Edinger v. Edinger, 24016.
| Decision Date | 21 November 2006 |
| Docket Number | No. 24030.,No. 24016.,24016.,24030. |
| Parties | Jackie L. EDINGER, Plaintiff and Appellant, v. James W. EDINGER, Defendant and Appellee. |
| Court | South Dakota Supreme Court |
Rick A. Cain of Cain & Broz, Mobridge, South Dakota, Attorneys for plaintiff and appellant.
Melissa E. Neville of Bantz, Gosch & Cremer, LLC, Aberdeen, South Dakota, Attorneys for defendant and appellee.
[¶ 1.] Jackie Edinger appeals the division of property in her divorce. She contends that the trial court erred in valuing her nursing degree as a marital asset to be divided and erred in dividing the parties' property. By notice of review, James appeals the calculation of child support and the award of attorney's fees to Jackie. We reverse the division of property and remand for an equitable division. We affirm all other issues.
[¶ 2.] Jackie and James were married August 21, 1999. They had two children, a son (born May 20, 1996) and a daughter (born January 19, 2000). Jackie received a nursing degree in the spring of 2001 and was licensed one year later. She has since been employed full time as a nurse. James is engaged in farming. Although Jackie was not involved with the farm, her wages were used for household expenses.
[¶ 3.] The parties agreed to a divorce on grounds of irreconcilable differences. They also agreed to joint custody of the children. Jackie was awarded primary physical custody and James was awarded visitation.
[¶ 4.] With respect to marital property, the record reflects that at the time of their marriage, Jackie and James each had a negative net worth. At the end of the marriage the parties had a combined net worth of $146,700. In dividing the property, Jackie was assigned debts greater than assets, leaving her with net debt of $7,420, and James received the parties' entire net worth of $146,700.
[¶ 5.] Jackie appeals this property division raising two issues:
1. Whether the trial court improperly considered her educational degree in making the division of the marital property.
2. Whether the trial court abused its discretion in making an equitable division of the marital property.
James raises the following issues:
3. Whether the trial court erred in calculating child support.
4. Whether the trial court abused its discretion in awarding Jackie $2,400 in attorney's fees.
[¶ 6.] "[T]he valuation of property involved in a divorce proceeding will not be overturned unless it is clearly erroneous." Priebe v. Priebe, 1996 SD 136, ¶ 8, 556 N.W.2d 78, 80 (citing Grode v. Grode, 1996 SD 15, ¶ 5, 543 N.W.2d 795, 799). However, "an educational degree earned during the course of a marriage is not property which is subject to division upon dissolution of marriage." Kanta v Kanta, 479 N.W.2d 505, 508 (S.D. 1991) (citations omitted). Jackie contends that the trial court improperly valued her nursing degree as a marital asset to be divided.
[¶ 7.] However, the trial court did not do so. In the court's memorandum opinion, after determining the value of the combined marital assets to be divided, the court specifically stated that its valuation of marital property did "not assign any monetary value to Jackie's education." Instead, the trial court properly limited its consideration of Jackie's degree to the two property division factors that require the court to consider the parties' post divorce income and ability to earn a living.1 We acknowledge that in considering the income that would be available to the parties after the divorce, the trial court did state that the parties' only income producing assets were the farm and Jackie's degree. However, the court specifically declined to value the nursing degree and the court's remaining analysis reflects that it only considered the degree to determine the parties' post divorce income and ability to earn a living. Because the trial court was required to consider Jackie's educational degree for these purposes, we affirm on this issue.
[¶ 8.] Our standard of review for the division of property is well established.
A trial court's division of property will not be overturned by this court unless it appears the trial court abused its discretion. Billion v. Billion, 1996 SD 101, ¶ 14, 553 N.W.2d 226, 230; DeVries v. DeVries, 519 N.W.2d 73, 75 (S.D. 1994). "The term `abuse of discretion' refers to a discretion exercised to an end or purpose not justified by, and clearly against, reason and evidence." DeVries, 519 N.W.2d at 75 (citing Gross v. Gross, 355 N.W.2d 4, 7 (S.D. 1984)). The determination is not "whether we would have made the same ruling, but whether `a judicial mind, in view of the law and the circumstances of the particular case, could reasonably have reached such a conclusion.'" Id. (citing Steffens v. Peterson, 503 N.W.2d 254, 257 (S.D. 1993)).
Pellegrin v. Pellegrin, 1998 SD 19, ¶ 10, 574 N.W.2d 644, 646-647. In making an equitable division of the property, the trial court generally considers seven factors. See supra n. 1.
[¶ 9.] Jackie contends that the court's division of property was an abuse of discretion because it was substantially unequal and it failed to consider her contributions to the property accumulated during the marriage. Jackie points out that at the time of their marriage, she had assets of $3,200 and liabilities of $12,158.99, leaving her with a negative net worth of $8,958.99. At the same time, James had assets of $170,800 and liabilities of $232,800, leaving him a negative net worth of $62,000. The trial court determined that at the end of the marriage the parties had accumulated a joint net worth of $146,700. The court ultimately awarded Jackie non-income producing assets of $29,180 and debts of $36,600 leaving her with net debt of $7,420. This resulted in an award to her of approximately $1,539 of the property accumulated during the five years of the marriage. On the other hand, James was awarded the parties' entire net worth of $146,700. Because James began the marriage with a negative net worth of $62,000 and ended the marriage with a positive net worth of $146,700, he received approximately $208,700 of the property accumulated during the marriage.
[¶ 10.] In our opinion, this division is inequitable considering the parties' similar age, health,2 competence to earn a living, and contributions to the accumulation of property. We understand that the bulk of the property was the farm and related assets, and that the parties agreed that James would retain those assets. However, we are unable to ascertain the trial court's reasoning for not awarding any adjusting payment. Our inability to ascertain the court's reasoning is complicated by the fact that we have been unable to duplicate the property values the trial court used to arrive at its division.3
[¶ 11.] "In divorce cases, the trial court is required to place a value upon all of the property held by the parties and to make an equitable distribution of that property." Caughron v. Caughron, 418 N.W.2d 791, 792 (S.D. 1988) (citation omitted). See also Guthmiller v. Guthmiller, 2003 SD 120, ¶ 6, 670 N.W.2d 516, 517 (). Because we are unable to determine precisely how the court valued the property, we are unable to determine why James received the parties' entire net worth. We recognize that our inability may be due to the fact that the parties stipulated to the division of much of their property. However, a complete understanding of the property valuation is necessary for our review.
[¶ 12.] Further, even though the parties agreed that James would receive the farm, an equitable division is still ultimately required. This often necessitates some sort of adjusting payment. "While we have in the past expressed a reluctance to require a lump sum payment that would necessitate a sale of a farm and thus put a defendant out of the farming business, the court must also make an award [that] is fair to the spouse." Hanson v. Hanson, 252 N.W.2d 907, 909 (S.D. 1977). Therefore, we reverse and remand for a valuation of all property and a reconsideration of an equitable division.4
[¶ 13.] "An award of child support will not be disturbed unless the trial court clearly abused its discretion." Roberts v. Roberts, 2003 SD 75, ¶ 8, 666 N.W.2d 477, 480 (citations omitted). However, the underlying "[f]indings of fact are reviewed under the clearly erroneous standard." Id.
[¶ 14.] The trial court based James' child support obligation on the income shown on his 2003 tax return. Eight days before trial, James filed his 2004 tax return. James argues that because SDCL.2, SDCL.3 and SDCL.6 base child support on monthly income and federal tax returns, the trial court erred in refusing to consider his 2004 return. However, the trial court refused to consider the 2004 return because the court found that James was untruthful and that the 2004 return had been manipulated to hide assets.
[¶ 15.] Although James contends that there was no evidence to support the findings of dishonesty and manipulation, he is mistaken. The trial court noted in its memorandum opinion that:
After hearing [James] testify and considering all of the evidence presented, I find that he has been intentionally manipulating his income and expenses to minimize his income and assets. I further find that he knowingly testified falsely about matters in this case.
These findings would normally end this matter, but James claims that the court should have specified the points on which it considered him dishonest. However, the court's various references to James's conduct clearly reflect that it was skeptical about the differences in the valuations James gave to his bank and to the court. Further, "`[w]e give the trial court's opportunity to judge the...
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