Riopel v. Riopel
| Decision Date | 17 January 2012 |
| Docket Number | A11-445 |
| Parties | In re the Marriage of: Michael William Riopel, petitioner, Respondent, v. Amy Preston Riopel, Appellant. |
| Court | Minnesota Court of Appeals |
This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2010).
Affirmed in part, reversed in part, and remanded
Washington County District Court
D. Patrick McCullough, Kelly Eull, Justin Terbeest, McCullough & Associates, P.A., St. Paul, Minnesota (for respondent)
Steven C. Pundt, Pundt Law Firm, Minneapolis, Minnesota (for appellant)
Considered and decided by Minge, Presiding Judge; Ross, Judge; and Huspeni, Judge.
UNPUBLISHED OPINION
This appeal involves a challenge to the district court's division of property following the divorce of Michael Riopel and Amy Riopel. The main issue of contention is the ownership of the Riopel family farm, a nearly 200-acre dairy farm. Appellant Amy Riopel argues that the district court erroneously determined that the Riopel farm was nonmarital property and that it abused its discretion in distributing the parties' marital property. In the alternative, she argues that if the Riopel farm is Michael Riopel's nonmarital property, the district court abused its discretion by failing to apportion it between the parties to prevent unfair hardship. She also contests the district court's findings regarding spousal maintenance and attorney fees. Because the district court properly concluded that the Riopel farm is Michael Riopel's nonmarital property, we affirm its property division and its finding that Amy Riopel did not suffer an unfair hardship. We also affirm the district court's conclusion that each party should pay their own attorney fees and costs. But because Amy Riopel has a need for spousal maintenance that Michael Riopel is currently unable to pay, we reverse and remand for the district court to reserve the issue of future maintenance.
In the fall of 1996, Catherine Riopel contemplated a sale of the Riopel family farm, located in Hugo, to her son, Michael Riopel. The Riopel farm has been in the Riopel name since 1906, and Michael Riopel has worked as a dairy farmer on the family farm his entire life. On November 21, 1996, Catherine Riopel received an appraisal of$415,000 for the approximately 181 acres of farm property. After receiving the appraisal, on December 31, 1996, Michael Riopel entered into a purchase agreement with his mother to transfer ownership of the farm. Michael Riopel and his mother re-codified the purchase agreement giving him the right to buy the farm on February 28, 1997, and the agreement stated in part that "[Catherine Riopel] has deeply felt feelings and desires [that] the [Riopel farm] remain in the family and be actively farmed as a working farm so that it can be determined to be a century farm . . . ."
Despite the existing purchase agreement, less than a month later Michael Riopel and Catherine Riopel entered into a lease agreement dated March 18, 1997 that charged Michael $1,125 per month in rent to lease the farm and also gave him the right to purchase the farm for $192,800. The lease agreement referenced a $10,000 down-payment that was given as a gift from Catherine Riopel to Michael Riopel. Michael understood that each subsequent year he would receive a gift of $10,000 to be applied toward the remaining balance of the $192,800 purchase price.
Michael Riopel and Amy Riopel were married on October 20, 1999, and they made their living operating the dairy farm. In 2002, the parties made a plan to purchase the farm for $192,800 from Catherine Riopel. Amy Riopel's parents, Arnold and Rusk Anderson, loaned the parties $213,000 and in return the parties signed a promissory note and a mortgage in their favor. The mortgage required interest-only payments for a number of years along with a final balloon payment. Prior to the purchase, the parties hired an attorney to review the abstracts of title and do a title opinion. In order to convey the entire farm property, the attorney revised the legal description to add approximately35 more acres. The purchase closed in June 2002, and Catherine Riopel executed a full warranty deed to convey full title to the farm to the parties as joint tenants.
Catherine Riopel reported the entire purchase price on her 2002 income tax return as the sale price. There is no evidence that she ever filed a gift tax return for the sale price of the farm. Catherine Riopel died on June 26, 2008. After Michael Riopel and Amy Riopel purchased the farm in 2002, they paid monthly interest payments to Amy Riopel's parents pursuant to the promissory note and mortgage from their farm income. A few years later, the Riopel farm was targeted as a prime area for development and, prior to the collapse of the real estate market, a purchase agreement for approximately $16 million was executed between the parties and the Beard investment group to sell the property. The parties were represented by Jeffrey Anderson, an attorney and Amy Riopel's brother, in the negotiations for the potential sale of the farm. Although the potential buyers paid numerous extension fees totaling nearly $350,000 to extend the closing date, the contract has never been finalized and is now in default.
Amy Riopel was diagnosed with bipolar disorder with chemical dependency after suffering a major mania event in 2007. She was admitted to Fairview Riverside hospital and received inpatient psychiatric treatment for a month, and was then transferred to a different in-patient program. Following that in-patient program she participated in a 12-week aftercare program. She continues to see a psychiatrist for treatment and for purposes of adjusting her medication.
Michael Riopel filed for divorce on May 28, 2009. At trial Amy Riopel argued that the farm was a marital asset because the law presumes that assets purchased duringthe marriage are marital property. Michael Riopel argued that the farm was his nonmarital asset because his mother had made a gift to him of the difference between the purchase price and the actual value of the farm, or, in the alternative, that he had a pre-marriage ownership interest in the farm that made it his nonmarital asset. A neutral appraisal of the farm determined that the property has a current fair market value of $4,570,000 and had a fair market value of $1,500,000 at the date of the parties' marriage.
The district court found that the testimony and exhibits during the trial showed that Catherine Riopel put into place a succession plan wherein Michael would purchase the farm and its acreage at a value far below the fair market price based upon the appraisal done in 1996. This plan, which included the December 31, 1996 purchase agreement (re-codified on February 28, 1997), was then substituted by the land lease with the same purchase terms on March 18, 1997. Because of this succession plan, the district court held that the change in title that occurred after the parties' marriage was only a consummation of the succession plan under the terms of the agreement put into place prior to the parties' marriage.
In finding that Catherine Riopel wished to make a gift to Michael Riopel, the district court focused on the fact that she knew the 1997 fair market value of the farm was $415,000 and she allowed her son to purchase the farm for 54% of this value, while gifting him the remaining 46% of the value. She also left her son with the understanding that every year he would receive $10,000 to reduce the amount of the purchase price he owed, and she initially gave him $10,000 to cover the required down-payment. The court also noted that Catherine Riopel had expressed her desire that her son stay on the farmand that the farm stay in the Riopel family to become a century farm. These factors, among others, led the district court to conclude that based on a preponderance of the evidence Michael overcame the presumption that the Riopel farm was marital property.
Because the farm was a nonmarital asset, in order to determine the division of the parties' property the court subtracted the original purchase price from the fair market value as of the date of the marriage, ($1,500,000 - $192,800) for a total of $1,307,200. The court then divided this total ($1,307,200) into the fair market value as of the date of marriage ($1,500,000) and, adopting a submission introduced by Michael Riopel's expert, found that Michael Riopel had a nonmarital interest of 87.1446% while the parties together had a marital portion of 12.8534%, which was apportioned equally between them at 6.4267%. The district court noted that its decision was equitable because of the relatively short length of the parties' marriage in comparison to the length of the farm's existence in the Riopel family.
The Riopel farm real estate, valued at $4,570,000, was awarded to Michael Riopel, and the court also awarded him the cattle, valued at $60,600 (all marital) and the farm equipment, valued at about $208,125 ($76,650 nonmarital, $131,475 marital). Amy Riopel was awarded a 1999 Chevrolet Suburban valued at $2,000 with an encumbrance of $927 remaining on an auto loan from River Bank. Michael Riopel received a 1998 Jeep Cherokee valued at $1,100 and a 1995 Ford F350 valued at $1,675. Amy Riopel was awarded $369,176.18 in the form of a lien against the Riopel farm for her approximately six-percent interest in the homestead and farm real estate and for her marital portion of the cattle and farm equipment. The court did not order the farm or anypart of it to be sold to pay Amy Riopel's lien, but it did order Michael Riopel to satisfy her lien within six months of the date of entry of the judgment and decree.
Amy Riopel requested an award of spousal maintenance because she claimed that she lacked the resources to pay her reasonable living expenses. She was formerly employed as a teacher by the Minneapolis school district...
To continue reading
Request your trial