In re the Marriage of: Fadumo Salad, petitioner, Respondent,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A17-1648

In re the Marriage of:
Fadumo Salad, petitioner,
Respondent,

vs.

Hassan Hassan,
Appellant.

Filed August 27, 2018
Affirmed
Peterson, Judge

Hennepin County District Court
File No. 27-FA-16-1995

Fadumo Salad, Minneapolis, Minnesota (pro se respondent)

Andrew Tyler, Tyler Law Office LLC, Minneapolis, Minnesota (for appellant)

Considered and decided by Florey, Presiding Judge; Peterson, Judge; and
Rodenberg, Judge.
U N P U B L I S H E D O P I N I O N
PETERSON, Judge
In this marital -dissolution action, appellant -husband argues that the district court
(1) incorrectly identified the extent and value of marital assets; (2) abused its discretion in
dividing marital assets; and (3) erred by including $633 per month in potential rental
income in husband’s income for purposes of calculating child support. We affirm.

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FACTS
Appellant-husband Hassan Hassan and respondent-wife Fadumo Salad participated
in a cultural and religious marriage ceremony in Minnesota in 2007 . A formal legal
marriage ceremony occurred in March 2013. The parties have four minor children. Wife
began this dissolution action in March 2016. The parties stipulated to custody and
parenting time, and the remaining issues were tried to the court.
In 2009, a house was purchased in husband’s name alone for $119,000, and the
parties lived in the house from the spring of 2010 until the spring of 2012. Husband
testified that he paid $22,000 of his own money to renovate the house , but he did not
provide any documentary evidence substantiating his claim. Husband testified that wife
did not contribute any money toward purchasing or renovating the house.
Wife testified that b oth parties contributed money and labor to the renovations.
Wife testified, “All the money we had together, we had about $20,000. All that money we
had went to the house and the – our renovation.” Wife testified that the main reason the
parties moved out of the house and into an apartment was because husband said that they
could rent out the house for more money than they would pay in rent, which would enable
them to pay off the mortgage.
When the parties moved out of the house, husband’s sister moved i nto the house
and took over the mortgage and homeowner’s insurance payments at an estimated monthly
cost of $980. The sister moved out in 2014, and husband’s cousin began renting the house
from husband for $1,300 per month. In May 2016, when that cousin moved out and another
cousin moved in, husband stopped charging rent. Husband testified that although he could

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rent out the house for $1,300 a month, he was not doing so because he planned to begin
living there again in eight months.
On February 28, 2015, a money market savings account (MMS) in husband’s name
had a balance of $62,000. On May 31, 2016, the MMS had a balance of $90. Husband
testified that in his native country of Somalia, family members and colleagues pool their
money into savings accou nts, an arrangement under which each person contributes a set
amount of money per specified time period. At trial, husband estimated that the balance
of the MMS in May 2016 was $4,000. According to husband’s estimate on which his trial
testimony was based, $58,000 was withdrawn from the MMS between February 28, 2015,
and May 2016. Husband testified that he was the manager of the MMS, that only $16,000
in the account belonged to him, and that $42,000 of the amount withdrawn belonged to
other members of th e pool. There were no written agreements showing other people’s
contributions to or distributions from the account. During his testimony about other
people’s interests in the account, husband became confused and gave conflicting answers
about how the money was distributed and used.
Wife testified that the $62,000 in the MMS was money that the parties saved after
buying the house and before separating. Wife testified that both parties contributed what
they could, although husband contributed more because his income was higher. Wife was
not aware of any loans to or investments in the account by husband’s f amily members or
other people.

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Husband has an account with the Public Employees Retirement Association
(PERA). A PERA estimated marriage -dissolution report states that the present value of
the marital portion of husband’s benefit is $3,352.33. The report explains:
The projected present value estimates answer the question,
“What’s my future retirement benefit worth today?” Or, stated
another way, “How much money would I need to invest today
to earn the estimated Single —Life monthly benefit listed
above in the future?” The net present value estimates are
calculated using the funding assumptions. They do not
represent the balance in your account and are not payable to
you in a lump sum.

Husband testified that he could rent out the house for $1,300 a month. The monthly
mortgage payment for the house was $667. The district court included $633 ($1,300 -
$667) in husband’s income for child-support purposes.
On appeal, husband challenges the district court’s rejection of his claim to a
nonmarital interest in the house, the division of the MMS and PERA accounts, and the
determination of his income for child-support purposes.
D E C I S I O N
I.
“District courts have broad discretion over the division of marital property and
appellate courts will not alter a district court’s property division absent a clear abuse of
discretion or an erroneous application of the law.” Sirek v. Sirek , 693 N.W.2d 89 6, 898
(Minn. App. 2005). “Appellate courts will affirm the [district] court’s division of property
if it had an acceptable basis in fact and principle even though the appellate court might
have taken a different approach.” Id. (quotation omitted). “We defer to the [district]

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court’s findings of fact and will not set them aside unless they are clearly erroneous.” Id.
(quotation omitted).
Real Property
Marital property is defined as any real or personal property acquired by the parties
during the marriage and before the valuation date. Minn. Stat. § 518.003, subd. 3b (2016).
Property is presumed to be marital if it is acquired during the marriage and before the
valuation date. Id. Nonmarital property includes real or personal property obtained prior
to the marriage. Id. “Whether property is marital or nonmarital is a question of law, but a
reviewing court must defer to the [district] court ’s underlying findings of fact.” Olsen v.
Olsen, 562 N.W.2d 797, 800 (Minn. 1997).
The Schmitz formula provides that “[t]he present value of a party ’s nonmarital
interest in a marital homestead is calculated by dividing the party’s equity in the property
at the time of purchase by the value of the property at the time of purchase and then
multiplying by the value of the property at the time of dissolution. . . .” Kerr v. Kerr, 770
N.W.2d 567, 570 (Minn. App. 2009); see Schmitz v. Schmitz, 309 N.W.2d 748, 750 (Minn.
1981). But “the increase in the value of nonmarital property attributable to the ef forts of
one or both spouses during their marriage, like the increase resulting from the application
of marital funds, is marital property.” Nardini v. Nardini , 414 N.W.2d 184, 192 (Minn.
1987). A “spouse claiming that property is nonmarital must prove the necessary underlying
facts by a preponderance of the evidence.” Johnson v. Johnson, 388 N.W.2d 47, 49 (Minn.
App. 1986).

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The parties’ house was purchased in husband’s name before the parties’ marriage,
but wife testified that the parties bought the house together and that both parties contributed
to the renovations. In declining to award husband a nonmarital interest in the ho use, the
district court noted the parties’ conflicting testimony a bout the assets used to buy it and
husband’s failure to “submit into evidence any documents showing the value of the house
and the mortgage balance at the time of the parties’ legal marriage. ” Although husband
presented evid ence that he owned the ho use before the parties’ marriage, he failed to
produce evidence to prove the underlying facts necessary to determine the value of his
claimed nonmarital interest. The district court, therefore, did not err in declining to award
husband a nonmarital interest in the house.
MMS
If the district court finds that one par ty has disposed of marital assets without the
consent of the other party, except in the usual course of business or for the necessities of
life, during the pendency of a dissolution or separation, the district court shall compensate
the other party for the transfer or disposal. Minn. Stat. § 518.58, subd. 1a (2016); see
Bollenbach v. Bollenbach, 285 Minn. 418, 428, 175 N.W.2d 148, 155 (1970) (“A party to
a marriage subject to severance in divorce proceedings cannot be permitted to subvert the
orderly proce sses of the courts by concealing, dissipating, or misusing his assets in
anticipation of divorce so as to reduce the property available for division . . . .”).
The district court rejected husband’s claim that the MMS was a pooled account.
The court explained:

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66. At trial, [wife] submitted into evidence a statement
from Wells Fargo showing that as of February 28, 2015,
[husband’s] MMS account had a balance of $62,000.00. The
statement was admitted into evidence as Exhibit 16. Regarding
this account, [wife] testified that both parties contributed to this
account throughout their marriage, and that the amount
represents their joint savings. During [husband’s] testimony,
he admitted that as of February 2015, his MMS account held a
balance of $62,000.00. When asked to explain the account ’s
substantial decline between February 2015 and spring of 2016,
[husband] stated that approximately $42,000.00 out of
$62,000.00 did not belong to him, but belonged to various
members of his family and friends, who withd rew their shares
during the aforementioned time period. When asked to
elaborate on the identity of these family members and friends,
and how much each person held as his or her share, [husband]
struggled to provide an accurate answer. [Husband] also
claimed that he gave $13,000.00 to [wife] out of this account.
[Husband] did not offer into evidence any bank statements or
documents showing these alleged transactions, and [wife]
denied receiving any sum out of this a ccount after their
separation.

The district court’s division of the MMS was based on it s credibility determination with
respect to the parties’ conflicting testimony about the source of funds for the account and
what happened to the money in it . We defer to the district court’s credibility
determinations. Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988).
PERA
Retirement benefits are usually divided using one of two methods. DuBois v.
DuBois, 335 N.W.2d 503, 505 (Minn. 1983). Under the “present cash value” method, the
value of the pension for property -division purposes is set at its “present value,” which
discounts an award to be received in the future to that amount which, if presently received,
could be invested in order to yield the future sum. Johnson v. Johnson, 627 N.W.2d 359,

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362 (Minn. App. 2001), review denied (Minn. Aug. 15, 2001). Under the “reserved
jurisdiction” method, the district court reserves jurisdiction over the division of the pension
until the employee ’s retirement and divides the actual monetary benefit at that time.
DuBois, 335 N.W.2d at 505. This method requires a “determination of a fixed percentage
for the non -employee spouse of any future payments the employee receives under the
plan.” Taylor v. Taylor , 329 N.W.2d 795, 799 (Minn. 1983). It “should be us ed where
present value determinations are unacceptably speculative or there are not enough assets
to equitably require that benefits due in the future be split presently.” Id.
Husband argues that the district court erred in not awarding wife the present value
of her interest in his PERA account. The district court awarded wife a percentage of
husband’s retirement benefit because it found that husband failed to provide accurate proof
of the account’s present value. The court explained:
Although [husband ] argues that the marital portion actually
amounts to $3,353.33, the Report notes this figure as “present
value,” which does not “represent the balance in [husband’s]
account and are not payable to [him] in lump sum.” The Report
also includes a disclaimer that “the benefit information and/or
amounts presented on this report are estimates only.” Based
on the single document provided by the parties regarding
[husband’s] PERA account, it is difficult for the Court to
determine the exact amount to which [wife ] is entitled.
Accordingly, the Court finds that [wife] is entitled to 50% of
the marital portion of [husband’s] PERA account, and directs
the parties to determine [wife’s] share by applying the
following formula: length of [husband’s] marital pension
service x .50 of his benefit/length of [husb and’s] total pension
service.

The formula that the district court directed to be used to divide the pension results in wife
receiving one half of the value of the benefits husband earned during the marriage and was

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not an abuse of discretion given the lack of evidence necessary to accurately determine the
account’s present value.
II.
“[G]ross income includes any form of periodic payment to an individual, including,
but not limited to, salaries, wages, commissions, self-employment income, . . . and potential
income . . . .” Minn. Stat. § 518A.29(a) (2016). Whether a source of funds is considered
to be income for child -support purposes is a legal question reviewed de novo. Hubbard
Cty. Health & Human Servs. v. Zacher, 742 N.W.2d 223, 227 (Minn. App. 2007).
Wife’s testimony that the main reason the parties moved out of the house was to
earn rental income supports the district court’s decision to include potential rental income
in husband’s income for child -support purposes. And t he evidence supports the district
court’s finding that the house could be rented for $1,300 a month, resulting in $633 in
potential rental income. The district court did not err in including that amount in husband’s
income for child-support purposes.
Affirmed.