Charron v. Charron

K aren D. C harron , appellee anD Cross - appellant , v .
C harles J. C harron , appellant anD Cross - appellee .
751 N.W.2d 645
Filed June 3, 2008. 	No. A-07-338.
1. Divorce: Appeal and Error. 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 judge.
2. Divorce: Property Division. The purpose of property division is to equitably dis-
tribute the marital assets between the parties, and the polestar for such distribution
is fairness and reasonableness as determined by the facts of each case.
3. ____: ____. Pursuant to Grace v. Grace, 221 Neb. 695, 380 N.W.2d 280 (1986),
a “Grace award” is a device to fairly and reasonably divide marital estates where
the prime asset in contention is one spouse’s gifted or inherited stock or property
in a family agriculture organization.
Appeal from the District Court for Buffalo County: J ohn p.
ICenogle, Judge. Affirmed.
Kent A. Schroeder, of Ross, Schroeder & George, L.L.C.,
for appellant.
John O. Sennett and Julianna S. Jenkins, of Sennett, Duncan,
Borders & Jenkins, P.C., L.L.O., for appellee.
sIevers , M oore, and C assel, Judges.
sIevers, Judge.
Karen D. Charron and Charles J. Charron (Joe) were mar-
ried on February 20, 1988, and the district court for Buffalo
County, Nebraska, dissolved their marriage by a decree of dis-
solution on March 14, 2006. Neither party is completely satis-
fied with the trial court’s decree, as Joe has appealed and Karen
has cross-appealed.
FACTUAL BACKGROUND
Karen and Joe were married when she was 18 years old and
he was 22. High school is the extent of the education of both
parties. During the marriage, four children were born, and the
primary responsibility for raising the children was Karen’s. The
children and their ages at the time of trial were Sara, age 18;
Kristie, age 15; Nolan, age 10; and Dustin, age 6. Karen was
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www.nebraska.gov/apps-courts-epub/
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responsible for doing the household work, paying the house-
hold bills, and occasionally running errands or helping out
during branding for the Arrow C Ranch, Inc. She had not been
employed during the marriage, other than some part-time clean-
ing work, but was employed at the time of trial.
Joe has always worked for his family’s corporation, Arrow
C Ranch (hereinafter the corporation). At the time of the trial,
Joe’s salary was $1,000 per month. Joe testified that he worked
7 days a week from dawn to dusk and took about 20 days a
year off. In addition to Joe’s salary, the corporation provided
the Charron family’s housing, vehicle fuel, utilities, beef, and
bulls to service their cow herd. In addition, Joe used the cor-
poration’s equipment to farm their land, as well as using the
corporation’s pasture ground to graze their cattle. Karen and
Joe’s personal assets included investments of approximately
$182,700 plus 138.75 acres of mixed crop and pasture ground
worth $130,000. Depending upon whose numbers were used,
Karen and Joe had a cow herd of 98 or 81 head. Joe had been
given 25 percent of the capital stock of the corporation by his
parents, which stock the trial court valued at approximately
$1 million.
DeCRee OF DISSOLUTION
Joe was awarded custody of the eldest child, Sara, and Karen
was awarded custody of the three other children. The trial court
noted that Karen was employed on a part-time basis earning
$8 per hour and attributed such hourly wage to her on a full-
time basis for purposes of the child support calculation. The
trial court ordered Joe to pay child support in the amount of
$1,171.50 per month, along with 75 percent of unreimbursed
medical expenses. The trial court found that the amount of the
parties’ marital estate was approximately $503,000. Joe was
awarded $251,767 of such estate, plus his corporate stock, and
Karen was awarded $251,335 of the marital estate. Included
in such award to Karen were approximately 138 acres located
in “Ne 1⁄4 14-12N-13 West, West of the 6th PM, Buffalo
County, Nebraska.”
In addition to division of the marital property, Karen sought
a “Grace award,” due to the substantial ownership interest that
CHARRON v. CHARRON 	725
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Joe had in the his family’s corporation and the fact that during
the marriage, his work efforts were devoted to the betterment
of the corporation. See Grace v. Grace, 221 Neb. 695, 380
N.W.2d 280 (1986). The trial court, after reciting the substantial
benefits the Charron family received from the corporation other
than Joe’s somewhat nominal salary, as well as the fact that the
parties had a substantial marital estate, found that the case was
not appropriate for a Grace award to Karen. Karen was awarded
alimony of $1,200 per month for 84 consecutive months, to
terminate upon Karen’s death or remarriage. Other findings and
orders in the decree are not pertinent to this appeal.
ASSIGNMeNTS OF eRROR
Joe assigns error to the court’s award of the 138 acres owned
by the parties to Karen, error in the amount of child support
which he was ordered to pay, and error in the trial court’s failure
to award him credit for a certificate of deposit that he owned prior
to the parties’ marriage. In her cross-appeal, Karen complains of
the failure of the trial court to give her a Grace award.
STANDARD OF ReVIeW
[1] 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 judge. Bauerle
v. Bauerle, 263 Neb. 881, 644 N.W.2d 128 (2002). This stan-
dard of review applies with respect to the trial court’s determi-
nation regarding division of property and alimony. See id.
ANALYSIS
Award of 138 Acres to Karen.
Joe argues that he should have received the 138 acres owned
by the parties. This piece of ground is composed of 58 acres of
farm ground, with the balance being a building site and a pas-
ture. Of the farm ground, approximately 45 acres are devoted to
row crops and 13 acres to hay. Joe farmed this ground during the
marriage under a lease agreement before it was acquired by the
parties approximately 2 years before the parties separated. Joe
used the land to pasture the parties’ cattle herd, and he contended
that it was an “integral part” of his farming operation and that
he needed it to generate income to support the family. Joe also
726 	16 NeBRASKA APPeLLATe RePORTS

argues that the only use Karen would make of the land would
be to pasture her eight horses and that there are sufficient liquid
assets to award her the cash equivalent of this parcel of land.
In response, Karen asserts that the parties had only owned
the ground for 2 years before their separation and that it was
acquired through a series of transactions involving her fam-
ily. Karen does not dispute that Joe could farm the ground,
but strongly disputes that it is an “integral part” of his farming
operation, given that the corporation owns approximately 5,000
acres, of which it farms 130 acres of row crops and 300 to 400
acres of hay ground. Karen asserts that she would pasture her
eight horses and five cows on the ground and raise hay and
crops to feed her livestock. Finally, Karen asserts that she would
build a home on the acreage, and we note that the family did
not have their own home, because housing was provided by
the corporation.
[2] Under Neb. Rev. Stat. § 42-365 (Reissue 2004), the pur-
pose of property division is to equitably distribute the marital
assets between the parties, and the polestar for such distribu-
tion is fairness and reasonableness as determined by the facts
of each case. See Gress v. Gress, 271 Neb. 122, 710 N.W.2d
318 (2006). Although the trial court’s decree of dissolution
does not specifically address why Karen rather than Joe was
assigned such property, the question for us after our de novo
review is simply whether such award was an abuse of discre-
tion. The difficulty is that each party not only wants the land,
but has a viable and well-articulated reason behind such desire.
Obviously, the trial court found it reasonable and equitable to
award the land to Karen. From our review of the record, and
recalling Joe’s involvement with the corporation, it seems that
it may well be a stretch to conclude that the ground in question
is an “integral part” of Joe’s farming and ranching operation, as
he asserts. Both parties have appropriate uses for the ground,
and we cannot say that the trial court abused its discretion or
that its treatment of this parcel was unreasonable or unfair.
Child Support.
The trial court’s decree orders Joe to pay $1,171.50 per
month in support until the parties’ oldest child is emancipated.
CHARRON v. CHARRON 	727
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This figure fails to take into account Karen’s obligation under
the worksheet adopted by the trial court to be responsible for
$128.25 per month in support. In short, there is an offset which
the trial court appears to have forgotten in drawing up the
decree. Karen does not dispute Joe’s claim in this regard. We
hereby modify Joe’s child support obligation, retroactive to the
time of the decree, to $1,043.25 per month for three children.
Joe’s Premarital Certificate of Deposit.
Joe claims that the trial court should have set aside to him
the sum of $27,072 from the marital assets because he brought
a certificate of deposit (CD) worth that amount into the mar-
riage. Joe testified that he went to his bank and had them print
records going back to the time of his marriage and that such
records indicated he then owned a CD in the amount stated
above. Joe’s testimony concerning what happened to the CD is
as follows:
Q Now, did you and your wife ever cash that [CD] and
spend it on household expenses or take a trip or anything
like that or did it end up in other investments?
A I believe it probably made its way to the other
investments.
Q And why do you believe that?
A Because I know we never cashed it for anything.
Q So why did you move it to other investments?
A For better investment reasons.
Q And so did you move those — that CD to the invest-
ments that are found on F2 through F6?
A Yes, I believe so.
Q And possibly F7?
A Yes.
We have tracked “F2” through “F7” down to exhibit 17,
where there is a category thereupon designated as “F. LIFe
INSURANCe, ReTIReMeNT PLANS & IRA’s.” Six of these
items are the “investments” where the money from the CD
ended up, according to Joe’s quoted testimony. These six items
include IRA’s valued at approximately $70,000 and liquid
assets, such as mutual funds, valued at approximately $95,000.
The trial court found that the CD Joe had identified as item
728 	16 NeBRASKA APPeLLATe RePORTS

“K11,” his premarital property, on exhibit 17 had not “ade-
quately been traced into other now existing assets to establish a
premarital credit.”
The law is that if premarital property can be identified, it is
typically set off to the spouse who brought the property into the
marriage. Olson v. Olson, 13 Neb. App. 365, 693 N.W.2d 572
(2005). But when the actual premarital property no longer exists,
then the question of whether there should be a setoff becomes
more problematic. The Supreme Court has noted inherent prob-
lems with tracing premarital property through disposition and
reinvestment during the marriage. See Rezac v. Rezac, 221 Neb.
516, 378 N.W.2d 196 (1985) (noting that parties tend to suggest
tracing only when there is improvement in value but noting it is
not error to restrict credit to identical property which is retained
during marriage or to value of property at time of marriage or
when disposed of during marriage).
The tracing argued for in this case illustrates many, if not
all, of the problems present in tracing premarital assets and
emphasizes the need for rather comprehensive and exacting
proof of what has happened to a party’s premarital asset.
Without producing any concrete evidence of the existence of
the CD other than his say-so, Joe testifies in effect that “it’s
in those six investments somewhere.” Suffice it to say that the
proof in this case falls far short of that seen when a party to a
dissolution action makes a successful tracing claim. The burden
of proof is on Joe, but he did not show where the money went,
that it stayed where it went, or that the investment(s) into which
it went gained value rather than lost value. The trial court did
not abuse its discretion in rejecting Joe’s claim for the tracing
of a CD which is alleged to have existed nearly 20 years prior
to trial.
Karen’s Cross-Appeal Seeking Grace Award.
[3] Karen assigns error to the district court’s failure to
give her a “Grace award” which has become a common term
of art in dissolution cases, particularly involving farms and
ranches, and which derives from the Supreme Court’s opinion
in Grace v. Grace, 221 Neb. 695, 380 N.W.2d 280 (1986).
We comprehensively discussed the concept of a Grace award
CHARRON v. CHARRON 	729
Cite as 16 Neb. App. 724

and the application of Grace, supra, in our decision in Walker
v. Walker, 9 Neb. App. 834, 622 N.W.2d 410 (2001). For the
sake of judicial efficiency, we will not repeat that discussion
and analysis here beyond our description of a Grace award
“as a device to fairly and reasonably divide marital estates
where the prime asset in contention is one spouse’s gifted or
inherited stock or property in a family agriculture organiza-
tion.” Id. at 843, 622 N.W.2d at 417. We also note the Supreme
Court’s decision in Medlock v. Medlock, 263 Neb. 666, 679, 642
N.W.2d 113, 125-26 (2002), in which the Supreme Court used
the following description of its decision in Grace, supra: “[W]e
ordered a cash award as compensation for the inadequacy of the
marital estate.”
The inadequacy of the marital estate in cases of this nature
involves a typical factual pattern where the wife devotes herself
to running the household and caring for the children and where
the husband’s labors are devoted to a family farming or ranch-
ing corporation in which he owns stock, usually owned prior
to the marriage or gifted solely to him during the marriage.
Hence, under our cases, the stock is treated as the husband’s
separate property. Additionally, in the typical situation where
the issue arises, the husband receives a rather nominal cash
salary in exchange for his labor devoted to his family’s farm
or ranch but also receives such things as housing, utilities,
vehicles, fuel, beef, use of the corporation’s land for his private
livestock herd, et cetera. As a result of the low cash earnings
of the husband, the couple often has an inconsequential marital
estate. This typical factual backdrop helps explain the Supreme
Court’s reference in Medlock, supra, to a Grace award as
compensation for the inadequacy of the marital estate. In the
instant case, the trial court found significant factual differences
between this case and Grace, supra; therefore, the trial court
denied Karen’s request for a Grace award.
We review the trial court’s decision in this respect de novo
for an abuse of discretion. Given that the parties were mar-
ried rather young and that Joe is only in his early 40’s and
Karen in her late 30’s, it cannot be said that their marital estate
that the trial court valued at $503,000—a value undisputed in
this appeal—is inadequate. The trial court evenly divided the
730 	16 NeBRASKA APPeLLATe RePORTS

marital estate and, in addition, awarded Karen 7 years’ worth of
alimony at the rate of $1,200 per month.
The overriding concern is whether the division is fair and rea-
sonable, recognizing the substantial factual difference between
the instant case and Grace, supra; Medlock, supra; and Walker,
supra, because the parties here have a substantial marital estate.
Therefore, the instant case is distinguishable from Grace,
supra, as well as the cases we have mentioned that followed it
and where a Grace award was made. Additionally, the division
of the marital estate was equal and thus was clearly fair and
reasonable. Hence, we cannot say that the trial court abused its
discretion in declining to make a Grace award to Karen.
CONCLUSION
Finding no merit to the assignments of error raised by either
Karen or Joe, we affirm the decision of the district court in
all respects, except for the minor correction to Joe’s child
support obligation.
affIrMeD.
rICharD h. B oxuM, appellant , v . sherry l. M unCe
anD harry J. M unCe , appellees .
751 N.W.2d 657
Filed June 3, 2008. 	No. A-07-552.
1. Judgments: Statutes: Appeal and Error. To the extent an appeal calls for statu-
tory interpretation, it represents a question of law, and an appellate court must reach
an independent conclusion irrespective of the determination of the lower court.
2. Secured Transactions: Trusts: Deeds: Limitations of Actions. At any time
within 3 months after any sale of property under a trust deed, as provided in Neb.
Rev. Stat. § 76-1013 (Reissue 2003), an action may be commenced to recover the
balance due upon the obligation for which the trust deed was given as security.
3. Secured Transactions: Trusts: Deeds. The Nebraska Trust Deeds Act provides a
specific statutory plan to obtain performance of an obligation, prescribes a distinct
procedure to dispose of security for performance of an obligation, and, generally,
authorizes a form of financing quite apart from other methods recognized under
Nebraska law.
4. Limitations of Actions: Legislature: Intent. A special statute of limitations con-
trols and takes precedence over a general statute of limitations because the special
statute is a specific expression of legislative will concerning a particular subject.
BOxUM v. MUNCe 	731
Cite as 16 Neb. App. 731