Gaulrapp v. Gaulrapp, 930194

• Citation: 510 N.W.2d 620
• Decision Date: 05 January 1994
• Docket Number: No. 930194,930194
• Parties: Jane GAULRAPP, Plaintiff and Appellee, v. David GAULRAPP, Defendant and Appellant. Civ.
• Court: United States State Supreme Court of North Dakota

Page 620

510 N.W.2d 620

Jane GAULRAPP, Plaintiff and Appellee, v. David GAULRAPP, Defendant and Appellant.

Civ. No. 930194.

Supreme Court of North Dakota.

Jan. 5, 1994.

Garaas Law Firm, Fargo, for plaintiff and appellee; argued by Jonathan T. Garaas.

Griffeth Law Office, West Fargo, for defendant and appellant; argued by Scott A. Griffeth.

MESCHKE, Justice.

David Gaulrapp appeals from a divorce decree dividing property. We reverse the trial court's distribution of assets and debts, and remand for reconsideration in light of our decision.

Jane and David Gaulrapp were married in 1973 and had three children. Except for temporary layoffs, David worked for J.I. Case and Steiger Tractor during the entire marriage, and earns over eleven dollars an hour. Jane worked at a packaging job for 14 years. After being laid off there in 1991, she began working for a health food outlet, and currently earns less than five dollars an hour.

When Jane filed for divorce in 1992, Jane and David stipulated that Jane would have custody of their two minor sons and that David would pay child support of $300 per month. They could not agree on an equitable division of property.

The trial court found that the total value of the Gaulrapps' assets was $98,261.81. After excluding the value of family gifts during the marriage to Jane of $39,210 and to David of $1,000, the court found that "[t]he parties have a gross marital estate, including real and personal property, of $58,051.81." Of this amount, Jane received $31,466.82 in property and debts of $798.60. David received $26,584.99 in property and debts of $12,738.84. The net property distributed to Jane, including the credit for her gifts, was $69,878.22, and consisted mainly of the debt-free marital residence valued at $56,400. The net amount distributed to David was $14,846.15.

David argues that the trial court erred by treating the gifts each received during the marriage as separate property and by excluding their value from the marital estate. He claims that the disparity in the value of property distributed by the court was not adequately explained and, under NDCC 14-05-24, is not an equitable distribution.

Jane responds that the trial court merely considered the source of the property in making an equitable distribution as allowed under the Ruff- Fisher guidelines, and that David agreed to treat these gifts as separate property. She further argues that she sought this distribution in lieu of any spousal support.

In a divorce, the trial court must "make such equitable distribution of the real and personal property of the parties as may seem just and proper...." NDCC 14-05-24. In making this distribution, "[t]he trial court must consider all relevant factors and guidelines." Pfliger v. Pfliger, 461 N.W.2d 432, 437 (N.D.1990), citing Ruff v. Ruff, 78 N.D. 775, 52 N.W.2d 107 (1952) and Fischer v. Fischer, 139 N.W.2d 845 (N.D.1966). "A trial court's determinations on matters of property division are treated as findings of fact and will not be set aside on appeal unless they are clearly erroneous under NDRCivP 52(a), or they are induced by an erroneous conception of the law." Heley v. Heley, 506 N.W.2d 715, 718 (N.D.1993), citing Anderson v. Anderson, 368 N.W.2d 566, 568 (N.D.1985). Here, the trial court erred by treating gifts as separate property, rather than marital property, and we reverse.

In dividing marital property, "the trial court must consider all of the real and personal property accumulated by the parties as part of their marital estate, regardless of the source...." Anderson, 368 N.W.2d at 568. Separate property, whether inherited or otherwise, must initially be included in the marital estate. Id. As we held in Freed v. Freed, 454 N.W.2d 516, 520 (N.D.1990), only after all assets are included in the marital estate can a trial court apply the Ruff- Fisher guidelines and consider the sources of the property in making an equitable distribution.

The origin of the property owned by the parties can be considered by the trial court under the guidelines, Winter v. Winter, 338 N.W.2d 819, 822 (N.D.1983), and we have acknowledged that "inherited property should be set aside to the heir where fairly possible." Olson v. Olson, 445 N.W.2d 1, 4 (N.D.1989). However, these gifts to Jane were cash, and they were not segregated from other marital assets. The length of the marriage is relevant to the distribution of gifts and inherited property, and redistribution of gifted property may often be equitable in long-term marriages. Behm v. Behm 427...