Background
Thomas and Manal Campbell met online in 2015 and married on November 17, 2016, after meeting in person in Kuwait in 2016. They had two daughters (born 2017 and 2021). During the marriage, Thomas was a self-employed attorney and Manal remained at home with their children. Manal filed for dissolution on November 1, 2021, seeking custody, child support, alimony, and an equitable division of marital property. Thomas contested custody and sought an equitable property distribution. Trial occurred November 1–4, 2024.
The district court entered a comprehensive decree on March 3, 2025, awarding joint legal custody to both parties with Manal having primary physical custody, setting child support at $734 per month retroactive to January 1, 2024, and determining that spousal support was satisfied as of May 1, 2024. The court identified and divided the marital estate, ordering Thomas to pay Manal $90,608.59 to equalize the division. Thomas appealed on eleven assignments of error challenging the court’s classification, valuation, and allocation of various properties and debts.
The Court’s Holding
The Nebraska Court of Appeals affirmed the district court’s decree in its entirety. On the central issue of a $220,000 Citizens State Bank loan, the court held that the loan was Thomas’s nonmarital debt rather than a marital obligation. Although the loan was incurred during the marriage, the court found no credible evidence that it was used for the joint benefit of the parties. Instead, evidence showed that the funds coincided with Thomas’s extensive travel and purchases during 2021, including multiple trips with his girlfriend. The court emphasized that marital debt includes only obligations incurred during marriage for the joint benefit of the parties. Because the loan was nonmarital, Thomas was not entitled to credit for its reduction during the divorce proceedings.
On Thomas’s premarital properties, the court affirmed that he was entitled to nonmarital offsets for equity in the Y Street and Castelar Street properties, which he owned before marriage and that were unencumbered at the time of marriage. However, because these properties were sold subject to the Citizens Bank loan, the net proceeds available to Thomas were reduced by the loan payoff amounts. The court allowed a $98,010.99 offset from proceeds of his premarital home (North 127th Street) used to purchase the lot for the marital home, but declined to credit an additional $105,752.25 due to insufficient documentary evidence (beyond his testimony) that the proceeds were used for the permanent financing of the marital home.
The court rejected Thomas’s challenge regarding appreciation in the marital home, holding that because he never raised this issue at trial, it could not be considered on appeal. The court also affirmed the district court’s rulings on tax liability allocation, the classification of a $50,000 gift from Manal’s father as her nonmarital property, and the denial of Thomas’s motion to disqualify Manal’s counsel.
Key Takeaways
- The party claiming property is nonmarital bears the burden of proof; Nebraska property division operates under a three-step process: classify property as marital or nonmarital, value assets and liabilities, and divide the net marital estate equitably.
- Debt incurred during marriage can be classified as nonmarital if it was not incurred for the joint benefit of the parties; extensive personal expenditures by one spouse can defeat a claim that a loan secured by nonmarital collateral was taken for marital purposes.
- Documentary evidence is critical in marital property cases; testimony alone, without supporting wire transfers, checks, or closing statements, may be insufficient to establish the use of funds.
- Issues not presented to the trial court cannot be raised for the first time on appeal; a party must frame its requested relief at trial.
- Trial court credibility determinations regarding witness testimony receive deference on appeal, particularly when the trial court observes witnesses firsthand.
Why It Matters
This decision provides important guidance for practitioners handling contested divorces involving substantial premarital assets and business interests. The court’s treatment of the Citizens Bank loan—rejecting Thomas’s attempt to characterize it as marital debt despite being incurred during the marriage—illustrates that the timing of a debt’s incurrence is not dispositive. Instead, courts will examine the evidence of how funds were actually used. The decision underscores the importance of tracing funds through documentary evidence rather than relying on party testimony, particularly when the evidence suggests competing uses of loan proceeds.
The ruling also reinforces procedural requirements: litigants must present all theories of relief at trial, including apportionment claims and depreciation-related offsets, or risk waiver on appeal. For divorces involving rental properties, premarital homes, and tax implications, practitioners should gather comprehensive documentation including closing statements, tax returns, wire transfer records, and contemporaneous financial records to support any allocation arguments.