Bowen v. Bowen , 29 Neb. Ct. App. 726 ( 2021 )

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BOWEN v. BOWEN
Cite as 29 Neb. App. 726Melvin Kadel Bowen, appellant, v.
Karen Denise Bowen, appellee.
___ N.W.2d ___
Filed April 6, 2021. No. A-20-194.
1. Divorce: Child Custody: Child Support: Property Division:
Alimony: Attorney Fees: Appeal and Error. 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. This standard of review applies to the trial court’s determinations
regarding custody, child support, division of property, alimony, and
attorney fees.
2. Judgments: Words and Phrases. An abuse of discretion occurs when
a trial court bases its decision upon reasons that are untenable or unrea-
sonable or if its action is clearly against justice or conscience, reason,
and evidence.
3. Divorce: Property Division. Under Neb. Rev. Stat. § 42-365 (Reissue
2016), the equitable division of property is a three-step process. The first
step is to classify the parties’ property as marital or nonmarital, 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
liabilities of the parties. The third step is to calculate and divide the net
marital estate between the parties in accordance with the principles con-
tained in § 42-365.
4. ____: ____. The ultimate test in determining the appropriateness of the
division of property is fairness and reasonableness as determined by the
facts of each case.
5. ____: ____. Generally, all property accumulated and acquired by either
spouse during a marriage is part of the marital estate.
6. ____: ____. The marital estate does not include property that a spouse
acquired before the marriage, or by gift or inheritance.
7. ____: ____. Separate property becomes marital property by commin-
gling if it is inextricably mixed with marital property or with the
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Cite as 29 Neb. App. 726separate property of the other spouse. If the separate property remains
segregated or is traceable into its product, commingling does not occur,
and thus it does not become marital property.
8. Property Division: Proof. The party claiming that property is nonmari-
tal has the burden of proving the property’s separate status.
9. Divorce: Courts: Property Division. The manner in which property is
titled or transferred by the parties during the marriage does not restrict
the trial court’s determination of how the property will be divided in an
action for dissolution of marriage.
10. Divorce: Property Division: Judicial Sales. A court in a dissolution
action may provide for the sale of all or part of the parties’ assets in lieu
of dividing them, if to do so is reasonable in the light of the facts, the
circumstances of the parties, and the nature of their property.
Appeal from the District Court for Sarpy County: Nathan
B. Cox, Judge. Affirmed in part, and in part reversed and
remanded with directions.
Donald A. Roberts, of Lustgarten & Roberts, P.C., L.L.O.,
for appellant.
Mona L. Burton, of Anderson, Creager & Wittstruck, P.C.,
L.L.O., for appellee.
Riedmann, Bishop, and Welch, Judges.
Welch, Judge.
I. INTRODUCTION
Melvin Kadel Bowen appeals the dissolution decree entered
by the Sarpy County District Court dissolving his marriage to
Karen Denise Bowen. Melvin contends the district court erred
in failing to find that certain real property was a marital asset
and in ordering the sale of real property rather than dividing
the real property and ordering an equalization payment. For the
reasons set forth herein, we affirm in part, and in part reverse
and remand with directions.
II. STATEMENT OF FACTS
Melvin and Karen married in September 2010. No children
were born of the marriage. Melvin filed for dissolution in
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BOWEN v. BOWEN
Cite as 29 Neb. App. 726June 2018. At the time of trial, Melvin was 57 years old and
Karen was 50 years old.
During the parties’ marriage, Melvin was employed as a
mission analyst for an information technology company and
later as a civilian employee for the U.S. Air Force. In addition
to his salary, Melvin received military retirement and disabil-
ity payments from the Department of Veterans Affairs (VA)
resulting from his military service that ended prior to the date
of the parties’ marriage. Karen was unemployed as of 2015,
but received VA disability income and monthly Social Security
benefits. Karen testified that during the marriage, Melvin told
her she did not have to work or pay any bills.
1. Trial
The evidence adduced at trial that is relevant to this appeal
centered on the parties’ real property consisting of a property
on Rahn Boulevard in Nebraska and a property on Sunset
Drive in North Carolina.
(a) Rahn Boulevard Property
Melvin purchased the Rahn Boulevard property in 2004
with his ex-wife and originally encumbered the property with a
mortgage in the amount of $182,663.64.
In October 2010, at Karen’s request, Melvin executed a quit-
claim deed adding Karen as a titleholder to the Rahn Boulevard
property. Melvin testified that he signed the deed voluntarily
and that it was “[his] intent to include [Karen] on the deed” as
tenants in common. Although Melvin testified that he added
Karen’s name to the property “[b]ecause we were married,”
because he “felt it was the right thing to do,” and “so [Karen]
would . . . feel comfortable in the house,” he also testified that
he did not intend to make a gift to Karen of half the value of
the property.
Melvin testified that during the parties’ marriage, there
were improvements made to the Rahn Boulevard property,
including the installation of granite countertops and crown
molding in the kitchen. According to Melvin, he and Karen
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BOWEN v. BOWEN
Cite as 29 Neb. App. 726installed the backsplash themselves and he alone paid for these
upgrades. Melvin testified that at the time of trial, a Sarpy
County website listed the value of the Rahn Boulevard prop-
erty at approximately $213,000 and the remaining mortgage
balance was $51,000.
Melvin also testified he discovered Karen had executed a
real estate transfer statement and quitclaim deed of the Rahn
Boulevard property to herself and her two daughters dated
March 2018. Melvin explained he was unaware that Karen
executed these documents.
Karen testified Melvin deeded half of the Rahn Boulevard
house to her because she told Melvin she did not want to live
in a house previously inhabited by Melvin and his ­ex-wife
and that she was uncomfortable with the property being titled
solely in his name. She further explained another reason
Melvin included her on the deed “was that I owned half of
that house to do whatever I choose to do with, and he had
his half that he could do whatever he wanted to do as far
as if something would happen to either one of us.” Further,
Karen testified that after she moved into the property in July
2010, the property still had the furnishings from Melvin’s first
marriage which Karen explained was “not going to work. I
didn’t want to live like that,” so she took responsibility for
refurnishing the property. Karen moved out of the residence
on December 15, 2018. Karen testified that at the time of
trial, the value of the Rahn Boulevard property was $250,300
with a mortgage balance of $54,597.34. In exhibit 61, Karen’s
“Suggestions to the Court” (which was received as an aid to
the court), she suggested that Melvin should be awarded the
Rahn Boulevard property.
(b) Sunset Drive Property
During the parties’ marriage, they purchased the Sunset
Drive property located in North Carolina for $263,000. Melvin
testified he paid $26,000 as a downpayment with money from
his premarital accounts. In connection with that purchase, the
court received exhibit 21, which included a bank statement
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BOWEN v. BOWEN
Cite as 29 Neb. App. 726indicating that as of November 20, 2018, the unpaid principal
balance on the mortgage for the Sunset Drive property was
$214,865.65 and the total amount paid against the mortgage
balance during the marriage was $21,846.24.
Melvin testified that he should be awarded the Sunset Drive
property, that the current value of the property was $295,000,
and that the current mortgage balance was $214,865.65. Karen
agreed Melvin should be awarded the Sunset Drive property,
but testified the value of the property was $309,800. Karen tes-
tified that after reducing the equity in the property by Melvin’s
$26,000 downpayment, the remaining $68,935 in equity in the
property should be divided equally.
2. Dissolution Decree
The district court entered a decree of dissolution in August
2019. In the decree, as relevant to this appeal, the district
court found Melvin owned the Rahn Boulevard property prior
to the marriage, but added Karen’s name to the deed giving
her “joint status of ownership,” making the property part of
the marital estate. The district court ordered the sale of the
Rahn Boulevard property with the proceeds or liabilities split
equally between the parties. The district court found the par-
ties acquired the Sunset Drive property during the marriage
but utilized $26,000 of Melvin’s premarital assets in making a
downpayment for the property. The district court also ordered
a sale of the Sunset Drive property with any profits or losses
split equally between the parties after reducing the equity by
$26,000 for Melvin’s downpayment.
Melvin moved for a new trial or, in the alternative, to alter
or amend the decree, alleging the district court’s findings were
not supported by the facts or the law. In support of his motion,
Melvin argued the court erred in finding the Rahn Boulevard
property was a marital asset and in ordering the sale of the
Sunset Drive property. Following a hearing, the district court
denied Melvin’s motion for new trial or to alter or amend
the decree.
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BOWEN v. BOWEN
Cite as 29 Neb. App. 726Karen filed a motion to clarify, which in relevant part
requested clarification on how the parties were to accomplish
the sales of the Rahn Boulevard and Sunset Drive properties.
In response, the district court entered an order stating that if
Melvin or Karen wished to purchase the Rahn Boulevard prop-
erty, the Sunset Drive property, or both,
he/she may do so if the parties are able to agree upon
a sales price. The purchasing party would then have 30
days after closing on the property in question within
which to provide the non-purchasing party’s portion of
the proceeds from the sale of the home(s).
If neither party chooses to purchase one and/or both
homes, the same shall be placed on the market within 60
days of the date of this order. [Melvin] shall be respon-
sible to prepare the properties for sale and any reasonable
costs to prepare the houses for sale shall be deducted
from the proceeds and reimbursed to him prior to a divi-
sion pursuant to the Court’s Decree. If [Melvin] and
[Karen] cannot agree on a realtor within 15 days of this
order, then Re/Max Real Estate Company will be used,
and a specific realtor is to be randomly assigned by the
company in each market. If the parties cannot agree on a
sales price, the Re/Max Real Estate Company’s agent will
provide the offering price using their best professional
judgment of the fair market values of each property.
[Melvin] and [Karen] shall cooperate in the sale of the
homes in signing all necessary documents. [Karen’s] por-
tion of the proceeds shall be paid within 30 days of the
closing of each home.
Melvin has timely appealed to this court.
III. ASSIGNMENTS OF ERROR
Melvin contends that the district court erred (1) in find-
ing the Rahn Boulevard property was a marital asset and (2)
in ordering the sale of the Rahn Boulevard and Sunset Drive
properties rather than awarding the properties to him and
ordering an equalization payment from Melvin to Karen.
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BOWEN v. BOWEN
Cite as 29 Neb. App. 726IV. STANDARD OF REVIEW
[1] 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. This standard
of review applies to the trial court’s determinations regard-
ing custody, child support, division of property, alimony, and
attorney fees. Dycus v. Dycus, 307 Neb. 426, 949 N.W.2d
357 (2020).
[2] An abuse of discretion occurs when a trial court bases
its decision upon reasons that are untenable or unreasonable
or if its action is clearly against justice or conscience, reason,
and evidence. Windham v. Kroll, 307 Neb. 947, 951 N.W.2d
744 (2020).
V. ANALYSIS
1. Marital Estate
Melvin first argues the district court erred in finding the
Rahn Boulevard property was a marital asset. In support of his
contention, Melvin argues that he clearly purchased the prop-
erty prior to his marriage with Karen and added Karen’s name
to the title because she did not want to live in the house previ-
ously inhabited by himself and his ex-wife and that he simply
added Karen’s name to the title to assuage her discomfort in
living in a property previously purchased and inhabited by
Melvin and his ex-wife. More specifically, Melvin asserts that
by adding Karen’s name to the title, he did not intend to make
a gift of the property. As such, he argues his actions did not
convert the premarital property into marital property.
[3,4] Regarding the marital estate, the Nebraska Supreme
Court has articulated:
Under Neb. Rev. Stat. § 42-365 (Reissue 2008), 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
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Cite as 29 Neb. App. 726liabilities 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.
See, Sitz v. Sitz, 275 Neb. 832, 749 N.W.2d 470 (2008);
Plog v. Plog, 20 Neb. App. 383, 824 N.W.2d 749 (2012).
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, 41, 858 N.W.2d 566,
573 (2015).
[5-8] In classifying assets as marital or nonmarital, the
Nebraska Supreme Court has explained:
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. Setting
aside nonmarital property is simple if the spouse pos-
sesses the original asset, but can be problematic if the
original asset no longer exists. Separate property becomes
marital property by commingling if it is inextricably
mixed with marital property or with the separate property
of the other spouse. If the separate property remains seg-
regated or is traceable into its product, commingling does
not occur. The burden of proof rests with the party claim-
ing that property is nonmarital.
Brozek v. Brozek, 292 Neb. 681, 698, 874 N.W.2d 17, 31 (2016).
Applying these principles to the case at bar, it is clear from
the record that Melvin acquired the Rahn Boulevard property
prior to his marriage to Karen. As such, the property would
be considered nonmarital and set aside for Melvin unless the
property became marital because of actions taken by Melvin
and Karen after their marriage.
In this case, approximately a month after their marriage,
Melvin added Karen to the title of the Rahn Boulevard prop-
erty. Karen moved into the property and lived there with
Melvin, and the parties made certain improvements to the
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Cite as 29 Neb. App. 726property. Melvin testified he funded these improvements, but
the record is unclear as to whether the improvements were
made with marital or nonmarital funds. After reviewing the
evidence, the district court found:
[Melvin] added [Karen’s] name to the title on that prop-
erty, hereby giving her joint status of ownership to the
same. Accordingly, the Court finds that said property is
marital property. Thus, the Court orders that said property
should be sold and any proceeds or liabilities shall be
split equally (50/50) between the parties.
Melvin argues that in making this finding, the district court
applied a presumption that was disapproved by the Nebraska
Supreme Court in Schuman v. Schuman, 265 Neb. 459, 658
N.W.2d 30 (2003).
[9] In Schuman, the court addressed the application of a
joint-title presumption in connection with property distribu-
tion following a dissolution of marriage. The specific principle
to be applied was framed by the court as follows: “‘“[W]hen
a husband and wife take title to a property as joint tenants,
even though one pays all the consideration therefor, a gift is
presumed to be made by the spouse furnishing the consider-
ation to the other . . . .” [Citations omitted.] This presumption
is a rebuttable presumption.’” Schuman, 265 Neb. at 469, 658
N.W.2d at 39. After noting that the Nebraska Court of Appeals
had previously applied the gift presumption in connection
with the distribution of property following a dissolution in
Gerard-Ley v. Ley, 5 Neb. App. 229, 558 N.W.2d 63 (1996),
the Schuman court held:
The Court of Appeals erred in applying the aforemen-
tioned principle in Gerard-Ley. None of the cases cited in
the quote above involved a dispute between spouses over
property distribution following a dissolution of marriage.
The manner in which property is titled or transferred
by the parties during the marriage does not restrict the
trial court’s determination of how the property will be
divided in an action for dissolution of marriage. As a
general rule, all property accumulated and acquired by
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Cite as 29 Neb. App. 726either spouse during the marriage is part of the marital
estate, unless it falls within an exception to the general
rule. Heald v. Heald, 259 Neb. 604, 611 N.W.2d 598(2000). To the extent that the Court of Appeals’ opinion
in Gerard-Ley can be interpreted to mean that nonmarital
property which during a marriage is titled in joint ten-
ancy cannot be considered as a nonmarital asset in an
action for dissolution of marriage, such interpretation is
expressly disapproved.
265 Neb. at 469-70, 658 N.W.2d at 39.
Melvin argues that the district court’s finding here clearly
applied the gift presumption rule disapproved of in Schuman
and that the district court erred in concluding the Rahn
Boulevard property became a marital asset. Although we agree
with Melvin that the act of adding Karen to the title is not
dispositive of the issue, we disagree that the district court’s
ultimate conclusion was in error.
Although Melvin’s act of adding Karen’s name to the title
did not create a presumption that he gifted the property to her,
it was evidence to be considered with all other evidence here in
determining whether the Rahn Boulevard property retained its
character as a nonmarital asset following the parties’ marriage.
Stated differently, even though adding Karen to the title does
not create a presumption that Melvin gifted the asset to her, it
does provide some evidence of Melvin’s state of mind at the
time he added her name to the title. As a general rule, property
which one party brings into the marriage is excluded from the
marital estate. Onstot v. Onstot, 298 Neb. 897, 906 N.W.2d 300(2018). However, the burden of proof to show that property is a
nonmarital asset remains with the person making the claim. Id.Applying that burden, we hold the district court did not abuse
its discretion in finding the Rahn Boulevard property became
a marital asset following certain circumstances occurring after
Melvin’s marriage to Karen.
In support of that finding, the record indicates that Karen
objected to living in the Rahn Boulevard property due to
its affiliation with Melvin’s ex-wife. In order to assuage her
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Cite as 29 Neb. App. 726concerns, Melvin agreed to add Karen to the title of the Rahn
Boulevard property, and the record includes evidence that
Melvin told Karen she was free to do what she wanted with
her half of the property. This testimony, together with the
testimony of how the parties subsequently worked together to
improve the Rahn Boulevard property and their post­marriage
living arrangements, was sufficient to support the district
court’s determination that Melvin intended to convert this one-
time nonmarital property into marital property. And, although
following the Nebraska Supreme Court’s holding in Schuman
v. Schuman, 265 Neb. 459, 658 N.W.2d 30 (2003), a court is
not prohibited from considering a previously nonmarital asset
that is jointly titled during marriage as a nonmarital asset, it is
not required to do so. Such a finding depends on the facts and
circumstances of each case.
In this case, Melvin simply did not satisfy his burden of
showing the Rahn Boulevard property remained a nonmarital
asset following the parties’ marriage. Further, we note Melvin
did not present evidence to support a finding that at least a
portion of the equity in the property, the part accruing prior to
his marriage to Karen, should be considered nonmarital prop-
erty. For instance, there was no evidence offered regarding the
value of the property or the mortgage balance as of the date
of the marriage. Instead, the issue was framed by Melvin as
having preserved the entirety of the property as nonmarital. As
discussed above, having failed to satisfy his burden to establish
the Rahn Boulevard property was nonmarital, the court did not
err in finding the Rahn Boulevard property became marital
property. The first assigned error fails.
2. Property Division
Next, Melvin contends the district court erred in ordering
the sale of the Rahn Boulevard and Sunset Drive properties
because neither Melvin nor Karen disputed that he should
be awarded those properties. Instead, Melvin argues that the
properties should have been awarded to him and that he
should have been ordered to pay an appropriate equalization
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Cite as 29 Neb. App. 726payment in relation to the equity in the properties. Melvin
argues that because the parties agreed he should be awarded
the properties, the district court abused its discretion in order-
ing the sale of the properties.
[10] “Nebraska courts do not generally order sales of mari-
tal assets to facilitate distribution. In the few cases where a
sale is ordered, the sale was the only practical way to divide
the parties’ assets.” Kellner v. Kellner, 8 Neb. App. 316, 328,
593 N.W.2d 1, 10 (1999). After discussing the few Nebraska
cases in which marital property had been ordered sold, this
court stated:
[A] court in a dissolution action may provide for the sale
of all or part of the parties’ assets in lieu of dividing them,
if to do so is reasonable in the light of the facts, the cir-
cumstances of the parties, and the nature of their property.
Such action, of course, must be within the statutory dic-
tate that the division of the assets be reasonable, having
regard for the circumstances of the parties as provided in
§ 42-365, and that it satisfy the ultimate test of fairness
and reasonableness articulated by case law.
Kellner, 8 Neb. App. at 332, 593 N.W.2d at 12.
Here, although the parties agreed that the district court
should award both the Rahn Boulevard and Sunset Drive
properties to Melvin, they disagreed on the market value of
both properties and differed on the mortgage balance of the
Rahn Boulevard property. Melvin valued the Rahn Boulevard
property at $213,000, whereas Karen valued the property at
$250,300. Melvin testified the Rahn Boulevard property had
a mortgage balance of $51,000, whereas Karen testified the
mortgage balance was slightly under $54,600. Based upon
the parties’ testimonies, Melvin asserted the net value of the
Rahn Boulevard property was $162,000 ($213,000 less the
$51,000 mortgage) and Karen’s net value of the property
was $195,700 ($250,300 less the $54,600 mortgage). Thus,
the parties’ valuations for the Rahn Boulevard property were
$33,700 apart.
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Cite as 29 Neb. App. 726Similarly, regarding the Sunset Drive property, Melvin val-
ued the property at $295,000, whereas Karen valued the prop-
erty at $309,800. Melvin testified the current mortgage balance
on the property was just under $214,900, which was not dis-
puted by Karen. Based upon the parties’ testimonies, Melvin’s
net value of the Sunset Drive property was $80,100 ($295,000
less the $214,900 mortgage) and Karen’s net value of the
property was $94,900 ($309,800 less the $214,900 mortgage).
Thus, the parties’ valuations of the Sunset Drive property
were only $14,800 apart. Further, Karen testified that Melvin
should be awarded the Sunset Drive property and that the
equity in the property should be reduced by Melvin’s $26,000
downpayment.
Based upon the circumstances present in this case, includ-
ing that the parties’ valuations of the Rahn Boulevard property
and the Sunset Drive property were relatively close, a $33,700
difference in one and a $14,800 difference in the other; that
both parties agreed Melvin should be awarded both proper-
ties; and that Melvin had sufficient assets from which to pay
an equalization payment, the district court’s decision to order
the Rahn Boulevard and Sunset Drive properties sold was
not reasonable. Accordingly, we reverse the district court’s
order requiring the parties to sell the Rahn Boulevard and
Sunset Drive properties and remand the cause with directions
for the district court to determine the value of these assets
on the existing record; award the two properties to Melvin;
order Melvin to refinance the mortgages in his name alone,
if necessary, by a date certain with the parties to evenly
share that expense; order a payment to Karen to equalize the
marital equity in these properties; and provide for any other
orders necessary to accomplish our directives set forth in
this opinion.
VI. CONCLUSION
For the foregoing reasons, we affirm the district court’s
determination that the Rahn Boulevard property was mari-
tal. However, we reverse the district court’s order for the
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Cite as 29 Neb. App. 726parties to sell the Rahn Boulevard and Sunset Drive proper-
ties and remand the cause with directions for the district court
to determine the value of these assets on the existing record;
award the two properties to Melvin; order Melvin to refinance
the mortgages in his name alone, if necessary, by a date certain
with the parties to evenly share that expense; order a payment
to Karen to equalize the marital equity in these properties; and
provide any other orders necessary to accomplish our direc-
tives set forth in this opinion.
Affirmed in part, and in part reversed
and remanded with directions.