Walker v. Walker

Decision Date09 January 2001
Docket NumberNo. A-99-1272.,A-99-1272.
Citation9 Neb.App. 834,622 N.W.2d 410
PartiesSheryl K. WALKER, Appellee and Cross-Appellant, v. Rodney A. WALKER, Appellant and Cross-Appellee.
CourtNebraska Court of Appeals

Jeffrey L. Hansen, of Simmons, Olsen, Ediger, Selzer, Ferguson & Carney, P.C., Scottsbluff, for appellant.

Brenda L. Bartels, of Douglas, Kelly, Meade & Ostdiek, P.C., Scottsbluff, for appellee.

HANNON, SIEVERS, and MOORE, Judges.

SIEVERS, Judge.

After 30 years of marriage, Rodney A. Walker (Rod) and Sheryl K. Walker were divorced by the district court for Scotts Bluff County, Nebraska. Rod has appealed, and the principal issues are the valuation and distribution of Rod's share of a family farming corporation and the trial court's award of alimony. Sheryl has cross-appealed.

FACTUAL BACKGROUND

Rod and Sheryl were married August 8, 1969, and their marriage produced three children who were all adults at the time of this divorce action. Sheryl, age 52 and in good health at the time of trial, graduated from high school and attended 1 year of secretarial school. Rod was 51 years old at the time of trial and held an associate's degree in agribusiness. Rod began farming with his father, Arthur Walker, in 1973. Arthur had approximately 300 acres of farm ground which he transferred to Walker Farms, Inc., a corporation formed in late 1974. Arthur owned 2,051 shares of stock, and 217 shares were issued to each of Arthur's three sons who were working the farm, Rod, Stan, and Cliff. The youngest son, Greg, later joined the operation.

During the time the parties were married, Walker Farms, which included Walker Farms; Walker Brothers; Panhandle Pig Company, Inc.; and Blue Stem Pork, grew and diversified to the point that at the time of trial, it owned 1,248.88 acres, as well as large facilities for hog breeding, farrowing, and finishing. Over the years, Rod and his siblings have acquired additional shares of stock, and at the time of trial, Rod owned 612 shares of Walker Farms. Arthur is now deceased, and his four sons who work in the farming operation own a majority of the stock in Walker Farms. Rod did not pay for his original shares of stock or for those thereafter acquired.

Rod is paid $2,500 per month salary from Walker Farms and additionally receives a house to live in, a vehicle, utilities, meat, reimbursement for half of his telephone bill, and medical insurance. Rod receives additional income from his position as a director of Farm Credit Services, which amounted to $12,200 in 1998.

While the parties agree that Sheryl was never formally employed by Walker Farms and never owned stock, they have somewhat different versions of her contributions and involvement with Walker Farms. Rod asserts that Sheryl hated the farm and anything to do with it and that her contributions consisted of occasionally answering the telephone and running errands. Sheryl maintains that she worked as a "gofer" in the farming operation during the entire marriage, that she assisted all of the Walker brothers, and that they relied upon her. Sheryl testified that she ran for parts, assisted with banking, cooked, and maintained part of her family's home as the financial center of Walker Farms. However, she does not indicate in her testimony that she ever did fieldwork, that she was involved in the hog operation in any way, or that she was part of the decisionmaking processes of this large farming operation.

Sheryl was working as a secretary when the parties married, but soon quit and thereafter only worked outside the home sporadically for a few months in 1981, 1982, 1983, 1990, 1991, and 1992 at minimum wage part-time jobs.

Rod introduced testimony from Darrell Eskam, a certified public accountant, who opined that Walker Farms had a net equity value of $1,219,000 and that Rod's 21.77 percent interest in Walker Farms equaled $146,684.52 as of December 31, 1998. Eskam utilized a 35-percent discount for lack of marketability because Rod cannot convert the stock into cash and a 15-percent discount for lack of control because Rod does not have exclusive control of Walker Farms to arrive at the above figure for Rod's interest.

TRIAL COURT DECISION

The trial court awarded each party the personal property in his or her possession, his or her separate bank accounts, certain insurance policies, and retirement accounts. Rod was awarded all of his stock in Walker Farms, together with any interest in Panhandle Pig Company; Walker Brothers, a partnership with his three brothers; and Blue Stem Pork, a partnership. He was to pay all debts related to those entities and hold Sheryl harmless thereupon. To equalize the property division, Rod was ordered to pay Sheryl the sum of $60,000, which was to draw interest at the rate of 6.285 percent from the date of judgment until paid. Additionally, Rod was to pay alimony at the rate of $500 per month for 60 months beginning November 1, 1999.

The trial court's division of property was detailed in an attachment to the decree which we re-create here for convenience. Property Description Sheryl Rod 1997 Buick Park Avenue $ 18,500.00 Household goods 3,000.00 $ 3,000.00 Baler xx Cash Putnam Account 7,500.00 7,800.00 Farm Bureau Annuity 25,790.00 Farm Bureau Annuity 9,464.14 Ohio National Policy 19,868.23 Panhandle Pig Company 16,671.58 Blue Stem Pork 13,550.48 Walker Brothers Partnership xx Walker Farms, Inc. 443.00 168,190.43 Tax refunds 2,595.00 Money judgment 60,000.00 (60,000.00) ___________ ____________ Total Value-Property received $146,717.37 $149,655.49 Percentage received 49.5 50.5

The trial court determined that Rod's Walker Farms stock was a marital asset and set the value of Rod's 21.77 percent interest in Walker Farms at $168,190.43. Because there are assignments of error relating to that valuation, we will discuss the court's method of valuation later in our opinion.

Rod perfected this timely appeal, and Sheryl cross-appeals the trial court's failure to award any attorney fees to her.

ASSIGNMENTS OF ERROR

Restated, Rod's assignments of error are as follows: The district court erred in (1) holding that Rod's stock in Walker Farms was a marital asset; (2) alternatively, including the entire value of the Walker Farms stock in the marital estate, rather than including merely the increase in the value of the stock which occurred during the course of the marriage, plus failing to require Sheryl to prove the value of her contributions to Walker Farms and using the decision in Grace v. Grace, 221 Neb. 695, 380 N.W.2d 280 (1986), as a basis for the cash award to Sheryl; (3) including in the property division $60,000 worth of improvements to a house when such value was already included in the real estate valuation; (4) allowing Sheryl to testify about the value of improvements on land which she did not own and for which she had no foundation; (5) calculating the value of the Walker Farms stock by not applying the discount rate used by Rod's expert witness; and (6) awarding excessive alimony.

STANDARD OF REVIEW

In actions for dissolution of marriage, an appellate court reviews the case de novo on the record to determine whether there has been an abuse of discretion by the trial court with respect to the court's determinations regarding division of property, payment of alimony, and attorney fees. Davidson v. Davidson, 254 Neb. 656, 578 N.W.2d 848 (1998).

ANALYSIS
Is Walker Farms Marital Property?

Out of the 2,856.5 shares of Walker Farms stock, Rod is the owner of 612 shares or a 21.77 percent interest. His three younger brothers with whom he farms, Cliff, Stan, and Greg, each own a like amount of Walker Farms stock. Rod's three sisters and his mother own the remaining 369.5 shares. The trial court included the Walker Farms stock, at a valuation of $168,190.43 in the marital estate, awarded it to Rod, and ordered Rod to pay Sheryl $60,000 to make the property division 49.5 percent for her and 50.5 percent for Rod. Rod advances a number of arguments about this result under the above assignments of error. The first is that the Walker Farms stock should have been excluded from the marital estate as gifted property given that Sheryl did not contribute to the improvement or operation of the farming operation during the marriage. The well-known rule from Van Newkirk v. Van Newkirk, 212 Neb. 730, 733, 325 N.W.2d 832, 834 (1982), is as follows:

[P]roperty acquired by one of the parties through gift or inheritance ordinarily is set off to the individual receiving the inheritance or gift and is not considered a part of the marital estate.... An exception to the rule is where both of the spouses have contributed to the improvement or operation of the property which one of the parties owned prior to the marriage or received by way of gift or inheritance, or the spouse not owning the property prior to the marriage or not receiving the inheritance or gift has significantly cared for the property during the marriage.

In short, the marital estate generally does not include property acquired by one of the parties through gift or inheritance. Reichert v. Reichert, 246 Neb. 31, 516 N.W.2d 600 (1994). The primary exception is when both spouses have contributed to the improvement or operation of the property which one of them received by gift. Tyler v. Tyler, 253 Neb. 209, 570 N.W.2d 317 (1997). In Tyler, the wife brought a home from a prior marriage into the marriage. The husband and the wife lived in the wife's house, sold it, and purchased another, and then another, and finally a fourth home which became the focus of the appeal. While this court in Tyler modified the divorce decree to require the wife to pay the husband half of the equity in the final home owned by the parties, the Supreme Court reversed. The Tyler court said that each time the Van Newkirk exception had been applied, "this court has required evidence of the value of the contributions and evidence that the contributions were significant." 253 Neb. at 213, ...

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