GROETKEN v. GROETKEN
v.
RANDALL L. GROETKEN, APPELLEE.
Court of Appeals of Nebraska.
Michele M. Lewon and Bradford Kollars, of Kollars & Lewon, P.L.C., for appellant.
Brian B. Vakulskas, of Vakulskas Law Firm, P.C., for appellee.
IRWIN, SIEVERS, and CARLSON, Judges.
MEMORANDUM OPINION AND JUDGMENT ON APPEAL
IRWIN, Judge.
I. INTRODUCTION
Kelli M. Groetken appeals an order of the district court for Dakota County, Nebraska, dissolving her marriage to Randall L. Groetken. On appeal, Kelli challenges the court's distribution of property and denial of attorney fees. Kelli asserts that the court erred in setting off the marital home as Randall's separate nonmarital property, in failing to give her credit for alleged premarital assets and contributions to the marriage, and in dividing the marital debt. We find no merit to Kelli's assertions on appeal, and we affirm.
II. BACKGROUND
Kelli and Randall were married in September 2003. At the time of their marriage, they executed a premarital agreement. The premarital agreement specifically provided that lain of the separate property which either party now owns shall remain and be separate property." The agreement also provided that "[i]f either party transfers or gifts to the other party any portion of his or her separate property . . . to be jointly held with the other party . . . a presumption will not arise that said specific separate property has been contributed to the marital estate." The agreement then included a listing of each party's separate property being brought into the marriage. Randall's separate property comprised several pages and included numerous pieces of realty and various accounts and life insurance policies "held through Bill Markve & Associates," including a "Supplemental Account" with an undisclosed balance. Another trial exhibit indicates that the balance of this supplemental account on June 6, 2002, was $1,007,036.75. The same exhibit indicated that Randall had made withdrawals totaling $326,820.86 prior to September 2003 and withdrawals totaling $265,939.06 during September 2003. Kelli's separate property consisted of only four items and included a 1998 Kia Sportage and a checking account with an approximate value of $10,000.
In October 2003, real estate was purchased, upon which the marital home was subsequently constructed. Exhibits at trial indicate that Randall opened another account labeled as a "BM&A Supplimental [sic] House Acct" (house account) in April 2004. Randall testified at trial that Kelli did not have access to the house account, was not listed as a signer on the account, never asked to be added to the account, and did not have her name on the checks associated with the account. Randall testified that the parties had discussions prior to beginning construction on the marital home, including that Randall could not afford to make house payments on the kind of house they wanted "so [he] was going to pay for the house with money [he] had prior to .. . getting married." Randall testified that the money had been invested with Bill Markve & Associates.
Randall testified that the money in the supplemental account referenced in the premarital agreement was from a life insurance policy from his father's death. Randall testified that he set up the house account so that he could more easily access the money needed to construct the marital home; the supplemental account was such that the number of withdrawals were limited, so he "set [the house] account up and got a check from [the supplemental account] each time [he] needed one and put it in [the house] account." Randall testified that, other than three checks written in relation to an apartment complex Randall owned, the house account was used exclusively for building the marital home.
Randall also testified that he and Kelli had discussed the titling of the deed for the real estate. Randall testified that their discussion included that he "was paying for the house completely with monies from [his] father's life insurance policy that [he] was beneficiary on, so it was [his] money prior to and if something were to go wrong, it would still be [his] place afterwards." Randall testified that Kelli "said she would never try to take anything that she didn't have prior to or something [he] already had prior to so it wouldn't be an issue." Although the deed indicated that the realty was held by Randall and Kelli as joint tenants, Randall testified that, based on their conversations, he "very much" believed that Kelli understood the property was to be his sole property. Kelli disputed that she was aware of this, but acknowledged that the money for the marital home could have come from Randall's premarital funds.
During the marriage, Kelli's premarital vehicle, the Kia Sportage, was sold and a 2000 Mercedes vehicle was purchased instead. Evidence was adduced at trial indicating that the vehicle's value would be $9,400 if it was in "fair" condition, but that it needed approximately $2,600 worth of repairs to make it operable. Kelli testified that the balance on the loan used to purchase the vehicle was approximately $8,664.
Kelli testified, "I would like to be awarded my money back that I brought into the marriage. I don't have any of it at this point so." Kelli testified that all income she earned during the marriage "went towards whatever it took to maintain the house and lifestyle that [they] had which was food, clothing, whatever." She testified that Randall paid the monthly utilities and that she paid for clothing, food, and other expenses out of a joint account that contained both her income and Randall's salary. She testified that if there was not enough money in the joint account to cover expenses, Randall would deposit money into the account. She testified that the $10,000 she had in a checking account at the time of the premarital agreement "was put towards joint stuff when [they] became engaged." She testified that she had "put about $2,500 of [her] own money into" repairing the Mercedes. She also testified that when she moved out of the marital home she "left with $1,000 that was in [the] joint checking account." Kelli did not otherwise testify to what the money she had brought into the marriage was spent on, but Randall testified that she was "always buying clothes and shoes and getting hair and nails done, buying expensive purses" and that she spent the money on herself during the course of the marriage.
At the time of trial, the parties had already divided the undisputed marital property. The primary issues at trial concerned whether the marital home should have been set aside to Randall as traceable to his premarital money, whether Kelli was entitled to have her full $10,000 of premarital money restored, and the division of the parties' marital debt which consisted of the outstanding balance on the Mercedes loan and a credit card debt of approximately $2,696.
On November 15, 2007, the district court entered an order dissolving the parties' marriage and resolving the issues. Relevant to this appeal, the court concluded that Randall had demonstrated through exhibits that the money used to purchase the real estate and construct the marital home was traceable to the supplemental account listed in the premarital agreement as Randall's separate property. The court concluded that the marital home is Randall's separate property and not part of the marital estate, and awarded the home to Randall. With respect to the $10,000 Kelli had in a checking account prior to the marriage, the court concluded that the evidence presented at trial indicated that it had been spent during the marriage on living expenses, household goods, gifts, and personal expenses like clothing. According to the court, Kelli had "spent all except the $1,000 she took with her" when she left the marriage. The court awarded Kelli the $1,000 as her separate property, but declined to restore the rest of her premarital checking account. The court also ordered that Kelli pay the parties' credit card debt of $2,696. The court ordered Randall to pay a property settlement payment of $3,305. Finally, the court awarded Kelli $250 in attorney fees and ordered Randall to pay the costs of the dissolution proceeding. This appeal followed.
III. ASSIGNMENTS OF ERROR
Kelli assigns five errors on appeal. First, Kelli asserts that the district court erred in declaring the marital home to be Randall's separate property. Second, Kelli asserts that the court erred in not restoring the entire $10,000 she had in her checking account prior to the marriage. Third, Kelli asserts that the court erred in not otherwise reimbursing her for contributions to the marriage. Fourth, Kelli asserts that the court erred in ordering her to pay the entire marital debt. Fifth, Kelli asserts that the court erred in not awarding her more attorney fees.
IV. ANALYSIS
Initially, we note that the premarital agreement entered into by the parties specifically provided that it was to "be interpreted and construed under the laws of the State of Iowa regardless of the present or future domicile of either of the parties at any time after the execution of [the] agreement." Both parties recognize this provision of the premarital agreement.
The Iowa Court of Appeals has recognized that prenuptial agreements are looked upon with favor and are to be liberally construed to carry out the intentions of the parties. In re Marriage of Pillard, 448 N.W.2d 714 (Iowa App. 1989). The purpose of such agreements is to fix the interests of the respective parties in the property of the other. Id. Prenuptial agreements are construed, considered, and treated as any ordinary contract. Id.
1. MARITAL HOME
Kelli first asserts that the district court erred in setting aside the marital home as Randall's separate property. The court did so because the court concluded that the funds used to purchase the real estate and construct the home were traceable to one of Randall's premarital accounts specifically listed in the premarital agreement of the parties. We find no error by the district court.
A review of the record indicates that Randall established an account specifically to pay for the construction of the marital home. He funded that account with money withdrawn from a supplemental account that included money Randall inherited upon his father's death. In addition, Randall testified that the parties specifically discussed the title to the house and specifically discussed that Randall was paying for the construction of the house from his own separate money and that if anything "went wrong" in the marriage, the marital home would remain his property.
We find no error by the district court in concluding that the monies used to construct the marital home were traceable to Randall's premarital account. The premarital agreement entered into by the parties includes a provision specifying that the owner of premarital property retained the right to, among other things, use, transfer, exchange, or otherwise manage and control the property. The premarital agreement also includes a provision specifying that transferring any premarital property and titling it jointly with the other does not result in the creation of a presumption that the property has been contributed to the marital estate. We find no error by the district court in reading the premarital agreement to allow Randall to use his premarital monies to build a home, title it jointly, and yet retain it as separate property after the parties' brief marriage, in light of the evidence presented at trial.
Kelli appears to argue in her brief that we should find that the parties "abandoned" the premarital agreement. As with any contract, a party to a prenuptial agreement may abandon the agreement. In re Marriage of Pillard, supra. Abandonment may be established either by an express agreement to relinquish, renounce, or surrender rights under the prenuptial agreement or by conduct establishing that a party should be estopped from asserting rights under the prenuptial agreement. See id. In this case, Kelli presented no evidence of an express agreement, and the evidence presented establishing that the monies used for the home were kept separate and traceable to Randall's premarital accounts and indicating that the parties specifically discussed the home remaining separate property despite the joint titling prevents a finding of conduct warranting estoppel. As such, we do not find abandonment to be a basis for reversing the district court.
Although the marital home was an asset of considerable value, we find no error in the district court's enforcement of the premarital agreement to set aside the home as Randall's separate asset. The evidence indicates that the money used for the construction of the home came from an account Randall specifically listed in the premarital agreement and was money he received from the death of his father. Randall's testimony, if believed, further established that financing the construction of the home with a separate account was consistent with discussions the parties had about the home remaining a separate asset. We find no merit to Kelli's assertions on this issue.
2. KELLI'S PREMARITAL MONEY
Kelli next challenges the district court's conclusion that only $1,000 of the $10,000 she had brought into the marriage in a premarital checking account remained at the time of dissolution. We find no merit to this assertion, either.
The evidence at trial established that no more than $1,000 of the money Kelli had in her premarital checking account still remained at the time of dissolution. Testimony indicated that Kelli spent her premarital money during the course of the marriage. The testimony suggested that she might have spent some of the money on household expenses and on gifts for Randall's children and that she might have spent some of the money on clothing and other personal items. Randall testified that Kelli spent significant amounts on clothing, hair and nail treatments, and purses. Whatever the money was spent on, there was no evidence presented to indicate what tangible assets the expenditures could be traced to. Kelli cites us to no Iowa authority that would require restoration of premarital monies that have been spent and are not traceable to any particular asset. The primary difference between Kelli's use of her premarital money and Randall's use is that Randall's use was traceable to an asset that could be set aside to him; Kelli's use was not. We find no merit to Kelli's assertions on this issue.
3. KELLI'S CONTRIBUTIONS TO MARRIAGE
Kelli next asserts that she should have somehow been reimbursed for contributions to the marriage. Kelli's argument in this regard seems to be that her income was used to pay household expenses and that she should get some kind of "credit" for those expenses. Kelli cites no authority for such a reimbursement, and our review of the record suggests no error by the district court in this regard. The record indicates that Randall paid for the parties' home, deposited his salary check into the parties' joint account for household expenses, and contributed additional money to the account whenever it was needed. Kelli's income also went into this account. That money was spent as necessary to finance the parties' lifestyle and living expenses. We find no merit to Kelli's assertions on this issue.
4. MARITAL DEBT
Kelli next asserts that the district court erred in making her responsible "for 100% of the marital debt accumulated between the parties." Brief for appellant at 31. Our review of the record reveals no reversible error in this regard.
Kelli was ordered to pay the remaining debt on the Mercedes, but she was also awarded the Mercedes. Kelli was ordered to pay the only other debt the parties had, a $2,696 credit card debt. She also received a property settlement award of $3,305.
Excluding the property considered nonmarital, the division of the marital assets and debts which were at issue at trial, including Randall's property settlement payment, resulted in a nearly equal division. Kelli received a property settlement payment of $3,305. Kelli received the Mercedes, valued at $9,400. Kelli was ordered to pay the remaining debt on the Mercedes, totaling $8,718. Kelli was ordered to pay the credit card debt of $2,696. Finally, the Mercedes required approximately $2,600 in repairs to be functional. This resulted in Kelli receiving a net debt of $1,309.
Randall received another marital vehicle valued at $1,995. He was ordered to pay Kelli $3,305. This resulted in Randall receiving a net debt of $1,310.
Additionally, we note that evidence at trial indicated that the credit card debt about which Kelli complains on appeal included expenses incurred after the parties separated. Kelli did not provide any testimony about what any of the credit card expenses were for, but Randall testified that he was never a signer on the card. In light of the evidence presented and the nearly equal net division of the marital assets at issue at trial, we find no merit to Kelli's assertions on this issue.
5. ATTORNEY FEES
Finally, Kelli asserts that the district court failed to award a reasonable attorney fee. Kelli's only argument in this regard is that Randall has more money and a greater ability to pay. The record supports a finding that Kelli has an earning capacity of at least $50,000 per year, and Randall's greater earning capacity alone is not sufficient for us to conclude that the court erred in awarding Kelli $250 in attorney fees and ordering Randall to pay the costs of the action. We find no merit to Kelli's assertions on this issue.
V. CONCLUSION
We find no merit to Kelli's assertions on appeal. Pursuant to the parties' premarital agreement, the district court did not err in setting aside the marital home as Randall's separate property and did not err in finding that Kelli had spent all but $1,000 of her premarital checking account during the course of the marriage. The court did not err in failing to reimburse Kelli for her financial contributions to the marriage, did not err in distributing the marital estate, and did not err in the award of attorney fees. We affirm.
AFFIRMED.
