Simons v. Simons

• Decision Date: 05 August 2022
• Docket Number: S-21-599.
• Citation: 312 Neb. 136,978 N.W.2d 121
• Parties: Jonathan B. SIMONS, appellant, v. Heather L. SIMONS, appellee.
• Court: Nebraska Supreme Court

312 Neb. 136

978 N.W.2d 121

Jonathan B. SIMONS, appellant,

v.Heather L. SIMONS, appellee.

No. S-21-599.

Supreme Court of Nebraska.

Filed August 5, 2022

John A. Kinney, Omaha, Jill M. Mason, Omaha, and Samantha M. Robb, of Kinney Mason, P.C., L.L.O., for appellant.

Benjamin M. Belmont and Wm. Oliver Jenkins, Omaha, of Brodkey, Cuddigan, Peebles, Belmont & Line, L.L.P., for appellee.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

Freudenberg, J.

I. INTRODUCTION

In a dissolution action governed by a premarital agreement, the court imposed a constructive trust over certain limited liability companies titled solely in the respondent's name, such that they were considered additions to the marital estate under the agreement. The petitioner appeals the court's judgment, arguing that the court abused its discretion in allowing the respondent to amend her pleadings to conform to the evidence at trial to include the issue of the constructive trust, that the trust was in conflict with the premarital agreement, that the evidence did not support a constructive trust, and that the amount of the trust was in error. The petitioner also challenges the court's award of a $150,000 lump-sum payment under the terms of the premarital agreement, an order to maintain life insurance to fund a support order, the inclusion of a truck in the marital estate, and the amount of the alimony award.

II. BACKGROUND

Jonathan B. Simons brought a complaint for dissolution of his marriage to Heather L. Simons. Jonathan and Heather were married in 2005. Two children, still minors at the time of filing, were born to the marriage. The complaint alleged that a premarital agreement controlled the division of their assets and debts. In her operative answer, Heather asked, among other things, for an equitable division of the marital estate and for alimony. She denied the validity of the premarital agreement. However, the court ultimately found the agreement was valid, and that finding is not challenged on appeal.

1. ISSUES IN CONTROVERSY

The court issued a pretrial order directing the parties to submit a letter stating the issues in controversy, the issues not in controversy, and a concrete statement of the relief sought. As relevant to this appeal, the letter submitted by Heather's counsel set forth as issues in controversy the following:

4. Whether Jonathan holds one half of the membership interest in JBS Kids Play & Fitness, LLC; JBS Properties, LLC and Dogwatch, LLC in a constructive trust for the benefit of Heather.

5. Does Jonathan have an equitable duty to convey one half of the membership interest in JBS Kids Play & Fitness, LLC; JBS Properties, LLC and Dogwatch, LLC to Heather on the ground that his acquisition or retention of the membership interests would constitute unjust enrichment.

6. If the Premarital Agreement is valid and enforceable, whether three limited liability companies [Jonathan] organized to operate the parties’ businesses which were started during the marriage and in which Heather was an owner and held out to the public as being an owner are part of the marital estate;

7. Whether the provision of the Premarital Agreement stating, "Anything in this section 3.2 to the contrary notwithstanding, in no event shall [Jonathan's] Property or Heather's Property be made a part of or be considered in determining any alimony award as herein contemplated" is valid, or contrary to law and if contrary to law, is it able to be severed from the Premarital Agreement.

8. Whether Jonathan has comingled any purported separate funds with marital funds to subject those funds to an equitable division;

9. The determination of what assets are part of the marital estate and the equitable division of the marital estate[.]

A copy of the letter was sent to opposing counsel, who raised no objections.

Before trial commenced, Jonathan's counsel argued to the court that the premarital agreement was enforceable and that, under the agreement, title controls—assets jointly titled are marital while assets not jointly titled are not marital.

Heather's counsel responded that even with the premarital agreement, the court had equitable powers, there were issues as to what exactly the agreement means, and "[i]t's not just a matter of title." Heather's counsel elaborated that at issue in the case was a business Heather and Jonathan started together, which they both worked for and which Jonathan represented to Heather and to others that he and Heather jointly owned. Heather's counsel argued that the fact the business was titled solely in Jonathan's name should not be controlling of the distribution even under the premarital agreement.

At the conclusion of the evidence presented at trial, Heather moved to amend her pleadings to conform to the evidence so as to allege constructive trust and unjust enrichment. A discussion ensued with Jonathan's counsel arguing that Heather's position relating to a constructive trust was simply a type of equitable distribution that would not be applicable if the premarital agreement, which distributed assets by title, was valid. Heather's counsel responded that the claimed constructive trust was not mooted by a possible finding that the premarital agreement is enforceable; rather, a constructive trust created under equitable principles would simply make that asset marital under the terms of the premarital agreement. The record does not reflect that Jonathan's counsel raised the waiver provision of the agreement found in section 6.

The court granted the motion to amend the pleadings over Jonathan's objection, stating from the bench, "I don't see how the amendment to the pleadings would change the evidence, nor would the Court's equitable resolution of the issues presented." The court reasoned further in its written order that the issues were set forth in the pretrial letter and that Jonathan raised no objection to the litigation of those issues either before or during the trial in which those issues were actually litigated. The court noted that a constructive trust and unjust enrichment are equitable concepts and that Heather raised in her pleadings the issue of the equitable division of the marital estate and the court's equitable jurisdiction. Finally, the court found that Jonathan was not prejudiced by the amendment.

2. PREMARITAL AGREEMENT

The premarital agreement was entered into evidence at trial. Section 1.5 of the agreement describes the "Marital Estate":

Anything in this Agreement to the contrary notwithstanding, to the extent that [Jonathan] or Heather have acquired or in the future acquire and affirmatively transfer or convey any assets the title to which, as evidenced by some written instrument, is held by them after such acquisition, transfer or conveyance in any form of co-ownership, including but not limited to tenancy in common, joint tenancy, tenancy by the entirety or community property, such property shall be deemed to constitute and be part of the "Marital Estate." The Marital Estate shall include any appreciation or depreciation on the assets forming a part of the Marital Estate but shall not include any earnings thereon, proceeds therefrom or replacements thereof unless such earnings, proceeds or replacements, as the case may be, are also titled in some form of co-ownership.... The Marital Estate shall be subject to division, distribution and disposition as hereinafter provided in this Agreement.

Section 3.4, in turn, addresses division of the marital estate, providing that "[i]n the event of a future legal separation, divorce, annulment or other dissolution of this proposed marriage, [Jonathan] and Heather agree that the Marital Estate shall be divided equally between them."

Section 3.3 sets forth the division of separate property in the event of divorce, providing:

As further provided in Section 6 hereinafter, or in any other part of this Agreement:

....

(b) Heather hereby waives any and all claims for division of property or property settlement from [Jonathan] with respect to [his] Property in the event of a future legal separation, divorce, annulment or other dissolution of this proposed marriage. Anything in this Agreement to the contrary notwithstanding including the foregoing sentence, in the event of a future legal separation, which ultimately results in a divorce or dissolution; divorce, annulment, or other dissolution of this proposed marriage (for purposes of this Section, an "Action") and at the time of initiation of such Action, Heather and [Jonathan] have children born to them or legally adopted by them during the marriage or Heather is pregnant with a child of [Jonathan] and Heather, [Jonathan] shall be required to pay to Heather a lump sum of money based on the number of Full Year(s) of Marriage subsequent to the marriage date ....

Under the schedule, if the marriage ends after between 10 and 15 years of marriage, then Jonathan would have to give Heather a lump sum of $150,000.

Jonathan's property is defined in section 1.1 of the agreement:

[Jonathan's ] Property. A listing of the assets and liabilities of [Jonathan] has been prepared and a copy thereof has been given to Heather and is also attached to this Agreement as Exhibit "A," and is, by this reference, made a part of this Agreement. Such assets and liabilities of [Jonathan] as set forth on Exhibit "A," together with proceeds and income therefrom, replacement(s) thereof and appreciation or depreciation in value thereon as more specifically described in Sections 1.4, 2.1, 2.2, 4.1, 4.2, and 4.3, shall hereinafter be referred to as "[Jonathan's] Property."

Section 4 of the agreement governs the treatment of assets, liabilities, earnings, and expenses during the marriage. Section 4.1, "Assets as Separate Property," states:

Each of the parties agrees that, unless and until transferred and conveyed to the Marital Estate as contemplated by Sections 1.5 and 4.6, the following described property shall remain the separate and solely owned property

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