Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
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                                  Nebraska Supreme Court A dvance Sheets
                                          297 Nebraska R eports
                                              STEPHENS v. STEPHENS
                                                Cite as 297 Neb. 188

                                        Robert L. Stephens, appellee, v.
                                         Janet E. Stephens, appellant.
                                                    ___ N.W.2d ___

                                          Filed July 14, 2017.    No. S-16-431.

                1.	 Divorce: Appeal and Error. In actions for dissolution of marriage, 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.
                2.	 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.
                3.	 Appeal and Error. Errors must be specifically assigned and argued to
                     be considered by an appellate court.
                4.	 Statutes: Words and Phrases. Traditionally, the word “include” in
                     a statute connotes that the provided list of components is not exhaus-
                     tive and that there are other items includable though not specifically
                     enumerated.
                5.	 Property Division. Equitable property division under Neb. Rev. Stat.
                     § 42-365 (Reissue 2016) is a three-step process. The first step is to
                     classify the parties’ property as marital or nonmarital. The second step
                     is to value the marital assets and determine the marital liabilities of the
                     parties. The third step is to calculate and divide the net marital estate
                     between the parties in accordance with the principles contained in
                     § 42-365.
                6.	 Divorce: Property Division. All property accumulated and acquired by
                     either spouse during the marriage is part of the marital estate, unless it
                     falls within an exception to this general rule.
                 7.	 ____: ____. Any given property can constitute a mixture of marital and
                     nonmarital interests; a portion of an asset can be marital property while
                     another portion can be separate property.
                8.	 Divorce: Property Division: Pensions. Investment earnings accrued
                     during the marriage on the nonmarital portion of a retirement account
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              Nebraska Supreme Court A dvance Sheets
                      297 Nebraska R eports
                           STEPHENS v. STEPHENS
                             Cite as 297 Neb. 188

     may be classified as nonmarital where the party seeking the classifica-
     tion proves: (1) The growth is readily identifiable and traceable to the
     nonmarital portion of the account and (2) the growth is due solely to
     inflation, market forces, or guaranteed rate rather than the direct or indi-
     rect effort, contribution, or fund management of either spouse.
 9.	 Divorce: Property Division. The active appreciation rule sets forth the
     relevant test to determine to what extent marital efforts caused any part
     of the appreciation or income.
10.	 Property Division: Words and Phrases. Appreciation caused by mari-
     tal contributions is known as active appreciation, and it constitutes mari-
     tal property.
11.	 ____: ____. Passive appreciation is appreciation caused by separate con-
     tributions and nonmarital forces.
12.	 Divorce: Property Division: Proof. The burden is on the owning
     spouse to prove the extent to which marital contributions did not cause
     the appreciation or income.
13.	 Divorce: Property Division. Appreciation or income of a nonmarital
     asset during the marriage is marital insofar as it was caused by the
     efforts of either spouse or both spouses.
14.	 Corporations: Employer and Employee. Despite the importance of
     each employee in a company, a company’s value for purposes of active
     appreciation is attributable only to the efforts of first-tier management or
     similar persons with control over the asset’s value.
15.	 ____: ____. Courts have uniformly rejected arguments by the owning
     spouse that the universe of persons in a company that effect its value is
     so large that no one person has any significant effect.
16.	 Property Division: Proof. The burden of proof to show that property is
     nonmarital remains with the person making the claim.
17.	 Divorce: Mental Competency. The amount of support awarded under
     Neb. Rev. Stat. § 42-362 (Reissue 2016) is a matter initially entrusted
     to the sound discretion of the trial judge, which award, on appeal to this
     court, is reviewed de novo on the record and affirmed in the absence of
     an abuse of the trial judge’s discretion.

   Appeal from the District Court for Lancaster County: Robert
R. Otte, Judge. Affirmed in part, vacated in part, and in part
reversed and remanded with directions.
  Stefanie Flodman and Steven J. Flodman, of Johnson,
Flodman, Guenzel & Widger, for appellant.
   David P. Kyker for appellee.
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           Nebraska Supreme Court A dvance Sheets
                   297 Nebraska R eports
                      STEPHENS v. STEPHENS
                        Cite as 297 Neb. 188

  Heavican, C.J., Wright, Miller-Lerman, Cassel, K elch,
and Funke, JJ.
  Wright, J.
                     I. NATURE OF CASE
   In this dissolution action, the husband is the cofounder and
president of a C corporation and owns 34 percent of its stock.
He asserts that only the appreciation, during the marriage, of
a business interest that is due to the active efforts of the non-
owning spouse is part of the marital estate. He claims, there-
fore, that none of the almost $5 million in appreciation of his
stock interest during the parties’ 25-year marriage was subject
to equitable division.
                        II. BACKGROUND
   Janet E. Stephens and Robert L. Stephens were married on
September 8, 1991. Twin boys were born of the marriage in
1996. Robert filed for dissolution in 2014.
   For approximately 15 years of the marriage, Janet worked
as a real estate agent. But during the last 10 years of the mar-
riage, Janet suffered from a mental illness that required peri-
odic hospitalization and left her unable to work. She receives
approximately $1,500 per month in Social Security disability
income. Robert testified that he did not expect Janet would
recover and become employable in the future.
   A guardian ad litem (GAL) was appointed to protect Janet’s
interests at trial. The GAL is also Janet’s guardian and conser-
vator. Janet refused to participate in the dissolution proceed-
ings but was represented by counsel.
   Both before and during the marriage, Robert worked full
time as president of Stephens & Smith Construction Co., Inc.
(Stephens & Smith), and his current annual salary is approxi-
mately $265,000 per year. Robert received additional income
from bonuses and from his other business interests. In 2014,
Robert’s total taxable income was $503,414. When Janet’s
mental health allowed, she shared equally with Robert the tasks
relating to the care of their children.
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           Nebraska Supreme Court A dvance Sheets
                   297 Nebraska R eports
                      STEPHENS v. STEPHENS
                        Cite as 297 Neb. 188

   The principal issue at trial was what assets should be con-
sidered marital and subject to equitable division. The approxi-
mate total value of the assets under the court’s consideration in
the dissolution action was $9 million. There were 166 exhibits
entered into evidence without objection, and Robert was the
only witness.

                       1. Stephens & Smith
   Stephens & Smith is a construction company specializing
in concrete work. At all relevant times before and during the
marriage, Robert owned stock totaling 34 percent of the stock
of Stephens & Smith. Robert cofounded Stephens & Smith in
1971 as a partnership with Michael Smith. Stephens & Smith
was incorporated as a C corporation in 1974. According to the
exhibits in the record, Robert’s stock in Stephens & Smith was
worth $298,459 in 1991 before the parties married. Robert’s
stock in Stephens & Smith at the time of dissolution was worth
$5,044,934.16.
   Robert worked a “normal eight-hour day,” 5 days a week, in
his capacity as president. At other times during the marriage,
he worked more. He was also on the 12-member board of
directors. Robert admitted that he sets his own salary and has a
significant role in determining bonuses.
   Robert testified that the leadership personnel of Stephens
& Smith has not changed since the marriage. He described
Stephens & Smith as consisting of six moneymaking depart-
ments, each with its own department head. Robert was involved
in selecting and training the leadership within Stephens &
Smith. At all times during the marriage, Stephens & Smith
had approximately 200 employees. Robert considered at least
20 of those employees “integral,” though he believed every
employee was important.
   Robert described his role as president as “constantly chang-
ing.” He made financial and investment decisions for Stephens
& Smith and performed “some management real estate over-
sight.” As part of obtaining lending to fund Stephens &
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           Nebraska Supreme Court A dvance Sheets
                   297 Nebraska R eports
                      STEPHENS v. STEPHENS
                        Cite as 297 Neb. 188

Smith’s projects, Robert also personally guaranteed millions of
dollars in loans for Stephens & Smith’s operations.
   Robert attended human resources, rental management, share-
holder, and board meetings. He occasionally consulted with
and advised the department heads for the company. Robert con-
ceded that he was an integral part of the success of Stephens &
Smith. But Robert suggested that, based on his latest bonus of
6 percent, “maybe I provide 6 percent of the leadership.”

                          2. R.I.P., Inc.
   R.I.P., Inc., is a wholly owned subsidiary of Stephens &
Smith. It holds Stephens & Smith’s real estate investments and
represents approximately two-thirds of Stephens & Smith’s
value. R.I.P. was created before the marriage with capital
from Stephens & Smith, and continued thereafter to be funded
by the profits of Stephens & Smith. R.I.P. owns a percent-
age of The Mystic Pines Apartments, L.L.C.; Eagles Landing
Apartments, LLC; Aardvark Antique Mall, LLC; and Village
Square Apartments, LLC. Although there was no testimony spe-
cifically on this point, Robert’s estimated interest in Stephens
& Smith of $5,044,934.16 apparently includes any interests
held through R.I.P.

       3. Infinity S Development Co., Heritage Square
          Partners, Smith and Stephens R eal Estate,
                     and A ardvark Partners

                    (a) Infinity S Development
   Infinity S Development Co. (Infinity) is a partnership
between Robert, Smith, and one other partner. Infinity is pre-
dominantly involved in the self-storage business, and at the
time of trial, it owned approximately 900 storage units. At one
point, Robert testified that no capital has been added to Infinity
since the marriage. Its expansion has been paid for with the
partnership’s profits. Robert also indicated, however, that as
with Stephens & Smith, he had personally guaranteed bank
loans to Infinity.
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                   297 Nebraska R eports
                      STEPHENS v. STEPHENS
                        Cite as 297 Neb. 188

   The day-to-day operation of Infinity is run by a hired man-
ager. But Robert and the two other partners make the larger
decisions, such as what to build. Robert participates in monthly
meetings to analyze occupancy rates and financial statements.
Robert owns one-fourth of Infinity. According to the exhibits
in evidence, at the time of trial, Robert’s equity interest in
Infinity was $1,243,232. In contrast, when the parties married,
Robert’s interest in Infinity was worth $270,553.
                 (b) Heritage Square Partners
   Heritage Square Partners (Heritage) was formed as an off-
shoot of Infinity just prior to the marriage. The partnership
consists of Robert; Smith; and, originally, three other per-
sons. It owns one building that was capitalized with funds
from Infinity and with loans. No other funds have been
funneled into Heritage since the marriage. The building pro-
vides rental income and is managed by a person employed
by the partnership. Robert is not involved in the day-to-day
operation of Heritage. At the time of trial, Robert’s equity
interest in Heritage was $403,884. It was unclear what the
value of Robert’s interest in Heritage was at the time the par-
ties married.
               (c) Smith and Stephens Real Estate
   Smith and Stephens Real Estate was created by Robert
and Smith before the marriage and owns a single piece of
property that was purchased before the marriage. The value
of Robert’s interest in Smith and Stephens Real Estate when
the parties married was $88,830, and it was $140,000 at the
time of trial.
                       (d) Aardvark Partners
   Aardvark Partners, LLC, was formed after the marriage. It
was formed by the five partners of Infinity and with R.I.P. as the
sixth partner. R.I.P. owns 50 percent of Aardvark Partners. The
$500,000 purchase of the real estate held by Aardvark Partners
was capitalized with $50,000 from each of five individual
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                   297 Nebraska R eports
                      STEPHENS v. STEPHENS
                        Cite as 297 Neb. 188

investor partners from Infinity and $250,000 from R.I.P. Each
individual obtained the $50,000 contribution through a distri-
bution of $55,000 from Infinity.
   Aardvark Partners owns a property that consists of a clus-
ter of buildings and parking lots. Robert is not involved in
the day-to-day operation of Aardvark Partners, which is run
by a hired manager. At the time of trial, Robert’s interest in
Aardvark Partners was valued at $306,429.
           4. A ardvark A ntique M all, The Mystic
                 Pines A partments, and Eagles
                      Landing A partments
   Robert conceded at trial that his ownership interests in
Aardvark Antique Mall, The Mystic Pines Apartments, and
Eagles Landing Apartments were marital property. At the time
of trial, Aardvark Antique Mall was valued at $66,474, The
Mystic Pines Apartments were valued at $923,687, and Eagles
Landing Apartments were valued at $381,385. Robert’s com-
bined interest in the three properties produced approximately
$60,000 per year in owner draws, and he proposed that it
would be most beneficial for all parties to transfer to Janet the
ownership interest in these properties.
   Janet’s attorney and GAL questioned the practicality of
making Janet part-owner of the properties. Janet’s counsel also
pointed out that transfer of ownership would require the coop-
eration of the other partners, since at least two of the entities
required owner approval before allowing new members. Robert
assured the court that the partners having an interest in these
properties would cooperate.
                           5. Decree
   The court awarded to Robert the marital home, valued at
$542,000, and the mortgage debt therein, in the amount of
$337,078. Also awarded to Robert, subject to liens or encum-
brances, were a “60-foot Gen[i]e Manlift” valued at $20,000, a
jet ski valued at $1,740, a 1998 motorcycle valued at $7,625,
a 2003 automobile valued at $16,904, and a 2005 recreation
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                   297 Nebraska R eports
                     STEPHENS v. STEPHENS
                       Cite as 297 Neb. 188

vehicle valued at $60,250. The only debt associated with
these items appears to be an automobile loan in the amount
of $19,893.
   Robert was awarded $31,965 in household goods and art-
work. Robert was awarded a credit union checking account
with a balance of $553.50 and a bank checking account with a
balance of $100. Robert was awarded Stephens & Smith retire-
ment plans valued at $326,104.79. The retirement plans were
formed after the marriage, and Robert had conceded they were
marital assets.
   Robert was solely responsible for a personal loan in 2009
from his sister in the amount of $480,589, for the purpose of
investing in Eagles Landing Apartments and The Mystic Pines
Apartments. Robert was awarded any and all bank or invest-
ment accounts, life insurance policies and annuities, and any
household goods or personal property in his possession not
otherwise allocated.
   The court awarded to Janet, along with any indebtedness
thereon, a 2012 automobile valued at $27,357. The court
awarded to Janet $18,510 in household goods and artwork,
any and all jewelry, including a $10,000 ring that Janet had
purportedly flushed down the toilet. It was unclear to what
extent the other jewelry could be located at the time of trial.
The jewelry, minus the ring, was appraised at $72,760. Janet
was awarded an account at a local bank with a balance at the
time of trial of $10,010. She was awarded any and all bank or
investment accounts, life insurance policies and annuities, and
any household goods or personal property in her possession not
otherwise allocated.
   The court found that Robert’s combined interest in Aardvark
Antique Mall ($66,474), The Mystic Pines Apartments
($923,687), and Eagles Landing Apartments ($381,385) was
part of the marital estate. In light of the tax disadvantages of
the forced buying or selling of the business interests, and the
court’s trust that Robert would conduct his business affairs so
as not to disadvantage Janet, the court awarded Robert and
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               Nebraska Supreme Court A dvance Sheets
                       297 Nebraska R eports
                           STEPHENS v. STEPHENS
                             Cite as 297 Neb. 188

Janet each one-half of the total interest in these properties
through a transfer of ownership. Robert was ordered to com-
plete all documentation of such joint ownership within 30 days
of the decree.
   The court found that Robert’s ownership interests in Infinity,
Heritage, Smith and Stephens Real Estate, and Aardvark
Partners were traceable to premarital assets and that the entirety
of the appreciation in value of these interests during the mar-
riage was excludable from the marital estate, because Robert
had a “passive” role in such appreciation. It noted that no
marital assets and no active effort by Janet contributed to these
entities. The court awarded these interests in their entirety
to Robert.
   The court also found that Robert’s 34 percent ownership
interest in Stephens & Smith was, in its entirety, nonmarital.
It did not specifically mention R.I.P. in its decree, which was
presumably treated as part of Stephens & Smith.
   The court noted that no marital funds were contributed to
Stephens & Smith. And, as for the substantial appreciation of
the company’s value during the marriage, the court cited Van
Newkirk v. Van Newkirk1 and Buche v. Buche.2 Ultimately, the
court concluded that Robert had met his burden of proof that
his stock, including the appreciation during the marriage, was
premarital property. In this regard, the court reasoned that
the appreciation was “due to a combination of factors, not
the least of which is organic growth” and that “[t]here is no
evidence to suggest what part of that growth can be attributed
to [Robert].”
   Although the court concluded that the entirety of Stephens
& Smith was nonmarital property, it nevertheless awarded
a “Grace award”3 to Janet based on the court’s valuation of
Robert’s stock interest in Stephens & Smith. The court found

 1
      Van Newkirk v. Van Newkirk, 212 Neb. 730, 325 N.W.2d 832 (1982).
 2
      Buche v. Buche, 228 Neb. 624, 423 N.W.2d 488 (1988).
 3
      See Grace v. Grace, 221 Neb. 695, 380 N.W.2d 280 (1986).
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                Nebraska Supreme Court A dvance Sheets
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                            STEPHENS v. STEPHENS
                              Cite as 297 Neb. 188

that other considerations and equities present in the case justi-
fied an award to Janet of $1.1 million to be paid in installments
of $100,000 per year, with interest of 2.51 percent on the out-
standing balance. The court explained as to the mathematical
basis for such award that if the appreciation of Robert’s own-
ership interest in Stephens & Smith were marital, one-third
of that interest would be $1.55 million and one-half would be
$2.35 million.
   Other marital property, a coin collection and various items
held in storage units, had not yet been given an estimated
value and were ordered divided by equal value or sold with
the proceeds to be divided equally between Robert and Janet.
   The court found that Janet was suffering from a mental ill-
ness as defined by Neb. Rev. Stat. § 42-362 (Reissue 2016)
and awarded alimony under § 42-362 in the amount of $1,000
per month for 120 months. It ordered Robert to maintain until
August 20, 2020, a life insurance policy in the amount of
$1 million, with Janet as the beneficiary.
   Janet appeals from the decree. Robert did not cross-appeal.
                III. ASSIGNMENTS OF ERROR
   Janet assigns that the district court erred in (1) finding that
the appreciation in the value of Stephens & Smith during the
parties’ marriage should be considered nonmarital, (2) failing
to find that the spousal support ordered under § 42-362 should
continue until Janet’s mental disability is corrected, and (3)
ordering the division of marital property held in a small busi-
ness or partnership when the articles of organization do not
allow for the same.
                IV. STANDARD OF REVIEW
   [1,2] In actions for dissolution of marriage, 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.4 A judicial abuse of discretion exists if the reasons or

 4
      Stanosheck v. Jeanette, 294 Neb. 138, 881 N.W.2d 599 (2016).
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                Nebraska Supreme Court A dvance Sheets
                        297 Nebraska R eports
                            STEPHENS v. STEPHENS
                              Cite as 297 Neb. 188

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.5
                          V. ANALYSIS
                       1. Property Division
   [3] Janet first assigns as error the district court’s finding
that the appreciation during the parties’ marriage of Robert’s
interest in Stephens & Smith should be considered nonmari-
tal. She does not assign as error the court’s determination that
other assets at issue at trial were nonmarital. Errors must be
specifically assigned and argued to be considered by an appel-
late court.6
   Thus, we consider only whether the district court erred
in its classification of Stephens & Smith, together with its
wholly owned subsidiary, R.I.P.—which we hereafter refer
to collectively as “Stephens & Smith.” We do not consider
whether the court erred with respect to its classification
of Infinity, Heritage, Smith and Stephens Real Estate, or
Aardvark Partners as nonmarital assets. And because Robert
did not cross-appeal, neither do we consider whether the
court erred in designating Aardvark Antique Mall, The Mystic
Pines Apartments, and Eagles Landing Apartments as marital.
We do consider the propriety of the “Grace award,” as it is
inseparable from the court’s determination that Stephens &
Smith was nonmarital.
   Neb. Rev. Stat. § 42-365 (Reissue 2016) provides that when
a dissolution of marriage is decreed, the court may order the
      division of property as may be reasonable, having regard
      for the circumstances of the parties, duration of the mar-
      riage, a history of the contributions to the marriage by
      each party, including contributions to the care and educa-
      tion of the children, and interruption of personal careers

 5
      Id.
 6
      Shipler v. General Motors Corp., 271 Neb. 194, 710 N.W.2d 807 (2006).
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                             STEPHENS v. STEPHENS
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      or educational opportunities, and the ability of the sup-
      ported party to engage in gainful employment without
      interfering with the interests of any minor children in the
      custody of such party.
Section 42-365 provides that “[t]he purpose of a property divi-
sion is to distribute the marital assets equitably between the
parties.” (Emphasis supplied.)
   No statute defines “marital assets.” Neb. Rev. Stat.
§ 42-366(8) (Reissue 2016) states that in the event the parties
fail to agree upon a property settlement that is conscionable,
the court shall order the equitable division of the marital
estate, which “shall include . . . any pension plans, retirement
plans, annuities, and other deferred compensation benefits
owned by either party, whether vested or not vested.” But no
statutory provision relating to the equitable division of prop-
erty specifically addresses business entities or the concept
of appreciation.
   [4] We find no merit to Robert’s argument that § 42-366
is a legislative mandate to exclude from the marital estate
items not specifically listed in § 42-366. Traditionally, the
word “include” in a statute connotes that the provided list of
components is not exhaustive and that there are other items
includable though not specifically enumerated.7 And § 42-366
seems particularly concerned with clarifying the status of
nonvested assets. Business interests like Stephens & Smith,
and indeed many other assets such as the marital home, do
not fall into that category. Thus, it is no surprise that they
are not enumerated. Moreover, while the Legislature speci-
fied the condition in § 42-366(8) “owned by either party” as

 7
      See Samantar v. Yousuf, 560 U.S. 305, 130 S. Ct. 2278, 176 L. Ed.
      2d 1047 (2010). See, also, Stansell v. Revolutionary Armed Forces of
      Colombia, 704 F.3d 910 (11th Cir. 2013); Federal Election Com’n v. Mass.
      Citizens for Life, 769 F.2d 13 (1st Cir. 1985); Highway & City Freight
      Drivers, Etc. v. Gordon, 576 F.2d 1285 (8th Cir. 1978); Matter of Adoption
      by W.P. and M.P., 308 N.J. Super. 376, 706 A.2d 198 (1998); Auer v. Com.,
      46 Va. App. 637, 621 S.E.2d 140 (2005).
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to the assets listed, we have held as to these listed assets that
only the portion of such deferred compensation benefits that
was earned or contributed to during the marriage is part of the
marital estate.8 In sum, § 42-366 does not indicate whether
appreciation during the marriage of a nonmarital business or
property interest is a marital asset. That question has instead
long been determined by case law.
   [5] Since 2000, we classify as a threshold matter the parties’
property as either marital or nonmarital. In Meints v. Meints,9
we said:
      Equitable property division under § 42-365 is a three-step
      process. The first step is to classify the parties’ property
      as marital or nonmarital. The second step is to value the
      marital assets and determine the marital liabilities of the
      parties. The third step is to calculate and divide the net
      marital estate between the parties in accordance with the
      principles contained in § 42-365.
Such division between the marital and nonmarital estate is
known as dual classification. Prior to Meints, our case law
was not entirely clear as to whether we operated under a dual
classification system. Most jurisdictions adopt the dual clas-
sification model and preclude under this model the equitable
distribution of separate property.10 “Equitable considerations
are generally no excuse for failing to follow the statutory clas-
sification process.”11
   [6,7] We have said that all property accumulated and
acquired by either spouse during the marriage is part of
the marital estate, unless it falls within an exception to this

 8
      See, e.g., Coufal v. Coufal, 291 Neb. 378, 866 N.W.2d 74 (2015).
 9
      Meints v. Meints, 258 Neb. 1017, 1023, 608 N.W.2d 564, 569 (2000). See,
      also, 3 Brett R. Turner, Equitable Distribution of Property, appendix A at
      274 (3d ed. 2005).
10
      See 1 Brett R. Turner, Equitable Distribution of Property § 2:10 (3d ed.
      2005).
11
      See id., § 5:7 at 266.
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general rule.12 Thus, for example, income from either party
that accumulates during the marriage is a marital asset.13 Any
given property can constitute a mixture of marital and non-
marital interests; a portion of an asset can be marital property
while another portion can be separate property.14 Therefore,
the original capital or value of an asset may be nonmarital,
while all or some portion of the earnings or appreciation of
that asset may be marital.15
   [8] In the recent case of Stanosheck v. Jeanette,16 we said
that investment earnings accrued during the marriage on the
nonmarital portion of a retirement account may be classified as
nonmarital where the party seeking the classification proves:
(1) The growth is readily identifiable and traceable to the non-
marital portion of the account and (2) the growth is due solely
to inflation, market forces, or guaranteed rate rather than the
direct or indirect effort, contribution, or fund management of
either spouse. In Coufal v. Coufal,17 we similarly examined
whether the increase in the value of the premarital capital in a
retirement account was a marital asset. After examining cases
from other jurisdictions discussing the active appreciation rule,
we held that the appreciation was nonmarital, because it was
not caused by the direct or indirect efforts of “either spouse.”18
   [9-11] Other jurisdictions have reached a “remarkable
degree of consensus” that appreciation or income of separate
property is marital property to the extent that it was caused
by marital funds or marital efforts.19 The active appreciation

12
      See Heald v. Heald, 259 Neb. 604, 611 N.W.2d 598 (2000).
13
      See Harris v. Harris, 261 Neb. 75, 621 N.W.2d 491 (2001).
14
      See 1 Turner, supra note 10, § 5:20.
15
      See id.
16
      Stanosheck v. Jeanette, supra note 4.
17
      Coufal v. Coufal, supra note 8.
18
      Id. at 384, 866 N.W.2d at 79.
19
      1 Turner, supra note 10, § 5:54 at 546. See, also, Annot., 39 A.L.R.6th 205
      (2008).
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rule sets forth the relevant test to determine to what extent
marital efforts caused any part of the appreciation or income.20
“Appreciation caused by marital contributions is known as
active appreciation, and it constitutes marital property in the
first instance.”21 In contrast, passive appreciation is apprecia-
tion caused by separate contributions and nonmarital forces.22
And most states, by statute or case law, define marital contribu-
tion broadly to include the efforts of either the owning or the
nonowning spouse.23
   Robert, however, argues that Stanosheck and Coufal, inas-
much as they recognize as marital property growth due to
the efforts of the owning spouse, are limited to retirement
accounts. He argues that appreciation of business interests
outside of retirement accounts should be considered a marital
asset only if the appreciation during the marriage was caused
by the efforts of the nonowning spouse.
   In support of this position, Robert relies on statements by
this court in cases decided before we clearly adopted a dual
classification system24 and under facts demonstrating that the
appreciation of the nonmarital asset was due principally to
inflation and market forces.25 Under these circumstances, in
Van Newkirk v. Van Newkirk, we said that property acquired
by gift or inheritance is not considered part of the marital
estate unless

20
      See 1 Turner, supra note 10, § 5:55.
21
      Id. at 549.
22
      Id.
23
      Id., § 5:56. See, also, e.g., Hanson v. Hanson, 125 P.3d 299 (Alaska
      2005); Horton v. Horton, 299 Ga. 46, 785 S.E.2d 891 (2016); Nardini
      v. Nardini, 414 N.W.2d 184 (Minn. 1987). See, generally, 39 A.L.R.6th,
      supra note 19.
24
      See Matlock v. Matlock, 205 Neb. 357, 287 N.W.2d 690 (1980)
      (consideration of inherited property depends on equities involved).
25
      See, Preston v. Preston, 241 Neb. 181, 486 N.W.2d 902 (1992); Ross v.
      Ross, 219 Neb. 528, 364 N.W.2d 508 (1985); Van Newkirk v. Van Newkirk,
      supra note 1.
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      both of the spouses have contributed to the improvement
      or operation of the property which one of the parties
      owned prior to the marriage or received by way of gift
      or inheritance, or the spouse not owning the property
      prior to the marriage or not receiving the inheritance or
      gift has significantly cared for the property during the
      marriage.26
   But in Rezac v. Rezac,27 decided only 3 years after Van
Newkirk, we recognized as a marital asset the appreciation
of nonmarital property due solely to the contributions of the
owning spouse during the marriage. We held in Rezac that
the lower court did not err in dividing as marital property the
entirety of the appreciated value of the husband’s premarital
stock in a corporation. We explained that if the husband’s own-
ership of the corporation had been merely “nominal” or the
increase in the value of the stock during the marriage had been
“strictly an inflationary increase,”28 there would have been a
better argument that the stock should be viewed as continuing
to be separate property. But such was not the case.
   We observed in Rezac that the lower court was correct in
treating the appreciation of stock as marital property, because
the corporation had paid for substantial improvements that
increased the corporate value, in lieu of distributing profits to
its owners as income. We explained that “had the corporation
not made substantial investments in improving its facility, the
value of the stock may have remained about the same but this
respondent would have received additional income resulting in
marital assets which would be subject to division at the time
of the dissolution.”29

26
      Van Newkirk v. Van Newkirk, supra note 1, 212 Neb. at 733, 325 N.W.2d
      at 834.
27
      Rezac v. Rezac, 221 Neb. 516, 378 N.W.2d 196 (1985).
28
      Id. at 518, 378 N.W.2d at 198.
29
      Id. See, also, Sughroue v. Sughroue, 19 Neb. App. 912, 815 N.W.2d 210
      (2012).
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   Though we observed in Rezac that the appreciation was
through reinvestment of income, other courts and legal
authorities find no meaningful distinction between apprecia-
tion through reinvestment of income and appreciation through
active efforts other than reinvestment.30 Income from and
appreciation of an asset are fundamentally similar insofar as
they are both ways that the property generates value.31 The
only difference is that income takes the form of a new asset,
while appreciation takes the form of added value.32 This dif-
ference in form bears “no relation to the policies behind equi-
table distribution.”33
   Nevertheless, in Grace v. Grace,34 a case decided a few
years after Van Newkirk and Rezac, we implicitly accepted
without analysis an appreciation/income distinction. There,
because of the inequities created by the application of such
a distinction, we were compelled to consider the value of
nonmarital assets in determining the equitable amount of the
property division.
   In Grace, we applied our statement in Van Newkirk to hold
that the husband’s interest in a premarital family business was
nonmarital. Then we said that whether an asset is marital is
but one consideration in the equitable division of property.35
Especially in light of the minimal accumulation of marital
assets due to the provision by the business of the marital home
and other expenses, we held that the wife should be awarded
a lump sum representing her portion of the husband’s corpo-
rate interest—even though the wife did not contribute to the
improvement or operation of the business.

30
      See 1 Turner, supra note 10, § 5:50 (and cases cited therein).
31
      See id., § 5:50.
32
      See id.
33
      Id. at 524.
34
      Grace v. Grace, supra note 3.
35
      Id.
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   A series of cases from the Nebraska Court of Appeals have
since recognized so-called Grace awards in order to achieve an
equitable result when the application of our statement in Van
Newkirk renders appreciation during the marriage nonmarital.36
It has not been clear under this line of case law what excep-
tional circumstances warrant a Grace award. The mathematics
behind the amount of such Grace awards have likewise never
been clear. But Grace awards generally represent a smaller
division of the asset in question than the expected division if
the asset were considered marital.37
   We find inapplicable to the modern dual classification
system any statements in Van Newkirk and its progeny which
fail to recognize as a marital asset appreciation through the
active efforts of the owning spouse. For purposes of the active
appreciation rule, there is no reason to treat appreciation of
a nonmarital asset differently from income derived from a
nonmarital asset during the marriage. We conclude, likewise,
that the principles set forth in Grace are no longer applicable
to the dual classification system set forth by this court in
Meints v. Meints.38 This is not to say that a court would, in
every conceivable circumstance, be forbidden from taking
into account nonmarital assets in its equitable division of the
marital estate, but our adoption of the active appreciation
rule as set forth herein limits the need for such an extraordi-
nary recourse.
   [12] We hold, therefore, that the principles set forth in
Stanosheck apply equally to appreciation or income during
the marriage of any nonmarital asset. Thus, accrued invest-
ment earnings or appreciation of nonmarital assets during

36
      See, Keig v. Keig, 20 Neb. App. 362, 826 N.W.2d 879 (2012); Shuck v.
      Shuck, 18 Neb. App. 867, 806 N.W.2d 580 (2011); Charron v. Charron,
      16 Neb. App. 724, 751 N.W.2d 645 (2008); Walker v. Walker, 9 Neb. App.
      834, 622 N.W.2d 410 (2001).
37
      See id.
38
      Meints v. Meints, supra note 9.
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the marriage are presumed marital unless the party seeking
the classification of the growth as nonmarital proves: (1) The
growth is readily identifiable and traceable to the nonmarital
portion of the account and (2) the growth is not due to the
active efforts of either spouse.39 We agree with many other
jurisdictions that the burden is on the owning spouse to prove
the extent to which marital contributions did not cause the
appreciation or income.40 This is the better policy, because it
places the burden on the party who has the best access to the
relevant evidence.41
   [13] We expressly adopt the active appreciation rule that
does not distinguish between the efforts of the owning spouse
and the efforts of the nonowning spouse. We agree that the
majority rule recognizing as a marital contribution the efforts
of either the owning or the nonowning spouse is “clearly cor-
rect, as the marital estate should include the fruits of either
spouse’s efforts during the marriage.”42 We hold that the appre-
ciation or income of a nonmarital asset during the marriage is
marital insofar as it was caused by the efforts of either spouse
or both spouses.
   Under the district court’s interpretation of our admittedly
confusing line of case law, it concluded that appreciation

39
      Stanosheck v. Jeanette, supra note 4.
40
      1 Turner, supra note 10, § 5:56.
41
      See id., citing Harrower v. Harrower, 71 P.3d 854 (Alaska 2003); Chapman
      v. Chapman, 866 So. 2d 118 (Fla. App. 2004); Macdonald v. Macdonald,
      532 A.2d 1046 (Me. 1987); Berenberg v. Berenberg, 474 N.W.2d 843
      (Minn. App. 1991); Waring v. Waring, 747 So. 2d 252 (Miss. 1999);
      Klaus v. Klaus, 918 S.W.2d 407 (Mo. App. 1996); Jurado v. Jurado, 119
      N.M. 522, 892 P.2d 969 (N.M. App. 1995); Pulice v. Pulice, 242 A.D.2d
      527, 661 N.Y.S.2d 675 (1997); Ciobanu v. Ciobanu, 104 N.C. App. 461,
      409 S.E.2d 749 (1991); Thielenhaus v. Thielenhaus, 890 P.2d 925 (Okla.
      1995); Garfinkel v. Garfinkel, 945 S.W.2d 744 (Tenn. App. 1996); Mayhew
      v. Mayhew, 205 W. Va. 490, 519 S.E.2d 188 (1999); In re Marriage of
      Popp v. Popp, 146 Wis. 2d 778, 432 N.W.2d 600 (Wis. App. 1988).
42
      1 Turner, supra note 10, § 5:56 at 564.
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of Stephens & Smith due to Robert’s active efforts was not
includable in the marital estate. The court accordingly made no
findings concerning what portion of Stephens & Smith’s appre-
ciation was attributable to Robert’s active efforts. Because
Janet did not directly contribute to Stephens & Smith, the court
concluded that the entirety of Stephens & Smith’s appreciation
during the marriage was nonmarital. In its attempt to make an
equitable distribution after having thus excluded approximately
$5 million from the marital estate, the court awarded as a
Grace award approximately one-fourth of Robert’s 34-percent
interest in Stephens & Smith.
   Based upon the active appreciation rule, the court should
not have excluded Stephens & Smith from the marital estate
and substituted a Grace award. We reverse the court’s deter-
mination of the marital property to the extent that it did not
include the increase in value of Robert’s interest in Stephens
& Smith, and we vacate the court’s Grace award.
   The classification of the growth in value of Robert’s stock,
including that due to retained earnings by Stephens & Smith,43
depends on the extent that the overall growth of the company
was caused by Robert’s active efforts. In this case, there was
no dispute that Stephens & Smith appreciated significantly
during the marriage and that Robert’s active efforts played a
significant role in that appreciation. Indeed, the underlying
facts were not contested. Robert, cofounder and president of
Stephens & Smith, worked full time in that capacity during the
entirety of the 25-year marriage.
   [14,15] Despite the importance of each employee in a com-
pany, a company’s value for purposes of active appreciation
is attributable only to the efforts of first-tier management or
similar persons with control over the asset’s value.44 First-tier
management is responsible for ensuring the policy, direction,
and good will that contributes most directly to the value of a

43
      See id., § 5:53.
44
      See id., § 5:57.
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company’s stock.45 Courts have uniformly rejected arguments
by the owning spouse that the universe of persons in a com-
pany that effect its value is so large that no one person has any
significant effect.46
   Even favorable market conditions are not passive inasmuch
as they create merely the opportunity that the skilled, own-
ing spouse detects and seizes.47 Nor does an argument that
the “‘ground work’” for growth was laid before the marriage
preclude as a marital asset substantial appreciation of a com-
pany’s value during the marriage.48 No person wears all hats
in a complex business operation, but it is nevertheless possible
for one person to be critical to such operation’s growth and
development.49 The appreciation of a company’s stock may be
due not just to a first-tier manager’s direct efforts, but to his or
her mere presence, when the individual is identified with the
business entity and tied to its good will.50
   [16] It was Robert’s burden to demonstrate that any portion
of Stephens & Smith’s appreciation was due to passive forces
or the active efforts of third parties who would qualify as first-
tier management or similar. In presenting the evidence at trial,
Robert was on notice of the possibility that the court would
apply the active appreciation rule. And it has been the long-
standing position of this court that the burden of proof to show
that property is nonmarital remains with the person making
the claim.51 In light of this burden of proof, it is clear on the
record presented that Robert’s active efforts were responsible

45
      See, Hanson v. Hanson, supra note 23; Berrie v. Berrie, 252 N.J. Super.
      635, 600 A.2d 512 (1991); 1 Turner, supra note 10, § 5:57.
46
      1 Turner, supra note 10, § 5:57.
47
      See id.
48
      See Innerbichler v. Innerbichler, 132 Md. App. 207, 231, 752 A.2d 291,
      304 (2000).
49
      Id.
50
      See Berrie v. Berrie, supra note 45.
51
      Heald v. Heald, supra note 12.
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for at least 34 percent of Stephens & Smith’s growth during
the 25 years that Robert and Janet were married.
   We accordingly direct the court to consider as marital
the entirety of the increase during the marriage of Robert’s
34-percent stock interest in Stephens & Smith. Because the
district court is in the better position to make an equitable
division, we remand the cause with directions to determine the
equitable distribution of that marital asset.

                        2. Spousal Support
   We turn next to Janet’s allegation that the district court erred
in failing to award spousal support under § 42-362 for so long
as she remains mentally ill. Janet does not take issue with the
monthly amount that was awarded, only its duration.
   Section 42-362 states in relevant part:
      When a marriage is dissolved and the evidence indicates
      that either spouse is mentally ill, the court may, at the
      time of dissolving the marriage or at any time thereafter,
      make such order for the support and maintenance of such
      mentally ill person as it may deem necessary and proper,
      having due regard to the property and income of the par-
      ties, and the court may require the party ordered to pro-
      vide support and maintenance to file a bond or otherwise
      give security for such support. Such an order for support
      may be entered upon the application of the guardian or
      guardian ad litem or of any person, county, municipality,
      or institution charged with the support of such mentally
      ill person. The order for support may, if necessary, be
      revised from time to time on like application.
   [17] The amount of support awarded under § 42-362 is a
matter initially entrusted to the sound discretion of the trial
judge, which award, on appeal to this court, is reviewed de
novo on the record and affirmed in the absence of an abuse of
the trial judge’s discretion.52

52
      Black v. Black, 223 Neb. 203, 388 N.W.2d 815 (1986).
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   Section 42-362 empowers the court to order the payment of
such support and maintenance “‘as it may deem necessary and
proper, having due regard to the property and income of the
parties’” and, to that extent, parallels the alimony contemplated
by § 42-365, but provides an additional specific ground to be
considered—the mental illness of a spouse.53
   However, support and maintenance of a mentally ill spouse
and alimony are not the same in all respects.54 In Black v.
Black,55 we said that although allowances of alimony in the
form of requiring one to pay a fixed sum for an indefinite
period of time are not favored, payment of support and main-
tenance of a mentally ill spouse “should continue so long as,
and only so long as, the mental illness continues” or the spouse
remarries. We accordingly modified the dissolution court’s
award of spousal support under § 42-362 until death or remar-
riage to provide that it shall continue only so long as the men-
tal illness continued and the spouse did not remarry.
   We have never held that a court must always award sup-
port under § 42-362 for so long as the mental illness con-
tinues. Nothing in the language of the statute indicates this
is required. Rather, § 42-362 contemplates that the order of
support under this section “may, if necessary, be revised from
time to time on like application.” We find that the district
court did not abuse its discretion in making the award for 120
months. Because of our determination that Stephens & Smith
is a marital asset, the court in its discretion may reconsider the
amount of alimony.56

53
      Id. at 208, 388 N.W.2d at 819.
54
      Id.
55
      Id. at 209, 388 N.W.2d at 820.
56
      See, Pendleton v. Pendleton, 242 Neb. 675, 496 N.W.2d 499 (1993);
      Olson v. Olson, 195 Neb. 8, 236 N.W.2d 618 (1975); Corn v. Corn, 190
      Neb. 383, 208 N.W.2d 678 (1973) (although alimony and distribution of
      property are technically distinct and have different purposes in marriage
      dissolution proceedings, they are closely related and circumstances may
      require that they be considered together).
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                 3. A rticles of Incorporation
   Janet last assigns as error the fact that the court ordered
the transfer to her of ownership interests in Aardvark Antique
Mall, The Mystic Pines Apartments, and Eagles Landing
Apartments, instead of a cash award. Janet’s sole objection
is her concern that the other partners will not consent to her
co-ownership. Robert was ordered to complete all documen-
tation of such joint ownership within 30 days of the decree.
In the event that did not occur, and it appears that a transfer
of ownership will not take place in spite of Robert’s best
efforts, then the parties are free to seek modification of the
decree.57 The court did not abuse its discretion in not ordering
a cash award.
                       VI. CONCLUSION
   We affirm the distribution of ownership interests in
Aardvark Antique Mall, The Mystic Pines Apartments, and
Eagles Landing Apartments, instead of a cash award. We
reverse the division of the property described as Stephens &
Smith and direct the court to include the increase in value
from the date of the marriage to the dissolution as a marital
asset. The Grace award is reversed and vacated, because the
court is directed to include the increase in value of Robert’s
interest in Stephens & Smith as a marital asset. We affirm the
award of alimony subject to the court’s discretion as set forth
in this opinion.
	A ffirmed in part, vacated in part, and in part
	               reversed and remanded with directions.
   Stacy, J., not participating.

57
      See Whitesides v. Whitesides, 290 Neb. 116, 858 N.W.2d 858 (2015).


                   IN THE COURT OF APPEALS OF IOWA

                                  No. 16-0831
                              Filed June 7, 2017

IN RE THE MARRIAGE OF PATRICIA F. MURPHY
AND MICHAEL J. MURPHY

Upon the Petition of
PATRICIA F. MURPHY,
      Petitioner-Appellee,

And Concerning
MICHAEL J. MURPHY,
     Respondent-Appellant.
________________________________________________________________

      Appeal from the Iowa District Court for Shelby County, Joel E. Swanson,

Judge.

      A former husband appeals the district court’s denial of his petition to

modify the spousal support order in the dissolution decree. AFFIRMED.

      Amanda J. Heims, Council Bluffs, for appellant.

      Matthew V. Stierman of Stierman Law Office, P.C., Council Bluffs, for

appellee.

      Heard by Vogel, P.J., and Doyle and McDonald, JJ.
                                           2

VOGEL, Presiding Judge.

       Michael Murphy appeals the district court’s denial of his application to

modify the spousal support provision contained in the 2005 decree that dissolved

his marriage to Patricia Murphy. He claims the court should have modified the

spousal support award in light of his health issues that are impacting his ability to

continue to work and in light of his claim that Patricia is no longer in need of

support. He also asks us to reduce or eliminate the district court’s award of

Patricia’s trial attorney fees. We affirm the district court’s decision.

I. Background Facts and Proceedings.

       The parties’ twenty-five-year marriage was dissolved in March 2005, and

in the stipulated decree, Michael was ordered to pay Patricia $2750 per month in

traditional alimony until either party died or Patricia remarried. Shortly after the

dissolution decree was filed, Michael remarried, and he maintains a law practice

with his current wife, Kimberly. Patricia has not remarried, and her sources of

income, besides the spousal support from Michael, include social security, a

portion of Michael’s military pension, a small pension payment, and the income

from the rental properties she was awarded in the dissolution proceeding, totaling

$3311.63 per month.

       In November 2015, Michael filed a petition to modify the spousal support

order of the dissolution decree, asserting his support obligation should terminate

at his retirement, which he claimed was imminent in light of his age and declining

health. The matter proceeded to a trial on April 22, 2016. At the trial, Michael
                                          3

testified he underwent a quadruple bypass surgery.1 He also testified he has

trouble with regulating his heartbeat, is inflicted with recurrent cellulitis, and has

trouble sleeping.     He also has physical scars and psychological trauma

associated with his military service while in Vietnam.         Michael asserted he

receives a sixty-percent disability benefit from the military due to his health

conditions.   He also reported he was more recently having difficulty with his

memory—forgetting information in the midst of trial and failing to remember court

deadlines. For that reason, Michael testified he has scaled back his law practice

to criminal law only, refusing to take cases dealing with family law, personal

injury, workers’ compensation, or court appointments.          Michael asserted his

doctors told him to reduce his stress.        In order to do so, Michael stated he

wanted to retire in light of his age—sixty-six years old—but cannot do so with his

monthly spousal support obligation.

       The law practice where Michael works is completely owed by Kimberly,

and Michael receives a salary from his work at the firm in the amount of

$118,500. He also receives a monthly veteran disability benefit and pension

payment in the amount of $1676.38. He has no administrative obligations for the

firm or ownership interest in the firm, and he estimates that he works sixty or

sixty-five hours per week. In addition, the law firm is located in a building that is

owned by Kimberly’s property management company, and Michael also has no

interest in that company. The two rental properties Michael was awarded in the

dissolution proceeding in 2005 were transferred to Kimberly’s property

1
  The record on appeal is unclear, but Michael’s counsel at oral argument informed this
court that the bypass surgery occurred approximately two weeks before the stipulated
dissolution decree was filed by the district court.
                                         4

management company during the time Michael was recovering from his heart

surgery. While Michael and Kimberly asserted at the modification trial that the

properties had no value at the time of the transfer in light of the substantial

repairs each required, the financial affidavit Michael filed in the 2005 dissolution

proceeding asserted the properties had a net value of over $42,000.

       Patricia testified at the hearing that she continues to manage the rental

properties she was awarded in the dissolution proceeding, work she performed

before the parties’ dissolution, and has paid off over $200,000 in mortgage debt

attached to the rental properties and the former marital home. While she has

typically taken an extended vacation each year, she also has many physical

ailments. After the dissolution proceeding, she had knee surgery after falling at

work, she had wrist surgery, and more recently she underwent another knee

surgery due to a torn meniscus. In addition, she was currently scheduled to have

back surgery due to a herniated disc, and she has thyroid disease. Because of

her age—sixty-six years old—and her physical condition, Patricia testified she did

not believe she could obtain any other employment to support herself.

       The district court issued its order denying the modification petition May 11,

2016. The court noted Michael’s concerns regarding his health and his desire to

retire from the practice of law but observed Michael’s law license is still active

and no medical testimony was received into evidence to support his claimed

need for retirement. The court also noted that while Patricia’s net worth has

increased since the dissolution due to her work in maintaining the rental

properties and her efforts to pay off her debt obligations, her annual income

remained steady—yielding between $23,000 and $32,000 annually. The court
                                           5

concluded that while Michael and Kimberly may have a legitimate purpose for

transferring Michael’s assets to Kimberly’s company and preventing Michael from

having an ownership interest in the law firm or property management company,

there was no consideration given for Michael’s support obligation to Patricia in

Michael’s retirement plans. As the court noted, “Spousal support creates an

obligation which must be considered when considering employment practices

and in this case retirement.” Michael earned an annual salary of $118,500 and

annual disability and pension payments of over $20,000.                   He had no

responsibility for expenses for the law firm, yet he enjoyed a comfortable lifestyle

with Kimberly, remodeling the apartment above their law firm at a cost exceeding

$500,000 and purchasing a motor home at a cost exceeding $87,000. The court

also awarded Patricia her request for $16,362 in trial attorney fees.

       Michael appeals.

II. Scope and Standard of Review.

       We review de novo the district court’s decision entered in response to a

petition to modify the spousal support provision of a dissolution decree. In re

Marriage of Michael, 839 N.W.2d 630, 635 (Iowa 2013).              But, “[w]e will not

disturb the trial court’s conclusions ‘unless there has been a failure to do equity.’”

Id. (citation omitted). Our review of the district court’s award of trial attorney fees

is for an abuse of discretion. Id.

III. Modification of Spousal Support.

       On appeal, Michael asserts that the district court should have modified his

spousal support obligation in light of his health conditions that are influencing his

decision to retire and in light of Patricia’s ability to support herself with the income
                                         6

producing assets awarded to her in the dissolution decree. Patricia defends the

district court’s decision, noting Michael continues to practice law and earns a

salary higher now than his earnings at the time of the dissolution decree, she

continues to need support, and Michael’s actions in transferring assets out of his

name are motivated by his desire to avoid his spousal support obligation.

      Spousal support obligations can be modified if “there is a substantial

change in circumstances.” See Iowa Code § 598.21C(1) (2015). The court is to

consider the following factors when determining whether a substantial change in

circumstances has occurred:

               a. Changes in the employment, earning capacity, income, or
      resources of a party.
               b. Receipt by a party of an inheritance, pension, or other gift.
               c. Changes in the medical expenses of a party.
               d. Changes in the number or needs of dependents of a
      party.
               e. Changes in the physical, mental, or emotional health of a
      party.
               f. Changes in the residence of a party.
               g. Remarriage of a party.
               h. Possible support of a party by another person.
               i. Changes in the physical, emotional, or educational needs
      of a child whose support is governed by the order.
               j. Contempt by a party of existing orders of court.
               k. Entry of a dispositional or permanency order in juvenile
      court pursuant to chapter 232 placing custody or physical care of a
      child with a party who is obligated to pay support for a child. Any
      filing fees or court costs for a modification filed or ordered pursuant
      to this paragraph are waived.
               l. Other factors the court determines to be relevant in an
      individual case.

Id. Michael bears the burden to prove a substantial change in circumstances by

a preponderance of the evidence, and the change “must not have been within the

contemplation of the district court when the decree was entered.” See Michael,

839 N.W.2d at 636.      “[W]e presume the decree is entered with a ‘view to
                                          7

reasonable and ordinary changes that may be likely to occur.’”            Id. (citation

omitted). While changes in earning capacity may satisfy this burden, the change

will not justify a modification if it is motivated by “an improper intent to deprive an

obligee of support.” Id. In addition, “[m]edical problems associated with the

aging process are in the contemplation and knowledge of the trial court when a

decree is entered. They are reasonable and ordinary changes that are likely to

occur.” In re Marriage of Skiles, 419 N.W.2d 586, 589 (Iowa Ct. App. 1987).

       Michael has increased his income since the time of the initial decree in

2005, when he earned approximately $103,000 annually at his former law firm.

While he testified that his current annual salary of $118,500 was set by Kimberly

in order to maximize the social security contribution, Kimberly testified that this

amount was “commensurate with what [Michael] has earned in the past and

commensurate with kind of a fair share based on both of us working [at the law

firm] and some of the advantages he gets for not having to hire a secretary, pay

for a computer, you know, IT people.” Michael’s expert also testified at trial that

his salary was fairly reasonable in light of the income of the law firm. Michael

testified he worked longer hours now than at the time of the dissolution decree.

He also receives annual pension and disability payments of over $20,000.

       In addition, Michael, while contemplating retirement at some point in the

near future, had no definite retirement date, and he testified he planned to work

and not apply for social security until he reached the age of seventy—another

four years into the future. See In re Marriage of Gust, 858 N.W.2d 402, 416–18

(Iowa 2015) (preferring to defer consideration of the impact of retirement upon

spousal support obligations until “retirement is imminent or has actually
                                          8

occurred”); see also Michael, 839 N.W.2d at 639 n.8 (declining to terminate the

spousal support obligation at payor’s anticipated retirement age, which was four

years in the future, because such modification would depend on the

circumstances of the parties prevailing at the time of the retirement). Michael

testified, “[M]y plans are hopefully this alimony will stop then I can then put some

money into a retirement plan.”        Michael claimed his health condition was

requiring him to reduce his work productivity, but as the district court noted, no

medical evidence or testimony was received at trial to support Michael’s

assertions.2

       Michael also points to Patricia’s increased net worth as a justification for

reducing his support obligation. Since the dissolution decree, Patricia has been

able to significantly reduce the debt associated with the real property she was

awarded, and her retirement account has seen a considerable increase in value

from approximately $100,000 to $294,000. Despite the increase in net worth,

Patricia testified her own health conditions will impact her ability to continue to

manage the rental properties, and it is those rental properties that generate the

majority of her income beyond the spousal support.

       Finally, both parties offered expert testimony as to the financial status of

Michael and Kimberly and Kimberly’s companies in light of Michael’s lack of

ownership interest in the law firm and his transfer of nearly all of his assets to

2
  Michael’s assertion on appeal that the 2005 decree “should have terminated alimony
upon Michael’s eligibility for retirement, as a more than equitable property division
occurred” demonstrates he now simply regrets his agreement to pay Patricia traditional
spousal support and is attempting to rewrite the 2005 stipulated decree without meeting
the necessary statutory burden to prove a substantial change in circumstances not
contemplated at the time of the dissolution decree.
                                         9

Kimberly’s company. While the experts testified there were legitimate reasons,

such as estate planning and liability exposure, for keeping Michael separate from

both the law firm and the property management company, Patricia’s expert

testified that he saw a deliberate effort by Michael to divest himself of assets by

transferring income and ownership into Kimberly’s name.

       Although Kimberly testified that she and Michael keep their finances

separate, Michael and Kimberly utilize a joint checking account where all income

and profits from all business ventures are deposited and all personal expenses

are paid. Kimberly also testified she came to the marriage with considerable

assets and all of the money invested in the law firm and in the property

management company, including the improvements to the apartment above the

law firm, has come from her premarital assets. While Kimberly has no obligation

to support Patricia, in evaluating whether a support obligation should be

modified, we are to consider the full picture of Michael’s financial situation, which

includes the “[r]emarriage of a party” and the “[p]ossible support of a party by

another person.”    See Iowa Code § 598.21C(1)(g), (h).         For Michael, such

support includes his competitive salary at Kimberly’s law firm, with no obligation

for law firm expenses, and perks such as driving a new car provided by the law

firm, taking vacations paid by the law firm, and living comfortably in a newly

renovated home in which he has no ownership interest.

       In light of all the factors that are to be considered, we cannot say that the

district court’s denial of Michael’s petition to modify the spousal support at this

time resulted in “a failure to do equity.” See Michael, 839 N.W.2d at 635. At this
                                            10

point, Michael has failed to prove a substantial change in circumstances to justify

a modification of his support obligation.

IV. Trial Attorney Fees.

       Finally, Michael asserts the district court abused its discretion in ordering

him to pay $16,362 for Patricia’s trial attorney fees. He asserts the amount is

excessive in light of the fact the only issue before the district court was spousal

support and Patricia is capable of paying her own attorney fees.            Patricia

responds that her attorney fee affidavit supports the amount awarded and

asserts she was forced to file a motion to compel and respond to frivolous

motions.   Pursuant to Iowa Code section 598.36, the court may award the

prevailing party in a proceeding to modify a dissolution decree a reasonable

amount for attorney fees.     The district court has “considerable discretion” in

determining whether to award the fees. In re Marriage of Maher, 596 N.W.2d

561, 568 (Iowa 1999). We find no abuse of discretion in the trial court’s award of

attorney fees.

       AFFIRMED.


133 F.3d 1141
98 Cal. Daily Op. Serv. 330, 98 Daily JournalD.A.R. 437In re PINTLAR CORPORATION;  Gulf USA Corp., Debtors.Bernard GOODSON;  Ford Elsaessar;  Lowell Finley;  and JayJ. Miller, as Trustees, Plaintiffs-Appellees,v.David J. ROWLAND;  Jeremy E. James;  David L. Hudd;  DerekJ. Moran, Defendants-Appellants.In re PINTLAR CORPORATION;  Gulf USA Corp., Debtors.Bernard GOODSON;  Ford Elsaessar;  Lowell Finley;  and JayJ. Miller, as Trustees, Plaintiffs-Appellees,v.David J. ROWLAND;  Jeremy E. James;  David L. Hudd;  DerekJ. Moran, Defendants,andInoco PLC, a United Kingdom corporation, Defendant-Appellant.
Nos. 96-36062, 96-36063.
United States Court of Appeals,Ninth Circuit.
Argued and Submitted Sept. 9, 1997 (No. 96-36062).Submitted on the Briefs Sept. 9, 1997* (No. 96-36063).Decided Nov. 3, 1997.Amended Jan. 14, 1998.

1
Lawrence E. Carnevale, Carter, Ledyard & Milburn, New York City;  John T. Mitchell, Mitchell & Mitchell, Coeur D'Alene, Idaho, for defendants-appellants.

2
Richard W. Reinthaler, New York City;  Dianne Coffino, New York City;  Givens, Pursley & Huntley, Boise, Idaho, for plaintiffs-appellees.

3
Appeals from the United States District Court for the District of Idaho;  Edward J. Lodge, Chief Judge, Presiding.  D.C. Nos.  CV-96-00010-EJL, CV-96-00011-EJL.

4
Before:  WRIGHT and SCHROEDER, Circuit Judges, and SCHWARZER,** Senior District Judge.

SCHWARZER, Senior District Judge:

5
We must decide whether the bankruptcy court had personal jurisdiction over the defendants in this adversary proceeding under Fed.  R. Bankr.P. 7004(f) ("Rule 7004(f)"), as amended subsequent to the commencement of this action.

I. Procedural Background

6
Plaintiffs, the trustees (the "Trustees") of a litigation trust (the "Litigation Trust"), brought this adversary proceeding against defendants David J. Rowland, Jeremy E. James, David L. Hudd, Derek J. Moran (the "Rowland Directors") and Inoco Plc ("Inoco") to recover certain assets belonging to debtors Gulf USA Corporation ("Gulf") and its subsidiary, Pintlar Corporation ("Pintlar").  The amended complaint alleged counts for fraudulent conveyance under Bankruptcy Code §§ 544, 548 and 550, and for misrepresentation, breach of fiduciary duties, civil conspiracy, breach of contract and violation of Delaware corporation law.  The bankruptcy court granted defendants' motion to dismiss count II (corporate waste and mismanagement) for lack of personal jurisdiction but denied the motion with respect to the other counts.  On interlocutory appeal, the district court affirmed the bankruptcy court's order as to all counts except count VI (breach of contract), dismissing that count, and count II (corporate waste and mismanagement), reinstating that count.  The district court certified its order for interlocutory appeal and we granted the Rowland Directors and Inoco permission to appeal under 28 U.S.C. § 1292(b);  the Trustees do not appeal the dismissal of the breach of contract count.

II. Factual Background

7
The Rowland Directors are foreign citizens who reside outside of the United States.  Inoco is a publicly traded United Kingdom corporation, headquartered in England.  At all relevant times, the Rowland Directors were officers of Inoco and Rowland, through intermediaries, owned a controlling interest in Inoco.  The Rowland Directors acquired control of Gulf in 1989 when Inoco, through a subsidiary, purchased 34% of Gulf's outstanding shares.  At the time, Gulf had assets exceeding $177 million but it also had potentially large liabilities.  These liabilities arose out of the former ownership of the Bunker Hill mine by Gulf's subsidiary, Pintlar.  They largely involve claims for environmental damage caused by the Idaho operations of Bunker Hill and claims for medical and pension benefits by its retired Idaho employees.  The creditors holding these claims are beneficiaries of the Litigation Trust.

8
In their complaint, the Trustees allege that the Rowland Directors and Inoco, after taking control of Gulf, engaged in a course of conduct to loot and waste the assets of the company.  They allege that the defendants entered into a series of transactions by which they transferred Gulf's assets into their control.  When creditors became concerned over Gulf's ability to meet its obligations, Rowland sent a letter to former employees of Bunker Hill in Idaho, assuring them that Gulf would meet its obligations for employee benefits and environmental clean-up, assurances alleged to be false and fraudulent.  In 1991, the Rowland Directors sold Inoco and their shares in Gulf.  In 1993, involuntary bankruptcy petitions were filed against Gulf and Pintlar in the District of Idaho.  This adversary proceeding followed.  In it the Trustees seek to recover for the benefit of the Litigation Trust the assets of Gulf and Pintlar, which they claim were looted by defendants.

9
The district court held that the Idaho contacts of Rowland, Hudd and James were sufficient to find that they purposefully availed themselves of the Idaho forum.  With respect to Moran and Inoco, the court found that, although they were not alleged to have taken actions directed at Idaho, the allegations of conspiracy were sufficient to satisfy the purposeful availment test.  Parsing the controlling factors, the court concluded that the exercise of specific personal jurisdiction over the defendants under the Idaho long-arm statute would not be unreasonable and held them subject to personal jurisdiction on all claims other than the contract claim.  We affirm, but on a different ground.

III. Standard of Review

10
Plaintiffs have the burden of establishing personal jurisdiction but need to make only a prima facie showing of jurisdictional facts to avoid a motion to dismiss.  Farmers Ins. Exch. v. Portage La Prairie Mut. Ins. Co., 907 F.2d 911, 912 (9th Cir.1990).  We review the record in the district court de novo to determine whether plaintiffs have established a prima facie case for personal jurisdiction over defendants.  Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 269 (9th Cir.1995).  Factual findings are reviewed for clear error.  Hunt Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 75, 78 n. 2 (9th Cir.1987).  All factual disputes are resolved in favor of the Trustees.  Lake v. Lake, 817 F.2d 1416, 1420 (9th Cir.1987).

IV. Personal Jurisdiction under Rule 7004(f)

11
A. Application of the Rule to the Pending Action

12
In 1994, when the Trustees commenced this action, Rule 7004 did not authorize personal jurisdiction over nonresidents on the basis of national contacts.  The rule was amended, effective December 1, 1996,1 to add subsection (f) which provides:

13
(f) Personal Jurisdiction

14
If the exercise of jurisdiction is consistent with the Constitution and the laws of the United States, serving a summons or filing a waiver of service in accordance with this rule or the subdivisions of Rule 4 F.R.Civ.P. made applicable by these rules is effective to establish personal jurisdiction over the person or any defendant with respect to a case under the Code, or a civil proceeding arising under the Code, or arising in or related to a case under the Code.

15
Fed. R. Bankr.P. 7004(f).  Thus, under the new rule, personal jurisdiction may be obtained in proceedings under the Bankruptcy Code over nonresidents who are served in conformity with Rule 7004(a) or the applicable subdivisions of Fed.R.Civ.P. 4 ("Civil Rule 4") so long as the exercise of jurisdiction is consistent with the Constitution.  See Fed.  R. Bankr.P. 7004(f) and advisory committee notes (1996 Amendments) ("[S]ervice or filing a waiver of service in accordance with this rule or the applicable subdivisions of F.R.Civ.P. 4 is sufficient to establish personal jurisdiction over the defendant.").

16
The threshold question is whether the new Rule 7004(f) may be applied to an action commenced in 1994.  The Supreme Court's order adopting the amended rules states that they "shall govern all proceedings ... thereafter commenced and, insofar as just and practicable, all proceedings in bankruptcy then pending."   Communication from the Chief Justice, Amendments to the Federal Rules of Bankruptcy Procedure that Have Been Adopted by the Court, at 2, Apr. 24, 1996 (emphasis added).  Application of the rule to this action therefore turns on whether it would be just and practicable.  While in some circumstances we would remand so that the district court may exercise its discretion, we see no need to do so here.  Remand is not necessary where the issue has been fully briefed on appeal, the record is clear and remand would "impose needless additional expense and delay...."  Foster v. Skinner, 70 F.3d 1084, 1089 (9th Cir.1995) (citing Roundtree v. United States, 40 F.3d 1036, 1040 (9th Cir.1994));  Hoffman v. GMAC, 814 F.2d 1385, 1387 (9th Cir.1987).

17
This appeal is interlocutory and is limited to the issue of personal jurisdiction.  Both sides have thoroughly briefed the issue, and applying the rule to this action is plainly practicable.  Defendants argue, however, that to do so would be prejudicial because the claims against them would otherwise be barred by the prior rule.  Their reliance on Chenault v. USPS, 37 F.3d 535 (9th Cir.1994), is misplaced.  We held there that a newly enacted statute that shortens the applicable statute of limitations may not be applied retroactively to bar a plaintiff's claim that might otherwise be brought "because to do so would be manifestly unjust."  Id. at 539.   This clearly is not such a case.  As the Supreme Court stated in Landgraf v. USI Film Products, 511 U.S. 244, 274, 114 S.Ct. 1483, 1501-02, 128 L.Ed.2d 229 (1994), "[w]e have regularly applied intervening statutes conferring or ousting jurisdiction, whether or not jurisdiction lay when the underlying conduct occurred or when the suit was filed....  Present law normally governs in such situations because jurisdictional statutes 'speak to the power of the court rather than to the rights or obligations of the parties.' "   See also Duldulao v. INS, 90 F.3d 396, 399 (9th Cir.1996) (stating that "the 'presumption against retroactive application of new legislation to pending cases ... does not apply to rules conferring or withdrawing jurisdiction.' "  (citation omitted));  Arrowhead Estates Dev.  Co. v. United States Trustee, 42 F.3d 1306, 1311 (9th Cir.1994) (same);  Friel v. Cessna Aircraft Co., 751 F.2d 1037, 1039 (9th Cir.1985) (stating that "when a statute is addressed to remedies or procedures and does not otherwise alter substantive rights, it will be applied to pending cases");  see also Driscoll v. Gebert, 458 F.2d 421(9th Cir.1972)(holding that newly enacted California long-arm statute applied to previously filed pending action).

18
Defendants' argument that they could not reasonably have expected being haled into court in Idaho is unpersuasive since they had at least to reckon with application of the Idaho long-arm statute to their dealings affecting Idaho creditors.  None of the defendants offer facts to show that they would have behaved differently had they expected Rule 7004(f) to apply or that they have been otherwise prejudiced.2  See McGee v. International Life Ins. Co., 355 U.S. 220, 224, 78 S.Ct. 199, 201-02, 2 L.Ed.2d 223 (1957) (stating that defendant "had no vested right not to be sued in California").  Moreover, weighing against defendants' arguments is the policy favoring consolidation in a common forum of all litigation relating to a bankruptcy in the interest of economy and efficiency-as opposed to having the litigation dispersed across two continents.

B. Applying Rule 7004(f)

19
Defendants contend that even if Rule 7004(f) applies, personal jurisdiction cannot be exercised until the court determines that the defendants are "not subject to the jurisdiction of the courts of general jurisdiction of any state."  Fed.R.Civ.P. 4(k)(2).  Defendants' argument rests on the assumption that jurisdiction under Rule 7004(f) is subject to this limitation found in Civil Rule 4(k)(2).  For support they rely on the introductory sentence of the advisory committee notes to the 1996 Amendment of Rule 7004 which states, "The new subdivision (f) is consistent with the 1993 amendments to F.R.Civ.P. 4(k)(2)."  Fed. R. Bankr.P. 7004 advisory committee notes (1996 Amendments).

20
The plain language of Rule 7004(f) refutes the argument.  It omits the critical language of Civil Rule 4(k)(2) that limits application to "any defendant who is not subject to the jurisdiction of the courts of general jurisdiction of any state."   That the rule is not cloned from Civil Rule 4(k)(2) is shown, as well, by other differences in the text of the two rules.  First, Rule 7004 cross-references only to those subdivisions of Civil Rule 4 "made applicable by these rules" and that does not include Rule 4(k)(2).  See Fed.  R. Bankr.P. 7004(a) ("Rule 4(a), (b), (c)(1), (d)(1), (e)-(j), (l), and (m) F.R.Civ.P. applies in adversary proceedings.").  Second, Rule 7004(f)'s application is narrower than Civil Rule 4;  Rule 7004(f) is limited to cases or civil proceedings arising or related to a case under the Bankruptcy Code.  Finally, the advisory committee statement relied on by defendants is further explained by the sentence immediately following which states, "[Rule 7004(f) ] clarifies that service or filing a waiver of service in accordance with this rule or the applicable subdivisions of F.R.Civ.P. 4 is sufficient to establish personal jurisdiction over the defendant."  Fed. R. Bankr.P. 7004(f) advisory committee notes.  That statement confirms that the drafters' purpose was to incorporate the service provisions of the amended Civil Rule 4, not its limitation on personal jurisdiction.3  We therefore decline to import into Rule 7004(f) the "not subject to the jurisdiction ... of any state" limitation of Civil Rule 4(k)(2).

21
Applying Rule 7004(f) as written, all of the requisite elements to support the exercise of jurisdiction are present.

22
The complaint, alleging claims under 11 U.S.C. §§ 544, 548, and 550, is a "civil proceeding arising under the [Bankruptcy] Code."  Fed. R. Bankr.P. 7004(f).

23
The defendants were served "in accordance with [Rule 7004] or the subdivisions of Rule 4 F.R.Civ.P. made applicable by [Rule 7004]."  Fed.  R. Bankr.P. 7004(f).  Rowland contends he was not properly served under pre-amendment Rule 7004(e) which states, "[t]he summons and complaint ... may be served as provided in [Civil Rule] 4(d)(1) and (d)(3)" for service in a foreign country.  Fed. R. Bankr.P. 7004(e) (emphasis added).  Rowland was served instead pursuant to Civil Rule 4(i) which is made applicable to adversary proceedings in bankruptcy under Rule 7004(a).  See Fed.  R. Bankr.P. 7004(a).  Civil Rule 4(i), as it was in 1990, contained "Alternative Provisions for Service in a Foreign Country," and stated that a defendant in a foreign country may be served by any one of five specified methods.  The district court correctly held service under Rule 4(i) to be sufficient.  Its ruling was consistent with that of other courts, finding Rule 7004(e) to be permissive, not mandatory.  See Schwinn Plan.  Comm. v. AFS Cycle & Co., 190 B.R. 599, 608 (Bankr.N.D.Ill.1995);  Official Comm. of Unsecured Creditors of Southold Dev.  Corp. v. Mittemyer, 148 B.R. 726, 728 (E.D.N.Y.1992);  In re Crysen/Montenay Energy Co. v. E & C Trading Ltd., 166 B.R. 546, 548-49 (S.D.N.Y.1994).

24
Finally, "the exercise of jurisdiction is consistent with the Constitution and the laws of the United States."  Fed. R. Bankr.P. 7004(f).  While the Rowland Directors do not contest the constitutional basis for personal jurisdiction, Inoco contends that it lacked sufficient contacts with the United States.  The bankruptcy judge's findings suffice to establish defendants' contacts with the United States:

25
Thus, these alien defendants reached out to Gulf in the United States and forged a continuing relationship with it.  The alleged looting of Gulf foreseeably caused Gulf injury in the United States where it was located....  [T]he alleged injuries arise out of the defendants' purposeful direction of their activities toward the United States....

26
*   *   *   *   *   *

27
Inoco's sale of property located in Texas and New York to Gulf was activity directed to the United States ... As part of the conspiracy to loot Gulf, Inoco took control of a United States corporation....  Inoco purposefully interjected itself into the United States.

V. Conclusion

28
The order of the district court is AFFIRMED and the matter is REMANDED for further proceedings.

*
 The panel unanimously finds this case suitable for decision without oral argument.  Fed. R.App. P. 34(a) and 9th Cir.  R. 34-4

**
 Honorable William W Schwarzer, Senior United States District Judge for the Northern District of California, sitting by designation

1
 The district court took note of the forthcoming amendment but its order was issued before the effective date of the amendment

2
 In their Petitions for Rehearing, appellants argue that they did not have an opportunity to offer facts to show "that they would have behaved differently had they expected amended Rule 7004(f) to apply."   It is difficult to see how Rule 7004(f) might have induced them into behavior that the long-arm statute did not.  The argument, in any event, is not persuasive in light of their failure to give any indication in their briefs or petitions what facts they might have offered for this purpose

3
 This makes Rule 7004(f) consistent with the expansive jurisdictional reach of the bankruptcy courts, which are empowered to exercise jurisdiction over a debtor's property wherever located.  See 28 U.S.C. § 1334(e)


                                                                 NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ____________

                                      No. 10-3743
                                     ____________

                                 TAMARA ANTHONY,

                                                     Appellant

                                           v.

               DUFF & PHELPS CORPORATION; DUFF & PHELPS, LLC
                                     ____________

                    On Appeal from the United States District Court
                       for the Eastern District of Pennsylvania
                               (D.C. No. 2-09-cv-03918)
                     District Judge: Honorable Paul S. Diamond
                                    ____________

                      Submitted Under Third Circuit LAR 34.1(a)
                                   June 20, 2011

                 Before: HARDIMAN and ALDISERT, Circuit Judges
                             and RESTANI * Judge.

                                 (Filed: June 22, 2011)

                                     ____________

                              OPINION OF THE COURT
                                   ____________

HARDIMAN, Circuit Judge.

      *
        The Honorable Jane A. Restani, Judge of the United States Court of International
Trade, sitting by designation.
       Tamara Anthony appeals the District Court’s summary judgment on her Title VII

claim for national origin discrimination. We will affirm, essentially for the reasons stated

by the District Court in its careful and thorough opinion.

                                             I

       Because we write for the parties, we recount only the essential facts, and we do so

in the light most favorable to Anthony.

       Anthony worked as a real estate analyst at Duff & Phelps, LLC from September

2006 to June 2008. As a Russian emigrant, Anthony claimed that she was being singled

out for unfair treatment by her co-workers and supervisors. Specifically, Anthony

testified that one of her supervisors, Jay White, “constantly corrected” her pronunciation

of English words and another supervisor, John Corbett, assigned her low-billable hour

work “that nobody else seemed to want.” In contrast, Anthony claims her direct

supervisor, Paul Sipala, was a “fair and reasonable supervisor” who exhibited no obvious

bias against persons of Russian origin.

       In the spring of 2008, “as a result of the general economic downturn,” Duff &

Phelps, LLC “implemented Project Pearl, a nationwide reduction-in-force.” The

company directed Ross Prindle, the national manager of the real estate group, to terminate

one analyst position from the Philadelphia office. At the time, two real estate analysts

worked in Philadelphia: Anthony and an American-born college graduate, Robert

                                             2
Wasenius. Prindle had not met either candidate. Accordingly, he relied on the company’s

“utilization data”—measuring employee productivity and efficiency—to determine which

employee to fire. The data showed that “between January 1, 2007 and March 31, 2008,

[Anthony’s] overall utilization score was 10-15% lower per year than Wasenius’s score.”

       Prindle contacted Corbett to determine whether the employees’ utilization scores

“grossly mischaracterized the overall quality of their respective work performance.”

Corbett was unaware, during his conversation with Prindle, that the company was

planning to lay off workers. Believing that Prindle merely called to discuss the

employees’ annual performance reviews, Corbett noted the analysts’ “good qualities and

qualities that needed work.” Corbett made no mention of either candidate’s national

origin. Following this conversation, Prindle selected Anthony for termination and she

was officially notified of the company’s decision on June 9, 2008.

       Two months later, Anthony filed suit in the District Court for the Eastern District

of Pennsylvania, alleging national origin discrimination in violation of Title VII of the

Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. The District Court entered summary

judgment against Anthony on August 12, 2010, holding that she could not make out a

prima facie case of discrimination. This timely appeal followed. 1

       1
         The District Court had jurisdiction pursuant to 28 U.S.C. § 1331. We have
jurisdiction pursuant to 28 U.S.C. § 1291.
                                             3
                                              II

         We review the District Court’s summary judgment de novo, and apply the same

standard as the District Court. Dique v. N.J. State Police, 603 F.3d 181, 185 (3d Cir.

2010).

         The District Court found no “causal nexus” between Anthony’s membership in a

protected class and her termination. Anthony v. Duff & Phelps Corp., 2010 U.S. Dist.

LEXIS 83161, *18-19 (E.D. Pa. Aug. 12, 2010) (citing Sarullo v. U.S. Postal Serv., 352

F.3d 789, 798 (3d Cir. 2003)). The Court held that “it is counterintuitive to infer that

[Prindle] discriminated [against Anthony]” based on her national origin, because there is

no evidence that Prindle was aware of Anthony’s nationality at the time of her

termination. Id. at *16 (quoting Geraci v. Moody-Tottrup, Inc., 82 F.3d 578, 581 (3d Cir.

1996)).

         Anthony argues that because Prindle’s decision was based, in large part, on her

supervisors’ recommendations, a “causal nexus” exists between her supervisors’ anti-

Russian bias and Prindle’s ultimate determination. See Roebuck v. Drexel Univ., 852

F.2d 715, 727 (3d Cir. 1988) (“it plainly is permissible for a jury to conclude that an

evaluation at any level, if based on discrimination, influenced the decisionmaking

process”).

         The District Court rejected this argument, however, finding that Anthony failed to

point to any evidence showing that her “supervisors (Corbett, Sipala, or White) . . .

                                              4
influenced Prindle’s decision based upon an anti-Russian bias.” Anthony, 2010 U.S. Dist.

LEXIS 83161, at *17. Apart from Anthony’s allegations that Corbett assigned less

desirable work to her than he did to her co-workers, no evidence in the record shows that

Corbett was motivated by discriminatory animus, let alone that he allowed such animus to

infect his recommendations to Prindle. Rather, Corbett testified that he did not

recommend that Anthony be laid off, but rather spoke to Prindle about the employees’

2007 evaluations. In 2007, Anthony received an overall competency score of

“proficient”—the second lowest possible rating. 2 Like Anthony’s “utilization data,” this

score reflected Sipala’s objective analysis of Anthony’s performance. Thus, no evidence

in the record supports Anthony’s allegation that Corbett’s recommendation to Prindle was

tainted by discriminatory animus.

       Nor is there evidence that White’s alleged bias against persons of Russian origin

influenced Prindle’s decision to terminate Anthony. During his deposition, White

claimed that Prindle never contacted him to discuss Anthony’s performance.

Nevertheless, Anthony argues that a reasonable jury might find that White was part of the

decision making process, because Prindle claimed to speak to multiple “individuals,” but

only identified one person by name. We decline Anthony’s invitation to assume that one

       2
        Although Wasenius received an even lower score that year—“requires
development”—Sipala explained that this score is given to all employees in their first
year. In fact, Anthony received the same low rating during her first year at Duff &
Phelps, LLC.
                                             5
of the individuals with whom Prindle spoke was White. Such “unsupported assertions,

speculation, and conclusory allegations are insufficient to withstand a motion for

summary judgment.” Nelson v. DeVry, Inc., 2009 U.S. Dist. LEXIS 38161, *27-28 (E.D.

Pa. Apr. 23, 2009). Thus, we find no “causal link” between White’s alleged bias and

Prindle’s decision to terminate Anthony.

       As the District Court found, the record contains no evidence that Anthony’s

termination was based on anything other than the “utilization data” and her overall

competency score. Thus, the District Court did not err in holding that Anthony failed to

establish a prima facie case of discrimination. Accordingly, we will affirm the District

Court’s summary judgment. 3

       3
         Because we hold that Anthony failed to make out a prima facie case of
discrimination, we need not consider her assertion that the “economic” justification for
her layoff was pretextual. Moreover, where a plaintiff fails to make out a prima facie
case of discrimination under McDonnell-Douglas, “there is no basis to allow the plaintiff
to proceed on a mixed motive theory.” Sulit v. Fed. Reserve Bank of Phil., 2009 U.S.
Dist. LEXIS 77699, at *21 (E.D. Pa. Aug. 28, 2009).
                                             6