Dunham v. Sabers
| Citation | 2022 S.D. 65 |
| Decision Date | 26 October 2022 |
| Docket Number | 29558-SRJ,29582-SRJ |
| Parties | CHRISTOPHER ALAN DUNHAM, Plaintiff and Appellant, v. SUSAN MICHELLE SABERS, Defendant and Appellee. |
| Court | Supreme Court of South Dakota |
ARGUED MAY 25, 2022
APPEAL FROM THE CIRCUIT COURT OF THE FIRST JUDICIAL CIRCUIT UNION COUNTY, SOUTH DAKOTA THE HONORABLE RODNEY J. STEELE Retired Judge
ELIZABETH A. ROSENBAUM MEGAN R. DEDONCKER OF ELIZABETH A ROSENBAUM, P.C. SIOUX CITY, IOWA ATTORNEYS FOR PLAINTIFF AND APPELLANT.
WILLIAM P. FULLER MOLLY K. BECK OF FULLER, WILLIAMSON, NELSEN & PREHEIM, LLP SIOUX FALLS, SOUTH DAKOTA ATTORNEYS FOR DEFENDANT AND APPELLEE.
[¶1.] The circuit court granted a divorce to Christopher Dunham and Susan Sabers on the grounds of irreconcilable differences. The court resolved issues involving child custody and support, the valuation and division of marital assets, and attorney fees. Dunham appeals portions of the circuit court's rulings on each of these issues. Sabers filed a notice of review appealing the circuit court's rulings regarding the grounds for divorce, property division and valuation, and attorney fees. We affirm in part, reverse in part, and remand.
[¶2.] Dunham and Sabers began dating in 1997. At the time, Sabers owned her own home (Belmont House). Dunham moved in with Sabers in 1998. They were married in 2002, and two children were born during the marriage, Q.S.D. (DOB 5/31/2003) and Z.S.D. (DOB 4/11/2005). In 2004, Sabers sold the Belmont House. Dunham and Sabers used the proceeds as a down payment to build a new home (Marital Home).
[¶3.] Sabers was a partner at the law firm of Woods, Fuller, Shultz & Smith P.C. (Woods Fuller) at the time of the marriage. Sabers left Woods Fuller in January 2006 to begin a law practice with William Fuller called Fuller & Sabers LLP (Fuller & Sabers). Sabers received a buy-out from Woods Fuller and contributed the funds to buy into Fuller & Sabers and Dakota Law, LLC (Dakota Law), an entity that owned the building where Fuller & Sabers was located. Sabers and Dunham each owned a 25% interest in Dakota Law, while Fuller and his spouse owned the other 50% interest. Sabers left Fuller & Sabers in 2013 when she was appointed as a circuit court judge in the South Dakota Second Judicial Circuit. She received buy-outs from Fuller & Sabers of $86,670 and Dakota Law of $216,410.22. Sabers continues to serve as a judge in the Second Circuit.
[¶4.] Dunham was working in residential real estate sales with his mother, Karen Dunham, when the parties were married. Later, Dunham was involved in real estate development and other business operations with his father, Donald Dunham Jr. In 2012, Dunham began working at the Dunham Company, a real estate development and management company owned by Donald.
[¶5.] During the parties' marriage, Dunham acknowledged that Sabers "was the breadwinner of the family." There was also testimony that Dunham had some business setbacks during the marriage and that he and Sabers received some financial assistance from Donald. Dunham claimed he contributed to the marriage by supporting Sabers in her career, staying home with the children, and helping plan and construct the Dakota Law building. Sabers disputed Dunham's assertions and testified that she did most of the caretaking and housework and that nannies had helped care for the children until at least 2009. Sabers also claimed that Dunham made no financial contribution to Fuller & Sabers or Dakota Law and that all the equity in the building represented contributions from her buy-outs from Woods Fuller and Fuller & Sabers. Sabers also claimed that she supported Dunham professionally by helping Dunham with the design and sale of homes built by Dunham's company, Milestone Consulting and Construction Services (Milestone), and by providing legal services for Dunham's business ventures.
[¶6.] Donald passed away in January 2013, and Dunham was named the personal representative in the probate of Donald's will (Estate). Donald had also created the Living Trust of Donald Dunham Jr. (Trust) in 2006. Donald's will provided that the assets he owned at the time of his death would pour into the Trust so that all of Donald's assets would be owned by the Trust. Dunham is the primary discretionary beneficiary of the Trust. After Donald's death in 2013, Dunham received approximately $322,000 in life insurance proceeds outside the Estate.
[¶7.] Dunham began discussions to purchase the Dunham Company in the spring of 2013 but did not inform Sabers until September 2013. This disclosure caused major problems in their relationship and ultimately led to their separation. Sabers was concerned about the financial risk this purchase may have had on the parties' finances. Upon her request, Dunham transferred the title to the Marital Home, vehicles, and joint bank account to Sabers to protect the assets from business debt taken on by Dunham. Dunham bought 100% of the Dunham Company for $1.5 million in the fall of 2013.
[¶8.] Dunham left the Marital Home in September 2013 and moved in with his mother Karen. Dunham moved into a townhome owned by Milestone in 2016. Sabers paid the mortgage and interest payments on the Marital Home during the marriage and following the separation.
[¶9.] In July 2016, Dunham filed a complaint for a divorce from Sabers on the grounds of irreconcilable differences and extreme cruelty and sought shared legal and physical custody of the children and child support. Sabers answered the complaint and counterclaimed seeking a divorce on the grounds of irreconcilable differences and extreme cruelty. She requested sole legal and physical custody of the children, child support, alimony, and attorney fees. Dunham subsequently amended his complaint to include a request for alimony and attorney fees. He later abandoned his alimony claim.
[¶10.] Sabers retained physical custody of the children since the separation. In July 2016, the court entered a parenting time order that provided Dunham time with the children every Wednesday evening and rotating Saturdays and Sundays every other week. In January 2018, the court ordered supervised parenting time for Dunham following a hearing where Sabers presented evidence of several physical altercations between Dunham and Q.S.D.[1] Dunham claimed the incidents were disciplinary responses to Q.S.D.'s behaviors. Subsequently, Dunham filed a motion seeking an order for the children to attend counseling and an order for a custody evaluation. The court denied Dunham's request for counseling. However, the court ordered Dr. Stephan Langenfeld, a licensed psychologist in Sioux Falls, to interview and assess both Q.S.D. and Z.S.D. Following the assessment, Dr. Langenfeld opined that neither child needed counseling and that Q.S.D. should not be ordered to have parenting time with Dunham. The court denied three subsequent motions by Dunham seeking counseling with the children.
[¶11.] In March 2018, the court ordered a custody evaluation to be conducted by Dr. Judy Zimbelman. Dr. Zimbelman opined that Sabers had contributed to Dunham's strained relationship with the children, but that Dunham's physical abuse was the primary cause of the estrangement. Dr. Zimbelman recommended that Dunham initially attend counseling, before including the children, and that Sabers should have sole physical custody with parenting time for Dunham consistent with the order already in place.
[¶12.] Dunham was initially ordered to pay child support in 2018. Previously, Dunham had voluntarily paid for a portion of the children's parochial school tuition expenses for the 2014-2015 school year but had not provided any other child support to Sabers since their separation in 2013. Q.S.D. and Z.S.D. were in high school at the time of the divorce trial, and both had attended parochial school since they began their schooling.
[¶13.] Throughout the proceedings, Dunham refused to produce information related to the Estate and the Trust. Sabers filed three motions to compel in the divorce action in May 2019, October 2019, and May 2020. Sabers also filed five motions for continuance of the trial because of Dunham's refusal to produce discovery. The court granted four of the five motions for continuance.
[¶14.] A five-day divorce trial was held in August 2020. Each party called a financial expert and presented evidence concerning the valuation of various business interests owned by Dunham and Sabers. At the time of the trial, the court found Dunham, individually, had a 100% ownership interest in the Dunham Company, a 50% interest in American Land Development Company (ALDC),[2] and a 100% interest in Milestone.[3] The evidence was undisputed that in 2014 Dunham invested $141,000 into ALDC and $82,000 into Milestone from the life insurance proceeds that he received after Donald's death. Additionally, Sabers and Dunham each owned 50% of QAZ, LLC (QAZ), a holding company formed for estate planning purposes in 2008. QAZ owned 20% of Dunham Partnership, a real estate development entity, and 10% of Dunham Equity Management, the latter of which both experts agreed had no value.
[¶15.] Donald's Estate remained open at the time of trial. Prior to trial, the Estate acquired the 20% interests in Dunham Equity Management and Dunham Partnership that Dunham's two half-brothers each owned. Dunham bought their separate interests in 2016 and then transferred those interests to the Estate in 2017. Dunham explained that the Estate did not have the funds to acquire these interests, and therefore he served as the conduit for the purchases. The Estate also purchased a 92% interest in Tatar Quincey, another real estate holding company, for $1.8 million in 2018. Dunham testified that the Estate obtained a loan...
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