Boehm v. Boehm, 20010318.

• Decision Date: 29 August 2002
• Docket Number: No. 20010318.,20010318.
• Parties: Sheila BOEHM, Plaintiff and Appellee, v. David BOEHM, Defendant and Appellant.
• Court: North Dakota Supreme Court

651 N.W.2d 672

2002 ND 144

Sheila BOEHM, Plaintiff and Appellee, v. David BOEHM, Defendant and Appellant.

No. 20010318.

Supreme Court of North Dakota.

August 29, 2002.

Todd D. Kranda, Kelsch, Kelsch, Ruff & Kranda, Mandan, ND, for plaintiff and appellee.

Robert V. Bolinske, Jr., Bismarck, ND, for defendant and appellant.

KAPSNER, Justice.

[¶ 1] David Boehm appeals from a divorce judgment, challenging the trial court's denial of his motion for continuance, the property division, and child support calculation. The trial court did not abuse its discretion in denying the motion for a continuance, and was not clearly erroneous in its property division. The trial court did err as a matter of law in calculating David's child support obligation. We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

I

[¶ 2] Sheila and David Boehm were married in August of 1989. Sheila worked at Wal-Mart and David managed the family video store business. They have two minor children. In January of 2001, Sheila filed for divorce on the grounds of irreconcilable differences. Trial was set for September 6, 2001.

[¶ 3] In January of 2000, David had entered into an agreement with his father regarding a video store business with locations in Bismarck and Dickinson. The "lease with option to purchase" covered a seven-year period—January 1, 2000 through December 31, 2006. The terms of the agreement included an initial $25,000 payment and monthly payments of $2500. If the agreement ran the full term, David could purchase the business "for $20,000.00 or a different price if agreed to ... in writing." David could also purchase the business before the duration of the agreement had run "by applying an amount equal to 85 percent of the total lease payments to date ... and paying the difference in cash." The agreement valued the business at $200,000, but the price could "be modified if agreed to ... in writing." In June of 2001, the Bismarck location was destroyed by fire. In August of 2001, David moved for a continuance of the trial, based on the uncertain future of the business. His motion was denied, and trial was held on the date scheduled.

[¶ 4] On November 8, 2001, the parties were granted a divorce on the grounds of irreconcilable differences. Sheila was awarded custody of their two children, and David's child support obligation was calculated to be $779 per month. David has appealed the denial of the motion for continuance, the property division, and child support calculation.

II

[¶ 5] David contends the trial court abused its discretion in denying his request for continuance of the September 2001 trial date. He argues because the destruction of the video store rendered his business future and income uncertain, it would have been beneficial for both parties to have the trial continued to a later date. David asserts the complexity of the situation, amplified by the provisions of the lease, made it impossible to clarify issues regarding the business prior to the scheduled trial date.

[¶ 6] "A motion for continuance will be granted only for good cause shown." Kjonass v. Kjonass, 1999 ND 50, ¶ 11, 590 N.W.2d 440. "The decision to grant or deny a motion for continuance lies within the discretion of the trial court, and its determination will not be overturned on appeal absent an abuse of discretion." Id. "A trial court abuses its discretion when it acts in an arbitrary, unreasonable, or unconscionable manner." Fahlsing v. Teters, 552 N.W.2d 87, 90 (N.D.1996).

[¶ 7] Even though the Bismarck business location was destroyed on June 12, 2001, David did not move for a continuance until August 23, 2001—two weeks before the scheduled trial date. David failed to assert any pertinent information, whether financial or otherwise, was destroyed in the fire. Under these circumstances we cannot say the trial court acted arbitrarily, unreasonably, or unconscionably in denying David's request for a continuance. The trial court did not abuse its discretion.

III

[¶ 8] David argues he is entitled to one-half of the value of both the marital home and Sheila's Wal-Mart retirement accounts because of contributions made during the marriage. He also argues valuing the video store at $40,000 is clearly erroneous.

A

[¶ 9] Under N.D.C.C. § 14-05-24(1), "[w]hen a divorce is granted, the court shall make an equitable distribution of the property and debts of the parties." "There is no set formula for dividing a marital estate, but the trial court must equitably divide the property based upon the circumstances of the particular case." Nelson v. Nelson, 1998 ND 176, ¶ 6, 584 N.W.2d 527. With property distribution, equitable does not mean equal, but a substantial disparity must be explained. Wald v. Wald, 556 N.W.2d 291, 294 (N.D. 1996). "The trial court's determinations regarding division of property are treated as findings of fact and will not be reversed unless they are clearly erroneous." Mellum v. Mellum, 2000 ND 47, ¶ 14, 607 N.W.2d 580. A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence to support it, or if, although some evidence supports it, on the entire evidence this Court is left with a definite and firm conviction a mistake has been made. Peterson v. Peterson, 1999 ND 191, ¶ 6, 600 N.W.2d 851.

[¶ 10] When distributing property, the trial court must use the Ruff-Fischer guidelines, which stipulate the consideration of the following factors:

the respective ages of the parties to the marriage; their earning abilities; the duration of the marriage and the conduct of each during the marriage; their station in life; the circumstances and necessities of each; their health and physical conditions; their financial circumstances as shown by the property owned at the time; its value and incomeproducing capacity, if any, and whether it was accumulated or acquired before or after the marriage; and such other matters as may be material.

Mellum 2000 ND 47, ¶ 15, 607 N.W.2d 580. We have held the trial court must consider all property accumulated by the parties, whether jointly or individually owned. Barth v. Barth, 1999 ND 91, ¶ 8, 593 N.W.2d 359. After all assets are included in the marital estate, only then under the Ruff—Fischer guidelines can the source of the property be considered in making the equitable distribution. Barth, at ¶ 8.

[¶ 11] David's argument he is automatically entitled to one-half of the value of both the marital home and Sheila's retirement accounts is flawed. The award of the marital home and the Wal-Mart retirement accounts to Sheila "can only properly be considered in the context of the entire property distribution." Lohstreter v. Lohstreter, 1998 ND 7,¶ 34, 574 N.W.2d 790 (Neumann, J., concurring and dissenting). The trial court does not examine and distribute each piece of property independently without regard to other property. Instead, all assets and property accumulated by the parties, including the home and retirement accounts, must be included in the marital estate and considered by the trial court. See Dufner v. Dufner, 2002 ND 47, ¶ 9, 640 N.W.2d 694

(holding a trial court must consider all property obtained by the divorcing parties). Once all property is included in the marital estate, only then is it equitably divided. See id. The whole distribution of property must be equitable, not each individual asset. Emter v. Emter, 1999 ND 102, ¶ 10, 595 N.W.2d 16.

B

[¶ 12] David also argues valuing the video store at $40,000 is clearly erroneous. David contends the store has a value of $0, while Sheila contends the store has a value of $300,000. Sheila's valuation is based upon the $200,000 purchase price listed in the agreement and insurance policy values on the Bismarck location. David's valuation is based upon the destruction of the Bismarck location and his contention he did not have any vested interest in the business. The trial court valued the store at $40,000 based on David's "experience and management abilities."

[¶ 13] A trial court's determination on valuation of property is treated as a finding of fact and will be reversed only if clearly erroneous. Kautzman v. Kautzman, 1998 ND 192, ¶ 8, 585 N.W.2d 561. "The trial court, which had the opportunity to observe the demeanor and credibility of the parties, is in a far better position than an appellate court in ascertaining the true facts regarding the property's value." Freed v. Freed, 454 N.W.2d 516, 521 (N.D.1990). "Marital property valuations within the range of the evidence are not clearly erroneous." Peterson, 1999 ND 191, ¶ 12,600 N.W.2d 851. Generally, fair market value is the proper method of valuing marital property in a divorce. Id. at ¶ 11. Earning power is not a property interest subject to equitable distribution. See Nastrom v. Nastrom, 262 N.W.2d 487, 493 (N.D.1978)

("Earning power is not, however, property that a court may divide as it would a parcel of land or a collection of household goods."). A trial court can value property not yet completely owned by one of the divorcing parties. See Peterson, at ¶ 13 (affirming a trial court's valuation of a steakhouse where a balance was owing on its contract for deed). Property interests not yet reduced to possession during the marriage are to be regarded as marital property if the interest still exists at the time of divorce. See Sonja A. Soehnel, Annotation, Divorce Property Distribution: Treatment and Method of Valuation of Future Interest in Real Estate or Trust Property not Realized During Marriage, 62 A.L.R.4th 107, 135 (1988) (citing Frank G.W. v. Carol M.W., 457 A.2d 715 (Del.1983)). Although David did not yet have the legal title to the video store business we cannot conclude the trial court erred in including it in the property distribution where the contract provided for eventual transfer of title and the contract remained in force at the time of trial. See Peterson, at ¶ 13.

[¶ 14] The...