Marriage of Eklund v. Eklund

378 N.W.2d 127, 1985 Minn. App. LEXIS 4839
CourtCourt of Appeals of Minnesota
DecidedDecember 17, 1985
DocketC2-85-844
StatusPublished

This text of 378 N.W.2d 127 (Marriage of Eklund v. Eklund) 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
Marriage of Eklund v. Eklund, 378 N.W.2d 127, 1985 Minn. App. LEXIS 4839 (Mich. Ct. App. 1985).

Opinion

OPINION

SEDGWICK, Judge.

This appeal is from a dissolution judgment which: (1) ruled that the parties’ real estate be sold and the proceeds used to pay debts not discharged by the bankruptcy court; and (2) denied appellant’s motion for maintenance and attorney fees.

FACTS

Patricia Eklund (appellant) and James Eklund (respondent) were married November 25, 1950. They lived in Morris, Minnesota, where respondent operated Ek-lund’s Body Shop and appellant worked at Morris State Bank.

Six months after appellant sued for dissolution, respondent was hospitalized to be treated for cancer.

While in the hospital, respondent signed a stipulation prepared by appellant’s attorney which transferred all respondent’s interest in the parties’ real estate to appellant. At the same time, respondent signed a quit claim deed transferring the property to appellant.

The property included a house in Morris, the body shop business property, and rental property adjacent to the body shop. The stipulation provided that respondent would assume all of the parties’ debts from the body shop. The existing debts were not itemized in the stipulation.

On June 25, 1982, respondent’s attorney withdrew as counsel upon learning that *129 respondent had signed the stipulation. Immediately after his withdrawal, a default hearing was held.

At the time of the default hearing, respondent was indebted to the Citizens Bank of Morris on an unsecured promissory note in the principal sum of $46,500, and to the State Bank of Cyrus in the sum of $62,000.

The judge who presided at the default hearing later said he was not advised by either the parties or counsel of the nature and extent of the indebtedness, or of the quit claim deeds. Appellant’s attorney claims he told the judge of the existence of unsecured debts. Appellant also claims that she did not jointly apply for those debts with respondent.

In June and July of 1982, Citizens Bank and the State Bank of Cyrus sued the Eklunds to set aside the real estate transfer as fraudulent. In mid-July 1982, respondent filed a petition in voluntary bankruptcy listing total unsecured debts of $129,000 and no nonexempt assets, except $923.84 in contingent and unliquidated claims. The bankruptcy court stayed the district court suits after respondent filed his bankruptcy petition.

In October 1982, the trustee in bankruptcy sued in bankruptcy court to set aside the property transfers.

Also in October, the trustee moved the court in the dissolution proceeding to set aside that portion of the decree which provided for the property division, under Minn. R.Civ.P. 60.02. On February 7, 1983, the county court granted the trustee’s motion and set aside the division of property.

Appellant sought district court review of the February 7, 1983 order. A three judge district court panel affirmed the court’s order on November 29, 1983, stating that the trustee properly sued under Rule 60.02 to set aside that part of the dissolution decree transferring property to appellant. Finally, the Minnesota Supreme Court denied appellant’s petition to appeal the district court’s ruling.

In September 1983, the bankruptcy court awarded the State Bank of Cyrus $34,-316.02 and the Citizens Bank of Morris $43,872.78, both awards with interest from July, 28, 1983. These awards were not dischargeable in bankruptcy. In April 1984, the bankruptcy court set aside the quit claim deeds as fraudulent under 11 U.S.C. 548(a)(2).

The county court issued a judgment dated February 7, 1985, denying appellant’s request for maintenance and attorney fees. The trial court also ruled that the parties’ property should be sold and the proceeds used to pay debts not discharged in bankruptcy.

ISSUES

1. Did the trial court err in ruling that the parties’ property should be sold and the net proceeds used to pay debts not discharged by the bankruptcy court?

2. Did the trial court err in denying appellant’s motion for maintenance?

3. Did the trial court err in denying appellant’s motion for attorney fees and costs?

ANALYSIS

1. Minn.Stat. § 518.58 (1984) provides in part:

[T]he court shall make a just and equitable division of the marital property of the parties without regard to marital misconduct, after making findings regarding the division of the property. The court shall base its findings on all relevant factors including the length of the marriage, any prior marriage of a party, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, needs, opportunity for future acquisition of capital assets, and income of each party. The court shall also consider the contribution of each in the acquisition, preservation, depreciation, or appreciation in the amount or value of the marital property, as well as the contribution of a spouse as a homemaker.

This court further explained division of property:

*130 Minn. Stat. § 581.58 (1982) requires that the trial court make a just and equitable disposition of the property. Debts are apportionable. Each division of property is considered in the light of the particular facts of that case. The statute requires the court to balance such facts as the length of the marriage, the parties’ incomes, age, skills, occupations, and needs. The court is guided by equitable considerations in distributing rights and liabilities, and has broad discretion in the distribution.

Kreidler v. Kreidler, 348 N.W.2d 780, 784 (Minn.Ct.App.1984) (citations omitted).

The trial court is vested with broad discretion in determining appropriate property division, division of debts incurred during marriage, and obligations of spousal maintenance. Ruud v. Ruud, 372 N.W.2d 851, 855 (Minn.Ct.App.1985) (citation omitted), pet. for rev. granted (Minn. Oct. 29, 1985).

The trial court here found:
That the Petitioner and Respondent owned the real estate as joint tenants prior to the commencement of dissolution proceedings and bankruptcy proceedings and filed joint income tax returns relating to said property for an extended period of time. # * * * * *
That the parties, having received the joint mutual benefits of the properties and income, are, therefore, jointly responsible for the non-dischargeable debts relating to said properties.

Appellant argues that she did not participate in the fraud against the two banks, and it is inequitable to require her to pay.

This argument is not persuasive. The federal bankruptcy court and the Minnesota courts all found that the stipulation which attempted to transfer all assets but none of the debts to appellant was fraudulent.

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Related

Marriage of Riley v. Riley
369 N.W.2d 40 (Court of Appeals of Minnesota, 1985)
Kramer v. Kramer
372 N.W.2d 364 (Court of Appeals of Minnesota, 1985)
Ruud v. Ruud
372 N.W.2d 851 (Court of Appeals of Minnesota, 1985)
Marriage of Erlandson v. Erlandson
318 N.W.2d 36 (Supreme Court of Minnesota, 1982)
Krick v. Krick
349 N.W.2d 350 (Court of Appeals of Minnesota, 1984)
Marriage of Otte v. Otte
368 N.W.2d 293 (Court of Appeals of Minnesota, 1985)
Marriage of Kreidler v. Kreidler
348 N.W.2d 780 (Court of Appeals of Minnesota, 1984)

Cite This Page — Counsel Stack

Bluebook (online)
378 N.W.2d 127, 1985 Minn. App. LEXIS 4839, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marriage-of-eklund-v-eklund-minnctapp-1985.