Hitz v. Hitz

• Decision Date: 24 March 2008
• Docket Number: No. 20070211.,20070211.
• Citation: 746 N.W.2d 732,2008 ND 58
• Parties: Lois Konzak HITZ, n/k/a Lois Ann Marie Konzak, Plaintiff and Appellant v. John William HITZ, Defendant and Appellee.
• Court: North Dakota Supreme Court

746 N.W.2d 732

2008 ND 58

Lois Konzak HITZ, n/k/a Lois Ann Marie Konzak, Plaintiff and Appellant v. John William HITZ, Defendant and Appellee.

No. 20070211.

Supreme Court of North Dakota.

March 24, 2008.

Todd W. Foss (argued), Stefanson, Plambeck & Foss, Moorhead, MN, for plaintiff and appellant.

Sherry Mills Moore (argued), Bismarck, ND, for defendant and appellee.

KAPSNER, Justice.

[¶ 1] Lois Konzak Hitz ("Konzak") appeals an amended judgment dividing marital property between her and her former husband, John Hitz ("Hitz"). We affirm the amended judgment.

I

[¶ 2] Konzak and Hitz were married June 25, 1994. Konzak commenced a divorce action in January 2005. Following post-trial briefing, an amended judgment, dividing and distributing the debts and assets between Konzak and Hitz, was entered in May 2007. In its findings of fact, conclusions of law, order for amended judgment and amended judgment, the district court awarded net property of $1,257,409 to Hitz and $334,206 to Konzak before adjustments. The court made an adjustment for post-separation property and debt, adding $12,000 to Hitz's net property and $179,934 to Konzak's net property. Hitz was also ordered to pay Konzak $160,000 in cash. After the adjustment and the cash payment, the district court awarded Hitz 62 percent and Konzak 38 percent of the net marital estate.

[¶ 3] Konzak was born in 1953. She obtained a pharmacy degree from North Dakota State University in 1976. Following her graduation, Konzak worked at various pharmacies. Prior to her marriage to Hitz, Konzak lived on a hobby farm near Duluth, Minnesota. The hobby farm consisted of a house and barn located on six acres of land; Konzak was purchasing the property on a contract for deed. According to Konzak, by 1995, the hobby farm was nearly paid off. Konzak also entered the marriage with a parcel of undeveloped real estate, which adjoined her hobby farm. At the time she married Hitz, she owed $16,850 on the undeveloped parcel. Konzak testified she thought she had retirement accounts at the time of marriage, valued at about $75,000; however, the statements closest to the marriage showed she had $33,286 in the accounts. She owned a 1976 Ford one-ton truck, a 1985 Toronado, and a 1992 Chrysler LeBaron. On the LeBaron, Konzak owed $8,884 at the time of marriage. Konzak also entered the marriage with some personal property, including livestock and family heirlooms. Konzak worked as a pharmacist at Fort Totten Indian Health Services. During the time she worked at Fort Totten, Konzak made between $35,000 and $60,000 per year. She continued her employment at Fort Totten through 2002, when she left work due to severe depression. Since leaving her job in 2002, Konzak worked part time at a drug store in Devils Lake and received disability income in the amount of $3,200 per month after taxes and deductions for insurance premiums.

[¶ 4] At the time of the marriage, Hitz was farming 256 acres he owned debt free and 874 acres he was buying from his mother on a contract for deed. The contract for deed with his mother was the only substantial debt Hitz had at the time of marriage. Hitz also rented other farmland. Hitz entered the marriage with personal property, including livestock and farm equipment. Hitz's income varied considerably from year to year. In January 1994, around the time the couple married, a Farm Credit Services balance sheet showed Hitz's net worth to be $364,992. At trial, the district court valued his net worth at the time of marriage to be $452,495, due in part to the fact that he was purchasing the acreage from his mother below fair market value.

[¶ 5] After Konzak and Hitz began living together in 1993 and married in 1994, Konzak rented out her hobby farm and used the rental profits to pay the loan on the adjoining undeveloped real estate. In 1998, Konzak sold her undeveloped, unimproved parcel of land for $350,000. Konzak used the sale proceeds from this real estate to purchase 317 acres of farmland in Wells County, North Dakota, for the sum of $140,000. The money from Konzak's farm also purchased an additional 157 acres, called the Kucera property, for $91,000.

[¶ 6] In 1995, Konzak and Hitz purchased a home in New Rockford, North Dakota, which they moved to the Hitz farmstead. Konzak testified at trial that the purchase price of the home was $58,000, and the cost of moving the house was $12,780. She testified the money for the purchase of the home came from a mortgage loan the parties obtained in the amount of $46,400. She testified she paid the mortgage off three years later with money she received from the sale of her hobby farm, which she sold in 1996 for $75,000. She testified the costs for moving the home, along with additions and improvements, were paid from the parties' joint funds and with money from Konzak's Edward Jones account. Hitz testified he paid between $125,000 and $135,000 towards the house from the parties' Security State Bank account and alleged that the bulk of the money in that account came from his farming income. During the marriage, the parties also purchased an additional quarter of land for $65,000 in 2004. In January 2005, after the parties had separated, Konzak's mother gave a house to Konzak. Konzak later inherited several other parcels of land before the divorce action was completed.

[¶ 7] At the time of separation, Konzak withdrew $60,000 from the parties' farm operating loan account, spent $100,000 to restore the house given to her by her mother, which was valued after improvements at approximately $29,000, and withdrew $35,000 from her own retirement account. She also incurred additional credit card debt and debt to friends and family. The district court noted that in the 22 months following the parties' separation, Konzak acquired nearly $180,000 in new debts. The court also noted that little of the debt incurred was spent in a manner that increased the parties' net worth and found Konzak's actions constituted economic waste, which would be considered in making the property distribution.

[¶ 8] The district court awarded Hitz 62 percent and Konzak 38 percent of the net estate of the parties. Before making this disparate division, the court included all of the assets and debts and analyzed all of the Ruff v. Ruff, 78 N.D. 775, 52 N.W.2d 107 (1952)-Fischer v. Fischer, 139 N.W.2d 845 (N.D.1966) factors.

[¶ 9] Konzak appeals, arguing the district court erred in failing to divide the property equitably between the parties, misclassified the marriage as a relatively short-term marriage, and erred in applying post-separation spending adjustments.

II

[¶ 10] "`We review a district court's determinations regarding the division of property as findings of fact, and we will not reverse unless the findings are clearly erroneous.'" Lorenz v. Lorenz, 2007 ND 49, ¶ 5, 729 N.W.2d 692 (quoting Dvorak v. Dvorak, 2005 ND 66, ¶ 20, 693 N.W.2d 646). A finding of fact is clearly erroneous when it is induced by an erroneous view of the law, there is no evidence to support it, or when, although there is some evidence to support it, after a review of the entirety of the evidence, this Court is left with a definite and firm conviction a mistake has been made. Lorenz, at ¶ 5 (citing Kostelecky v. Kostelecky, 2006 ND 120, ¶ 8, 714 N.W.2d 845). This Court views the evidence in the light most favorable to the findings, and the district court's findings of fact are presumptively correct. Lorenz, at ¶ 5 (citing Striefel v. Striefel, 2004 ND 210, ¶ 8, 689 N.W.2d 415).

[¶ 11] "[A] trial court must start with a presumption that all property held by either party whether held jointly or individually is to be considered marital property. The trial court must then determine the total value of the marital estate in order to make an equitable division of property." Ulsaker v. White, 2006 ND 133, ¶ 13, 717 N.W.2d 567. "After a fair evaluation of the property is made, the entire marital estate must then be equitably divided between the parties under the Ruff-Fischer guidelines." Id. (citing Neidviecky v. Neidviecky, 2003 ND 29, ¶ 10, 657 N.W.2d 255). The Ruff-Fischer guidelines require a district court to consider the following factors in determining how to equitably divide the marital estate:

the respective ages of the parties, their earning ability, the duration of the marriage and conduct of the parties during the marriage, their station in life, the circumstances and necessities of each, their health and physical condition, their financial circumstances as shown by the property owned at the time, its value at the time, its income-producing capacity, if any, whether accumulated before or after the marriage, and such other matters as may be material. The trial court is not required to make specific findings, but it must specify a rationale for its determination.

Bladow v. Bladow, 2003 ND 123, ¶ 7, 665 N.W.2d 724 (internal quotations omitted).

[¶ 12] After calculating the entire marital estate, the district court, in considering the Ruff-Fischer factor regarding the origin of property, found Hitz entered the marriage with nearly twice as much in assets as Konzak. Konzak contends the court clearly erred in determining Hitz held twice as much property at the time of marriage. "A trial court's valuation of property is a finding of fact that is presumptively correct and subject to the clearly erroneous standard of review." Hoverson v. Hoverson, 2001 ND 124, ¶ 13, 629 N.W.2d 573 (citing Peterson v. Peterson, 1999 ND 191, ¶ 12, 600 N.W.2d 851). At trial, the court was presented with balance sheets for farm operating loans, which valued Hitz's real and personal property around the time of marriage. Hitz testified the loan balance sheets undervalued his property, because the real property he purchased from his mother was purchased for less than fair market value. He testified that the loan balance sheet underestimated the value of his livestock, because the lending...