Heald v. Heald

• Decision Date: 02 June 2000
• Docket Number: No. S-98-1301.,S-98-1301.
• Citation: 259 Neb. 604,611 N.W.2d 598
• Parties: Diane L. HEALD, appellee, v. David S. HEALD, appellant.
• Court: Nebraska Supreme Court

611 N.W.2d 598

259 Neb. 604

Diane L. HEALD, appellee, v. David S. HEALD, appellant.

No. S-98-1301.

Supreme Court of Nebraska.

June 2, 2000.

Charles Jan Headley, Omaha, for appellant.

Mark J. Milone, of Frost, Meyers, Govier & Milone, Omaha, for appellee.

HENDRY, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.

GERRARD, J.

NATURE OF CASE

David S. Heald (husband) appeals from the dissolution decree rendered by the Cass County District Court, which dissolved the marriage between Diane L. Heald (wife) and him. The husband contends that the district court erred in its division of the marital estate by including alleged nonmarital property, by awarding the wife the entirety of the husband's profit-sharing plan, and by failing to set off his premarital downpayment toward the family home. The husband further claims that the district court erred in not granting his motion for a new trial to determine the wife's earning capacity. For the reasons that follow, we affirm as modified.

FACTUAL AND PROCEDURAL BACKGROUND

The Healds were married on August 26, 1983, and their marriage produced one child. The wife filed a petition for dissolution on January 21, 1997.

During the marriage, the wife was employed in various jobs, including U S West until 1992, followed by a 14-month period of unemployment; then at her husband's family business, Prescott Heald & Son, Inc. (Heald & Son), for approximately 1 year; and also for a temporary employment agency. At Heald & Son, she worked part time as a computer programmer and was paid $8 an hour. She was still registered with the temporary agency at the time of trial, but was not working. Her highest hourly rate with the agency was $8.97. At trial, the wife calculated her gross monthly income at $9 per hour for a 40-hour week.

Throughout the marriage, the husband was employed by the family corporation, Heald & Son. The husband testified that his gross yearly income was approximately $48,000. The husband was the sole director, officer, and president of the corporation. Additionally, the couple owned the Heald & Son building and derived monthly rental income. The wife estimated the monthly rental income at $3,576.17, whereas the husband proffered a $749.23 figure.

The husband was also a Heald & Son shareholder. The manner in which he acquired his share was sharply disputed at trial. The husband claimed the stock was a gift and should be excluded from the marital estate, whereas the wife argued that the stock was marital property.

The husband testified that he and his father negotiated an agreement in which he became the owner of one share of Heald & Son. Two documents detailed the transaction. Exhibit 26 was an attorney letter, dated August 15, 1983, and addressed to both the husband and his parents. In this letter, the attorney advised:

In my opinion the stock should be purchased by [the husband] and so long as any amount remains due and owing on the Note from the Company to [the husband's father], or on the Purchase Agreement, the stock should be sold to the Company with only one (1) share being sold to [the husband].

The other significant document was the "Stock Purchase Agreement" between the husband and his parents, dated September 1, 1983. In this agreement, the husband and Heald & Son were referred to as "Buyers" and the husband's father was referred to as "Seller." The agreement stated that the Seller desired to sell 1 share of his stock in the corporation to the husband and the remaining 189 shares to Heald & Son and that the Buyers desired to purchase such shares. The Buyers agreed to pay all notes and loans the corporation owed the Seller. With these notes, together with interest and price, the total purchase price of all the shares was $147,474.21. The agreement also provided that the shares would remain in escrow and that the husband was prohibited from voting his share until all shares were paid in full. The Buyers authorized the Seller to vote all stock held in escrow until full payment was made.

At trial, the husband's mother testified that no payment was made to her or the husband's father for the share of stock that the husband received and that it was a gift to him. She admitted, however, that she was not involved in the legal transaction, but only in the home discussion. The husband also noted that his mother was not "too involved" in the negotiations. The husband's mother further admitted that, to her knowledge, the stock purchase agreement controlled the transaction.

The husband also testified that the stock was a gift. He stated that he did not file a gift tax return because his accountant told him it was not necessary. He explained that exhibit 27, which contained numerous Heald & Son checks written to the husband's father and signed by the husband, were payments made by the corporation for the 189 shares of stock. The husband stated that he did not use personal earnings to purchase the stock which was evinced in exhibit 27. When confronted with the stock purchase agreement on cross-examination, the husband maintained that the stock was gifted or inherited, but admitted that no documents indicated that it was in fact a gift. The wife testified that she believed that she and her husband bought the one share of stock for $150,000 because he told her that that was what had occurred.

Shortly before the couple married, the husband paid a downpayment for the marital home in Ralston, Nebraska. The wife did not know the amount of the downpayment. The mortgage banker's "Good Faith Estimate of Settlement Charges" was received into evidence, which shows that the home's purchase price was $72,880 and the loan amount was $67,500. At trial, the husband testified and the wife conceded that the difference between the purchase price and the loan amount was the downpayment supplied by the husband. The Ralston home was originally titled in the husband's name, but during the marriage, he conveyed title to the wife and himself as joint tenants. The couple later moved to another home in Plattsmouth.

Both parties accumulated value in various plans and pensions. Notably, the husband's profit-sharing plan was valued at $151,297.20. The wife also incurred substantial credit card debt during the marriage, and the husband would "bonus" himself additional money from the corporation in order to pay off the debt. Testimony was also adduced involving the wife's purported frustration of the husband's discovery process during the proceedings. The wife testified that there were 5 or 10 boxes, now located at her mother's house, which she did not disclose to her husband. The wife stated that the boxes contained magazines and sewing books and that she did not disclose them to him because they were heavy. The husband testified that approximately 3 years before he left the marital home, the wife started "boxing stuff" and that although the wife eventually allowed him to review some of them, those he reviewed were not the same boxes that he saw her packing. The husband wanted an opportunity to review the contents of those boxes to see if there were items of substantial value that he could claim as a marital asset.

On October 15, 1998, the district court issued its decree dissolving the marriage. In relevant part, the court made findings that the wife had an earning capacity of $9 per hour and that the husband had a gross monthly income of $4,000 from Heald & Son and $1,065 from the rental property. In the property division, the district court acknowledged that the husband had made a $5,380 downpayment on the first marital home, but found that he was not entitled to any type of credit. The court noted that the property was eventually titled in the names of both parties as joint tenants and that when a husband and wife take property as joint tenants, even though one pays all the consideration therefor, a gift is presumed to be made by the spouse furnishing the consideration to the other. The court found that the current marital home had a fair market value of $220,000 and awarded it to the husband, subject to the outstanding mortgage of approximately $97,081.82. The court found that the rental property had a fair market value of $230,000, with mortgages totaling $163,445.59. The rental property was also awarded to the husband, subject to the mortgages.

The court found that the Heald & Son stock was marital property. In making its finding, the court noted:

The Court finds that shortly after the parties were married, the [husband] entered into a stock purchase agreement (Exhibit 7) wherein the [husband] purchased one share of stock in Prescott Heald and Son, Inc. The remaining 189 shares of stock were purchased by Prescott Heald and Son, Inc. and became treasury stock. The [husband], as the owner of the one share of stock, is the sole stockholder of the corporation. A letter from the attorney who handled the transaction (Exhibit 26) further evidences the intent of the parties to enter into an agreement involving the purchase of the share of stock. The outstanding balance owed to the sellers pursuant to the stock purchase agreement has been fully paid off during the marriage of the parties. The [husband's] argument that the one share of stock was a gift to him and that the stock should not be considered as marital property is without merit.

The court valued the stock at $297,000 and awarded it to the husband.

The husband was also awarded the $500 boat trailer, bank accounts worth $244.79, all interest in his 401K plan valued at $2,761, and personal property with an approximate value of $3,550. The court awarded the wife the Jeep Cherokee valued at $10,175, bank accounts worth $15.24, and 600 shares of ADMS stock with an approximate value of $9,750. The wife was also awarded her U S West pension plan, which was rolled over into a Perelman-Carley & Associates, Inc., account, and was valued at $29,591.15. The court awarded the wife all interest in the husband's...