Terca v. Terca
| Decision Date | 22 October 2008 |
| Docket Number | No. 24738.,No. 24730.,24730.,24738. |
| Citation | 2008 SD 99,757 N.W.2d 319 |
| Parties | Marissa S. TERCA, Plaintiff and Appellee, v. James J. TERCA, Defendant and Appellant. |
| Court | South Dakota Supreme Court |
Robert C. Riter, Jr., Margo D. Northrup of Riter, Rogers, Wattier & Northrup, LLP, Pierre, SD, for plaintiff and appellee.
Rose Anne Wendell, Pierre, SD, for defendant and appellant.
[¶ 1.] In this divorce proceeding, the circuit court evaluated real property inherited by James Terca, one-half before and one-half nine years into an eighteen-year marriage, and determined it was a marital asset. The circuit court awarded Marissa Terca two parcels of the inherited land and other real property valued at $476,167.75 and James the remainder valued at over $1,000,000.00. James appeals contending: (1) Marissa made no contribution to the maintenance of the property, (2) the intent of the donor should have been more heavily considered, (3) Marissa had no need for the asset given her ability to earn an income, and (4) James's need for the assets was greater due to his inability to earn an income. The circuit court is affirmed on the basis that its denial of spousal support was contingent on the property division.
[¶ 2.] Marissa and James were married on November 25, 1989. Three children were born during the marriage who were ages sixteen, thirteen, and ten at the time of the divorce proceedings. The parties were married for eighteen years. James was forty-nine and Marissa was forty-five when the divorce was finalized.
[¶ 3.] Prior to the marriage, James operated a family farm in Lyman County, South Dakota, on land he inherited from his grandmother and grandfather. James's father died a few months before the parties were married, and James eventually inherited the majority of the farmland owned by the parties at the time of the divorce proceedings. James received one-half of his father's bequest of farmland at the time of his father's death, and the other half of the real property was kept in trust until James turned forty. James farmed all the inherited land during the marriage, paying rent to the trust for one-half of the inherited farmland until title transferred on his fortieth birthday.
[¶ 4.] The fair market value of the land, including the trust property, was $400,000.00 at the time James's father died. On the date of the divorce trial, the land was valued at $1,400,000.00 using a value of $750.00 per acre based on an appraisal conducted eighteen months prior to trial.
[¶ 5.] During the marriage, income from the farming operation was used for the upkeep and maintenance of the family. The farm income was commingled with marital monies and used to pay for marital property and service marital debts. The parties also purchased additional real property during the marriage. Notes against the farmland were maintained in the name of both parties.
[¶ 6.] Marissa was employed full-time with the Division of Criminal Investigation at the time of the marriage. Shortly thereafter, Marissa quit her outside employment at James's urging and became a stay-at-home mother and homemaker. Marissa was responsible for the care of the couple's children and the upkeep of the home. Marissa supplemented the family income by working various part-time jobs including substitute teaching and at a local flower shop. All of Marissa's income from her part-time jobs was deposited into a joint account with James and used to support the family.
[¶ 7.] During the course of the marriage, Marissa helped James with the farming operation by moving vehicles, vaccinating hogs, providing lunch for the hired workers, and running for parts among other tasks. Marissa was listed as an employee on tax returns during the marriage. Marissa also worked on the farm books, but her efforts to move the books to an electronic system were rejected by James. At James's insistence, Marissa was not a decision-maker with regard to the farm operation.
[¶ 8.] In 2001, the parties jointly started a hunting guide service on their Lyman County real estate. Both were instrumental in starting the operation, but Marissa was principally involved with the operation. James minimized Marissa's contributions, testifying at trial that her role was to "flirt with the hunters."
[¶ 9.] Shortly before the parties married, James was diagnosed with multiple sclerosis (MS),1 which was at that time recurring with physical effects experienced a few times a year. In 2004, James was diagnosed with secondary progressive MS. At the time of trial, he was considered disabled pursuant to the Social Security Administration's guidelines and his capacity to earn a living was diminished. James operated the farm until 2006 when health issues made it impossible to continue farming. James also suffered from depression and severe mood swings during the marriage.
[¶ 10.] At the time of the divorce proceedings, James was no longer farming. The farm equipment had been sold and the proceeds used to pay off the joint farm debt. The farmland was either rented out to James's brother or in the Conservation Reserve Program. James was receiving $1,552.00 per month in Social Security disability payments. Marissa was working at the Lyman County Herald making $9.50 per hour.
[¶ 11.] The circuit court recognized that James's medical condition was expected to continue to deteriorate over time. While recognizing that James was a beneficiary of the Ohlson Trust and had a one-tenth interest in the trust, the circuit court excluded it from the marital estate due to the possibility that James might not live to receive a benefit from the trust. The individual with the life estate interest in the Ohlson Trust was ninety-seven (97) years old at the time of trial, and might utilize all or part of the asset during her lifetime. Although not valued for inclusion in the marital estate, the trial testimony placed the value of the trust at $850,000.00.
[¶ 12.] The circuit court granted Marissa a decree of divorce on the grounds of extreme cruelty. Marissa was awarded custody of the minor children subject to the reasonable visitation rights of James. James was granted supervised visitation until such time as the children's counselor and James's counselor agreed supervision was no longer necessary. James was court ordered to attend counseling sessions for a minimum period of six months, or until his counselor agreed counseling was no longer necessary. James was also court ordered not to interfere with the children's counseling sessions. James was ordered to pay $431.00 in child support from his Social Security payments.
[¶ 13.] The circuit court conducted the required analysis of the inherited property and concluded Marissa made more than a de minimus contribution to the maintenance of the real property. The circuit court found that Marissa's efforts as a housewife and mother constituted a valuable contribution to the accumulation of marital property. Further, the circuit court found that the income from the farming operation was commingled with marital monies and then used to purchase marital property and pay marital debts. The circuit court concluded that Marissa's lack of control in the decision making on marital property, including the inherited farmland, did not support separate treatment of the asset.
[¶ 14.] The circuit court's analysis of Marissa's need for support recognized her ability to earn an income. The circuit court also concluded that Marissa had sufficient assets of her own such that she was not in need of spousal support. However the circuit court also concluded that its division of the marital assets was a factor in determining that Marissa was not in need of spousal support. Without the allocation of the real property to Marissa, the circuit court found she could be forced to liquidate other assets allocated to her by the circuit court for her own support.
[¶ 15.] Marissa received title to two quarter sections, each valued at $120,000.00, that were originally inherited by James. Marissa also received real property purchased by the couple during the marriage consisting of one full quarter section valued at $120,000.00 and another parcel valued at $116,167.75. James received the balance of the inherited real estate, valued at slightly under $1,000,000.00. The value of the real property allocated to Marissa totaled $476,167.75, while James received land valued at $1,035,128.70. Marissa's application for reasonable attorney fees was denied by the circuit court.
[¶ 16.] James raises the following issue on appeal:
Whether the circuit court erred when it determined that real property inherited by James was part of the marital estate.
[¶ 17.] By notice of appeal, Marissa raises the following two issues. Marissa raised the first issue and asked that it be considered only in the event this Court reverses the circuit court on the inclusion of James's inherited property in the marital estate. The second issue was also included in Marissa's prayer for relief and thus must be addressed regardless of whether this Court reverses the circuit court on the inclusion of inherited property in the marital estate:
1. Whether the circuit court erred when it established the fair and reasonable value of the parties' real property using an eighteen-month-old appraisal.
2. Whether the circuit court erred when it denied Marissa's application for reasonable attorney fees.
[¶ 18.] A circuit court's division of marital property is reviewed under the abuse of discretion standard. Johnson v. Johnson, 2007 SD 56, ¶ 16, 734 N.W.2d 801, 806 (citing Grode v. Grode, 1996 SD 15, ¶ 6, 543 N.W.2d 795, 799). As this Court has noted on prior occasions:
[O]ur purpose is not to determine "whether we would have made an original like ruling, but whether a judicial mind, in view of the law and circumstances of the particular case, could reasonably...
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