Tierney v. Tierney
| Decision Date | 18 June 2019 |
| Docket Number | No. A-18-338.,A-18-338. |
| Parties | KATHRYN ANN TIERNEY, APPELLEE, v. LAWRENCE WILLIAM TIERNEY, APPELLANT. |
| Court | Nebraska Court of Appeals |
(Memorandum Web Opinion)
Appeal from the District Court for Custer County: KARIN L. NOAKES, Judge. Affirmed as modified.
Marsha E. Fangmeyer, of Knapp, Fangmeyer, Aschwege, Besse & Marsh, P.C., and Melodie T. Bellamy, Kearney County Attorney, for appellant.
John B. McDermott, of Shamberg, Wolf, McDermott & Depue, for appellee.
Lawrence William Tierney appeals from a decree of dissolution entered by the district court for Custer County, which decree dissolved his marriage to Kathryn Ann Tierney, divided the marital assets and debts, and ordered him to pay an equalization judgment to Kathryn of $139,412. Lawrence challenges the district court's classification and division of the marital estate as well as the district court's valuation of the marital corporation's bank accounts and real estate debts. We conclude the district court erred in its valuation and division of the marital estate, and we modify the district court's decree accordingly.
Lawrence and Kathryn were married in June 1980. They had two children during the marriage, who have since reached the age of majority. Throughout their marriage, Lawrence operated a ranch through his and Kathryn's jointly owned closely held corporation, Custer County Pastures. Kathryn taught school for approximately 30 years during her marriage to Lawrence. Lawrence and Kathryn separated in August 2015. Shortly thereafter, Kathryn filed a complaint for dissolution of marriage, and Lawrence filed an answer and cross-complaint in response.
The parties filed a stipulation on December 3, 2015, in which they agreed to be restrained from disposing of their personal property during the pendency of their divorce action, except in the usual course of business and for the necessities of life. The stipulation permitted the use of Custer County Pastures' checking account for paying "bills and expenses for cattle which are marital assets at this time" as well as "all the expenses related to the house, including gas, utilities, cell phones, and the [business credit card]." The stipulation allowed both Lawrence and Kathryn to withdraw $500 each month from the Custer County Pastures checking account as an officer's salary. They also agreed that they each would have temporary use of the family home. On June 28, 2016, however, Kathryn was awarded exclusive use of this home during the proceedings.
Trial was held on August 8, 2017. Kathryn and Lawrence testified as well as John Wurdeman, Kathryn's real estate appraiser, and Cyril Thoene, Lawrence's real estate appraiser.
The court received the parties' joint property statement, which divided the parties' assets and debts into categories. The asset categories included household furnishings and equipment; checking and savings accounts; automobiles and other vehicles; farm or business equipment, inventory, and supplies; real estate; as well as life insurance and retirement plans. The debt categories included mortgages or contracts on real estate, secured creditors, and unsecured creditors.
The joint property statement also described the real estate that the parties or Custer County Pastures owned, assigning a color to each tract. The red tract contained 286.46 acres; the pink tract contained 159.49 acres; the green tract contained 319.17 acres; and the yellow tract contained 557.87 acres. The parties did not agree on the number of acres the orange tract contained; Lawrence claimed it contained 250.92 acres while Kathryn claimed it contained 303.62 acres. The parties agreed that the marital house, located on the red tract, was valued at $105,000, but they disputed the values of the remaining tracts.
Wurdeman testified that he had appraised each tract individually based on its value on September 1, 2015, which was near when the complaint was filed. Wurdeman generally valued the land as grassland pasture, but he separately valued as cropland about 37 acres of tilled ground on which Lawrence grew triticale, a forage crop used for grazing calves and making hay. Wurdeman estimated the tracts had a total value of $3,150,000. He admitted, however, that the value of grassland had decreased by between 10 and 15 percent since September 2015. The court received Wurdeman's appraisal report into evidence.
Thoene testified that he valued the tracts as one approximately 1,500 acre parcel based on its value on March 7, 2017. His knowledge of ranch land sales led him to believe that the tilled ground did not add significant value to the parcel, namely because its size was small compared with the parcel as a whole. As a result, he valued all of the land as grassland. Further, Thoene didnot include the value of the marital house in his appraisal of the tracts. The court received Thoene's appraisal report into evidence, which report valued the land at $1,446 per acre or $2,275,000 in total (1,572.91 acres × $1,446 = $2,274,428).
The red tract was directly adjacent to the pink tract, and they were contiguous with other land Lawrence rented for his cattle operation. The red and pink tracts separated the orange, green, and yellow tracts from the other land Lawrence rented for his cattle operation. The orange, green, and yellow tracts were titled to Custer County Pastures, and the parties agreed that these tracts, as well as Custer County Pastures, were marital property. Although the red and pink tracts were titled to Lawrence and Kathryn jointly with rights of survivorship, the parties disputed whether these tracts were marital property due to the tracts' ownership history.
The red and pink tracts had been in Lawrence's family since 1948, and he was raised on them. In 1982, Kathryn and Lawrence signed a mortgage to purchase several tracts of land from Lawrence's mother, which tracts included the red and pink tracts. The mortgage was filed with the Custer County Register of Deeds on July 31, 1985. The consideration for the mortgage was "[a]ny amount which may accrue to $117,236 pursuant to an Agreement for the Sale of Real Estate and Annuity Agreement . . . ." These agreements are not included in the record; however, Lawrence testified that under the agreements, he and Kathryn were obligated to pay his mother $10 per acre of mortgaged land for the remainder of his mother's life.
Lawrence and Kathryn filed for bankruptcy in 1994. On June 28, 1994, near the time of the bankruptcy, the parties signed a warranty deed that conveyed the mortgaged land back to Lawrence's mother and discharged Lawrence and Kathryn's annuity obligation. This deed was recorded with the Custer County Register of Deeds at 3:25 p.m. Five minutes later, another warranty deed was recorded that conveyed the red and pink tracts from Lawrence's mother to Lawrence in consideration of "love and affection received." On April 10, 2008, Lawrence and Kathryn signed a quitclaim deed that conveyed the red and pink tracts to them as joint tenants with rights of survivorship, in consideration of "Correction of Title."
Kathryn testified that when she retired, she noticed the red and pink tracts were titled in Lawrence's name alone. Because she had been making payments on the marital house's remodel and because that house sat on the red tract, she asked Lawrence to sign a deed titling the tracts in his and her names jointly. Kathryn claimed that Lawrence told her the land should be titled to both of them jointly and that he agreed to sign the quitclaim deed correcting the title.
After she and Lawrence separated, Kathryn continued living in the marital house on the red tract. The red tract also contained a roping arena, corrals, a shop, and a barn as well as an old granary and an old bunkhouse. Because Kathryn desired to continue living in the marital house and to receive rental income, she requested that the court award her the red and pink tracts. She was willing to rent the land and necessary facilities to Lawrence for his use. She asked the court to award the land titled to Custer County Pastures to Lawrence. Kathryn admitted, however, that if Lawrence received the red and pink tracts, she was willing to separate the marital house from the remainder of the red tract so that she could continue living there.
At the time of trial, Kathryn was retired from teaching and worked in a part time position at a local bank. Kathryn was receiving retirement benefits from the Nebraska Public Employees Retirement System. The court received into evidence a statement of her monthly benefit as ofJanuary 2016. Kathryn received a gross monthly payment of $2,276.37, and after federal and state income tax withholdings, her net monthly payment was $2,108.60.
Lawrence testified that he had worked as a rancher for his entire life. Although he had lived on the red and pink tracts for most of that time, at the time of trial he was living in a Broken Bow apartment. Both of the parties' adult children were involved in Lawrence's cattle operation, which involved purchasing cows, lightweight calves, and yearling cattle. Kathryn did not normally help with the cattle operation, but she did from time to time. Lawrence used all of the tracts of real estate for the ranching operation, and Lawrence also rented land from his mother and another family trust. In total, he operated on 2,900 acres.
Although Lawrence admitted the marital house on the red tract was marital property, he believed the red and pink tracts were nonmarital because his mother gifted them to him. In the event that the court found the red and pink tracts to be marital property, Lawrence asked the court to award those tracts to him, including the marital house, due to his use of and family history with...
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