962 N.W.2d 563
Neb. Ct. App.2021Background
- Joshua and Michelle Verzal married in 2006 and have three children; Joshua filed for dissolution in June 2018.
- Prior to trial the parties agreed on custody, parenting time, and valuation/distribution of household goods and vehicles; outstanding issues at trial included child support, alimony, valuation/division of the marital residence, and certain accounts.
- The district court awarded joint legal and physical custody, ordered Joshua to pay $439/month child support, denied alimony, and made the following asset awards: Michelle received the marital residence (valued at $300,000) subject to a $197,673 mortgage, her retirement ($93,154) and an investment account ($11,057); Joshua received his 401(k) ($208,828), 457 ($12,277), pension ($103,408) and $3,336 in personal debt.
- To equalize the distribution the district court ordered Joshua to pay Michelle $57,319.50 in cash within 6 months of the decree.
- Joshua moved to amend the decree (denied) and appealed, challenging (1) the lump-sum cash equalization payment, (2) the manner of dividing retirement accounts, and (3) the court’s failure to require Michelle to refinance the mortgage.
Issues
| Issue | Plaintiff's Argument (Joshua) | Defendant's Argument (Michelle) | Held |
|---|---|---|---|
| Form of equalization payment | Lump-sum cash is infeasible; lacks liquid assets; tax consequences; equalization should be via QDRO from 401(k) | Michelle did not object to QDRO and proposed transferring equalization from Joshua’s 401(k) | Reversed cash order; remanded and directed equalization via Joshua’s 401(k) by QDRO |
| Division of retirement accounts | Retirement should be divided equally/separately from real estate to address tax consequences | Court’s mixed awards are equitable; absent expert tax evidence, no adjustment for taxes warranted | Affirmed; no abuse of discretion in the court’s property division |
| Mortgage refinancing | Court should require Michelle to refinance to remove Joshua’s name to protect his credit and future borrowing | Michelle awarded the home and mortgage; district court required her to pay mortgage and indemnify Joshua but did not mandate refinance | Modified decree: Michelle must refinance to remove Joshua by Oct 1, 2021; parties share refinancing costs equally |
Key Cases Cited
- Onstot v. Onstot, 298 Neb. 897 (2018) (standard of review for custody, support, property division in dissolution cases)
- Bock v. Dalbey, 283 Neb. 994 (2012) (statutory authority for equitable distribution of marital estate)
- Blaine v. Blaine, 275 Neb. 87 (2008) (QDROs as enforcement devices for dividing retirement benefits)
- Thompson v. Thompson, 18 Neb. App. 478 (Neb. App. 2010) (QDRO implements pension division in dissolution)
- Brozek v. Brozek, 292 Neb. 681 (2016) (three-step process for equitable property division)
- Jirkovsky v. Jirkovsky, 247 Neb. 141 (1995) (cannot discount retirement award for future taxes without expert testimony)