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10/01/2021 01:08 AM CDT
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Nebraska Supreme Court Advance Sheets
310 Nebraska Reports
VANDERVEER v. VANDERVEER
Cite as 310 Neb. 196
Joy R. Vanderveer, appellee and cross-appellant,
v. Steve M. Vanderveer, appellant
and cross-appellee.
___ N.W.2d ___
Filed September 24, 2021. No. S-20-733.
1. Divorce: Child Custody: Child Support: Property Division:
Alimony: Attorney Fees: Appeal and Error. In a marital dissolution
action, an appellate court reviews the case de novo on the record to
determine whether there has been an abuse of discretion by the trial
judge. This standard of review applies to the trial court’s determinations
regarding custody, child support, division of property, alimony, and
attorney fees.
2. Evidence: Appeal and Error. In a review de novo on the record, an
appellate court is required to make independent factual determinations
based upon the record, and the court reaches its own independent con-
clusions with respect to the matters at issue.
3. Judges: Words and Phrases. A judicial abuse of discretion exists if the
reasons or rulings of a trial judge are clearly untenable, unfairly depriv-
ing a litigant of a substantial right and denying just results in matters
submitted for disposition.
4. Property Division: Appeal and Error. The division of marital prop-
erty is a matter initially entrusted to the trial judge, and an appellate
court will not disturb the trial court’s findings, absent an abuse of
discretion.
5. Divorce: Property Division. In a dissolution action, the equitable divi-
sion of property is a three-step process. The first step is to classify the
parties’ property as either marital or nonmarital, setting aside the non-
marital property to the party who brought the property to the marriage.
The second step is to value the marital assets and marital liabilities of
the parties. And the third step is to calculate and divide the net marital
estate equitably between the parties.
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VANDERVEER v. VANDERVEER
Cite as 310 Neb. 196
6. ____: ____. In a dissolution action, there is no mathematical formula
by which property awards can be precisely determined, but as a general
rule, a spouse should be awarded one-third to one-half of the marital
estate, the polestar being fairness and reasonableness as determined by
the facts of each case.
7. Property Division. Marital debt includes only those obligations incurred
during the marriage for the joint benefit of the parties.
8. Property Division: Proof. The burden to show that a debt is nonmarital
is on the party making that assertion.
9. Property Division: Stock. Unvested employee stock options and stock
retention shares constitute marital property when accumulated and
acquired during the marriage through the joint efforts of the parties.
10. Property Division: Stock: Proof. To apply the time rule from Davidson
v. Davidson, 254 Neb. 656, 578 N.W.2d 848 (1998), it is essential
that the court be presented with evidence from which it can determine
whether the unvested stock options or stock retention shares were
granted as compensation for past, present, or future services. The bur-
den to present such evidence is on the party asserting the time rule
is applicable.
11. Child Support: Rules of the Supreme Court. When calculating the
amount of support to be paid under the Nebraska Child Support Guide
lines, a court must consider the total monthly income of the parties.
12. ____: ____. The main principle behind the Nebraska Child Support
Guidelines is to recognize the equal duty of both parents to contrib-
ute to the support of their children in proportion to their respective
net incomes.
13. ____: ____. When determining total income under the Nebraska Child
Support Guidelines, all income from all sources is to be included except
for those incomes specifically excluded.
14. Child Support: Rules of the Supreme Court: Presumptions: Proof.
When determining total income under the Nebraska Child Support
Guidelines, a court should not include income that is speculative in
nature and over which the party has little or no control. But when the
evidence shows the party earns or can reasonably expect to earn a cer-
tain amount of income on a regular basis, a rebuttable presumption of
including such income arises, and to rebut that presumption, the party
must produce sufficient evidence to show that including the income
would not result in a fair and equitable child support order.
15. Divorce: Alimony. Neb. Rev. Stat. § 42-365 (Reissue 2016) gives
courts discretion, in an appropriate case, to require sufficient security
to be given for the payment of alimony awards. Generally, reasonable
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Nebraska Supreme Court Advance Sheets
310 Nebraska Reports
VANDERVEER v. VANDERVEER
Cite as 310 Neb. 196
security for payment of alimony should be invoked in the original
decree only when compelling circumstances require it.
16. Child Custody: Appeal and Error. Child custody and parenting time
determinations are matters initially entrusted to the discretion of the trial
court, and although reviewed de novo on the record, the trial court’s
determination will normally be affirmed absent an abuse of discretion.
Appeal from the District Court for Douglas County: J.
Michael Coffey, Judge. Affirmed in part, and in part reversed
and remanded with directions.
Virginia A. Albers and Dennis G. Whelan, of Slowiaczek
Albers, P.C., L.L.O., for appellant.
Benjamin M. Belmont and Wm. Oliver Jenkins, of Brodkey,
Peebles, Belmont & Line, L.L.P., for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Stacy, J.
After a trial, the district court for Douglas County entered
a decree dissolving the marriage of Steve M. Vanderveer and
Joy R. Vanderveer, dividing their marital estate, awarding ali-
mony to Joy, and deciding issues of custody, child support, and
parenting time. Steve appeals, and Joy cross-appeals. For the
reasons explained below, we affirm in part, and in part reverse
and remand with directions.
I. BACKGROUND
Steve and Joy were married in 2004. The marriage produced
two children, a daughter born in 2006 and a son born in 2010.
The parties separated in February 2019, and Steve moved out
of the marital home. In May 2019, Joy filed a complaint for
dissolution in the district court for Douglas County.
The district court entered a temporary order under which
the parties shared joint legal and physical custody of their
minor children. The temporary order established a 2-2-2-1
parenting time schedule that accommodated Steve’s work
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310 Nebraska Reports
VANDERVEER v. VANDERVEER
Cite as 310 Neb. 196
schedule. Under the temporary plan, Joy had a total of four
overnights with the children each week and Steve had three.
Among other things, Steve was ordered to pay temporary child
support of $1,250 per month; the monthly mortgage, taxes,
insurance, and utilities on the family residence; the monthly car
payment on Joy’s vehicle; and “all joint credit card obligations
of the parties.”
1. Trial
Trial was held February 25, 2020. Steve and Joy were the
only witnesses. We summarize their testimony only as it per-
tains to the issues on appeal.
(a) Parties’ Education,
Employment, and Income
Steve has a bachelor’s degree in business and has worked
for Costco since he was 17 years old. Joy has a 12th grade
education but did not graduate from high school. Steve and
Joy got married in their early 20’s, in the State of Washington.
At that time, Joy worked as a barista and Steve worked as a
department manager for Costco.
When Joy became pregnant with their first child, the parties
agreed that she would stay home and raise the children and
that Steve would focus on his career. In 2013, Steve was pro-
moted to a general manager position with Costco and the fam-
ily moved to Illinois. In 2016, the family moved to Nebraska
when Steve accepted a general manager position with a Costco
facility in Omaha.
At the time of trial, Joy had returned to working part time
as a barista, earning $10 per hour. She testified that due to
ongoing pain from a prior foot injury, it was difficult for her
to stand for more than 5 hours at a time, and she generally
suggested that this restricted her ability to work full time. Joy
testified she was planning to obtain her GED and then pursue
further education in either interior design or real estate.
At the time of trial, Steve was still working as a general
manager for Costco in Omaha. His income in that position
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310 Nebraska Reports
VANDERVEER v. VANDERVEER
Cite as 310 Neb. 196
has increased every year, and in 2019, his reported earn-
ings from Costco were approximately $631,000. This amount
included, among other things, a base salary of approximately
$125,000, an annual performance-based bonus of roughly
$42,000, and more than $461,000 from Steve’s participation in
Costco’s “Restricted Stock Unit” (RSU) program.
Steve’s RSU income is by far the largest portion of his
annual income, and it was a central point of contention in this
dissolution. The parties disputed how to classify and equitably
divide the unvested RSUs granted during the marriage, and
they disagreed about whether Steve’s RSU income should be
included as part of his total income for purposes of calculating
child support. As relevant to the issues on appeal, we describe
the evidence regarding RSUs in some detail.
(b) RSUs
The RSUs granted to Steve are controlled by the “Costco
Wholesale Corporation Restricted Stock Unit Award Agreement”
(RSU agreement) and the “Costco Wholesale Corporation
Seventh Restated 2002 Stock Incentive Plan.” Only the RSU
agreement was offered into evidence. That agreement generally
describes that RSUs are not stock shares, but, rather, “Stock
Units” which represent “hypothetical shares” of Costco stock
that “will be converted into shares when the Stock Units are
settled after vesting.” Participation in the RSU program does
not create a right to future employment with Costco and does
not affect the company’s right to terminate or modify employ-
ment. The RSU agreement states that RSUs “shall not be sold,
encumbered, pledged or otherwise disposed of, whether volun-
tarily or by operation of law.”
Costco grants RSUs annually, usually on October 22, to
those who are eligible. The RSU agreement in our record
does not set out the eligibility criteria for participation in the
RSU program, nor does it describe how the company deter-
mines the number of RSUs to be granted. The total number
of RSUs granted annually to Steve varied year to year, but in
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310 Nebraska Reports
VANDERVEER v. VANDERVEER
Cite as 310 Neb. 196
each of the 6 years prior to trial, Costco granted Steve at least
1,100 RSUs.
The parties agree that all of the RSUs granted to Steve were
subject to a 5-year graded vesting schedule, under which 20
percent of the units vested into shares each year so long as
Steve worked continuously during the year at his current posi-
tion or higher. The RSU agreement contains provisions for
accelerated vesting after 25 years of service and in the event of
employee death. It also contains vesting provisions for employ-
ees who are terminated for other than cause.
Costco’s 2019 proxy statement was also received into evi-
dence, and it generally describes both “time-vesting” and
“performance-vesting” under Costco’s RSU program. It states
that “RSU grants to all executive officers are performance-
based, with performance-vesting over a one-year period [and]
time-vesting over five years . . . .” And it states that “[v]est-
ing of RSUs awarded to non-executive officers and employ-
ees is not performance-based.” No party contends that Steve,
as a general manager, was considered an executive officer
of Costco.
Steve testified that every October, when a portion of his
accumulated RSUs vest into shares, he has the option to either
cash them in or hold them as an investment. He routinely
cashes them, and he held no vested shares at the time of
trial. Throughout the marriage, the parties typically relied on
Steve’s base salary to pay regular monthly expenses and used
his annual bonus, and the annual income from cashing vested
RSUs, to pay off accumulated debt.
Under the RSU agreement, the value of vested shares is
determined based on the closing stock price on the date of
vesting. According to Steve’s investment and tax records, the
gross income earned from cashing his vested RSUs in 2017
was $227,328. In 2018, it was $384,591, and in 2019, it was
$461,053.
In October 2019, Costco granted Steve another 1,150 RSUs,
none of which had vested by the time of trial. At the time of
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310 Nebraska Reports
VANDERVEER v. VANDERVEER
Cite as 310 Neb. 196
trial, Steve’s Costco brokerage account held a total of 5,468
unvested RSUs from grants made in the previous 5 years, with
a projected value of more than $1.1 million. Steve asked the
court to classify the entire 2019 grant of RSUs as nonmarital
and set it off to him, reasoning that the grant was made after
the parties separated and would not begin vesting until after
the marriage was dissolved. Steve proposed that the unvested
RSUs remaining from grants made in 2015 through 2018 be
classified and divided using the “time rule” announced in
Davidson v. Davidson. 1
(c) “Postseparation” Debt
The parties’ spending habits were also a point of contention
at trial. Joy testified, “We, as a family, spent insane amounts of
money shopping and we’re accustomed to a very comfortable
lifestyle . . . .” During the marriage, both parties regularly used
credit cards in their own names, and Joy also used credit cards
issued to Steve. According to Joy, Steve handled all of their
finances and, during the year, he would make minimum pay-
ments on all of the credit cards to keep them current until the
RSUs vested, after which he would use that income to pay off
the balance on all the cards. Joy testified that Steve helped her
apply for a credit card in her name because “we were running
short on money and we had to figure out how we were going
to live until October when [the RSUs vested so that] we could
continue living the lifestyle that we were living.”
Steve generally agreed the parties’ spending habits had been
an issue throughout their marriage and had prompted them
to file bankruptcy 8 years earlier. He testified that their debt
accumulated “so frequently I can’t keep up” and stated “I’m
the only guy in the world [who] makes [$]630,000 and I have
no money. I’m broke.”
Joy testified that after the parties separated, she was
“taken off” their joint checking account and used credit cards
because she had no other source of income. Joy admitted that
1
Davidson v. Davidson, 254 Neb. 656, 664, 578 N.W.2d 848, 856 (1998).
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Nebraska Supreme Court Advance Sheets
310 Nebraska Reports
VANDERVEER v. VANDERVEER
Cite as 310 Neb. 196
between the date of separation and the date of trial, she accu-
mulated $73,656 in credit card debt. During this period, she
used credit cards to purchase what she described as “necessi-
ties” for the family, including clothes, furniture and household
goods, gas, groceries, dental and medical care, cell phones,
and “[m]iscellaneous stuff” for herself and the children. Joy
also testified that when Steve was setting up his apartment, she
used credit cards to purchase several thousand dollars’ worth
of furnishings and household items for Steve and the children.
Steve did not, for the most part, dispute Joy’s description of
the items she purchased on credit, but he did characterize her
spending as excessive. When Steve was asked whether his
spending habits were similar to Joy’s, he responded, “Not even
in the ballpark . . . .”
Steve testified that postseparation, he incurred $72,238.54
in debt using credit cards in his name, personal lines of credit,
and loans against his 401K. He testified that some of this debt
was incurred to meet his obligations under the temporary order,
but he took the position that each party should be responsible
for the postseparation debt incurred in his or her own name.
Joy took the position that her postseparation credit card debt
should be classified as marital.
(d) Proceeds From Vested RSUs Sold in 2019
Steve testified that when he cashed the shares that vested in
October 2019, the proceeds were $322,921.95, after taxes. He
used those proceeds to pay off $191,421 in what the parties
generally agree was marital debt. At the time of trial, $131,500
of the proceeds remained. Steve proposed that after using the
proceeds to pay the parties’ 2019 tax obligations, all remaining
proceeds should be awarded to him, with an appropriate equal-
ization payment to Joy.
(e) Custody and Parenting Time
At the time of trial, the parties’ daughter was 13 years old
and their son was 9 years old. Neither parent claimed the
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310 Nebraska Reports
VANDERVEER v. VANDERVEER
Cite as 310 Neb. 196
other was unfit, and they agreed joint legal custody was appro-
priate. But they disagreed on how physical custody and parent-
ing time should be allocated.
Joy asked for sole physical custody, reasoning:
[B]efore Steve and [I] ever had children, it had been
established that I would stay at home with the children
and raise them, and that would enable him to further his
career with Costco.
I’ve always been the primary caretaker in charge of
doing all the school — all of their educational stuff, doc-
tors’ appointments, dentist appointments. I would still like
to be able to play that role.
Joy testified she did not like the temporary parenting time
schedule. She thought it required too much “back and forth,”
and she did not “feel like [the children were] ever able to
settle at either home before they ha[d] to be taken to the next
home.” She also testified that Steve had missed several days of
parenting time due to his work schedule, and she disapproved
of some of his parenting decisions, including allowing the chil-
dren to use electronics in the evening and leaving their teenage
daughter to watch their preteen son.
Steve asked the court to order joint physical custody and to
continue the roughly equal parenting time schedule the parties
had been following under the temporary order. Steve thought
it was important for the children to have regular contact with
both parents, and he liked that “neither one of us ha[s] to go
more than two nights without seeing our children.” He testified
that the children had “never expressed any concerns with the
back-and-forth” and he liked the temporary parenting schedule
because it accommodated his work hours and allowed him to
“spend the most time with my children and still work and pro-
vide” for them.
(f) Child Support
For purposes of calculating child support, Joy estimated
her total monthly income at $1,083, based on a 25-hour
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VANDERVEER v. VANDERVEER
Cite as 310 Neb. 196
workweek earning $10 per hour. She estimated Steve’s total
monthly income at $52,594 based on his 2019 W-2 form,
which reported “Medicare wages and tips” in the amount of
$631,130. The parties agree this included Steve’s 2019 salary,
bonus, and vested RSU income.
Steve took the position that his RSU income should not be
considered when calculating child support, reasoning that such
income was not “guaranteed” in the future, because stock prices
could fall or he could be demoted or terminated. Excluding his
RSU income, Steve estimated his total monthly income at
$13,955.83, based on his 2019 base salary of $125,000 and
his 2019 bonus of $42,000. Steve believed Joy was capable of
working full time and earning more than $10 per hour. He thus
estimated Joy’s total monthly income either at $2,080, based
on a 40-hour workweek earning $12 per hour, or at $2,600,
if she worked the same amount earning $15 per hour. Steve
asked the court to calculate child support using the joint physi-
cal custody worksheet, based on his request for roughly equal
parenting time.
(g) Alimony
Joy requested an award of alimony, but our record does not
indicate the proposed amount or duration of her request. Joy
supported her request with an exhibit showing her anticipated
monthly living expenses were $8,470. Most of the itemized
expenses were for rent, food, utilities, and medical payments,
but approximately $2,000 was allocated monthly for clothing,
cosmetics, haircuts, entertainment, vacations, and “[m]iscel-
laneous” costs.
Steve generally agreed Joy should receive alimony, but
he asked the court to order graduated payments, claiming
that otherwise, he would not have enough to live on without
incurring monthly debt. Steve estimated his monthly expenses
were approximately $13,225, but that amount included several
thousand dollars in payments required under the temporary
order, which would not exist postdecree. Steve proposed pay-
ing alimony for a period of 5 years, with payments of $750
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VANDERVEER v. VANDERVEER
Cite as 310 Neb. 196
for the first 24 months, $1,500 for the next 24 months, and
$2,000 for the final 12 months.
2. Dissolution Decree
On September 3, 2020, the court entered a dissolution
decree. We summarize below only those provisions pertinent to
the issues raised on appeal and cross-appeal.
(a) Classification and Division of RSUs
When classifying and dividing the RSUs, the court made the
following findings:
[T]he RSUs granted . . . on October 22, 2015, October
22, 2016, October 22, 2017, and October 22, 2018, even
though not yet fully vested, are marital property and when
said RSUs vest [Joy] shall be awarded 50% of the actual
net value after the payment of taxes. [Steve] is awarded
the RSUs granted on October 22, 2019 free and clear of
any interest of [Joy].
Regarding proceeds from the vested RSUs cashed in 2019,
the court found that $191,421.10 had been used to pay down
marital debt, including credit card debt. It directed that the
remaining proceeds of $131,500.90 be used to pay the par-
ties’ 2019 state and federal taxes and to pay off Joy’s post
separation credit card balance of $72,656, which the court
classified as marital debt. After payment of these marital debts,
the remaining proceeds of $24,583.90 were awarded equally to
the parties.
(b) Child Custody and Support
The court found that both Steve and Joy were fit and proper
persons to be awarded the care, custody, and control of the
children and that it was in the children’s best interests for the
parties to share joint legal custody, with Joy having physical
custody. The decree ordered an alternating weekly parenting
time schedule under which Steve had the children four con-
secutive overnights during the first week and two consecu-
tive overnights during the second week. As such, Steve still
had 6 out of every 14 overnights with the children, but each
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VANDERVEER v. VANDERVEER
Cite as 310 Neb. 196
parent had longer blocks of time than the temporary schedule
allowed and the children had fewer transitions each week.
In calculating child support, the court generally accepted
each party’s estimate of his or her own total monthly income.
It did not include any RSU income when determining Steve’s
gross income, reasoning:
The Court finds that the [RSUs] and the income there-
from which have not vested [from units granted] on
October 22, 2015, October 22, 2016, October 22, 2017,
and October 22, 2018 are marital property and as such
should not be used to compute the child support due and
owing from [Steve] to [Joy]. . . .
At such time as the [RSUs] granted on October 22,
2019 begin to vest and when any such units granted
thereafter vest any RSU income realized by [Steve]
shall be considered income for purposes of calculating
child support.
The court’s child support worksheet was attached to the
decree. Using gross monthly income of $1,083 for Joy and
$13,955.83 for Steve, the court calculated that Steve should
pay $1,875 per month in child support for two children. After
determining that a downward deviation was appropriate “due
to the additional parenting time granted to [Steve],” the decree
ordered Steve to pay monthly child support of $1,600 for two
children and $1,100 for one child.
(c) Alimony
The court ordered Steve to pay alimony of $4,000 per month
for a period of 8 years or until the death of either party or
Joy’s remarriage, whichever occurred first. The decree did not
require Steve to provide security for his alimony obligation.
3. Motions to Alter or Amend
Both parties timely moved to alter or amend the decree,
seeking changes to provisions regarding parenting time, child
support, alimony, classification and division of unvested
RSUs, and allocation of the proceeds remaining from the
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VANDERVEER v. VANDERVEER
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vested RSUs cashed in 2019. After a hearing, the court gener-
ally overruled the motions, but it did modify Steve’s parenting
time to better accommodate his work schedule. That modifica-
tion resulted in each parent having the children 7 out of every
14 overnights.
Steve timely appealed, and Joy cross-appealed. We moved
this appeal to our docket on our own motion, primarily to
address the assignments of error pertaining to the RSUs.
II. ASSIGNMENTS OF ERROR
Steve assigns, consolidated and restated, that the district court
erred by (1) classifying Joy’s postseparation credit card debts
as marital, (2) failing to apply the time rule from Davidson 2
when classifying and dividing unvested RSUs, (3) miscalculat-
ing child support, and (4) awarding excessive alimony.
On cross-appeal, Joy assigns, restated and renumbered, that
the district court erred by (1) miscalculating child support, (2)
awarding insufficient alimony, (3) failing to require Steve to
maintain life insurance to secure the alimony award, and (4)
awarding the parties equal parenting time.
III. STANDARD OF REVIEW
[1] In a marital dissolution action, an appellate court reviews
the case de novo on the record to determine whether there has
been an abuse of discretion by the trial judge. 3 This standard
of review applies to the trial court’s determinations regarding
custody, child support, division of property, alimony, and attor-
ney fees. 4
[2] In a review de novo on the record, an appellate court
is required to make independent factual determinations based
upon the record, and the court reaches its own independent
conclusions with respect to the matters at issue. 5
2
Id.
3
Cornwell v. Cornwell, 309 Neb. 156, 959 N.W.2d 243 (2021).
4
Id.
5
Id.
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[3] A judicial abuse of discretion exists if the reasons or rul-
ings of a trial judge are clearly untenable, unfairly depriving a
litigant of a substantial right and denying just results in matters
submitted for disposition. 6
IV. ANALYSIS
1. Classification and Division of
Marital Assets and Debts
[4-6] The division of marital property is a matter initially
entrusted to the trial judge, and an appellate court will not dis-
turb the trial court’s findings, absent an abuse of discretion. 7
In a dissolution action, the equitable division of property is
a three-step process. 8 The first step is to classify the parties’
property as either marital or nonmarital, setting aside the non-
marital property to the party who brought the property to the
marriage. 9 The second step is to value the marital assets and
marital liabilities of the parties. 10 And the third step is to cal-
culate and divide the net marital estate equitably between the
parties. 11 There is no mathematical formula by which property
awards can be precisely determined, but as a general rule, a
spouse should be awarded one-third to one-half of the marital
estate, the polestar being fairness and reasonableness as deter-
mined by the facts of each case. 12
(a) Classifying Joy’s Credit Card Debt
At trial, Steve asked the court to classify all postseparation
debt as nonmarital and set it off to the spouse who incurred
6
Id.
7
Harris v. Harris, 261 Neb. 75, 621 N.W.2d 491 (2001).
8
Dooling v. Dooling, 303 Neb. 494, 930 N.W.2d 481 (2019).
9
Id. See Fetherkile v. Fetherkile, 299 Neb. 76, 907 N.W.2d 275 (2018).
10
Dooling, supra note 8.
11
Id.
12
Osantowski v. Osantowski, 298 Neb. 339, 904 N.W.2d 251 (2017).
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it. The court’s decree classified all of Joy’s postseparation
credit card debt as marital, and Steve argues that was an abuse
of discretion. He also argues the court should have similarly
classified all of his postseparation debt as marital, but since
Steve expressly asked the court to set that debt off to him, he
cannot now argue it was error to do so. 13 We therefore consider
only his assignment that it was error to classify Joy’s post
separation debt as marital.
[7,8] It is well settled in Nebraska that marital debt includes
only those obligations incurred during the marriage for the
joint benefit of the parties. 14 The burden to show that a debt is
nonmarital is on the party making that assertion. 15
Steve concedes that Joy’s credit card debt was incurred dur-
ing the marriage, but he argues it should have been classified
as nonmarital debt because it was incurred after the parties
separated. We understand his appellate briefing to generally
urge adoption of a bright-line rule requiring that marital debt
must have been incurred “‘before [the] date of separation.’” 16
We decline his invitation.
In the 2004 case of Mathews v. Mathews, 17 we announced
the general rule that “[m]arital debt includes only those obli-
gations incurred during the marriage for the joint benefit of
the parties.” We have consistently applied this flexible, fact-
specific standard, 18 and we see no principled reason to apply
a different standard in this case. To the extent the Nebraska
Court of Appeals articulated a more restrictive definition of
13
See Mahlendorf v. Mahlendorf, 308 Neb. 202, 952 N.W.2d 923 (2021)
(parties cannot complain on appeal of error they invited court to commit).
14
Fetherkile, supra note 9; Millatmal v. Millatmal, 272 Neb. 452, 723
N.W.2d 79 (2006); Mathews v. Mathews, 267 Neb. 604, 676 N.W.2d 42
(2004).
15
Fetherkile, supra note 9; Millatmal, supra note 14.
16
Brief for appellant at 16.
17
Mathews, supra note 14, 267 Neb. at 621, 676 N.W.2d at 58.
18
See, e.g., Fetherkile, supra note 9; Millatmal, supra note 14.
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marital debt in a 2002 opinion, 19 that definition was implic-
itly disapproved by Mathews and we expressly disapprove of
it here.
Applying the settled definition of marital property in our
de novo review, we find undisputed evidence that Joy’s credit
card debt was incurred during the marriage, and we also find
evidence showing the items she purchased were for the joint
benefit of the parties. Joy testified she used credit cards to
pay family medical and dental expenses, to purchase items
for Steve’s apartment postseparation, and to purchase grocer-
ies, clothing, furniture, household goods, gas, cell phones,
and “[m]iscellaneous stuff” for herself and the children. Steve
did not specifically dispute Joy’s description of the items she
purchased on credit, but he did generally characterize her pur-
chases and her spending habits as excessive.
The record shows a pattern of indulgent spending by the par-
ties throughout their marriage, but indulgent spending and mar-
ital debt are not necessarily mutually exclusive. It was Steve’s
burden to show the debt was nonmarital, 20 and on this record,
we cannot find an abuse of discretion in classifying Joy’s post-
separation credit card debt as marital. We reject Steve’s first
assignment of error.
(b) Classification of Unvested
RSUs and Time Rule
At the time of trial, Steve’s Costco brokerage account held
unvested RSUs from annual grants made in 2015, 2016, 2017,
2018, and 2019. The trial court classified all of the unvested
RSUs awarded from 2015 through 2018 as marital property,
and it classified the RSUs awarded in 2019 as nonmarital prop-
erty. Neither party challenges the classification of the 2019
19
See McGuire v. McGuire, 11 Neb. App. 433, 448, 652 N.W.2d 293, 305
(2002) (stating “[a] marital debt is ‘one incurred during marriage and
before date of separation by either spouse or both spouses for joint benefit
of parties’”).
20
See, Fetherkile, supra note 9; Millatmal, supra note 14.
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RSUs as nonmarital. But Steve assigns that when classifying
and dividing the unvested RSUs granted to him from 2015
through 2018, the district court erred by not applying the time
rule from Davidson. 21
One of the issues in Davidson was how to classify and equi
tably divide unvested employee stock options and stock reten-
tion shares. When the parties in Davidson married, the husband
was a senior executive with Union Pacific. Both before and
during the marriage, a large portion of the husband’s com-
pensation was composed of employee stock options and stock
retention shares. Similar to the RSUs at issue here, the stock
retention shares in Davidson were described as “stock shares
that are unvested when granted but will vest at some prede-
termined point in time . . . only if [the husband] remained
employed with Union Pacific until a certain point in time.” 22
When the parties in Davidson separated after roughly 2 years
of marriage, a primary dispute at trial was how to classify
and value the husband’s unvested stock options and unvested
stock retention shares. The trial court concluded this property
was “too difficult to value” and excluded it from the marital
estate. 23 On appeal, we found the trial court abused its discre-
tion by entirely excluding the unvested stock options and stock
retention shares from the marital estate.
[9] Our opinion in Davidson considered an issue of first
impression in Nebraska: How should courts determine whether
unvested employee stock options and restricted stock plans
are marital or nonmarital property? To answer that question,
Davidson began with the long-settled rule that “the marital
estate includes property accumulated and acquired during the
marriage through the joint efforts of the parties.” 24 Davidson
also observed that Neb. Rev. Stat. § 42-366(8) (Reissue
21
Davidson, supra note 1.
22
Id. at 660, 578 N.W.2d at 853.
23
Id. at 660, 578 N.W.2d at 854.
24
Id. at 662, 578 N.W.2d at 854. See, also, Dooling, supra note 8.
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2016) mandates that “court[s] shall include as part of the mari-
tal estate . . . any pension plans, retirement plans, annuities, and
other deferred compensation benefits owned by either party,
whether vested or not vested.” After considering this authority,
Davidson announced a new proposition of law: “[U]nvested
employee stock options and stock retention shares constitute
marital property when accumulated and acquired during the
marriage through the joint efforts of the parties.” 25
Applying this new proposition to the evidence in Davidson,
we first rejected the husband’s argument that all of his unvested
stock options and stock retention shares were the result of his
sole efforts, rather than the parties’ joint efforts. We explained
that so long as “unvested stock options and stock retention
shares were accumulated and acquired during the marriage,
they were accumulated and acquired through the joint efforts
of the parties.” 26 The harder question in Davidson was how to
determine when unvested stock options and retention shares
were “accumulated and acquired.”
In Davidson, some of the unvested stock options and reten-
tion shares had been awarded to the husband before the mar-
riage, and some during the marriage. Additionally, the evidence
showed that some had vested during the marriage and that
others were scheduled to vest after the date of dissolution. In
fashioning a general rule to determine when unvested stock
options and retention shares are accumulated and acquired for
purposes of determining the marital estate, we observed:
Most courts faced with the issue of when stock options
and retention stock are accumulated and acquired look to
whether and to what extent the unvested employee stock
options at issue were granted for past, present, or future
services and then determine what percentage thereof was
earned during the marriage and what percentage was
25
Davidson, supra note 1, 254 Neb. at 662, 578 N.W.2d at 855.
26
Id. at 663, 578 N.W.2d at 855.
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earned prior to the marriage and/or subsequent to its
dissolution. 27
Davidson referred to this as a “time rule” and concluded it
was consistent with Nebraska law and “generally applies” 28
to employee stock options and stock retention shares in dis-
solution actions. We saw no reason, on the facts in Davidson,
to distinguish between the two forms of compensation when
applying the time rule, but we acknowledged that “other juris-
dictions have held that stock retention shares are accumulated
and acquired in their entirety when granted.” 29
Davidson described application of the time rule as a two-step
process. First, “it is incumbent upon the trial court to calculate
whether and to what extent the options were granted as com-
pensation for past, present, or future services.” 30 Next, “the trial
court should determine what percentage of each portion thereof
was accumulated and acquired during the marriage.” 31
In Davidson, the director of compensation for Union Pacific
testified that its employee stock option program was “designed
to recognize and reward past performance and to create an
incentive for future contribution to the organization” and that
Union Pacific granted stock retention shares “to retain [the
employee] through a predetermined point in time.” 32 Based on
that evidence, we concluded that the husband’s employee stock
options were intended to compensate him “equally for both
past and future services” and that the stock retention shares
“were granted entirely for future services.” 33
27
Id. at 664, 578 N.W.2d at 856.
28
Id.
29
Id., citing In re Marriage of Miller, 915 P.2d 1314 (Colo. 1996) (en
banc) (applying time rule to unvested stock options but holding unvested
retention shares were marital property on date they were granted even
though husband must remain employed to realize full vesting).
30
Davidson, supra note 1, 254 Neb. at 665, 578 N.W.2d at 856.
31
Id.
32
Id. at 660, 578 N.W.2d at 854.
33
Id. at 665, 578 N.W.2d at 856.
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Guided by those findings, Davidson then proceeded to deter-
mine what percentage of each was accumulated and acquired
during the marriage. To do so, we described several different
formulas to apply, depending on the specific factual scenario.
The general purpose of each formula is to identify and exclude
from the marital estate “that portion [of unvested stock options
and retention shares] which represented compensation for serv
ices performed prior to the marriage or subsequent to the
dissolution.” 34 Among others, Davidson described the follow-
ing factual scenarios:
If the option or retention share is granted during the
marriage and vests during the marriage, that portion of
the option or retention share which represents compen-
sation for future services, if any, was accumulated and
acquired entirely during the marriage. If, however, the
option or retention share is granted during the marriage
and will vest sometime after dissolution, the percentage
of future services, if any, is determined by a fraction. The
numerator is the period of time from the date of the grant
until dissolution, and the denominator is the period of
time from the date of the grant until the employee stock
option vests. 35
Steve argues the district court erred by not applying this
formula from Davidson to determine which portion of his
unvested RSUs were marital. On this record, we disagree.
Steve’s argument assumes the RSUs he was granted by
Costco were intended as compensation for future services. But
unlike the husband in Davidson, Steve adduced no evidence
to support any judicial determination of whether his unvested
RSUs were granted as compensation for past, present, or future
services. On this record, Costco’s reasons for granting the
RSUs to Steve remain a mystery.
34
Id. at 664, 578 N.W.2d at 855.
35
Id. at 667, 578 N.W.2d at 857.
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Steve offered no testimony from his employer on this key
issue, and although he offered the RSU agreement, that docu-
ment does not set out the eligibility criteria for participa-
tion in the RSU program, nor does it describe how Costco
determines the number of RSUs to be granted, or whether it
intends RSUs to compensate employees for past, present, or
future services. Costco’s 2019 proxy statement summarized
the company’s criteria and rationale for awarding performance-
based RSUs to its executive officers, but it did not specifically
address the criteria or rationale for granting RSUs to non
executive employees like Steve. Indeed, to the extent Costco’s
proxy statement addressed any of the criteria governing RSUs
granted to nonexecutive employees, it stated that vesting was
not performance based at all.
[10] To apply the Davidson time rule, it is essential that the
court be presented with evidence from which it can determine
whether the unvested stock options or stock retention shares
were granted as compensation for past, present, or future serv
ices. As such, if Steve wanted to rely on the time rule to argue
that some or all of his unvested RSUs were nonmarital, it was
his burden to prove, by a preponderance of the evidence, that
at least some portion of the RSUs granted during the marriage
were granted as compensation for future services. 36 He failed
to meet that burden.
Absent sufficient evidence on which to make the factual
determinations necessary to apply the Davidson time rule, we
cannot find an abuse of discretion in the court’s decision not to
apply the rule. This assignment of error has no merit.
2. Child Support
Steve’s appeal and Joy’s cross-appeal both assign error
to the district court’s child support calculation. Steve argues
36
See id. (stating any “option/retention share or portion thereof which is
granted during the marriage and determined to be compensation for present
services is accumulated and acquired in its entirety when granted”).
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the court should have used worksheet 3 of the Nebraska Child
Support Guidelines (Guidelines), rather than worksheet 1 of the
Guidelines, to calculate child support, because the parenting
plan effectively established a joint physical custody arrange-
ment. 37 Alternatively, Steve argues that when calculating the
downward deviation based on Steve’s additional parenting
time, the court made a mathematical error.
In her cross-appeal, Joy argues the court erred by excluding
all of Steve’s RSU income when determining his total monthly
income for purposes of calculating child support. We address
Joy’s assigned error first and find it has merit.
[11] When calculating the amount of support to be paid
under the Guidelines, a court must consider the total monthly
income of the parties. 38 The Guidelines define “[t]otal monthly
income” as
the income of both parties derived from all sources, except
all means-tested public assistance benefits which includes
any earned income tax credit and payments received for
children of prior marriages. This would include income
that could be acquired by the parties through reasonable
efforts. For instance, a court may consider as income the
retained earnings in a closely-held corporation of which
a party is a shareholder if the earnings appear excessive
or inappropriate. All income should be annualized and
divided by 12. 39
[12-14] The main principle behind the Guidelines is to
recognize the equal duty of both parents to contribute to the
37
See, e.g., State on behalf of Kaaden S. v. Jeffery T., 303 Neb. 933, 948, 932
N.W.2d 692, 704 (2019) (“[w]here a parenting plan effectively establishes
a joint physical custody arrangement, courts will so construe it, regardless
of how prior decrees or court orders have characterized the arrangement”).
See, also, Elsome v. Elsome, 257 Neb. 889, 900, 601 N.W.2d 537, 545
(1999) (directing courts to use worksheet 3 when joint physical custody is
ordered, unless a “sound reason not to do so is established by the record”).
38
Gangwish v. Gangwish, 267 Neb. 901, 678 N.W.2d 503 (2004).
39
Neb. Ct. R. § 4-204 (rev. 2020).
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support of their children in proportion to their respective
net incomes. 40 We have been very clear that when determin-
ing total income under the Guidelines, “‘all income from all
sources is to be included except for those incomes specifi-
cally excluded.’” 41 A party’s total monthly income “should not
be based on income that is ‘speculative in nature and over
which the employee has little or no control.’” 42 But when
the evidence shows the party “earns or can reasonably expect
to earn a certain amount of income on a regular basis, a
rebuttable presumption of including such income arises under
the Guidelines.” 43 To rebut that presumption, the party must
produce sufficient evidence to show that application of the
Guidelines would not result in a fair and equitable child sup-
port order. 44
The undisputed evidence shows that Steve regularly receives
annual grants of RSUs from his employer, and there was no
evidence this pattern is likely to change in the future. Each
year, Steve cashes the RSUs that vest into shares of Costco
stock, and as a result, he receives significant income above
and beyond his base salary and annual bonus. The evidence
shows that in 2017, 2018, and 2019, Steve’s reported RSU
income was approximately $227,328, $384,591, and $461,053,
respectively. As such, over the 3-year period immediately
before trial, Steve’s actual RSU income averaged well over
$357,000 annually.
Because Steve regularly earns significant RSU income and
can reasonably be expected to earn it in the future, there is
40
Hotz v. Hotz, 301 Neb. 102, 917 N.W.2d 467 (2018).
41
Id. at 108, 917 N.W.2d at 474.
42
Noonan v. Noonan, 261 Neb. 552, 560, 624 N.W.2d 314, 322 (2001),
quoting Stuczynski v. Stuczynski, 238 Neb. 368, 471 N.W.2d 122 (1991).
43
Noonan, supra note 42, 261 Neb. at 561, 624 N.W.2d at 322-23. See, also,
Neb. Ct. R. § 4-203 (rev. 2020) (“[t]he child support guidelines shall be
applied as a rebuttable presumption”).
44
See Noonan, supra note 42.
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a rebuttable presumption that some amount of RSU income
should have been included when computing his total income
under the Guidelines. 45 And on this record, we do not see suf-
ficient evidence to rebut that presumption.
The trial court excluded all of Steve’s RSU income, and its
only stated reason for doing so was that the unvested RSUs
granted in 2015 through 2018 had been classified as marital
property and equitably divided. We have two concerns with
this reasoning.
First, it implies that when calculating child support, courts
must make a binary choice between classifying something as
marital property subject to equitable division and considering
it as income for purposes of child support. Our precedent con-
tains no such bright-line rule. 46 We have been careful to avoid
a rigid definition of income for purposes of calculating child
support, and instead have relied upon a flexible, fact-specific
inquiry that recognizes the wide variety of circumstances that
may be present. 47 We take this flexible approach because child
support proceedings are equitable in nature. 48 As such, we
reject the suggestion that the trial court had to make an all-or-
nothing choice when it came to including RSU income in the
child support calculation.
Moreover, the fact that a finite number of Steve’s unvested
RSUs were classified as marital and divided in the decree does
not adequately explain why the court excluded all RSU income
when determining total income for purposes of calculating
45
See id.
46
See, e.g., Kalkowski v. Kalkowski, 258 Neb. 1035, 607 N.W.2d 517
(2000) (finding no abuse of discretion in decree that treated growing and
stored crops as divisible marital asset and also as income for purposes of
child support); Venter v. Venter, 249 Neb. 712, 545 N.W.2d 431 (1996)
(rejecting argument that it was error to treat husband’s accounts receivable
as marital property subject to division and as income for purposes of
child support).
47
See Marshall v. Marshall, 298 Neb. 1, 902 N.W.2d 223 (2017).
48
Id.
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child support. 49 In addition to the marital RSUs, Steve has
unvested RSUs granted in 2019 that were deemed nonmarital
and set off exclusively to him, and it is reasonable to infer from
the evidence that he will continue to accumulate significant
grants of RSUs annually in the future. As those nonmarital
RSUs accumulate and vest into shares, Steve will receive
significant taxable income that is not subject to the decree’s
property division provisions, yet was not considered by the
court when calculating child support. We note the decree states
that when the nonmarital RSUs “begin to vest,” the income
should be considered for purposes of calculating child sup-
port. The first 20 percent of nonmarital RSUs was scheduled
to vest just a few weeks after the decree was entered, yet the
court excluded all RSU income when calculating Steve’s total
monthly income.
It is true that under the decree, Joy will receive a portion of
Steve’s annual RSU income until the last of the marital RSUs
vest into shares—likely sometime in 2023, assuming no accel-
erated vesting applies. This may support a downward devia-
tion in child support during that time period, but it does not
justify a blanket exclusion of all RSU income when calculating
child support.
In sum, on this record, we see no principled reason to
exclude all RSU income from the child support calculation.
We recognize Steve’s annual RSU income fluctuated some-
what, but his average annual income from RSUs was well over
49
See, e.g., Hoegen v. Hoegen, 89 Mass. App. 6, 43 N.E.3d 718 (2016)
(finding father’s income from vested RSUs should have been included
along with his base salary and bonus compensation when calculating
his child support obligation, because father regularly received RSUs
as part of compensation package and regularly earned income from
vested RSUs); Heckman v. Heckman, 422 S.W.3d 336 (Mo. App. 2013)
(finding no error in using 3-year average of father’s actual earnings
from restricted stocks when calculating his income for purposes of child
support, where restricted stocks were regularly granted as part of father’s
annual compensation package).
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$357,000, and to categorically exclude all RSU income from
the child support calculation was an abuse of discretion. We
therefore reverse the child support provisions in the decree and
remand the matter to the district court with directions to recal-
culate child support, on the existing record, without excluding
all RSU income. We necessarily leave to the trial court’s dis-
cretion the specific amount of RSU income to include when
determining total monthly income for purposes of child sup-
port, and we express no opinion on the amount or duration of
any downward deviation.
Because we are remanding for a recalculation of child sup-
port, we do not reach Steve’s assignments of error on this issue.
3. Alimony
On appeal, Steve argues that the amount and duration of the
alimony award was excessive, and on cross-appeal, Joy argues
the amount of alimony was insufficient. She also argues the
court should have required Steve to maintain life insurance to
secure his future alimony obligation.
The Guidelines “intend that spousal support be determined
from income available to the parties after child support has
been established.” 50 Because we are remanding this matter
for recalculation of child support, it is appropriate to likewise
reverse the alimony award and remand the matter with direc-
tions to determine alimony after Steve’s child support obliga-
tions have been recalculated. 51 As such, we do not address the
parties’ assignments of error pertaining to the amount or dura-
tion of alimony. 52
[15] We do, however, address Joy’s argument that the court
erred by failing to require Steve to maintain a life insurance
50
Neb. Ct. R. § 4-213. See, also, Hotz, supra note 40 (for purposes of deter
mining alimony, relative economic circumstances of parties are to be
tested based on income available after child support obligations, if any,
have been accounted for).
51
See Gress v. Gress, 271 Neb. 122, 710 N.W.2d 318 (2006).
52
See id.
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policy as security for his alimony obligation. Neb. Rev. Stat.
§ 42-365 (Reissue 2016) addresses alimony and provides that
“[r]easonable security for payment may be required by the
court.” We have long construed this statute to give courts dis-
cretion, “in an appropriate case, to require sufficient security to
be given for the payment of alimony . . . awards.” 53 We have
also said that “reasonable security for payment of alimony . . .
should be invoked in the original decree only when compelling
circumstances require it.” 54
Joy argues the decree should have included a requirement
that Steve maintain a life insurance policy sufficient to secure
his future alimony obligation. But she adduced no evidence
of what such a policy would cost annually to maintain, and
she directs us to no evidence of compelling circumstances
that would warrant requiring security. On this record, we find
no abuse of discretion in not requiring Steve to maintain life
insurance as security for his alimony obligation.
4. Equal Parenting Time
[16] Lastly, Joy asserts on cross-appeal that the court erred
in awarding Steve equal parenting time. Child custody and
parenting time determinations are matters initially entrusted to
the discretion of the trial court, and although reviewed de novo
on the record, the trial court’s determination will normally be
affirmed absent an abuse of discretion. 55
Our de novo review shows no abuse of discretion in award-
ing equal parenting time. The record fully supports the court’s
finding that both Steve and Joy are fit and proper parents and
that the equal parenting time schedule imposed by the court is
in the best interests of the children.
53
Lacey v. Lacey, 215 Neb. 162, 164, 337 N.W.2d 740, 741 (1983).
54
Wheeler v. Wheeler, 193 Neb. 615, 617, 228 N.W.2d 594, 596 (1975).
Accord Lacey, supra note 53.
55
See Dooling, supra note 8.
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V. CONCLUSION
For the foregoing reasons, we reverse the decree only as it
pertains to the calculation of child support and alimony and
remand the matter for recalculation on the existing record, in
accordance with the Guidelines and this opinion. We affirm the
decree in all other respects.
Affirmed in part, and in part reversed
and remanded with directions.