Parde v. Parde
313 Neb. 779
Neb.2023Background
- Arlan and Cynthia Parde married in 1994; Arlan operated a farming business before and during the marriage and both spouses contributed to the operation and used a joint account for farm receipts and expenses.
- They separated in 2019; trial occurred in February 2021. The dispute focused on classification (marital vs nonmarital) of appreciation in five parcels of agricultural land acquired before or during the marriage.
- The district court largely credited Arlan’s tracing and awarded substantial nonmarital setoffs, ordering an equalization payment to Cynthia.
- The Nebraska Court of Appeals reversed in part, applying the active-appreciation rule to farmland and treating much of the appreciation as marital, then remanded for redivision.
- The Nebraska Supreme Court granted further review to decide whether the active-appreciation rule applies to agricultural land and whether Arlan met his burden to show that appreciation was nonmarital; it affirmed the Court of Appeals as modified and remanded with specific marital/nonmarital values.
Issues
| Issue | Cynthia's Argument | Arlan's Argument | Held |
|---|---|---|---|
| Applicability of active-appreciation rule to farmland | Appreciation on farmland should be marital when caused by marital efforts; Court of Appeals properly applied rule | Farmland should be treated differently; remand should be allowed to permit Arlan to prove market (passive) causes | Rule applies to agricultural land; owning spouse bears burden to prove appreciation is nonmarital (not caused by active efforts) |
| Fertilizer Plant (premarital) | District court erred by treating appreciation as nonmarital; appreciation ($333,750) is marital | Appreciation is market-driven/nonmarital; district court correctly set off premarital value | Appreciation of $333,750 is marital; Arlan’s premarital basis $70,000 is nonmarital |
| Lenard’s Farm (partly premarital) | Appreciation is marital; district court undervalued marital portion | Arlan entitled to larger nonmarital credit (claimed $40,000) | Nonmarital equity at marriage $24,000 set off; remaining $129,000 is marital |
| Holmesville Farm (purchased during marriage via 1031 exchange using some premarital proceeds) | Much of property is marital; district court undervalued marital portion | Reduce marital value by percentage attributable to nonmarital funds used to acquire it | Marital portion $691,500; nonmarital setoff $42,500 (district court abused discretion in using lower marital figure) |
| Home Place (5 acres of premarital land with marital house built) | The house and land should be treated as marital; appreciation should be marital | Arlan entitled to premarital credit for the 5 acres ($25,000) | Entire Home Place ($385,000) is marital; Arlan receives no nonmarital credit for the 5 acres’ appreciated value |
| Grandma’s Farm (purchase from Arlan’s mother with alleged $20,000 gift/credit) | Entirety is marital (no proof gift funded purchase) | $20,000 from mother was a gift/inheritance to Arlan (nonmarital) and should reduce marital share | Court accepts district court’s finding that mother gifted $20,000 to Arlan but limits setoff to $20,000; $216,000 of $236,000 is marital |
Key Cases Cited
- Stephens v. Stephens, 297 Neb. 188 (2017) (adopted active-appreciation rule: appreciation of nonmarital assets during marriage is marital to extent caused by either spouse’s efforts)
- Stanosheck v. Jeanette, 294 Neb. 138 (2016) (articulated tracing/valuation principles for accrued earnings on nonmarital accounts)
- White v. White, 304 Neb. 945 (2020) (reaffirmed active-appreciation framework and emphasized need for evidence on causation)
- Shafer v. Shafer, 16 Neb. App. 170 (2007) (Court of Appeals decision on farmland appreciation later disapproved to extent inconsistent with Stephens)
- Simons v. Simons, 312 Neb. 136 (2022) (discussed contribution tests and burden for classifying separate vs marital property)