Schnackel v. Schnackel

September 2019 Expanded Case Summary for Concordia

A-18-0428, Laura B. Schnackel (appellee/cross-appellant) v. Gregory R. Schnackel (appellant)

Douglas County District Court, Judge Horacio J. Wheelock

Background:  Laura and Gregory were married in 1985 and had two children during their marriage. In 2016, Laura filed for divorce, and a trial was held for several days in October 2017 and February 2018. After trial concluded, the district court entered a decree which dissolved the parties’ marriage, divided the marital estate, and awarded alimony and child support to Laura. Gregory appeals the decree, and Laura cross-appeals.

The issues Gregory raises on appeal generally fall into four categories. First, Gregory makes several arguments regarding the valuation and division of the marital estate. Gregory owns a company called Schnackel Engineers, Inc., referred to throughout the case as “SEI.” SEI was originally founded by Gregory’s father, Dale, but in 1994, Dale gifted 50% of the company to Gregory. Dale then transferred the remaining 50% to Gregory in 2000. The district court determined that the 2000 transfer was not a gift, and Gregory challenges that finding on appeal. In 2003, Gregory started a related company, AEA Integration, Inc., referred to as “AEA.” The district court awarded Laura 50% of the issued and outstanding shares of AEA stock and 50% of any future profits AEA earns. Gregory challenges these awards on appeal. During the marriage, Gregory’s mother, Marvel, made certain transfers of money to SEI, and Gregory borrowed money from SEI during the pendency of this divorce case. On appeal, Gregory disagrees with the manner in which the district court treated these transactions.

The second category of Gregory’s arguments on appeal relate to dissipation of marital assets. Under Nebraska law, dissipation of marital assets occurs when one spouse uses marital property for a selfish purpose unrelated to the marriage at a time when the marriage is undergoing an irretrievable breakdown. When marital assets are dissipated by a spouse for purposes unrelated to the marriage, the remedy is to include the dissipated assets in the marital estate in dissolution actions. During the marriage, Gregory leased an apartment in New York City because SEI was doing a lot of business in New York. In 2010, he met a woman, Julia, and began spending time with her. The relationship turned into a sexual affair in September 2013, and Gregory began spending significant amounts of money on Julia by buying her clothes, shoes, and jewelry; paying for her to travel with him; paying her expenses such as a personal credit card; and giving her cash. Gregory took steps to conceal the affair from Laura, such as opening a separate credit card (referred to throughout the case as the “9779 account”) that he used for all spending related to Julia. Laura discovered the affair in April 2015, and she and Gregory began attending marriage counseling at that time. Gregory continued to live in the marital home, including staying in the marital bedroom, until he was demoted to a basement bedroom in June 2016 and eventually moved out of the marital home on August 28, 2016. The district court determined that, for purposes related to dissipation of marital assets, Gregory and Laura’s marriage began undergoing an irretrievable breakdown as of September 2013 and that in total, Gregory dissipated $3.5 million in marital assets. On appeal, Gregory argues that the court should have found that the marriage was not undergoing an irretrievable breakdown until August 28, 2016, the date he moved out of the marital home. He also argues that the district court improperly relied on hearsay testimony and used an incorrect standard in its dissipation analysis, and that the district court improperly calculated the amount of assets that were dissipated, arguing that the court failed to give him credit for some legitimate business and marital expenses.

The third category of arguments Gregory raises on appeal relate to the district court’s alimony award. The court ordered Gregory to pay alimony to Laura of $7,500 per month for 120 months. Gregory argues that the court erred in its calculation of his monthly income and ability to pay for alimony purposes and that the amount of alimony awarded was excessive, especially when considering the value of the property awarded to Laura.

Finally, Gregory raises several arguments regarding certain orders the district court entered after the decree was filed. In those orders, Gregory was required to make temporary payments to Laura during the pendency of this appeal, and Gregory challenges certain portions of those orders.

Laura cross-appeals the decree and raises an argument related to the treatment of funds she inherited during the marriage. Generally under Nebraska law, 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. If property inherited during the marriage can be identified, it is to be set off to the inheriting spouse and eliminated from the marital estate. In this case, Laura inherited stocks, bonds, and cash during the marriage due to the deaths of her mother and brother. She initially put the funds into a TD Ameritrade account, but used some of the funds to purchase two different stocks. The stocks appreciated in value a total of more than $600,000. The district court treated the appreciation of the stocks as a marital asset and awarded 50% of the value to Gregory. On appeal, Laura claims that the court erred when it did so and that she was entitled to retain 100% of the appreciation as her nonmarital property.

Attorneys:  Michael W. Milone, Mark J. Milone (Koukol & Johnson, LLC) (for Gregory) -- Edward D. Hotz (Pansing Hogan Ernst & Bachman LLP) (for Laura)