Temple v. Temple

• Decision Date: 23 March 1984
• Docket Number: Nos. 14293,14310,s. 14293
• Citation: 365 N.W.2d 561
• Parties: Judith L. TEMPLE, Plaintiff and Appellee, v. Douglas L. TEMPLE, Defendant and Appellant. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 561

365 N.W.2d 561

Judith L. TEMPLE, Plaintiff and Appellee, v. Douglas L. TEMPLE, Defendant and Appellant.

Nos. 14293, 14310.

Supreme Court of South Dakota.

Considered on Briefs March 23, 1984.

Decided March 20, 1985.

Dennis H. Hill of Costello, Porter, Hill, Nelson, Heisterkamp & Bushnell, Rapid City, for plaintiff and appellee; Thomas W. Stanton of Costello, Porter, Hill, Nelson, Heisterkamp & Bushnell, Rapid City, on brief.

Ronald W. Banks of Banks & Johnson, Rapid City, for defendant and appellant; Ann C. Jones of Banks & Johnson, Rapid City, on brief.

MORGAN, Justice.

Douglas L. Temple (Douglas), the defendant in the underlying divorce action, appeals from the portion of the trial court's divorce decree which awarded the plaintiff, Judith L. Temple (Judith), alimony and attorney fees and from the property division, particularly the portion which included twenty-five percent of certain Pitchfork Ranch assets and improvements to a house owned by Douglas' mother, Georgiana Temple (Georgiana), in the marital estate. Judith filed a notice of review based on her contention that one-half, rather than one-fourth, of the ranch assets should have been included in the marital estate. We affirm.

Douglas and Judith had very few assets when they married in 1959 at approximately ages 18 and 16 respectively. In 1961, Douglas inherited $13,515, including a one-half interest in 480 acres of deeded land from his father, Allen Temple (Allen). Georgiana acquired sole ownership of all land and property held jointly with her husband, Allen, and approximately $277,295 in land, equipment, livestock, and cash through inheritance when he died. The trial court found that these assets, along with assets she owned individually before Allen's death, were used for the operation and expansion of the ranch and were generally considered ranch assets at the time of the trial.

From the beginning of the marriage in 1959 until 1972, Douglas worked full-time on his family's ranch. He was paid $125 per month and was permitted to raise his own cattle herd of approximately sixty cows on the ranch. During this time, Douglas apparently covered his and his family's personal expenses with additional draws from the operation. In 1972 Douglas and Georgiana reached an agreement under which he was to receive a one-fourth interest in the profits generated by the ranch in exchange for his services as Ranch Manager. Since 1972, Douglas has substantially increased the Pitchfork Ranch profits which, throughout Douglas' tenure at the ranch, have been plowed back into the operation for the accumulation of ranch assets. Capital generated by the ranch was primarily used to purchase land which was titled to Douglas and Georgiana in joint tenancy.

The trial court found that Douglas was able to accumulate the assets and benefits that constitute the Pitchfork Ranch operation and Douglas and Judith's marital estate because of the business relationship between Douglas and Georgiana. Georgiana drew approximately $6,000 per year from the ranch operation to cover her personal expenses. Although the amount Douglas withdrew for his family's expenses was somewhat greater, evidence and testimony was presented which indicated that the parties lived moderately. The trial court specifically found that remaining ranch profits were used to acquire land and other property and to pay other costs of expansion.

The trial court also found that under the agreement between Douglas and Georgiana, allotting Douglas one-fourth of the ranch operation profits, Douglas was intended to receive a one-fourth interest in the value generated to the ranch. ¹ As a result of this finding, twenty-five percent of Pitchfork Ranch assets the trial court found to have been acquired with profits from the ranch operation were included in the marital estate. The total fair market value of the ranch assets acquired in this manner was $1,292,477 at the time of trial. Total ranch liabilities at that time were $16,000.

The trial court found that as a result of Douglas' service as Ranch Manager under his 1972 agreement with Georgiana, he had an interest in twenty-five percent of the ranch assets, reduced by twenty-five percent of ranch liabilities. The trial court apparently determined Douglas' interest in Pitchfork Ranch under the laws governing partnership and decided that Judith's argument, that the law of joint tenancy governed was not supported by the facts of this situation. The trial court also included assets that Douglas owned individually or jointly with Judith in the marital estate. The trial court valued these total individual assets at $565,533 and the total individual liabilities at $32,150 and added $533,383 to twenty-five percent of the net value of the ranch assets to arrive at the marital estate. After arriving at the net marital estate, the trial court properly considered the six factors set out in Hanson v. Hanson, 252 N.W.2d 907 (S.D.1977), in order to equitably divide the property.

The trial court worked out an intricate plan in order to protect Pitchfork Ranch as an ongoing enterprise and ruled that Douglas should pay Judith the dollar value of a proportionate amount of the net marital estate, which included Douglas' share of the ranch assets. The trial court awarded Judith specific assets valued at $16,194 and a cash award of $310,000 as her share of the marital estate. ² Douglas was awarded the land, the leases and mineral interests, the livestock and equipment, certain personal property and bank accounts, and all of the parties' liabilities. Judith was also awarded $500 per month alimony and Douglas was ordered to pay her attorney fees.

Douglas has raised four issues in his appeal: (1) Whether the trial court was inconsistent and erroneous when it initially found that Douglas had agreed to accept twenty-five percent of the ranch profits, and then included twenty-five percent of the ranch assets in the marital estate? (2) Whether the trial court erred when it included improvements to the parties' residence, located on Georgiana's land, in the marital estate and, thereby, among the assets subject to division? (3) Whether the trial court abused its discretion when it awarded Judith alimony? (4) Whether the trial court abused its discretion when it ordered Douglas to pay Judith's attorney fees?

The rationale behind the property division plan and the alimony award is set out in the trial court's Findings of Fact and Conclusions of Law. This court reviews a trial court's findings of fact under the "clearly erroneous" standard and overturns a trial court's conclusions of law only when the trial court has erred as a matter of law. Wefel v. Harold J. Westin & Associates, Inc., 329 N.W.2d 624 (S.D.1983); Hartpence v. Youth Forestry Camp, 325 N.W.2d 292 (S.D.1982).

In applying the clearly erroneous standard, this court's function is not to decide factual questions de novo. The question is not whether this court would have made the same findings the trial court made, but whether on the entire evidence this court is left with a definite and firm conviction that a mistake has been made. Cunningham v. Yankton Clinic, P.A., 262 N.W.2d 508 (S.D.1978); In Re Estate of Hobelsberger, 85 S.D. 282, 181 N.W.2d 455 (1970). The trial court's findings of fact are presumptively correct and the burden is upon appellant to show error. Hilde v. Flood, 81 S.D. 25, 130 N.W.2d 100 (1964).

With respect to property divisions in divorce actions, the trial court has broad discretion and its judgment will not be set aside unless it clearly appears that the trial court abused its discretion. Prentice v. Prentice, 322 N.W.2d 880 (S.D.1982); Laird v. Laird, 322 N.W.2d 254 (S.D.1982); Palmer v. Palmer, 316 N.W.2d 631 (S.D.1982). This court's review is limited to a determination of whether there was an equitable property division. Krage v. Krage, 329 N.W.2d 878 (S.D.1983).

Douglas argues first that while his 1972 agreement with Georgiana entitled him to twenty-five percent of the ranch profits, the trial court included twenty-five percent of the ranch assets in the marital estate. Douglas also contends that certain livestock and realty improvements which belong to Georgiana were characterized as ranch assets and improperly placed in the marital estate.

Given the variety and extent of the ranch assets, the informality of the 1972 agreement, and the absence of bookkeeping records, it would have been impossible to precisely designate the ownership of each ranch asset at the time of trial. In his reply brief filed with this court, Douglas cites SDCL 48-4-2 for the proposition that "property acquired with partnership funds is partnership property." When dividing property, trial courts may consider when and how property was acquired. Swenson v. Swenson, 85 S.D. 320, 181 N.W.2d 864 (1970). The trial court characterized all property that was not clearly owned by Douglas or Georgiana individually as ranch property. The trial court then treated their business relationship as a partnership and allocated a share of the total ranch assets to each of them, based on the percentages found in the 1972 agreement. The trial court allocated Georgiana seventy-five percent and Douglas twenty-five percent of the ranch operation.

A partnership is an association of two or more persons who carry on a business as co-owners. Fredrickson v. Kluever, 82 S.D. 579, 152 N.W.2d 346 (1967). There is no arbitrary test for determining the existence of a partnership; therefore, each case is governed by its individual facts and the existence of the relationship is a question for the trier of fact, except when the evidence is conclusive. Widdoss v. Donahue, 331 N.W.2d 831 (S.D.1983); Munce v. Munce, 77 S.D. 594, 96 N.W.2d 661 (1959). The existence and scope of a partnership may be evidenced by a written or an oral agreement, or implied by conduct of the parties. Lewis v. Gallemore, 173 Neb. 211, 113 N.W.2d 54 (1962); Gangl v. Gangl, 281...