In re the Marriage of: Jerry Arthur McDonald, petitioner, Appellant,

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A22-1421

In re the Marriage of:
Jerry Arthur McDonald, petitioner,
Appellant,

vs.

Donna Arnela McDonald,
n/k/a Donna Arnela Rosenblad,
Respondent.

Filed December 4, 2023
Affirmed in part, reversed in part, and remanded
Worke, Judge

Fillmore County District Court
File No. 23-FA-21-170

Thomas R. Braun, Tammy L. Shefelbine, Bruce K. Piotrowski, Restovich Braun &
Associates, Rochester, Minnesota (for appellant)

Kenneth R. White, Law Office of Kenneth R. White, P.C., Mankato, Minnesota (for
respondent)

Considered and decided by Worke, Presiding Judge; Ross, Judge; and Schmidt,
Judge.
NONPRECEDENTIAL OPINION
WORKE, Judge
In this marriage-dissolution appeal, appellant-husband challenges the district
court’s (1) classification of assets as marital or nonmarital, (2) division of marital property,
and (3) valuation of marital property. Because we agree with the district court’s valuation
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of the marital home, determination that wife had a nonmarital interest in that home, and
determination of wife’s other nonmarital interests in property, we affirm in part. But
because the district court erred in its determination of the value of other marital accounts
of husband, we also reverse in part and remand.
FACTS
Appellant Jerry Arthur McDonald (husband) and respondent Donna Arnela
Rosenblad1 (wife) married in March 2019 and separated in February 2021. Before their
marriage, each party owned a home. Husband’s home later became the marital
home. Wife sold her home and deposited the proceeds ($109,719.52) into a joint account
of the parties.
Before the marriage, husband opened three investment accounts and a Thrift
Savings Plan (TSP) retirement account. Husband was also obligated to make child-support
payments for a nonjoint child until December 2019. And in May 2019, husband received
$10,000 from wife’s mother to purchase a motorcycle. Wife’s mother asserted that the
$10,000 was a loan that husband was expected to repay.
In the proceedings to dissolve the parties’ marriage, they agreed that, when they
married, the marital home was worth $370,000 and had an outstanding mortgage of
$262,827.63. The value of the marital home on the valuation date and the extent of each
party’s nonmarital interest therein were contested, however.

1 Formerly Donna Arnela McDonald.
3
After a trial, on August 23, 2022, the district court entered a judgment dissolving
the parties’ marriage. In the judgment, the district court found that, when the parties
married, the marital home had a market value of $370,000 and an outstanding mortgage of
$262,827.63, meaning that husband’s nonmarital equity in the home when the parties
married was $107,172.37, or about 28.965505%. The district court also found that on the
valuation date , the marital home had a market value of $510,000 and an outstanding
mortgage of $263,546.96 2; husband’s nonmarital interest in the home was $107,172.37;
and wife’s nonmarital interest was $66,740. Husband was awarded title to the marital
home.
Regarding other matters, the district court:
1. Ruled that the sum of the current balances of husband’s investment accounts
was $201,571.24. H usband’s aggregate nonmarital interest in those accounts was
$145,005, and the remaining marital interest was approximately $56,566.
2. Ruled that the current value of husband’s TSP was $199,133. Husband’s
nonmarital interest was $159,791 and the remaining marital interest was $39,342.
3. Ruled that during the marriage, the parties made a $2,000 overpayment of
husband’s child-support obligation, to which husband was entitled to the full repayment.
4. Acknowledged that awarding husband title to the motorcycle and marital
home awarded him assets in which wife had nonmarital interests of $10,000 and $66,740,
respectively.

2 The increase to the outstanding mortgage from the date of marriage to the valuation date
was the result of the parties’ refinancing of the marital home in December 2020.
4
5. Ruled that an equitable division of the parties’ marital property required an
equal division of that property.
6. Ruled that given its division of the parties’ assets, husband was directed to
make a $156,083.09 payment to wife to account for her nonmar ital interests in assets
awarded to husband ($76,740) and the amount necessary to otherwise equalize the division
of marital property ($79,343.09).
This appeal followed.
DECISION3
Marital home
We reject husband’s argument that the district court’s valuation of the marital home
fails to account for the improvements made during the marriage.
A district court’s valuation of property is a finding of fact. Maurer v. Maurer, 623
N.W.2d 604, 606 (Minn. 2001). Appellate courts will not set aside a finding of fact unless
the finding is clearly erroneous. Minn. R. Civ. P. 52.01; see Goldman v. Greenwood, 748
N.W.2d 279, 284 (Minn. 2008) (applying rule 52.01 in family-law appeal). The clear-error
standard of review “is a review of the record to confirm that evidence exists to support the

3 Husband notes that the district court adopted wife’s proposed judgment with what he
asserts are minimal changes, and that a district court’s adoption of proposed findings
verbatim is disfavored. See Anderson v. City of Bessemer City, 470 U.S. 564, 572 (1985);
Pooley v. Pooley, 979 N.W.2d 867, 878 (Minn. 2022). The district court, however, did not
adopt the proposed judgment verbatim. Further, husband makes no effort to identify an
actual error in the district court’s process of adopting the proposed judgment. Therefore,
we do not address this issue. See Loth v. Loth, 35 N.W.2d 542, 546 (Minn. 1949) (noting
that error is “never” presumed on appeal); Butler v. Jakes, 977 N.W.2d 867, 873 (Minn.
App. 2022) (stating that appellate courts “cannot presume error by the district court”);
Luthen v. Luthen, 596 N.W.2d 278, 283 (Minn. App. 1999) (citing Loth).
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decision.” In re Civ. Commitment of Kenney, 963 N.W.2d 214, 222 (Minn. 2021). “When
the record reasonably supports the findings at issue on appeal, it is immaterial that the
record might also provide a reasonable basis for inferences and findings to the
contrary.” Id. at 223 (quotation omitted). When applying the clear-error standard of
review, appellate courts (1) view the evidence in the light most favorable to the findings;
(2) do not reweigh the evidence; (3) do not find their own facts; and (4) do not reconcile
conflicting evidence. Id. at 221-22. Thus,
an appellate court need not go into an extended discussion of
the evidence to prove or demonstrate the correctness of the
findings of the [district] court. Rather, because the factfinder
has the primary responsibility of determining the f act issues
and the advantage of observing the witnesses in view of all the
circumstances surrounding the entire proceeding, an appellate
court’s duty is fully performed after it has fairly considered all
the evidence and has determined that the evidence reasonably
supports the decision.

Id. at 222 (quotations omitted); see Bayer v. Bayer, 979 N.W.2d 507, 513 (Minn. App.
2022) (citing Kenney in family-law appeal); Vangsness v. Vangsness, 607 N.W.2d 468,
472 (Minn. App. 2000) (discussing clear-error standard of review).
Here, in valuing the marital home at $510,000, the district court found that, but for
$59,237.60 spent during the marriage to improve the marital home, its value would be
“approximately $443,260,” or $66,740 less. In making these findings, the district court
stated that its valuation was supported by the fact that the parties made the improvements,
noted that the experts of both parties opined that “the parties did not waste money on the
improvements,” recognized that husband’s $430,000 suggested value would mean that the
increase in value during the marriage would be less than what the record showed was the
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average increase in the value of comparable homes over the same period of time, and
explicitly stated that husband’s suggested value was “less credible” while wife’s suggested
value was “more credible and better supported by the underlying circumstances.” Given
our clear-error standard of review, and particularly our deference to the district court’s
credibility determinations, see Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988), we
cannot say husband has shown that the district court clearly erred in valuing the marital
home at $510,000.
The district court ruled that wife’s nonmarital interest in the marital home was
$66,740 based on its finding that $59,237.60 of the improvement costs were paid with
proceeds from the sale of wife’s premarital home, and that these improvements accounted
for about $66,740 of the $139,280.67 increase in the value of the home during the
marriage. Noting that the proceeds from the sale of wife’s nonmarital home were deposited
into a joint account, husband challenges the district court’s determination that wife traced
her nonmarital interest.
Depositing nonmarital funds into a joint account does not cause the nonmarital
funds to lose their nonmarital character if those funds can be traced. Nash v. Nash, 388
N.W.2d 777, 781 (Minn. App. 1986), rev. denied (Minn. Aug. 20, 1986); Prahl v. Prahl,
627 N.W.2d 698, 705 (Minn. App. 2001). If the district court accepts the relevant
testimony, the tracing of nonmarital interest can be accomplished based solely on otherwise
undocumented testimony. Doering v. Doering, 385 N.W.2d 387, 390-91 (Minn. App.
1986). “Whether a nonmarital interest has been traced is . . . a question of fact” reviewed
7
for clear error. Kerr v. Kerr, 770 N.W.2d 567, 571 (Minn. App. 2001); Minn. R. Civ. P.
52.01.
Here, the district court explicitly acknowledged that wife’s proceeds were deposited
into a joint account, and still found that wife traced a nonmarital interest into the marital
home. Viewing this record in the light most favorable to that finding, and particularly, the
district court’s consideration of the funds going into and out of the joint account, we cannot
say that husband showed that the finding that wife traced a nonmarital interest into the
home is clearly erroneous. Additionally, we reject husband’s assertion that Crosby v.
Crosby supports his claim that wife did not trace a nonmarital interest into the marital
home. 587 N.W.2d 292, 296-97 (Minn. App. 1998), rev. denied (Minn. Feb. 18, 1999).
Crosby simply affirms the district court’s finding that tracing did not occur in that case. See
id. Lack of clear error in Crosby does not show its existence in this case.
Marital and nonmarital interests in the home
Husband challenges the district court’s calculation of the amounts of the parties’
marital and nonmarital interests in the marital home. Husband notes that the district court
did not apply the Schmitz formula to the $510,000 value of the marital home to calculate
his nonmarital interest. See Schmitz v. Schmitz, 309 N.W.2d 748, 750 (Minn. 1981)
(addressing calculation of nonmarital interest in asset that changed in value during
marriage); Antone v. Antone, 645 N.W.2d 96, 101-04 (Minn. 2002) (discussing application
of Schmitz formula in different contexts). While it does not appear that the district court
8
used the Schmitz formula, we reject husband’s assertion that the district court should have
applied the Schmitz formula to the entire $510,000 value of the marital home.
“[T]he Schmitz formula applies only to the appreciation of property not attributable
to improvements made by the parties.” Dorweiler v. Dorweiler, 413 N.W.2d 572, 575
(Minn. App. 1987). Here, it is undisputed that the marital home was improved during the
marriage. Further, above, we affirmed the district court’s f inding that, because the
improvements were paid for using wife’s nonmarital proceeds, wife traced a nonmarital
interest into the marital home. Thus, while there is a presumption that improvements made
to an asset during a marriage are marital, Dorweiler, 413 N.W.2d at 576, here, wife rebutted
that presumption. As a result, each party has a nonmarital interest in the marital home. 4
Generally, when improvements made to a home during a marriage increase that
home’s value, a
[p]roper [Schmitz] calculation of [a] current nonmarital interest
in the homestead requires that the court first divide [the]
nonmarital contribution to the downpayment by the purchase
price of the house. Next, the cost of repairs and improvements
must be subtracted from the current value of the house . . . to
determine the increase in value of the property due solely to
appreciation. Finally, the net appreciated value of the house
must be multiplied by the ratio of nonmarital net equity to the
purchase price . . . to determine [the] nonmarital interest in the
homestead.

4 We note that, here, because the improvements made to the marital home required the
parties to take an active role to increase the value of the home, the Dorweiler formula must
be applied before the Schmitz formula can be applied, because the Schmitz formula
contemplates the passive increase in value to the marital home through appreciation caused
solely by an increase to the market.
9
Id. (citation omitted). Additionally, here, during their marriage, the parties refinanced the
marital home, increasing the balance due on the mortgage. How the district court
accounted for the increased mortgage balance is also less than clear, as is whether the equity
borrowed against in the refinancing process was marital or nonmarital (and if nonmarital,
whose nonmarital interest). Therefore, we remand for the district court to recalculate the
extent of the parties’ marital and nonmarital interests in the marital home using the Schmitz
formula, account for the improvements (Dorweiler formula), and account for the increased
mortgage balance.5
Property division
Husband challenges parts of the district court’s property division involving certain
investment accounts, a retirement account, a motorcycle, certain debts, and the refund of a
child-support overpayment. Generally, marital property is “property, real or personal, . . .
acquired by the parties, or either of them, to a dissolution . . . at any time during the
existence of the marriage relation between them . . . but prior to the date of
valuation . . . .” Minn. Stat. § 518.003, subd. 3b (2022). Assets acquired during a marriage
by either spouse are presumed to be marital. Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn.
1997). A spouse claiming a nonmarital interest in an asset presumed marital can prove the

5 We note that while we are remanding for recalculation of the various interests in the
marital home, we appreciate the detail in the district court’s order on this point. Nothing
in this opinion should be construed as an expression of this court’s opinion on what the
resolution of the remanded calculations should be. On remand, on this issue, the district
court shall have discretion to reopen the record as it deems necessary, if it believes that
additional information is needed to perform the Schmitz calculations.
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claimed nonmarital interest by a preponderance of the evidence. Id. Nonmarital property
is property acquired by a spouse which
(a) is acquired as a gift, bequest, devise or inheritance
made by a third party to one but not to the other spouse;
(b) is acquired before the marriage;
(c) is acquired in exchange for or is the increase in value
of property which is described in clauses (a), (b), (d), and (e);
(d) is acquired by a spouse after the valuation date; or
(e) is excluded by a valid antenuptial contract.

Minn. Stat. § 518.003, subd. 3b. Appellate courts review de novo whether property is
marital or nonmarital but will not alter a district court’s underlying finding of fact unless
that finding is clearly erroneous. Olsen, 562 N.W.2d at 800.
Investment accounts
The district court ruled that husband’s nonmarital interest in the relevant investment
accounts was about $147,005, and that the remaining $56,566 in those accounts was marital
property. Husband asserts that the $56,566 was passive appreciation of the investment
accounts, and therefore his nonmarital property. Generally, appreciation of an investment
account during a marriage is marital if it arises from active management but is nonmarital
if the appreciation is passive due to, for example, inflation or market conditions. Baker v.
Baker, 753 N.W.2d 644, 650 (Minn. 2008).
Here, husband created the investment accounts before the marriage. During the
marriage, he made no contributions to, received no payments from, received dividends
from, made no withdrawals from, did not borrow against, and did not otherwise personally
manage the accounts. In Baker, an account manager testified that he and his employees
had discretion to invest the relevant funds, and that the respondent’s involvement was
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“[v]ery passive.” Id. at 648. That record showed that the respondent ordered a single trade
while the account was open, the respondent neither withdrew funds nor received
distributions, and all investment returns were reinvested. Id. The supreme court ruled that
the respondent’s use of a financial institution meant that he did not need to devote much
marital effort to managing the funds; hence, the appreciation of the account was
passive. Id. at 652-53. The facts here mimic those in Baker. Because passive appreciation
is nonmarital, we reverse the district court’s determination that the appreciation of
husband’s investment accounts was marital property.
Retirement account
Before the marriage, husband borrowed $9,338.37 from his TSP. During the
marriage, wife’s nonmarital funds were used to repay the TSP. The district court included
the repaid amount in the marital portion of the TSP. To account for the use of wife’s
nonmarital funds to repay husband’s nonmarital debt, the district court included $9,338.37
in husband’s property -equalization payment. Husband seems to argue that doing so
constitutes “double dipping” because the district court included the repayment in the
marital portion of the TSP. We see no reversible error. Using wife’s nonmarital funds to
repay husband’s nonmarital debt decreased wife’s nonmarital property by the amount of
the repayment. The district court’s inclusion of the repayment in the marital share of the
TSP (instead of giving wife a nonmarital interest in the TSP) artificially increased the
marital estate by the amount of the repayment. Because the district court equally divided
the marital estate, wife received half of that artificial increase. Thus, any “double dipping”
is limited to half of the $9,338.37 included in the property-equalization payment. In the
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context of this marital estate, an error of that size is de minimis. And appellate courts
ignore de minimis errors. Risk ex rel. Estate of Miller v. Stark, 787 N.W.2d 690, 694 n.1
(Minn. App. 2010), rev. denied (Minn. Nov. 16, 2010); Hesse v. Hesse, 778 N.W.2d 98,
105 (Minn. App. 2009).
Motorcycle
Husband challenges the district court’s award to wife of a $10,000 nonmarital
interest in a motorcycle. The district court based this award on its finding that wife used
nonmarital funds to repay her mother the $10,000 loan to husband to purchase his
motorcycle. The crux of husband’s argument seems to be that the district court clearly
erred in finding that the loan from wife’s mother was to husband to buy the motorcycle,
rather than to the parties to pay living expenses. While husband’s argument cites evidence
that he asserts supports his view of the matter, he misapprehends the standard of review.
The question on appeal is not whether the record could support the findings husband
wanted the district court to make—it is whether the evidence does support the findings that
the district court did make. See Kenney, 963 N.W.2d at 223 (“When the record reasonably
supports the findings at issue on appeal, it is immaterial that the record might also provide
a reasonable basis for inferences and findings to the contrary.” (quotation omitted));
Vangsness, 607 N.W.2d at 474 (“That the record might support findings other than those
made by the [district] court does not show that the court’s findings are defective.”). An
argument that simply cites evidence that could support findings that differ from those made
by the district court does not identify the evidence that supports the findings that the district
court made. Nor does it explain why, when we are required to view that evidence in the
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light most favorable to the findings of the district court, that those findings are clea rly
erroneous. See Kenney, 963 N.W.2d at 221. Thus, challenging a district court’s findings
of fact by simply marshalling evidence that could support findings that differ from those
made by the district court is an inadequate way to challenge those findings. Here, there is
evidence to support the district court’s findings and husband has not attempted to show
how, given that evidence, that the district court’s findings are clearly erroneous. Therefore,
our inquiry on this point is done. See id. at 222 (“[A]n appellate court need not go into an
extended discussion of the evidence to prove or demonstrate the correctness of the findings
of the [district] court.” (quotation omitted)).
Child-support overpayment
Noting that husband’s $2,000 child-support overpayment occurred during the
marriage, the district court ruled that the debt owed by the support recipient was marital
property, awarded it to husband, and compensated wife accordingly. Husband challenges
the award to him of the full amount, arguing that recovery of those funds is
unlikely. Husband’s argument amounts to a challenge to the district court’s valuation of
the support recipient’s debt. As noted, a district court’s valuation of property is a factual
determination reviewed for clear error. See Maurer, 623 N.W.2d at 606. Husband has not
shown the district court’s valuation of this item of property to be clearly erroneous.
In sum, we ( 1) affirm the district court’s valuation of the marital home,
determination that wife had a nonmarital interest in that home, treatment of the TSP, award
to wife of a $10,000 interest in the motorcycle, and treatment of the child-support
overpayment; (2) reverse the district court’s identification of the amounts of the marital
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and nonmarital interests in the marital home, and determination that the appreciation of the
relevant investment accounts was marital property; and (3) remand for the district court to
recalculate the marital and nonmarital interests in the marital home, and make any
adjustments to the property equalization payment it deems necessary to achieve an
equitable distribution of the parties’ marital property. The district court shall have
discretion to reopen the record if it deems it necessary to do so in determining the
equalization adjustment based on its calculations of the parties’ interests.
Affirmed in part, reversed in part, and remanded.