                         IN THE NEBRASKA COURT OF APPEALS

               MEMORANDUM OPINION AND JUDGMENT ON APPEAL

                                       EYMAN V. EYMAN


  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).


                      TERRY R. EYMAN, APPELLEE AND CROSS-APPELLANT,
                                            V.
                     ANNETTE J. EYMAN, APPELLANT AND CROSS-APPELLEE.


                            Filed February 4, 2014.   No. A-13-373.


       Appeal from the District Court for Douglas County: J. MICHAEL COFFEY, Judge.
Affirmed.
       Michael B. Lustgarten, of Lustgarten & Roberts, P.C., L.L.O., for appellant.
       Anthony W. Liakos, of Govier & Milone, L.L.P., for appellee.


       IRWIN, MOORE, and BISHOP, Judges.
       BISHOP, Judge.
        Annette J. Eyman appeals and Terry R. Eyman cross-appeals from the decree of
dissolution entered by the district court for Douglas County dissolving the parties’ marriage.
Annette argues that the trial court erred by failing to include in the marital estate Terry’s
25-percent interest in Pipers Plus Company, L.L.C. (Pipers Plus), a business established by
Terry, his two brothers, and their mother during the parties’ marriage. On cross-appeal, Terry
argues that the trial court abused its discretion when it awarded Annette $10,000 of the $50,000
in proceeds traceable to the sale of Terry’s premarital residence. Upon our de novo review of the
record, we find no abuse of discretion by the trial court and affirm.
                                        BACKGROUND
        Annette and Terry were married on May 31, 1997. The parties are the parents of two
minor children, born in 2003 and 2007.
        Terry filed a “Complaint for Dissolution of Marriage” on January 25, 2012. Prior to trial,
the parties resolved several disputed issues and stipulated to a custody and parenting plan, child
support, alimony, division of retirement accounts and investment accounts, childcare, health


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insurance and costs, life insurance, and the division of the tax dependency exemption. The
parties further stipulated that Terry should retain as his separate property his interest in his
family’s business, Eyman Plumbing, Inc.
         Evidence and testimony was adduced at trial on February 27, 2013, to resolve the issues
still in dispute by the parties, including whether Terry’s ownership interest in Pipers Plus was a
marital asset and its value, and the extent of Terry’s premarital interest in the parties’ marital
residence. Neither party appealed the other disputed issues at trial, and we therefore do not
include them in our discussion.
Establishment of Pipers Plus.
         Terry testified that he received his bachelor’s degree from the University of
Nebraska-Lincoln in 1991. After college, he began working in an office manager type of role for
Eyman Plumbing. Eyman Plumbing was established by Terry’s grandfather in 1957 and was
operated as a sole proprietorship until it was incorporated as a subsection “S corporation” in
November 1998. In 1994, Terry left the family business to begin a plumber’s apprenticeship and
became a licensed plumber in 1999. Terry has worked at Eyman Plumbing since becoming
licensed. Eyman Plumbing is presently owned equally by Terry, his two brothers Tim Eyman
and Tom Eyman, and their mother, Anne Eyman.
         In October 1998, Terry, Tim, Tom, and Anne formed Pipers Plus. Tom, the president of
both Eyman Plumbing and Pipers Plus, testified that Anne decided they should form a separate
limited liability company to protect Eyman Plumbing from liability. According to Pipers Plus’
articles of organization, Terry, Tim, Tom, and Anne each contributed $10,000 to Pipers Plus, and
each individual received a 25-percent ownership interest. Similarly, Pipers Plus’ operating
agreement reflects that 400 units were divided equally among Terry, Tim, Tom, and Anne and
that each individual’s initial capital contribution was $10,000. However, both Terry and Tom
testified that Anne was the only individual who contributed money to Pipers Plus when it was
formed, and then gifted a 25-percent interest to each brother over 4 to 5 years through stock
options. Although Tom testified there was documentation to show their interest was gifted to the
brothers over time, such documentation was not offered or received into evidence.
         According to Tom’s testimony, in August 1999, Pipers Plus purchased real property for
$396,780, and in October 1999, Pipers Plus expended $893,813.25 to construct a building in
which the business could operate. Tom testified that Anne fully funded the purchases of both the
real property and the building construction and that neither he, Terry, nor Tim contributed any
money toward these purchases. At trial, Tom testified that Anne loaned the money for these
purchases and that Eyman Plumbing paid the loan, although in his deposition, he testified that
Pipers Plus was the entity that paid the loan. In 2010, Pipers Plus purchased its neighboring land
for $605,724.85. Tom testified that Anne loaned the funds to Pipers Plus to pay the purchase
price and that Pipers Plus is currently indebted to her for $480,693. Pipers Plus has no
employees, and Eyman Plumbing is the only tenant of the building owned by Pipers Plus. Eyman
Plumbing is currently $498,780.95 in arrears in rent to Pipers Plus. According to the commercial
appraiser hired by Annette, Pipers Plus’ net value as of February 12, 2013, was $1,880,513 and
Terry’s share is worth $470,128.




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       Annette stipulated that she had no involvement in Pipers Plus. Annette testified that she
and Terry maintained a joint account at the time Pipers Plus was formed and that she does not
believe they paid anything into the business.
       Although Pipers Plus and Eyman Plumbing are legally distinct entities that file taxes
separately, Terry considers them to be the same entity.
Terry’s Premarital House.
         Prior to the parties’ marriage, in February 1992, Terry purchased a house on Frederick
Street in Omaha, Nebraska, for $37,000. Terry financed the purchase with gifts from his parents
and by a mortgage. Annette moved into the Frederick Street house with Terry approximately 2
years before they married. Terry testified that most of the improvements to the Frederick Street
house were made when he initially moved in, such as “the landscaping, the sprinkler, the roof,
the painting, [and] the driveway.”
         According to Annette’s testimony, Terry purchased the Frederick Street house very near
to when they first started dating. She testified she helped make major improvements to the house,
including painting every room, tearing down a wall, tearing up tile and putting down new tile,
refinishing the bathroom, grouting, purchasing new furniture, redoing the roof, redoing all the
landscaping, and purchasing and planting flowers. Annette was unable to find documentation of
amounts she paid for improvements to the Frederick Street house.
         The assessed value of the Frederick Street house was $48,500 nearest to when the parties
married, with approximately $16,000 in equity. The parties lived in the Frederick Street house
until December 2, 1999, when they sold it for $85,000, with approximately $50,000 in equity.
         On November 7, 1999, the parties entered into a purchase agreement to buy a residence
on North 73d Plaza in Omaha for $260,000. Including closing costs and other fees, the total cost
to purchase the North 73d Plaza residence was $274,393.16. The parties made a downpayment of
$100,393.16 and paid the remaining balance with a bank loan. Terry testified that the
downpayment was comprised of $50,000 in proceeds from the sale of the Frederick Street
residence and that the remaining funds came from the parties’ savings account.
         During the dissolution proceedings, the parties agreed to sell the North 73d Plaza
residence. The sale of the home netted approximately $350,000. Terry requested that the court
divide the remaining equity equally after awarding to him as his separate property $50,000 to
reflect the amount of proceeds he contributed to the downpayment from the sale of the Frederick
Street house.
         The court entered a decree of dissolution on April 29, 2013. The court found that Pipers
Plus was not a marital asset. The court found that Terry’s 25-percent interest in Pipers Plus was
gifted to him by his mother and that any increase in the value of Pipers Plus did not result from
the efforts of Annette, who in no way contributed to the improvement or operation of the
company.
         The court further found that $50,000 of the purchase price for the parties’ marital home
located on North 73d Plaza was obtained from the sale of Terry’s premarital home at Frederick
Street. However, the court found that Annette participated in the repair and upkeep of the
Frederick Street house and that therefore, she was entitled to $10,000 of the $50,000 in
remaining equity from the sale of the marital residence.



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        Other findings by the court are not at issue in this appeal and are therefore not included in
our discussion. Annette timely appealed, and Terry timely cross-appealed.
                                  ASSIGNMENTS OF ERROR
        On appeal, Annette asserts that the trial court erred in determining that Pipers Plus was
not a marital asset and in failing to include the value of Pipers Plus in the overall division of the
marital estate.
        On cross-appeal, Terry asserts that the trial court abused its discretion in awarding
Annette $10,000 of the proceeds from the sale of Terry’s premarital home used in the
downpayment on their marital home.
                                    STANDARD OF REVIEW
        In an action for the dissolution of marriage, an appellate court reviews de novo on the
record the trial court’s determinations of custody, child support, property division, alimony, and
attorney fees; these determinations, however, are initially entrusted to the trial court’s discretion
and will normally be affirmed absent an abuse of discretion. Mamot v. Mamot, 283 Neb. 659,
814 N.W.2d 440 (2012).
        A judicial abuse of discretion exists when the reasons or rulings of a trial judge are
clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in
matters submitted for disposition. Fitzgerald v. Fitzgerald, 286 Neb. 96, 835 N.W.2d 44 (2013).
        When evidence is in conflict, an appellate court considers, and may give weight to, the
fact that the trial judge heard and observed the witnesses and accepted one version of the facts
rather than another. Freeman v. Groskopf, 286 Neb. 713, 838 N.W.2d 300 (2013).
                                            ANALYSIS
Exclusion of Pipers Plus From Marital Estate.
        Annette argues that the trial court abused its discretion when it determined that Terry’s
ownership interest in Pipers Plus was a nonmarital asset gifted to Terry by his mother during the
parties’ marriage.
        Pursuant to Neb. Rev. Stat. § 42-365 (Reissue 2008), the equitable division of property is
a three-step process. The first step is to classify the parties’ property as marital or nonmarital.
The second step is to value the marital assets and liabilities of the parties. The third step is to
calculate and divide the net marital estate between the parties in accordance with the principles
in § 42-365. Sitz v. Sitz, 275 Neb. 832, 749 N.W.2d 470 (2008). The ultimate test in determining
the appropriateness of the division of property is fairness and reasonableness as determined by
the facts of each case. Molczyk v. Molczyk, 285 Neb. 96, 825 N.W.2d 435 (2013).
        The parties were married on May 31, 1997, and Pipers Plus was established in October
1998. Thus, Terry acquired his sole interest in Pipers Plus during the marriage, and his interest is
presumptively marital property unless an exception to the general rule excludes it from the
marital estate. Heald v. Heald, 259 Neb. 604, 611 N.W.2d 598 (2000). 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. Sitz, supra.




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         Terry claims that his interest in Pipers Plus was a gift, which is normally excluded from
the marital estate. With some exceptions, the marital estate does not include property acquired by
one of the parties through gift or inheritance. Heald, supra. The burden of proof to show that
property is a nonmarital asset remains with the person making the claim. Schuman v. Schuman,
265 Neb. 459, 658 N.W.2d 30 (2003).
         Annette argues that Terry offered no documentary evidence to substantiate his claim that
Pipers Plus was gifted to him by his mother, similar to Heald, supra. In Heald, the Nebraska
Supreme Court affirmed a trial court’s determination that stock received by the husband during
marriage was not a gift from his parents. Although both the husband and his mother testified the
stock was a gift, a stock purchase agreement referred to the husband as a buyer, an attorney’s
letter referenced a purchase of the stock by the husband, and the wife testified that her husband
told her he had purchased the stock. Recognizing that credible evidence was in conflict, the
Nebraska Supreme Court concluded that the trial court did not err by including the stock in the
marital estate after considering and giving weight to the fact that the trial judge heard and
observed the witnesses and accepted the wife’s testimony and related inferences from the
evidence. Id.
         In this case, according to the testimony of Terry and his brother, Terry’s mother was the
only person who paid any money to form Pipers Plus. Although Pipers Plus’ articles of
organization and operating agreement both indicated that each brother contributed $10,000 in
capital contributions when Pipers Plus was formed, Terry’s brother testified that in reality, their
mother was the sole individual to make capital contributions due to tax consequences if she
gifted such amounts to each brother all at once. Terry’s brother testified that each brother’s
25-percent interest in Pipers Plus was gifted to them over 4 to 5 years through stock options.
Further, unlike Heald, supra, where the wife testified her husband purchased stock and therefore
marital funds were implicated, Annette testified that she and Terry shared a joint account at the
time Pipers Plus was formed and that to her knowledge, they did not put any money into the
business. Given this conflict in evidence, we consider and give weight to the fact that the trial
court heard and observed the witnesses and accepted one version of the facts rather than another.
Marcovitz v. Rogers, 267 Neb. 456, 675 N.W.2d 132 (2004). We therefore conclude the district
court did not abuse its discretion in excluding Terry’s 25-percent interest in Pipers Plus from the
marital estate.
Award of Proceeds to Annette From
Terry’s Premarital Home.
        In his cross-appeal, Terry argues that the trial court abused its discretion when it awarded
Annette $10,000 of the $50,000 in proceeds from the sale of Terry’s premarital residence, which
the parties used as part of their downpayment on their marital residence.
        Property owned by a party at the time of marriage is not marital property. Smith v. Smith,
9 Neb. App. 975, 623 N.W.2d 705 (2001). If premarital property can be identified, it is typically
set off to the spouse who brought the property into the marriage. Charron v. Charron, 16 Neb.
App. 724, 751 N.W.2d 645 (2008). An exception to the rule applies where both of the spouses
have contributed to the improvement or operation of the property which one of the parties owned
prior to the marriage or where the spouse not owning the property prior to the marriage has



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significantly cared for the property during the marriage. See Van Newkirk v. Van Newkirk, 212
Neb. 730, 325 N.W.2d 832 (1982). Where the Van Newkirk exception is applied, evidence of the
value of the contributions and evidence that the contributions were significant are generally
required. Bussell v. Bussell, 21 Neb. App. 280, 837 N.W.2d 840 (2013). See, also, Tyler v. Tyler,
253 Neb. 209, 570 N.W.2d 317 (1997).
        The evidence at trial supports the trial court’s finding that Annette is entitled to $10,000
for her repair and upkeep of Terry’s premarital residence. Annette testified that she helped Terry
make major improvements to the house, including painting every room, tearing down a wall,
tearing up tile and putting down new tile, refinishing the bathroom, grouting, purchasing new
furniture, redoing the roof, redoing all the landscaping, and purchasing and planting flowers.
Annette presented evidence that demonstrated such improvements significantly improved the
house’s value during the parties’ marriage. Annette presented evidence at trial reflecting that the
assessed value of the house at the time the parties married in 1997 was $48,500, with
approximately $16,000 in equity. The parties sold the house 2 years later for $85,000, with
approximately $50,000 in equity. Annette testified that the increase in equity following their
marriage was in part due to their joint improvements. The trial court agreed and awarded
$10,000 of that $50,000 in equity to Annette. We cannot say that the trial court abused its
discretion in making that determination. See Harris v. Harris, 261 Neb. 75, 621 N.W.2d 491
(2001) (awarding wife portion of growth in equity in husband’s premarital home due to her
contributions to mortgage payments from marital income and certain home improvements).
                                         CONCLUSION
       We conclude that the district court did not abuse its discretion in its determination that
Pipers Plus was a nonmarital asset, nor did it abuse its discretion by awarding Annette a portion
of the proceeds Terry claimed were solely his premarital property. We therefore affirm the
decree of dissolution in all respects.
                                                                                      AFFIRMED.




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