Court Opinion

ID: 9581967
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:20:50.681724+00
Date Added: 2024-06-11T13:37:21.901168
License: Public Domain

Hannon, Judge,
dissenting.
I respectfully dissent from that portion of the opinion which decreases the amount of the credit that Pat is to receive for the $50,000 she brought into the marriage. In my view, the majority is basing its decision upon the trial court’s inability to trace that portion of the $50,000 she brought into the marriage, and the opinion allows credit for only the $13,000 which can be traced. It has always been my understanding that credit may be given for property brought into the marriage even though the property loses its identity in the marital estate. The Nebraska Supreme Court has stated:
Equitable property division under § 42-365 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 in accordance with the principles contained in § 42-365.
Heald v. Heald, 259 Neb. 604, 612, 611 N.W.2d 598, 605 (2000).
I think the cases cited in the opinion to support denying Pat credit, such as Shockley v. Shockley, 251 Neb. 896, 560 N.W.2d 777 (1997); Buche v. Buche, 228 Neb. 624, 423 N.W.2d 488 (1988); Frost v. Frost, 227 Neb. 414, 418 N.W.2d 220 (1988); and Rezac v. Rezac, 221 Neb. 516, 378 N.W.2d 196 (1985), have to do with the first step, that is, the determination of the parties’ marital and nonmarital property. “Tracing” has to do with the determination of whether specific property is subject to treatment as nonmarital property, and cases such as Tyler v. Tyler, 253 Neb. 209, 570 N.W.2d 317 (1997); Van Newkirk v. Van Newkirk, 212 *1018Neb. 730, 325 N.W.2d 832 (1982); and Gerard-Ley v. Ley, 5 Neb. App. 229, 558 N.W.2d 63 (1996), have to do with special situations where for one reason or another property was considered marital property even though the evidence showed that it could be traced as property brought into the marriage by one party. Notwithstanding these rules, I think that in dividing the marital estate, the trial court can give a party credit for property that he or she brought into the marriage, even when such property has lost its identity as nonmarital property. I think this process is part of the third step referred to in Heald v. Heald, supra.
I have always understood the portion of § 42-365 directing the court to consider the history of the contribution of each party to the marriage when dividing marital property to include a consideration of the financial contribution the parties might have made to the marriage by way of bringing property into the marital estate. This approach is longstanding. In Francil v. Francil, 153 Neb. 243, 44 N.W.2d 315 (1950), the court noted that the husband and wife had separately inherited $4,000 and $2,000, respectively, which they had both “contributed to the estate.” The court concluded that an equal division of property was justified, but awarded the husband a 40-acre tract of marital property which represented the greater amount put into the estate by the husband.
In Heald v. Heald, supra, the trial court did not give the husband credit for a $5,380 downpayment he made on the parties’ first marital home, which was originally purchased by him before the marriage in his name, but was later placed in joint tenancy with his wife. The trial court did not give credit for the downpayment because the husband had placed the property in joint tenancy. Upon appeal, the husband was given credit for the downpayment. The court’s opinion states that the first marital home was replaced when the parties moved from Ralston, Nebraska, to Plattsmouth, Nebraska, but does not state whether the first marital home was sold or retained, only that a new marital home was acquired. In my opinion, Heald is recent authority for the proposition that when dividing the marital estate, credit may, and maybe should, be given for property contributed to the marital estate. I believe the case held that it was error not to give the credit.
*1019The practice of giving credit for property brought into the marriage is longstanding. In Johnson v. Johnson, 209 Neb 317, 307 N.W.2d 783 (1981), certain bonds which the husband owned at the time of the marriage were later transferred to both spouses’ names, and then the funds were used to build a home and a Quonset building and to buy machinery. The value of the bonds were “set off’ to the husband in dividing the property. The action was affirmed, and in so doing, the court stated that the wife had failed to recognize that the bonds which were placed in her name were cashed and the funds used. In Johnson, the husband was also awarded certain real estate which had come to him by way of gifts of cash from his mother. The cash was used to purchase real estate from the mother, which real estate was then deeded to both parties. The court stated:
The trial court, in making its determination relating to the property division, was entitled to consider the fact that Sharon contributed nothing to the acquisition of these properties and that the source of the funds used to acquire the farms were gifts from John’s mother. In an action for dissolution of marriage, a court may divide property between the parties in accordance with the equities of the situation, irrespective of how legal title is held.
Id. at 324, 307 N.W.2d at 788.
Nebraska Supreme Court cases frequently give parties credit for untraced property brought into the marriage. For instance, in Rezac v. Rezac, 221 Neb. 516, 378 N.W.2d 196 (1985), frequently cited for its statement on tracing, the trial court gave the wife $17,400 credit for property brought into the marriage. On appeal, it was noted that this figure gave her credit for the $10,000 value of an insurance policy she brought into the marriage, but the credit was ultimately found to be error because she had also been awarded that insurance policy. My point being that she received a $7,400 credit for other property brought into the marriage without comment and that credit for the value of the insurance policy was only disallowed for the stated reason that to give her both the policy and credit for its value was a duplication. While the Rezac court did not allow the husband to trace certain premarital property that had been sold and reinvested during the marriage, the division of the marital estate *1020gave the husband 60 percent of the marital estate after allowance for the property the wife brought into the marriage.
It appears to me that in dividing the marital estate, the trial court can give the parties the benefit of their respective financial contributions to the marital estate either by giving them credit when computing the value of the property distributed to them or by crediting them the value of the property brought into the marriage. The credit is usually for the value of the property when the property was brought into the marriage or, if it was later sold or transferred, for the amount realized upon the sale or transfer. However, I think the party with the greatest financial contribution is frequently given a greater share of the marital property with the larger contribution in mind. The approach used in a given case depends upon the situation of the parties at the time of the dissolution. In the case at hand, I do not think the trial court abused its discretion in giving Pat credit in the manner that it did.
In Ragains v. Ragains, 204 Neb. 50, 281 N.W.2d 516 (1979), the trial court made an allowance to the husband of $75,460 for an inheritance, gifts he had received, and property that he had owned prior to marriage. The balance of the assets was divided $138,481.75 to the husband and $126,713.72 to the wife, and the wife received $36,000 in alimony. The wife assigned the credit as error and argued that the decree awarded her husband 62.8 percent of the property and gave her only 37.2 percent. The court stated that if alimony was considered, the husband received 52 percent of the property and the wife received 48 percent, and affirmed the trial court’s award.
In Ward v. Ward, 7 Neb. App. 821, 585 N.W.2d 551 (1998), the trial court had not listed and valued the assets, and therefore as part of our review, this court listed and valued the marital estate property and the marital debts, and then divided the property equally after allowing each party credit for property he or she brought into the marriage. We awarded the husband $43,303 of credit for the value of a house and savings he brought into the marriage, less the debts he brought with him, and gave the wife $3,329 credit for the proceeds of the sale of her nonmarital car, which were used to purchase the parties’ home. I believe that approach has been quite common and usually goes undisputed or unmentioned.
*1021In the case at hand, the evidence shows that Pat spent $17,000 on living expenses while the parties were separated. It also shows that she and Dan separated in November 1996 and that the divorce petition was not filed until September 1998. Pat and the children lived in the Upland home only until December 1997. During the separation, Dan gave her $1,342 per month for support and paid himself $1,002 per month in salary. After the divorce petition was filed, Dan paid Pat $2,139 per month child support and $1,000 per month alimony. Dan moved back in the Upland home in October 1998, and of course, he had access to the family money from the time of separation. I think this situation justifies the conclusion that Pat needed to spend the money in her possession to support herself and the children while Dan had control of the remainder of the family wealth. He undoubtedly lived upon the family wealth without accounting to her for it. I think the trial court, in its discretion, was correct in awarding Pat credit for the entire $50,000 she brought into the marriage. I would affirm that portion of the trial court’s property division which gave Pat credit for property she brought into the marriage, because I do not believe the credit given was an abuse of discretion.