). We disagree. In Nardini, we held: [T]he increase in the value of nonmarital property attributable to the efforts of one or both spouses during their marriage, like the increase resulting from the application of marital funds, is marital property. Conversely, an increase in the value of nonmarital property attributable to inflation or to market forces or conditions, retains its nonmarital character. Id. at 192. We illustrated how to apply our holding in a lengthy hypothetical. The hypothetical involved real property that was owned by the husband and subject to a mortgage at the time of the marriage. Id. at 192-93. During the marriage, the husband and wife used marital funds to reduce the mortgage balance. Id. at 193. We stated that “[i]nasmuch as the real property comprised both marital and non-marital interests, the interests should be apportioned according to the [Schmitz ] formula.” Nardini, 414 N.W.2d at 193. Thus, the Schmitz formula may be used to determine marital and nonmarital interests in property acquired during the marriage with a nonmarital down payment, 309 N.W.2d at 750, as well as property acquired before the marriage, Nardini, 414 N.W.2d at 193. For property acquired before the marriage, the formula uses the time of the marriage instead of the time of the purchase. Thus, [t]he present value of a [nonmarital interest in property acquired before the marriage] is the proportion the net equity * * * at the time of [the marriage] bore to the value of the property at the time of [the marriage] multiplied by the value of the property at the time of separation. The remainder of equity increase is characterized as marital property * * *. See Brown, 316 N.W.2d at 553. Application of the Schmitz formula to property acquired before the marriage is consistent with section 518.54, subd. 5. The formula recognizes that the net equity at the time of the marriage is nonmarital property because it was “acquired before the marriage.” See id., subd. 5(b). Assuming the property appreciates during the *103marriage, the formula also recognizes that the increase in value of the property acquired before the marriage — that is, the net equity at the time of the marriage — is nonmarital property. In this case, respondent owned 18 rental properties at the time of the marriage. They consisted of a triplex, a 12-unit apartment building, and 16 single-family houses. Each was subject to a mortgage at the time of the marriage. Marital equity in the properties was created because the parries used marital funds to reduce the mortgage balances during the marriage. The trial court’s characterization of all of the market-related appreciation during the marriage as respondent’s nonmari-tal property ignores the fact that those same market forces caused the marital equity to appreciate. The dissent also fails to distinguish between the marital and nonmarital interests in the properties, even though the parties agree that the equity created by paying down the mortgages during the marriage was marital property. By the dissent’s reasoning, the appreciation of that marital property would be awarded to the holder of the nonmarital portion of the properties, depriving the marital estate of any return on its investment. We therefore conclude that the trial court should have applied the Schmitz formula to apportion the marital and nonmarital interests in the 18 rental properties. We hold as a matter of law that a portion of the market-related appreciation during the marriage is marital property. We remand to the trial court to determine the properties’ values at the time of the marriage and to apply the Schmitz formula to determine the marital and nonmarital interests. III. We now turn to the trial court’s division of the marital homestead. Appellant contends that respondent withdrew his nonmarital equity by refinancing the homestead. Appellant asserts the trial court erred by failing to apply the Schmitz formula after accounting for respondent’s withdrawal of his nonmarital equity. Respondent argues that there was no marital equity created in the homestead because the mortgage balances increased during the marriage. Respondent maintains that there is no basis in fact or law for appellant’s assertion that respondent withdrew his nonmarital equity from the homestead. We reject appellant’s argument that respondent withdrew his nonmarital equity in the homestead by refinancing the homestead. As already noted, property obtained by either spouse during the marriage is presumed to be marital property. Minn. Stat. § 518.54, subd. 5; Olsen, 562 N.W.2d at 800. To overcome this presumption, “a party must demonstrate by a preponderance of the evidence that the property is nonmarital.” Olsen, 562 N.W.2d at 800; see also MinmStat. § 518.54, subd. 5. The trial court did not make findings as to how the parties used the proceeds from the refinanced first mortgage and the second mortgage. The trial court found that the debt secured by the home equity line of credit was marital. Appellant concedes that she does not know how the proceeds from the additional encumbrances were used. Thus, appellant failed to demonstrate by a preponderance of the evidence that the loan proceeds were used by respondent for nonmarital purposes. We also reject the trial court’s conclusion that there was no marital equity in the homestead because the mortgage balances increased during the marriage. By refinancing the homestead during the marriage, the marital estate effectively borrowed against its interest in the home*104stead. We reverse the court of -appeals’ decision affirming the trial court’s disposition of the marital homestead. We remand to the trial court to determine the fair market value of the homestead at the time of the marriage and at dissolution, and to apply the Schmitz formula to determine the marital and nonmarital interests in the homestead. IV. We now address the trial court’s disposition of EPI. The parties agree that the trial court properly concluded that respondent’s purchase in 1997 of Anderson’s interest in EPI created a marital interest in 50% of the EPI stock. Appellant argues the trial court erred by concluding that respondent’s remaining 50% interest in EPI is respondent’s nonmarital property. In the alternative, appellant argues that, even if respondent had traced the 50% interest in EPI to his nonmarital interest in FCI, the trial court failed to acknowledge that the appreciation in the value of respondent’s interest during the marriage is marital property. In response, respondent argues that the trial court did not err by concluding that respondent’s remaining interest in EPI was nonmarital property. The trial court described how FCI ceased operations and the formation of EPI: In 1993 through 1995, [FCI] invested in a new business venture to manufacture incontinent underwear. The company took on a number of additional investors as stockholders and lenders. The underwear business however never made money and conversely experienced substantial losses. The underwear venture was eventually discontinued by the company. As part of the winding up of the affairs of this business venture, FCI ceased doing business and a new corporation, EPI[,] was created in 1995. Mr. Anderson and [respondent] remained the equal owners of the new corporation and EPI continued the military contractor business. The other shareholders in FCI who had invested in the underwear business had no interest in EPI. The trial court explained its decision that respondent had a 50% nonmarital interest in EPI: [Appellant] asserted that FCI became insolvent and was completely liquidated and that EPI was created as an entirely new company. The evidence presented by [respondent] established that the company is presently making the same products for the same customers that FCI had in 1986 prior to the parties’ marriage. There was therefore no marital effort that went into creating new products or any changes in the way the business is run. Nor did the change in corporate form from FCI to EPI create any marital interest, as this change did not constitute a purchase since it was not an arm’s length transaction and no consideration was paid. Nor did the coming and going of the other shareholders for the underwear business and the debt for the underwear venture that was assumed by EPI and later paid off create any marital interest as the former business has remained unchanged. Appellant contends that the trial court’s finding that the formation of EPI was a “change in corporate form from FCI” is clearly erroneous. We agree. The record reveals that respondent and Anderson purchased FCI as equal partners from Anderson’s parents in 1975. Approximately 20 people invested in FCI’s underwear venture. One of the investors invested and loaned a total of approximately $1 million, taking a secured interest in FCI’s assets, including its receivables, inventory, and equipment. The underwear *105business experienced significant losses that ultimately caused FCI to become insolvent. When FCI was liquidated in 1995, its secured creditors were repaid. Its unsecured creditors were not fully repaid. After FCI’s liquidation, Anderson and respondent formed EPI. Anderson and respondent each invested $10,000 in EPI and loaned $10,000 to EPI. EPI used Anderson’s and respondent’s capital contributions, as well as a bank loan, to purchase equipment from a secured creditor of FCI. EPI continued the military subcontractor business that FCI established. Based on our review of the record, we conclude that the trial court’s finding that there was “a change in corporate form from FCI to EPI” is clearly erroneous. After experiencing substantial losses from its expansion into the underwear business, FCI was insolvent and was liquidated in 1995. FCI’s secured creditors were repaid, but its unsecured creditors were not. After FCI’s liquidation, EPI was formed, in part, with respondent’s capital contribution. EPI used Anderson’s and respondent’s capital contributions as well as bank financing to purchase equipment from a secured creditor of FCI. Thus, there was no “change in corporate form” from FCI to EPI. We conclude that the evidence is insufficient to rebut the presumption that respondent’s interest in EPI is marital. Although EPI continued the military subcontractor business started by FCI, EPI was formed as an entirely new business. Without respondent’s capital contribution during the marriage, respondent would not have had any interest in EPI. Respondent failed to demonstrate by a preponderance of the evidence that 50% of EPI’s stock is his nonmarital property. Reversed and remanded.

+ 8 more citations in this opinion.

Marriage of Rogers v. Rogers · 2001 7 citations

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Ka Ying Vue v. State Farm Insurance Companies · 1998 1 citation

+ 1 more citation in this opinion.

Marriage of Dobrin v. Dobrin · 1997 1 citation

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Schaefer v. Weber · 1997 1 citation

+ 1 more citation in this opinion.

Marriage of Olsen v. Olsen · 1997 5 citations

+ 5 more citations in this opinion.

Marriage of McKee-Johnson v. Johnson · 1989 1 citation

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Marriage of Oldewurtel v. Redding · 1988 2 citations

+ 2 more citations in this opinion.

Searles v. Searles · 1988 2 citations

Defendant then brought a Rule 12 motion to dismiss for failure of the complaint to state a claim upon which relief could be granted. Although not pleaded, the parties disclosed neither has ever resided in Minnesota. A copy of the 1971 Missouri divorce decree was also presented to the trial court. The decree dissolved the marriage, awarded custody of a minor child to Scott, denied Antonia separate maintenance, and said nothing about any property, whether in Missouri or elsewhere. On this record, the trial court granted Scott’s motion to dismiss, ruling that any interest Antonia might have had in the Minnesota land was extinguished when the marriage was dissolved, and, in any event, the partition action was “time barred by statute and equity.” The court of appeals panel reversed. The panel construed the complaint to include a claim for “disposition of property acquired during coverture” under Minn. Stat. § 518.54 (1971); that this claim was not extinguished by dissolution of the marriage; that plaintiff’s claim for a share of the income derived from the land is barred by the 6-year statute of limitations, but that the real estate claim, having been brought within the 15-year statute of limitations, survived. The dissenting member of the panel would have dismissed the action for laches. We granted defendant’s petition for further review.

Marriage of Nardini v. Nardini · 1987 1 citation

Maintenance, an award of “payments from the future income or earnings of one spouse for the support and maintenance of the other”, Minn. Stat. § 518.54, subd. 3 (1986), may be granted when the court finds that the spouse seeking maintenance:

Marriage of Katz v. Katz · 1987 4 citations [Dissent]

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Moylan v. Moylan · 1986 4 citations

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Marriage of Rohling v. Rohling · 1986 1 citation

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Abuzzahab v. Abuzzahab · 1984 4 citations

359 N.W.2d 12 (1984) Beverly ABUZZAHAB, Respondent, v. Faruk Said ABUZZAHAB, Appellant. No. C7-82-1540. Supreme Court of Minnesota. November 30, 1984. *13 Walter M. Baker, Edina, Mary C. Sherman, Minneapolis, for appellant. James H. Hennessy, Dale M. Wagner, Minneapolis, for respondent. Considered and decided by the court en banc without oral argument. KELLEY, Justice. Respondent in this marital dissolution proceeding Faruk Said Abuzzahab appeals from the order of the district court denying his motion for a new trial, claiming that the court failed to properly consider a liability in reaching a distribution of marital property and that it abused its discretion in awarding permanent spousal maintenance in the amount of $4,000 per month to the petitioner Beverly Abuzzahab. We affirm the property distribution and reverse and remand the question of spousal maintenance. The parties were married on June 29, 1962 in Washington D.C. and shortly thereafter moved to Minnesota to enable the respondent to obtain a post-graduate degree in pharmacology. Respondent is a board-certified psychiatrist who is presently engaged in the full-time practice of psychiatry and pharmacology. Four children were born during the marriage, three of whom remain unemancipated. In addition, the parties adopted the child of the respondent's deceased sister; that daughter is no longer a minor. A stipulation executed by the parties provided for joint legal custody of the minor children, the physical custody of each of the minor children, liberal visitation rights and a valuation of several of the major marital assets. That stipulation was approved by the court and the substantial marital estate was essentially equally divided. The court awarded Beverly $4,000 per month as permanent spousal maintenance and $400 per month per child as child support for the two children in her physical custody. 1. The respondent first contends that the trial court abused its discretion in failing to recognize and credit to him as against the marital estate, a liability of $80,600, a prepayment for services to be performed by Psychopharmacology Fund, a research concern owned and operated by him. In our view, the fact that payment has been received but the work not yet performed does not require that the valuation of services be included as a liability against the marital estate. As a result, the property distribution, as challenged, shall stand. 2. The primary issue on appeal is whether the trial court abused its discretion in awarding $4,000 per month as permanent spousal maintenance to Beverly. Minn. Stat. § 518.552, subd. 1 (1982) authorizes a trial court to award spousal maintenance if it finds that two criteria are satisfied, i.e., that the spouse: (a) Lacks sufficient property, including marital property apportioned to him, to provide for his reasonable needs, especially during a period of training or education, and (b) Is unable to adequately support himself after considering all relevant circumstances through appropriate employment or is the custodian of a child whose condition or circumstances make it appropriate *14 that the custodian not be required to seek employment outside the home. Minn. Stat. § 518.552, subd. 1 (1982). Subdivision 2 of that section sets forth the factors to be considered by the trial court in determining the amount and duration of an award. Minn. Stat. § 518.552, subd. 2 (1982). The record demonstrates that Beverly is a registered nurse, although she has not been so employed since the parties' marriage. At the time of trial, she was enrolled in a course in real estate sales, intending to obtain her real estate license. She presently is employed by Merrill Lynch Realty as a sales person. Although she suffers from chondromalacia, an inflammation beneath the kneecap, her treating physician did not suggest that the condition would affect her employment. The trial court found that she has a maximum earning capacity of $18,000 to $22,000 per year. As a result, she is capable of attaining a degree of self-sufficiency through employment. Minn. Stat. § 518.552, subd. 1(b) (1982). Moreover, under the distribution of marital property, the petitioner has sufficient property to provide for her reasonable needs, including the cash proceeds representing her share of the homestead equity and the cash payments due her as a result of the property settlement. Minn. Stat. § 518.552, subd. 1(a) (1982). Under those circumstances, we conclude that a permanent award is not justified under either statutory or precedential authority and remand the matter to the trial court for further proceedings to establish the durational limitation of the award. See Otis v. Otis, 299 N.W.2d 114 (Minn. 1980). In so doing, we affirm the amount of the award, but direct the trial court to reexamine the criteria contained in section 518.552, subd. 2 (1982) for the purpose of its determination of the appropriate period for an award of temporary maintenance. As we point out in McClelland v. McClelland, 359 N.W.2d 7 (Minn., filed November 30, 1984), filed herewith, the older dependent spouse who has a "traditional marriage" presents a special situation. The dissent in this case likewise stresses that the 1982 amendments to Minn. Stat. § 518.552 reflect this concern. If on remand the trial court determines from the record that it cannot clearly predict the success of the rehabilitation plan, it can, as suggested in McClelland, retain continuing jurisdiction to revise, if necessary, the amount and duration of the maintenance. Affirmed in part; reversed in part and remanded for further proceedings consistent with this decision. SIMONETT, Justice (concurring specially). As part of her property award, the wife receives $300,863.50 in cash, $200,000 of which represents her half equity share in the homestead, for which the husband has mortgaged the homestead to pay her share. The wife apparently intends to purchase a $160,000 house with a downpayment of $100,000. The real estate she receives, which has a negative cash flow, offers a substantial tax shelter. The property distribution and its income and tax consequences are complex and varied. Suffice it to say here that I join in affirmance of the property awards. Interestingly, the trial court says it "took cognizance" of the manner in which the husband attempted to put marital property out of the wife's reach in arriving at its property distribution. I mention the property award because it has a bearing on spousal maintenance. My concern is not with the permanency of the maintenance as I think that might be justified in this case, unlike in McClelland (also decided today) but whether, in view of the property settlement, the maintenance is too much. But I concur with the majority opinion on the assumption that the trial court, on remand, will "retain continuing jurisdiction to revise, if necessary, the amount and duration of the maintenance." WAHL, Justice (dissenting). I respectfully dissent. The majority opinion perpetuates this court's misreading *15 of the intent of the legislature in enacting Minn. Stat. § 518.552, 1978 Minn. Laws, ch. 772, § 51, and the court's subsequent misinterpretation of that statute in Otis v. Otis, 299 N.W.2d 114 (Minn.1980). We must review Otis in the light of the legislature's response to our decision in that case, which we have not, until now, had the opportunity to do. Section 518.552 is concerned with the granting of maintenance in marriage dissolution proceedings under Chapter 518. Formerly, alimony[1] was the provision made for a needy wife from the future income or earnings of the husband. The court could determine in any judgment of divorce, as one of the issues of the case, whether or not the wife was entitled to an award of alimony, even though such an award was not then made. Minn. Stat. § 518.55 (1982). The statute did not specify whether alimony should be awarded on a permanent basis, a temporary basis, or either of the two depending on the facts and circumstances of the case. Under this statute, in the exercise of their sound discretion, courts of this state awarded alimony both permanently, Cashman v. Cashman, 256 N.W.2d 640 (Minn.1977); Arundel v. Arundel, 281 N.W.2d 663 (Minn.1979), and for lesser periods of time, Ruzic v. Ruzic, 281 N.W.2d 502 (Minn.1979) (6 years) but not as a matter of right, Cooper v. Cooper, 298 Minn. 247, 251, 214 N.W.2d 682, 685 (1974). An award of permanent alimony was considered a substitute for a husband's duty to support a wife to the extent that her earning capacity was permanently impaired due to the fact that "she was married at a time when the prevailing social custom made her professional career subordinate to her husband's and required that she abandon a career to raise her son and keep house for her husband." Otis, 299 N.W.2d at 118 (Otis, J., dissenting). Factors considered important in the award of permanent alimony were length of the marriage, the wife's age, health, earning capacity, lack of vocational skills or independent resources, contribution to marriage by child-rearing and maintenance of family home in such a way as to contribute to establishment and furtherance of the husband's career, and resources and income of the husband. Loth v. Loth, 227 Minn. 387, 35 N.W.2d 542 (1949); Arundel v. Arundel, 281 N.W.2d at 666. A divorced wife, where alimony was appropriate, was entitled, not just to the bare necessities of life, but to a sum which would enable her to maintain her standard of living at the time of the divorce to the extent the husband was reasonably able to provide it. Arundel, id.; Cooper, 298 Minn. at 251-52, 214 N.W.2d at 686; Botkin v. Botkin, 247 Minn. 25, 77 N.W.2d 172, 175 (1956). In 1978, as the Otis court recognized, the legislature significantly amended the law of divorce. 1978 Minn. Laws, ch. 772. "Alimony" was still allowed but had now become "maintenance" which could be awarded from the future income or earnings of either spouse for the support and maintenance of the other. Minn. Stat. § 518.54, subd. 3 (1978). To have granted maintenance, a court must have found that the spouse seeking maintenance a) lacked sufficient property, including apportioned marital property, to provide for the spouse's reasonable needs, "especially during a period of training or education," and b) was unable to be adequately self-supporting "after considering all relevant circumstances through appropriate employment or is the custodian of a child whose condition or circumstances make it appropriate that the custodian not be required to seek employment outside the home." Minn. Stat. § 518.552, subd. 1 (1978). Again, the statute did not specify whether such support and maintenance should be awarded on a permanent basis, a temporary basis, or either of the two depending on the facts and circumstances of the case, but provided that the maintenance order should be in amounts and for "periods of time" as the *16 court deems just, without regard to marital misconduct and after considering all relevant factors. Minn. Stat. § 518.552, subd. 2 (1978). These factors include for the most part the factors previously considered relevant by our cases in the award of alimony. Minn. Stat. § 518.552, subd. 2(a)-(g)(1978). The court in Otis seemed to read the word "especially" out of the requirement that the spouse seeking maintenance lack "sufficient property, including marital property apportioned to him, to provide for his reasonable needs, especially during a period of training or education," seemed to read "for periods of time" to be something less than permanent, and, citing Florida Court of Appeals cases for the proposition, seemed to conclude that the legislature intended maintenance to be for rehabilitative purposes only. It is true that rehabilitative maintenance is all that many women need, if they need it at all, particularly those women growing up in the 1960s and 1970s with careers and job skills and every expectation of sharing equally in the parenting, household work and finances of marriage. Midlife women, however, those women between the ages of 45 and 65, entered marriage under a very different set of rules. Like Georgia Contos Otis and Beverly Abuzzahab, they abandoned their own jobs and careers to fulfill the expected, traditional roles of mother, wife and hostess for rising business and professional men. In those years in which they would have developed job skills and careers, gained seniority and built up Social Security accounts, they worked at home. Their husbands, like Emmanuel Otis, often forbade these women to seek outside employment because they were "not going to have any wife of mine pound a typewriter." Otis, 299 N.W.2d at 118. There is no indication in section 518.552 that the Minnesota legislature intended the courts to turn this group of women out to lives of poverty in their later years.[2] It is absolutely clear in the legislature's response to Otis v. Otis that the legislature did not so intend. Otis was released October 3, 1980. The 1982 session of the Minnesota legislature adopted, as Chapter 535-S.F. No. 378, the following "act relating to marriage dissolution; clarifying factors to consider in awarding maintenance; amending Minnesota Statutes 1980, Section 518.552" (emphasis added).

+ 2 more citations in this opinion.

Marriage of Miller v. Miller · 1984 1 citation

+ 1 more citation in this opinion.

In Re the Marriage of O'Brien v. O'Brien · 1984 2 citations

Here, rental income was properly excluded in determining maintenance. The valuation of the asset, in this case the 2520 Nevada property, already reflects a capitalization of the income stream which the property produces; it is for this reason, presumably, that rents, like dividends and interest, are not among the items listed as “income” in Minn. Stat. § 518.54, subd. 6 (1982). As to the argument that the liquidity of the assets should be reflected in their valuation, the record shows that this factor was considered. Each party presented testimony on the value of the principal assets and liquidity was part of that testimony. The trial court weighed this evidence in establishing the value of the assets, and this factual determination, like others, was within the trial court’s discretion. “The trial court’s decision [on valuation] is to be affirmed if it has an acceptable basis in fact and principle even though this court may have taken a different approach.” Castonguay v. Castonguay, 306 N.W.2d *853 143, 147 (Minn.1981), citing Bollenbach v. Bollenbach, 285 Minn. 418, 175 N.W.2d 148 (1970).

Appellant’s claim on appeal is not entirely clear. She argues generally that the trial court should have considered tax consequences, and she suggests evidence on this point was erroneously excluded. The record, however, reveals no offer of proof on tax consequences. Even when tax consequences are “considered,” the ultimate division of the assets, based on many factors in addition to taxes, remains within the trial court’s discretion. More importantly, the law precludes any consideration where the court must speculate because the evidence is lacking or nonspecific. See Johnson v. Johnson, 277 N.W.2d 208 (Minn.1979); Aaron v. Aaron, 281 N.W.2d 150 (Minn.1979). Here, appellant would have the trial court speculate on both points of her argument. As to the tax consequences of transferring her appreciated stock in the Iron Company to her husband, appellant argues that the state legislature might fail in its efforts to circumvent United States v. Davis, 370 U.S. 65, 82 S.Ct. 1190, 8 L.Ed.2d 335 (1962), through amendment of Minn. Stat. §§ 518.54 and 518.58. As to the possible future sale of the homestead, she offers no evidence as to the tax consequences of the sale, assuming a sale takes place.

Marriage of Janssen v. Janssen · 1983 4 citations

+ 4 more citations in this opinion.

Marriage of Taylor v. Taylor · 1983 3 citations

+ 3 more citations in this opinion.

Faus v. Faus · 1982 4 citations

+ 4 more citations in this opinion.

Marriage of Schmitz v. Schmitz · 1981 1 citation

+ 1 more citation in this opinion.

St. George v. St. George · 1981 1 citation

+ 1 more citation in this opinion.

Marriage of Otis v. Otis · 1980 2 citations

+ 2 more citations in this opinion.

Minnesota Court of Appeals

In re the Marriage of: Any K. Arensberg v. Nicholas Shamus Arensberg · 2024 1 citation

+ 1 more citation in this opinion.

Lee v. Lee · 2008 1 citation

+ 1 more citation in this opinion.

Hubbard County Health & Human Services v. Zacher · 2007 1 citation

+ 1 more citation in this opinion.

Marriage of Baker v. Baker · 2007 2 citations

I. Wife first argues that the district court erred as a matter of law when it held that the appreciation of husband's premarital retirement funds is nonmarital property. Whether property is marital or nonmarital is a question of law over which we exercise de novo review. Gottsacker v. Gottsacker, 664 N.W.2d 848, 852 (Minn. 2003). But in doing so, we defer to the district court's findings of fact. Id. Marital property is "property, real or personal, including vested public or private pension plan benefits or rights, acquired by the parties, or either of them, to a dissolution . . . proceeding at any time during the existence of the marriage." Minn. Stat. § 518.003, subd. 3b (2006) (codified at Minn. Stat. § 518.54, subd. 5 (2004)). All property acquired by either spouse during the marriage is presumed to be marital property. Id. To overcome this presumption, a spouse must demonstrate by a preponderance of the evidence that the property is nonmarital. Crosby v. Crosby, 587 N.W.2d 292, 296 (Minn.App. 1998), review denied (Minn. Feb. 18, 1999). Nonmarital property includes property acquired by either spouse before marriage and any increase in the value thereof, Minn. Stat. § 518.003, subd. 3b, provided such an increase is the result of passive appreciation, Gottsacker, 664 N.W.2d at 853 (citing Nardini v. Nardini, 414 N.W.2d 184, 193 (Minn. 1987)); Swick v. Swick, 467 N.W.2d 328, 331 (Minn.App. 1991), review denied (Minn. May 16, 1991). Appreciation is passive when it is "`attributable to inflation or to market forces or conditions.'" Gottsacker, 664 N.W.2d at 853 (quoting Nardini, 414 N.W.2d at 192). In other words, appreciation occurring when "no investment decisions are made, and neither [spouse] may withdraw the funds or otherwise control the investments," is passive. Prahl v. Prahl, 627 N.W.2d 698, 706 (Minn.App. 2001). Conversely, appreciation that is attributable to the exertion of efforts by one or both spouses during the marriage generally is deemed active and, thus, marital property. Gottsacker, 664 N.W.2d at 853 (quoting Nardini, 414 N.W.2d at 192); White v. White, 521 N.W.2d 874, 878 (Minn.App. 1994). Such efforts may include the application or investment of marital funds, marital labor, or entrepreneurial decision-making *820 that is marital in nature. White, 521 N.W.2d at 878. When the parties married, husband had $957,473 in a retirement plan entitled Specialists in General Surgery Pension and Profit Sharing Plan ("SIGS accounts"). During the marriage, additional contributions and investment returns caused the value of the SIGS accounts to reach $3,088,072 on the date of valuation for the dissolution proceedings. During trial, husband's expert, Thomas Harjes, testified as to the proper allocation of that amount between marital and nonmarital property. To derive this allocation, Harjes classified the premarital amount of $957,473 as nonmarital property and all contributions made during the marriage as marital property. For each year of marriage, Harjes determined the percentage of funds in the SIGS accounts that was marital property and the percentage that was nonmarital property. He then used those percentages to divide the investment returns between marital and nonmarital property. Based on these calculations, Harjes concluded that $639,577 of $3,088,072 was marital property subject to equitable division. The district court adopted Harjes's conclusions and allocated the final value of the SIGS accounts between marital and nonmarital property accordingly. Wife challenges this allocation, arguing that the district court should have allocated the entire amount by which the SIGS accounts have increased above the premarital amount of $957,473 to marital property because that increase is attributable to the exertion of marital efforts. Specifically, wife argues that this increase is the result of husband's active management of the SIGS accounts himself and through his financial advisor. The district court rejected this argument, holding that the appreciation of a spouse's nonmarital retirement funds is not active appreciation "simply because the spouse . . . hires a financial advisor to manage the funds." We agree that a financial advisor's management of a retirement account containing nonmarital funds does not necessitate a finding that the appreciation of those funds is active. That nonmarital funds are managed by a financial advisor, however, does not preclude a finding that the appreciation thereof is active. Rather, to make this determination, a district court must examine the nature of the spouses' efforts regarding these retirement accounts. Gottsacker, 664 N.W.2d at 853. Here, the district court's findings of fact and the record evidence of husband's involvement with the SIGS accounts establish that the appreciation of the SIGS accounts is active and, therefore, marital property. At trial, wife testified that she and husband hired financial advisor Randy Trask to manage the SIGS accounts. Specifically, wife testified that "after we were married we invited Merrill Lynch representatives to come out to our home and discuss retirement plans for our future. . . . [T]ogether we sat down and chose some Merrill Lynch plans and then invested money in those plans." Trask testified that husband paid him an annual fee to manage these accounts.[2] Trask confirmed that he "could not have discretionary management over any of these accounts if [husband] would not allow it" and that husband "has the ultimate control over [the] accounts." Harjes also confirmed that husband has full discretion regarding how the accounts are controlled. *821 The evidence conclusively establishes that husband and Trask created an agency relationship when they mutually agreed that Trask would act on husband's behalf but subject to husband's control. See A. Gay Jenson Farms Co. v. Cargill, Inc., 309 N.W.2d 285, 290 (Minn. 1981) ("Agency is the fiduciary relationship that results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act."); see also Dalager v. Montgomery Ward & Co., 350 N.W.2d 391, 394 (Minn.App. 1984) (holding that whether agency relationship exists is fact question unless evidence is conclusive). As such, husband is bound by Trask's active management of the accounts as if it were his own. See Fingerhut Mfg. Co. v. Mack Trucks, Inc., 267 Minn. 201, 204, 125 N.W.2d 734, 737 (1964) (holding that when agent acts within scope of express or implied authority, principal is bound thereby); Kellogg v. Woods, 720 N.W.2d 845, 852 (Minn.App. 2006) (holding that principal is liable for agent's acts that are within scope of agency relationship). Not only did husband actively manage the SIGS accounts through Trask, husband also actively managed them himself. During the trial, there was extensive evidence and testimony presented about husband's ability to control and withdraw funds from the SIGS accounts. Harjes testified that husband had full authority to make changes to the SIGS accounts, which he often exercised by rolling funds from one account to another. Trask testified that, during his tenure as manager of the SIGS accounts, husband made at least one stock purchase in which husband bought stock of a company with which husband's son was associated. Wife testified, and Trask confirmed, that, at one point, husband transferred the SIGS accounts to another financial advisor, but husband later transferred them back to Trask. Trask and Harjes also testified that, during the marriage, the funds in the SIGS accounts were available as liquid assets that husband could withdraw at any time.[3] We have held that the ability to control investments or withdraw funds can defeat a claim that the increases in value of premarital funds were the result of passive appreciation.[4]See Prahl, 627 N.W.2d at 706 (stating that appreciation is passive when "no investment decisions are made, and neither [spouse] may withdraw the funds or otherwise control the investments"). Taken together, and with the statutory presumption that all property acquired during the marriage is marital property, these characteristics establish that the appreciation of husband's premarital *822 funds in husband's SIGS accounts was not the result of mere market forces or conditions but rather the result of marital efforts in the form of entrepreneurial decision-making. Accordingly, this increase constitutes active appreciation that is marital property subject to just and equitable division under Minn. Stat. § 518.58, subd. 1 (2006).[5] Because the district court erroneously concluded that the value of the appreciation of husband's premarital funds in his SIGS accounts is nonmarital property, we reverse and remand to the district court with instructions to divide the parties' marital property in a just and equitable manner.

+ 1 more citation in this opinion.

Marriage of Reed v. Albaaj · 2006 1 citation

+ 1 more citation in this opinion.

In Re the Estate of Barg · 2006 1 citation

+ 1 more citation in this opinion.

Marriage of Zander v. Zander · 2006 7 citations

+ 7 more citations in this opinion.

Maschoff v. Leiding · 2005 1 citation

*839 The issue, then, is whether appellant’s two motions presented the same legal issue. While “child support” may be used narrowly to refer only to the monetary amount an obligor pays under the guidelines, “child support” can also be used more broadly to refer to other childcare costs. Compare Minn. Stat. § 518.551, subd. 5(b) (2004) (child-support guidelines) with Minn. Stat. § 518.54, subd. 4a (2004) (“[s]upport order” includes rulings requiring a party to provide “monetary support, child care, [or] medical support”). Because the substantially changed circumstances required by Minn. Stat. § 518.64, subd. 2, to modify child support must render the existing support obligation unreasonable and unfair, the changed circumstances must pertain to the portion of the obligation sought to be modified. Thus, if multiple types of child support are involved in multiple motions to modify, the mere statement in a prior order that there was no substantial change in circumstances rendering the existing obligation unreasonable and unfair does not necessarily justify invoking res judicata in a subsequent proceeding. See Loo, 520 N.W.2d at 744 (holding untimeliness of motion to modify medical insurance payment did not preclude motion to modify maintenance).

Stageberg v. Stageberg · 2005 2 citations

+ 2 more citations in this opinion.

Maki v. Hansen · 2005 5 citations

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County of Stearns v. Barnell · 2005 1 citation

+ 1 more citation in this opinion.

County of Anoka Ex Rel. Hassan v. Roba · 2004 1 citation

+ 1 more citation in this opinion.

Gatfield v. Gatfield · 2004 1 citation

+ 1 more citation in this opinion.

State Ex Rel. Jarvela v. Burke · 2004 4 citations

+ 4 more citations in this opinion.

Marriage of Porro v. Porro · 2004 1 citation

+ 1 more citation in this opinion.

Marriage of Kilpatrick v. Kilpatrick · 2004 1 citation

+ 1 more citation in this opinion.

Kammueller v. Kammueller · 2003 10 citations

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Marriage of Bender v. Bender · 2003 1 citation

+ 1 more citation in this opinion.

Rooney v. Rooney · 2003 2 citations

+ 2 more citations in this opinion.

Eisenschenk v. Eisenschenk · 2003 2 citations

+ 2 more citations in this opinion.

Walswick-Boutwell v. Boutwell · 2003 3 citations

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Robert v. Zygmunt · 2002 6 citations

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Nolte v. Mehrens · 2002 1 citation

Mother contends that the district court erred when it failed to address the child’s uninsured medical expenses, despite both parties’ requests for the district court to do so. It is clear from the record that the district court’s order fell within the definition of a “support order,” as that term is defined for child support purposes. See Minn. Stat. § 518.54, subd. 4a (2000) (stating that the definition of “child support order” in chapter 518 applies to orders issued in paternity proceedings under chapter 257).

Grigsby v. Grigsby · 2002 2 citations

+ 2 more citations in this opinion.

In Re Ramsey Cty. Ex Rel. Pierce Cty., Wis. · 2002 1 citation

+ 1 more citation in this opinion.

Ramsey County ex rel. Pierce County, Wisconsin v. Carey · 2002 1 citation

+ 1 more citation in this opinion.

Senske v. Senske · 2002 2 citations

+ 2 more citations in this opinion.

Marriage of Williams v. Williams · 2001 1 citation

+ 1 more citation in this opinion.

Marriage of Schlichting v. Paulus · 2001 1 citation

+ 1 more citation in this opinion.

In RE MARRIAGE OF FITZGERALD v. Fitzgerald · 2001 3 citations

+ 3 more citations in this opinion.

Marriage of Prahl v. Prahl · 2001 1 citation

+ 1 more citation in this opinion.

Marriage of Duffney v. Duffney · 2001 1 citation

+ 1 more citation in this opinion.

Marriage of Krech v. Krech · 2001 1 citation

+ 1 more citation in this opinion.

Marriage of Chamberlain v. Chamberlain · 2000 3 citations

+ 3 more citations in this opinion.

Marriage of Rumney v. Rumney · 2000 1 citation

+ 1 more citation in this opinion.

Maurer v. Maurer · 2000 1 citation

+ 1 more citation in this opinion.

Marriage of Pfleiderer v. Pfleiderer · 1999 4 citations

+ 4 more citations in this opinion.

Marriage of Swanson v. Swanson · 1998 2 citations

+ 2 more citations in this opinion.

Marriage of Holmberg v. Holmberg · 1998 2 citations

. "Child support” is "an award * * * for the care, support and education of any child of the marriage or of the parties to the proceeding.” Minn. Stat. § 518.54, subd. 4(1) (1996). Social security benefits paid on behalf of the child of a disabled support obligor have a similar purpose. See Henry v. Henry, 156 Ill.2d 541, 190 Ill.Dec. 773, 779, 622 N.E.2d 803, 809 (1993) ("[s]ocial security dependent disability benefits replace support the child loses upon the disability of the wage earner responsible for the child’s support”); Potts v. Potts, 240 N.W.2d 680, 682 (Iowa 1976) ("primary purpose” of disability benefits paid for children due to obligor’s disability "is to meet the current needs of the dependents").

+ 1 more citation in this opinion.

Marriage of Olsen v. Olsen · 1996 6 citations

+ 6 more citations in this opinion.

Marriage of Desrosier v. Desrosier · 1996 1 citation

+ 1 more citation in this opinion.

Mower County Human Services Ex Rel. Meyer v. Hueman · 1996 1 citation

Minn. Stat. § 518.54, subd. 6 (1994) (emphasis added). Periodic annuity payments received by a parent from settlement of a tort action are income for purposes of establishing child support. Sherburne County Social Servs. v. Riedle, 481 N.W.2d 111, 112 (Minn.App.1992) (structured tort settlement treated as income). In Riedle, the parent received monthly annuity payments, as well as periodic lump sum payments. This court included both payments as income in setting child support, stating:

Marriage of Sweere v. Gilbert-Sweere · 1995 1 citation

+ 1 more citation in this opinion.

State v. Bachmann · 1994 1 citation

+ 1 more citation in this opinion.

Marriage of White v. White · 1994 1 citation

+ 1 more citation in this opinion.

Kriesel v. Gustafson · 1994 2 citations

+ 2 more citations in this opinion.

Marriage of Kuronen v. Kuronen · 1993 1 citation

+ 1 more citation in this opinion.

Marriage Of: Wopata v. Wopata · 1993 1 citation

+ 1 more citation in this opinion.

Marriage of Reynolds v. Reynolds · 1993 1 citation

+ 1 more citation in this opinion.

Marriage of Schultz v. Schultz · 1993 1 citation

+ 1 more citation in this opinion.

Lukaswicz v. Lukaswicz · 1993 1 citation

+ 1 more citation in this opinion.

Becker County Human Services v. Peppel · 1992 1 citation

+ 1 more citation in this opinion.

Marriage of Austin v. Austin · 1992 1 citation

+ 1 more citation in this opinion.

Sherburne County Social Services Ex Rel. Schafer v. Riedle · 1992 2 citations

+ 2 more citations in this opinion.

Freking v. Freking · 1992 1 citation

+ 1 more citation in this opinion.

In re the Marriage of Freeing v. Freeing · 1992 1 citation

+ 1 more citation in this opinion.

Gilbertson v. Graff · 1991 2 citations

+ 2 more citations in this opinion.

Marriage of Berenberg v. Berenberg · 1991 2 citations

+ 2 more citations in this opinion.

Marriage of Urbick v. Urbick · 1991 2 citations

+ 2 more citations in this opinion.

Marriage of Pettit v. Pettit · 1991 2 citations

+ 2 more citations in this opinion.

Marriage of Wiegers v. Wiegers · 1991 2 citations

+ 2 more citations in this opinion.

Marriage of Swick v. Swick · 1991 4 citations

+ 4 more citations in this opinion.

Beltz v. Beltz · 1991 1 citation

+ 1 more citation in this opinion.

Marriage of Burns v. Burns · 1991 1 citation

Minn. Stat. § 518.54, subd. 5 (1988) provides that all property acquired during the existence of a marriage is presumed to be marital property regardless of whether the title is held individually or in co-ownership. Here, it is undisputed that both the homestead and the apartment four-plexes have both marital and nonmarital aspects. Appellant contends the trial court used the wrong formula to compute the marital and nonmarital interests.

Marriage of Darcy v. Darcy · 1990 2 citations

+ 2 more citations in this opinion.

Marriage of Ward v. Ward · 1990 4 citations

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Marriage of Herrley v. Herrley · 1990 1 citation

+ 1 more citation in this opinion.

Borich v. Borich · 1990 16 citations

+ 16 more citations in this opinion.

Marriage of Nolden v. Nolden · 1989 1 citation

+ 1 more citation in this opinion.

In Re the Marriage of Aaker · 1989 2 citations

+ 2 more citations in this opinion.