Holen v. Holen, A-16-1201

Background

Claire and Erik Holen married in 2005, had three young children; divorce filed by Claire in October 2014; trial in Sept. 2016 and decree entered Nov. 2016 (amended Dec. 2016).
Central disputed property: a lease with a 10-year option to purchase farmland held by Claire/Erik and owned by Erik’s grandmother, LaVaughn Larson; option price reduced to $480,000 by amendment; refinancing in Sept. 2014 subordinated the option to a Dakota MAC deed of trust and created substantial farm debt.
Claire’s expert valued the unexercised option at roughly $1,088,061 (reduced in court to $1,023,061); the district court awarded the option and associated tax liability to Erik and allocated the Dakota MAC debt to him, producing a property equalization award to Claire.
Larson sent a termination letter in Aug. 2016 claiming the option was unenforceable; the district court made findings about Larson’s motives and Erik’s role in the termination, which were contested on appeal.
Custody: court awarded joint legal custody and physical custody to Claire with specified parenting time for Erik; child support, health insurance, daycare/medical cost allocation and caps, alimony (nominal $1/year later), and attorney-fee decisions were included in the decree.

Issues

Issue	Plaintiff's Argument (Erik / Claire as applicable)	Defendant's Argument (opposing party)	Held
Valuation & allocation of unexercised option to purchase farm	Erik: option was worthless because parties could not obtain financing and it was subordinated; court lacked jurisdiction over Larson-related matters because Larson was not a party	Claire: option had substantial value per expert; district court properly included option in marital estate and assigned value	Court: option is a marital asset but it was an abuse of discretion to award it solely to Erik and assign a million-dollar value given financing/subordination and Larson’s termination; reversed and remanded to award the option to both parties and delete the deferred-tax liability from Erik’s allocation; vacated district court findings about Larson’s motives/enforceability because Larson was a necessary party
Jurisdiction to decide enforceability/termination of the lease/option	Erik: district court lacked personal/subject-matter jurisdiction to adjudicate validity/termination because Larson was not joined	Claire: court could treat any interference as dissipation and include value in marital estate without joining Larson	Court: where resolution would affect a nonparty’s interests (Larson), she is a necessary party; court lacked jurisdiction to decide Larson’s motives or termination enforceability—those findings reversed and vacated
Custody and parenting time	Erik: sought joint physical custody or greater parenting time per expert recommendation	Claire: primary physical custody should remain with her due to established routines and primary caretaker role; joint legal custody only	Court: affirmed award of physical custody to Claire and parenting time to Erik; trial court did not abuse discretion in declining to adopt expert’s alternate midweek/overnight proposal
Child support / earning capacity; averaging income; daycare/medical cap; annualization	Erik: court should use Claire’s earning capacity and annualize abated months; Claire: court should average Erik’s fluctuating farm income and not cap daycare/medical reimbursements at $113 per month	Court below used $11/hr (40-hr wk) for Claire and $17/hr (40-hr wk) for Erik; capped daycare/medical at $113 due to subsistence rule	Appellate court: affirmed income determinations and child support amount; declined to annualize abatement; upheld $113/month cap as consistent with Neb. Ct. R. § 4-218 but modified decree to permit annual recalculation if Guidelines change
Post-valuation withdrawals & attorney fees	Erik: court should require Claire to account for $23,373.42 removed after valuation date; Claire: funds paid attorney—court already considered this	Claire: sought additional attorney fees given work and results	Court: district court considered the withdrawals and denied additional fees; appellate court found no abuse of discretion in denying further attorney fees

Key Cases Cited

Marshall v. Marshall, 298 Neb. 1 (2017) (sets three-step process for classification, valuation, and division of marital property)
Reed v. Reed, 277 Neb. 391 (2009) (necessary-party rule: absence of indispensable parties deprives court of jurisdiction over issues affecting their interests)
Schuman v. Schuman, 265 Neb. 459 (2003) (general rule that property acquired during marriage is marital estate absent exceptions)
Liming v. Liming, 272 Neb. 534 (2006) (property division guidance: no precise mathematical formula; fairness and reasonableness govern split)
Garza v. Garza, 288 Neb. 213 (2014) (factors for awarding attorney fees in dissolution matters)