In re the Marriage of:

This opinion is nonprecedential except as provided by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
A24-1028

In re the Marriage of:

Melissa Sydney Reed Lesch, petitioner,
Respondent,

vs.

John Patrick Lesch,
Appellant.

Filed April 21, 2025
Affirmed in part, reversed in part, and remanded
Johnson, Judge

Ramsey County District Court
File No. 62-FA-20-1890

Sam Khoroosi, Jessica Sampson, Khoroosi Law Office, P.A., St. Louis Park, Minnesota
(for respondent)

Lymari J. Santana, Mack & Santana Law Offices, P.C., Minneapolis, Minnesota (for
appellant)

Considered and decided by Johnson, Presiding Judge; Ede, Judge; and Reilly,
Judge.
∗

∗ Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant
to Minn. Const. art. VI, § 10.
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NONPRECEDENTIAL OPINION
JOHNSON, Judge
This appeal arises from the dissolution of an 11-year-long marriage and is concerned
primarily with the district court’s division of the parties’ assets and liabilities. We affirm
in part, reverse in part, and remand for further proceedings on certain issues, as described
below.
FACTS
Melissa Sydney Reed Lesch and John Patrick Lesch were married in September
2012. Before they were married, they entered into an antenuptial agreement “to limit the
other’s right to share in” each party’s nonmarital property “in the event of dissolution of
the marriage.”
In December 2020, Melissa moved out of the marital home and petitioned for
dissolution of the marriage. John filed an answer and a counter-petition the following
month. Over the next two years, the parties e xchanged discovery and attended three pre-
trial hearings focused on child support, parenting time, and the appointment of a custody
and parenting-time evaluator. In March 2023, the district court bifurcated the issues,
scheduled a trial for the following month on child custody and parenting time, and deferred
a trial on financial issues until a later date. Before the second phase of trial, the parties
agreed that their antenuptial agreement is valid and enforceable.
The financial issues were tried on two days in June 2023. The parties introduced
more than 200 exhibits. Each party testified and called two additional witnesses. The
district court filed its judgment and decree in November 2023. The district court divided
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the parties’ marital assets and liabilities, ordered John to transfer to Melissa approximately
$81,000 of funds in his pre-tax retirement accounts, and ordered John to pay Melissa
$109,494 to equalize the awards of other marital property. In addition, the district court
granted Melissa’s motion for conduct-based attorney fees. John filed a motion for amended
findings or a new trial. In April 2024, the district court denied John’s post-trial motion and
ordered John to pay Melissa $18,000 in conduct-based attorney fees. John appeals.
DECISION
John argues that the district court erred in numerous ways. In his principal brief, he
identifies eight issues. We address each issue in turn, in the order in which he presents
them.
Before addressing the issues raised, we note that most of the parties’ arguments
relate to the district court’s interpretation and application of the parties’ antenuptial
agreement. In section 4 of the antenuptial agreement, which is captioned “Rights During
Marriage,” the parties agreed, among other things, that “[d]uring the marriage of the
parties, . . . neither party shall acquire (by reason of the contemplated marriage) for himself
or herself, his or her heirs, assigns or creditors, any interest in, or right to control, the other’s
nonmarital property.” In section 5, which is captioned “Rights Upon Dissolution or
Separation,” the parties agreed, among other things, that, “[u]pon the divorce or legal
separation of the parties . . . , each party shall be released from all claims of the other party
against his or her nonmarital property as defined in this agreement.” The parties also
agreed that, upon a dissolution of the marriage, each of them “shall be entitled to an equal
division of all marital property acquired during their marriage.” When entering into the
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antenuptial agreement, the parties made disclosures of their respective assets and income
in two schedules, which are referenced in the antenuptial agreement.
This court applies a de novo standard of review to a district court’s interpretation
and application of an unambiguous contract. Denelsbeck v. Wells Fargo & Co., 666
N.W.2d 339, 346 (Minn. 2003). We apply a clear-error standard of review to a district
court’s findings of fact. Tornstrom v. Tornstrom, 887 N.W.2d 680, 686 (Minn. App. 2016),
rev. denied (Minn. Feb. 14, 2017).
I. John’s Retirement Accounts
John first argues that the district court erred by finding that all funds in two of his
retirement accounts are marital property.
John has two retirement accounts with the Minnesota State Retirement System
(MSRS), both of which appear to be defined -contribution, tax- deferred accounts. John
disclosed both accounts when entering into the antenuptial agreement. John testified that
he made additional contributions to the two MSRS retirement accounts during the
marriage. On the valuation date, the two accounts had a combined value of $269,265.
In making its property award, which is reflected in a spreadsheet-like financial
statement, the district court characterized the full value of John’s two MSRS retirement
accounts as marital property. The district court found that the total value of all of John’s
marital retirement assets exceeded the value of Melissa’s marital retirement assets by
$163,412. To equalize the awards of marital retirement assets, the district court ordered
John to transfer $81,706 of his MSRS retirement funds to Melissa pursuant to a qualified
domestic-relations order (QDRO).
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Section 4.F of the antenuptial agreement provides that all property acquired before
the marriage, and all appreciation in the value of that property, is nonmarital property.
Section 5.B of the antenuptial agreement provides that the value of nonmarital investment
accounts that can be traced to contributions made during the marriage is marital property.
Accordingly, some of the funds in John’s two MSRS retirement accounts are nonmarital
property, and some are marital property. John’s financial expert submitted a report stating
that, based on his tracing, $187,793 of the combined value of the two MSRS retirement
accounts is John’s nonmarital property. At oral argument, Melissa’ s attorney conceded
that there is no contrary evidence.
Thus, the district court erred by finding that all funds in John’s two MSRS
retirement accounts are marital property. Therefore, we reverse that part of the decree and
remand the issue to the district court for reconsideration. On remand, the district court
shall find that $187,793 of the funds in John’ s two MSRS retirement accounts is John’s
nonmarital property and that $81,472 of the funds in those two accounts is marital property.
The district court then shall recalculate the total value of the partie s’ marital retirement
assets, reconsider the transfer necessary to equally divide marital retirement assets, and
revise paragraph 12 of its conclusions of law with respect to the QDRO.
II. Bayard Avenue House
John next argues that the district court erred by finding that all of Melissa’s interest
in her post-separation home is nonmarital.
Before the parties’ marriage, Melissa owned a duplex on Blair Avenue in St. Paul.
She lived in one unit and rented out the other unit. Melissa disclosed the Blair Avenue
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duplex when entering into the antenuptial agreement. After Melissa and John purchased
their marital home in 2012, Melissa rented out both units of the Blair Avenue duplex. In
December 2020, Melissa sold the Blair Avenue duplex. Five days before Melissa served
John with the dissolution petition, she used the proceeds of the sale of the Blair Avenue
duplex to purchase a house on Bayard Avenue. In the decree, the district court found that
the Bayard Avenue house is Melissa’s nonmarital property and awarded it to her.
John contends that he has a marital interest in the Bayard Avenue house for two
reasons. First, he contends that he has a marital interest in the Bayard Avenue house
because he had a marital interest in the Blair Avenue duplex due to Melissa’s use of rental
income received during the marriage to reduce the balance of the loan on the Blair Avenue
duplex. John relies on section 4.G.(1) of the antenuptial agreement, which generally
defines “marital property” to include “earned income during the marriage including all cash
compensation and rental income distributed to her.” But that same section expressly
excludes from the definition of marital property “all capital gains, income, dividends and
appreciation from the investment of Melissa ’s nonmarital property.” Because of that
exclusion, rental income Melissa received during the marriage from her nonmarital
property is nonmarital in character. Thus, John had no marital interest in the Blair Avenue
duplex.
Second, John contends that he has a marital interest in the Bayard Avenue house
because Melissa used $5,000 of marital funds when making a down payment on the Bayard
Avenue house. Melissa testified that she did so. Melissa’s appellate brief does not respond
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to this contention. At oral argument, Melissa’s attorney did not dispute that she used
$5,000 of marital funds when purchasing the Bayard Avenue house.
Thus, the district court erred by finding that all of Melissa’s interest in the Bayard
Avenue house is nonmarital. Therefore, we reverse that part of the decree and remand the
issue to the district court for reconsideration. On remand, the district court shall find that
$5,000 of the value of the Bayard Avenue house is marital property and that the remainder
of the value of that house is Melissa’s nonmarital property. The district court then shall
recalculate the total value of marital non-retirement property and reconsider the equalizer
payment necessary to equally divide marital non-retirement property.
III. Debts of Others
John next argues that the district court erred by finding that three debts incurred by
members of Melissa’s family on John and Melissa’s behalf are marital liabilities.
First, John argues that the district court erred by including in the parties’ marital
liabilities two credit-card debts in the amounts of $3,198 and $2,687, which were incurred
by Melissa’s sister. Section 4.E. of the antenuptial agreement provides, “Neither party
shall be responsible for or obligated to pay any liability incurred by the other party except
joint debts incurred for marital purposes . . . .” (Emphasis added.) Melissa testified that
her sister used her own credit card to purchase, on Melissa’s behalf, furniture for the
parties’ children’s bedroom in Melissa’s post-separation home on Bayard Avenue. Melissa
introduced into evidence credit-card statements showing that these purchases were made
within two months of her move to the Bayard Avenue house. In light of this evidence, the
district court did not clearly err by finding that Melissa owes a debt to her sister, that the
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debt was incurred for expenses associated with the parties’ children, and that the debt is a
marital liability.
Second, John argues that the district court erred by including in the parties’ marital
liabilities a debt owed by Melissa’s mother. The district court found that Melissa’s parents
used two home-equity lines of credit (HELOCs) to help the parties purchase their marital
home and that the parties promised to use their marital funds to make payments on the
HELOCs. John contends that Melissa did not prove that the parties are obligated to pay
back Melissa’s mother. Melissa introduced e-mail messages from 2018 in which she
described to John the amortization schedule for her mother’s HELOC, and she testified that
she used marital income to make payments toward the HELOC. The district court
specifically found Melissa’s testimony on this issue to be credible. In light of Melissa’s
evidence, the district court did not clearly err by finding that the parties owe a debt to
Melissa’s mother and that the debt is a marital liability.
Thus, the district court did not err by finding that three debts of members of
Melissa’s family are marital liabilities.
IV. John’s Debts
John next argues that the district court erred by not finding that several debts he
owes are marital liabilities. None of the debts identified by John were included in the
financial statement attached to the decree. John raised each of these debts in his post-trial
motion, but the district court declined to amend its findings.
First, John contends that he incurred marital debt to purchase an engagement ring
for Melissa. John asserts that he used marital funds to pay down some of the debt. Again,
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section 4.E. of the antenuptial agreement provides, “Neither party shall be responsible for
or obligated to pay any liability incurred by the other party except joint debts incurred for
marital purposes . . . .” (Emphasis added.) A debt incurred by John before the marriage
to purchase an engagement ring is not a “joint debt” but, rather, a debt incurred only by
him for purposes of making a conditional gift to Melissa. See Benassi v. Back & Neck Pain
Clinic, Inc., 629 N.W.2d 475, 484 (Minn. App. 2001) (concluding that engagement ring is
conditional gift given in contemplation of marriage), rev. denied (Minn. Sept. 11, 2001).
Second, John contends that he incurred marital debt on two credit cards, one
belonging to his former law firm, of which he was a partner, and one belonging to him
personally. John introduced a credit-card statement showing that the first of these cards
was issued to Lesch & Duren LLP. John’s evidence tends to prove that the debt is owed
by his former law firm and is not a joint debt incurred for marital purposes.
John also introduced a credit-card statement showing a balance of $7,091 on his
personal Citi Preferred card. John included this alleged debt in his proposed division of
marital property. The district court did not make any specific findings about or otherwise
account for this debt, either in the decree or in its order denying John’s post-trial motion.
Third, John contends that he has two outstanding marital debts secured by two
vehicles. The first is a debt in the amount of $7,743, which is secured by a 2016 Jeep
Wrangler. John introduced exhibits showing a balance of $7,743 on that debt and a value
of $29,995 for the Jeep Wrangler. The district court found that the Jeep Wrangler is valued
at $20,989 and is marital property and awarded it to John. This award considers both the
value of the vehicle and the debt secured by the vehicle.
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The second vehicle-related debt is an alleged loan secured by a 2018 Can Am
Outlander. John introduced a statement showing a balance of $5,247 on that loan. John
included this debt in his proposed division of marital property. The district court did not
make any findings about or otherwise account for this debt, either in the decree or in its
order denying John’s post-trial motion.
We conclude that the district court did not err by excluding from its findings of
marital liabilities the debts identified by John relating to the engagement ring, the credit
card issued to his former law firm, and the loan secured by the Jeep Wrangler. But the
district court erred by not making any findings concerning the alleged debts relating to the
Citi Preferred credit card and the 2018 Can Am Outlander. See Minn. Stat. § 518.58,
subd. 1 (2024) (providing that district court must “make[] findings regarding the division
of property”); Dick v. Dick, 438 N.W.2d 435, 437 (Minn. App. 1989) (stating that district
court must make “findings which indicate the rationale of the trial court in making its
award”); Vinnes v. Vinnes, 384 N.W.2d 589, 592 (Minn. App. 1986) (stating that findings
must be “sufficient to allow appellate review”). Therefore, we reverse those parts of the
decree and remand those issues to the district court for reconsideration. On remand, the
district court shall make the necessary findings concerning the alleged debts and, if the
debts are found to be marital liabilities, revise the division of marital liabilities accordingly.
V. Joint Tax Liability
John next argues that the district court erred by not giving him a credit for the fact
that his reporting of a business loss on the parties’ 2020 joint tax return offset a capital gain
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on the sale of Melissa’s Blair Avenue duplex, thereby reducing the parties’ joint tax
liability.
As explained in the written report of John’s financial expert, John had a nonmarital
ownership interest in an LLC before the marriage. He increased his ownership interest
during the marriage, using both nonmarital and marital funds. In 2020, the LLC distributed
losses to him in the amount of $81,624. That loss partially offset a capital gain of $172,590
on the sale of Melissa’s Blair Avenue duplex, thereby reducing the parties’ joint tax
liability by $32,301.
We assume that John was required by law to report his loss in 2020 rather than in a
future year. Reporting the loss presumably benefitted both Melissa and him by reducing
the parties’ joint tax liability. Most importantly, John does not identify any particular
provision of the antenuptial agreement that applies to this issue. In these circumstances,
we cannot conclude that the district court erred by not giving John credit, at Melissa’s
expense, for the reduction in the parties’ marital tax liability arising from John’s business
loss.
VI. John’s Attorney-Fee Debt
John next argues that the district erred by finding that attorney fees he incurred in
defending a defamation lawsuit are a nonmarital liability. See Olson v. Lesch, 943 N.W.2d
648 (Minn. 2020).
The district court found that John incurred $82,500 in attorney fees to defend against
the defamation lawsuit and that he used marital funds to pay $43,756 of those fees. The
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district court found that the fees “were not incurred to benefit the marriage” and, thus, that
debt was a nonmarital liability.
Again, section 4.E. of the antenuptial agreement provides, “Neither party shall be
responsible for or obligated to pay any liability incurred by the other party except joint
debts incurred for marital purposes . . . .” (Emphasis added.) Melissa testified that some
of the attorney-fee debt was paid using marital funds. John testified that he used a credit
card in Melissa’s name to pay some of these fees. The evidence includes a ledger showing
that, between 2018 and the valuation date, the parties spent $43,756 on attorney fees
relating to the defamation lawsuit.
Thus, the district court did not err by finding that the attorney-fee debt John incurred
in defending against the defamation lawsuit was nonmarital and by awarding half of the
marital funds spent to Melissa.
VII. Conduct-Based Attorney Fees
John next argues that the district court erred by awarding Melissa conduct-based
attorney fees in the amount of $18,000.
Melissa requested reimbursement of some of her attorney fees on the ground that
John unnecessarily prolonged the length and expense of the proceeding by denying the
existence of the antenuptial agreement despite possessing a copy of it, by not disclosing
his copy of it, and by challenging the validity and enforceability of it . In the early stages
of the case, there was some uncertainty as to whether the parties had entered into an
antenuptial agreement and, if so, the terms of the agreement. When Melissa petitioned for
dissolution, she filed with the court a copy of the parties’ antenuptial agreement that was
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signed only by her. In March 2023, Melissa found and produced a copy signed by both
parties, which differed in some ways from the copy she had attached to the petition.
Melissa testified in her deposition that she believed the antenuptial agreement that she
attached to the petition had been executed by both parties and was unaware at that time of
any questions concerning its validity. In contrast, John testified in his deposition that he
did not know whether he had signed an antenuptial agreement or whether an agreement
had ever been drafted. In May 2023, John filed a motion challenging the validity and
enforceability of the antenuptial agreements produced by Melissa and requested an order
that “no valid antenuptial agreement has been submitted to the court by either party.” John
later agreed that the fully executed copy of the antenuptial agreement that Melissa produced
at her deposition is valid and enforceable.
The issue arose again on the second day of trial. Melissa introduced e-mail
messages between John and the MSRS. The messages show that, in August 2021, John
provided the MSRS with a copy of the antenuptial agreement in an attempt to withdraw
funds from his retirement accounts. The district court stated on the record that John
appeared to have been in possession of the antenuptial agreement in August 2021, even
though he testified in his deposition in March 2023 that he did not possess a copy. The
district court also noted that the antenuptial agreement that John provided to the MSRS
appears to have been altered. Based on these facts, the district court made an adverse
inference that John had been dishonest about the antenuptial agreement, and the district
court left the record open to allow him to rebut the adverse inference. John later filed an
affidavit in which he stated that “he did not have an independent recollection of all that
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happened with respect to communications with the MSRS in August 2021” and that he
“did not” alter the antenuptial agreement.
In the decree, the district court granted Melissa’s motion for conduct-based attorney
fees after finding that John’s “behavior warrants fees” because he “misrepresented facts”
to the courts and “fraudulently altered documents in order to obtain access to assets during
the dissolution, while denying he had a fully executed agreement.” The district court also
found that John’s “bad faith conduct was directly responsible for the bifurcation of this
trial” and other proceedings between the two phases of trial.
In general, a district court has discretion to 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. 1a (2024). An award of conduct-based attorney
fees is appropriate if a party takes positions that are “duplicitous and disingenuous and
have had the effect of further delaying distribution, lengthening litigation, and increasing
the expense of these proceedings.” Redmond v. Redmond, 594 N.W.2d 272, 276 (Minn.
App. 1999). We apply an abuse-of-discretion standard of review to an award of conduct-
based attorney fees. Sanvik v. Sanvik, 850 N.W.2d 732, 737 (Minn. App. 2014).
John contends that the district court erred on the ground that, in the antenuptial
agreement, the parties expressly waived their right to seek attorney fees from each other.
Section 5.F of the antenuptial agreement states that “each party waives the right to claim
attorney fees and costs from the other.”
In denying John’s post-trial motion on this issue, the district court cited this court’s
opinion in Hill v. Hill, 356 N.W.2d 49 (Minn. App. 1984), rev. denied (Minn. Feb. 19,
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1985). In that case, we affirmed an award of need-based attorney fees despite the fact that
the parties had waived their right to seek attorney fees in an antenuptial agreement. Id. at
58. In reaching that conclusion, we reasoned that the fee award was “necessary to ensure
substantial justice.” Id. The Hill opinion authorizes the award of conduct-based attorney
fees in the circumstances of this case. Given the particular facts of this case, the district
court did not abuse its discretion by concluding that an award of conduct-based attorney
fees is appropriate.
Thus, the district court did not err by granting Melissa’s motion for conduct-based
attorney fees in the amount of $18,000.
VIII. Motion for New Trial
John last argues that the district court erred by denying his motion for a new trial.
The district court denied the motion after observing that John had “failed to state any
compelling grounds for a new trial” other than the fact that he “does not agree with the
Court’s decision.” John’s arguments on appeal are similar in nature. He reiterates the
arguments we have discussed above, and he makes very general assertions that the district
court did not properly consider his evidence and arguments. We have reviewed each of his
specific arguments, and we have granted relief on three of them. See supra parts I, II, IV.
We generally apply an abuse-of-discretion standard of review to a district court’s denial of
a new-trial motion. Christie v. Estate of Christie, 911 N.W.2d 833, 838 (Minn. 2018). In
this case, the district court did not abuse its discretion by denying John’s motion for a new
trial.
Affirmed in part, reversed in part, and remanded.