Cain v. Cain, 49352

CourtCourt of Appeals of Idaho
Writing for the CourtBRAILSFORD, Judge
PartiesRICKY ASHTON CAIN, Petitioner-Appellant, v. VICTORIA ANNE CAIN, Respondent.
Docket Number49352
Decision Date17 November 2022

RICKY ASHTON CAIN, Petitioner-Appellant,
v.

VICTORIA ANNE CAIN, Respondent.

No. 49352

Court of Appeals of Idaho

November 17, 2022


UNPUBLISHED OPINION

Appeal from the District Court of the Seventh Judicial District, State of Idaho, Bonneville County. Hon. Dane H. Watkins, Jr., District Judge; Hon. Andrew R. Woolf, Magistrate.

Decision of the district court, on intermediate appeal from the magistrate court, affirming in part and reversing in part the judgment, affirmed.

David A. Johnson and Beard St. Clair Gaffney PA; Kristopher D. Meek, Idaho Falls, for appellant.

Parsons Behle & Latimer; Challis A. McNally, Idaho Falls, for respondent.

BRAILSFORD, Judge

Ricky Ashton Cain (Rick) appeals the district court's decision, on intermediate appeal, affirming in part and reversing in part the magistrate court's judgment and decree of divorce. Specifically, Rick asserts the magistrate court erred in concluding that a franchised business, The Little Gym, was acquired with community property funds and that The Little Gym's value was $100,000. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

Rick and Victoria Cain (Tori) were married in 2011, and Rick filed for divorce in June 2018. The case proceeded to trial in May 2019. At trial, Tori testified that she acquired a franchise right to operate The Little Gym in May 2017; she obtained the financing for the business from her

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father, John Zumberge; and the business had a value of $100,000 at the time of trial. The magistrate court admitted into evidence several documents related to the funding of The Little Gym. These documents included: (1) a promissory note signed by Tori and payable to Zumberge in the amount of $350,000; (2) a "loan request letter" from Tori to Zumberge dated May 2017, requesting "a small business loan of $350,000" to fund The Little Gym, which letter Zumberge countersigned noting "approved"; and (3) a "business plan" for The Little Gym dated August 2017. Additionally, Zumberge testified about providing the financing for The Little Gym.

Following the trial, the magistrate court entered written findings of fact and conclusions of law. The court found that "the parties agreed they would open The Little Gym and would borrow money from Tori's father to do so"; "Tori's father agreed to loan the parties $350,000 in order to open The Little Gym"; and "Tori and Rick started The Little Gym in May 2017." Based on these findings, the court concluded:

The Little Gym was started during the marriage and is community property. The value of The Little Gym is $100,000.00. The debt owed on The Little Gym is $350,000. The debt is community debt. The Little Gym is awarded to Tori along with the debt at a community value of [a negative] $250,000

On intermediate appeal, Rick challenged the magistrate court's conclusions that The Little Gym's value was $100,000; The Little Gym was community property; and the related community debt was $350,000. In addressing these challenges, the district court ruled that the magistrate court did not err in concluding that The Little Gym was community property acquired with community debt or that The Little Gym's value was $100,000. The district court, however, ruled "the undisputed evidence demonstrated that the parties only incurred $325,000 in debt on The Little Gym." Accordingly, the district court ordered the magistrate court on remand to correct the debt calculation and to adjust the equal division of community property and debt between the parties.

Rick timely appeals.

II. STANDARD OF REVIEW

For an appeal from the district court, sitting in its appellate capacity over a case from the magistrate division, we review the magistrate court record to determine whether there is substantial and competent evidence to support the magistrate court's findings of fact and whether the magistrate court's conclusions of law follow from those findings. Pelayo v. Pelayo, 154 Idaho 855, 858-59, 303 P.2d 214, 217-18 (2013). However, as a matter of appellate procedure, our

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disposition of the appeal will affirm or reverse the decision of the district court. Id. Thus, we review the magistrate court's findings and conclusions, whether the district court affirmed or reversed the magistrate court and the basis therefore, and either affirm or reverse the district court.

The manner and method of the acquisition of community and separate property are questions of fact for the trial court. Papin v. Papin, 166 Idaho 9, 24, 454 P.3d 1092, 1107 (2019). The characterization of property as either community or separate property is a mixed question of law and fact. Id. Determining the value of the community property is within the trial court's discretion and will not be disturbed on appeal if substantial and competent evidence supports the valuation. Id. at 29, 454 P.3d at 1112. Substantial and competent evidence does not mean uncontradicted evidence but rather is relevant evidence that a reasonable mind might accept to support a conclusion. Griffiths v. Griffiths, 167 Idaho 287, 296, 469 P.3d 615, 624 (2020). The trial court resolves conflicting evidence and determines the weight, credibility, and inferences to be drawn from the evidence. Id.

When a trial court's discretionary decision is reviewed on appeal, the appellate court conducts a multi-tiered inquiry to determine whether the trial court: (1) correctly perceived the issue as one of discretion; (2) acted within the boundaries of such discretion; (3) acted consistently with any legal standards applicable to the specific choices before it; and (4) reached its decision by an exercise of reason. Lunneborg v. My Fun Life, 163 Idaho 856, 863, 421 P.3d 187, 194 (2018).

III. ANALYSIS

A. Characterization of The Little Gym

Rick challenges the characterization of The Little Gym as community property acquired with community debt. Whether a specific piece of property is characterized as community or separate property depends on when it was acquired and the source of the funds used to purchase it. Papin, 166 Idaho at 24, 454 P.3d at 1107. The property's characterization as either community or separate vests at the time the property is acquired. Id. "All property of either the husband or the wife owned before marriage" or thereafter acquired "by gift, bequest, devise or descent" or with proceeds of separate property is separate property. Idaho Code § 32-903. Under Idaho law, a gift is defined as a voluntary transfer of property by one to another without consideration or compensation therefore. Stanger v. Stanger, 98 Idaho 725, 728, 571 P.2d 1126, 1129 (1977);

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See also Smith v. Smith, 164 Idaho 457, 472, 432 P.3d 6, 21 (2018). "All other property acquired after marriage by either husband or wife is community property." I.C. § 32-906. A rebuttable presumption exists that all property acquired during marriage is community property. Reed v. Reed, 137 Idaho 53, 58, 44 P.3d 1108, 1113 (2002). A party seeking to show an asset acquired during marriage is separate property bears "the burden of proving with reasonable certainty and particularity that the property is separate." Baruch v. Clark, 154 Idaho 732, 737, 302 P.3d 357, 362 (2013).

Rick does not dispute that The Little Gym was acquired during the marriage. He contends, however, that the district court erred by affirming the magistrate...

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