Sateren v. Sateren, 910393

• Decision Date: 19 August 1992
• Docket Number: No. 910393,910393
• Citation: 488 N.W.2d 631
• Parties: Erika SATEREN, a/k/a Erika D. Sateren, Plaintiff and Appellant, v. Elmer D. SATEREN, a/k/a Elmer Dale Sateren, Defendant and Appellee. Civ.
• Court: North Dakota Supreme Court

Page 631

488 N.W.2d 631

Erika SATEREN, a/k/a Erika D. Sateren, Plaintiff and Appellant, v. Elmer D. SATEREN, a/k/a Elmer Dale Sateren, Defendant and Appellee.

Civ. No. 910393.

Supreme Court of North Dakota.

Aug. 19, 1992.

Jon J. Jensen, of Pearson, Christensen, Larivee and Fischer, Grand Forks, for plaintiff and appellant.

Kevin B. Spaeth, of Spaeth, Thelen, Johnson & Dearstyne, Grand Forks, for defendant and appellee. Appearance by Mary Johnson, Third Year Law Student.

VANDE WALLE, Justice.

Erika Sateren appealed from a district court judgment granting her a divorce. She challenges the distribution of the marital property, and the denial of spousal support. We reverse and remand.

Erika and Elmer Sateren were married in 1962. During the course of the marriage they acquired a small farming operation. They separated in 1990, and Erika commenced this action for divorce. During the pendency of the divorce action Elmer has remained on the farm, while Erika has enrolled in college. Elmer was ordered to pay $300 per month in interim support.

The trial court valued the marital assets at $76,960, less debts of $20,449. The court awarded Erika a car, cattle, and stored grain valued at $7,790. The court awarded Elmer cattle, stored grain, the machinery, and all of the land, including the parties' homestead, for a total value of $69,170. Elmer was ordered to pay the marital debts of $20,449. In an attempt to offset the obvious disparity, the court ordered Elmer to pay Erika $300 per month for 60 months as part of the property distribution. The court calculated the property distribution as follows:

Erika Elmer

Property 7,790 69,170

Cash Settlement 18,000 (18,000)

Debts 20,449

------- --------

$25,790 $30,721

The trial court determined that Elmer's limited earnings, $9,003 in 1990, are heavily burdened by his debts and the court-ordered property settlement to Erika. Erika attends the University of North Dakota studying languages and hopes to become a translator following her graduation around 1994. The trial court found that Erika should earn $18,000 a year following graduation. The trial court observed that Erika had been able to continue her education with the $300 per month she was receiving from Elmer as temporary support and that she would receive the same amount from Elmer as property settlement. The trial court denied Erika's request for rehabilitative spousal support, concluding that the $300 per month property payments, along with Erika's own opportunities for student aid and employment, should allow her to continue her education without spousal support.

On appeal, Erika asserts that the trial court erred in failing to discount the cash settlement to present value and in failing to award rehabilitative spousal support.

I. PROPERTY DISTRIBUTION

We 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." Lucy v. Lucy, 456 N.W.2d 539, 542 (N.D.1990); see also Pankow v. Pankow, 347 N.W.2d 566 (N.D.1984); Tuff v. Tuff, 333 N.W.2d 421 (N.D.1983). The reason for the rule is obvious: if the payments are not discounted to present value, the court is relying upon an artificial value when it distributes the property. When one party receives property which is clearly worth less than the value ascribed to it by the trial court, a reviewing court cannot determine whether the resulting property distribution is equitable. Therefore, it is necessary to discount periodic payments to present value. ¹

The trial court did not provide for interest on the periodic payments, nor did it discount the payments to present value when calculating the property distribution. Elmer concedes that the trial court failed to comply with controlling caselaw, but urges that the error may be viewed as de minimis. Alternatively, Elmer concedes that the twelve percent interest rate applicable to judgments under Section 28-20-34, N.D.C.C., may be used to modify the judgment on appeal, thereby saving the parties the cost of further proceedings.

We do not view the error in this case as de minimis. According to calculations provided by Erika, and not disputed by Elmer, the present value of 60 monthly payments of $300, assuming an interest rate of twelve percent, ² is $13,486.54. Thus, Erika received $4,500 less, and Elmer retained $4,500 more, of the parties' marital property than was recognized by the trial court. This is not a de minimis amount relative to the value of the distributed property.

Elmer's suggestion to preserve the decision of the trial court by applying the statutory interest rate on judgments of twelve percent under Section 28-20-34, N.D.C.C., is appealing insofar as it would save the parties time and expense of further proceedings. However, not only is that contrary to our normal procedure of remand to the trial court to reexamine the property distribution where there has been a failure to discount periodic payments to present value, e.g., Lucy v. Lucy, supra, our concern with the merits of the second issue raised by Erika convinces us that a reversal and remand for further consideration is appropriate.

II. SPOUSAL SUPPORT

Erika asserts that the trial court erred in failing to award her rehabilitative spousal support. A trial court's determination on the matter of spousal support is a finding of fact which will only be set aside on appeal if it is clearly erroneous. Kaiser v. Kaiser, 474 N.W.2d 63 (N.D.1991); Lucy v. Lucy, supra. The complaining party bears the burden of demonstrating that a finding is erroneous, and a finding is clearly erroneous only when the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been made. Branson v. Branson, 411 N.W.2d 395 (N.D.1987).

In determining whether to award spousal support many factors must be considered, including the needs of the party disadvantaged by the divorce as well as the supporting spouse's needs and ability to pay. Lucy v. Lucy, supra; Branson v. Branson, supra. Because property division and spousal support often overlap, they should be examined and resolved together. Pfliger v. Pfliger, 461 N.W.2d 432 (N.D.1990). In assessing whether an award of spousal support is appropriate, a determinative factor is whether the income is sufficient to permit each party to maintain apart the standard of living enjoyed together. Branson v. Branson, supra. These considerations, however, must always "be tempered by the necessities of reality." Branson v. Branson, supra, 411 N.W.2d at 398.

The trial court found that Elmer was financially unable to...