Rebel v. Rebel, 20150066.

• Decision Date: 20 July 2016
• Docket Number: No. 20150066.,20150066.
• Citation: 882 N.W.2d 256
• Parties: Helen REBEL, Plaintiff and Appellant v. Rodney Allen REBEL, Defendant and Appellee.
• Court: North Dakota Supreme Court

882 N.W.2d 256

Helen REBEL, Plaintiff and Appellant

v.Rodney Allen REBEL, Defendant and Appellee.

No. 20150066.

Supreme Court of North Dakota.

July 20, 2016.

Thomas M. Jackson, Bismarck, N.D., for plaintiff and appellant.

Gary D. Ramsey, Dickinson, N.D., for defendant and appellee.

VANDE WALLE, Chief Justice.

[¶ 1] Helen Rebel appealed from an amended divorce judgment entered after remand distributing the parties' marital property. We conclude the district court adequately explained its disparity in distributing the parties' marital property and the distribution is not clearly erroneous. We further conclude the court did not abuse its discretion in awarding interest on Rodney Rebel's delayed cash payments to Helen Rebel. We affirm.

I

[¶ 2] Helen and Rodney Rebel were married in 1989 and owned a farming and ranching operation. In 2010, Helen Rebel sued for divorce. They had two children, one of whom was a minor at the time of the divorce. After an initial trial, Helen Rebel appealed a judgment granting her a divorce from Rodney Rebel, awarding her primary residential responsibility and child support for the minor child, and distributing their marital property.

[¶ 3] This Court affirmed the district court's child support award but reversed and remanded its property distribution, holding the court had not adequately articulated reasons justifying its disparity in favor of Rodney Rebel. Rebel v. Rebel, 2013 ND 116, ¶ 15, 833 N.W.2d 442. In remanding the case, a majority of this Court explained:

The district court articulated some reasons for granting an unequal distribution. But, the fact that the land was acquired on “very generous terms” from Rodney Rebel's parents does not explain giving the greater distribution to Rodney Rebel when the land was acquired during the marriage, both parties were purchasers, and the district court found “[b]oth parties' income and effort contributed to the increase in the marital estate.” See Ulsaker v. White, 2006 ND 133, ¶ 12, 717 N.W.2d 567 (“[T]he origin of property is not the sole or, necessarily, the controlling factor under the Ruff–Fischer guidelines.”) (citation omitted). The distribution was based on an assumption that the difference was $356,769.00. The district court has not adequately articulated reasons justifying a greater disparity in favor of Rodney Rebel. Moreover, by failing to either award interest or to compute the present value of the delayed payments, the actual disparity is greater than the $356,769.00 identified by the district court.

Because the district court has not adequately articulated reasons justifying its calculated $356,769.00 disparity in favor of Rodney Rebel, and Helen Rebel “receive[d] property which is clearly worth less than the value ascribed to it by the trial court, [we] cannot determine whether the resulting property distribution is equitable.” Welder [v. Welder] , 520 N.W.2d [813, 816 (N.D.1994)] ; see also Steckler [v. Steckler] , 519 N.W.2d [23, 25 (N.D.1994)] ; Sateren [v. Sateren] , 488 N.W.2d [631, 633 (N.D.1992)] ; Lucy [v. Lucy] , 456 N.W.2d [539, 542 (N.D.1990) ]. We remand the case to the district court to reconsider the property distribution.

Rebel, at ¶¶ 14–15. We therefore remanded to the district court to adequately explain any disparity favoring Rodney Rebel and to address its failure either to award interest or to compute the present value of the delayed payments to Helen Rebel.

[¶ 4] On remand the case was assigned to a different judge because the previous judge had retired. The district court permitted the parties to present additional evidence regarding valuation of the property at a three-day trial. After that trial, the court found the parties' net marital estate as of May 2, 2012, the date of their divorce, was $1,994,086.30. The court found the value of the real property was $1,302,000, valuing the farmland at $1,210,000 and the marital home at $92,000. The court also found the value of the livestock was $569,750, of the crops and feed was $135,471, and of the farm machinery was $319,065.

[¶ 5] The district court allocated $279,832.17 in assets and $13,111 of debt, for a net award of $266,721.17, to Helen Rebel, mainly consisting of the marital home, not subject to a mortgage, and other monetary assets. The court allocated $2,281,077.50 in assets and $553,712.37 of debt, for a net award of $1,727,365.13, to Rodney Rebel, mainly consisting of the farmland and assets related to the farm operation. Based on these values, the district court recognized that if it were to make an “equal” division of the property, Rodney Rebel would “owe” Helen Rebel $730,321.98. The court found, however, that $410,207 constituted a fair and equitable cash payment under the circumstances of this case.

[¶ 6] In the initial divorce judgment, the previous judge had awarded Helen Rebel $512,534.78, of which Rodney Rebel had a balance owing of $410,207 at the time of the remand. On remand, the court reaffirmed and adopted this remaining amount. The court found the property division was not unequal or inequitable because “if any higher cash payment amount is ordered, Rodney's farm operation will not cash flow,” and “this would certainly lead to liquidation and the adverse tax consequences and sale costs associated with liquidation.” The court also found that 4.5 percent was a fair and appropriate interest rate and that Rodney Rebel could admittedly “cash flow” an annual payment of $33,607.85. The court therefore ordered him to make annual payments of about $33,530 to Helen Rebel, allowing him seventeen years to pay the $410,207 cash award with a 4.5 percent interest rate. The court also ordered that “[n]either party shall be required to pay any spousal support to the other now or[ ] at any time in the future since[ ] the issue was never raised on appeal.” An amended judgment was entered distributing the parties' marital property and assigning the debts.

II

[¶ 7] Section 14–05–24(1), N.D.C.C., requires a district court make an equitable division of the parties' marital estate in a divorce action. “In making an equitable distribution of marital property, a court must consider all of the parties' assets.” Rebel, 2013 ND 116, ¶ 7, 833 N.W.2d 442 (quoting Kosobud v. Kosobud, 2012 ND 122, ¶ 6, 817 N.W.2d 384 ). After including the parties' marital assets and debts in the marital estate, the court considers the Ruff–Fischer guidelines in distributing the assets:

[T]he respective ages of the parties, their earning ability, the duration of the marriage and conduct of the parties during the marriage, their station in life, the circumstances and necessities of each, their health and physical condition, their financial circumstances as shown by the property owned at the time, its value at the time, its income-producing capacity, if any, whether accumulated before or after the marriage, and such other matters as may be material.

Rebel, at ¶ 7 (quoting Kosobud, at ¶ 6).

[¶ 8] The district court is not required to make specific findings on each Ruff–Fischer factor but must explain the rationale for its decision. Kostelecky v. Kostelecky, 2006 ND 120, ¶ 13, 714 N.W.2d 845. A long-term marriage supports an equal property distribution. Wagner v. Wagner, 2007 ND 101, ¶ 11, 733 N.W.2d 593. However, a property distribution need not be equal to be equitable, and the district court must explain any “substantial disparity” in its distribution. Rebel, 2013 ND 116, ¶ 7, 833 N.W.2d 442. In Rebel, at ¶ 8, we also discussed offsetting periodic payments to preserve the family farm:

“We have upheld the distribution of farm assets to one spouse with an offsetting monetary award to the other spouse.” Gibbon v. Gibbon, 1997 ND 210, ¶ 7, 569 N.W.2d 707 (citation omitted). But, “[w]e have consistently held that periodic cash payments without interest awarded as part of a property distribution must be discounted to present value in determining whether or not the distribution is equitable.” Welder v. Welder, 520 N.W.2d 813, 816 (N.D.1994) (quotation and citations omitted); see also Horner v. Horner, 2004 ND 165, ¶ 18, 686 N.W.2d 131 ; Steckler v. Steckler, 519 N.W.2d 23, 25 (N.D.1994) ; Sateren v. Sateren, 488 N.W.2d 631, 633 (N.D.1992) ; Lucy v. Lucy, 456 N.W.2d 539, 542 (N.D.1990) ; Pankow v. Pankow, 371 N.W.2d 153, 157–58 (N.D.1985).

[¶ 9] The district court's distribution of property presents a finding of fact, which we will not reverse unless the court's findings are clearly erroneous. Rebel, at ¶ 9. The district court's choice between two permissible views of the evidence is not clearly erroneous. Id. On appeal, we do not reweigh conflicts in the evidence and will not reverse because we may have viewed the evidence differently. Id. We give “due regard” to the district court's opportunity to judge the witnesses' credibility. Id.

III

[¶ 10] Helen Rebel argues the district court erred in its distribution of the marital estate by making an inequitable allocation of the property to Rodney Rebel. She essentially argues the court erred as a matter of law when it considered liquidation of the assets to reduce Rodney Rebel's monetary payments to pay her. She further contends the court erred in its factual findings that there was evidence a liquidation would have to occur if a higher cash payment were required.

[¶ 11] Generally, “North Dakota law does not mandate a set formula or method to determine how marital property is to be divided; rather, the division is based on the particular circumstances of each case.” Holden v. Holden, 2007 ND 29, ¶ 10, 728 N.W.2d 312. We have recognized on numerous occasions “the importance of preserving the viability of a business operation like a family farm,” Eberle v. Eberle, 2010 ND 107, ¶ 20, 783 N.W.2d 254 (quoting Gibbon v. Gibbon, 1997 ND 210, ¶ 7, 569 N.W.2d 707 ), and “liquidation of an ongoing farming operation or business is ordinarily a last resort.” Eberle, at ¶ 20 (quoting Gibbon, at ¶ 7); see also Holden, at ¶ 14; Kostelecky, 2006 ND 120, ¶ 13, 714...