Schultz v. Schultz

• Decision Date: 06 December 2018
• Docket Number: No. 20180097,20180097
• Parties: Chad W. SCHULTZ, Plaintiff and Appellant v. Kelli C. SCHULTZ, Defendant and Appellee
• Court: North Dakota Supreme Court

920 N.W.2d 483

Chad W. SCHULTZ, Plaintiff and Appellant

v.Kelli C. SCHULTZ, Defendant and Appellee

No. 20180097

Supreme Court of North Dakota.

Filed December 6, 2018

Tressie C. Brazil, Fargo, ND, for plaintiff and appellant.

Steven T. Ottmar, Jamestown, ND, for defendant and appellee.

Jensen, Justice.

[¶1] Chad Schultz appeals from a final judgment and decree of divorce entered on January 17, 2018 dissolving his marriage to Kelli Schultz. Chad appeals the district court's valuation of marital assets and the allocation of the marital estate. We affirm.

[¶2] Chad and Kelli were married in September 2008 following a one and one-half-year period of cohabitation. In February 2016, after approximately seven and one-half years of marriage, the parties separated and Chad moved out of the marital home. The marriage was dissolved on January 17, 2018 by the filing of the final judgment and decree of divorce. Including the period of cohabitation, the time the parties were married and living together, and the time they were married and living apart, the parties were together for approximately ten and one-half years. The district court found the marriage to be a "long-term" marriage.

[¶3] In 2001, prior to the parties' marriage, Chad inherited a fifty percent interest in three separate quarters of Nelson County farmland. The parties agreed that Chad would receive the farmland in the property distribution, but disagreed whether a reciprocal value should be allocated to Kelli. Chad argued that when considering the length of the marriage and that he inherited the property prior to marriage, the property should be allocated to him without a reciprocal allocation of value to Kelli. Kelli requested an equal division of the farmland's value through post-judgment payments to her from Chad. The district court's property division allocated a reciprocal value to Kelli and ordered a series of post-judgment equalization payments from Chad to Kelli. The post-judgment payments included an interest rate of 4%.

[¶4] The parties also disputed the valuation of the farmland. Chad and his father, Herbert Schultz, testified to their opinions on the value of each quarter. Kelli's values for the farmland came from the 2017 County Rents and Values survey funded by the North Dakota Department of Trust Lands. The district court valued the farmland between the amounts suggested by the parties.

[¶5] In 2010, the parties purchased Face 2 Face Salon ("Salon") as a business to be operated by Kelli. The parties agreed that Chad paid $35,000 of the purchase price, and Kelli paid $5,000 towards the purchase price. The parties agreed the Salon would be distributed to Kelli, but disputed the valuation of the Salon. Kelli argued the Salon was worth $40,000, while Chad argued the Salon was worth $160,000. The district court found the Salon to have a value of $40,000.

[¶6] In June 2016, Chad's father, Herbert Schultz, finished building a home located in Jamestown, North Dakota. Title to the property was held jointly by Chad and his father. The parties disagreed on whether the home should be considered marital property. Chad argued, and his father also testified, the property should not be considered marital property because Chad's name appeared on the title only for the purpose of estate planning, the home was built at the end of the parties' marriage, and the funds used to build the home were from an inheritance received by Herbert Schultz. Kelli argued the property should be included because the deed provided that the property was held jointly by Chad and his father. The district court included one-half of the value of a one-half interest in the property in the marital estate.

[¶7] During the marriage, Chad was employed by the State of North Dakota and participated in the NDPERS retirement plan. All the contributions to the account were made during the marriage. Chad argued he should be allocated the entire NDPERS account, and Kelli should be allocated her MFS Roth IRA account. Kelli argued she should receive a portion of Chad's NDPERS account under the "Bullock" formula. The district court allocated the NDPERS account evenly between the parties and ordered the account to be split through the use of a Qualified Domestic Relations Order.

[¶8] Prior to the marriage, Kelli owned a home, subject to a mortgage. The parties used the residence as their marital home during the majority of the marriage. Chad paid $21,500 during the marriage to satisfy the mortgage. Chad also testified that he paid for improvements to the home and contributed the labor to complete improvements to the home. Chad argued his contribution to the payment of the mortgage should be offset against the property allocated to Kelli. The district court declined to make the requested offset.

[¶9] Chad challenges the district court's overall allocation of the parties' marital property. He contends the district court erred by finding the marriage was "long-term," incorrectly valuing the farmland, not allocating the farmland to him without a reciprocal allocation to Kelli, incorrectly valuing the Salon, awarding Kelli a portion of his NDPERS retirement account, including his father's home in the marital estate, the inclusion of a property equalization payment, and applying a 4% interest rate to the equalization payment.

[¶10] In determining an equitable division of a marital estate, a district court is required to consider the Ruff-Fischer guidelines. Lill v. Lill , 520 N.W.2d 855, 857 (N.D. 1994). Along with the other factors included within the Ruff-Fischer guidelines, the district court is required to consider the duration of the marriage and source of the property in determining an equitable allocation of the parties' marital property. There is no bright-line rule to distinguish between short and long-term marriages. Hitz v. Hitz , 2008 ND 58, ¶ 16, 746 N.W.2d 732. Generally, a long-term marriage supports an equal division of all marital assets. Bladow v. Bladow , 2003 ND 123, ¶ 8, 665 N.W.2d 724. In a short-term marriage, the district court may distribute property unequally and award the parties what each brought into the marriage. See Buzick v. Buzick , 542 N.W.2d 756, 759 (N.D. 1996) ; Lill , 520 N.W.2d at 857. Despite these generalities, duration of a marriage is only one factor of the Ruff-Fischer guidelines and is not controlling in a distribution of marital property. See Lill , at 857.

[¶11] We review a district court's division of property as a finding of fact subject to the clearly erroneous standard of review under N.D.R.Civ.P. 52(a). Lill , 520 N.W.2d at 857. Rule 52(a) provides that the district court's findings "must not be set aside unless clearly erroneous, and the reviewing court must give due regard to the trial court's opportunity to judge the witnesses' credibility." "A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence to support it, or if, although there is some evidence to support it, on the entire evidence we are left with a definite and firm conviction a mistake has been made." Mertz v. Mertz , 2015 ND 13, ¶ 4, 858 N.W.2d 292 (quoting Brandner v. Brandner , 2005 ND 111, ¶ 8, 698 N.W.2d 259 ).

[¶12] The district court found the parties to have had a long-term marriage. Chad argues our prior cases have established ten years as the dividing line between short and long-term marriages. Chad asserts the district court erred in finding his marriage to be "long-term" because the parties were married only eight years.

[¶13] We disagree that the district court was required to calculate the length of the parties' marriage at eight years. First, the district court may consider how long the parties lived together before marriage. See Paulson v. Paulson , 2010 ND 100, ¶ 10, 783 N.W.2d 262. The district court here considered the parties' cohabitation for a year and a half before marriage. Second, because the parties' marriage did not end until the issuance of the final decree of divorce, the district court could exercise its discretion and consider the time subsequent to the filing of the action to be included within the marriage. See N.D.C.C. § 14-05-01. In the present case, the parties had a one and one-half year period of cohabitation, were married for approximately seven and one-half years before the divorce proceedings began, and were separated for approximately two years before the final decree of divorce was entered. Although we decline to draw a bright-line at ten years to define short and long-term marriages, the total time beginning with the parties' cohabitation until the entry of the final decree of divorce exceeded ten years. As such, even if we were to adopt Chad's argument that our prior cases establish a bright-line at ten years, the evidence provided to the district court supports the court's determination that this was a long-term marriage. The court's determination that the parties' marriage should be considered long-term for the purpose of allocating their marital property was not induced by an erroneous view of the law, was not lacking in some evidence to support it, and we are not left with a definite and firm conviction a mistake has been made. The district court's determination of a long-term marriage was not clearly erroneous.

[¶14] Chad challenges the district court's determination of the value of farmland and the value of the Salon. This Court will not reverse a district court's findings on valuation of marital property unless they are clearly erroneous. See Corbett v. Corbett , 2001 ND 113, ¶ 12, 628 N.W.2d 312. "A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, there is no evidence to support it, or if, although there is some evidence to support it, on the entire evidence the reviewing court is left with a definite and firm conviction a mistake has been made." Kautzman v. Kautzman , 1998 ND 192, ¶ 8, 585 N.W.2d 561. "A choice between two permissible views of the...