Anderson v. Anderson

• Decision Date: 06 May 2015
• Docket Number: No. 27150.,27150.
• Citation: 864 N.W.2d 10
• Parties: Dorothea ANDERSON, Plaintiff and Appellee, v. John ANDERSON, Defendant and Appellant.
• Court: South Dakota Supreme Court

864 N.W.2d 10

Dorothea ANDERSON, Plaintiff and Appellee

v.John ANDERSON, Defendant and Appellant.

No. 27150.

Supreme Court of South Dakota.

Considered on Briefs on March 23, 2015.

Decided May 6, 2015.

Dava A. Wermers, Mitchell, South Dakota, Attorney for plaintiff and appellee.

Chris A. Nipe of Larson & Nipe Mitchell, South Dakota, Attorneys for defendant and appellant.

Opinion

SEVERSON, Justice.

[¶ 1.] Dorothea Anderson and John Anderson obtained a divorce. The circuit court divided the marital assets, including land and cash that John had inherited from his mother during the marriage. The court also awarded Dorothea child support. John appeals. We affirm.

Background

[¶ 2.] Dorothea and John married in 1996 and separated in 2012. They both brought vehicles into the marriage but no other assets of value. Neither party brought debt into the marriage. They have three children who were 16, 11, and 9 at the time of the divorce. They lived with John's parents until 2003 or 2004 when they acquired their marital home. John farmed and worked full time at Scott Supply. Dorothea took care of the home and children. She also worked at a restaurant before obtaining full-time employment as a paraprofessional at a local school where she continued to work at the time of the divorce hearing. Dorothea helped with various aspects of the farm such as running errands and serving as bookkeeper. Throughout the marriage both parties placed their income into a joint checking account. No money or property was kept separate by either party. The disputed property in this case is two quarters of land, inherited cash, and cash taken by Dorothea upon separation of the parties.

[¶ 3.] The circuit court determined that the parties' farmland, consisting of two quarter sections, referred to as the SE 1/4 and NE 1/4, was a marital asset subject to equitable division. John's mother gifted the SE 1/4 in 2004. At John's suggestion, his mother put Dorothea's name on the deed, despite the strain Dorothea caused on the relationship between John and his mother. In 2007, John's mother passed away. She bequeathed him the NE 1/4 and $91,296. The circuit court noted that the SE 1/4 had been obtained eight years into the marriage, and they received the NE 1/4 eleven years into the marriage. Further, the court found that John had minimized Dorothea's contributions to the farming operation and improvement of the real estate. It found that her management of the home and children provided John with the time he needed to perform farming tasks and that her money went into the joint checking account to pay farm-related expenses and taxes. Therefore, the court included the land in the marital property, concluding that Dorothea's contributions were more than de minimis and that she had need for the financial support the asset can provide. The court determined that each party would retain an undivided one half interest in the real estate as tenants in common. It gave John the option, for six months, to purchase Dorothea's share of the property for its current appraisal value. Neither party could dispose of the land or bring an action for partition until his option expired. The court did this in recognition of John's family history associated with the land and in an effort to keep the farm intact.

[¶ 4.] The court did not include in the marital estate the sum of $10,000, which Dorothea had withdrawn from the joint account at the time of the parties' separation. The court found that the money no longer existed. It also found that John had used marital assets during the separation—specifically the marital household and farm. Therefore, the $10,000 was determined to be a non-marital asset, as were the 2012 and 2013 crops, which were in storage at the time of trial. John asked the court to require Dorothea to repay him $91,296—the amount he inherited from his mother. He asserted that it should be considered a marital debt owed by Dorothea to him. The court noted that the money went into the joint checking account, had been spent on family needs, and it was not a debt. The amount was never to be repaid to the estate of John's mother, and there was no evidence that John exercised exclusive control and possession of the money. Lastly, there was no evidence that the parties entered into a debtor/creditor relationship where Dorothea agreed to repay John for any money she may have spent. Given that the asset did not exist, and there was no marital debt arising from it, the court did not consider the sum in the property division.

[¶ 5.] The parties agreed to joint custody of the children, and the court ordered John to pay child support in the amount of $351 per month. Prior to John's child support obligation, neither party had paid child support to the other during the separation period. John appeals raising the following issues:

1. Whether the circuit court erred by including inherited and gifted land as a marital asset.

2. Whether the court erred by failing to make an adjustment for cash taken by Dorothea at the time of separation.

3. Whether the court erred by failing to make an adjustment to the property division for cash inherited from John's mother.

4. Whether the court erred by ordering John to pay child support.

Analysis

Inherited and gifted farmland

[¶ 6.] SDCL 25–4–44 provides: “When a divorce is granted, the courts may make an equitable division of the property belonging to either or both, whether the title to such property is in the name of the husband or the wife. In making such division of the property, the court shall have regard for equity and the circumstances of the parties.” “In arriving at an equitable division of property, a circuit court must classify property as ‘marital’ or ‘non-marital.’ ” Halbersma v. Halbersma, 2009 S.D. 98, ¶ 10, 775 N.W.2d 210, 215 (Halbersma II). “A circuit court has broad discretion in determining whether property is marital or non-marital.” Id. “Only where one spouse has made no or de minimis contributions to the acquisition or maintenance of an item of property and has no need for support, should a court set it aside as ‘non-marital’ property.” Novak v. Novak, 2006 S.D. 34, ¶ 5, 713 N.W.2d 551, 552–53. “We review the [circuit] court's determination of child support ... and the division of property under an abuse of discretion standard.” Hill v. Hill, 2009 S.D. 18, ¶ 5, 763 N.W.2d 818, 822. Findings of fact are reviewed under the clearly erroneous standard. Id.

[¶ 7.] We have explained that “inherited property ‘is not ipso facto excluded from consideration in the overall division of property.’ ” Novak, 2006 S.D. 34, ¶ 5, 713 N.W.2d at 553 (quoting Billion v. Billion, 1996 S.D. 101, ¶ 20, 553 N.W.2d 226, 232). Further, “this Court has consistently held that the [circuit] court has discretion in determining how to consider premarital assets and gifts during a marriage; whether to include or exclude them from the marital estate.' ” Billion, 1996 S.D. 101, ¶ 20, 553 N.W.2d at 232 (quoting Strickland v. Strickland, 470 N.W.2d 832, 836 (S.D.1991) ) (internal quotation marks omitted). The circuit court should consider the following factors when dividing property and when determining whether inherited property is a marital asset: “(1) the duration of the marriage; (2) the value of the property owned by the parties; (3) the ages of the parties; (4) the health of the parties; (5) the competency of the parties to earn a living; (6) the contribution of each party to the accumulation of the property; and (7) the income-producing capacity of the parties' assets.” Novak, 2006 S.D. 34, ¶ 4, 713 N.W.2d at 552. “In evaluating the seven principal factors listed above, a circuit court may consider other evidence to determine whether inherited or gifted property should be excluded from the marital estate, including the origin and treatment of inherited or gifted property and the direct or indirect contributions of each party to the accumulation and maintenance of the property.” Halbersma II, 2009 S.D. 98, ¶ 12, 775 N.W.2d at 215.

[¶ 8.] John's main contentions are that Dorothea did not contribute to the acquisition of the two quarters and that she did not bring any assets into the marriage through inheritance. He maintains that he should have been granted the land, even though he recognizes that “[t]his Court has consistently held that a homemaker's contribution to the family's upkeep is valuable and must be considered as no less significant and substantial to the accumulation of marital property than the other spouse's labor outside the home.” Terca v. Terca, 2008 S.D. 99, ¶ 25, 757 N.W.2d 319, 326. He contends that a homemaker's contribution is only relevant if the parties “had jointly acquired the property in question.” We reject such a notion, as it is clearly contrary to our case law. “South Dakota is an ‘all property state’ which results in all property of both of the divorcing parties being subject to equitable division by the [circuit] court, regardless of title or origin.” Billion, 1996 S.D. 101, ¶ 61, 553 N.W.2d at 237. It is well within the court's discretion to determine which property is marital or non-marital, and we will not overturn such a decision absent an abuse of discretion.

[¶ 9.] John's analysis improperly focuses solely on the sixth factor to be considered by the circuit court when dividing property. Even assuming that Dorothea made de minimis contributions to the accumulation of the property, the lack of such contributions would not automatically result in an exclusion of the property from the marital estate. “[N]o one factor should be determinative in cases where the circuit court equitably divides property under SDCL 25–4–4 [4].” Halbersma II, 2009 S.D. 98, ¶ 19, 775 N.W.2d at 217. In determining that the two quarters were subject to division, the court properly considered the factors we have named. It noted that the parties were married for nearly seventeen years. The SE 1/4 was deeded to both parties eight and one-half years into the...