Reed v. Reed

Decision Date17 January 2002
Docket NumberNo. 26307.,26307.
Citation44 P.3d 1108,137 Idaho 53
PartiesKatherine L. REED, Plaintiff-Respondent-Cross Appellant, v. William REED, Defendant-Appellant-Cross Respondent.
CourtIdaho Supreme Court

Pike & Smith, P.A., Idaho Falls, for appellant-cross respondent. Edward W. Pike argued.

Swafford Law Office, Chtd., Idaho Falls, for respondent-cross appellant. Ronald L. Swafford argued.

KIDWELL, Justice.

This case arises from a divorce action filed by Katherine L. Reed against William Reed. The parties eventually stipulated to a divorce on the ground of irreconcilable differences. The contested issues on appeal revolve around the magistrate judge's characterization of various items of property as community or separate, his valuation of various items of property, his award of separate maintenance to Katherine, and the district court's dismissal of Katherine's cross appeal. We affirm the decision of the magistrate division and reverse the decision of the district judge.

I. FACTS AND PROCEDURAL BACKGROUND

The plaintiff (Katherine) and the defendant (William) were married on August 17, 1972. They have one child, who was born on June 6, 1983. During the course of their marriage, the parties acquired substantial assets and incurred substantial debt. They were the owners of several business interests, including a watercraft sales business, a recreational vehicle sales business, and various rental properties. William alleges that during the marriage he made substantial contributions of his separate property to community assets. The alleged separate property sources of the contributions included a trust account of which William is a beneficiary, disbursements from a partnership involving members of William's family, gifts and inheritance.

On October 21, 1996, the magistrate judge issued temporary orders providing for child custody, spousal maintenance, maintenance of debts and business interests, and an order of mediation. A trial was held on February 26 and 27, March 2, and August 10 and 11 of 1998. On August 28, 1998, the magistrate judge entered a Partial Judgment and Decree of Divorce, granting the parties a divorce on the ground of irreconcilable differences and ordering the continuing applicability of the temporary orders. On October 26, 1998, the magistrate judge entered Findings Of Fact And Conclusions Of Law and an Order Supplementing Decree Of Divorce, in which he determined the community or separate character of various items of property, valued the property, divided the property substantially equally, ordered the payment of separate maintenance from William to Katherine, and entered orders regarding the custody and support of their child.

On October 30, 1998, William filed a notice of appeal with the district court, raising various assignments of error. He appealed the magistrate judge's exclusion of various items of evidence, his characterization, valuation and division of various items of property, and his award of maintenance to Katherine. On November 9, 1998, Katherine filed a "Motion for Reconsideration and/or Motion to Amend Findings of Fact and Conclusions of Law and/or Motion to Alter or Amend Judgment" with the magistrate division. The judge entered an order substantially denying Katherine's motion on December 17, 1998, and Katherine filed a notice of cross appeal in the district court on December 28, 1998. The district judge dismissed Katherine's appeal as untimely under I.R.C.P. 83(e). The district judge remanded the case for more factual findings, because he determined that the magistrate judge's findings of fact regarding the characterization and value of various items of property were insufficient to facilitate appellate review. Both parties appeal various decisions of the district and magistrate judges.

II. STANDARD OF REVIEW

This Court reviews the decisions of the magistrate division independently, with due regard for the decision of the district court acting in its appellate capacity. Stevens v. Stevens, 135 Idaho 224, 227, 16 P.3d 900, 903 (2000).

A trial court's findings of fact which are based upon substantial and competent, although conflicting, evidence will not be disturbed on appeal; which is to say the findings of fact will not be set aside unless clearly erroneous. DeChambeau v. Estate of Smith, 132 Idaho 568, 571, 976 P.2d 922, 925 (1999). The credibility and weight to be given evidence is in the province of the trial court, and this Court liberally construes the trial court's findings of fact in favor of the judgment entered. Bouten Constr. Co. v. H.F. Magnuson Co., 133 Idaho 756, 760, 992 P.2d 751, 755 (1999). However, when the issue is one of law, this Court exercises free review of the trial court's decision. Id.

III. ANALYSIS
A. The Magistrate Judge's Holdings Regarding William's Separate Property Claims Were Based Upon Substantial, Competent Evidence.

This is primarily a fact-driven dispute. William's arguments—regarding the admissibility of evidence, the sufficiency of his evidence to overcome the community property presumption, and the legality of giving Katherine a one-half interest in William's interest in a limited partnership—are all aimed at showing factual error in the magistrate judge's characterization, valuation, and division of property and supporting William's contention that he is entitled to reimbursement from the community for separate property contributions.

1. Evidentiary rulings.

William argues that the magistrate judge erred in excluding various documents he sought to admit in order to prove that he made separate contributions to some items of community property. Specifically, he argues that the magistrate judge erred in excluding Exhibits L, W, X, Y, Z and AA, as hearsay, excluding Exhibit I as unnecessarily cumulative or as a sanction for failure to comply with a pre-trial order, and excluding testimony of his accountant as unnecessarily cumulative.

The admissibility of evidence and the existence of facts upon which admissibility is conditioned are questions for the trial judge. I.R.E. 104(a)-(b). This Court reviews challenges to a trial court's evidentiary rulings under the abuse of discretion standard. Perry v. Magic Valley Reg'l Med. Ctr., 134 Idaho 46, 50-51, 995 P.2d 816, 820-21 (2000). To determine whether a trial court has abused its discretion, this Court considers whether it correctly perceived the issue as discretionary, whether it acted within the boundaries of its discretion and consistently with applicable legal standards, and whether it reached its decision by an exercise of reason. Id. As to all of the evidentiary rulings at issue in this appeal, the magistrate judge recognized the issues as being ones of discretion and reached a decision by exercise of reason.

Exhibits L, W, X, Y, Z and AA were documents that summarized other documents or information gathered over time. It is undisputed that these exhibits fell under the definition of hearsay, as they were all out-of-court statements offered to prove the truth of matters asserted therein. I.R.E. 801. If a hearsay summary was prepared in anticipation of litigation, its admissibility is properly analyzed under I.R.E. 1006; if the summarizing document was not so prepared, then the proper analysis is under the business records exception to the hearsay rule found in I.R.E. 803(6). City of Idaho Falls v. Beco Constr. Co., Inc., 123 Idaho 516, 523, 850 P.2d 165, 172 (1993). "The contents of voluminous writings . . . may be presented in the form of a chart, summary, or calculation. The originals, or duplicates, shall be made available for examination or copying, or both, by other parties at a reasonable time and place." I.R.E. 1006. Thus, in order for a summary to be admissible, the source documents being summarized must also be admissible, and the party offering the summary must fulfill the procedural requirement of making the source documents reasonably available to the opposing party. City of Idaho Falls, 123 Idaho at 524, 850 P.2d at 173.

Exhibits W, Z, and AA were summaries prepared in anticipation of litigation, and there was substantial and competent evidence to show that the source documents were either inadmissible hearsay, undisclosed prior to trial, or both. The magistrate judge did not abuse his discretion in excluding these exhibits.

Exhibits X and Y were not prepared in anticipation of litigation. Summarizing documents that are hearsay but that are not prepared in anticipation of litigation may nonetheless be admissible if they are:

A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness.

I.R.E. 803(6). The record contains evidence to support a ruling that the information contained in Exhibits X and Y was not transmitted by a person with personal knowledge, as is required under I.R.E. 803(6). The magistrate judge did not abuse his discretion in excluding these exhibits.

Exhibit I was a copy of the trust agreement for the William Reed Trust, offered to demonstrate the separate property nature of the trust and the contributions made from the trust to community property. It is unclear from the record whether the magistrate judge excluded this evidence as cumulative or as a sanction for failure to comply with a pre-trial order requiring the parties to serve upon each other a list of all exhibits to be used at trial. However, the trust agreement had no tendency to show whether the...

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