In re Marriage of Chaignot, No. A07-1135 (Minn. App. 5/6/2008), A07-1135.
| Decision Date | 06 May 2008 |
| Docket Number | No. A07-1135.,A07-1135. |
| Parties | In re the Marriage of: Mary Jane Chaignot, petitioner, Respondent, v. Edward Barton Chapin, Jr., Appellant. |
| Court | Minnesota Court of Appeals |
Appeal from the District Court, Hennepin County, File No. 27-FA-000280008.
Denis E. Grande, Robert Due, Mackall, Crounse & Moore, PLC, (for respondent).
Linda R. Allen, Butler, Huson & Allen, P.A., (for appellant).
Considered and decided by Worke, Presiding Judge; Hudson, Judge; and Harten, Judge.*
UNPUBLISHED OPINION
On appeal after remand, appellant argues that the district court failed to follow this court's remand instructions by failing to consider a debt when dividing the marital estate thereby rendering the division of the marital estate inequitable. We affirm.
The judgment dissolving the marriage of Edward Chapin and Mary Jane Chaignot held that certain debts, including one owed to attorney Frank Mabley, were unenforceable and did not consider them when dividing the marital estate. Husband appealed. In that appeal, this court (a) noted that because husband signed a promissory note, Mabley could, under the relevant statute of limitations, sue on the note until August 2008; (b) reversed the determination that the Mabley debt was unenforceable; (c) ruled that the district court abused its discretion by excluding the Mabley debt from the marital estate; and (d) remanded for a determination of whether the Mabley debt was marital. Chaignot v. Chapin, No. A05-1966, 2006 WL 2348119, at *11—*12 (Minn. App. Aug. 15, 2006) (Chaignot I).
On remand, the district court found that (a) the Mabley debt "is attributable to corporations owned in whole or in part by [husband or wife], and, therefore, neither [party] has any liability for this debt, nor can it be considered a marital debt"; (b) Mabley accepted stock in various businesses of the parties as payment for some of the services he provided, but he had limited records of his services, the amounts owed, the stock received, or the businesses in which he received stock; and (c) "[t]he questionable liability to [Mabley] is highly speculative and highly contingent and will not be added to the calculations of the marital estate." The district court also found:
[The Mabley debt] is speculative and contingent, and the Court will not order either party to be responsible for this debt, nor will it be considered in determining how to divide the marital estate. The parties will have to deal with this liability separately if and when [Mabley] seeks to enforce it against the corporations or the parties as corporate officers or shareholders.
The associated conclusion of law states that the Mabley debt is not marital and that the parties "will be left to assert whatever defenses each may have in the event of litigation." Husband appeals.
Husband argues1 that the district court exceeded the scope of the remand when it addressed the "validity and enforceability of the [Mabley] debt" and found it to be "`speculative and contingent' despite the fact that [Chaignot I] previously opined otherwise." We reject husband's argument.2 On remand, a district court must strictly execute the remanding court's instructions without altering the mandate. Halverson v. Village of Deerwood, 322 N.W.2d 761, 766 (Minn. 1982); Rooney v. Rooney, 669 N.W.2d 362, 371 (Minn. App. 2003), review denied (Minn. Nov. 25, 2003). But if on remand, the district court does not have "specific directions as to how it should proceed," it has discretion to "proceed in any manner not inconsistent with the remand order." Duffey v. Duffey, 432 N.W.2d 473, 476 (Minn. App. 1988), review denied (Minn. Feb. 24, 1989). Whether a district court exceeds the scope of its remand instructions is a question of law. See Alpha Real Estate Co. of Rochester v. Delta Dental Plan of Minn., 671 N.W.2d 213, 217 (Minn. App. 2003), review denied (Minn. Jan. 20, 2004).
The relevant portions of the remand instructions state that "the district court erroneously concluded that [the Mabley] debt is unenforceable" and that "the district court abused its discretion by excluding the [Mabley] debt from the marital estate." Chaignot I, 2006 WL 2348119, at *12. Husband reads those remand instructions to mean that the Mabley debt is enforceable and must be included in the marital estate. But Chaignot I's next sentence states: "On remand, the district court may reopen the record to consider whether the debt is marital property." Id. A marital estate does not include property that is not marital. Therefore, the remand instruction directing the district court to consider whether the debt is marital property contemplates the possibility that, depending on the record generated on remand, the Mabley debt would be excluded from the marital estate because it was not marital property. And if the Mabley debt was excluded from the marital estate, it would also be excluded from consideration in the division of that marital estate.
This fact is confirmed by the scope of Chaignot I. Before that appeal, the district court ruled the Mabley debt to be unenforceable because it was barred by the statute of limitations. See Chaignot I, 2006 WL 2348119, at *11. This court reversed because the statute of limitations allowed Mabley to sue on the debt until August 2008. Id. at *12. Thus, the only enforceability-related question addressed in Chaignot I was the statute of limitations, and the remand instructions must be read in light of that fact. See Skelly Oil Co. v. Comm'r of Taxation, 269 Minn. 351, 371, 131 N.W.2d 632, 645 (1964) (); Stageberg v. Stageberg, 695 N.W.2d 609, 613 n.2 (Minn. App. 2005) (), review denied (Minn. July 19, 2005). Chaignot I did not address non-statute-of-limitations reasons that the Mabley debt could be excluded from the marital estate and hence from consideration in division of that estate. Therefore, the remand instructions directing the district court to determine whether the debt is marital property (and hence whether it is part of the marital estate) is consistent with the instructions stating that "the district court erroneously concluded that [the Mabley] debt is unenforceable" and that "the district court abused its discretion by excluding the [Mabley] debt from the marital estate" based on a misapplication of the statute of limitations. Thus, if the record allowed it, the scope of the remand allowed the district court to exclude the Mabley debt from consideration in the division of the marital estate for reasons other than an unenforceability arising from the statute of limitations. And on remand, that is what the district court did: It excluded the Mabley debt from the marital estate and hence consideration in the division of that estate because it was property not of the parties but of their businesses, and because it found the likelihood of the debt being enforced unduly speculative.
Husband also asserts that the remand instructions required the district court to determine whether the Mabley debt was "marital or nonmarital" and to divide the marital estate in light of that determination. Husband claims that the district court's ruling makes the debt his nonmarital property for which he is solely, and therefore inequitably, responsible. We reject this argument because it incorrectly assumes that if the debt is not the marital property of the parties, it must be the nonmarital property of one of the parties. In a marital dissolution, courts treat debts as property. See Justis v. Justis, 384 N.W.2d 885, 889 (Minn. App. 1986), review denied . And for dissolution purposes, "[m]arital property" is property "acquired by the parties, or either of them" during the marriage, while "[n]onmarital property" is property "acquired by either spouse before, during, or after the . . . marriage" that falls into certain statutory categories. Minn. Stat. § 518.003, subds. 1, 3b (2006). Thus, for property to be "marital" or "nonmarital" under Minn. Stat. § 518.003, subd. 3b, it must be the property of one or both spouses. Alternatively stated: Under Minn. Stat. § 518.003, subd. 3b, property of neither spouse is not marital. Nor is it nonmarital. It is, essentially, extramarital.
Here, the district court ruled that the Mabley debt "is attributable to corporations owned in whole or in part by [husband or wife.]" And corporations are generally considered a legal entity separate from the shareholders. Milwaukee Motor Transp. Co. v. Comm'r of Taxation, 292 Minn. 66, 71, 193 N.W.2d 605, 608 (1971). Therefore, the district court essentially ruled the Mabley debt to be extramarital. Consistent with its determination that the Mabley debt is extramarital, the district court further ruled that "neither [party] has any liability for this debt, nor can it be considered a marital debt." Refusal to divide or apportion an extramarital debt in the division of marital property is consistent with caselaw. See Sammons v. Sammons, 642 N.W.2d 450, 457 (Minn. App. 2002) (); Fraser v. Fraser, 642 N.W.2d 34, 38 (Minn. App. 2002) (). We conclude that husband's assertion that the district court made the Mabley debt his nonmarital property for which he is solely responsible is inconsistent with the district court's explicit ruling that the debt is corporate in nature. Accordingly, the...
To continue reading
Request your trial