Opinion ID: 2016516
Heading Depth: 1
Heading Rank: 5

Heading: property and debt allocations

Text: The second assignment of error questions the allocation of the property and debts. The oft-repeated general rule which guides the resolution of this and the succeeding assignments of error is that in a dissolution of marriage appeal, an appellate court's review is de novo on the record to determine whether there has been an abuse of discretion by the trial judge, whose judgment will be upheld in the absence of an abuse of discretion. In such de novo review, when the evidence is in conflict, the 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 than another. Schmale v. Schmale, 240 Neb. 499, 482 N.W.2d 268 (1992); Stuhr v. Stuhr, 240 Neb. 239, 481 N.W.2d 212 (1992). The principal question concerning the property and debt allocations is whether the ambulance service corporation is to be considered as part of the marital estate. In a dissolution of marriage action, property acquired by one of the parties through gift or inheritance ordinarily is set off to the party receiving the inheritance or gift and is not considered a part of the marital estate. Sullivan v. Sullivan, 223 Neb. 273, 388 N.W.2d 516 (1986); Van Newkirk v. Van Newkirk, 212 Neb. 730, 325 N.W.2d 832 (1982). An exception to this general rule is recognized, however, where both parties have contributed during the marriage to improving or operating the property, or where a party, not owning the property prior to marriage or receiving the inheritance or gift, has significantly cared for such property during the marriage. Sullivan v. Sullivan, supra ; Grace v. Grace, 221 Neb. 695, 380 N.W.2d 280 (1986); Van Newkirk v. Van Newkirk, supra . In Sullivan, we noted that there was no evidence indicating that [the noninheriting spouse] either contributed to improvement or operation of [the inheriting spouse's] property owned jointly with her brother or that [the noninheriting spouse] had significantly cared for the property during his marriage to [the inheriting spouse]. The record is silent regarding any involvement by [the noninheriting spouse] in the care of [the inheriting spouse's] jointly owned farmland or the farm operations conducted on that property. Id., 223 Neb. at 276, 388 N.W.2d at 519. We thus concluded that the inherited property should have been excluded from the marital estate and set over to the inheriting spouse. Here, there is no evidence in the record that the wife contributed to the improvement or operation of the property or that she significantly cared for the property during the marriage. The record shows only that $25,000 of the husband's inheritance was used to purchase a house which was later sold and that $22,342 of the sale proceeds were used to acquire the corporation. The wife admitted that she had neither a part in this purchase nor any other association with the corporation. It has been stated that if the inheritance can be identified, it is to be set off to the inheriting spouse and eliminated from the marital estate to be divided. See, Buche v. Buche, 228 Neb. 624, 423 N.W.2d 488 (1988); Ross v. Ross, 219 Neb. 528, 364 N.W.2d 508 (1985). Since the husband's inheritance can be readily traced to the purchase of the corporation and there is no evidence that the wife falls within the Van Newkirk exception, the corporation must be excluded from the marital estate and set aside to the husband. Having removed the corporation from the marital estate, we turn our attention to the remaining property. Neb.Rev.Stat. § 42-365 (Reissue 1988) provides: When dissolution of a marriage is decreed, the court may order payment of such alimony by one party to the other and 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, including contributions to the care and education of the children, and interruption of personal careers or educational opportunities.... While the criteria for reaching a reasonable division of property and a reasonable award of alimony may overlap, the two serve different purposes and are to be considered separately. The purpose of a property division is to distribute the marital assets equitably between the parties. The purpose of alimony is to provide for the continued maintenance or support of one party by the other when the relative economic circumstances and the other criteria enumerated in this section make it appropriate. In applying § 42-365, this court has repeatedly held that the ultimate test for determining an appropriate division of marital property is one of reasonableness. Mellor v. Mellor, 235 Neb. 361, 455 N.W.2d 177 (1990); Hallan v. Hallan, 233 Neb. 261, 444 N.W.2d 896 (1989); Murrell v. Murrell, 232 Neb. 247, 440 N.W.2d 237 (1989). Although property division is not subject to a rigid mathematical formula, but, rather, turns upon the facts and circumstances of each individual case in light of the factors set forth in § 42-365, Kimbrough v. Kimbrough, 228 Neb. 358, 422 N.W.2d 556 (1988), and Taylor v. Taylor, 222 Neb. 721, 386 N.W.2d 851 (1986), it has been stated that the one-third to one-half rule in dividing marital property is of particular significance when the marriage is of long duration and the parties are the parents of all the children, see, Sullivan v. Sullivan, supra ; Taylor v. Taylor, supra ; and Koubek v. Koubek, 212 Neb. 2, 321 N.W.2d 55 (1982). Here, the parties were married for 26 years and produced four children. The record reveals that both parties were employed consistently throughout the marriage and that both contributed to the support of the family. The marital estate has an approximate value of $33,000. The wife was awarded property having an approximate value of $14,500. She was also awarded $2,000 to equalize the value of the vehicles; thus, the wife was awarded approximately $16,500. The husband was awarded approximately $18,444.64 in property. Taking into account the $2,000 equalization payment, he, too, was awarded approximately $16,500 in property. Thus, at first glance, it would appear that the marital estate was divided equally between the parties. However, in Black v. Black, 221 Neb. 533, 378 N.W.2d 849 (1985), we stated that the debts of the parties should be considered in making a property division. See, also, Hildebrand v. Hildebrand, 239 Neb. 605, 477 N.W.2d 1 (1991); Keim v. Keim, 228 Neb. 684, 424 N.W.2d 112 (1988). When the debts are considered, it is obvious that the property was not divided equally between the parties. They had $26,472 in current joint obligations. (We obviously do not consider in this figure the potential liability of the parties on the daughter's student loan or the husband's sole liability on the $14,000 he owes in connection with his purchase of the ambulance service corporation.) The wife was made responsible for one-half of the $10,000 loan from her parents, and the husband was allocated all remaining debts. Thus, the wife received approximately $16,500 in assets less $5,000 in debts, for a net award of about $11,500. The husband, on the other hand, received $16,500 of the marital assets less $17,200 in joint current debts. The wife, therefore, actually received more than all of the marital estate, which is an abuse of discretion. The decree must therefore be modified so as to obligate the wife to pay one-half of each of the joint obligations of the parties and to require each party to pay one-half of the daughter's student loan, should that go into default. The husband alone is to remain obligated on the debt arising out of his purchase of the capital stock of the ambulance service corporation.