Evenson v. Evenson

• Decision Date: 13 December 2007
• Docket Number: No. 20060148.,20060148.
• Citation: 742 N.W.2d 829,2007 ND 194
• Parties: Shelly EVENSON, Plaintiff and Appellant v. John T. EVENSON, Defendant and Appellee.
• Court: North Dakota Supreme Court

742 N.W.2d 829

2007 ND 194

Shelly EVENSON, Plaintiff and Appellant v. John T. EVENSON, Defendant and Appellee.

No. 20060148.

Supreme Court of North Dakota.

December 13, 2007.

Neil W. Fleming (argued) and Lawrence D. DuBois (on brief), Fleming, DuBois & Fleming, P.L.L.P., Cavalier, N.D., for plaintiff and appellant.

Alan M. McDonagh, Carter McDonagh, P.L.L.P., Grand Forks, N.D., for defendant and appellee.

MARING, Justice.

[¶ 1] Shelly Rae Evenson appeals from an amended judgment granting her a divorce from John T. Evenson, dividing their marital property, setting his child support obligation, granting her spousal support, and awarding neither party attorney fees. Shelly Evenson also appeals from an order denying her motion for a new trial and for relief from the judgment. We conclude the district court's findings on the value of the marital property and John Evenson's child support and spousal support obligations are not clearly erroneous, and the court did not abuse its discretion in refusing to award Shelly Evenson attorney fees and in denying her post-trial motions. We affirm.

I

[¶ 2] The parties were married in 1985. At the time of the marriage, Shelly Evenson had completed her education at St. Luke's School of Nursing and was working full-time as a registered nurse. John Evenson had one year of college left at North Dakota State University, where he completed school with a degree in education, concentrating in mathematics. After John Evenson graduated, the parties moved to Edinburg. John Evenson began working as a loan officer with Farm Credit Services, and the parties moved to Langdon. After the first of their four children was born, Shelly Evenson worked at hospitals in Langdon and Park River. The family eventually moved back to Edinburg. Throughout the marriage and birth of the other children, Shelly Evenson continued to work part-time as a registered nurse in the area. John Evenson eventually left his job at Farm Credit Services and worked as a loan officer and insurance agent for area banks.

[¶ 3] In January 2000, John Evenson quit his employment as a bank loan officer and opened his own multi-peril crop insurance agency, Tri-County Insurance, which he operated as a sole proprietorship. He sold insurance to many of his former clients from the area banks where he had been employed. He also accepted employment with Cenex Harvest States performing accounting and collection services for the company. Shelly Evenson began doing administrative work for the insurance agency from its inception, and by 2001, she was working full-time at the agency. By 2002, she had also become a licensed multi-peril crop insurance agent. John Evenson continued working at Cenex Harvest States until March 2004, when his position was "discontinued."

[¶ 4] Shelly Evenson brought this divorce action in August 2003. The parties stipulated that Shelly Evenson would have physical custody of the three children who were still minors. Following the trial, the district court found the net value of the parties' marital estate to be $284,211.44, which was subsequently amended to $277,211.44. The court awarded Shelly Evenson approximately 52 percent of the net marital property, including the parties' newly-completed home. The court awarded John Evenson approximately 48 percent of the net marital estate, including the Tri-County Insurance business. Shelly Evenson was awarded most of the parties' liquid assets, including a $67,550 cash distribution from John Evenson payable in $15,000 annual installments with interest. The court ordered John Evenson to pay $1,809 per month for child support and awarded Shelly Evenson $700 per month in spousal support for four years and $400 per month for an additional two-year period. The court further ordered the parties to pay their own attorney fees. Shelly Evenson moved to amend the findings of fact, and the court denied the motion in part and granted the motion in part. Shelly Evenson subsequently moved for a new trial and for relief from the judgment under N.D.R.Civ.P. 59 and 60, but the court denied the motion.

II

[¶ 5] Shelly Evenson argues the district court erred in valuing the crop insurance business, Tri-County Insurance, at $135,000.

[¶ 6] In Olson v. Olson, 2002 ND 30, ¶ 7, 639 N.W.2d 701, this Court said:

The value a trial court places on marital property depends on the evidence presented by the parties. See Fox v. Fox, 2001 ND 88, ¶ 22, 626 N.W.2d 660. Because a trial court is in a far better position than an appellate court to observe demeanor and credibility of witnesses, we presume a trial court's property valuations are correct. See Hoverson v. Hoverson, 2001 ND 124, ¶ 13, 629 N.W.2d 573. We will not reverse a trial court's findings on valuation and division of marital property unless they are clearly erroneous. See Corbett v. Corbett, 2001 ND 113, ¶ 12, 628 N.W.2d 312. "A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, there is no evidence to support it, or if, although there is some evidence to support it, on the entire evidence the reviewing court is left with a definite and firm conviction a mistake has been made." Kautzman v. Kautzman, 1998 ND 192, ¶ 8, 585 N.W.2d 561. "A choice between two permissible views of the evidence is not clearly erroneous if the trial court's findings are based either on physical or documentary evidence, or inferences from other facts, or on credibility determinations." Hoverson, at ¶ 13. Marital property valuations within the range of evidence presented to the trial court are not clearly erroneous. See id.; Fox, at ¶ 19; Wald v. Wald, 556 N.W.2d 291, 295 (N.D.1996).

Ordinarily, the proper method of valuing marital property in a divorce is the fair market value as of the date of trial. See Hoverson v. Hoverson, 2001 ND 124, ¶ 12, 629 N.W.2d 573; Barth v. Barth, 1999 ND 91, ¶ 8, 593 N.W.2d 359. Business property need not be liquidated for a distribution to be equitable. Holden v. Holden, 2007 ND 29, ¶ 14, 728 N.W.2d 312. "It is not usually wrong for a trial court to accept the valuations submitted by one spouse over the other's, or to weigh one spouse's value testimony more heavily." Braun v. Braun, 532 N.W.2d 367, 370 (N.D.1995).

[¶ 7] The parties' expert witnesses agreed that the most common method of determining the fair market value of an insurance business is to apply a multiplier to the total amount of the agency's gross commissions over a period of time. The witnesses testified relevant factors for computing the value included the loss ratios on the policies sold, the volume of business, the retention of business, and the company reinsurance agreements which established the commission rates. The district court found the gross premiums for Tri-County Insurance were $114,315 with a 229.19 percent loss ratio for 2000; $144,759 with a 146.08 percent loss ratio for 2001; $179,427 with a loss ratio of 168.34 percent for 2002; $174,883 with a loss ratio of 135 percent for 2003; and $130,488.40 with a loss ratio of 181 percent for 2004.

[¶ 8] Shelly Evenson asserted at trial that the value of the business should be determined by taking a three-year average of gross commissions from 2001 through 2003 and applying a multiplier of 1.75, resulting in a value of $296,674.47. Her expert witness, Timothy L. Dvorak, testified a multiplier of 1.5 would be "reasonable" under current circumstances, and that a multiplier of 1.75 would be "the upper range today." John Evenson proposed in his property and debt listing that the court average the gross commissions during the first four years of the business and apply a multiplier of 1.0, resulting in a value of $146,666.06. The district court, however, found averaging annual gross commissions "will not serve the purpose of fairly valuing the business at the time of trial." Rather than adopting one of the values proposed by the parties, the court applied the gross commissions for the most recent year of business, 2004, to a multiplier of 1.0 and found the value of Tri-County Insurance to be $135,000.

[¶ 9] Shelly Evenson argues the district court erred in its valuation of the business because neither party proposed basing the value on only the gross commissions from 2004. She further asserts those figures are suspect because the parties were separated during 2004. There is, however, support in the record for the court's valuation.

[¶ 10] Shelly Evenson's expert witness, Dvorak, testified that "current conditions" of the past year were a factor in valuating an insurance business. He testified "we use an average or also, a single year. And generally go by current conditions. With a little bit of speculation in the future." The court also rejected the suggestion that John Evenson had intentionally decreased Tri-County Insurance's income in 2004. The court found that John Evenson had lost numerous clients between 2003 and 2004 based on circumstances beyond his control and there was little likelihood they would be replaced by new clients from the area. The court decided to use a multiplier of 1.0 based on the agency's "steady decrease in commission rates" caused by the high loss ratios suffered in the previous years and found "this pattern of decreased commission rates will continue." The court reasoned:

North Dakota has experienced high loss ratios exceeding premium rates over the past recent years. In this state those loss ratios are more severe north of Highway Two. They are even more severe in the locality of the farm operations of the clients of Tri-County Insurance Agency. Those loss ratios are consistent with the wet weather conditions testified to by different witnesses. This testimony does not favor a higher value for this agency.

[¶ 11] Furthermore, the court specifically found unpersuasive Dvorak's proposed multipliers of 1.5 or 1.75 because "his agency's use of a 1.75 multiplier for the purchase of another area agency was four years ago, when the crop...