Bornhorst v. Bornhorst

Decision Date14 April 2020
Docket NumberNo. A-18-903.,A-18-903.
Citation941 N.W.2d 769,28 Neb.App. 182
Parties Jennifer E. BORNHORST, appellant and cross-appellee, v. Matthew D. BORNHORST, appellee and cross-appellant.
CourtNebraska Court of Appeals

Shane J. Placek, of Sidner Law, Fremont, for appellant.

Philip B. Katz and Steven J. Riekes, of Marks, Clare & Richards, L.L.C., for appellee.

Moore, Chief Judge, and Pirtle and Bishop, Judges.

Bishop, Judge.

I. INTRODUCTION

In this dissolution action, the Washington County District Court awarded Jennifer E. Bornhorst and Matthew D. Bornhorst joint legal and physical custody of their children. Jennifer was ordered to pay child support. The district court also found that Jennifer’s nonmarital stock in her family’s subchapter S corporation increased in value during the marriage and that the increase was therefore a marital asset for purposes of dividing the marital estate.

Jennifer appeals, challenging the district court’s decision to award joint legal and physical custody and its determination that the growth in value of her nonmarital stock was a marital asset. Matthew cross-appeals, challenging the district court’s decision to not include as income for child support purposes the distributions Jennifer received from her family’s business, which Jennifer claimed were intended only to offset her personal tax liability on her share of the S corporation’s pass-through income. We affirm.

II. BACKGROUND

Jennifer and Matthew were married in 2010, and they have two children, one born in 2013 and the other born in 2014. The parties separated in December 2016.

Jennifer filed for divorce in February 2017. She originally asked that the parties be awarded joint legal custody of their two children, but that she be awarded physical custody. However, in her amended complaint, she asked the district court to award the legal and physical custody of the children to her, subject to Matthew’s reasonable rights of parenting time, but "[i]n the event full custody" was not awarded to her, Jennifer asked the court to award the parties joint legal and physical custody. Matthew’s responsive pleading and counterclaim requested joint legal and physical custody.

Both parties filed motions for temporary relief, and the district court entered a temporary order on June 29, 2017, awarding the parties joint legal custody of the children, but awarding "primary physical care" to Jennifer. The temporary order awarded Matthew parenting time every other weekend from Friday at 5 p.m. until Monday at 8 a.m., and every week on Wednesday at 5 p.m. until Thursday at 8 a.m.; a holiday schedule was also included. Pursuant to the temporary order, Matthew was to pay $974 per month to Jennifer for child support, commencing July 1.

On October 27, 2017, Jennifer filed a motion for further temporary allowances, asking the district court for an order modifying the previous temporary order to provide for " ‘joint legal custody with tie-breaking authority to [Jennifer].’ " She also asked for an order authorizing her to enroll the children in activities, childcare, and schooling in Blair, Nebraska. In an order filed on November 29, the court denied Jennifer’s request "for the tiebreaker in relation to joint legal custody," granted her request to change the children’s childcare and schooling to Blair, and ordered that "each party is free to enroll the children in activities and participate in same during their respective parenting time without the permission of the other party."

Trial took place on April 19 and 20, 2018. We will discuss the trial evidence relevant to the errors assigned in our analysis below. A decree dissolving the marriage was entered by the district court on July 11 and amended on July 16 and August 28.

Relevant to this appeal, the district court awarded the parties joint legal and physical custody of their two minor children and adopted a 50-50 parenting time schedule. The court ordered Jennifer to pay Matthew child support in the amount of $283 per month for two children. When determining income for child support purposes, the district court did not include Jennifer’s schedule K-1 (K-1) distribution related to her 8.30565-percent ownership interest in her family’s company (Eriksen Construction), because it found the income was speculative and Jennifer had no control over the timing or amount of the distributions.

With regard to the parties’ property, the district court awarded Jennifer the entirety of her stock and ownership interest in Eriksen Construction as her separate property. However, the court found that Jennifer’s nonmarital stock grew in value in an amount "at least equivalent to the total retained earnings" and that the growth in value was a marital asset for purposes of dividing the marital estate. After valuing and dividing the marital assets and debts, the court ordered Matthew to pay Jennifer an equalization payment of $79,348, which included a reimbursement to Jennifer of her $50,000 premarital contribution toward the purchase of the marital residence which was awarded to Matthew.

On July 19, 2018, Jennifer filed a motion for new trial or, in the alternative, to alter or amend. After a hearing on the motion, the district court entered an order on August 28 granting Jennifer’s motion in part; the court amended the parenting plan to provide that Jennifer would have "tiebreaking authority" for nonemergency medical issues regarding the children "as [Matthew] had consented to that during his testimony at trial." All other requested relief was denied.

Jennifer appeals and Matthew cross-appeals from the marriage dissolution decree, as amended by the district court.

III. ASSIGNMENTS OF ERROR

Jennifer assigns, summarized and reordered, that the district court abused its discretion by (1) allowing certain expert testimony, (2) awarding joint legal and physical custody, and (3) applying the active appreciation rule in determining that the retained earnings of Jennifer’s gifted nonmarital asset were part of the marital estate and should be equitably divided.

On cross-appeal, Matthew claims the district court abused its discretion by not including the distributions received by Jennifer from Eriksen Construction for purposes of determining her child support obligation.

IV. STANDARD OF REVIEW

In an action for the dissolution of marriage, an appellate court reviews de novo on the record the trial court’s determinations of custody, child support, property division, alimony, and attorney fees; these determinations, however, are initially entrusted to the trial court’s discretion and will normally be affirmed absent an abuse of that discretion. Donald v. Donald , 296 Neb. 123, 892 N.W.2d 100 (2017).

Parenting time determinations are also matters initially entrusted to the discretion of the trial court, and although reviewed de novo on the record, the trial court’s determination will normally be affirmed absent an abuse of discretion. Aguilar v. Schulte , 22 Neb. App. 80, 848 N.W.2d 644 (2014), disapproved on other grounds, State on behalf of Kaaden S. v. Jeffery T. , 303 Neb. 933, 932 N.W.2d 692 (2019).

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. Flores v. Flores-Guerrero , 290 Neb. 248, 859 N.W.2d 578 (2015).

When evidence is in conflict, an 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. Donald v. Donald, supra .

V. ANALYSIS
1. JENNIFER'S APPEAL
(a) Expert Witness Testimony

Jennifer contends the district court erred in allowing Matthew’s expert witness, Dr. Glenda Cottam, to provide testimony about a custody evaluation when she was court ordered to perform a parenting assessment only. Jennifer also argues the court erred in allowing Dr. Cottam to refer to published articles and in allowing another of Matthew’s expert witnesses, a certified public accountant, to provide his opinion and interpretation of Nebraska case law on retained earnings. However, to the extent either witness testified to matters which may have been inappropriate or otherwise inadmissible, we note that in all cases, the district court, as the trier of fact in a bench trial, is presumed to have considered only the appropriate evidence. See, e.g., Tapia-Reyes v. Excel Corp. , 281 Neb. 15, 793 N.W.2d 319 (2011) (it is presumed that judges disregard evidence which should not have been admitted); In re Interest of Ty M. & Devon M. , 265 Neb. 150, 655 N.W.2d 672 (2003) (absent showing to contrary, it is presumed that trial court disregarded all incompetent and irrelevant evidence).

(b) Custody

Jennifer argues the district court’s award of joint legal and physical custody was contrary to the evidence.

(i) Evidence at Trial

Jennifer testified that at the time of the parties’ separation in December 2016, they had been living in their marital residence in Bennington, Nebraska. In December, Jennifer moved into her father’s house in Blair, and then in April 2017, she moved into a rental property in Blair. She had plans to purchase a home in a particular subdivision in Blair after the divorce, because "a lot of [her] equity that [she] would need to purchase a home [was] tied up" in the marital residence. Matthew agreed that the children would attend school in Blair and that their activities would be in Blair. Jennifer had a "huge support network" with her family and friends in Blair; Matthew’s parents lived in Iowa, about 2 hours away, and his siblings lived out of state.

According to Jennifer, from the time of the parties’ separation in December 2016 until the time of the temporary order in June 2017, they had a "kind of confusing" parenting schedule. Jennifer said she "was getting a lot of issues from the girls with being angry, being upset, clinginess, and the biggest issue was when we had that extended five-day period every other...

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10 cases
  • Harrison v. Harrison
    • United States
    • Nebraska Court of Appeals
    • September 15, 2020
    ...from S corporations were at issue in the context of a parties’ income for purposes of child support. See, Bornhorst v. Bornhorst, 28 Neb.App. 182, 941 N.W.2d 769 (2020) ; Guthard v. Guthard, 28 Neb.App. 156, 942 N.W.2d 792 (2020). Our holdings in both cases more fully developed Nebraska cas......
  • Guthard v. Guthard
    • United States
    • Nebraska Court of Appeals
    • April 14, 2020
    ...not be included as income for purposes of calculating child support. A list of those cases can be found in Bornhorst v. Bornhorst, 28 Neb. App. 182, 941 N.W.2d 769 (2020), released the same day as this opinion. In Bornhorst v. Bornhorst, supra , we held that distributions made to a sharehol......
  • Kelly v. Kelly
    • United States
    • Nebraska Court of Appeals
    • November 24, 2020
    ...de novo on the record, the trial court's determination will normally be affirmed absent an abuse of discretion. Bornhorst v. Bornhorst , 28 Neb. App. 182, 941 N.W.2d 769 (2020). When evidence is in conflict, an appellate court considers, and may give weight to, the fact that the trial judge......
  • Toro v. Toro
    • United States
    • Nebraska Court of Appeals
    • September 21, 2021
    ...de novo on the record, the trial court's determination will normally be affirmed absent an abuse of discretion. Bornhorst v. Bornhorst , 28 Neb. App. 182, 941 N.W.2d 769 (2020). When evidence is in conflict, an appellate court considers, and may give weight to, the fact that the trial judge......
  • Request a trial to view additional results

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