Kautzman v. Kautzman

Decision Date30 October 1998
Docket NumberNo. 980004,980004
Citation585 N.W.2d 561,1998 ND 192
PartiesRachel M. KAUTZMAN, Plaintiff, Appellee, and Cross-Appellant, v. Robert A. KAUTZMAN, Defendant, Appellant and Cross-Appellee. Civil
CourtNorth Dakota Supreme Court

Pamela J. Hermes, of Vogel, Weir, Bye, Hunke & McCormick, Ltd., Fargo, for plaintiff, appellee and cross-appellant.

Wayne T. Anderson (argued), Fargo, Mark R. Fraase (submitted on brief), and Douglas W. Nesheim (submitted on brief), of Wegner, Fraase, Nordeng, Johnson & Ramstad, Fargo, for defendant, appellant and cross-appellee.

NEUMANN, Justice.

¶1 Robert A. Kautzman appealed from an order denying his motion for a new trial and from the second amended judgment entered in Rachel M. Kautzman's divorce action. Rachel Kautzman cross-appealed from the second amended judgment and from orders denying her post-trial motions. We affirm in part, reverse in part, and remand for further proceedings.

¶2 Robert and Rachel began living together in 1978 and married in 1988. They built a construction company (Kautzman Construction or KCI), which they incorporated in 1989. The parties separated in January 1995, and Rachel sued for a divorce. No children were born of the marriage.

¶3 After a lengthy trial, the trial court made findings of fact, conclusions of law, and ordered judgment. After the judgment was entered, and after the court ruled on post-trial motions and issued amended findings and conclusions, a second amended judgment was entered. That judgment granted Rachel a divorce, awarded spousal support to Rachel, and divided the marital property.

¶4 The trial court ordered Robert to pay Rachel spousal support of $4,000 per month through December of 2002, "with $2,000 of said amount being for rehabilitative purposes, and thereafter he shall pay her the sum of $2,000 per month in spousal support." In dividing the marital property, the second amended judgment awarded Rachel property valued at $470,160 and awarded Robert property valued at $1,512,720. Robert was ordered to pay Rachel $200,000 within 60 days and an additional $180,000 within four years. Included in the property awarded to Robert was KCI, which the judgment valued at $581,860. Using the value of $581,860 for KCI, and the cash payments Robert is required to give Rachel, without reducing them to present value, Rachel received property valued at $850,160 and Robert received property valued at $1,132,720. By order of December 31, 1997, the trial court ordered finding of fact number 47 amended to value KCI, at "at least $301,001.58." Use of that value results in a property award of $850,160 to Rachel and $851,962 to Robert. 1

¶5 Robert appealed, challenging the property distribution and the spousal support award. He asserts the trial court used an inequitable property division and an unfair spousal support award to punish him for perceived disrespect toward the court. Rachel's cross-appeal challenges the court's valuation of KCI, its failure to require Robert to return $50,000 withdrawn from a savings account or to clarify the judgment in that respect, and its failure to award her attorney fees. She also seeks attorney fees on appeal.

I. Robert's Appeal
A. Property Division

¶6 Robert contends the property division is clearly erroneous because the trial court erroneously found a premarital partnership, failed to consider the source of property brought into the marriage, failed to consider Rachel's lack of contribution to increasing the marital assets during the pendency of the divorce, and otherwise failed to consider all of the appropriate factors. We reject all of those contentions.

¶7 Under N.D.C.C. § 14-05-24, "[w]hen a divorce is granted, the court shall make such equitable distribution of the real and personal property of the parties as may seem just and proper." "In reviewing a property division, we start with the view that marital property should be equally divided and, while the division need not be exactly equal to be equitable, the trial court must explain any substantial disparity." Christmann v. Christmann, 1997 ND 209, p 6, 570 N.W.2d 221.

¶8 A trial court's determinations on valuation and division of property are treated as findings of fact and will be reversed on appeal only if they are clearly erroneous. Wilhelm v. Wilhelm, 1998 ND 140, p 11, 582 N.W.2d 6; Kluck v. Kluck, 1997 ND 41, p 25, 561 N.W.2d 263. A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, there is no evidence to support it, or if, although there is some evidence to support it, on the entire evidence the reviewing court is left with a definite and firm conviction a mistake has been made. Gierke v. Gierke, 1998 ND 100, p 15, 578 N.W.2d 522. A trial court's findings of fact are presumed to be correct. In re Estate of Helling, 510 N.W.2d 595, 597 (N.D.1994). If a party does not challenge specific findings of fact, we will not review them. Wagner v. Wagner, 1998 ND 117, p 9, 579 N.W.2d 207; Helling, 510 N.W.2d at 597.

¶9 In distributing marital property, the trial court must use the guidelines established in Ruff v. Ruff, 78 N.D. 775, 52 N.W.2d 107 (1952), and Fischer v. Fischer, 139 N.W.2d 845 (N.D.1966). Freed v. Freed, 454 N.W.2d 516, 520 (N.D.1990). The Ruff-Fischer guidelines allow a court to consider a number of factors:

These guidelines allow the trial court, in making a property distribution, to consider the respective ages of the parties to the marriage; their earning abilities; the duration of the marriage and the conduct of each during the marriage; their station in life; the circumstances and necessities of each; their health and physical conditions; their financial circumstances as shown by the property owned at the time; its value and income-producing capacity, if any, and whether it was accumulated or acquired before or after the marriage; and such other matters as may be material. Volk v. Volk, 376 N.W.2d 16, 18 n. 2 (N.D.1985).

Freed, 454 N.W.2d at 520 n. 3.

¶10 "To make an equitable distribution of property under NDCC 14-05-24, the trial court must include in the marital estate all of the parties' assets, regardless of source." Zuger v. Zuger, 1997 ND 97, p 8, 563 N.W.2d 804. "A spouse need not make a direct contribution to the acquisition of an asset for it to be included in the marital estate." Zuger, at p 8. "An asset accumulated after the spouses have separated, but while the marriage still exists, is includable in the marital estate." Zuger, at p 8. "Ordinarily, property acquired while living separately is accountable to satisfy obligations which arise out of the status of marriage." Hoge v. Hoge, 281 N.W.2d 557, 561 (N.D.1979).

¶11 Where a homemaker's contributions to the family enable the other spouse to devote full time and attention to a business, contributing to the accumulation, appreciation, and preservation of assets, the homemaker's contributions deserve equivalent recognition in a property distribution upon dissolution of the marriage. Young v. Young, 1998 ND 83, p 15, 578 N.W.2d 111; Behm v. Behm, 427 N.W.2d 332, 337 (N.D.1988). A traditional homemaker's contributions are an asset to the enterprise of marriage and should be recognized in a property distribution upon dissolution of the marriage. Volk v. Volk, 404 N.W.2d 495, 498 (N.D.1987). A difference in earning capacity should be taken into consideration in determining a property division. Nastrom v. Nastrom, 284 N.W.2d 576, 582 (N.D.1979).

¶12 In light of the factors to be considered in making or reviewing a property distribution, Robert has a heavy burden to overcome the presumption of correctness we accord to a trial court's property distribution.

¶13 Relying on Kohler v. Flynn, 493 N.W.2d 647, 649 (N.D.1992), Robert argues our law on equitable distribution of marital property does not apply to the breakup of other living arrangements and the time he and Rachel lived together before marrying should not be a factor in the property distribution. While our law on equitable distribution of marital property upon dissolution of a marriage does not apply to the breakup of other living arrangements, we have said time spouses lived together before marriage may be considered in distributing property. "When parties live together and then marry it is appropriate for the court to consider all of their time together in dividing the marital property." Nelson v. Nelson, 1998 ND 176, p 7, 584 N.W.2d 527. In Braun v. Braun, 532 N.W.2d 367 (N.D.1995), the parties began living together in 1986, married in 1988, and divorced in 1994. The husband argued he was "entitled to everything he had when their marriage began in 1988, and that only the net increase since then should be divided equally." Id., at 371. We said: "But when spouses live together for a time, have children together, and then marry, the trial court may properly consider all of their time together." Id. Robert would distinguish those cases because he and Rachel had no children. We are not persuaded the parties' failure to have children renders the time they lived together before marrying beyond the trial court's consideration in making an equitable distribution of their property.

¶14 The trial court found, among other things:

7. The parties lived with each other from about 1978 on. From the time the parties started residing together, they were, in effect, a financial partnership or community, having agreed to share expenses and assets. Although there was no written contract between the parties, their conduct from 1978 up until immediately prior to their separation was consistent with such an agreement.

....

34. At the time of trial, the parties had been married for about nine years, but they had been a defacto [sic] business and financial partnership for about nineteen years.

Robert contends "the facts simply do not support the trial court's finding that there was some sort of premarital partnership."

¶15 While a property distribution upon the dissolution of a...

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