A18-1408

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A18-1402
A18-1408

In re the Marriage of:
Faye Karen Bernstein, petitioner,
Appellant (A18-1402),
Respondent (A18-1408),

vs.

Scott Tomi Gilbert,
Respondent (A18-1402),
Appellant (A18-1408).

Filed August 5, 2019
Affirmed
Slieter, Judge

Hennepin County District Court
File No. 27-FA-16-2816

Kelly M. McSweeney, Jensen, Mullen, McSweeney, & Meyer, PLLP, Bloomington,
Minnesota (for appellant)

Louise C. Rogness, Rogness & Field, P.A., Oakdale, Minnesota (for respondent)

Considered and decided by Connolly, Presiding Judge; Halbrooks, Judge; and
Slieter, Judge.
U N P U B L I S H E D O P I N I O N
SLIETER, Judge
In these consolidated appeals, Faye Bernstein ( wife) argues that the district court
erred in declining to enforce the parties’ purported settlement agreement, abused its

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discretion in distributing the marital property, and abused its discretion in denying her
motion for need-based attorney fees. Scott Gilbert (husband) argues that the district court
abused its discretion in distributing the marital property and abused its discretion in
denying his motion for conduct -based attorney fees. The trial court properly c oncluded
there was no meeting of the minds between the parties, properly distributed the parties’
marital property, and did not abuse its discretion in denying either party attorney fees.
Therefore, we affirm.
FACTS
Marriage and divorce
The parties married in 2005 and have one minor child . The parties separated in
February 2016; t he dissolution action was commenced in April 2016. Before trial, the
parties agreed on all matters related to custody and spousal support. The issues at trial and
on appeal concern allocation of marital assets and whether a purported stipulated
agreement should be enforced.
Husband’s nonmarital assets
Before the parties’ marriage in 2005, husband owned what bec ame the marital
homestead. At the time of marriage, husband’s nonmarital share in the home was 22% of
the home’s value. Over the next few years, the parties obtained equity lines of credit, a
second mortgage, and refinanced the mortgage, all of which reduced husband’s nonmarital
share in the homestead to 10% of the home’s value.
The parties sold the marital home in December 2015—husband’s nonmarital portion
of the proceeds was $50,930. Despite knowing they were separating, the parties deposited

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this money into their joint U.S. Bank checking account. Some of husband’s paychecks
were also deposited into this account during this time. Both parties readily spent from this
account from about December 2015 until April 2016 when the funds were depleted. From
this account, wife spent $2,500 for construction on her new home, $3,000 for legal fees,
$13,594 for closing costs on her new home , wrote a $9,000 check to herself , and wrote a
$4,000 check out to cash.
Wife’s nonmarital assets
Shortly before moving into the marital home in 2005 , wife sold her nonmarital
home. Wife deposited these proceeds into her own account and, o ver next few years,
transferred some of the nonmarital money to husband for various marital expenses ,
including: (1) a $50,000 check from wife to husband used for renovations on the marital
home, (2) $ 8,000 for wedding and honeymoon expenses, (3) $ 5,000 for husband’s
retirement contribution, (4) $10,000 for marital expenses, and (5) several $1,000 checks to
husband for marital expenses.
Settlement agreement
After wife filed for divorce, the parties tried to reach an agreement on asset and debt
division. The parties’ attorneys negotiated via email from about February 27, 2017 to
March 29, 2017. At the time of these negotiations, wife’s counsel was Kelly McSweeney
and husband’s counsel was Josh Gitelson.
On February 27, 2017, McSweeney emailed Gitelson a settlement offer. The offer
included a $50,000 equalizer payment from husband to wife, and attached to the email was
a one -page “asset/debt worksheet” that included a division of several of the parties’

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retirement accounts. Gitelson responded on March 9, 2017, stating that husband was
agreeable to the $50,000 equalizer payment on three conditions: (1) a 401k transfer to wife,
via a qualified-domestic-relations order , that would ultimately be used to restructure
husband’s debt, (2) that the parties equally share the cost of a joint and survivor benefit on
wife’s pension at her retirement, and (3) husband obtain the right to carry medical insurance
for the minor child. Gitelson also stated “[i]f these conditions are acceptable, then all issues
in the case are indeed resolved , and you may begin drafting a stipulated Judgment and
Decree.”
McSweeney requested clarification of husband’s conditions. Gitelson responded
and McSweeney then said she would talk to wife about the conditions.
On March 13, 2017, Gitelson emailed McSweeney; he inquired if McSweeney had
a response to the proposed stipulation and suggested a continuance of an upcoming hearing
if “settlement [was] around the corner.” McSweeney responded via email on March 14,
2017 with a proposed settlement of the financial issues. Gitelson emailed a counteroffer
aimed at resolving the outstanding disagreement about tax implications of the equalizer
payment, husband’s bonus, and the survivorship option of wife’s pension.
McSweeney responded that she would review the “stipulation” and “latest offer[]”
with wife. Three days later, McSweeney emailed another “proposal in an effort to settle
all remaining issues.” Over the next few days, the parties also discussed several other
issues.
On March 28, 2 017, McSweeney emailed Gitelson another offer regarding the
unresolved issues. On March 29, 2017, Gitelson responded “[husband] has authorized me

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to accept the terms you have put forward below, so we do have an agreement.” The parties
then cancelled their trial date.
Several hours after canceling the trial date, Gitelson emailed McSweeney, writing
“in all of our back -and-forth over the $50,000 payment, its source, and the allocation of
taxes and penalties, there was never any mention of the three oth er transfers on your
balance sheet that I only understood after our conversation this morning were an integral
part of your offer of settlement.” McSweeney responded that “what [Gitelson] is
suggesting . . . sounds like buyer’s remorse. We have a deal an d we will enforce the deal
and ask for fees for having to move to enforce, if necessary.”
Wife then moved to enforce the agreement, and the district court denied the motion.
Wife appealed this denial, but this court d ismissed the appeal as taken from a
nonappealable, interlocutory order. The case proceeded to trial.
Attorney Fees
Both parties moved , at the conclusion of trial, for attorney fees. Wife requested
need-based attorney fees in the amount of $38,000. The district court denied wife’s motion
and reasoned that wife went on numerous trips during the pendency of the dissolution,
including: (1) a ten-day trip to Panama, (2) a six -day trip to Florida, (3) a 14 -day trip to
Honduras, (4) a trip to New York, and (5) a planned 10-day trip to Canada after the divorce
trial.
Husband requested conduct-based fees stemming from wife’s motion to enforce the
purported settlement agreement. The district court denied this motion, finding that wife’s
motion did not cause unnecessary delay or expense. This appeal follows.

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D E C I S I O N
I. The district court did not clearly err in declining to enforce the parties’
purported settlement agreement.

“Whether parties reach an objective meeting of the minds on the essential elements
of a contract is a question of fact, which this court reviews under the clear-error standard.”
Tornstrom v. Tornstrom, 887 N.W.2d 680, 686 (Minn. App. 2016) , review denied (Minn.
Feb. 14, 2017). “Factual findings are clearly erroneous when they are manifestly against
the weight of the evidence or not reasonably supported by the evidence as a whole .” Id.
at 683.
Settlement agreements are contractual in nature and are bindin g on the parties.
Chalmers v. Kanawyer , 544 N.W.2d 795, 797 (Minn. App. 1996). “For a stipulation to
stand, a meeting of minds on the essential terms of the agreement must have occurred.”
Pekarek v. Wi lking, 380 N.W.2d 161, 163 (Minn. App. 1986) (quotation omitted). “To
constitute a full and enforceable settlement, there must be such a definite offer and
acceptance that it can be said that there has been a meeting of the minds on the essential
terms of the agreement.” Jallen v. Agre , 119 N.W.2d 739, 743 ( Minn. 1963) (footnote
omitted). “Whether a contract is formed is judged by the objective conduct of the parties
and not their subjective intent.” Gresser v. Hotzler , 604 N.W.2d 379, 382 (Minn. App.
2000).
The district court found that “[husband] and [wife] didn’t have a single, unified idea
of what the ‘deal’ was.” Although wife’s initial offer included all terms of wife’s proposed
agreement, the parties then negotiated various terms over a six-week span of email

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exchanges. There was never a full offer made by either party with every term of the
agreement in a single document. The district court’s finding that there was no meeting of
the minds between the parties is “reasonably supported by the evidence as a whole. ”
Tornstrom, 887 N.W.2d at 683.
II. The district court did not err in concluding that husband’s nonmarital share
of the homestead proceeds was traceable.
Wife argues that the district court erred in determining that husband’s nonmarital
share of the homestead proceeds was traceable. Because the record supports the district
court’s findings that husband’s nonmarital funds were traced, wife’s claim fails.
Appellate courts “independently review the issue of whether property is marital or
nonmarital, giving deference to the district court’s findings of fact.” See Baker v. Baker,
753 N.W.2d 644, 649 (Minn. 2008). This court will only overturn a finding of fact if it is
“clearly erroneous on the record as a whole.” Lund v. Lund, 615 N.W.2d 860, 861 (Minn.
App. 2000).
Marital property includes any property that either party acquires during the
marriage, unless covered by a statutory exception. See Minn. Stat. § 518.003, subd. 3b,
3b(a)-(e) (2018). “To overcome the presumption that property is marital, a party must
demonstrate by a preponderance of the evidence that the property is nonmarital.” Antone
v. Antone , 645 N.W.2d 96, 101 ( Minn. 2002). Nonmarital property includes property
“acquired before marriage [,]” Minn. Stat. § 518.003, subd. 3b(b), and property that “is
acquired in exchange for or is the increase in value” of nonmarital property. Id., subd.
3b(c).

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When marital and nonmarital funds are commingled , the party asserting a
nonmarital claim must sufficiently trace the nonmarital assets to prove the nonmarital
character. See Crosby v. Crosby , 587 N.W.2d 292, 296 -97 (Minn. App. 1998), review
denied (Minn. Feb. 18, 1999). Property can have “both marital and nonmarital aspects. ”
Schmitz v. Schmitz , 309 N.W.2d 748, 750 ( Minn. 1981). But if nonmarital and marital
property are commingled, “the nonmarital investment may lose that character unless it can
be readily traced.” Wiegers v. Wiegers , 467 N.W.2d 342, 344 (Minn. App. 1991) . A
spouse seeking to trace an asset to a nonmarital source is not held to a “strict tracing”
standard, but need only show by a preponderance of the evidence that the asset was
“acquired in exchange for” nonmarital property. Kottke v. Kottke, 353 N.W.2d 633, 636
(Minn. App. 1984) (quotation marks omitted), review denied (Minn. Dec. 20, 1984).
Wife contends that husband failed to satisfy his burden of proof with respect to the
tracing of his 10% nonmarital interest in the home. We disagree. The district court found
that from the joint checking account that held husband’s nonmarital share of the sale of the
marital home, wife spent $32,094 for her benefit . This finding is supported by the bank
statements and records admitted at trial. Further, the district court found that husband
provided all bank activity in the account from the time the proceeds were deposited through
the account’s exhaustion, and credibly testified regarding what activity on the account was
not normal marital expenses. “Deference must be given to the opportunity of the trial court
to assess the credibility of the witnesses.” Sefkow v. Sefkow, 427 N.W.2d 203, 210 (1988).
The district court did not err by concluding that wife spent $32,094 of husband’s nonmarital
funds.

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III. The district court made an equitable property distribution.
Husband contends that in dividing the marital property, the district court abused its
discretion because that property division was based on erroneous factual findings related
to: (1) wife’s application of her nonmarital funds towards marital expenses , and (2)
husband’s nonmarital share in the homestead. Husband also contends that the district court
abused its discretion in apportioning the parties’ marital debt to husband. Because we
conclude that the district court properly awarded the parties’ marital property in an
equitable manner, we reject husband’s claim.
A district court generally has broad discretion in dividing marital property during a
dissolution, and its decision will not be revers ed on appeal absent an abuse of this
discretion. Maranda v. Maranda , 449 N.W.2d 158, 164 -65 (Minn. 1989). A reviewing
court “will affirm the [district] court’s division of [marital] property if [the division] had
an acceptable basis in fact and principle even though [the reviewing court] might have
taken a different approach.” Antone, 645 N.W.2d at 100.
In a dissolution, all marital property is subject to a fair a nd equitable, but not
necessarily equal , division. Minn. Stat. § 518.58, subd. 1 ( 2018); White v. White , 521
N.W.2d 874, 878 (Minn. App. 1994). “When dividing marital property, the district court
may consider many factors, such as the length of the marriage, sources of income, and the
contribution of each party in the preservation of the marital property.” Sirek v. Sirek, 693
N.W.2d 896, 899 (Minn. App. 2005) ; see Minn. Stat. § 518.58, subd. 1 (listing factors to
be considered). “It shall be conclusively presumed that each spouse made a substantial

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contribution to the acquisition of income and property while they were living together as
husband and wife.” Sirek, 693 N.W.2d at 899 (quotation omitted).
Because the district court found that wife spent $78,000 of nonmarital funds to pay
marital expenses , the district court awarded wife $25,000 of the marital funds to
compensate her for the use of her nonmarital funds on marital expenses. The district court
found that husband did not use his nonmarital funds to pay marital expenses and did not
make a similar award to husband. Husband argues that the district court overstated wife’s
nonmarital expenditures because, at most, she could have spent $58,000. Even if true,
however, this does not render the district court’s property division inequitable.
Assuming wife spent $58,000 of her nonmarital funds for marital expenses , the
marital estate contained $58,000 more in property than it would have but for this
expenditure by wife . After the $25,000 award, the remaining marital estate was divided
equally between the parties, resulting in each party receiving more marital property than
they would have otherwise. Husband cannot show that the district court abused its broad
discretion by dividing the marital property in a manner that results in a larger award to him
than he would have received otherwise.
Moreover, the amount of marital property awarded to wife, including the $25,000
awarded as compensation for her use of nonmarital funds, resulted in a net award to wife
of less than she would have received had she not used her nonmarital funds to pay marital
expenses. Awarding wife $25,000 as compensation was consistent with the district court’s
obligation when dividing marital property to “consider the contribution of each spouse in

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the acquisition, preservation, depreciation or appreciation in the amount or value of marital
property [.]” Minn. Stat. § 518.58, subd. 1.
Husband also argues that the district court clearly erred by finding that he did not
spend his nonmarital funds on marital expenses. Husband notes that the district court found
that his nonmarital share in the marital home decreased from 22% to 10% as a result of
various lines of credit and mortgages. Husband then asserts that the borrowed funds were
used for marital expenses and that the district court abused its discretion in distributing the
marital property when it compensated wife for her use of nonmarital funds to pay marital
expenses but did not similarly compensate him.
The decrease in the percentage of husband’s nonmarital interest in the house does
not demonstrate a decreased dollar value of husband’s nonmarital interest. Assuming that
there was a decrease in the dollar value of husband’s nonmarital interest in the house,
husband has not shown the district court abused its broad discretion in dividing the marital
property. The district court is required to make an equitable, but not necessarily equal,
division of marital property. Sirek, 693 N.W.2d at 900. Husband has not shown that the
extent of any alleged decrease in the dollar value of his interest in the house was so
significant as to show a clear abuse of the district court’s broad discretion.
Finally, husband argues that the district court abused its discret ion in awarding
husband the parties’ marital debt. The district court based its debt division on husband’s
substantially greater income. The district court’s division has an “acceptable basis in fact
and principle[,]” and it did not abuse its broad discretion. See Antone, 645 N.W.2d at 100.

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IV. The district court did not abuse its discretion in denying the parties’ motions
for attorney fees.
Both husband and wife contend the district court abused its discretion in denying
their respective motions for attorney fees. The district court properly exercised its
discretion in denying both parties’ attorney-fees requests.
“An award of attorney fees rests almost entirely within the discretion of the trial
court and will not be disturbed absent a clear abuse of discretion.” Crosby, 587 N.W.2d at
298 (quotation omitted).
The district court found that during the pendency of the divorce, wife and the child
took various trips. The district court determined that “[t]his extensive travel activity to far
away locations for extended periods of time is not consistent with [w]ife’s position that she
is so insolvent as to be unable to pay her own attorney’s fees.” The district court did not
abuse its discretion in denying need-based attorney fees.
Husband argues that the district court should have awarded conduct -based fees for
wife’s motion to enforce the settlement agreement. A court may, in its discretion, award
additional fees, costs, and disbursements against a party who unreasonably contributes to
the length or expense of the proceeding. Minn. Stat. § 518.14, subd. 1 (2018).
Husband claims the district court erroneously believed conduct -based fees require
both unnecessary delay and expense because it did “not find that [w]ife’s actions caused
unnecessary delay and expense.” The district court, however, correctly explained the
standard for awarding conduct -based fees and nothing in its decision suggests that the
district court believed that the conduct -based fees require both unnecessary delay and

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expense. The district court did not abuse its discretion in denying husband’s conduct-based
attorney fees.
Affirmed.