Clark v. Clark, 56010

Decision Date02 March 1985
Docket NumberNo. 56010,56010
Citation696 P.2d 1386,236 Kan. 703
PartiesArnold CLARK, Appellee, v. Jean CLARK, Appellant.
CourtKansas Supreme Court

Syllabus by the Court

In an appeal from a final order in an action for divorce and other relief, the record is examined and it is held: The trial court did not abuse its discretion in denying alimony.

Allen Shelton, of Clark & Shelton, P.A., Hill City, argued the cause and was on the briefs, for appellant.

Gene F. Anderson, of Kent, Wichman & Anderson, Hays, argued the cause and was on the brief, for appellee.

MILLER, Justice:

This is a divorce case. The respondent wife, Jean Clark, appeals from the trial court's order and judgment dividing the property and refusing to award alimony. The Court of Appeals, in an unpublished opinion, approved the division of property but reversed and remanded with directions to award alimony to the wife in an amount to be determined by the trial court. 688 P.2d 745. We granted review.

We first turn to the factual background. The parties were married on August 19, 1974. Divorce was granted on May 13, 1983, so the marriage existed for a little less than nine years. Two children were born of the marriage, Robert, now nine years of age, and Lora, now almost six. Throughout the marriage, except for short periods of time surrounding the birth of the children, Jean has worked as a waitress. Her earnings are approximately $200 per month. When the children are not in school, she pays about half of her earnings for babysitters. Prior to 1981, Arnold worked in the construction business and also worked as a truck driver, hauling milk for his father. In 1981, the parties bought a milk route for $17,500, borrowing all of the money from a local bank. The balance on that indebtedness at the time of trial was $8,228. They also bought two trucks with which to haul milk, a 1978 International and a 1981 GMC. At the time of trial, they owed $89,050 on the trucks. The International has some 296,000 miles on it, the GMC about 84,000. The parties owned their home, valued at $13,700, on which there is a mortgage of $7,000. They also owned several other motor vehicles: an AMC Eagle, valued at from $7,500 to $8,500; motorcycles and a Jeep valued at a total of $1,325; and a Pontiac TransAm valued at $6,300. While the case was pending, Arnold purchased a Chevrolet Blazer, worth about $1,000 more than the $13,214 mortgage against it. The parties had household goods and furniture valued at $1,000, and life insurance policies and mutual funds with a value of $1,277. Arnold also had tools which are valued at $500. The most valuable asset of the parties is the milk route. Arnold testified that he bought it for $17,500, that he has added several new milk producers, and that in his opinion the route is now worth $25,000. An economist retained by Jean testified that in his opinion the value of the route, depending on the rate of capitalization, is somewhere between $73,365 and $96,485, over and above the physical assets of the business.

The trial court found the value of the milk route to be $25,000. The Court of Appeals accepted that valuation, as do we. When the trial court has made findings of fact, the first function of this court is to determine whether the findings are supported by substantial, competent evidence. In making that determination, we consider the evidence favorable to the successful party. If there is substantial evidence to support the findings, it is of no consequence that there may have been contrary evidence adduced which, if believed, would have supported a different finding. Waggener v. Seever Systems, Inc., 233 Kan. 517, 525, 664 P.2d 813 (1983). Here there was substantial, competent evidence to support the trial court's finding as to value of the route.

The trial court awarded the route to the husband, but required him to pay to the wife about half of the value, or $12,600, payable in monthly installments of $350 each for a period of 36 months. The trial court's division of property can best be demonstrated by the following table:

Awarded to Jean Clark:

                    Item                      Value
                    ----                      -----
                    The Home                  $ 13,700
                    AMC Eagle automobile         7,500
                    Furniture                    1,000
                    1/2 value of route          12,600
                                              --------
                         TOTAL                $ 34,800  $ 34,800
                    Less: Mortgage on
                      home                                 7,000
                                                        --------
                        Net Value                       $ 27,800
                Awarded to Arnold Clark
                    Insurance & Mutual
                      Funds                   $  1,277
                    Milk trucks                 78,700
                    Blazer                      14,214
                    Pontiac TransAm              6,300
                    Tools                          500
                    Motorcycles & Jeep           1,325
                    Milk Route                  25,000
                                              --------
                        TOTAL                 $127,316  $127,316
                Less: Loan on Route           $  8,228
                      Loan on Trucks            89,050
                      Loan on Blazer            13,214
                    Outstanding bill for
                      truck repair             $ 4,000
                    Judgment to wife for
                      half interest in route    12,600
                                              --------
                        TOTAL                 $127,092  $127,092
                                                        --------
                        Net Value                       $    224
                

The trial court also required Arnold to pay $750 towards Jean's attorney fees, $750 towards Jean's expert witness fees, child support of $400 per month, and the court costs. Additionally, Arnold is required to provide medical and hospital insurance for the children.

The evidence indicates and the trial court found that the parties had adjusted gross income, for income tax purposes, of about $46,000 in 1982, less overdue taxes of $12,000, leaving only $34,000; and that Arnold will have adjusted gross income for 1983 of $34,000 or $35,000. The decrease was attributable to Arnold's decision to hire a driver to do part of the driving during 1983. We think it is important to note that these figures are for adjusted gross income, not net income. From adjusted gross income, Arnold must make monthly loan payments of almost $1,000; he must pay state and federal income taxes, estimated at $16,000 for 1983; he must make payments into court for the benefit of Jean and the children of $750 per month or $9,000 annually; he must pay the other outstanding obligations, including attorney and expert witness fees, costs, and the $4,000 repair bill on the trucks; and he must pay his own living expenses. The trial court found that the husband could not apply much more than the $750 which is assessed against him. Considering the division of property, with the larger share going to the wife, and considering the indebtedness falling upon the husband, the trial court refused to award alimony.

In reversing the trial court, the Court of Appeals said:

"(T)he additional $350 in monthly payments she was awarded for her half of the business will have to be consumed by [the wife] to meet the ordinary needs of her children and herself.... By contrast, although the tangible property received by the petitioner has little net worth, he was awarded the milk route which can produce a gross income of at least $35,000 per year.

"The trial court's order reflects its goal of dividing the marital property equally. It has been acknowledged that this goal is defeated if a division of property forces a party receiving tangible assets of a business to liquidate the business in order to make the cash settlement payments to the other party. Reich v. Reich, 235 Kan. 339, 342-43, 680 P.2d 545 (1984); Bohl I [Bohl v. Bohl, 232 Kan. 557, 565, 657 P.2d 1106 (1983) ]. However, it is equally true that the party receiving the cash payments should not be placed in the position of having to spend those payments in order to survive. Almquist v. Almquist, 214 Kan. 788, 793-94, 522 P.2d 383 (1974). Although the district court's order reflects appropriate concern for the former problem, it did not take into consideration the latter.

"In our opinion, the trial court overstated the value of the property received by respondent when compared to petitioner's income. We conclude that alimony should be awarded to the respondent to supplement the property settlement in such an amount that she will not have to consume the settlement payments already awarded by the court."

While we do not disagree with the rationale of Almquist v. Almquist, 214 Kan. 788, 522 P.2d 383 (1974), the factual situation in that case is quite dissimilar to the one now before us. After 36 years of marriage, the parties had a net marital estate of $176,000. Total debts were a mere $600. The parties were in their mid-fifties. Their children were grown. The trial court gave the wife property worth less than $5,000 and all of the rest to the husband, with the provision that he pay an "equalizing" judgment of $28,250 to the wife in installments. Even with that judgment, the wife received less than one-fifth of the value of the marital estate. The wife had but limited income; the husband's income is not discussed. We said "It seems apparent that in order to survive she will be required to dip into her share of the property. This factor should, we think, have weighed more heavily in the balancing of the parties' overall financial position." 214 Kan. at 793-94, 522 P.2d 383.

The court, with Justices Schroeder, Kaul and Fromme dissenting, increased the "equalizing" judgment by $20,000. Even with the increase, which gave her approximately 30% of the marital estate, it would seem that she would have to "dip into her share of the property" in order to survive.

The issue before the trial court, the Court of Appeals, and now this court, is the division of property and the denial of alimony. The Court of Appeals correctly pointed out in its opinion that the focus of an appellate court...

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