Laird v. Laird

• Decision Date: 07 July 1982
• Docket Number: No. 13588,13588
• Citation: 322 N.W.2d 254
• Parties: Deborah M. LAIRD, Plaintiff and Appellant, v. W. Ray LAIRD, III, Defendant and Appellee.
• Court: South Dakota Supreme Court

Page 254

322 N.W.2d 254

Deborah M. LAIRD, Plaintiff and Appellant, v. W. Ray LAIRD, III, Defendant and Appellee.

No. 13588.

Supreme Court of South Dakota.

Argued May 17, 1982.

Decided July 7, 1982.

Carleton R. Hoy of Davenport, Evans, Hurwitz & Smith, Sioux Falls, for plaintiff and appellant; Sarah Richardson of Davenport, Evans, Hurwitz & Smith, Sioux Falls, on brief.

Donald H. Breit, Sioux Falls, for defendant and appellee.

DUNN, Justice.

Deborah Laird (appellant) and W. Ray Laird, III (appellee) were granted a divorce on September 29, 1981. Appellant appeals from that portion of the decree regarding the division of property and the child support award. ^* We reverse and remand.

The parties were married on December 17, 1977. One child was born to this marriage on January 12, 1980. Both parties have children from previous marriages. Appellant has one child, while appellee has three children from a prior marriage.

When the parties were married, appellant was employed as an installation supervisor with Northwestern Bell Telephone. Her salary was approximately $15,000 a year, which later increased to $16,500 a year. Appellee was employed as Vice-President in charge of consumer lending at Northwest Bank in Sioux Falls, South Dakota, earning approximately $22,000 per year. Shortly after their marriage, appellee terminated his employment with the bank and began working as supervisor of Dakota By-Products, a rendering plant. By 1980, his salary had increased to $55,300.

Appellant had limited assets at the time of the marriage. Appellee, on the other hand, had substantial assets indicating a net worth of $215,200. His assets included $135,900 in stocks, primarily in three closely held corporations: Dakota By-Products, R & N, Inc., and L & L, Inc. When appellee turned thirty-five years of age, he received $80,000 from a trust established for him by his grandfather. Appellee applied $45,000 of the trust funds toward the cost of acquiring a lot and constructing a new home; $35,000 of the funds was in stocks. A short time later, appellee's mother died and left him $126,000 of Dakota By-Products stock.

Appellant was granted a divorce on the ground of extreme mental cruelty. She was awarded $250 per month in child support. Appellee received the major portion of the property.

Appellant contends that the trial court abused its discretion when it distributed the property of the parties. In reviewing the division of property, we recognize that the trial court has broad discretion in making such division and we will not modify or set it aside unless it clearly appears that the trial court abused its discretion. Palmer v. Palmer, 316 N.W.2d 631 (S.D.1982); O'Connor v. O'Connor, 307 N.W.2d 132 (S.D.1981); Michael v. Michael, 287 N.W.2d 98 (S.D.1980). In making an equitable division of property, the trial court must consider the duration of the marriage, the value of the property of each of the parties, the ages of the parties, their health and competency to earn, and the contributions of each of the parties to the accumulation of the marital property. Palmer v. Palmer, supra; O'Connor v. O'Connor, supra; Wallahan v. Wallahan, 284 N.W.2d 21 (S.D.1979). "[T]he trial court is not bound by any mathematical formula but is to make the award on the basis of the material factors in the case, having due regard for equity and the circumstances of the parties." O'Connor v. O'Connor, 307 N.W.2d at 136.

The trial court awarded appellee real and personal property valued at $159,784. Appellant, on the other hand, only received the personal property in her possession at the time of the divorce, an award valued at $21,550. The exhibits relied upon by the trial court value the assets and liabilities of the parties as follows:

                Appellee's Award:                             Appellant's Award
                $210,000        residence & real estate        $2,000  engagement ring
                 221,000        stocks                          2,000  jewelry
                  21,500        cash value in life insurance    1,500  mink coat
                     800        cash                            4,000  cash
                --------------
                $453,200        TOTAL ASSETS                    4,000  stock
                 293,416        less debts                      7,000  1980 Honda Accord
                --------------
                $159,784        NET WORTH                         600  cash value in life
                                                                         insurance
                (Appellee's total assets, as listed in the        450  flute
                parties' exhibits, are in error by $100.      -------
                We find this mistake to be inconsequential    $21,550  NET WORTH
                in amount and irrelevant in determining
                whether the property has been
                properly distributed to the parties.)
                

Ordinarily, this court will not attempt to place a valuation on the parties' assets, because that task is within the province of the trier of fact. Hanks v. Hanks, 296 N.W.2d 523 (S.D.1980); Kittelson v. Kittelson, 272 N.W.2d 86 (S.D.1978). The trial court must, however, place a value upon all of the property and make an equitable distribution of that property. Kittelson v. Kittelson, supra; Guindon v. Guindon, 256 N.W.2d 894 (S.D.1977).

The record indicates that appellee failed to comply with a motion to produce corporate records for Dakota By-Products, Inc. Without these corporate records, the only evidence of value of the closely held corporate stock considered by the trial court was appellee's personal opinion. We acknowledged in Hanks v. Hanks, supra, that the parties should be prepared to produce hard evidence as to the value of the property other than their own personal opinions, when they come into the trial court without a stipulation as to those values. In addition, appellee at trial denied present or past ownership of R & N, Inc. stock. He now admits on appeal, and his 1979 and 1980 income tax returns indicate, that he did own R & N, Inc. stock. This stock has now merged with L & L, Inc. Because the trial court failed to enter a finding of fact placing a value on each of the appellee's stock investments, we are unable to determine whether the valuation of the L & L, Inc. stock properly included the R & N, Inc. stock. Thus, we find that the trial court erred in failing to fully scrutinize the question of valuation of the Dakota By-Products, Inc. stock and the L & L, Inc. stock in its determination of appellee's net worth, and the case must be reversed and remanded on this issue.

We now address whether the trial court divided the listed property in an equitable manner. Here, the marriage lasted about three and one-half years. Both parties are in good health, but appellee does have a hearing problem. At the time of trial, appellant was twenty-eight years of age and appellee was thirty-eight years of age. Appellee was awarded all of the income-producing property.

Appellee entered the marriage with considerable assets valued at approximately $215,000. During the course of the marriage, appellee's adjusted gross earnings, as reported for tax purposes, was $113,955 in 1979 and $74,518 in 1980. He inherited $126,000 from his mother and also received $80,000 from a trust during the marriage. Approximately $161,000 of this $206,000 was in the form of corporate stock. It is within the trial court's discretion whether to consider gifts or inheritance as part of the property to be divided. Balvin v. Balvin, 301 N.W.2d 678 (S.D.1981); Buseman v. Buseman, 299 N.W.2d 807 (S.D.1980); Andera v. Andera, 277...