Heckenlaible v. Heckenlaible

• Decision Date: 01 December 1995
• Docket Number: No. 19153,19153
• Citation: 1996 SD 32,545 N.W.2d 481
• Parties: Nancy Lou HECKENLAIBLE, Plaintiff and Appellee, v. Galen L. HECKENLAIBLE, Defendant and Appellant. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 481

545 N.W.2d 481

1996 SD 32

Nancy Lou HECKENLAIBLE, Plaintiff and Appellee, v. Galen L. HECKENLAIBLE, Defendant and Appellant.

No. 19153.

Supreme Court of South Dakota.

Considered on Briefs Dec. 1, 1995.

Decided March 27, 1996.

Wanda Howey-Fox of Harmelink & Fox, Yankton, for plaintiff and appellee.

John M. Wilka of Christenson, Wilka, Haugen & Kirby, P.C., Sioux Falls, for defendant and appellant.

MILLER, Chief Justice.

¶1 Galen L. Heckenlaible (Galen) appeals from a judgment and decree of divorce challenging the valuation and division of property, the award of alimony, and the award of $2,500 in attorney fees to his former wife Nancy Lou Heckenlaible (Nancy). We affirm in part, reverse in part, and remand.

FACTS

¶2 Galen and Nancy were married 26 years. During that time they had three children, the youngest of whom was 17 years old at the time of the divorce. During the marriage, the parties lived on a dairy farm belonging to Galen's parents. Galen worked with his father in the dairy while Nancy assumed the traditional role of homemaker, mother, and farm wife. In 1976, the parties moved to Menno to pursue non-farm occupations. At that time, Nancy began working outside of the home as a teacher's aid and at the local Dairy Bar in Menno. She continues to work at these jobs, and earns a gross monthly income of $689.92. Nancy is in her mid-forties and, although she suffers from high blood pressure, it does not interfere with her ability to work.

¶3 Galen is also in his mid-forties. He has worked on his father's milking farm most of his life. He suffers from osteoporosis and heart problems, but they do not interfere with his work. He receives Social Security Disability Income of $923.00 per month. He also receives income in the form of farm program payments and proceeds from the sale of milk (milk checks). In 1993, Galen purchased his parents' interest in the family dairy business. In December, 1993, Galen's parents gifted over 80 acres of farmland and buildings to Galen and Nancy as joint tenants. In July, 1994, Nancy filed for divorce.

¶4 The trial court divided the marital property and, in so doing, included the 80 acres from Galen's parents and the value of milk checks he had collected from July, 1994 through November, 1994, the date of trial. The court also awarded Nancy alimony of $350 per month. Galen appeals.

ISSUES

¶5 I. Does the valuation of property evidence an abuse of discretion?

¶6 Galen contends it was error to include as marital property the gift from his parents of 80 acres of farmland and buildings and the value of the milk checks for July through November, 1994 which he had expended in the dairy operation. We review such claims against an abuse of discretion standard. Grode v. Grode, 1996 SD 15, p 9, 543 N.W.2d 795; Osman v. Keating-Osman, 521 N.W.2d 655, 659 (S.D.1994). We will consider each item in turn.

¶7 Galen contends the farmland is inherited property, not subject to division as part of the marital estate. He relies on Voelker v. Voelker, 520 N.W.2d 903 (S.D.1994), in which the husband inherited 160 acres of farmland, and received the land after the action for divorce had been commenced but before it had been completed. In Voelker, we held that the wife was not entitled to an interest in the inherited land because she had no involvement with the land and had not contributed to its acquisition, whereas the husband had worked the land with his father throughout his life. 520 N.W.2d at 908.

¶8 As the trial court pointed out, however, this case is different. Despite Galen's attempts to characterize the transfer from his parents as an "inheritance," it was a gift made jointly to Galen and Nancy during the marriage, and his parents are both alive. The court found: "The fact that the deed dated December 28, 1993 conveys the real estate to both [Nancy] and [Galen] [husband and wife, as joint tenants] is convincing evidence of its status as marital property." The trial court has broad discretion in determining whether property is marital in nature and subject to division. Voelker, 520 N.W.2d at 907. Further, even if the land could be considered an "inheritance," the trial court had the authority to treat it as part of the marital estate. Id. No abuse of discretion has been demonstrated here.

¶9 Next, Galen argues that it was an abuse of discretion to include the five months of milk checks as divisible marital property because they are his source of income. The court included the proceeds of the milk checks from July through November of 1994, totalling over $11,000 in the calculation of the marital estate. Both Galen and Nancy testified that during the marriage the proceeds from the milk checks were used for living expenses and farming expenses. Checks for the sale of milk were received on the 1st and 15th of each month, and ranged from $1,000 to over $3,000. Galen gave Nancy $500 from each check (a total of $1,000 per month) to pay household expenses. This amount was deposited into the family's personal account for living expenses, as was Galen's disability income and Nancy's income from the two jobs she worked. The balance of the milk checks was deposited into a separately maintained farm account which was used to pay the operating expenses of the dairy and to purchase equipment and livestock.

¶10 The evidence was uncontroverted that the balance was used by Galen in the dairy operation. ¹ Throughout the marriage, the parties treated the milk checks as income of the dairy operation, using the monies to pay operating expenses of the dairy, purchase equipment, livestock and feed. The facts support a conclusion that--with the exception of $1,000 per month--the milk checks have always been treated separately as part of the dairy operation. On that basis, it was proper for the trial court to treat the dairy's income as a component of the dairy operation, the value of which is an asset subject to division.

¶11 Under the circumstances, a portion of the proceeds of the milk checks is property and a portion is income. To the extent Galen regularly paid himself a salary of $1,000 per month from the operation, he should be allowed to claim as personal income that amount he regularly paid into the family's personal account for living expenses. However, the balance of the proceeds which was maintained separately for the dairy operations and used only for the dairy, was properly treated as a divisible asset. Of the $11,392 in milk checks received over the 5 months, $1,000 per month (a total of $5,000) represents Galen's farming income and the balance of $6,392 was subject to the property division. Consequently, on this limited issue, we remand the property division.

¶12 II. Does the award of alimony evidence an abuse of discretion?

¶13 Galen also contends that Nancy was not entitled to an award of $350 per month of permanent alimony. He claims he lacks the ability to pay such an award because his monthly income is only $554.79 and that his health prevents him from ever being able to meet such an obligation. Trial courts are guided by the well-established factors to be used in making an alimony award, and we will not disturb such an award absent an abuse of discretion. Jones v. Jones, 1996 SD 2, p 21, 542 N.W.2d 119. ²

¶14 Galen attempts to argue both sides of the income issue. In his first issue, he claimed the milk checks were entirely personal income, but now he claims he has no income at all aside from his disability income. He goes on to claim that his disability income at the time of trial was substantially less than the $923 amount he listed in his answers to interrogatories signed that same month (November, 1994). He claims he only has an income of $554.79 (after deducting payment of $117 in child support from disability income of $661.79). The $661.79 figure was used by the court as Galen's net income for purposes of child support calculation, after taking the statutorily allowed deductions.

¶15 The court's decision does not express an analysis of Galen's ability to pay $350 per month in alimony. It does not state whether it considered his income in the restrictive sense of the child support calculation or the broader sense which included income from the dairy operation. The court was required to consider the financial situation of the parties after the property division and the earning capacity of each, and the record plainly shows it did so. Galen's argument that it must make a specific finding that he has the ability to pay is not supported by Parsons v. Parsons, 490 N.W.2d 733 (S.D.1992) (Parsons II ). Rather, in Parsons II we reiterated the requirement that the financial condition of the parties must be assessed as a whole. In that case we rejected a claim similar to Galen's that mere proof his expenses exceeded his income established an inability to pay alimony where he had been awarded substantial liquid assets. Regardless of what figure the trial court accepted as representative of his actual monthly income, it is plain from the record and our earlier analysis that Galen has personal income in the form of disability income of $932 and from milk check proceeds of $1,000 per month which is available to him. He has failed to establish that he has an inability to pay alimony based on his monthly income.

¶16 The record demonstrates the trial court considered all of the relevant factors in awarding alimony. It found that after 26 years of marriage, the parties were each in their mid-forties, with some health problems, but none which interfered with the ability of either to earn a living. In particular, the court found that, although Galen suffers from osteoporosis and has had heart problems (including a heart attack in 1989), his health problems do not interfere with his ability to make a living as a dairy farmer. He has been in the milking business almost his entire life and, in 1993, bought out his father's interest in the dairy operation, and has been making his...