In re the Marriage of: Brian D. Peterson v. Joyce Marie Deeb

CourtCourt of Appeals of Minnesota
DecidedApril 27, 2015
DocketA13-2259
StatusUnpublished

This text of In re the Marriage of: Brian D. Peterson v. Joyce Marie Deeb (In re the Marriage of: Brian D. Peterson v. Joyce Marie Deeb) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Marriage of: Brian D. Peterson v. Joyce Marie Deeb, (Mich. Ct. App. 2015).

Opinion

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2014).

STATE OF MINNESOTA IN COURT OF APPEALS A13-2259 A13-2281

In re the Marriage of: Brian D. Peterson, petitioner, Appellant,

vs.

Joyce Marie Deeb, Respondent.

Filed April 27, 2015 Affirmed Hooten, Judge

Dakota County District Court File No. 19HA-FA-12-103

J. Virgil Bradley, Rachael C. Peters, Cornerstone Family Law, LLC, Minneapolis, Minnesota (for appellant)

Patricia A. O’Gorman, Patricia A. O’Gorman, P.A., Cottage Grove, Minnesota (for respondent)

Considered and decided by Schellhas, Presiding Judge; Stauber, Judge; and

Hooten, Judge.

UNPUBLISHED OPINION

HOOTEN, Judge

In these consolidated appeals in a marital dissolution matter, appellant-husband

argues that the district court erred by: (1) not enforcing the parties’ antenuptial

agreement; (2) miscalculating respondent-wife’s nonmarital interest in real property; and (3) appointing a receiver to liquidate real property. In her related appeal, respondent-wife

argues that the district court abused its discretion by admitting evidence of appellant-

husband’s alleged nonmarital interest in real property. We affirm.

FACTS

Appellant-husband Brian D. Peterson and respondent-wife Joyce Marie Deeb were

married in 1999. Peterson petitioned for dissolution of the marriage in January 2012.

After a five-day trial in April 2013, the district court issued a judgment and decree

dissolving the marriage and determining child custody, child support, property division,

and other issues. The parties do not contest any issues relating to child custody or child

support, but both parties appeal from the district court’s division of real property in light

of the parties’ rights under their antenuptial agreement.

Before the parties married, Deeb was the sole owner of residential real property

located in Inver Grove Heights (the homestead). At the time of marriage, the fair-market

value of the homestead was $240,000, the homestead was encumbered by a mortgage in

the amount of $165,000, and Deeb therefore had equity in the homestead in the amount

of $75,000. In the antenuptial agreement, the parties disclosed all of their assets, and

they were represented by independent counsel when they negotiated its terms and entered

into the agreement. Under the agreement, Deeb retained her $75,000 nonmarital interest

in the homestead, but any “future increase in value or equity” of the homestead would be

considered marital property. According to the agreement, within 30 days after the

marriage, the homestead was to be transferred into joint tenancy and both parties were to

become joint obligors of the mortgage on the homestead. Exhibit B, which was attached

2 to the agreement, indicated that Peterson owned a nonmarital asset called “Zurich Money

Market” (the Zurich account) that was worth $15,417 at the time of marriage.

In 2005, the parties refinanced the homestead in order to purchase a cabin. Prior

to refinancing, the “appraised value” of the homestead was $429,000, which was

encumbered by a mortgage of $146,387.06. Therefore, the total equity in the homestead

was $282,612.94, which consisted of Deeb’s $75,000 nonmarital equity as well as marital

equity of $207,612.94. The purchase price of the cabin was approximately $225,000, and

of that amount, $173,612.94 of the purchase price was paid with funds obtained through

the refinancing of the homestead. Peterson also contributed nonmarital funds toward the

purchase of the cabin that were later traced to the Zurich account. By applying funds

obtained by the refinancing of the homestead, as well as other funds, the parties were able

to purchase the cabin without having to obtain a mortgage on the cabin. As a result of the

refinancing and the purchase of the cabin, the homestead was encumbered by a new

mortgage in the amount of $320,000, and $109,000 of equity remained in the homestead.

In 2008, the parties purchased rental property for $88,000. The rental property

was financed in part by encumbering the cabin with a home equity line of credit in the

amount of $45,230.24. At the time of dissolution, the rental property was unencumbered

and was being used as rental property.

Upon dissolution, the district court awarded Deeb the homestead and ordered that

she was responsible for paying the mortgage. The fair-market value of the homestead at

the time of dissolution was $276,000, and it was encumbered by a mortgage in the

amount of $278,000. In interpreting and enforcing the antenuptial agreement, the district

3 court found that Deeb had a $75,000 nonmarital interest that “persists in the marital

estate” and that Peterson had a $15,417 nonmarital interest in the cabin. The district

court ordered that the parties sell the cabin and, out of the net proceeds of the sale, pay

Deeb $75,000 for her nonmarital interest and Peterson $15,417 for his nonmarital interest

in the cabin. The remaining proceeds from the sale of the cabin were to be equally

distributed as marital property. The district court also ordered the parties to sell the rental

property and distribute the proceeds as marital property, but gave Peterson the

opportunity to purchase the rental property if he paid Deeb her share.

These appeals followed.

DECISION

A district court’s division of property upon marital dissolution is reviewed for an

abuse of discretion. Antone v. Antone, 645 N.W.2d 96, 100 (Minn. 2002).

I.

Peterson acknowledges that Deeb had a $75,000 nonmarital interest in the

homestead at the time of marriage and that the distribution of the parties’ property upon

dissolution is governed by their antenuptial agreement. But, he disputes the district

court’s interpretation and enforcement of the antenuptial agreement. Under Peterson’s

interpretation of the antenuptial agreement, Deeb’s nonmarital interest was extinguished

when the parties refinanced the homestead and the value of the homestead decreased.

The district court rejected Peterson’s interpretation, concluding that the interpretation and

enforcement of the agreement so as to extinguish Deeb’s nonmarital interest would be

substantively unfair and “unconscionable.” We agree.

4 Generally, Minnesota public policy favors the freedom to contract. Lyon Fin.

Servs., Inc. v. Ill. Paper & Copier Co., 848 N.W.2d 539, 545 (Minn. 2014). Under

freedom of contract principles, “parties are generally free to allocate rights, duties, and

risks.” Id. Consistent with this public policy, “[a]n antenuptial agreement is a type of

contract recognized and favored at common law.” Pollack-Halvarson v. McGuire, 576

N.W.2d 451, 455 (Minn. App. 1998), review denied (Minn. May 28, 1998). Minnesota

has “long recognized” the validity of antenuptial agreements, which alter the statutory

dissolution schemes regarding the disposition of both marital and nonmarital property.

See McKee-Johnson v. Johnson, 444 N.W.2d 259, 263–65 (Minn. 1989), overruled on

other grounds by In re Estate of Kinney, 733 N.W.2d 118

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