Hiller v. Hiller

• Decision Date: 01 July 2015
• Docket Number: No. 27094.,27094.
• Citation: 866 N.W.2d 536
• Parties: Jennifer L. HILLER, Plaintiff and Appellee, v. James D. HILLER, Defendant and Appellant.
• Court: South Dakota Supreme Court

866 N.W.2d 536

Jennifer L. HILLER, Plaintiff and Appellee

v.James D. HILLER, Defendant and Appellant.

No. 27094.

Supreme Court of South Dakota.

Considered on Briefs Feb. 17, 2015.

Decided July 1, 2015.

Stacy F. Kooistra Sharla B. Svennes of Myers Billion, LLP, Sioux Falls, South Dakota, Attorneys for plaintiff and appellee.

Kenneth M. Tschetter of Nicholson, Tschetter, Adams & Nicholson, Sioux Falls, South Dakota, Attorneys for defendant and appellant.

Opinion

WILBUR, Justice.

[¶ 1.] The circuit court distributed the marital assets of James and Jennifer Hiller by divorce decree. The court ordered that James assume all of the marital debt but $500,000 and ordered James “to make best efforts with the bank and cooperate to remove [Jennifer] from the liabilities as otherwise provided herein.” James did not remove Jennifer from the assigned liabilities. As a result, the court ordered that it would compel James to sell personal property if he does not remove Jennifer from his assigned liabilities by March 15, 2015. James appeals. We affirm in part and reverse in part. We reject both parties' requests for attorney's fees.

Background

[¶ 2.] James and Jennifer were married in 1997. Two children were born from this marriage. Throughout their marriage, James and Jennifer operated a family farming business. James and Jennifer rented and farmed land owned by James's parents. James's parents eventually sold James and Jennifer the land and the house located on the property (Home Quarter). James, Jennifer, and their two children lived at the Home Quarter. In 2007, James and Jennifer purchased adjacent farmland (New Quarter). The parties contributed equally to the accumulation of property during their marriage.

[¶ 3.] Jennifer filed for divorce on September 9, 2012. The circuit court entered a divorce decree on June 6, 2013. The parties did not have a premarital agreement. In dividing the marital property, the court made a concerted effort to fashion an equitable division that maintained the viability of the farming operation. The court noted that there was a significant difference in total value between the Home Quarter and the New Quarter. The value of the Home Quarter was $1,580,000, while the value of the New Quarter was $1,365,700. As of January 7, 2013, the amount of liabilities of the parties was valued at $2,453,159.

[¶ 4.] The court awarded James the Home Quarter and most of the farm assets (Farming Operation).¹ The court awarded Jennifer the New Quarter. To equalize the distribution of marital property between James and Jennifer, the court ordered James to assume all of the marital debt but $500,000 and required James to pay Jennifer, over time, a cash equalizing payment of $150,000. In an effort to require the removal of Jennifer from James's assigned liabilities, the court ordered that “[James] shall make best efforts with the bank and cooperate to remove [Jennifer] from the liabilities as otherwise provided herein.” (Refinancing Provision). The Refinancing Provision is the primary subject of this appeal.

[¶ 5.] Neither party appealed the divorce decree.² Ultimately, James did not secure refinancing of the Home Quarter. First National Bank approved the refinancing of the Home Quarter, but the approval was contingent on the approval of Farm Service Agency. Farm Service Agency denied the refinancing because the New Quarter had been removed from the asset base. Farm Credit Services and First Dakota National Bank also denied James the refinancing. Because James did not remove Jennifer from his assigned liabilities, Jennifer filed a motion on August 30, 2013, asking the court to issue an order requiring James to sell as much property as necessary to remove her from James's assigned liabilities. As support for this argument, Jennifer alleged that James had not complied with the Refinancing Provision. In response, James filed a motion on September 4, 2013, asking the court to restructure the division of marital property to assist him in removing Jennifer from his assigned liabilities. James asked the court to transfer the New Quarter to him and order him to pay Jennifer the value of the property over a period of time.

[¶ 6.] On October 7, 2013, the circuit court granted Jennifer's motion for the sale of James's property and denied James's motion to restructure the division of marital property. The court ordered that “[James] shall refinance or restructure the existing debt of the farming operation in order to remove [Jennifer] from all debt in excess of Five Hundred Thousand Dollars ($500,000) as previously ordered by the [c]ourt.” The court imposed a deadline of March 1, 2014, to complete this refinancing or restructuring of debt. The court stated that “in the event of [James's] failure to refinance or restructure said debt by March 1, 2014, the [c]ourt shall revisit the issue as to the sale of the property at that time[.]”

[¶ 7.] James did not refinance or restructure the debt by the imposed deadline. On March 7, 2014, James sought relief from the divorce decree under SDCL 15–6–60(b). James argued that the circuit court mistakenly relied on Dave Knudsen's testimony at the divorce trial in concluding that James could obtain refinancing. At trial, Knudsen—a thirty-five-year employee and agricultural lender at First National Bank—testified about a potential resolution of the property distribution. Knudsen presented a hypothetical situation wherein Jennifer assumed only $500,000 of the marital debt with the New Quarter as the collateral. Knudsen said this may be sufficient to allow James to refinance the homestead and remove Jennifer as a co-signer: “Again, with the ag loan committee approval, that's something we can talk about, yes.” Then, during cross-examination, Knudsen testified that the bank could “probably” release both the New Quarter as collateral, and Jennifer as co-signer, through refinancing. In support of his motion for relief under SDCL 15–6–60(b), James submitted an affidavit from Knudsen stating that the removal of the New Quarter as collateral “essentially ruined any possibility of refinancing.”

[¶ 8.] The circuit court conducted a hearing on the motion on March 24, 2014, and entered findings of fact, conclusions of law, and an order on May 2, 2014 (Order). The court denied James's motion for relief. The court found that “[James] is requesting that the [c]ourt reopen the property division in the present matter,” but the “property division was decided at the time of the divorce and is closed.” The court further found that James failed to establish a basis for relief under SDCL 15–6–60(b).

[¶ 9.] The Order required James to sell the Home Quarter “to the extent necessary such that, along with [Jennifer's] required payment of $500,000, [Jennifer] is relieved of her obligation to the marital debt.” The circuit court extended the deadline to sell the Home Quarter from March 1, 2014, to March 15, 2015.³ As a caveat, the court noted, “Should [James] obtain the release of [Jennifer] from said debt prior to the time of sale, then the sale of Home Quarter need not occur.” But, “[i]f the sale of Home Quarter is not sufficient to release [Jennifer] from said debt, [James] must sell other farm assets to attain [Jennifer's] removal from the debt.” James raises the following issues for our review:

1. Whether the circuit court had authority to grant Jennifer's motion for sale of James's farmland or farming operations.

2. Whether the circuit court abused its discretion in refusing to consider or divide the costs and taxes incurred by the forced sale.

3. Whether the circuit court abused its discretion in denying James's SDCL 15–6–60(b) motion for relief from judgment and request to restructure the property division.

Analysis

[¶ 10.] 1. Whether the circuit court had authority to grant Jennifer's motion for sale of James's farmland or farming operations.

[¶ 11.] James argues that the circuit court's order granting Jennifer's motion for sale of property constituted an improper modification of the property division because it “impermissibly orders the sale of property previously awarded to him in fee simple in the divorce.” In response, Jennifer contends that the Order merely clarified and enforced the Refinancing Provision and did not “materially alter[ ] the rights and responsibilities of the parties [.]”⁴

[¶ 12.] The long-standing law of this State is “that the division of property pursuant to a divorce decree is not subject to modification.” Sjomeling v. Sjomeling, 472 N.W.2d 487, 489 (S.D.1991). “Absent fraud or some other reason which would apply to any judgment, a divorce decree which incorporates a property settlement agreement is a final and conclusive adjudication and is not subject to later modification.” Duran v. Duran, 2003 S.D. 15, ¶ 15 n. 2, 657 N.W.2d 692, 698 n. 2 (quoting Beermann v. Beermann, 526 N.W.2d 127, 129 (S.D.1995) ). While the circuit court generally must not modify the division of the marital property, the court may enter an order enforcing or clarifying the divorce decree. Sjomeling, 472 N.W.2d at 490; Hisgen v. Hisgen, 1996 S.D. 122, ¶ 9, 554 N.W.2d 494, 497. “[A]s a general rule, courts retain jurisdiction to make such further orders as are appropriate to compel compliance with its judgment.”Sjomeling, 472 N.W.2d at 490 (citing 24 Am. Jur. 2d, Divorce and Separations § 959 ). Similarly, “[w]hile a property division is irrevocably fixed by the terms of the divorce decree and cannot be later modified, if indeterminate language was employed, a court may clarify its decree [.]” Hisgen, 1996 S.D. 122, ¶ 9, 554 N.W.2d at 497.

[¶ 13.] Jennifer argues that the circuit court's order granting Jennifer's motion for sale of property constituted an enforcement rather than a modification of the Refinancing Provision. She contends that Sjomeling is analogous to this case. See 472 N.W.2d at 489. In Sjomeling, the circuit court ordered the defendant to pay the plaintiff a property settlement adjustment in four annual installments...