Liebel v. Liebel

• Docket Number: 30169-a-SRJ
• Decision Date: 26 June 2024
• Citation: Liebel v. Liebel, 2024 S.D. 34, 30169-a-SRJ (S.D. Jun 26, 2024)
• Parties: JULIE ANNE LIEBEL, Plaintiff and Appellant, v. GARY LEE LIEBEL, Defendant and Appellee.
• Court: South Dakota Supreme Court

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2024 S.D. 34

JULIE ANNE LIEBEL, Plaintiff and Appellant, v. GARY LEE LIEBEL, Defendant and Appellee.

No. 30169-a-SRJ

Supreme Court of South Dakota

June 26, 2024

CONSIDERED ON BRIEFS AUGUST 29, 2023

APPEAL FROM THE CIRCUIT COURT OF THE THIRD JUDICIAL CIRCUIT CODINGTON COUNTY, SOUTH DAKOTA THE HONORABLE CARMEN MEANS JUDGE

TIM HOGANBRIAN ZIELINSKI OF RIBSTEIN & HOGAN LAW FIRM BROOKINGS, SOUTH DAKOTA ATTORNEYS FOR PLAINTIFF AND APPELLANT.

MELISSA E. NEVILLE OF BANTZ, GOSCH & CREMER, LLC ABERDEEN, SOUTH DAKOTA ATTORNEY FOR DEFENDANT AND APPELLEE.

JENSEN, Chief Justice

[¶1.]Julie and Gary Liebel married in 2010 and divorced in 2022.The circuit court granted Gary a divorce from Julie on the grounds of adultery and applied a premarital agreement (Agreement) signed by the parties to divide their assets.Julie appeals, arguing the court erred in applying the Agreement to the property division in the divorce and abused its discretion in classifying and distributing the parties' property.We affirm.

Factual and Procedural Background

[¶2.]The parties first met in 2004 at a bar and restaurant Gary owned in Florence, South Dakota, and began dating in 2008.Both had been married and divorced twice.Gary has two adult children, while Julie does not have children.Julie resided in Watertown, South Dakota, where she owned and operated a travel agency.She moved into Gary's Florence home after they began dating.

[¶3.]Because of their prior marriages and the assets Gary had accumulated, the parties discussed a premarital agreement before marrying.Each prepared personal financial statements and met with attorney John Foley to draft the Agreement.^[1] The Agreement named the parties identified their respective personal financial statements which were attached as exhibits, and indicated their plans to marry.The Agreement stated that "it is mutually desired and agreed by the parties that the assets of each of the parties shall remain separate and be subject to the sole control and use of its owner as well after as previous to the solemnization of said marriage," and included the following terms:

1.That the estate of [Gary] shall remain and be his separate property, subject entirely to his individual control and use the same as if he were unmarried; and that [Julie] shall not acquire by force of the contemplated marriage, for herself, her heirs, her assigns or creditors, any interest in his property or estate, or right to the control thereof, or any interest in the income, increase, rents, profits or dividends arising therefrom; and it is further agreed that any property that [Gary] may hereafter acquire or become entitled to shall be owned and held by him as though he had acquired it before the solemnization of said marriage; and [Julie] hereby agrees in consideration of the contemplated marriage and of the covenants of [Gary] herein set forth, that she will waive, release and relinquish unto [Gary] all right to the use and control of his separate property and estate and the income therefrom; and further agrees that [Gary] shall have the right at all times to dispose of any part or all of his separate property and estate by deed, will or otherwise, on his sole signature, hereby ratifying and consenting on her part to any and all such disposition of his said property or estate.

2.[This paragraph recites reciprocal terms as to Julie's property.]

3.The parties hereto expressly further agree and covenant with each other that on the death of either, the survivor shall not have and will not assert any claims, interest, estate or title, under the laws of any state, because of such survivorship, in or to the property, real, personal or mixed, or life insurance, of which such deceased party may die seized or possessed, except as hereinafter provided[.]. . .

4.It is also understood that the parties may subsequently wish to place a portion of their property in joint tenancy with right of survivorship.In the event that any such property is placed in [the name of the parties,] as joint tenants with right of survivorship, it is understood and agreed that such joint tenancy property may vest in the survivor upon the death of one of the parties.In other words, this agreement is not intended to limit the right of either of the parties to place property in joint tenancy or to make gifts to one another if such actions are the result of the act of one or both of the named parties to this agreement; if this paragraph should be in conflict with any other provision in this agreement, this paragraph shall govern.

6.The parties hereto have read the above agreement, and each of them knows the contents thereof and fully understands all of the terms and conditions contained herein.

9.That the parties have consulted and have been advised of their rights, under the laws of the State of South Dakota.

The parties signed the Agreement on April 7, 2010.They were married on April 20, 2010.

[¶4.]Around the time the parties married, they moved into a rental property in Watertown.The following year, Gary deposited funds he had accumulated prior to the marriage into a joint checking account.Gary also received approximately $25,000 from the sale of a home he owned prior to the marriage that was deposited into the joint account.The parties used these premarital funds to purchase an undeveloped lot in Watertown in both their names as joint tenants with rights of survivorship and began to build a home.Gary also paid some of the contractors working on the construction of the home with premarital funds.Both parties executed a construction loan and a ten-year mortgage in the amount of $150,000 to finish the home.They moved into the home in 2011.

[¶5.]Gary testified that nearly all the monthly household expenses were paid from the joint account and that he deposited all the funds into the joint account from premarital funds or his wages during the marriage.He further testified that he deposited funds each month to pay the home mortgage from monies received on a contract for deed from the sale of a bar and restaurant he owned prior to the marriage.Julie maintained a separate account where she deposited her earnings.She testified that she purchased groceries and paid some of the utilities from this account.

[¶6.]In December 2013, Gary received the balance of $177,000 owed on the contract for deed from the sale of his restaurant and bar he owned prior to the marriage.From this amount, Gary paid the remaining balance owed on the home mortgage in the amount of $125,000.He used the remaining funds to purchase one or more vehicles.The parties executed a warranty deed on June 24, 2016, taking the home out of joint tenancy and conveyed an undivided one-half interest to Julie and the other one-half to a trust Gary created for his grandchildren.

[¶7.]Julie filed for divorce on August 11, 2021, on the grounds of extreme cruelty.Shortly after filing for divorce, Julie traveled to the Sturgis Motorcycle Rally with a former coworker she referred to as her friend.She had made a hotel reservation but instead stayed with her friend in his cabin.Gary filed an answer and counterclaim seeking a divorce on the grounds of extreme cruelty and adultery.

[¶8.]On March 15, 2022, Julie filed an action for a protection order against Gary.She had been living at her parents' residence, and claimed Gary entered the attached garage of her parents' home without permission and left a note on a toolbox.Gary shared a video with police that appeared to show that the note had already been on the toolbox when Julie was moving her belongings out of the marital home.Julie withdrew her request for a protection order just before the scheduled hearing; however, in the divorce proceeding, the court awarded Gary the attorney fees he had incurred in the protection order proceeding.

[¶9.]With respect to property division, Julie argued that the marital home was marital property under the terms of the Agreement and that the Agreement was unenforceable as to other property.Julie also claimed that she did not voluntarily enter into the Agreement and that it was unconscionable.Notwithstanding the extensive personal financial statements included with the Agreement, she claimed to have met with Foley only one time.She contends that during this meeting she was instructed to sign the Agreement and financial statement without having had an opportunity to review them.She also claimed that Gary told her he would not marry her if she did not sign.Julie further argued that the parties did not intend for the Agreement to apply in the event of divorce because it did not mention divorce.Julie did not seek alimony.

[¶10.]Gary argued that the Agreement was valid and enforceable.He testified that they both met with Foley three times before executing the Agreement and that Foley was Julie's family attorney and represented them both with respect to the Agreement.Gary also maintained that the parties intended the Agreement to apply to the division of assets in the event of divorce and that it was because of their prior marriages that they entered into a premarital agreement.He argued that "[t]he fact that this marriage is ending in divorce should not make separate property joint property" when the Agreement "does not explicitly mention divorce, separation, alimony, or property settlement, but repeatedly references separate property, the parties' respective estates, and their marriage."He alternatively argued that even if the Agreement did not apply, the circuit court should exclude the property that each party owned prior to the marriage.

[¶11.]At the time of trial, Julie, age 57, continued to operate her travel business part-time out of her home and worked at a bank.Gary, ten years Julie's...