Osantowski v. Osantowski

• Decision Date: 08 December 2017
• Docket Number: No. S-16-807.,S-16-807.
• Citation: 298 Neb. 339,904 N.W.2d 251
• Parties: Dori Ann OSANTOWSKI, appellee, v. Brian OSANTOWSKI, appellant.
• Court: Nebraska Supreme Court

298 Neb. 339

904 N.W.2d 251

Dori Ann OSANTOWSKI, appellee,

v.Brian OSANTOWSKI, appellant.

No. S-16-807.

Supreme Court of Nebraska.

Filed December 8, 2017.

John W. Ballew, Jr., and Adam R. Little, of Ballew, Covalt & Hazen, PC., L.L.O., Lincoln, for appellant.

Stan A. Emerson, of Sipple, Hansen, Emerson, Schumacher & Klutman, for appellee.

Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy, Kelch, and Funke, JJ.

Funke, J.

Brian Osantowski appeals from a decree of dissolution entered by the Seward County District Court, which dissolved his marriage to Dori Ann Osantowski, divided the marital assets and debts, and ordered Brian to make an equalization payment of $680,000, distributing the estate about equally.

Brian argues that his premarital crops should have been treated similarly to a herd of cattle—as a single asset for tracing purposes, that the court made specific errors in the division of marital assets, and that its distribution of the marital estate was inequitable.

We reject Brian's argument that crops are similar to cattle herds for tracing purposes. However, we hold that the court erred in its division of certain marital assets and debts. Therefore, we affirm the district court's order as modified by this opinion.

I. BACKGROUND

Brian and Dori were married on September 23, 2011, and separated on or about May 26, 2014. Dori filed a dissolution complaint in June 2014. Trial was held on January 14 and February 12, 2016.

1. PARTIES' MARRIAGE

During the marriage, Brian resided primarily in Polk County, Nebraska, at a residence owned by his parents. Dori maintained a residence in Lincoln, Nebraska, until May 2013. Dori testified that while she was living in Lincoln, she spent a minimum of three to four nights per week with Brian in Polk County during the academic year and full time during the summers and other school breaks. As of May 2013, Dori resided in Polk County full time and commuted to Lincoln for her final semester of school.

In September 2013, Dori held a master's degree in entomology from the University of Nebraska-Lincoln (UNL) and was enrolled in a doctoral program for plant health at UNL. She testified that while she had originally intended to pursue a Ph.D. in entomology at South Dakota State University, she enrolled in a program at UNL instead because Brian had objected to the distance. Dori also stated that she changed her program to plant health so that she could gain a better understanding of agriculture in Nebraska and contribute to the Osantowski farming operation.

Dori received a scholarship and a stipend for her school and living expenses. She also worked full time during the summers in Lincoln, earning between $8,000 and $20,000 in wages for 2011, 2012, and 2013 each. Most of Dori's income and scholarship money during the marriage went to tuition, insurance payments, payments for her motorcycle, commuting expenses, rent and utilities for the Lincoln apartment, and other living expenses. She testified that Brian provided minimal financial support to her during the marriage, but what he did provide was used for the household expenses she paid for the Polk County residence. In February 2014, Dori began working full time for an annual salary of $75,000 and obtained medical and dental insurance for herself and Brian.

Brian began farming in 2005. He has a farming operation with his two brothers in and around Polk County. Under the operation, Brian and his brothers own equipment separately but jointly acquire land, which is owned in equal thirds. Each brother, however, farms land independently and bears the rental fees and input costs for his operation. Accordingly, crops and expenses are completely separate and distinct to each individual.

Brian testified that he receives benefits from his family which increase the profitability of his farming operation, including: discounted rental rates of $150 to $200 per acre versus the market rate of $300 to $400 per acre on the majority of the land that he rents; the majority of his diesel fuel at no cost to him; and the sharing of equipment, labor, shop space, and various other expenses.

Dori testified that she made the following contributions to Brian's farming operation: Brian would consult her about chemical and herbicide application and general soil welfare; she created plat maps for all of the Osantowski fields to keep field spray records and to help plan for the future; she scouted fields for weed growth; she picked up parts and ran errands; and she went with Brian to check fields, pivots, and lay irrigation pipe. Brian agreed that Dori performed these tasks occasionally, except he explained that the plat maps created by Dori were part of her summer employment and that when Dori would ride with him to the fields, she did so because she enjoyed riding a "four-wheeler" and not because she actually helped with irrigation.

Dori also testified that she performed all of the household duties at her Lincoln residence and that such duties in the Polk County residence were a team effort with Brian.

2. EVIDENCE OFFERED AT TRIAL

The parties offered into evidence two versions of a joint property statement, each listing premarital and marital debts and assets. One of the statements was dated May 18, 2015, and the other dated January 9, 2016. Each version listed the same assets and debts; however, slightly different values were assigned to some. Additional documents were received into evidence to support the property statements, including personal property appraisals from Grubaugh Auction Services, LLC; inventory reports from a certified public accountant; tax returns; settlement sheets from elevators; bank statements; retirement accounts; and balance sheets from several banks, including Great Western Bank.

(a) Stored and Growing Crops

In regard to the premarital and marital crop inventory, Brian called Michael Hershberger as his expert witness to determine the quantity of stored crops that Brian had on the date of marriage and on the date of separation. Hershberger is a certified public accountant who works with agricultural clients on a regular basis. In reaching his conclusions on these issues, Hershberger relied on Brian's tax returns from 2011 to 2014; the total annual yields in Brian's crop insurance reports, which were reported to him by Brian; two crop sales receipts; and a spreadsheet summary of Brian's recorded crop sales. The spreadsheet summary was prepared by Brian's mother, who does all of Brian's bookkeeping.

On the first day of trial, Hershberger gave testimony regarding his determination of crop inventories and a report he authored was received into evidence. However, that testimony and the exhibit were stricken from the record, because Hershberger had relied on grain elevator receipts which were not provided to Dori through discovery. After Brian supplemented his discovery, Hershberger was again called to testify regarding the crop inventory.

In regard to the premarital crop inventory, Hershberger opined that Brian had a total of 57,156.26 bushels of corn in storage on September 23, 2011, and 91,296.09 bushels of corn and 10,405.99 bushels of soybeans ready for harvest. On September 23, the price at the local elevator was $6.07 for a bushel of corn and $11.57 for a bushel of soybeans. Accordingly, Hershberger concluded that the fair market value on the date of marriage for Brian's stored crops was $346,938.50 and his unharvested crops were $554,167.27 for corn and $120,397.30 for soybeans, totaling $1,021,503.07. Based on the spreadsheet summary, he also concluded that Brian sold these crops for a total of $1,207,465.53.

Hershberger testified that he believed his estimation of the total bushels of crops produced in 2011 was very accurate, because Brian had claimed on his crop insurance report that a total of 91,863 bushels of corn and 10,151 bushels of soybeans were produced.

In regard to the marital crop inventory, Hershberger concluded that the parties had 95,300.36 bushels of corn in storage on the date of separation and that a bushel of corn sold for $4.66 on that day. Accordingly, he valued the corn in storage on the date of separation as $444,099.68.

However, a balance sheet Brian had submitted to Great Western Bank, dated March 20, 2014, stated that he had 135,000 bushels of corn on hand which had a value of $573,750. Additionally, in Brian's November 2014 response to Dori's interrogatories, he stated that the March 20 balance sheet reflected the quantity and value of the stored crops. In both joint property statements, Dori relied on the March 20 balance sheet for the quantity and value of crops that were marital property.

In the May 2015 joint property statement, Brian failed to list the quantity of crops in storage or assign a value thereto. But in the January 2016 joint property statement, Brian listed 14,862 bushels of corn in storage on the date of separation with a value of $69,257. At trial, Brian testified that his January 2016 estimation of the quantity of corn in storage on the date of separation was based on Hershberger's initial analysis.

Hershberger admitted, however, that his opinions changed dramatically from the first day of trial to the second day of trial. His valuation of the stored crops on the date of separation changed from $69,259.25 to $444,099.68. While his valuation of the stored and growing crops on the date of marriage changed from $898,603.04 to $1,021,503.07. Hershberger attributed these changes to his mistaken belief that all crops were sold before the next harvest began. But after he requested that Brian's mother identify the year of production for each crop at issue in the sale transactions on the spreadsheet summary, his analysis changed.

(b) Personal Property and Farm Equipment

Minimal testimony was elicited regarding the parties' premarital and marital personal property and farm equipment. The joint property statements set forth the items, and Brian and Dori generally agreed to them. The values, however, were not agreed...