McGuire v. McGuire

• Decision Date: 01 October 2002
• Docket Number: No. A-01-513.,A-01-513.
• Citation: 11 Neb. App. 433,652 N.W.2d 293
• Parties: Betty A. McGUIRE, Appellee, v. James G. McGUIRE, Appellant.
• Court: Nebraska Court of Appeals

652 N.W.2d 293

11 Neb. App. 433

Betty A. McGUIRE, Appellee, v. James G. McGUIRE, Appellant.

No. A-01-513.

Court of Appeals of Nebraska.

October 1, 2002.

Thomas B. Donner, West Point, for appellant.

Christopher J. Connolly, of Olds, Pieper & Connolly, and, on brief, Michael L. Nozicka, Wayne, for appellee.

IRWIN, Chief Judge, and HANNON and INBODY, Judges.

HANNON, Judge.

INTRODUCTION

James G. McGuire appeals from the decree dissolving his marriage to Betty A. McGuire, alleging the trial court abused its discretion with respect to its treatment of his five life insurance policies; a $7,000 check from his father, used to help purchase the marital home; a debt incurred by Betty during the marriage to obtain a student loan for their daughter's education; and his retirement account, valuing it contrary to a stipulation of the parties. We conclude the debt incurred for the student loan is not a marital debt and should not be so treated, but otherwise, the disputed matters were within the discretion of the trial court. We therefore affirm as modified.

BACKGROUND

James and Betty were married on June 21, 1975. Betty filed a petition for dissolution of marriage on July 31, 2000. A hearing was held on March 30, 2001, and the court rendered its decree dissolving the marriage on April 30. At the time of the dissolution, James was 52 years old and Betty was 45 years old. James was employed by Zach Propane Service, Inc. (Zach Propane), earning $10.35 an hour, and Betty was employed as the city clerk for Wayne, Nebraska, earning $35,000 a year. Two children were born of the marriage: Jaime, on February 16, 1977; and Adam, on August 13,1984.

The hearing began by counsel for the parties advising the court of a number of stipulations. Those stipulations were that (1) Betty would receive custody of Adam; (2) James would pay Betty $367 per month as child support; (3) Betty would maintain health insurance for Adam; (4) each party would pay his or her own attorney fees; (5) each party would keep the personal property and vehicles in his or her possession, and the value of the personal property held by each was of equal value; (6) James' retirement account has a value of $1,001 which reflects a discount of 25 percent afforded for the tax liability; (7) certain debts were valued as: home mortgage, $43,342; MBNA credit card, $14,700; Mark Johnson, $1,704; John Thor, $1,285; Baxter Brown, $363; Zach Oil, $457; Zach Propane, $385; and appraisal fee, $200; (8) Betty's retirement account would be split equally; (9) income from James' life insurance policies is sufficient to set off the premium; (10) no alimony would be awarded to either party; and (11) in the event the parties do not execute the necessary quitclaim deeds, bills of sale, or vehicle titles within 30 days after entry of the decree of dissolution, the decree would operate as if said deeds, bills of sale, or vehicle titles had been executed to conform with the decree. The treatment of certain items in which the parties could not agree on are discussed in more detail below and form the basis of this appeal.

Life Insurance Policies.

During the course of the marriage, five State Farm life insurance policies owned by James and insuring his life were acquired. Loans were incurred against some of the policies during the marriage. For over 5 years, the policies have been on a premium offset plan, where the interest and dividends pay the premium so that James has not had to come up with any out-of-pocket funds to do so. It was stipulated that provided the interest or dividend rates do not change and there are no other significant changes in the policies, there should be sufficient income to continue offsetting the premiums.

At the time of dissolution, the policies had an aggregate surrender value of $16,303.39 and a possible taxable gain of $48,029.14 if James were to surrender the policies. James admitted that only upon surrender of the policies would the taxable gain be attributable to him. He has complete control over whether or not the policies are ever surrendered. James said that he has no reason to surrender the policies at the present time or in the near future and that the policies do not need to be surrendered. He was asked why Betty should share in the tax if surrender was entirely in his control and if he saw no reason to surrender them in the foreseeable future. James answered, "Well, the foreseeable future, maybe they will be needed, but I don't see any need for it right now." Betty's position on the issue of deferred tax liability on the policies was that it was "speculative" and "bogus."

$7,000 Check.

A check for $7,000 was given during the marriage by James' father, John McGuire (McGuire), and was made payable to James. James testified, "It was a gift to me to use as I saw fit." James said that the check was deposited into a joint checking account he held with Betty and that it was "possibly" used to pay a portion of the purchase price of the home. The check was dated April 20, 1993, and James and Betty closed on the real estate purchase on April 22, the same date the check was deposited. The parties took title to the property as joint tenants with right of survivorship. Both parties stated that there was never any discussion that the $7,000 was a separate, nonmarital asset.

James admitted that the check was delivered from McGuire as part of discussions with McGuire that James and Betty were trying to purchase a house. James was asked if he requested a specific amount of money from McGuire and answered, "I really don't remember the whole deal, just we seemed to be a little short on coming up with purchasing the home, and he said he had some extra money that maybe I could use ... if I wanted to."

McGuire testified that James came to McGuire and said that James and Betty would be a little short on money to buy the house. McGuire said he wrote the check out and gave it to Betty. He testified the money was "to go to James and Betty to buy the house, make the down payment [sic] on the house." When asked if McGuire intended to make that a gift to Betty as well, he answered, "Well, not really. I wouldn't—Jim came to me to ask for it. My kids need some money and I've got it, I usually give it to them.... I always liked Betty. I gave it to her at that time." The check was payable only to James, but McGuire said he did not know why he did not include Betty's name on it.

At the time of dissolution, the residence had an appraised value of $86,500, with $43,342 remaining on the mortgage. James said that since the $7,000 was used to acquire a house for $75,500, the appreciation in value of that asset, based upon the house's value of $86,500, would be $8,020.

Student Loan.

Although the petition for dissolution was filed on July 31, 2000, Betty and James continued to reside in the same house until October. James testified that they had lived in separate areas of the house and separately managed their affairs for approximately 3 years before he moved out. On January 18, 2000, while James and Betty were still married and living together, Betty took out a loan in the amount of $5,524 to enable their daughter, Jaime, to attend the Omaha School of Massage Therapy. Jaime was 22 years old at the time the loan was taken and had graduated from high school in 1995. After graduation, she had attended Wayne State College for 1 year and then went to Northeast Community College for a semester. In 1998, she moved to Omaha, Nebraska, and worked as a telemarketer for Omaha Steaks. Jaime was living independently and continued to work part time while attending school.

Betty signed the note as borrower and is solely responsible for paying that amount; Jaime is merely listed as the student, not a cosigner. Betty testified that she signed the note because Jaime had wanted to attend the Omaha School of Massage Therapy when she graduated from high school, but she could not afford to do so. Betty agreed that Jaime was "on her own" at the time. James said that neither Betty nor Jaime ever talked to him about this loan and that he did not know about it at the time. He said that Jaime should have to repay it. Betty testified that Jaime had indicated she might pay Betty back, and Betty hoped that one day when Jaime was established, she would pay it back, but it was uncertain whether that would happen. Betty considered that loan to be a marital debt.

Value of Retirement Account.

James and Betty each asked the court to approve all the stipulations. One of the stipulations was that James had a retirement account with a value of $1,001, which reflected a discount of 25 percent for tax liability. James testified that this retirement account was through Zach Propane and that the value as of December 31, 2000, was $1,001, after the discount.

The court's decree states: "The parties entered into oral and written Stipulations prior to hearing, which Stipulations were received into evidence and are fair and reasonable in all respects. The Court specifically finds that said Stipulations are not unconscionable and are approved, and the parties are ordered to comply with the terms thereof." However, in its decree, the court valued James' retirement plan at $3,336.93.

Property Division.

In substance, the court's division of marital property was as follows:

Betty James Real estate $86,500.00 State Farm life insurance policies (5) $16.303.39 Betty's 457 deferred compensation plan 50% 50% Knights of Columbus insurance policy 366.00 James' profit-sharing plan $ 3,336.93 __________ __________ Total Assets $86,500.00 $20,006.32 Mortgage on home $43,342.00 Nebraska student loan program 5,524.00 MBNA credit 14,700.00 2000 real estate taxes ($1,424 total) 356.00 1,068.00 Appraisal fee 200.00 Mark Johnson 1,704.00 John Thor 1,285.00 Baxter Brown 363.00 Zach Oil 457.00 Zach Propane 385.00 __________ __________ Total Liabilities $64,122.00 $5,262.00 Net Martial Estate $22,378.00 $14,744.32 Sum to...