Green v. Green, 28541

• Decision Date: 09 January 2019
• Docket Number: 28541
• Citation: 922 N.W.2d 283
• Parties: Kathryn M. GREEN, Plaintiff and Appellee, v. Scotty J. GREEN, Defendant and Appellant.
• Court: South Dakota Supreme Court

922 N.W.2d 283

Kathryn M. GREEN, Plaintiff and Appellee,

v.Scotty J. GREEN, Defendant and Appellant.

28541

Supreme Court of South Dakota.

CONSIDERED ON BRIEFS ON NOVEMBER 12, 2018

OPINION FILED January 9, 2019

MICHELE LEWON of Kollars & Lewon, PLC, Sioux City, Iowa, Attorneys for plaintiff and appellee.

REBECCA A. NELSON of Rawlings, Ellwanger, Mohrhauser, Nelson & Roe, LLP, Sioux City, Iowa, Attorneys for defendant and appellant.

GILBERTSON, Chief Justice

[¶1.] Scotty J. Green (Scotty) appeals from a judgment and decree of divorce from his wife Kathryn M. Green (Kathy). Scotty asserts the circuit court abused its discretion in awarding attorney fees, calculating child support, and dividing property. We affirm.

Facts and Procedural History

[¶2.] Kathy and Scotty were married November 21, 2003, in Elk Point. During the marriage, Kathy and Scotty adopted two biological siblings, B.S.G. and B.M.G., in Iowa. B.S.G. was born in 2002, and B.M.G. was born in 2003. Both children were considered to have special needs because of their biological mother's drug use. Kathy and Scotty received an adoption subsidy for each child, which was set to be paid monthly until the children reach the age of majority.

[¶3.] After living a short time in Scotty's pre-marital home, the couple purchased a home in Dakota Dunes on Sagebrush Pass. They later built another home in Dakota Dunes on Bluestem Trail (marital home). During the marriage, Kathy worked at HyVee in Sioux City, Iowa, as a pharmacy tech and later as a personal shopper. At the time of trial, her wages were $19.25 per hour, and she worked an average of 32 hours per week. Scotty was employed as the Director of Operations for a McDonald's franchise in Sioux City. After working in that position for 30 years, Scotty was earning approximately $140,000 per year. In 2014, the franchise was sold due to the owners' divorce. Scotty had been approved by McDonald's to own his own restaurant but was not offered one at the time of the sale. As a result, Kathy and Scotty began to search for other franchise opportunities.

[¶4.] Eventually, Scotty and Kathy and three other couples formed their own limited liability company: OCSC, LLC. OCSC signed a franchise agreement to own and operate an Old Chicago restaurant in Sioux City. Scotty and Kathy invested $148,250 in OCSC between 2014 and 2017. Scotty was employed as an owner-operator of the restaurant at a salary of $116,000 per year. As owners, Kathy and Scotty were required to personally guarantee much of the OCSC debt, including debt related to the franchise agreement, the lease, and operating loans.

[¶5.] During the marriage, the parties argued over spending money, OCSC, and the proper way to raise their children. In October 2016, Scotty moved out of the marital home. On October 5, 2016, Kathy filed for divorce. She also filed for a protection order on October 13, 2016. A hearing was held on December 19, 2016, and the circuit court dismissed the protection order. On January 6, 2017, the court released a temporary order awarding the couple joint legal custody of the children. Kathy was awarded primary physical custody, possession of the marital home, $1,357 per month in child support, and $1,300 per month in spousal support.

[¶6.] In February 2017, Scotty was terminated from his position with OCSC due to performance-based issues. Scotty's employment agreement contained a non-compete clause that prohibited him from working in another restaurant within a 250-mile radius for two years after termination. Despite Scotty's termination, he and Kathy retained their ownership interest in OCSC. In May 2017, Scotty found new employment working at Home Depot at a wage of $16 per hour.

[¶7.] Also in February 2017, Kathy filed an application for order to show cause as to why Scotty should not be held in contempt for failure to make timely support payments. Scotty filed a resistance to the application. Kathy moved to continue the hearing on the application for order to show cause and later moved to dismiss the application on April 5, 2017, before a hearing was held. Kathy's counsel drafted a second application in May 2017 that was never filed. In March 2017, Scotty filed an application for an emergency hearing and for the appointment of a custody evaluator. Kathy filed a resistance to the application, and Scotty filed a response, but the parties ultimately resolved the issue without a hearing. In July 2017, Scotty filed an application for modification of child support claiming a downward change in income. A hearing was held on August 29, 2017, and the court granted Scotty's application.

[¶8.] Shortly before trial, Scotty and Kathy agreed to and signed a parenting plan providing for joint legal custody and shared physical care of their children. The parties agreed that the children would alternate weeks with the parties and be exchanged on Sunday evenings. The circuit court adopted the parenting plan. All other matters proceeded to a bench trial before the circuit court on November 16 and 30, 2017.

[¶9.] On January 26, 2018, the circuit court entered its findings of fact, conclusions of law, and a judgment and decree of divorce granting the divorce to Kathy on the grounds of irreconcilable differences. The court also ordered that: (1) Scotty pay Kathy $25,000 in attorney fees; (2) Kathy receive the monthly adoption subsidies from the State of Iowa in the amount of $523.50 for each child; (3) the parties divide credit card debt and that Scotty pay a $40,183.10 cash settlement; and (4) each party pay any outstanding judgments against them not satisfied by the sale of the marital home within one year of the date of the judgment and decree of divorce. Scotty appeals the court's decision raising the following issues for review:

1. Whether the circuit court abused its discretion in awarding Kathy $25,000 in attorney fees.

2. Whether the circuit court erred and abused its discretion in calculating child support and awarding adoption subsidies to Kathy.

3. Whether the circuit court abused its discretion in dividing the credit card debts of the parties and requiring Scotty to pay a $40,183.10 cash property settlement.

4. Whether the circuit court abused its discretion in requiring Scotty to pay any judgments against him not covered by the sale of the house within twelve months from the date of the judgment and decree of divorce.

Standard of Review

[¶10.] "We review a circuit court's factual findings ... under the clearly erroneous standard of review." Osdoba v. Kelley-Osdoba , 2018 S.D. 43, ¶ 9, 913 N.W.2d 496, 500 (quoting Terca v. Terca , 2008 S.D. 99, ¶ 18, 757 N.W.2d 319, 324 ). "We will overturn the circuit court's findings of fact on appeal only when a complete review of the evidence leaves this Court with a definite and firm conviction that a mistake has been made." Id. (quoting Miller v. Jacobsen , 2006 S.D. 33, ¶ 19, 714 N.W.2d 69, 76 ). We review a circuit court's legal conclusions de novo. Huston v. Martin , 2018 S.D. 73, ¶ 10, 919 N.W.2d 356, 361.

[¶11.] In divorce actions, we review an award of attorney fees, determinations as to child support, and determinations in the division of property for an abuse of discretion. Id. (attorney fees and division of property); Anderson v. Anderson , 2015 S.D. 28, ¶ 6, 864 N.W.2d 10, 14 (quoting Hill v. Hill , 2009 S.D. 18, ¶ 5, 763 N.W.2d 818, 822 ) (child support). "An abuse of discretion occurs when discretion is exercised to an end or purpose not justified by, and clearly against, reason and evidence." Osdoba , 2018 S.D. 43, ¶ 10, 913 N.W.2d at 500 (quoting Terca , 2008 S.D. 99, ¶ 18, 757 N.W.2d at 324 ).

Analysis & Decision

[¶12.] 1. Whether the circuit court abused its discretion in awarding Kathy $25,000 in attorney fees.

[¶13.] It is well established that a circuit court must employ a two-step analysis in making a discretionary decision to award attorney fees in divorce actions under SDCL 15-17-18. Streier v. Pike , 2016 S.D. 71, ¶ 25, 886 N.W.2d 573, 581 (citations omitted).

First, the court must determine what constitutes a reasonable attorney's fee. This requires consideration of[:] (1) the amount and value of the property involved[;] (2) the intricacy and importance of the litigation[;] (3) the labor and time involved[;] (4) the skill required to draw the pleadings and try the case[;] (5) the discovery utilized[;] (6) whether there were complicated legal problems[;] (7) the time required for the trial[;] and (8) whether briefs were required. Second, it must determine the necessity for such fee. That is, what portion of that fee, if any, should be allowed as costs to be paid by the opposing party. This requires consideration of the parties' relative worth, income, liquidity, and whether either party unreasonably increased the time spent on the case.

Id. (quoting Nickles v. Nickles , 2015 S.D. 40, ¶ 34, 865 N.W.2d 142, 154 ).

[¶14.] Scotty concedes that the circuit court correctly decided the reasonableness of the $25,000 attorney fee awarded to Kathy, but he claims the court abused its discretion in finding that the award was necessary. As to the necessity of the fee, Scotty claims that the amount of property awarded to each party was relatively the same due to Scotty's responsibility for OCSC loan guarantees and a potential increase in Kathy's 401(k). He asserts that at the time of trial, Kathy was earning a higher wage and that the circuit court improperly relied on his higher earning capacity and speculative future income. Scotty also maintains that Kathy has the immediate ability to pay her attorney fees because she was awarded almost all liquid assets in the property settlement. Finally, Scotty argues that even though he fell behind on child support due to an administrative issue, Kathy unreasonably delayed the divorce trial by filing a contempt action against him. Overall, Scotty believes these factors show that it was not necessary for the circuit court to award Kathy attorney fees.

[¶15.] In its findings of fact and...