Barton v. Barton

In Barton v. Barton, A13-0921 (Mar. 10, 2014), the Court of Appeals upheld the district court’s division of assets, allocating all the equity in the homestead to the wife. The parties had been married for seventeen years, and, at the time the wife sought a divorce, she was a registered nurse while her husband was and unemployed as a result of a work-related injury; he was receiving social security (SSI) and workers’ compensation benefits. The parties agreed that the wife would have full legal and physical custody of their two children.

The wife had inherited money from several relatives, and she used a significant amount of her inheritance to buy the parties’ homestead. The court applied the Schmitz formula; this formula calculates the current value of a party’s nonmarital interest in a homestead that the party purchased during marriage by dividing the equity at the time of the purchase by the value at the time of the purchase and then using that figure to determine the value at the time of the divorce. Any remaining amount is marital property. Because the wife’s nonmarital interest in the homestead was more than the net equity in the home, the court awarded the wife the homestead and divided the remainder parties’ marital property equally.

On appeal, the Minnesota Court of Appeals held that the wife’s nonmarital share of the property included not only the inherited money used for the purchase but also included nonmarital funds paid toward the mortgage when the homestead was refinanced.   The court also rejected the husband’s argument a $16,000 increase in the value of the homestead should have been classified as marital property. The court held that there was no evidence that marital funds had been used to improve the property. .

The fact that the parties owned the homestead as joint tenants did not abolish the nonmarital share of the home. The court held that the nonmarital share is only extinguished if there is evidence that the spouse intended to donate the nonmarital share to the marriage so that it becomes marital property

The court also held that the district court did not abuse its discretion in not finding that the husband suffered an undue hardship from failing to allocate some or all of the nonmarital property to the husband. Under Minnesota Statute 518.58, subd. 2, the court can apportion up to one-half of the nonmarital property if the court finds that, otherwise, there would be an undue hardship for either spouse.   The Minnesota Court of Appeals held that the statute does not require the court to evaluate whether either party would suffer any undue hardship. Here, although the district court found that the husband, due to his disability, would be unlikely to obtain employment in the future, it also found that both spouses earned too little to meet their monthly expenses or maintain their pre-dissolution standard of living.

Although the homestead was the principal issue, the Court of Appeals also rejected the husband’s claim to half of his wife’s retirement savings, as the district court divided the total of all marital assets, including the retirement savings, in half. Because the husband was on fixed disability benefits, the district court allotted all the marital debt to the wife. Thus, the district court did not abuse its discretion in dividing the assets.

The Court of Appeals also held the district court did not abuse its discretion in reserving the issue of spousal maintenance for the husband until the youngest child was emancipated, as the wife’s monthly expenses were greater than her income. She may be able to afford spousal maintenance when the children are emancipated.

Anyone who is concerned about the division of marital assets in a divorce proceeding should consult with an experienced family law attorney.