Else v. Else

• Decision Date: 14 January 1997
• Docket Number: No. A-95-488,A-95-488
• Citation: 5 Neb.App. 319,558 N.W.2d 594
• Parties: Julie A. ELSE, Appellee, v. Timothy L. ELSE, Appellant.
• Court: Nebraska Court of Appeals

Page 594

558 N.W.2d 594

5 Neb.App. 319

Julie A. ELSE, Appellee, v. Timothy L. ELSE, Appellant.

No. A-95-488.

Court of Appeals of Nebraska.

Jan. 14, 1997.

Syllabus by the Court

1. Divorce: Appeal and Error. In an appeal involving an action for dissolution of marriage, an appellate court's review of a trial court's judgment is de novo on the record to determine whether there has been an abuse of discretion by the trial judge. In such de novo review, when the 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.

2. Judges: Words and Phrases: Appeal and Error. A judicial abuse of discretion exists when a judge, within the effective limits of authorized judicial power, elects to act or refrain from acting, but the selected option results in a decision which is untenable and unfairly deprives a litigant of a substantial right in matters submitted for disposition in a judicial system.

3. Trial: Evidence: Appeal and Error. To constitute reversible error in a civil case, the admission or exclusion of evidence must unfairly prejudice a substantial right of a litigant complaining about evidence admitted or excluded.

4. Property Division. An appropriate division of marital property turns on reasonableness as determined by the circumstances of each particular case.

5. Corporations: Valuation. To determine the value of a closely held corporation, the trial court may consider the nature of the business, the corporation's fixed and liquid assets at the actual or book value, the corporation's net worth, marketability of the shares, past earnings or losses, and future earning capacity.

6. Corporations: Valuation. The method of valuation used for a closely held corporation must have an acceptable basis in fact and principle.

7. Child Support: Insurance. A trial court may make appropriate orders as to the manner in which future medical and dental expenses of the children, after the insurance payments, are to be shared.

8. Child Support: Insurance. A parent who does not wish to provide health insurance must be ready to pay for health care for the children.

Barbara B. McCall, Lincoln, for appellant.

Howard F. Ach, of Ach Law Office, Geneva, and Kathy Pate Knickrehm, Omaha, for appellee.

MILLER-LERMAN, C.J., and HANNON and IRWIN, JJ.

MILLER-LERMAN, Chief Judge.

Timothy L. Else appeals a divorce decree entered by the district court for Thayer County dissolving his marriage to Julie A. Else. Generally, he challenges the district court's division of property and order that he pay all reasonable and necessary medical and dental expenses incurred by or on behalf of their daughter Emily. For the reasons stated below, we affirm.

FACTUAL BACKGROUND

Timothy and Julie were married March 16, 1980. Three children were born of the marriage: Emily, born January 27, 1982; Natalie, born December 26, 1984; and Andrew, born November 20, 1985. Emily has had severe health problems since birth. When Emily was born, she had a medical condition requiring surgery and a long hospitalization. When Emily came home after the long hospitalization, Timothy changed the family's insurance carrier because he was dissatisfied with the coverage provided by their previous carrier for Emily's medical expenses. The new insurance carrier refused to extend coverage for Emily. Since that time, Emily has been uninsured. Emily currently suffers "lung problems" and asthma. Her medical expenses are paid, in part, by medicaid and, in part, by a grant for which Julie applied. The remainder of Emily's medical expenses must be paid by the parties.

Timothy has a degree from the University of Nebraska in agricultural economics. During the early years of the marriage, he was employed in several agricultural enterprises and farmed part time. In 1986, he began farming full time. In 1991, Timothy, his father, and his brother formed 3-E Farms, a subchapter S corporation. Timothy executed a bill of exchange, which transferred Timothy and Julie's homestead, farm equipment, livestock, growing crops, grain, and debt to the corporation. Timothy is a minority shareholder in the corporation with a net interest of 40.8 percent. Timothy's adjusted gross income for 1993 was $37,195.

At the time of the parties' marriage, Julie was a beautician. After Emily's birth, Julie remained in the home to care for Emily for a period of time. In 1983, Julie opened a beauty shop, which she later sold for $7,500. Julie then worked part time in her father's pharmacy for a couple of years. In 1988, Julie opened a day-care business, which she sold in April 1991 for roughly her related debt. Although at the time of trial Julie was on a leave of absence until January 1, 1995, she was employed part time at Blue River Agency on Aging as a senior center director and generally worked 25 hours per week at $5 per hour. Julie was also working approximately 8 hours per week at a movie theater. In addition to the above businesses and periods of employment, Julie was primarily responsible for the care of the parties' three children and also helped with Timothy's farming activities on occasion.

The parties separated in February 1993. Julie filed for divorce on April 27, 1993. Trial was held November 4 and 11, 1994. It is clear from the evidence that the parties are quite hostile toward one another.

The bulk of the evidence related to the division of the marital estate. The parties' largest assets are Timothy's interest in 3-E Farms and 160 acres of farmland. The parties stipulated to the receipt of evidence showing that the value of the 160 acres of farmland was $176,000.

The value of Timothy's interest in 3-E Farms was disputed. The record includes financial statements for Timothy and for the corporation dating from March 1993 to April 1994, and corporate and individual tax returns. Timothy offered appraisals of certain assets of 3-E Farms prepared October 31 and November 3, 1994, and a current financial statement of 3-E Farms dated November 4, 1994. These exhibits, numbered 35, 37, and 40, valued 3-E Farms' net worth as $451,997, placing Timothy's 40.8 percent interest at approximately $184,415. The district court refused to consider Timothy's appraisal and current financial statement of 3-E Farms except for the limited purpose of showing Timothy's ability to finance an award to Julie.

The evidence which was received at trial values Timothy's interest in 3-E Farms from $268,687 to $353,936. The evidence is composed of individual and corporate financial statements offered by Timothy and dated from March 1991 to April 1994.

In refusing to consider the more recent valuation offered by Timothy for the purposes of property division and valuation, the district court concluded that the value of the marital estate should be determined on the date of separation. The court stated:

But, nobody is required as far as I know to work for someone else or to take risks for someone else or to make investments for someone else after the divorce has been filed and summons served, and it doesn't make any sense.

....

... But when I was practicing and the older cases suggested that the best way of doing it was to determine what the people owed and owned at the time of the separation....

On March 1, 1995, the district court prepared a docket entry of its findings, and a decree was prepared and filed on May 10. The district court found the marriage to be irretrievably broken. Custody of the three children was awarded to Julie with reasonable visitation by Timothy. Timothy was ordered to pay child support in the amount of $765 per month beginning March 1, 1995, retain his current medical insurance coverage for Natalie and Andrew, and pay the reasonable and necessary medical and dental bills of Emily. Timothy and Julie were ordered to share the reasonable and necessary medical and dental costs for Natalie and Andrew not covered by insurance.

Regarding the division of property, the district court awarded Julie her premarital property, the personal property in her possession, her IRA, and a 1988 Lincoln Town Car. She was also ordered to be responsible for the payment of the AT & T credit card debt and the Dillard's credit card debt. Timothy was awarded the balance of the marital property and made responsible for the remainder of the parties' debt. In addition, in lieu of an award of property, Timothy was to pay Julie $14,000 on March 1, 1995, and thereafter, $133,000, payable in monthly payments of $1,112.47 for 240 months at 8-percent per annum interest. This appeal followed.

ASSIGNMENTS OF ERROR

For his assignments of error, Timothy contends that the district court erred in (1) admitting exhibits 19, 23, 35, 37, and 40 for a limited purpose only, (2) refusing to consider the value of the parties' interest in 3-E Farms as of the date of trial, (3) failing to determine the value of the marital estate, (4) awarding Julie $157,900 of assets from a marital estate of undetermined value, (5) incorrectly computing the amount of the parties' debt, and (6) requiring him to be solely responsible for the medical and dental costs for Emily.

STANDARD OF REVIEW

In an appeal involving an action for dissolution of marriage, an appellate court's review of a trial court's judgment is de novo on the record to determine whether there has been an abuse of discretion by the trial judge. In such de novo review, when the 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. Thiltges v. Thiltges, 247 Neb. 371, 527 N.W.2d 853 (1995); Jirkovsky v. Jirkovsky, 247 Neb. 141, 525 N.W.2d 615 (1995); Policky v. Policky, 239 Neb. 1032, 479 N.W.2d 795 (1992).

A judicial abuse of discretion exists when a judge, within the effective limits of authorized...