Court Opinion

ID: 4019998
Source: CourtListenerOpinion
Date Created: 2016-07-29 13:05:58.103003+00
Date Added: 2024-06-11T09:26:37.018268
License: Public Domain

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
07/29/2016 08:06 AM CDT

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                                  Nebraska Supreme Court A dvance Sheets
                                          294 Nebraska R eports
                                               SELLERS v. SELLERS
                                                Cite as 294 Neb. 346

                                    K rista M arie Sellers, appellant and
                                     cross-appellee, v. Ryan O. Sellers,
                                        appellee and cross-appellant.
                                                   ___ N.W.2d ___

                                         Filed July 29, 2016.    No. S-15-618.

                1.	 Divorce: Child Custody: Child Support: Property Division:
                     Alimony: Attorney Fees: 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. This standard of review applies to the trial court’s determinations
                     regarding custody, child support, division of property, alimony, and
                     attorney fees.
                2.	 Divorce: Property Division. The ultimate test in determining the appro-
                     priateness of the division of property is fairness and reasonableness as
                     determined by the facts of each case.
                 3.	 ____: ____. Under Neb. Rev. Stat. § 42-365 (Reissue 2008) the equi-
                     table division of property is a three-step process. The first step is to clas-
                     sify the parties’ property as marital or nonmarital, setting aside the non-
                     marital property to the party who brought that property to the marriage.
                     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.
                 4.	 ____: ____. Generally, all property accumulated and acquired by either
                     spouse during a marriage is part of the marital estate. Exceptions
                     include property that a spouse acquired before the marriage, or by gift
                     or inheritance.
                5.	____: ____. Separate property becomes marital property by com-
                     mingling if it is inextricably mixed with marital property or with
                     the separate property of the other spouse. If the separate property
                     remains segregated or is traceable into its product, commingling does
                     not occur.
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           Nebraska Supreme Court A dvance Sheets
                   294 Nebraska R eports
                       SELLERS v. SELLERS
                        Cite as 294 Neb. 346

  Appeal from the District Court for Lincoln County: R ichard
A. Birch, Judge. Affirmed in part, and in part reversed and
remanded with directions.
  Patrick M. Heng, of Waite, McWha & Heng, for appellant.
   Timothy P. Brouillette, of Brouillette, Dugan & Troshynski,
P.C., L.L.O., for appellee.
  Heavican, C.J., Wright, Connolly, Miller-Lerman, Cassel,
Stacy, and K elch, JJ.
  Miller-Lerman, J.
                       NATURE OF CASE
   Krista Marie Sellers appeals, and Ryan O. Sellers cross-
appeals, from the decree entered by the district court for
Lincoln County dissolving their marriage. The issues on appeal
relate to the court’s determination of whether a cattle herd and
certain other assets and debts associated therewith should be
included in the marital estate and, consequently, whether the
division of property was proper. We affirm in part and in part
reverse, and remand with directions.
                  STATEMENT OF FACTS
   Krista and Ryan were first married in 2005. They divorced
in 2008, but they reconciled soon thereafter, and they remar-
ried on August 27, 2010. Krista filed a complaint to dis-
solve the marriage on April 9, 2014. Although the district
court determined various issues concerning the dissolution, the
issues raised on appeal relate solely to the property division
involving certain assets and debts. Specifically, we are asked
to assess whether a cattle operation, interests in three limited
liability companies (LLCs), and a debt related to one of the
LLCs should have been included in the marital estate. We
therefore focus on the facts related to those issues.
Cattle Operation.
  The court received into evidence a joint property statement
showing the property possessed or owned and debts owed
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           Nebraska Supreme Court A dvance Sheets
                   294 Nebraska R eports
                       SELLERS v. SELLERS
                        Cite as 294 Neb. 346

by the parties at the time of dissolution and the respective
value each party assigned to each item. Under the category of
“Farm Business Equipment, Inventory, and Supplies,” the list
included, inter alia, cattle which the parties agreed were valued
at over $600,000. In the decree of dissolution, the court found
that the cattle were nonmarital property owned by Ryan prior
to the marriage. The court stated:
      To the extent that there has been an increase in the value
      of the cattle, that increase resulted from the increase in
      the market value of cattle, and from the input of [Ryan’s]
      inheritance of approximately $200,000. While [Krista]
      may have occasionally helped [Ryan] care for the cattle,
      such help was at most occasional and would not have
      resulted in any increase in the value of the livestock.
   In his testimony at trial, Ryan acknowledged that around
the time the parties remarried in August 2010, he owned
cattle valued at approximately $130,000, and that at the time
the parties separated, the value of the cattle had increased to
over $600,000. He testified that he had used $104,000 of an
inheritance to purchase additional cattle and approximately
$75,000 of the inheritance had been used to pay back taxes.
Ryan testified that the rest of the increase in the value of the
cattle was because “the market for livestock ha[d] increased
dramatically” in the last year. Ryan acknowledged, however,
that he had bought and sold cattle throughout the duration of
the marriage and that the cattle operation had been financed
through an operating line of credit that was taken out in the
names of both Ryan and Krista.
Three LLCs.
   At the time the parties remarried in 2010, Ryan was the sole
member of three LLCs: 5 Star Pawn, L.L.C.; Royal Colonial
Inn, LLC; and Western Mobile Home Park, LLC. On August
27, 2010, the day the parties remarried, Ryan executed three
documents; each document pertained solely to each of the
LLCs. The three documents were received into evidence at
trial. The documents were each titled “Assignment of Interest
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                       SELLERS v. SELLERS
                        Cite as 294 Neb. 346

in . . . by Gift” and stated (with the name of each of the respec-
tive LLCs inserted where indicated) that the assignment was by
and between Ryan as “Transferor” and Ryan and Krista, as joint
tenants with rights of survivorship, as “Transferee.” However,
elsewhere in the document, Ryan and Krista were referred to as
“Transferees.” The documents stated that “Transferor desires to
assign to Transferee as a gift pursuant to [a provision of each
of the LLCs’ operating agreements], all of Transferor’s 100%
interest in . . . currently held by Transferor.” The documents
stated that Transferor “gifts, assigns, transfers, conveys, and
delivers to Transferees” 100 percent interest as follows: 50 per-
cent to “Ryan . . . as joint tenant with right of survivorship in
Krista” and 50 percent to “Krista . . . as joint tenant with right
of survivorship in Ryan.”
   After its consideration of the evidence in the decree of dis-
solution, the court made a finding that “[Ryan’s] transfer to
[Krista] of an interest in the LLCs was a gift from [Ryan] to
[Krista.]” In reaching this finding, the court noted evidence
that Krista had told Ryan that she “would not marry [Ryan]
without the financial security that came from transfer of the
property to her.” The court also found that “[Ryan] signed the
transfers after the marriage occurred. As such, the transfer was
a gift made during the course of the marriage, and the inter-
est transferred [to Krista] is included in the marital estate.”
The court further found that “when [Ryan] made the transfer
to [Krista], he specifically transferred only 50 percent of his
interest in the LLCs. The other 50 percent he retained for
himself.” Based on these findings, the court concluded that
the 50-percent interests of the LLCs Ryan retained for himself
were nonmarital property and were not subject to division but
that the 50-percent interests transferred to Krista were marital
property and were subject to division.
   In dividing the marital assets, the court awarded the
50-­percent interests in the LLCs that it had found to be mari-
tal property to Ryan. The court ordered Krista to assign Ryan
all of her interests in the LLCs.
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          Nebraska Supreme Court A dvance Sheets
                  294 Nebraska R eports
                      SELLERS v. SELLERS
                       Cite as 294 Neb. 346

Debts of LLCs and
Promissory Note.
   During his testimony at trial, Ryan offered, and the court
received into evidence, an exhibit that included a promissory
note dated December 31, 2008, in the amount of $200,000
which listed Ryan, individually and as the sole member of the
Royal Colonial Inn, as the maker of the note and Gregory G.
and Judy M. Gifford as the holders of the note. The exhibit
also included an amortization table which, Ryan testified,
reflected “the balance owed roughly on today’s date” for the
loan as set forth in the property list. We note that the property
list includes a line for debt to “Judy and Greg Gifford- Royal
Colonial” and that the column for Krista’s valuation of the
debt contains no entry, while the column for Ryan’s valuation
of the debt lists $110,000. We note further that the trial was
held on February 19, 2015, and that the amortization table
shows a “Balance of Principal” of $109,299.76 on February 1
and $107,802.84 on March 1.
   During Ryan’s cross-examination of Krista, he asked her
whether she was aware of the debt owed to the Giffords in
connection with the Royal Colonial Inn and whether she had
any reason to dispute the balance of the debt. Krista indicated
she was aware of the debt and had no reason to dispute the
balance. In connection with the debt to the Giffords, in her
reply brief, Krista acknowledges the debt and indicates that the
debt is being serviced by the income of the LLCs.
   In the decree of dissolution, the district court stated that
Ryan was “not entitled to a deduction from the marital estate
for the debt” to the Giffords. The court further found that
“[b]ecause only one-half of the LLCs is a marital asset, for
purposes of property equalization” only one-half of the other
debts associated with the LLCs should be considered as mari-
tal debt.
Division of Property.
   Based on its findings, the court thereafter totaled the values
of all the marital assets awarded and marital debts assigned
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           Nebraska Supreme Court A dvance Sheets
                   294 Nebraska R eports
                       SELLERS v. SELLERS
                        Cite as 294 Neb. 346

to each of the parties and divided the property. Such division
did not include the cattle operation or the 50 percent of the
interests in the LLCs that the court had found to be nonmarital
property belonging to Ryan. The division also did not include
the debt to the Giffords. However, the division included the
50 percent of the interests in the LLCs that the court found to
have been gifted to Krista during the marriage and 50 percent
of the debts that the court found to be related to the LLCs and
therefore marital debt. The court determined that in total, Ryan
had been distributed net marital assets of $415,522 and Krista
had been distributed net marital assets of $15,622. The court
therefore awarded Krista $199,958 “in order to equalize the
marital property division.”
   Krista appeals the decree of dissolution, and Ryan
cross-appeals.
                 ASSIGNMENTS OF ERROR
   In her appeal, Krista claims that the district court erred
when it (1) treated the cattle operation as nonmarital property
belonging to Ryan and (2) treated her 50-percent interests in
the three LLCs as marital property rather than as her sepa-
rate property.
   In his cross-appeal, Ryan claims that the district court
erred when it found that his transfer of interests in the
LLCs was a gift to Krista and when it therefore included the
50-percent interests in the LLCs as marital property rather
than treating the entire interest in the LLCs as his separate
property. He also claims that the court erred in its treat-
ment of the debt to the Giffords associated with the Royal
Colonial Inn.
                   STANDARD OF REVIEW
   [1] 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.
Coufal v. Coufal, 291 Neb. 378, 866 N.W.2d 74 (2015). This
standard of review applies to the trial court’s determinations
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                   294 Nebraska R eports
                       SELLERS v. SELLERS
                        Cite as 294 Neb. 346

regarding custody, child support, division of property, ali-
mony, and attorney fees. Id.
                           ANALYSIS
   [2,3] The parties’ assignments of error focus on the dis-
trict court’s treatment and division of the marital estate. We
therefore review general standards relating to property divi-
sion. Under Nebraska’s divorce statutes, “[t]he purpose of
a property division is to distribute the marital assets equita-
bly between the parties.” Neb. Rev. Stat. § 42-365 (Reissue
2008). The ultimate test in determining the appropriateness
of the division of property is fairness and reasonableness as
determined by the facts of each case. Despain v. Despain, 290
Neb. 32, 858 N.W.2d 566 (2015). We have stated that under
§ 42-365, the equitable division of property is a three-step
process. 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. The
second step is to value the marital assets and marital liabili-
ties 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. Despain v. Despain, supra.
The parties’ assignments of error in this case focus primarily
on the first step of the property division process concerning
the court’s determination of which assets and debts were part
of the marital estate and which were the separate property of
one or the other party. Because the classification of assets and
debts impacts the division of property, we must also consider
the district court’s orders relating to the division of property.
Finally, because the considerations in the appeal and cross-
appeal are intertwined, we analyze the parties’ assignments of
error together.
Cattle Operation.
   Krista claims that the district court erred when it treated
the cattle operation as nonmarital property belonging to
Ryan despite the significant increase in its value during the
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           Nebraska Supreme Court A dvance Sheets
                   294 Nebraska R eports
                       SELLERS v. SELLERS
                        Cite as 294 Neb. 346

marriage. We find no abuse of discretion by the district court
in this determination.
   The court found that the cattle had been owned by Ryan
prior to the marriage, and it appears undisputed that at the
time the parties remarried in August 2010, Ryan owned cattle
valued at approximately $130,000. However, the evidence
indicated that at the time the parties separated, the value of
the cattle had increased to over $600,000. Krista contended
that the increase in the value of the cattle occurred because
Ryan had bought and sold cattle throughout the duration of
the marriage, and she noted evidence that Ryan had financed
such activity through an operating line of credit that was taken
out in the names of both Ryan and Krista. She argued that as
a result of such activity, the cattle operation had become mari-
tal property.
   The court, however, found that the “increase in the value of
the cattle . . . resulted from the increase in the market value of
cattle, and from the input of [Ryan’s] inheritance.” The court
determined that the increase in value could not be attributed
to the contribution or effort of Krista, whose “help [with the
cattle] was at most occasional and would not have resulted in
any increase in the value of the livestock.”
   [4,5] 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. Id. Setting aside non-
marital 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 prop-
erty 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. The burden of
proof rests with the party claiming that property is nonmari-
tal. Id.
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           Nebraska Supreme Court A dvance Sheets
                   294 Nebraska R eports
                       SELLERS v. SELLERS
                        Cite as 294 Neb. 346

   In this case, the district court determined that the cattle
were Ryan’s separate property based on two of the above-
mentioned exceptions: property acquired before the marriage
and property acquired by inheritance. With regard to the cattle
Ryan owned at the time the parties married, we note the rea-
soning of the Nebraska Court of Appeals in Shafer v. Shafer,
16 Neb. Ct. App. 170, 741 N.W.2d 173 (2007). In Shafer, the
husband had owned a herd of cattle at the time the parties
married, and the couple owned a larger herd of cattle at the
time they divorced 13 years later. The Court of Appeals deter-
mined that the husband did not need to show that the specific
cattle he owned at the time of the marriage were the same
specific cattle owned at the time of the divorce. The Court of
Appeals stated:
      Obviously, one cannot draw a straight line from a cow
      owned by [the husband] to a cow owned 13 years later
      . . . , which is the prototypical “tracing” of a premarital
      asset so as to set it aside to the party who owned it at the
      time of the marriage. But in our view, the “disposable”
      nature of a cow does not, by itself, mean that a set-aside
      for preowned cattle is not allowable. Instead, it seems to
      us that the issue is resolved according to the particular
      facts of the case.
Id. at 178, 741 N.W.2d at 178-79. In Shafer, the Court of
Appeals continued by noting evidence that the husband had
been involved in the cattle business throughout the marriage
and had reinvested proceeds from the sale of cattle owned at
the time of marriage into replacement cattle that were part
of the herd owned at the time of the divorce. The Court of
Appeals determined:
      Given the undisputed evidence concerning the cattle
      herd . . . , the controlling precedent on set-aside of
      premarital assets, and the fact that this is an equitable
      matter, we can discern no reason not to set aside to [the
      husband] that portion of the value of the present cattle
      herd which is attributable to [his] premarital cattle. In
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                   294 Nebraska R eports
                       SELLERS v. SELLERS
                        Cite as 294 Neb. 346

      doing so, we view the cattle herd as in effect a single
      asset—rather than taking a “cow by cow” approach
      to the tracing issue. Thus, we believe we have simply
      acknowledged the realities of what happens over time
      in a cattle operation. . . . To do otherwise seems to us
      to exalt form over substance and ignore the equitable
      nature of a dissolution action.
Id. at 178, 741 N.W.2d at 179. The Court of Appeals concluded
in Shafer that it was appropriate for the trial court to set aside
as the husband’s separate property a portion of the value of
the cattle herd owned at the time of divorce that reflected
the value of the cattle herd the husband owned at the time of
the marriage.
   In the present case, the Sellers’ marriage had lasted less
than 4 years, as compared to the 13 years in Shafer, and
therefore, it was even more reasonable to treat the cattle herd
Ryan owned at the time of the marriage as being his separate
property without requiring him to trace the specific animals.
We note the facts of this case differ from Shafer, because the
trial court in that case treated only a portion of the cattle herd
owned at the time of the divorce as the husband’s separate
property and included a portion of the value of the herd as
marital property to reflect that the herd had grown in size dur-
ing the marriage. The court in this case treated the entire herd
as Ryan’s separate property even though the value of the herd
had increased significantly. We determine that this difference
was justified by the particular facts in this case.
   With regard to Ryan’s purchase of additional cattle using
his separate inheritance, as noted above, property acquired
by inheritance is an exception to the general rule that prop-
erty acquired during the marriage is marital property, and an
inheritance may remain separate property if it remains segre-
gated or is traceable into its product. Brozek v. Brozek, 292
Neb. 681, 874 N.W.2d 17 (2016). In this case, in addition
to Ryan’s testimony regarding the increased market value,
Ryan also presented evidence which allowed the district court
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           Nebraska Supreme Court A dvance Sheets
                   294 Nebraska R eports
                        SELLERS v. SELLERS
                         Cite as 294 Neb. 346

to trace a portion of Ryan’s inheritance that was used to
purchase additional cattle. Therefore, it was appropriate for
the court to treat the cattle purchased using the inheritance
as Ryan’s separate property. Based on the record before the
court, we conclude that the district court did not abuse its
discretion when it determined that the cattle operation was
Ryan’s separate property, and we reject Krista’s assignment
of error.

Three LLCs.
   Krista claims that the district court erred when it treated the
50-percent interests in the three LLCs that Ryan had gifted
to her as marital property rather than as nonmarital property
belonging to her. In his cross-appeal, Ryan claims that the
district court erred when it found that his transfer of interests
in the LLCs was a gift to Krista and included any portion of
the LLCs as marital property rather than nonmarital property
belonging entirely to him. Given the evidence, we determine
that the district court did not err when it found that the transfer
to Krista was a gift, but we conclude that it did err when it
determined that Krista’s interests were marital property rather
than Krista’s separate property.
   We first address Ryan’s claim that the district court erred
when it found that his transfer to Krista of the interests in the
LLCs was a gift. He argues that the transfers were merely an
estate planning device and that he intended to keep the entirety
of the interests as his separate property. He also argues that
the fact that the interests in the LLCs transferred were to be
held by Ryan and Krista as joint tenants should not lead to a
presumption that he made a gift to Krista. He cites Schuman
v. Schuman, 265 Neb. 459, 658 N.W.2d 30 (2003), for the
proposition that the manner in which property is titled or
transferred by the parties during the marriage does not restrict
the trial court’s ability to determine how the property should
be divided in an action for dissolution of marriage. Our point
in Schuman was to disapprove a Court of Appeals’ opinion to
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                   294 Nebraska R eports
                        SELLERS v. SELLERS
                         Cite as 294 Neb. 346

the extent it could be read to hold that “nonmarital property
which during a marriage is titled in joint tenancy cannot be
considered as a nonmarital asset in an action for dissolution of
marriage.” 265 Neb. at 470, 658 N.W.2d at 39. In Schuman,
we stated that the division of property “must depend upon
the facts of the particular case and the equities involved.” Id.
Neither the district court nor this court is restricted in this case
to an analysis of the documents which, standing alone, are
not conclusive.
   In the present case, the district court’s finding that the
transfer of interests in the three LLCs was a gift from Ryan
to Krista was not based solely on the manner in which the
property was titled or described in the assignment documents.
Instead, there was testimonial evidence supporting the district
court’s ruling as well as several references in the transfer
documents describing each transfer as being a “gift,” based on
which the court found, as urged by Krista, that Ryan intended
to gift the 50-percent interests in the LLCs to Krista while
retaining the 50-percent interests to himself. We find no error
in such finding.
   However, we conclude that having found Ryan had gifted
the 50-percent interests in the LLCs to Krista, the court erred
when it determined that the 50-percent interests Ryan had
gifted to Krista were marital property but that the 50-percent
interests he retained for himself were his separate property.
Viewing the evidence regarding the transfers made by Ryan,
we see two reasonable interpretations: (1) that Ryan gifted
the 50-percent interests to Krista as her separate property and
retained the 50-percent interests as his separate property or (2)
that Ryan transferred 100-percent interests in the LLCs to the
parties jointly. Under the second interpretation, it would have
been proper to treat 100 percent of the interests as marital
property subject to division in this action. As noted, the dis-
trict court found the first interpretation was supported by the
evidence. In the decree, the district court stated that “[Ryan’s]
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transfer to [Krista] of an interest in the LLCs was a gift from
[Ryan] to [Krista].”
   Having found the first interpretation, i.e., that Ryan gifted
the 50-percent interests to Krista as her separate property
and retained the 50-percent interests as his separate property,
it would have been proper to treat each party’s 50-percent
interests as his or her separate, nonmarital property. Given
the nature of the evidence under consideration, the court’s
determinations that Krista’s 50-percent interests were marital
property while Ryan’s 50-percent interests were nonmarital
property were not compatible with its finding that Ryan had
gifted the 50-percent interests to Krista.
   We therefore reverse the portion of the decree of dissolu-
tion in which the district court included Krista’s 50-percent
interests in the LLCs in the marital estate and divided her
interests between her and Ryan. Instead, the court should have
treated each party’s 50-percent interests as separate property
not subject to division and, upon remand, shall do so.
Debts of LLCs and
Debt to Giffords.
   In view of our resolution of the classification of the LLCs
issue, the portion of the decree regarding the debts associated
with the LLCs needs to be reexamined by the district court.
Subparagraph 22(a) of the decree stated as follows:
         a. Because only one-half of the LLCs is a marital asset,
      for purposes of property equalization only one-half of
      the following debts associated with the LLCs should be
      taken into account in determining the value of the mari-
      tal estate:
         (i) Hershey State Bank has a debt secured by the LLCs,
      in the total amount of $863,514.50, one-half of which
      is $431,757;
         (ii) Equitable business loan . . . is secured by property
      owned by Western Mobile Home Park, LLC, one-half of
      which is $53,800;
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         (iii) 2014 real estate taxes in the amount of $56,000
      and are owed on real estate owned by the LLCs, one-half
      of which is $28,000;
         (iv) The debt to Farmers State Bank is secured by prop-
      erty owned by Western Mobile Park, LLC, and one-half
      of the debt is $26,346.
Because the premise of subparagraph 22(a)(i) through (iv) is
no longer accurate, we strike subparagraph 22(a)(i) through
(iv) and direct the district court to reexamine the debts asso-
ciated with the LLCs and, when calculating and dividing
the marital estate upon remand, enter orders consistent with
§ 42-365.
   Finally, Ryan claims in his cross-appeal that the court erred
in its treatment of the debt to the Giffords associated with
the Royal Colonial Inn. Given the evidence on this issue, the
rationale of the district court’s finding in subparagraph 22(d)
of the decree that Ryan is not entitled to a deduction from
the marital estate for the debt to the Giffords is not clear, and
because we have determined above that the interests in the
LLCs should be treated as the parties’ separate properties,
we reverse this finding and strike subparagraph 22(d) of the
decree. We direct the district court to reexamine the evidence
related to this debt and, when calculating and dividing the
marital estates upon remand, enter orders consistent with
§ 42-365.
                       CONCLUSION
   We determine that the district court did not err when it
determined that the 50-percent interests in the three LLCs
retained by Ryan were nonmarital property and the transfer
of the 50-percent interests in the three LLCs to Krista was
a gift, but it erred when it determined that the 50-percent
interests in the LLCs that Ryan gifted to Krista should be
part of the marital estate. We therefore reverse the district
court’s ruling which treated Krista’s 50-percent interests in
the three LLCs as marital property and divided them between
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the parties. For the reasons explained above, we reverse and
strike the decree’s finding in subparagraph 22(a)(i) through
(iv) and 22(d) related to the debts associated with the LLCs.
We remand the cause to the district court with directions to
treat the parties’ respective 50-percent interests in the LLCs
as nonmarital property, to reexamine the classification of
debts associated with the three LLCs, and to redetermine the
division of property based on such treatment. We find no
abuse of discretion in the district court’s determination that
the cattle operation was Ryan’s separate property, and we
affirm this ruling.
	A ffirmed in part, and in part reversed
	                      and remanded with directions.