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Brozek v. Brozek

Supreme Court of Nebraska

February 5, 2016

SHELLEY JANE BROZEK, APPELLEE AND CROSS-APPELLANT,
v.
KIRK STEVEN BROZEK, APPELLANT AND CROSS-APPELLEE

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Appeals from the District Court for Antelope County: Mark A. Johnson, Judge.

David A. Domina and Christopher A. Mihalo, of Domina Law Group, P.C., L.L.O., for appellant.

Russell A. Westerhold, of Fraser Stryker, P.C., L.L.O., for appellee.

HEAVICAN, C.J., CONNOLLY, MILLER-LERMAN, CASSEL, and STACY, JJ. WRIGHT and MCCORMACK, JJ., not participating.

OPINION

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[292 Neb. 683] CONNOLLY, J.

I. SUMMARY

Shelley Jane Brozek and Kirk Steven Brozek separated, and the court later dissolved their marriage of about 20 years. The decree divided the marital estate and ordered Kirk to buy some of Shelley's separate property. Kirk appeals, and Shelley cross-appeals. Kirk argues that the court erred by ordering him to buy Shelley's shares in a closely held farming corporation for an amount higher than the value determined under a stock redemption agreement. He also argues that the court erred in dividing the marital estate, that it should have given him a credit for premarital property he disposed of during the marriage, and that it lacked jurisdiction to award Shelley attorney fees after he filed a notice of appeal. Shelley argues that the court should have awarded her alimony, a cash award for the inadequacy of the marital estate, and attorney fees. We affirm the decree and the order awarding Shelley attorney fees.

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[292 Neb. 684]II. BACKGROUND

1. Parties' Work History

Shelley and Kirk married in October 1993. They have two daughters, and Kirk adopted Shelley's son from a prior mar-riage. The parties separated on December 24, 2011, after more than 18 years together.

A month later, Shelley filed a dissolution complaint. When the court tried the case in April 2014, Shelley was 50 and Kirk was 47 years of age. Only one of their children was still a minor.

Kirk has farmed since he graduated from college in 1986. He farms with his father, brother, and adopted son.

Before Shelley married Kirk, she worked as a grocery clerk and secretary, and she also worked in sales. She did not pursue education beyond high school and testified that her marriage to Kirk did not interrupt her education or career.

Shelley stated she and Kirk were in " total agreement" that she would not work outside the home. She maintained the marital home, brought meals and equipment parts to the field, mowed and sprayed pasture, and helped put up hay on a few small tracts. Kirk's brother, though, testified that Shelley sel-dom helped with the farming operation and " was mostly in the way."

2. The Corporations

Kirk's farming is interwoven with two closely held corpora-tions. The first, Brozek & Sons, Inc., is " the operating entity of the farming operation." It owns the land, sells the grain, and pays the Brozeks and others for their services. Its largest asset is about 3,400 acres of land. Kirk and his brother personally rent some of Brozek & Sons' land, but the corporation " also operate[s] some of its own ground."

The other corporation is Brozek Farms, Inc., which is " prin-cipally an equipment company." It leases the equipment it owns to Brozek & Sons.

Kirk and Shelley are shareholders of both Brozek & Sons and Brozek Farms. Kirk's parents gifted him shares of Brozek [292 Neb. 685] & Sons before and during the marriage. Shelley testified that she received her shares by gift during the marriage. Kirk has 75,541.67 shares, and Shelley has 12,000 shares of Brozek & Sons, comprising stakes of about 21 percent and 3 percent, respectively. Kirk has 437.5 shares, and Shelley has 62.5 shares of Brozek Farms.

Kirk, Shelley, and the other shareholders of Brozek & Sons signed a " Redemption Agreement" in 2003. The agreement states that no sale, assignment, or other disposition of Brozek & Sons shares is valid unless made under the agreement.

At trial, the parties disputed the meaning of two paragraphs of the agreement. The second paragraph provides:

Transfer to Related Stockholder. Anything in this agreement to the contrary notwithstanding, a Stockholder may at any time or from time to time transfer all or any part of his stock to his spouse, one or more of his children, or a trustee or custodian for the exclusive benefit of himself, his spouse, or his issue . . . .

The third paragraph provides: " Sale During Life. A Stockholder desiring, during his lifetime, to sell or otherwise encumber his stock shall make a written offer to sell to [Brozek & Sons] upon the following terms and conditions, and [Brozek & Sons] shall purchase all of such shares of stock . . . ." The original price was $8.50 per share, but Kirk testified that the Brozek & Sons board increased it to $12 in 2013.

Shelley testified that she did not want to remain a share-holder of either Brozek &

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Sons or Brozek Farms because " I don't think that would be reasonable." Kirk testified that he did not want to purchase Shelley's Brozek & Sons shares for a price above the value determined under the redemp-tion agreement.

In contrast to Brozek & Sons, there is no redemption agree-ment for Brozek Farms. Kirk testified that he was willing to buy Shelley's Brozek Farms shares at a price determined by the court.

Kirk and Shelley hired experts to appraise their Brozek & Sons and Brozek Farms shares using a net asset approach. [292 Neb. 686] Shelley's expert valued a minority share of Brozek & Sons at $50 in August 2011 and August 2012. He valued a minority share of Brozek Farms at $341 in August 2011 and $290 in August 2012. As of December 24, 2011, Kirk's expert valued Shelley's Brozek & Sons shares at about $34 each and her Brozek Farms shares at about $270 each. Shelley's expert reviewed the reports of Kirk's expert and testified that the main differences were the valuation dates and the discounts for lack of control and marketability.

3. Disputed Personal Property

Because Brozek & Sons held the land, Kirk and Shelley did not own any real estate. But they did accumulate signifi-cant personal property during the marriage, including several horses. Shelley could not remember how many horses she and Kirk had when they separated, but she thought there might have been six. She did not possess any of the horses at the time of trial because her current residence lacked facilities.

In Kirk's " Statement of Financial Condition" as of December 31, 2011, he said that he had " Horses 7 head" but named only six animals. In a " 2011 Depreciation and Amortization Report," Kirk included a " Horse/MH" in addition to the six horses he named in his " Statement of Financial Condition." Kirk had taken depreciation on all of the horses except one.

Kirk valued the horses at $12,600. Shelley suggested that the court include half of the horses' value in the marital estate and award the horses to Kirk.

The parties acquired a horse trailer during their marriage. Shelley possessed the trailer at the time of trial but did not want it because she did not have any horses. Kirk stated that he did not want the trailer.

Shelley and Kirk also bought automobiles during their mar-riage, including a 2004 Ford pickup truck. Kirk was driving the truck when he and Shelley separated but said that their adult daughter was driving it at the time of trial. Shelley testi-fied that their adult daughter drove, but did not own, the truck, [292 Neb. 687] which was " part of the whole package of vehicles that Kirk and I own."

4. Kirk's Premarital Property

Kirk attempted to identify and trace a significant amount of premarital personal property. For items that he no longer had at his separation from Shelley, Kirk asked for a " credit or set-off" against the marital estate.

Kirk's alleged premarital property included two checking accounts. He used one for household use and the other for farm use. Kirk said that the farm account had about $79,000 when he married Shelley. He added Shelley's name to both accounts after their marriage, and they used the accounts until they separated.

For the premarital machinery that he had sold or traded in, Kirk wanted a credit against the marital estate. He submitted evidence of the purchase price of the machinery, which he said was evidence of its " value" because his equipment ...


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