Innis-Smith v. Smith

• Decision Date: 26 January 2018
• Docket Number: No. 20170031,20170031
• Citation: 905 N.W.2d 914
• Parties: Cindie INNIS–SMITH, Plaintiff, Appellee and Cross–Appellant v. Terry SMITH, Defendant, Appellant and Cross–Appellee
• Court: North Dakota Supreme Court

905 N.W.2d 914

Cindie INNIS–SMITH, Plaintiff, Appellee and Cross–Appellant

v.Terry SMITH, Defendant, Appellant and Cross–Appellee

No. 20170031

Supreme Court of North Dakota.

Filed January 26, 2018

Susan L. Ellison, West Fargo, N.D., for plaintiff, appellee, and cross-appellant.

H. Malcolm Pippin, Williston, N.D., for defendant, appellant, and cross-appellee.

Tufte, Justice.

[¶ 1] Terry Smith appeals, and Cindie Innis–Smith cross-appeals, an amended judgment granting the parties a divorce, dividing the parties' marital property, and awarding Innis–Smith spousal support. Smith also appeals an order denying his motion to reopen the record to present additional evidence relating to the values of certain items of marital property. We affirm in part, reverse in part, and remand.

I

[¶ 2] Smith and Innis–Smith began dating in 1994, were engaged in 1996, and married in March 2006. Smith worked as a welder, had a farming and cattle operation, and received income through a gravel pit, water depot, and mineral interests. Smith also had an interest in his mother Jacqueline Smith's revocable trust. Innis–Smith assisted with Smith's farming and cattle operations, did some bookkeeping for Smith, and helped care for his parents.

[¶ 3] Innis–Smith sued for a divorce in 2011. At the April 2013 trial, Innis–Smith was sixty years old and Smith was sixty-one. In May 2015, the district court issued its memorandum opinion and valued the net marital estate at $7,937,804.55. The court awarded Smith $7,400,607.55 in property and Innis–Smith $558,206.50, plus a $3,431,705 cash payment from Smith to equalize the property distribution. The court also awarded Innis–Smith $4,000 per month in permanent spousal support.

[¶ 4] The district court did not include Smith's interest in his mother's trust in the marital estate. Jacqueline Smith died before trial, and the court concluded that under amendments she made to the trust during the divorce, Terry Smith's interest lapsed to his daughters when Jacqueline Smith died. The court held Smith had no interest in the trust at his mother's death.

[¶ 5] After the district court issued its May 2015 decision, Smith moved the court under N.D.R.Civ.P. 59(j) to reopen the record to present additional evidence relating to the values of the water depot and mineral interests. Smith argued the values of the water depot and mineral interests dramatically decreased between the April 2013 trial and May 2015 decision. Smith attached an affidavit and exhibits purporting to show the value of the water depot decreased from $4,335,000 to $1,220,215, and the value of the mineral interests decreased from $1,113,950 to $598,637. The court denied Smith's motion after a hearing.

II

[¶ 6] Smith argues the district court erred in its distribution of the marital property.

[¶ 7] A district court's distribution of marital property is a finding of fact and will not be overturned unless it is clearly erroneous. Lewis v. Smart , 2017 ND 214, ¶ 10, 900 N.W.2d 812. A factual finding is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence supporting it, or if, although there is some evidence to support it, on the entire record, we are left with a definite and firm conviction a mistake has been made. Id. "We view the evidence in the light most favorable to the findings, and the district court's factual findings are presumptively correct." Adams v. Adams , 2015 ND 112, ¶ 13, 863 N.W.2d 232. The clearly erroneous standard of review does not allow us to reassess the credibility of witnesses, reweigh the evidence, or substitute our judgment for a court's initial decision. Hoverson v. Hoverson , 2013 ND 48, ¶ 8, 828 N.W.2d 510. A choice between two permissible views of the evidence is not clearly erroneous if the court's findings are based on evidence in the record, inferences from other facts, or credibility determinations. Stephenson v. Stephenson , 2011 ND 57, ¶ 7, 795 N.W.2d 357.

[¶ 8] Under N.D.C.C. § 14–05–24(1), a district court must equitably distribute the parties' property and debts. After including all of the marital assets and debts, the court must apply the Ruff–Fischer guidelines in dividing the property. Lewis , 2017 ND 214, ¶ 10, 900 N.W.2d 812. Under the Ruff–Fischer guidelines, the court considers:

[T]he respective ages of the parties, their earning ability, the duration of the marriage and conduct of the parties during the marriage, their station in life, the circumstances and necessities of each, their health and physical condition, their financial circumstances as shown by the property owned at the time, its value at the time, its income-producing capacity, if any, whether accumulated before or after the marriage, and such other matters as may be material.

Lewis , at ¶ 10 (quoting Rebel v. Rebel , 2013 ND 116, ¶ 7, 833 N.W.2d 442 ).

[¶ 9] Smith argues the district court clearly erred by equally distributing the marital property. Smith claims the parties' short marriage does not justify an equal distribution.

[¶ 10] Here, in distributing the parties' marital property, the district court made findings under the Ruff–Fischer guidelines. In relevant part, the court discussed the length of the parties' relationship, finding the circumstances of this case supported an equal division of property:

The testimony established that the parties began dating in 1994, and the relationship became serious fairly quickly with a promise ring purchased by Terry for Cindie in 1994 and an engagement ring being purchased in 1996. As early as 1996, the parties entertained family members at Terry's farm on holidays and that Cindie began living at Terry's farm in 1997 along with her son. Cindie asserts that the parties made financial decisions together such as deciding to remodel the house, building a garage and patio and creating a teardrop garden. Cindie further indicated she worked in the yard and assisted with Terry's cattle and farming operation and did some bookkeeping for Terry's business. Cindie also helped care for Terry's parents and helped plan their 50 ^th anniversary party. The parties separated from 2001–2002.

....

The Court finds that the circumstances of this case support nearly equal division of the marital property even if characterized as short term, and that it would not be equitable to award each party what they brought into the marriage. It is also appropriate to consider all the parties time together as they in essence lived like a married couple from 1997–2011, except for the separation previously addressed from 2001–2002. Horner [v. Horner] , 2004 ND 165, ¶¶ 12, 13, 686 N.W.2d 131. All assets, with the exception of the Jacqueline Smith Trust property addressed later, will be included in the marital estate and will be fairly and equitably distributed by looking at the Ruff–Fischer Guidelines.

[¶ 11] As discussed by the district court, Horner stated, "It is appropriate for a court to consider all of the parties' time together in dividing the marital property when parties live together and then marry." Horner v. Horner , 2004 ND 165, ¶ 13, 686 N.W.2d 131. The court found the parties lived like a married couple from 1997–2011, with an intervening separation in 2001–2002. The court's remaining findings relating to the division of property have support in the record. We cannot conclude the court clearly erred by equally dividing the parties' property. We are not left with a definite and firm conviction a mistake has been made.

III

[¶ 12] Smith argues the district court erred by not reopening the record to receive additional evidence relating to the values of the water depot and mineral interests after the court decided the case two years after trial.

[¶ 13] District courts have broad discretion in allowing or refusing to allow a party, after having rested, to reopen the record to introduce additional evidence. Vandal v. Leno , 2014 ND 45, ¶ 26, 843 N.W.2d 313. A court's decision on a motion to reopen will not be disturbed on appeal unless the court abused its discretion. Id. A court abuses its discretion when it acts in an arbitrary, unconscionable, or unreasonable manner, when it misinterprets or misapplies the law, or when its decision is not the product of a rational mental process leading to a reasoned decision. Estate of Johnson , 2017 ND 162, ¶ 18, 897 N.W.2d 921.

[¶ 14] In his motion to reopen the record to present additional evidence, Smith claimed the values of the water depot and mineral interests substantially decreased between the April 2013 trial and May 2015 decision. To support his argument, Smith submitted appraisals showing the value of the water depot decreased from $4,335,000 to $1,220,215, and the value of the mineral interests decreased from $1,113,950 to $598,637.

[¶ 15] The district court declined to reopen the record to hear additional evidence:

Revaluation of the East Fork Water Depot and mineral interests is inappropriate. Marital property should be valued as of the date of trial, rather than the date of distribution because otherwise parties would be free to file additional evidence, not subject to cross-examination, whenever they believed a marital asset had changed in value. This procedure would promote never-ending trial by affidavit. This is not an extraordinary case involving a substantial, unanticipated change in valuation of an asset that occurred after trial but before distribution. The marital assets Terry seeks to revalue are assets which values experience ebbs and flows depending on any number of factors, including the economy. The value of these assets is constantly fluctuating, and the change will extend beyond the distribution of these assets. Compare Grinaker v. Grinaker , 553 N.W.2d 204, 209 (N.D. 1996) (redistribution in case of a $1 lottery ticket which appreciated into a million-dollar jackpot in a single, one-time event that is straightforward and measurable in one instance).

Terry and Cindie stipulated and agreed upon the values for both the East Fork Water

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