IN RE MARRIAGE OF LEMERE v. LeMere

• Decision Date: 27 June 2003
• Docket Number: No. 01-2204.,01-2204.
• Citation: 262 Wis.2d 426,2003 WI 67,663 N.W.2d 789
• Parties: IN RE the MARRIAGE OF: Michael G. LEMERE, Petitioner-Respondent, v. Marcia L. LEMERE, Respondent-Appellant-Petitioner.
• Court: Wisconsin Supreme Court

262 Wis.2d 426

2003 WI 67

663 N.W.2d 789

IN RE the MARRIAGE OF: Michael G. LEMERE, Petitioner-Respondent, v. Marcia L. LEMERE, Respondent-Appellant-Petitioner.

No. 01-2204.

Supreme Court of Wisconsin.

Oral argument April 8, 2003.

Decided June 27, 2003.

For the respondent-appellant-petitioner there were briefs by James R. Sickel, Daniel J. Vande Loo, and Hinkfuss, Sickel & Petitjean, Green Bay, and oral argument by James R. Sickel.

For the petitioner-respondent there was a brief by Lise Lotte Gammeltoft and Peterson, Berk & Cross, S.C., Green Bay, and oral argument by Lise Lotte Gammeltoft.

¶ 1. DIANE S. SYKES, J.

The issue in this divorce case is whether the circuit court erroneously exercised its discretion in ordering an unequal property division based upon one spouse's greater direct contribution to the creation and expansion of the family business enterprise.

¶ 2. Michael and Marcia LeMere were married for nearly 20 years. During their marriage, Michael established and oversaw the family business, MGL Fitness, Inc. Marcia worked two jobs before having children, and then dedicated herself to full-time child-rearing and care of the family home.

¶ 3. Michael filed for divorce in 2001. At trial, Michael asked the circuit court to divide the assets unequally to reflect his industriousness and extensive efforts in creating and expanding MGL Fitness. The circuit court divided the marital assets equally, except for MGL Fitness, the largest asset, which was divided unequally, 65-35 percent in favor of Michael. The court of appeals affirmed.

¶ 4. Property division in divorce is governed by Wis. Stat. § 767.255(3) (2001-2002),¹ which establishes a presumption of equal division of marital property. The statute also provides that the circuit court may deviate from this presumption of equality, but only upon consideration of certain enumerated factors. Here, the circuit court ordered an unequal division of the largest asset in the marital estate upon consideration of only one statutory factor, neglecting entirely the other statutory factors. In so doing, the circuit court failed to apply the correct legal standard, which constitutes an erroneous exercise of discretion, requiring reversal and remand for reconsideration of the division of marital property.

I. FACTS AND PROCEDURAL HISTORY

¶ 5. Michael and Marcia LeMere married on June 13, 1981. At that time, neither party had any appreciable assets. Marcia was employed as a childcare worker until 1983. From 1983 until 1990, she held two jobs: working full-time as a dental office receptionist by day, and moonlighting part-time cleaning offices.

¶ 6. Michael worked for the post office when the couple married, but in 1983 he left his position there to become a firefighter. He was an avid weightlifter and started selling small fitness products out of a local gym in 1982. For the next several years he sold these products for two hours in the morning and three to four hours in the evening. After several years of good sales, he decided to establish MGL Fitness, Inc. He operated the business on his days off from the fire department.

¶ 7. Michael quit his firefighting position in 1992 to focus full-time on expanding MGL Fitness. During this expansion, MGL Fitness opened retail stores in Green Bay, Appleton, Wausau, and Duluth, Minnesota. Michael made all the business decisions for the company, such as product lines, expansion, and location. Marcia filled in only occasionally, on an "as needed" basis, and sometimes helped with local shows and events. The business was successful and several articles in Green Bay area publications recognized its unique growth.

¶ 8. Marcia quit her part-time job in 1989 prior to the birth of the couple's first child, and quit her fulltime receptionist position following the birth of their second child in 1990. At that point, she decided not to return to work outside the home, but, rather, to stay at home full-time to raise the children. Michael encouraged that move for several reasons, among them the success of MGL Fitness, the expense of daycare, and the tax consequences of Marcia's additional income.

¶ 9. Michael drew an annual salary of $41,000 from MGL Fitness, but this was dwarfed by the company's profits. In the early years of retail operation, Michael left most of the profits in the business to serve as working capital and to reduce debt. Despite the growing success of MGL Fitness, the family lived frugally in a modest home in order to save for retirement, the children's education, and to pay off their own debt. Michael and Marcia each drove modest and dated vehicles. In the six years prior to the divorce, however, Michael's total earnings from the company averaged over $333,000 per year, and the family gradually began to spend more money.

¶ 10. In May of 2000, Michael filed for divorce in Brown County Circuit Court. On May, 17, 2001, the parties reached an agreement regarding custody of the children, division of certain assets, Marcia's earning capacity, and payment of attorney's fees. On July 2, 2001, the circuit court, the Honorable Mark A. Warpinski, entered judgment dividing the marital assets equally, except for MGL Fitness, which was divided unequally, 65-35 percent in favor of Michael.² This resulted in a 54-46 percent overall division of the net marital estate in favor of Michael. The circuit court also ordered Michael to pay child support in the amount of $4,606 per month. Finally, the circuit court awarded maintenance to Marcia in the amount of $615 per month for eight years, a period which coincides with the youngest child's anticipated high school graduation.

¶ 11. The circuit court premised the 65-35 percent division of MGL Fitness on Michael's ingenuity and industriousness in creating and expanding the business, concluding that his effort in this regard constituted a substantial economic contribution to the marriage justifying the unequal division:

MGL Fitness is awarded to [Michael LeMere]. It was through his efforts that this business has prospered. There is nothing in this record to suggest that [Marcia LeMere] contributed to the financial success of the business. [Marcia] did not offer any testimony that she played any part in the organization, running, or expansion of the business.

[Michael] asks that I unequally divide the property division to reflect the industriousness of [Michael] in increasing the value of the business. [Michael] relies on Parrett v. Parrett, 146 Wis. 2d 830 (Ct. App. 1988) in this regard. In Parrett, the [c]ourt unequally divided the husband's interest in a business that was awarded to him. The Trial Court relied on the economic circumstances of the parties (§ 767.255(3)(d) Wis. Stats.). There as here, that decision was based on the husband's industriousness and extensive efforts in creating a business enterprise. I find that [Michael's] efforts to start, maintain, and expand MGL Fitness from a small box operation to a multi-location, multi-million dollar business is a substantial economic contribution to the marriage justifying an unequal property division.

In making this finding, I am not ignoring the contributions that [Marcia] made to this marriage. I do not find her testimony credible with respect to how much she was required to do in [Michael's] absence. [Marcia] indicated that the children do not like being with their father for periods of placement. Yet she conceded that the girls preferred to be by themselves even when they are at home. Neither child is in counseling. Neither child is a problem in school. The parties took their children on family vacations as well. From all of this I conclude that [Michael] spent reasonable periods of time with his children as they were growing up. The tangible evidence suggests that the children have a normal relationship with their father and not an estranged one as portrayed by [Marcia].

. . . .

The ratio for [the] division is problematic. To award 100% of the asset to [Michael] would completely ignore the fact that to some extent [Marcia's] homemaking played a part in [Michael's] success. There is no scientific way to construct this percentage. It occurs to this Court that a significant deviation from the 50-50 division is warranted for the reasons stated above. . . . I find that a split of 65-35 in favor of [Michael] is reasonable.

¶ 12. Marcia appealed on the issue of the unequal property division. She also challenged the child support award as an improper deviation from the percentage guidelines, and the maintenance award as too low. The court of appeals affirmed, concluding that the circuit court did not erroneously exercise its discretion in ordering the 65-35 percent division of MGL Fitness. The court of appeals also rejected Marcia's challenge to the child support award, because her own request of $4,000 per month was itself a deviation from the percentage guidelines, and in any event, she was awarded more than she had requested. Finally, the court of appeals concluded that the circuit court did not erroneously exercise its discretion in awarding maintenance of $615 per month for eight years. We accepted review, and now reverse on the issue of the unequal property division.

II. STANDARD OF REVIEW

[1-3]

¶ 13. The division of property, calculation of child support, and determination of maintenance in divorce actions are decisions entrusted to the discretion of the circuit court, and are not disturbed on review unless there has been an erroneous exercise of discretion. King v. King, 224 Wis. 2d 235, 248-49, 590 N.W.2d 480 (1999); Cook v. Cook, 208 Wis. 2d 166, 171-72, 560 N.W.2d 246 (1997). "[A] discretionary determination must be the product of a rational mental process by which the facts of record and law relied upon are stated and are considered together for the purpose of achieving a reasoned and reasonable determination." Hartung v. Hartung, 102 Wis. 2d 58, 66, 306 N.W.2d 16 (1981). A circuit court's discretionary...