Court Opinion

ID: 9893989
Source: CourtListenerOpinion
Date Created: 2023-10-31 14:08:17.933832+00
Date Added: 2024-06-11T09:07:58.305187
License: Public Domain

IN THE NEBRASKA COURT OF APPEALS

               MEMORANDUM OPINION AND JUDGMENT ON APPEAL
                        (Memorandum Web Opinion)

                                        FOSTER V. FOSTER

  NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION
 AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).

                                KATHLEEN A. FOSTER, APPELLANT,
                                                 V.

                                    LYLE D. FOSTER, APPELLEE.

                             Filed October 31, 2023.    No. A-22-873.

       Appeal from the District Court for Saunders County: CHRISTINA M. MARROQUIN, Judge.
Affirmed as modified.
       Sally A. Rasmussen, of Mattson Ricketts Law Firm, for appellant.
       Taylor L. Kidwell and Vanessa J. Gorden, of GordenLaw, L.L.C., for appellee.

       PIRTLE, Chief Judge, and MOORE and RIEDMANN, Judges.
       MOORE, Judge.
                                       I. INTRODUCTION
        Kathleen A. Foster appeals from the decree of dissolution entered by the district court for
Saunders County, dissolving her marriage to Lyle D. Foster. Kathleen challenges the district
court’s determination and division of the marital estate in several regards. Kathleen also claims the
district court erred in failing to restore her maiden name. We modify the decree to restore
Kathleen’s maiden name to her. We further modify the decree with regard to the classification and
valuation of certain assets and debts, and we modify the amount of equalization payment Lyle is
ordered to pay to Kathleen.

                                                -1-
                                  II. STATEMENT OF FACTS
        Kathleen and Lyle were married in September 2004. It was the second marriage for both,
and no children were born of this marriage. The parties separated, and Kathleen filed a complaint
for dissolution in December 2019.
        Trial was held before the district court in June and July 2022. The following evidence was
adduced.
                                1. RESTORATION OF MAIDEN NAME
        Kathleen testified that she was seeking the restoration of her maiden name. She stated and
spelled her maiden name for the record and Lyle offered no objection.
                                          2. REAL ESTATE
        The parties owned, either separately or jointly, 11 pieces of real property and they had
debts collateralized against the property. The trial court determined that the Yutan Road property
was marital, which neither party disputes on appeal. The court determined that the remaining 10
rental properties were nonmarital assets. The court awarded all of the real estate to Lyle. The court
determined that all of the debts associated with all of the real estate was marital debt and assigned
it to Lyle. Kathleen asserts that 2 of the rental properties should have been classified as marital
property. She also asserts that the debts associated with the remaining 8 rental properties were
improperly categorized as marital debts.
                                          (a) Yutan Road
        Four years prior to the marriage, Lyle purchased 39 acres of land on Yutan Road for
$136,000. Sometime between the purchase of Yutan Road and the parties’ marriage in 2004, Lyle
sold off portions of the property. At the time of the marriage, Yutan Road consisted of 21 acres of
land. Throughout their marriage the parties constructed several improvements on the property,
including a family home (not yet completed at the time of trial), a steel building used for the
parties’ various small businesses, and a pole barn. After the parties were married, Kathleen was
added to the deed. A September 2005 warranty deed listed Lyle and Kathleen as both the grantors
and grantees of Yutan Road.
                                          (b) LDF Homes
        Lyle started LDF Homes as a sole proprietorship in 1988, 16 years prior to the parties’
marriage. Through LDF Homes, Lyle purchased, renovated, and rented out properties. At the time
of the marriage, LDF Homes owned 8 rental properties. Two more were purchased after the date
of the marriage. At the time of trial, there were 10 rental properties under LDF Homes. Kathleen
does not challenge the trial court’s determination that 8 of the rental properties were Lyle’s
premarital assets; she only challenges the court’s determination that the Anderson Way and
Cypress Street properties were nonmarital assets, since they were purchased after the parties were
married.

                                                -2-
                                      (c) Kathleen’s Inheritance
         Kathleen inherited farm real estate from her father’s estate in 2001. Lyle’s name was added
to the deeds after the parties’ marriage. Kathleen testified that she sold the two sections of inherited
farmland and used some of the proceeds from the sales to finance the improvements to Yutan
Road. Two seller’s closing statements reflect that Kathleen sold a section of inherited farmland for
$642,139.52 in 2006, and another section for $678,799.75 in 2007. Kathleen testified that she
placed the proceeds from the 2006 sale in certificates of deposit (CDs) and the proceeds from the
2007 sale in a money market account. A First National Bank statement dated March 31, 2007,
reflects a deposit of $678,871.51 into a money market account held jointly by Kathleen and Lyle.
A handwritten note next to the deposit line-item states, “Sale of Quarter Colon Farm.” Kathleen
acknowledged that money other than her nonmarital inheritance was deposited into the joint First
National Bank account, including Lyle’s earnings. With the funds from the money market account,
the parties bought several new vehicles, and a small amount went into another CD. Kathleen
testified, “after that there were other purchases, and I’m not sure where [the remainder of the
money] really went.” Kathleen indicated that “some of it” went into more improvements for LDF
Homes properties.
         No documentary evidence related to the proceeds of the 2006 sale and corresponding CDs
was offered at trial. Kathleen testified that the parties had almost $1,000,000 in CDs and that they
later had the CDs “broken up” to purchase three more CDs for $250,000 each. According to
Kathleen, a remainder of $200,000 from the original CDs paid off Yutan Road’s construction loan
for the home, the steel building, and the pole barn. In roughly 2008, the parties moved money from
their remaining three CDs into an E-Trade account. Kathleen was unable to recall the initial amount
in the E-Trade account, but checks written from the account by both Lyle and Kathleen from May
2009 to February 2014, totaled over $265,000.
                                      (d) Real Estate Valuation
        Lyle hired a real estate agent in November 2021 to perform a market analysis for each of
the parties’ properties. The real estate agent testified that she physically inspected each property
and gave a fair market valuation based on the property’s present condition. The real estate agent
conceded that she did not have any certifications in real estate appraisals. The district court
received the market analysis into evidence and indicated that it would give the exhibit the
appropriate weight as to the agent’s opinion.
        The market analysis, dated December 2, 2021, stated that Yutan Road had a fair market
value of $400,000. The market analysis also noted that if Yutan Road were to be placed on the
market in its current condition, there would be significant resistance to finding a buyer due to “the
house continuing to sit unfinished for 14+ years, with no utilities to the property, along with
deterioration of the 3-sided machine shed building.”
                                      (e) Real Estate Mortgages
       Both the joint property statement and the mortgage balance statement reflect that there
were mortgages on all 10 of the LDF Homes properties. Cross referencing the loan numbers listed
in the parties’ joint property statement with the mortgage balance statement for the parties’

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properties demonstrates that the parties owed $678,518.13 in mortgages on the 10 LDF Homes
properties.
        The parties’ joint property statement also lists loan number 39101, for $32,208.46, and
number 39158, for $55,050, as operating notes. Lyle explained that the operating notes attached
to Yutan Road, as well as to all properties Lyle owned. The total mortgage and operating note debt
was $765,776.59.
        According to the parties’ joint property statement and the mortgage balance statement,
Yutan Road did not have a mortgage at the time of trial. The only debt associated with Yutan Road
are the two operating notes.
                                   (f) Anderson Way Property
        Kathleen provided no testimony regarding the property at Anderson Way at trial, however,
in a previous deposition received in evidence at trial, Kathleen testified that Anderson Way was
purchased by the parties in 2018. The down payment for Anderson Way was made through an
operating note from the bank and Anderson Way’s mortgage now had its own separate note.
Kathleen testified that LDF Homes paid Anderson Way’s mortgage.
        Lyle did not testify that Anderson Way was nonmarital property. He testified only that he
had hired the real estate agent to conduct a market analysis of the property. The agent’s market
analysis shows that Anderson Way was presently valued at $35,000 to $40,000, as the home is
currently uninhabitable and there would be significant resistance to finding a buyer in its current
state. The agent testified that if Anderson Way were to be refurbished, it could be sold for a price
between $155,000 and $160,000.
        The joint property statement noted that Anderson Way was “deeded joint ownership, Lyle
and Kathleen.” The mortgage balance statement includes a $70,000 debt for loan number 38759,
which is tied to this property according to the parties’ joint property statement.
                                   (g) Cypress Street Property
         Kathleen provided no trial testimony regarding the property at Cypress Street, however, in
a previous deposition received in evidence at trial, Kathleen testified that Cypress Street was
purchased after the parties were married, though she was unable to recall the source of the
property’s down payment. Kathleen conceded that the deed to Cypress Street listed only Lyle’s
name and, because she had trusted Lyle, she had not insisted that the property be titled in her name
as well.
         The joint property statement reflects that Cypress Street was purchased on October 25,
2004, roughly 1 month after the parties’ marriage. At trial, Lyle disagreed that Cypress Street was
a marital asset because he had signed the closing statement before the marriage, had planned for
the purchase of Cypress Street for “months and years,” and was the only person listed on the deed
for Cypress Street.
         The agent’s market analysis shows that Cypress Street was valued at $40,000 to $45,000
in its present condition. The market analysis again noted that the home is currently uninhabitable
and there would likely be significant resistance in finding a qualified buyer. The mortgage balance
statement shows a $74,330.69 debt for loan number 37410, which the parties attributed to this
property in the joint property statement.

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                                       (h) Real Estate Taxes
        The parties separated in November 2019. At the time of trial in the summer of 2022,
property taxes on 10 of the parties’ properties were in arrears. Tax sale redemption quotes, dated
June 9, 2022, showed that the property taxes for nine LDF Homes’ properties in Saunders County
and the Yutan Road property had become delinquent in March 2021, and detailed the amount still
owed in property taxes. No evidence as to the status of the property taxes on the LDF Homes
property in Dodge County was offered. By the time of trial, the total property tax liability for the
10 properties was $88,986.29.
        At trial, Lyle conceded that the LDF Homes’ rentals were not generating sufficient income
to pay the property tax because “they’re so run down I’ve got half of them empty. And before
[Kathleen] left, most of them were full.”
                         3. LIFE INSURANCE AND RETIREMENT ACCOUNTS
        Kathleen’s column of the joint property statement lists her whole life insurance policy
through Assurity at a value of $6,920, her Roth IRA through State Bank of Colon at a value of
$1,452, and her Roth IRA through Hartford Funds at a value of $7,086. Lyle’s column of the joint
property statement values the whole life insurance policy, and the State Bank of Colon’s Roth IRA
as Kathleen does but values the Hartford Funds Roth IRA at $7,612. The joint property statement
also notes that Kathleen did not produce any statements related to her two Roth IRA accounts
during discovery but listed the value of her Hartford Funds Roth IRA as $7,612 in answers to
interrogatories on July 30, 2020, and May 15, 2021.
        The joint property statement additionally lists Kathleen’s assets on the date of the parties’
marriage, including a whole life insurance policy through Woodman valued at $3,500 (with the
same policy number as the whole life policy later held by Assurity), the Colon Roth IRA valued
at $1,500, and the Hartford Roth IRA valued at $5,000.
        Kathleen provided no testimony regarding her life insurance policy or retirement accounts.
Lyle testified that the parties did not take out life insurance policies or contribute to retirement
accounts during their marriage. When Lyle was asked whether he saw any statements related to
Kathleen’s Hartford Funds Roth IRA he stated, “I have no clue.”
                                    4. MISCELLANEOUS ITEMS
                                       (a) Credit Card Debt
         During the marriage, Lyle and Kathleen established joint accounts at US Bank. Kathleen
testified that during the marriage, money from the parties’ US Bank joint checking account was
used to pay their Visa bills. Lyle testified that he paid off the $13,000 balance on the parties’ US
Bank Visa with marital funds around the time of his separation from Kathleen. Lyle stated that “I
transferred everything we had into the checking account and paid off the Visa bill, and the only
reason I knew to do that was because. . . we made sure we paid everything and closed everything
that was in our joint names.” This credit card payment of $13,648 is reflected in the joint property
statement.

                                                -5-
                                           (b) Bale Spear
        After the parties separated, but before trial, Lyle sold a bale spear for $1,500. In the joint
property statement, Kathleen placed a value of $500 on the bale spear and Lyle placed a value of
$0, noting that the bale spear “no longer exists”; Lyle indicated that this item was sold for $1,500
during the divorce action and that the gear drive pump on it was bad. Neither party testified
regarding the bale spear at trial.
                                        (c) Ford F350 Truck
       In the joint property statement, Kathleen valued a Ford F350 Truck at $18,975, and Lyle
valued it at $6,000. At trial, Lyle testified that he took into consideration that the truck had a bad
transmission which he estimated would cost $7,200 to repair.
                                       (d) Gooseneck Trailer
       Lyle testified that after the parties separated, he bought a gooseneck dump trailer for $4,000
using an operating note in both his and Kathleen’s names. At the time of trial, Lyle had repaid
some of the operating note amount and had continued “putting it back ever since.”
                             5. DECREE AND POSTTRIAL PROCEEDINGS
        The district court entered a decree of dissolution of marriage on August 24, 2022. The
decree did not address Kathleen’s request made at trial to have her maiden name restored. The
court identified the 10 LDF Homes properties as nonmarital property and Yutan Road as marital
property and awarded all 11 properties to Lyle. The court also classified all the properties’ debt,
both mortgages and property taxes, as marital and ordered Lyle to pay the properties’ debts and
refinance all loans to release Kathleen from any obligation. The court made other findings with
regard to personal property, vehicles, and accounts. We note that the trial court utilized Lyle’s
valuations for most items, finding that in some instances, Kathleen used replacement cost or
purchase price rather than fair market value. The court also indicated that “it believes [Lyle’s]
testimony” regarding the values of certain items on the property statement.
        The district court gave Lyle credit for paying the joint US Bank Visa balance of $13,648.
The district court awarded Kathleen a subtotal of $55,849 of the marital estate and Lyle a subtotal
of $77,780, which the court later reduced to $64,132 after crediting Lyle for the credit card
payment. Lyle was then ordered to make a $4,141.50 equalization payment to Kathleen so that
each was awarded an equal $59,990.50 of the marital estate. Additional findings and details of the
dissolution decree will be set forth in our analysis section below.
        On September 2, 2022, Lyle filed a motion to clarify or amend, seeking to amend the decree
to include a provision for the return of specific sentimental items allegedly in Kathleen’s
possession.
        On September 6, 2022, Kathleen, pro se, filed a motion to clarify or amend the decree to
“dispute the property allocation” and to restore her maiden name. The same day, Kathleen, through
trial counsel, filed a motion to alter or amend, seeking the same remedies as her earlier motion to
clarify or amend.
        On October 28, 2022, the district court filed an order dismissing both Lyle’s and Kathleen’s
posttrial motions. The court noted that the motions were scheduled for hearing on October 24, but

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both parties had contacted the court’s bailiff the day of the scheduled hearing and stated that they
were jointly moving to continue the hearing on both motions and obtain a new hearing date.
However, no motion to continue was filed. Thus, the court dismissed Lyle’s motion to clarify or
amend and Kathleen’s motion to alter or amend as the motions were not argued on the date they
were set for hearing, nor was the hearing properly continued. Both parties were given leave to
refile their respective motions, however, no further motions were filed. We considered the district
court’s dismissal of the motions as a denial, after which Kathleen perfected this appeal.
                                 III. ASSIGNMENTS OF ERROR
         Kathleen assigns, restated, that the district erred in (1) failing to restore her maiden name;
(2) finding that she had not met her burden of proof in tracing her premarital inheritance to the
equity in Yutan Road; (3) failing to include Anderson Way and Cypress Street in the marital estate;
(4) including the premarital value of her life insurance policy and retirement accounts in the marital
estate; (5) findings as to the classification and assignment of debt; and (6) division as to the bale
spear, Ford F350, and gooseneck trailer.
                                  IV. STANDARD OF REVIEW
        In a marital dissolution action, 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. Kauk v. Kauk, 310 Neb.
329, 966 N.W.2d 45 (2021). In a review de novo on the record, an appellate court is required to
make independent factual determinations based upon the record, and the court reaches its own
independent conclusions with respect to the matters at issue. Id.
        When 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. Id.
        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. Id.
                                           V. ANALYSIS
                              1. FAILURE TO RESTORE MAIDEN NAME
        Kathleen argues that the district court’s failure to restore her maiden name in the decree or
in posttrial proceedings was an oversight that amounts to a judicial abuse of discretion.
        Neb. Rev. Stat. § 42-380(1) (Reissue 2016) states that when a pleading is filed pursuant to
a complaint for dissolution of marriage, either party may include a request to restore his or her
former name. See § 42-380(1). The court shall grant such request except for good cause shown.
Id. In this case, Kathleen’s complaint did not specifically request the restoration of her maiden
name, although her prayer for relief included “such other and further relief as the Court deems just
and equitable.” At trial, Kathleen testified to her desire to have her maiden name restored to her
and provided the court with the desired name.
        Even when a party does not move to amend pleadings, a court may constructively amend
pleadings on unpleaded issues in order to render a decision consistent with the trial. See Simons v.
Simons, 312 Neb. 136, 978 N.W.2d 121 (2022) (emphasis added). Lyle did not object to the request

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to restore Kathleen’s maiden name at trial and as such, the court could have amended the pleadings
to conform to the evidence. See Neb. Ct. R. Pldg. § 6–1115(b).
        Under the circumstances of this case, we find that Kathleen’s request for restoration of her
maiden name should have been granted and we therefore modify the decree to provide that
Kathleen’s maiden name of Auch be restored to her.
                                2. EQUITABLE DIVISION OF PROPERTY
        Under Neb. Rev. Stat. § 42-365 (Reissue 2016), the equitable division of property is a
three-step process. Parde v. Parde, 313 Neb. 779, 986 N.W.2d 504 (2023). The first step is to
classify the parties’ property as marital or nonmarital, setting aside the nonmarital property to the
party who brought that property to the marriage. Id. The second step is to value the marital assets
and marital liabilities of the parties. Id. And the third step is to calculate and divide the net marital
estate equitably between the parties. Id. The ultimate test in determining the appropriateness of the
division of property is fairness and reasonableness as determined by the facts of each case. White
v. White, 304 Neb. 945, 937 N.W.2d 838 (2020).
                                            (a) Yutan Road
         Kathleen asserts that the marital equity in Yutan Road should be offset by her $200,000
contribution of nonmarital funds. Kathleen concedes that she did not trace monies from the
E-Trade account to specific assets and purchases. However, she argues that her testimony, that
$200,000 of proceeds from the sale of inherited farmland satisfied a construction lien on Yutan
Road, combined with her documentary evidence, showing that there was once a deposit of at least
$265,000 into the E-Trade account and $678,871.51 into the joint money market account, is
sufficient to satisfy her burden of tracing nonmarital funds to the equity in Yutan Road.
         Before addressing this assignment of error, we summarize the applicable law regarding the
classification of property. Generally, all property accumulated and acquired by either spouse
during a marriage is part of the marital estate. Brozek v. Brozek, 292 Neb. 681, 874 N.W.2d 17
(2016). Exceptions include property that a spouse acquired before the marriage, or by gift or
inheritance. See id. Setting aside nonmarital property is simple if the spouse possesses the original
asset, but can be problematic if the original asset no longer exists. Id. Separate property becomes
marital property by commingling if it is inextricably mixed with marital property or with the
separate property of the other spouse. Id. If the separate property remains segregated or is traceable
into its product, commingling does not occur. Id.
         Any given property can constitute a mixture of marital and nonmarital interests; a portion
of an asset can be marital property while another portion can be separate property. Kauk v. Kauk,
310 Neb. 329, 966 N.W.2d 45 (2021). The original capital or value of an asset may be nonmarital,
while all or some portion of the earnings or appreciation of that asset may be marital. White v.
White, 304 Neb. 945, 937 N.W.2d 838 (2020) (quoting Stephens v. Stephens, 297 Neb. 188, 899
N.W.2d 582 (2017)). The burden of proof rests with the party claiming that property is nonmarital.
Kauk v. Kauk, supra.
         In its decree, the district court found that Yutan Road was acquired by Lyle prior to
marriage, however, it determined that improvements were made during the marriage and the
appreciation of the property is subject to marital division. The court found that Kathleen failed to

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trace separate property contributions to the improvements of the real estate and that Kathleen’s
nonmarital funds have long since been comingled with marital funds and are not traceable as
separate property. The court found that Lyle also failed to establish the value of his separate share
of the property as of the date of marriage to be off set to him. The court valued the Yutan Road
property at $400,000, with debt against it of $55,050.
        The district court did not abuse its discretion in determining that Kathleen failed to trace
the $200,000 of nonmarital money she alleges funded improvements to Yutan Road and that any
such funds had been comingled with marital assets. Kathleen did provide documentation that the
proceeds from the 2007 sale of inherited farmland were deposited into a money market account,
however, that money market account was jointly held and used during the marriage by both parties
to deposit marital monies and pay marital bills. No receipts related to the construction of the home,
the steel building, and the pole barn on Yutan Road were offered into evidence, nor any records
related to the amount of the construction lien or the date of its satisfaction.
        Kathleen testified that the construction lien was paid for by funds which were in her
original CD from the 2006 sale of inherited property. However, these funds were later moved into
new CDs, and then later moved into the E-Trade account. No documentation related to any CD
account for these alleged transactions was offered at trial. While Kathleen offered copies of checks
drawn from the E-Trade account, Kathleen testified that the construction lien was paid off before
the money was moved into the E-Trade account.
        We recognize that documentation is not always required to support claims of nonmarital
property. See Burgardt v. Burgardt, 304 Neb. 356, 934 N.W.2d 488 (2019) (finding that party
seeking classification of property in dissolution proceeding may find it easier to meet burden of
persuasion with documentary support, but its absence does not automatically defeat claim).
However, under the circumstances in this case, we cannot say that the district court erred in finding
that Kathleen failed in her burden of tracing her premarital inheritance to the improvements to
Yutan Road. Our review of Kathleen’s testimony regarding the attempt to trace her premarital
inheritance shows that it was vague, confusing, and unpersuasive.
        Further, we agree with the district court that any nonmarital inheritance that was ultimately
deposited into the money market or E-Trade accounts has become inextricably mixed with marital
property. Separate property becomes marital property by commingling if it is inextricably mixed
with marital property or with the separate property of the other spouse. Eis v. Eis, 310 Neb. 243,
965 N.W.2d 19 (2021). The evidence shows that the money market account was a joint account
and both parties made an unknown number of withdrawals and deposits into the account, including
depositing Lyle’s earnings. Both Kathleen and Lyle were also able to write checks out of the
E-Trade account, demonstrating that they each had access to the account.
        Kathleen has failed to carry her burden of proof to trace any premarital contributions to the
improvements of Yutan Road. The district court did not abuse its discretion in finding that
Kathleen’s premarital funds had been comingled and including Yutan Road’s appreciation in the
marital estate. This assignment of error fails.

                                                -9-
                               (b) Anderson Way and Cypress Street
        Kathleen asserts that the district court erred in failing to include Anderson Way and
Cypress Street in the marital estate. She argues that the two pieces of real estate were acquired
during the marriage and thus are marital property.
        The district court found in the decree that except for Yutan Road, Lyle had satisfied his
burden of proof related to his claim that all other real estate was nonmarital property. Further, the
court found that Kathleen did not prove that these properties increased in value during the
marriage. The court noted that there was nothing in the record that proves what the premarital real
estate was worth in 2004. The court further found that the value of the real estate is less than the
debt associated with that real estate and that the active appreciation rule does not apply. The district
court then awarded all rental properties, including Anderson Way and Cypress Street, to Lyle.
        As Kathleen notes in her brief, no deeds, original notes, original mortgages, closing
documents, down payments, rental histories, amortization schedules, or other records related to
either property, were offered into evidence. Only general information regarding the present loan
amount on each property was offered and required cross referencing with the parties’ joint property
statement in order to match loan numbers with specific pieces of property. Without any
documentary evidence offered by either party, the district court had to rely on the parties’
testimony in order to classify the two rental properties at issue. When evidence is in conflict, the
appellate court considers and may give weight to the fact that the trial court heard and observed
the witnesses and accepted one version of the facts rather than the other. Kauk v. Kauk, 310 Neb.
329, 966 N.W.2d 45 (2021).
        Lyle testified that he signed the closing statement for Cypress Street prior to his marriage
with Kathleen and had been contemplating the purchase of the property some time in advance.
Lyle also noted that he was the only person on the deed for Cypress Street. On the other hand, the
record shows that the Anderson Way property was purchased in 2018 and the joint property
statement indicates that it is jointly held.
        We cannot say that the district court abused its discretion in determining that the Cypress
Street property should be classified as Lyle’s nonmarital assets. However, we do find an abuse of
discretion in failing to classify the Anderson Way property as marital property because it was
purchased during the marriage and titled jointly in the parties’ names.
                        (c) Life Insurance Policy and Retirement Accounts
        The district court awarded Kathleen her whole life insurance policy and retirement
accounts, which it valued at $15,984. Kathleen asserts that the district court erred in including the
premarital value of her whole life insurance policy and two retirement accounts in the marital
estate. Kathleen points to the parties’ joint property statement where Lyle’s column lists the
combined value of the assets at the time of trial as $15,984, and Kathleen’s column as $15,458.
Both Lyle and Kathleen list the assets’ premarital value as $10,000. Kathleen argues that only the
appreciation, rather than the total value of the assets, should have been included in the marital
estate.
        Under Neb. Rev. Stat. § 42-366(8) (Reissue 2016), 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

                                                 - 10 -
not assets of the marital estate. Stanosheck v. Jeanette, 294 Neb. 138, 881 N.W.2d 599 (2016).
Where there is nothing on the record to show the source of premarital funds, they should be
considered part of the marital estate. Id.
        Kathleen did not provide any specific testimony regarding these accounts and did not offer
any documentary evidence to show the source of the premarital funds in the accounts. However,
she generally testified that her information on the property statement was accurate. On the parties’
joint property statement, both Kathleen and Lyle listed the premarital and present value of the
assets as set forth above, with a difference in present value of $526. Lyle testified that he was
generally unaware of any retirement accounts held by Kathleen. Because both parties listed the
premarital value of these accounts, we conclude that the district court abused its discretion by
including the total value of her whole life insurance policy and two retirement accounts in the
marital estate. We modify the division of property to value the marital portion of these accounts at
$5,894.
                            (d) Classification and Assignment of Debt
        Kathleen next asserts that the district court erred in its assignment of various debts.
Kathleen argues that the debts against the LDF Homes properties, awarded to Lyle as nonmarital
assets, should likewise have been assigned as nonmarital debts rather than included in the marital
estate. She contends that Lyle refinanced all mortgages prior to the parties’ marriage, and that the
overdue property taxes accrued after the date of the parties’ separation. Kathleen also argues that
by comingling the equity of Yutan Road, included in the marital estate, with the debt associated
with Lyle’s nonmarital properties, the district court “zeroed out” Yutan Road’s equity when the
equity should have been distributed as a marital asset. Kathleen finally argues that Lyle should not
have been credited with paying off the parties’ joint credit card bill in the equalization calculation
as he did so with marital funds.
        Marital debt includes only those obligations incurred during the marriage for the joint
benefit of the parties. Fetherkile v. Fetherkile, 299 Neb. 76, 907 N.W.2d 275 (2018). The burden
to show that a debt is nonmarital is on the party making that assertion. Id.
        As noted above, the district court found that the value of the real estate, except for the
Yutan Road property, was less than the debt associated with that real estate. The district court
found that there was no appreciation of the investment properties during the marriage, rather there
was depreciation. The court noted Kathleen’s claim that she contributed to the rental properties,
both financially and through her own efforts. The court concluded that both parties took the risk
of financial gain and loss together and thus it would not be equitable to assign all the debt
associated with the rental properties to Lyle and award an equal share of the appreciation of Yutan
Road to Kathleen.
        Using the highest end of the real estate agent’s market analysis range on all 11 pieces of
the parties’ property (Yutan Road and all 10 of the LDF Homes properties), the district court found
the total value of the real estate to be $850,000 and the total cross collateralized debt to be
$765,776.59, with the net equity of the real estate being $84,224. After factoring in the $88,986.29
in overdue property taxes, the district court concluded that there was no equity in the real property.
The court awarded all of the real estate to Lyle and required him to refinance all of the loans on

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the real property, releasing Kathleen from any obligation thereon, within 1 year of the entry of the
decree. The court also ordered Lyle to be responsible for all tax liability existing on each property.
        Upon our de novo review of the record, we find that the district court abused its discretion
by classifying the debt against Lyle’s nonmarital rental properties as marital debt. The record
shows that Lyle had debt against the 8 rental properties (not including Anderson Way and Cypress
Street) at the time of the parties’ marriage. While additional debt was accrued during the marriage,
and the income from the rental properties was used to pay the debt, the fact remains that the rental
properties, with a total value of $450,000, were awarded to Lyle as nonmarital assets. As such,
these assets did not provide a joint benefit to the parties. We conclude that, with the exception of
Anderson Way, characterizing the debts against the rental properties as marital was error and these
debts should be classified as nonmarital debts.
        The district court noted in the decree that it used the trial date for the balances of the
mortgage debts because the first temporary order required Kathleen to collect rent and pay the
various properties’ debts. According to the court, a subsequent temporary order required each
party, for a time, to be responsible for any pay-down in mortgage principal. We find no abuse of
discretion in the district court’s reasoning regarding the date selected for the mortgage debt
balances. As a general principle, the date upon which a marital estate is valued should be rationally
related to the property composing the marital estate. Stanosheck v. Jeanette, 294 Neb. 138, 881
N.W.2d 599 (2016). The purpose of assigning a date of valuation in a dissolution decree is to
ensure that the marital estate is equitably divided. Rohde v. Rohde, 303 Neb. 85, 927 N.W.2d 37
(2019).
        Likewise, we conclude that the existing tax liability on all the rental properties, apart from
Anderson Way, should be assigned to Lyle as nonmarital debt for the same reasons found above.
        Regarding the parties’ joint credit card debt, the district court gave Lyle credit for paying
the US Bank Visa balance of $13,648. However, Lyle testified to paying off the parties’ US Bank
Visa with marital funds from the parties’ jointly held US Bank checking account at the time of the
parties’ separation. Because Lyle used marital funds to pay the credit card, we find that the district
court erred in giving Lyle credit for this payment in the equalization calculation.
        We conclude that the district court abused its discretion in classifying the mortgage debts
and back taxes as marital, except with respect to the Yutan Road and Anderson Way properties.
These debts, totaling $640,726.59 in mortgage debts and $64,598.07 in back taxes, should have
been assigned to Lyle as nonmarital debts. In addition, Lyle should not have received a credit of
$13,648 for payment of the credit card debt.
                                (e) Division of Miscellaneous Items
                                           (i) Bale Spear
        Kathleen asserts that the district court erred in failing to allocate Lyle the proceeds of the
sale of a marital bale spear.
        The district court did not make any findings regarding the bale spear in its decree. Neither
Lyle nor Kathleen testified regarding the bale spear at trial and the only evidence regarding its sale
is a notation on the joint property statement that Lyle sold the bale spear for $1,500 during the
pendency of the dissolution proceedings. Based on the lack of evidence regarding the bale spear,

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we cannot say that the district court abused its discretion by failing to allocate the proceeds of its
alleged sale to Lyle.
                                        (ii) Ford F350 Truck
        Kathleen next asserts that Lyle admitted at trial that the value of the Ford F350 truck should
be $11,775 instead of the $6,000 value he placed on the truck in the joint property statement.
        In the decree, the district court awarded the vehicles to the respective party in possession.
The district court noted the values placed on the vehicles by both Kathleen and Lyle in their joint
property statement and concluded that the vehicles awarded to each party were approximately
equal in value, and thus no equalization related to the vehicles was necessary.
        The district court did not make any specific findings as to the value of the parties’ vehicles,
only noting that the distribution of the parties’ vehicles was generally equitable. We cannot say
that the district court’s reliance on the parties’ joint property statement and equitable distribution
of vehicles was an abuse of discretion.
                                       (iii) Gooseneck Trailer
        Finally, Kathleen asserts that the district court erred by including the full amount of the
operating note in the marital estate after Lyle testified to using $4,000 of the operating note to
purchase a gooseneck trailer, which the district court awarded to Lyle.
        In the decree the district court included the gooseneck trailer in its award of vehicles to the
party in possession. The district court again relied on the values assigned by the parties in their
joint property statement to the gooseneck trailer. At trial, Lyle testified that after the separation he
had continued paying back $4,000 he had taken from the operating note with his own funds. Based
on this evidence, we cannot say that the district court abused its discretion to classify the full
amount of the operating note as marital debt.
                               (f) Effect of Findings on Equalization
         As discussed above, we find that Anderson Way, subject to the property’s mortgage debt
and back taxes, should be classified as marital property; the remaining debt and back taxes on the
9 other rental properties should be classified as Lyle’s nonmarital property. Lyle is not entitled to
credit for payment of the parties’ joint credit card debt since that was done with marital funds. We
also determine that the marital value of Kathleen’s life insurance and IRAs is $5,984. We modify
the trial court’s division of marital assets and debts as follows:

 Assets                            Kathleen’s Award                   Lyle’s Award
 Yutan Road                                                           $400,000
 20 Anderson Way                                                      $40,000
 Household & Personal              $26,865                            $6,265
 Farm & Business Equipment         $13,000                            $71,515
 Motor Vehicles                    (roughly equal)                    (roughly equal)
 Insurance & Retirement            $5,984
 Subtotal of Assets:               $45,714                            $517,780

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 Debts
 Yutan operating notes                                              $55,050
 Yutan taxes                                                        $16,452
 Anderson Way Mortgage                                              $70,000
 Anderson Way Taxes                                                 $6,730
 Subtotal of Debts:                                                 $148,232

 Net Award:                       $45,714                           $369,548
 Equalization:                    $161,917                          ($161,917)

        We modify the decree to provide that Lyle shall pay Kathleen the sum of $161,917 to
equalize the marital estate within 120 days of the of the entry of the mandate on this opinion. All
other provisions of the decree relating to property and debt division remain as ordered in the
decree.
                                        VI. CONCLUSION
         We modify the decree of dissolution to provide that Kathleen’s maiden name of Auch be
restored to her. We further modify the decree to find that the Anderson Way real estate is marital
property, that the debt and taxes owed on the remaining nine rental properties under LDF Homes
is nonmarital debt, that Lyle is not entitled to credit for payment of the credit card debt, and that
the marital value of Kathleen’s life insurance and retirement accounts is $5,984. As a result of
these findings, we modify the decree to order Lyle to pay Kathleen the sum of $161,917 as property
equalization within 120 days of the entry of the mandate on this opinion. The decree is affirmed
in all other respects.
                                                                            AFFIRMED AS MODIFIED.

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