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Stanosheck v. Jeanette

Supreme Court of Nebraska

July 15, 2016

Elizabeth E. Stanosheck, appellee
v.
Joseph P. Jeanette, appellant.

         1. Divorce: Appeal and Error. 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.

         2. Judges: Words and Phrases. A judicial abuse of discretion exists if the reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in matters submitted for disposition.

         3. Property Division: Appeal and Error. As a general principle, the date upon which a marital estate is valued should be rationally related to the property composing the marital estate. The date of valuation is reviewed for an abuse of the trial court's discretion.

         4. Divorce: Property Division. In a divorce action, the purpose of a property division is to distribute the marital assets equitably between the parties.

         5. Property Division. Equitable property division under Neb. Rev. Stat. § 42-365 (Reissue 2008) is a three-step process. The first step is to classify the parties' property as marital or nonmarital. The second step is to value the marital assets and marital liabilities of the parties. The third step is to calculate and divide the net marital estate between the parties.

         6. _ . The ultimate test in determining the appropriateness of a property division is fairness and reasonableness as determined by the facts of each case.

         7. Divorce: Property Division. As a general rule, all property accumulated and acquired by either spouse during the marriage is part of the marital estate, unless it falls within an exception to the general rule.

         8. Divorce: Property Division: Proof. Where there is nothing on the record to show the source of premarital funds, they should be considered part of the marital estate.

         [294 Neb. 139] 9. Property Division: Proof. The burden of proof rests with the party claiming that property is nonmarital.

         10. Divorce: Property Division: Pensions. Under Neb. Rev. Stat. § 42-366(8) (Reissue 2008), the general rule is that amounts added to and interest accrued on pension or retirement accounts which have been earned during the marriage are part of the marital estate, but contributions before marriage or after dissolution are not assets of the marital estate.

         11. _: _: _ . Investment earnings accrued during the marriage on the nonmarital portion of a retirement account may be classified as nonmarital where the party seeking the classification proves: (1) The growth is readily identifiable and traceable to the nonmarital portion of the account and (2) the growth is due solely to inflation, market forces, or guaranteed rate rather than the direct or indirect effort, contribution, or fund management of either spouse.

         Appeal from the District Court for Cass County: Jeffrey J. Funke, Judge.

          Steven M. Delaney and A. Bree Robbins, of Reagan, Melton & Delaney, L.L.R, for appellant.

          Amie C. Martinez, of Anderson, Creager & Wittstruck, P.C.. L.L.O., and Megan M. Schutt, Senior Certified Law Student, for appellee.

          Wright, Connolly, Miller-Lerman, Cassel, Stacy, and Kelch, JJ. Stacy, J.

          Stacy, J.

         I. NATURE OF CASE

         In this appeal from a decree of dissolution, error is assigned to the district court's classification, valuation, and division of certain marital property. After a de novo review, we find no abuse of discretion and affirm the district court's judgment in all respects but one-the division of the parties' retirement accounts. As it regards the retirement accounts, [294 Neb. 140] we vacate the decree in part and remand the cause for further proceedings.

         II. BACKGROUND

         Elizabeth E. Stanosheck (Elizabeth) and loseph P. leanette (loseph) were married in 2008. Elizabeth filed for dissolution in lanuary 2014. From the time the divorce was filed until a few months before trial, the parties lived together in the marital home. They had no joint debts other than the mortgage on their home, a loan against loseph's retirement account, and various household expenses. loseph paid the majority of these expenses, and Elizabeth reimbursed him $600 to $800 per month. During the pendency of the action, a temporary order was entered on the agreement of the parties, requiring each to contribute payment toward the joint debts and home expenses, with Elizabeth paying 40 percent and loseph paying 60 percent.

         Trial was held in lanuary 2015. The parties reached a comprehensive property settlement agreement, so trial was limited to just a few contested issues: (1) whether the marital estate should be valued at the time of trial or the time of filing, (2) how to divide the remaining proceeds from the sale of the marital home, and (3) whether loseph was entitled to set off as nonmarital property a portion of the market growth to his retirement account.

         1. Valuation Date

         Elizabeth asked the court to value the marital estate at the time of trial, and loseph asked that it be valued at the time the dissolution was filed. The district court found the date of trial was the more appropriate valuation date, reasoning:

Though the evidence indicates that the parties were not actively spending time together, such as eating meals together or engaging in social activities together, the parties were still married, still residing in the home together, and still sharing household expenses.
[294 Neb. 141] Therefore, the Court finds that the valuation date for the division of assets and debts should be the date of trial herein.

         2. Division of Proceeds From Sale of Marital Home

         During the marriage, Joseph took out a $50, 000 loan against his retirement account to contribute to building the parties' home. Payments on the loan were made every 2 weeks by withholding sums from Joseph's paycheck. At the time of trial, Joseph had paid back $12, 000 on the loan. The marital home was sold prior to trial. The parties agreed to divide a portion of the net sale proceeds immediately and held $50, 000 from the sale in trust, with the agreement that $38, 000 of that sum would be used to repay the balance of the loan against Joseph's retirement account. The parties disagreed as to how the remaining $12, 000 should be divided. Elizabeth asked that it be split equally between the parties, and Joseph asked to be awarded the entire $12, 000 as reimbursement for the loan payments made during the marriage. The district court found ...


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