Osdoba v. Kelley-Osdoba

• Citation: 913 N.W.2d 496
• Decision Date: 06 June 2018
• Docket Number: 28103
• Parties: Daniel OSDOBA, Plaintiff and Appellant, v. Amy B. KELLEY-OSDOBA, Defendant and Appellee.
• Court: South Dakota Supreme Court

913 N.W.2d 496

Daniel OSDOBA, Plaintiff and Appellant,

v.Amy B. KELLEY-OSDOBA, Defendant and Appellee.

28103

Supreme Court of South Dakota.

CONSIDERED ON BRIEFS ON JANUARY 8, 2018

OPINION FILED June 6, 2018

GREGORY T. BREWERS of Strange, Farrell, Johnson & Brewers, P.C., Sioux Falls, South Dakota, Attorneys for plaintiff and appellant.

KRISTINE K. O’CONNELL, ARON A. HOGDEN of Woods, Fuller, Shultz & Smith, P.C., Sioux Falls, South Dakota, Attorneys for defendant and appellee.

GILBERTSON, Chief Justice

[¶ 1.] This appeal concerns the divorce of Daniel Osdoba from Amy Kelley-Osdoba. At the conclusion of the divorce proceedings, the circuit court accepted Amy’s valuation of the parties’ residence at $574,340, which differed from Daniel’s valuation of $611,000 due to a 6% discount that accounted for realtor fees. The circuit court also included Amy’s student loans in the marital corpus. The student loans were incurred while Amy attended medical school before the parties were married. Further, the circuit court ordered Amy to make a cash-equalization payment to Daniel, but it allowed Amy to make the payment over time with an interest rate of 4%. Daniel was also awarded alimony upon the condition that he annually release his medical and counseling records to Amy. Finally, the circuit court denied Daniel’s request for attorney fees. Daniel appeals. We affirm in part, reverse in part, and remand.

Facts and Procedural History

[¶ 2.] Daniel and Amy met while Amy was attending medical school in Iowa City, Iowa. Before that time, Daniel was working in Minneapolis after completing his Associate’s Degree in Photographic Arts and Graphic Design. Daniel eventually moved in with Amy but had a hard time finding work in Iowa City. Daniel eventually found work in a restaurant. Daniel and Amy were married on June 5, 2004, after Amy’s last year of medical school. Within a few weeks of being married, Daniel and Amy moved to Indianapolis, Indiana, where they would stay for the next four years as Amy completed her residency program.

[¶ 3.] During Amy’s residency program, Daniel worked as a cook and a grocery-store stocker as he had a hard time finding a job in his field of study. Amy gave birth to twin boys during the third year of her residency program. After the birth of the twins, Daniel became a stay-at-home dad.

[¶ 4.] In 2011, Amy accepted a job at Sanford in Sioux Falls, South Dakota, as an ob-gyn specialist. The family moved to Sioux Falls from Des Moines, Iowa, where Amy was previously working after completing her residency program. While in Sioux Falls, Amy gave birth to their third son on August 16, 2012. Daniel continued staying at home and caring for the children at the couple’s new home in Sioux Falls.

[¶ 5.] On January 26, 2015, Amy petitioned the circuit court for a temporary protection order after Daniel exhibited threatening behavior. The circuit court granted the temporary protection order. Daniel filed for divorce two days later, and Amy filed a counterclaim seeking the same. The court ordered Daniel to undergo a psychological evaluation, which resulted in a recommendation for psychotherapy and a dismissal of the temporary restraining order. However, Amy was granted a second temporary restraining order on October 20, 2015, after Daniel exhibited more threatening behavior. The circuit court concluded that Daniel’s mental-health issues contributed to the failing marriage.

[¶ 6.] Subsequently, Daniel and Amy’s divorce trial was held November 8–9, 2016. At the conclusion of the trial, the circuit court made partial rulings from the bench. The circuit court issued a decree of divorce for Daniel and Amy based on irreconcilable differences. The court also divided property, awarded Daniel alimony, and set child support. On November 28, 2016, the circuit court issued a letter decision that supplemented its bench ruling. On December 30, 2016, the circuit court entered its final judgment and decree of divorce.

[¶ 7.] Under its rulings relevant to this appeal, the circuit court accepted Amy’s valuation of the parties’ home at $574,340. This valuation was determined by taking a 6% discount for realtor fees from Daniel’s proposed valuation of $611,000. The circuit court also included Amy’s student-loan debt into the marital corpus that she had incurred during medical school. After division of the property, the circuit court ordered Amy to pay a cash-equalization payment of $45,364 to Daniel. However, the circuit court allowed Amy the option to make the equalization payment over 48 months with 4% interest. The circuit court also awarded Daniel alimony on the condition that Daniel provide an annual release of his medical and counseling records to Amy. Daniel will receive decreasing alimony payments starting at $3,000 a month and ending at $1,000 a month over 14 years. Finally, the circuit court denied Daniel’s request for attorney fees.

[¶ 8.] Daniel appeals, raising the following issues of alleged error:

1. Whether the circuit court erred in its valuation of the marital residence.

2. Whether the circuit court abused its discretion in including Amy’s student-loan debt in the marital estate.

3. Whether the circuit court abused its discretion in allowing Amy the option of making the equalization payment over time with 4% interest.

4. Whether the circuit court abused its discretion in requiring that Daniel annually release his medical and counseling records to Amy as a condition of receiving alimony.

5. Whether the circuit court abused its discretion in declining to award Daniel his attorney fees.

Standard of Review

[¶ 9.] We review a circuit court’s factual findings, which includes the valuation of property involved in a divorce proceeding, under the clearly erroneous standard of review. Johnson v. Johnson , 2007 S.D. 56, ¶ 16, 734 N.W.2d 801, 806 ; accord SDCL 15–6–52(a). "We will overturn the [circuit] court’s findings of fact on appeal only when a complete review of the evidence leaves [this] Court with a definite and firm conviction that a mistake has been made." Miller v. Jacobsen , 2006 S.D. 33, ¶ 19, 714 N.W.2d 69, 76.

[¶ 10.] A circuit court’s determinations in the division of property and on the issue of spousal support are reviewed under an abuse of discretion standard. MacKaben v. MacKaben , 2015 S.D. 86, ¶ 9, 871 N.W.2d 617, 622. "A circuit court’s ruling on the allowance or disallowance of costs and attorney fees is also reviewed by this Court under the abuse of discretion standard of review." Terca v. Terca , 2008 S.D. 99, ¶ 18, 757 N.W.2d 319, 324. "An abuse of discretion occurs when discretion is exercised to an end or purpose not justified by, and clearly against, reason and evidence." Id. (quoting Miller , 2006 S.D. 33, ¶ 18, 714 N.W.2d at 76 ).

Analysis and Decision

[¶ 11.] 1. Whether the circuit court abused its discretion in its valuation of the marital residence.

[¶ 12.] Daniel first contends the circuit court erred in accepting Amy’s valuation of the marital residence at $574,340. He argues that the circuit court should have valued the residence at $611,000 and that the circuit court arbitrarily applied a 6% discount related to realtor fees.¹

[¶ 13.] "On review of a property division, this [C]ourt will not attempt to place valuation on the assets because that is a task for the [circuit] court as the trier of fact." Johnson , 2007 S.D. 56, ¶ 37, 734 N.W.2d at 810 (quoting Geraets v. Geraets , 1996 S.D. 119, ¶ 7, 554 N.W.2d 198, 200 ). "We do not require exactitude in the [circuit] court’s valuation of assets; it is only necessary that the value lie within a reasonable range of figures." Id. ¶ 37, 734 N.W.2d at 810–11. In other words, the circuit court is not obligated to accept either party’s proposed valuation, "but the value must be within the range of evidence presented to the court." Hill v. Hill , 2009 S.D. 18, ¶ 14, 763 N.W.2d 818, 823.

[¶ 14.] Here, Daniel introduced evidence that the appraised value of the residence was $611,000. Likewise, Amy agreed with Daniel’s appraised value, but she requested a 6% deduction from that value in contemplation of sales commission. Both parties’ positions were presented to the court via "court’s joint exhibit 1." It is apparent from the record that the circuit court accepted the appraised value Daniel seeks, but deducted the 6% requested by Amy. The court in essence accepted the net value of the residence, rather than the market value Daniel proposed. We have stated that "even if sale of the home [was] not immediately contemplated, it [is] reasonable for the [circuit] court to consider the net value of the house to the party who received it." Abrams v. Abrams , 516 N.W.2d 348, 351 (S.D. 1994). "Valuation is nothing more than a function of what the home is worth if it were to be presently sold; therefore, the costs of achieving that value should be considered." Id. at 350 (quoting Zeigler v. Zeigler , 365 Pa.Super. 545, 530 A.2d 445, 447 (1987) ).

[¶ 15.] Nonetheless, Daniel disagrees with the 6% deduction and challenges the presence of any evidence necessary for its use. However, Daniel never objected to the reasonableness of the 6% value at trial; instead, he only took issue with the value of the residence to which the deduction would be applied and whether the deduction was appropriate at all.² See id. at 351 (noting that the husband did not present evidence to dispute the amount of the closing costs). The circuit court correctly articulated the issue by stating, "I mean, my view of this question is, everybody is in agreement that the property is worth $611,000.00. The argument is whether or not it’s appropriate to deduct the sale’s [sic] commission." Because Daniel did not object to the value of the 6% deduction, he waives the issue on appeal. See In re M.S. , 2014 S.D. 17, ¶ 17 n.4, 845 N.W.2d 366, 371 n.4 (recognizing it is the standard policy of this Court that a party waives an issue on appeal if they fail to argue it at the circuit court below). As it was appropriate for the...