                          IN THE NEBRASKA COURT OF APPEALS

               MEMORANDUM OPINION AND JUDGMENT ON APPEAL
                        (Memorandum Web Opinion)

                                     FOCHTMAN V. FOCHTMAN


  NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION
 AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).


                    SHERRY M. FOCHTMAN, APPELLEE AND CROSS-APPELLANT,
                                                 V.

                    RANDY R. FOCHTMAN, APPELLANT AND CROSS-APPELLEE.


                             Filed January 5, 2016.    No. A-14-1002.


       Appeal from the District Court for Hamilton County: RACHEL A. DAUGHERTY, Judge.
Affirmed in part, and in part reversed and remanded with directions.
       John B. McDermott and Mark Porto, of Shamberg, Wolf, McDermott & Depue, for
appellant.
       Scott D. Grafton, of Grafton Law Office, P.C., for appellee.



       MOORE, Chief Judge, and IRWIN and INBODY, Judges.
       IRWIN, Judge.
                                       I. INTRODUCTION
         Randy R. Fochtman appeals and Sherry M. Fochtman cross-appeals from a decree of the
district court for Hamilton County, which decree dissolved the parties’ marriage, distributed the
marital estate, and awarded Sherry alimony. On appeal, Randy challenges the court’s decision to
exclude from the marital estate $8,600 Sherry withdrew 11 months before the couple’s separation
and which he claims Sherry used to purchase real estate with her adult daughter. Randy also
challenges the court’s inclusion of Sherry’s post-separation medical and dental bills as marital debt
and its award of alimony. On cross-appeal, Sherry challenges the court’s exclusion from the
marital estate of money Randy inherited and used to pay off a debt on the couple’s home. Upon




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our review of the record, we conclude the district court abused its discretion by including as marital
debt the bills Sherry incurred after the parties separated; however, we affirm in all other respects.
                                        II. BACKGROUND
        Sherry and Randy were married in 2004. There were no children born of the marriage. On
August 28, 2013, Randy filed a complaint seeking dissolution of the marriage and an equitable
division of the marital property and debts.
        On June 26, 2014, trial was held. At the trial, Randy testified regarding his income and
work history. He testified that he was employed as a truck driver for Fochtman Trucking, L.L.C.
According to his tax returns, Randy’s income was $65,239 in 2012 and $81,190 in 2013.
        In addition to the information regarding his salary, Randy testified that in January 2012, he
inherited $52,000 from the sale of his parents’ land. Bank records introduced into evidence
indicated Randy deposited the $52,000 into a checking account he shared with Sherry at Pinnacle
Bank on January 17. The same day Randy deposited the $52,000, the couple paid off $11,611.28
that was remaining on a loan from Pinnacle Bank. Randy testified this loan had been used for a
down payment on a house he and Sherry purchased together. To finance this loan, the couple had
used as collateral a camper Sherry owned prior to the marriage. Randy testified that the $11,611.28
loan payment came from the $52,000 he had inherited.
        Finally, Randy presented evidence that Sherry withdrew money from the couple’s joint
bank account in August 2012. Bank statements from the joint account showed that Sherry
transferred the following amounts from the couple’s joint account to her personal account: $2,600
on August 18, $5,000 on August 24, and $1,000 on August 28. Randy testified that while he was
not sure where this $8,600 went, he believed Sherry had used the money to purchase real estate
with JoBeth Swallow, her daughter from a prior relationship. To support his claim that Sherry had
helped Swallow buy a house, Randy produced a joint tenancy warranty deed for a property in
Sheridan County. The deed conveyed the property “to JoBeth Swallow and Sherry Fochtman,
Grantees, as joint tenants.” The deed was executed on September 22 and received by the county
clerk on October 17.
        Sherry also testified at the trial. With respect to her income, Sherry testified that she was
earning $800 a month caring for an elderly man at the time of the trial. Sherry also testified that
when she and Randy met nearly ten years earlier, she was making approximately $130,000 a year,
but that her financial condition had declined during the marriage. According to Sherry, her income
had decreased during the marriage due to her deteriorating health. Sherry testified that she suffered
from fibromyalgia and was no longer able to work full time or use her hands.
        Related to her medical problems, Sherry testified she had been referred to the Mayo Clinic
by her treating physician. Sherry was treated at the Mayo Clinic in January 2014. An itemized
billing statement from the Mayo Clinic showed total charges of $11,462.86 for services Sherry
received between January 6 and January 9. Sherry also adduced evidence that she had incurred
dental costs totaling $4,367 on October 30, 2013.
        During her testimony, Sherry disputed Randy’s version of events surrounding the money
she withdrew from the couple’s joint account in August 2012. According to Sherry, she later used
this $8,600 for her business. Sherry maintained she did not help her daughter pay for the property



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in Sheridan County. Sherry testified that her name appeared on the deed alongside her daughter’s,
but that she did not purchase the property.
         In support of her claim that she did not purchase any real estate with marital funds, Sherry
called her daughter, JoBeth Swallow, to the stand. According to Swallow, Sherry did not contribute
any funds to buy the property in Sheridan County. Swallow testified that she had her mother serve
as her joint tenant “because if something ever happens to me, I want the house to go to somebody.”
Swallow further testified that she was currently living with her fiancé while Sherry was living in
the house in Sheridan County. According to Swallow, Sherry paid rent while Swallow continued
to make the mortgage payments on the property.
         On August 11, 2014, the district court entered a decree of dissolution. In the decree, the
court divided the couple’s property. Relevant to the appeal, the court set aside $11,611.28 to Randy
as nonmarital funds. This set aside corresponded to the amount of money Randy had inherited and
used to pay off the Pinnacle Bank loan. The court also declined to place any marital value on the
property in Sheridan County because “there was no direct evidence that marital funds were utilized
to purchase the home.” The court stated it “accept[ed] the testimony of Ms. Swallow that the home
was paid for by her alone.”
         In the decree, the district court also addressed the debts Sherry incurred in October 2013
and January 2014. The court first noted that both the Mayo Clinic and dental charges were incurred
after the parties had separated. Nevertheless, the trial court stated that “Randy acknowledged in
his testimony that Sherry had health issues” prior to the divorce. The court concluded, “[T]hese
debts are necessaries and as such both parties are liable despite the fact they were incurred within
a few months post-separation.”
         Finally, the court ordered Randy to pay alimony to Sherry in the amount of $2,000 per
month for 48 months. In ordering alimony, the court noted that Randy earned $65,239 in 2012 and
$81,190 in 2013 while Sherry received $800 in income per month at the time of the trial. In support
of its determination that alimony was appropriate, the court indicated it had considered the specific
criteria listed in Neb. Rev. Stat. § 42-365 (Reissue 2008). Additionally, the court noted that
“Sherry’s earning capacity has greatly decreased due to her medical issues while Randy’s earning
capacity has increased.” The court therefore determined an award of alimony was reasonable.
         After the decree was entered, Randy filed a motion for new trial. In the motion, Randy
alleged, among other things, that the district court failed to include marital property that Sherry
had dissipated, that the court should not have included nonmarital debts in the estate, and that the
award of alimony was excessive in both amount and duration. On October 9, 2014, the court
overruled Randy’s motion for a new trial.
         This appeal followed.
                                  III. ASSIGNMENTS OF ERROR
        On appeal, Randy assigns three errors. First, he asserts that the district court erred in failing
to include as a marital asset the $8,600 Sherry withdrew from the couple’s joint account and that
Randy claims Sherry used to purchase a house with her daughter. Second, he claims that the court
erred when it included Sherry’s post-separation medical and dental bills as marital debt. Third,
Randy asserts that the court erred in awarding Sherry alimony in the amount of $2,000 per month
for 48 months.


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       On cross-appeal, Sherry asserts that the district court erred in excluding the $11,611.28
from the marital estate that Randy inherited and used to pay off the couple’s Pinnacle Bank loan.
                                          IV. ANALYSIS
                                     1. STANDARD OF REVIEW
        In an action for the dissolution of marriage, an appellate court reviews the case de novo on
the record to determine whether there has been an abuse of discretion by the trial judge. Molczyk
v. Molczyk, 285 Neb. 96, 825 N.W.2d 435 (2013). A judicial abuse of discretion exists when the
reasons or rulings of the trial judge are clearly untenable, unfairly depriving a litigant of a
substantial right and a just result. Despain v. Despain, 290 Neb. 32, 858 N.W.2d 566 (2015).
                                        2. RANDY’S APPEAL
                                      (a) Exclusion of $8,600
        Randy first challenges the district court’s decision not to credit him for the $8,600 Sherry
withdrew from the couple’s joint account. Randy claims Sherry did not disprove that she used this
money to purchase a property in Sheridan County with her daughter. He asserts the district court
should have presumed Sherry purchased the property with marital funds because she transferred
the money soon before the property was conveyed to Sherry and Swallow. We find no abuse of
discretion upon our de novo review.
        In an action for dissolution of marriage, Neb. Rev. Stat. § 42-365 authorizes a trial court to
equitably distribute a marital estate in accordance with what is fair and reasonable under the
circumstances. Bock v. Dalbey, 283 Neb. 994, 815 N.W.2d 530 (2012). The equitable division of
property is a three-step process. Despain, supra. The first step is to classify the parties’ property
as marital or nonmarital, setting aside the nonmarital property to the party who brought it to the
marriage. Id. The second step is to value the marital assets and liabilities of the parties. Id. The
third step is to calculate and divide the net marital estate between the parties. Id. The burden of
proof to show that property is nonmarital is on the person making the claim. McGuire v. McGuire,
11 Neb. App. 433, 652 N.W.2d 293 (2002).
        Upon conducting its de novo review of a dissolution case, an appellate court may give
weight to the fact that the trial court heard and observed the witnesses and accepted one version of
the facts over another. See Walker v. Walker, 9 Neb. App. 694, 618 N.W.2d 465 (2000).
        In this case, Sherry testified that the three transfers she made from the couple’s joint
account to her separate account in August 2012 were not to purchase the property in Sheridan
County. Rather, she testified she later spent the money on the business she operated at the time.
Swallow, Sherry’s daughter, corroborated Sherry’s version of events by testifying she alone
purchased the house in Sheridan County.
        Randy presented no evidence to contradict Sherry and Swallow’s testimony that no marital
funds were used to purchase the Sheridan County property. Rather, Randy speculated that Sherry
must have spent the money on the property because the deed was executed one month after Sherry
transferred the $8,600.
        After considering the testimony and evidence, the district court expressly accepted
Swallow’s version of the facts. The court therefore declined to place marital value on the Sheridan



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County property or to credit Randy the $8,600 he claimed Sherry used to buy it. We give weight
to the fact that the trial court heard Swallow’s testimony and found it to be credible. See Walker,
supra. Sherry provided evidence that she did not use marital funds to buy the property with her
daughter and Randy did not provide evidence to the contrary. We cannot say the district court
abused its discretion in excluding the $8,600 and the Sheridan County property from the marital
estate. Randy’s assignment of error to the contrary is without merit.
                                      (b) Post-Separation Debt
        Randy next challenges the district court’s inclusion of Sherry’s post-separation medical
and dental bills in the marital estate. Upon our de novo review of the record, we agree the district
court abused its discretion in including as marital debts the medical and dental expenses Sherry
incurred after the parties were separated.
        Marital debt includes only those obligations incurred during the marriage and before the
date of separation for the joint benefit of the parties. McGuire, supra; see, also, Millatmal v.
Millatmal, 272 Neb. 452, 723 N.W.2d 79 (2006).
        Nebraska courts have declined to include obligations incurred after the parties have
separated in the marital estate, even where the expenses are arguably necessary. For example, in
Mathews v. Mathews, 267 Neb. 604, 676 N.W.2d 42 (2004), the Nebraska Supreme Court
determined the trial court had properly excluded from marital debt $20,000 that the husband had
borrowed from his family after he had separated from his wife. The husband, Mark, testified that
he had to borrow the money because the divorce had “financially devastated” him. Id. at 621, 676
N.W.2d at 58. The Supreme Court nevertheless declined to include the loan as marital debt, stating,
“While these proceedings have no doubt adversely affected Mark’s financial circumstances, the
loan from his family was taken out after his separation . . . and is not properly recognized as marital
debt.” Id. at 621-22; 676 N.W.2d at 58; see, also, Finley-Swanson v. Swanson, 20 Neb. App. 316,
823 N.W.2d 697 (2012) (affirming the trial court’s exclusion from the marital estate of the parties’
attorney fees incurred during the dissolution proceedings because the expenses occurred after the
wife had filed for dissolution of marriage and were not for the parties’ joint benefit).
        In the present case, the parties separated in July 2013 and Randy filed for dissolution on
August 28. On October 30, Sherry incurred $4,367 in dental bills. Between January 6 and 9, 2014,
Sherry incurred $11,462.86 in medical bills at the Mayo Clinic. The district court acknowledged
that the medical and dental charges occurred after the parties had separated, but determined both
parties should be liable for them because Randy knew Sherry had health issues and the debts were
“necessaries.”
        Sherry’s dental and medical debts occurred three and six months, respectively, after she
and Randy were separated. Like the loan for living expenses in Mathews, Sherry’s medical
expenses may well have been necessary, but this alone does not qualify them as marital debts. Cf.
Mathews, supra. The medical bills were incurred after the date of separation and solely for Sherry’s
benefit. The court abused its discretion when it included the bills in the marital estate. Accordingly,
we reverse the decree and remand with directions for the district court to recalculate the division
of the parties’ property without including Sherry’s post-separation medical and dental bills as
marital debt.



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                                             (c) Alimony
        Third, Randy challenges the court’s order requiring him to pay Sherry $2,000 a month for
48 months in alimony. Randy argues there was no competent evidence that Sherry was incapable
of working. According to Randy, the award of alimony is untenable because “Randy is not
responsible for the current situation in which Sherry finds herself.” Upon our de novo review, we
find no merit to this assigned error.
        The purpose of alimony is to provide for the continued maintenance or support of one party
by the other when the relative economic circumstances make it appropriate. Claborn v. Claborn,
267 Neb. 201, 673 N.W.2d 533 (2004). In particular, § 42-365 provides:
               When dissolution of a marriage is decreed, the court may order payment of such
        alimony by one party to the other . . . as may be reasonable, having regard for the
        circumstances of the parties, duration of the marriage, a history of the contributions to the
        marriage by each party, including contributions to the care and education of the children,
        and interruption of personal careers or educational opportunities, and the ability of the
        supported party to engage in gainful employment without interfering with the interests of
        any minor children in the custody of such party.

In addition to the criteria listed in § 42-365, a trial court determining alimony should consider the
income and earning capacity of each party and the general equities of the situation. Anderson v.
Anderson, 290 Neb. 530, 861 N.W.2d 113 (2015).
         In reviewing an award of alimony, an appellate court does not determine whether it would
have awarded the same amount of alimony, but whether the trial court’s award is untenable such
as to deprive a party of a substantial right or just result. Hosack v. Hosack, 267 Neb. 934, 678
N.W.2d 746 (2004). The ultimate criterion in assessing an alimony award is reasonableness. Sitz
v. Sitz, 275 Neb. 832, 749 N.W.2d 470 (2008).
         In the decree of dissolution, the district court acknowledged the various factors relevant to
alimony determinations set forth in § 42-365. In addition to the statutory factors, the court noted
that Randy earned $65,239 in 2012 and $81,190 in 2013 and Sherry made only $800 a month.
With respect to this disparity in the parties’ incomes, the court apparently credited Sherry’s
testimony that her health problems prevented her from earning more. The court also recognized
the parties had been married for approximately 10 years, during which time Sherry’s earning
capacity greatly decreased and Randy’s earning capacity increased. The court therefore concluded
that an award of alimony was reasonable and fair.
         On our de novo review of the record, we do not find the district court’s alimony award to
be an abuse of discretion. The award of $2,000 per month for 48 months does not deprive Randy
of a substantial right or a just result and is reasonable in light of the factors considered by the trial
court. Randy’s assignment of error in this regard is without merit.
                                     3. SHERRY’S CROSS-APPEAL
       Sherry challenges the district court’s exclusion from the marital estate of the $11,611.28
that Randy inherited and used to pay off the Pinnacle Bank loan. Sherry argues Randy “benefitted
by way of owing less on the marital residence” when he used the inherited funds to pay off the
loan. Brief for appellee on cross-appeal at 18. She argues the district court should have classified


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only one-half of the $11,611.28 as nonmarital property “as only one-half of the payment did not
benefit Randy.” Id. We find no merit to this assertion.
        As a general rule, all property accumulated and acquired by either spouse during the
marriage is part of the marital estate, unless it falls within an exception to the general rule.
Davidson v. Davidson, 254 Neb. 656, 578 N.W.2d 848 (1998). One such exception is property
accumulated and acquired through inheritance. Gangwish v. Gangwish, 267 Neb. 901, 678 N.W.2d
503 (2004). If the inheritance can be identified, it is to be set off to the inheriting spouse and
eliminated from the marital estate. Schuman v. Schuman, 265 Neb. 459, 658 N.W.2d 30 (2003).
        In the present case, Sherry does not challenge the district court’s determination that the
$11,611.28 is traceable to Randy’s inheritance. Rather, she argues that because Randy used the
inherited money to pay a marital debt, only one-half of the amount should be eliminated from the
marital estate. This argument is unpersuasive. The use to which Randy put the money does not
change the fact that the funds were inherited. Had Randy spent the $11,611.28 to purchase a
personal item, the full amount would have been set off to him as inherited funds. The fact Randy
used the money to pay off a joint debt does not change the nature of the money; the $11,611.28
remained Randy’s separate inheritance. The district court did not abuse its discretion when it set
off to Randy the $11,611.28 of inherited funds.
                                        V. CONCLUSION
         Upon our review, we find that the district court abused its discretion in including Sherry’s
$8,600 post-separation debt in the marital estate. We reverse and remand with directions for the
district court to recalculate the division of the parties’ property without including Sherry’s medical
bill from October 2013 and dental bill from January 2014. We affirm the decree of dissolution in
all other respects.
                                                            AFFIRMED IN PART, AND IN PART REVERSED
                                                            AND REMANDED WITH DIRECTIONS.




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