Coufal v. Coufal
291 Neb. 378
| Neb. | 2015Background
- Dale and Lavon Coufal married in 2004; no children of the marriage. Dale had participated in the Nebraska Public Employees Retirement Systems (NPERS) since 1986.
- Before the marriage Dale’s NPERS account had a premarital principal of $76,271.45. Nebraska law guaranteed a statutory minimum return on NPERS accounts.
- An expert (Rosenbaum) calculated that, as of May 6, 2013, the premarital portion had grown to $120,010.82 under the statutory rate; the parties do not dispute that valuation.
- The district court treated the appreciation on the premarital portion as marital property and included it in the marital estate, valuing the whole retirement account at $219,830.07.
- Dale appealed, arguing the statutorily guaranteed appreciation of the premarital portion was not earned by marital efforts or contributions and therefore should remain nonmarital. The Nebraska Supreme Court granted bypass and reviewed de novo.
Issues
| Issue | Plaintiff's Argument (Coufal) | Defendant's Argument (Coufal) | Held |
|---|---|---|---|
| Whether statutory appreciation of premarital NPERS funds is marital property | The statutorily guaranteed increase is nonmarital because it was fixed prior to marriage and not caused by marital efforts | District court: appreciation accrued during marriage and therefore is marital income/asset tied to continued employment | Appreciation on premarital portion is nonmarital; reversing inclusion in marital estate |
| Whether premarital funds were commingled such that appreciation became marital | Premarital portion remained identifiable and traceable; no commingling | District court implied ongoing account activity made it marital | No commingling; premarital portion and its statutorily-caused appreciation are traceable and remain separate |
| Proper valuation date for nonmarital portion | Use expert’s valuation date (May 6, 2013) | District court used its own valuation date for the account | Valuation as of May 6, 2013 is acceptable; parties do not dispute that date |
| Standard for including appreciation of separate property in marital estate | Appreciation is marital only if caused by marital funds or marital efforts (active appreciation) | Court previously treated income/benefits earned during marriage as marital | Court applies ‘‘active vs. passive appreciation’’ test; statutory, passive appreciation is nonmarital |
Key Cases Cited
- Molczyk v. Molczyk, 285 Neb. 96 (review standard for dissolution matters)
- Tyma v. Tyma, 263 Neb. 873 (abuse-of-discretion and property classification principles)
- Reed v. Reed, 275 Neb. 87 (general rule that property acquired during marriage is marital)
- Shockley v. Shockley, 251 Neb. 896 (contributions before marriage not marital)
- Van Newkirk v. Van Newkirk, 212 Neb. 730 (passive inflation/market appreciation remains separate)
- Buche v. Buche, 228 Neb. 624 (separate stock retained as nonmarital where no marital contribution)
- Harris v. Harris, 261 Neb. 75 (income accumulated during marriage may be marital)
- Davidson v. Davidson, 254 Neb. 656 (employment-related benefits acquired during marriage can be marital)
- Heald v. Heald, 259 Neb. 604 (commingling can convert separate to marital property)
- Baker v. Baker, 753 N.W.2d 644 (retirement-account appreciation remained separate where not caused by marital effort)
- In re Marriage of Raad, 301 Ill. App. 3d 683 (premarital retirement account and subsequent appreciation held separate)
- Snodgrass v. Snodgrass, 295 S.W.3d 240 (traceability standard for commingling)