Divorce: Child Custody: Child Support: Property
Division: Alimony: Attorney Fees: Appeal and Error.
In an action for the dissolution of marriage, an appellate
court reviews de novo on the record the trial court's
determinations of custody, child support, property division,
alimony, and attorney fees; these determinations, however,
are initially entrusted to the trial court's discretion
and will normally be affirmed absent an abuse of that
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.
Evidence: Appeal and Error. When evidence is
in conflict, an appellate court considers, and may give
weight to, the fact that the trial judge heard and observed
the witnesses and accepted one version of the facts rather
Divorce: Equity. In Nebraska, dissolution of
marriage cases are equitable in nature.
Property Division. The purpose of a property
division is to distribute the marital assets equitably
between the parties.
The ultimate test for determining the appropriateness of the
division of property is fairness and reasonableness as
determined by the facts of each case. There is no
mathematical formula by which property awards can be
Property Division: Appeal and Error. A
division of property will not be disturbed on appeal unless
it is patently unfair.
Property Division. Under Neb. Rev. Stat.
§ 42-365 (Reissue 2016), the equitable division of
property 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 determine
the marital liabilities [298 Neb. 2] of the parties. The
third step is to calculate and divide the net marital estate
between the parties in accordance with the principles
contained in § 42-365.
. Any given property can constitute a mixture of marital and
non-marital interests; a portion of an asset can be marital
property while another portion can be separate property.
. 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
. Compensation for purely personal losses is not in any sense
a product of marital efforts. Compensation for an injury that
a spouse has or will receive for pain, suffering,
disfigurement, disability, or loss of postdivorce earning
capacity should not equitably be included in the marital
estate. On the other hand, compensation for past wages,
medical expenses, and other items that compensate for the
diminution of the marital estate should equitably be included
in the marital estate as they properly replace losses of
property created by marital partnership.
Property Division: Proof: Presumptions. The
burden of proving that all or a portion of an injury
settlement is nonmarital rests on the spouse making the
claim. If the burden is not met, the presumption remains that
the proceeds from the settlement are marital property.
Property Division. The rule announced in
Parde v. Parde, 258 Neb. 101, 602 N.W.2d 657');">602 N.W.2d 657 (1999),
does not require either that a settlement agreement itself
must categorize the nature of the compensation or that
parties must present expert testimony as to how settlement
proceeds should be allocated. Rather, Parde simply
requires competent evidence as to the nature of and
underlying reasons for the compensation.
Property Division: Proof. Where the evidence
shows the settlement proceeds were inadequate to compensate
the purely personal losses proved by the injured spouse, and
also were inadequate to compensate loses to the marital
estate, inequity would generally result from classifying all
of the settlement proceeds as either marital or nonmarital.
Property Division. The principles announced
in Parde v. Parde, 258 Neb. 101, 602 N.W.2d 657');">602 N.W.2d 657
(1999), can be applied to settlement proceeds that have
already been spent, so long as the nonmarital portion of the
settlement proceeds can be sufficiently traced.
___. Setting aside nonmarital property is simple if the
spouse possesses the original asset, but can be problematic
if the original asset no longer exists.
Property Division: Proof. Separate property
becomes marital property by commingling if it is inextricably
mixed with marital property or with the separate property of
the other spouse. But if the separate property remains
segregated or is traceable into its product, commingling does
[298 Neb. 3] not occur. The burden of proof rests with the
party claiming that property is nonmarital.
Child Support: Rules of the Supreme Court.
The Nebraska Child Support Guidelines provide that in
calculating the amount of child support to be paid, the court
must consider the total monthly income, which is defined as
income of both parties derived from all sources, except all
means-tested public assistance benefits which includes any
earned income tax credit and payments received for children
of prior marriages and includes income that could be acquired
by the parties through reasonable efforts.
___: ___. The Nebraska Supreme Court has not set forth a
rigid definition of what constitutes income, but instead has
relied upon a flexible, fact-specific inquiry that recognizes
the wide variety of circumstances that may be present in
child support cases.
Child Support: Taxation: Equity: Rules of the Supreme
Court. Income for the purposes of calculating child
support is not necessarily synonymous with taxable income. A
flexible approach is taken in determining a person's
income for purposes of child support, because child support
proceedings are, despite the child support guidelines,
equitable in nature.
for further review from the Court of Appeals. Moore, Chief
Judge, and Irwin and Bishop, Judges, on appeal thereto from
the District Court for Douglas County, Thomas A. Otepka,
Judge. Judgment of Court of Appeals reversed, and cause
remanded with directions.
A. Roberts and Justin A. Roberts, of Lustgarten &
Roberts, P.C., L.L.O., for appellant.
Anthony W. Liakos, of Govier, Katskee, Suing & Maxell,
PC, L.L.O., for appellee.
Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy, Kelch,
and Funke, JJ.
Marshall petitions for further review of the Nebraska Court
of Appeals' opinion in Marshall v.
Marshall. She [298 Neb. 4] argues the Court of
Appeals misapplied the principles of Parde v.
Parde when determining how proceeds from a
personal injury settlement should be classified in this
dissolution action. She also argues the appellate court erred
in recalculating child support, reversing the property
division, and reversing the award of alimony. On further
review, we reverse the decision of the Court of Appeals and
remand the cause with directions to affirm the decree entered
by the trial court.
complete recitation of the facts is set forth in the opinion
of the Court of Appeals. We summarize here only those facts
which are relevant to the issues on further review.
Brian W. Marshall married in 1993. Amy filed a complaint for
dissolution in February 2013, and trial was held in October
2014. By that time, one of the parties' two children had
reached the age of majority, and the other was 18. Disputed
issues at trial were child support, alimony, classification
and division of assets and debts, and attorney fees.
the evidence at trial focused on two issues: how to classify
and allocate a personal injury settlement received during the
marriage and how to calculate Brian's total monthly
income for purposes of child support and alimony. Given the
factually intensive nature of these issues, we recite in some
detail the evidence on which the district court relied.
Personal Injury Settlement
2003, at age 34, Amy suffered a massive stroke. The stroke
left her with permanent disabilities, including significant
left-sided paralysis. Before the stroke, Amy had been taking
the anti-inflammatory drug Vioxx on a regular basis. She did
not have a prescription for Vioxx, but had been given free
samples of the drug by a physician.
Neb. 5] Amy and Brian ultimately reached a settlement with
Merck & Co., Inc. (Merck), the manufacturer of Vioxx. As
part of the agreement, Amy and Brian executed a release of
all claims. The release did not allocate the settlement
proceeds to any particular claim or category of damages. The
release contained a confidentiality provision limiting
disclosure of the amount of the settlement payments; we thus
will not reference the gross settlement amount in this
opinion. It is sufficient to note that after deducting
attorney fees and costs, Amy and Brian received net
settlement proceeds totaling $330, 621.14.
undisputed that the parties spent nearly all the settlement
proceeds during their marriage. It is also undisputed that
they were able to trace where most of the settlement proceeds
were spent. As relevant to the issues on appeal, the evidence
showed they used $84, 268.83 to pay off the mortgage on the
marital home and $90, 123.36 to remodel the kitchen of that
home. Another $5, 211.90 was used for additional remodeling
of the home. Brian put $20, 000 into a new bank account in
his name and used $33, 333 to purchase a one-third interest
in a business, "Elite Fitness."
Permanent Disability and Pain and Suffering
the stroke, Amy was hospitalized for 1 week and then moved to
a rehabilitation center for another 30 days. Once she was
released to return home, Amy continued rehabilitation through
physical therapy for approximately 4 years. Both Amy and her
mother testified at trial about how the stroke affected her.
The most complete explanation of Amy's condition and
limitations after the stroke came from her rehabilitation
Despite a complete course of rehabilitation, [Amy] remains
with rather significant left-sided paralysis. She has no
significant functional use of the left upper extremity. She
previously worked as an owner/operator of a hair salon. This
stroke eliminated the functional use of her left [298 Neb. 6]
hand and ultimately she gave up her career and sold her
salon. She has not been able to sustain reasonable work as a
hairstylist since her stroke.
Functional tasks have become much more difficult . . . .
[F]eeding is made more difficult as she is unable to cut her
meat, prepare foods that require two hands and eating
one-handed is simply clumsier and more difficult.
Likewise, dressing is performed entirely one-handed. She must
select clothes from her wardrobe that do not have buttons or
zippers. She also must perform toileting and bathing tasks
one-handed and with adaptive equipment. These are performed
more slowly and less thoroughly with her one-handed
techniques. She is also unable to completely groom herself,
particularly placing deodorant on her right side. She has
difficulty grooming and bathing her right upper extremity
with the paralyzed left arm.
[Amy] has the residuals of a neurogenic bladder post stroke.
She has urinary urgency and must get to a bathroom more
frequently than prior to her stroke. She is also more prone
to the occasional bladder accident as a direct result of her
Exercise is performed more difficultly with her partially
paralyzed left lower extremity. She is unable to ride a
bicycle and is certainly unable to go jogging or ride an
elliptical trainer. It is harder for her to achieve
cardiovascular fitness under her hemiparetic circumstances.
Ambulation for [Amy] is clumsy and adaptive. She swings her
left lower extremity forward in a circumferential pattern and
has difficulty maintaining static stance on just her left
lower extremity. She falls approximately once per month and
has had [an] assortment of musculoskeletal bruises, sprains
and strains as a result of her falls.
[Amy] requires lifelong treatment with an antiplatelet
medication for her stroke. This slightly increases [298 Neb.
7] her overall risk of cerebral hemorrhage and certainly
increases the amount of bruising she suffers with normal
[Amy] at the present time [December 23, 2009, ] is considered
at maximum medical improvement in regard to her left
hemiparetic stroke residuals. She has adapted her life to the
near complete paralysis of her left upper extremity and the
partial paralysis of her left lower extremity. Nonetheless,
she has suffered significant functional impairments in her
activities of daily living as a direct result of her stroke
Past and Future Lost Earnings
the stroke, Amy co-owned a hair salon and earned
approximately $43, 580 per year. After the stroke, Amy was
not able to work at all for several years, so she sold her
interest in the hair salon. Later, she used proceeds from the
sale of her salon to remodel a portion of the basement of the
parties' home into a hair salon. She eventually returned
to work as a hairstylist, working about 3 hours a day, 2 to 3
days a week. She has 10 loyal clients, mostly family and
friends, who are willing to assist her with styling. In 2013,
the gross income from Amy's home salon was $6, 375 and
her expenses were $7, 000. Amy's past lost earnings from
the time of her stroke until the parties' separation
exceeded the amount of the Merck settlement proceeds. Her
future lost earnings were estimated at over $1, 133, 000.
purposes of calculating child support, the parties agreed on
the amount of Amy's total monthly income, but disagreed
regarding the amount of Brian's total monthly income. The
evidence showed Brian had several sources of income, as well
as in-kind benefits.
works as the property manager for Marshall Enterprises, doing
general property maintenance and upkeep. [298 Neb. 8] He owns
49 percent of Marshall Enterprises, and his mother owns the
remaining 51 percent. Marshall Enterprises manages properties
purchased by Brian's parents and held in trust. Brian
testified that he receives a salary of $2, 500 per month, but
his 2013 tax returns did not show any income from wages or
salary. In addition, Marshall Enterprises provides Brian a
truck, pays for maintenance and insurance on the truck, pays
his cell phone bill of approximately $270 per month, allows
Brian to live rent free in one of its rental properties that
rents for $1, 000 per month, and provides health insurance
for Brian and his family.
also operates a snow removal business. He testified he
usually earns "$10, 000 or more" annually from his
snow removal business. Brian's income tax returns for
2009 through 2013 reported net profits for this business of
$11, 184, $10, 830, $15, 958, $12, 990, and $13, 805,
respectively. Also, Brian's bank account statements from
January to August 2014 showed average monthly deposits of
more than $7, 400-well in excess of what he claimed to be
earning from his property management and snow removal
jobs-and he provided conflicting testimony regarding the
source of ...