The husband filed for dissolution after 18 years of marriage, disputing whether or not two adjoining heaps have been marital property. One lot included the marital residence, and the opposite had a barn for the spouse’s horse coaching enterprise. The husband bought each heaps earlier than the wedding, however each have been encumbered by loans paid off with a mixture of marital and premarital funds. The properties appreciated considerably through the marriage because of market forces. The important thing difficulty was whether or not paying down the loans with marital funds created a marital curiosity within the properties.
The District Courtroom concluded that the heaps have been nonmarital property, aside from the marital contributions towards the mortgage principals. The courtroom awarded the husband the properties and the spouse a money equalization fee for half of the marital contributions. The spouse appealed, arguing that the properties ought to be thought of marital because of using marital funds to pay down the loans.
The Courtroom of Appeals affirmed the district courtroom’s resolution concerning the land parts of the heaps, discovering them nonmarital. Nonetheless, it reversed the choice concerning the barn and different enhancements on one lot, classifying them as marital property as a result of joint efforts of their building and operation. The courtroom modified the equalization fee to the spouse accordingly.
The Supreme Courtroom reviewed the case and adopted the “supply of funds” rule, which considers the marital property’s acquisition of fairness within the properties by means of mortgage paydowns with marital funds. The courtroom reversed the Courtroom of Appeals’ resolution concerning the land parts of the heaps and remanded the case for a brand new listening to to find out the equitable division of those properties, contemplating the supply of funds rule. The choice concerning the barn and different enhancements was affirmed.
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