Zuger v. Zuger, 960195

• Decision Date: 23 May 1997
• Docket Number: No. 960195,960195
• Citation: 563 N.W.2d 804
• Parties: Mary H. ZUGER, n/k/a Mary C. Haunson, Plaintiff, Appellee and Cross-Appellant, v. William P. ZUGER, Defendant, Appellant and Cross-Appellee. Civil
• Court: North Dakota Supreme Court

Page 804

563 N.W.2d 804

1997 ND 97

Mary H. ZUGER, n/k/a Mary C. Haunson, Plaintiff, Appellee and Cross-Appellant, v. William P. ZUGER, Defendant, Appellant and Cross-Appellee.

Civil No. 960195.

Supreme Court of North Dakota.

May 23, 1997.

¶3 When they were married, Bill practiced in a law firm started by his father, and Mary worked as a secretary for Bill. Bill later opened his own practice. Mary earned degrees in Spanish and secondary education and, at the time of the divorce, was teaching Spanish at Dickinson State University.

¶4 Mary sued Bill for divorce. The trial court divided the marital property and ordered Bill to pay $100 per month in permanent spousal support and $5,000 for Mary's attorney fees. The court ordered joint legal custody of the children, but placed primary physical custody with Mary. Bill was given visitation each Wednesday evening, every weekend except one each month, and nearly seven weeks during the summer. Mary was given ultimate authority to decide educational matters affecting the children, while Bill had ultimate authority to decide non-emergency medical matters.

II. BILL'S APPEAL

¶5 Bill challenges various financial aspects of the divorce decree, contending the trial court erred (1) by including Bill's fee in one contingent fee case in the marital estate; (2) in valuing Bill's law-office money-market account; (3) by awarding Mary part of Bill's future share in a trust set up by his father;(4) by awarding permanent spousal support; and (5) by awarding attorney fees to Mary.

A. PROPERTY DIVISION

¶6 Bill contends several of the trial court's findings on property division are erroneous. In Grinaker v. Grinaker, 553 N.W.2d 204, 207-208 (N.D.1996), we summarized our standard for reviewing a trial court's valuation and distribution of marital property:

The trial court must make an equitable distribution of the marital property, based upon the facts and circumstances of each individual case. NDCC 14-05-24; Volson v. Volson, 542 N.W.2d 754, 756 (N.D.1996). The court's determinations on valuation and division of property are findings of fact that will only be reversed on appeal if they are clearly erroneous. Volson, 542 N.W.2d at 756; Braun v. Braun, 532 N.W.2d 367, 370 (N.D.1995). A finding is clearly erroneous only if the reviewing court on the entire record is left with a definite and firm conviction that a mistake has been made. Buzick v. Buzick, 542 N.W.2d 756, 758 (N.D.1996). As Buzick, 542 N.W.2d at 758, and Fenske v. Fenske, 542 N.W.2d 98, 102 (N.D.1996), explain, the trial court's findings of fact are presumptively correct, and the complaining party bears the burden of demonstrating on appeal that a finding of fact is clearly erroneous.

1) CONTINGENT FEE

¶7 Bill argues that the trial court erred by including in the marital estate a contingent fee he earned in a case acquired and settled while the parties were separated. Bill says Mary made no contribution toward this case and therefore the earned fee should be excluded from the marital estate.

¶8 To make an equitable distribution of property under NDCC 14-05-24, the trial court must include in the marital estate all of the parties' assets, regardless of source. Linrud v. Linrud, 552 N.W.2d 342, 344 (N.D.1996); Bell v. Bell, 540 N.W.2d 602, 604 (N.D.1995). A spouse need not make a direct contribution to the acquisition of an asset for it to be included in the marital estate. See, e.g., Berg v. Berg, 490 N.W.2d 487, 492 (N.D.1992); Bullock v. Bullock, 354 N.W.2d 904, 909-910 (N.D.1984). An asset accumulated after the spouses have separated, but while the marriage still exists, is includable in the marital estate. Keig v. Keig, 270 N.W.2d 558, 560 (N.D.1978). As Linrud, 552 N.W.2d at 344, and van Oosting v. van Oosting, 521 N.W.2d 93, 96 (N.D.1994), illustrate, the source of the property is only one factor for the court to consider in making an equitable distribution.

¶9 In this case, although Mary did not make a direct contribution to this contingent fee, it was accumulated during the marriage. The trial court therefore properly included the fee in the marital estate.

2) MONEY MARKET ACCOUNT

¶10 Bill argues the trial court erred in valuing the money market account for his law office with the value given at trial, rather than at the time of distribution several months later. We recently addressed the timing of valuation of fluctuating assets in Grinaker. In that case, there was a six-month delay between trial and entry of the judgment. The husband sought to introduce evidence that the value of certain mutual funds and annuity accounts had substantially changed since trial. We said:

Common sense dictates that marital property be valued as of the date of trial, rather than the date of distribution. The trial court hears the evidence on value at trial, and the evidence will ordinarily give a current value for the property. When valuing items like the mutual funds and variable annuities here, any evidence presented at trial on value for some future date would have been purely speculative. The difficulty with the procedure attempted by Gary in this case is evident. Parties would be free to file further "evidence," not subject to cross-examination, whenever they believed a marital asset had changed in value. This procedure would certainly lead to a never-ending trial by affidavit, with parties continually submitting account statements and other materials with each fluctuation of the financial markets.

Grinaker, 553 N.W.2d at 208-209. We conclude the trial court's finding on the value of this money market account is not clearly erroneous.

3) TRUST SHARE

¶11 Bill argues the trial court erred in awarding Mary one-half of Bill's share of a trust set up by his father.

¶12 Bill's late father established a credit trust for Bill's mother to receive the income during her lifetime, and for Bill and his three siblings to receive the principal upon the death of Bill's mother. The trust instrument allows the principal to be invaded up to a maximum of $5,000 or 5 percent per year, whichever is greater. At the time of trial, the trust principal was more than $936,000. Because the principal could be invaded and reduce the share available to Bill upon his mother's death, the trial court concluded an award of a specific dollar amount would be speculative. Relying upon van Oosting, the court therefore ordered that Mary receive one-half of Bill's share when it becomes available to him.

¶13 Bill contends it was inequitable to award Mary any part of Bill's share in the trust, arguing that Mary received substantial gifts from Bill's parents during the marriage and received substantial property under the decree. Identical arguments were raised and rejected in van Oosting, a case factually indistinguishable from this one. In van Oosting, 521 N.W.2d at 96-98, we held the trial court's failure to award the wife a share of her husband's interest in a credit trust was clearly erroneous, and we remanded with directions that the court award the wife a percentage of the trust proceeds when received by the husband. The trial court in this case followed van Oosting, included Bill's interest in the trust as a marital asset and, recognizing the speculative nature of that interest, ordered that Mary receive a percentage of what Bill receives.

¶14 Bill argues that the trial court was invading his "inheritance" from his father, and therefore he should be entitled to a share of Mary's future inheritance from her parents. Bill's interest in the trust is not a future inheritance; he has a current vested interest in the trust. As we explained in van Oosting, 521 N.W.2d at 97, when the trust interest is vested, "[a]lthough contingent in nature, his interest is certain to reach him upon the death of his mother."

¶15 Bill insists van Oosting is distinguishable because the wife in that case was ill, while Mary is healthy and able to work. Those are factual details that factor into the trial court's decision whether, and to what extent, Mary should share in Bill's interest in the trust. The trial court found that it was equitable to distribute one-half of Bill's share in the trust to Mary. That finding of fact is presumptively correct, and Bill has not met his burden of demonstrating that the finding is clearly erroneous.

B. SPOUSAL SUPPORT

¶16 Bill argues the trial court erred in ordering him to pay $100 per month permanent spousal support to Mary. He contends that Mary has been fully rehabilitated because she acquired college degrees during the marriage, received substantial property under the decree, and is employed.

¶17 A divorce court "may compel either of the parties ... to make such suitable allowances to the other party for support during life or for a shorter period as to the court may seem just, having regard to the circumstances of the parties respectively." NDCC 14-05-24. As Wald v. Wald, 556 N.W.2d 291, 296 (N.D.1996), and Wiege v. Wiege, 518 N.W.2d 708, 710 (N.D.1994), show, spousal support decisions are findings of fact that will not be reversed on appeal unless clearly erroneous.

¶18 We differentiate between two types of spousal support. Heley v. Heley, 506 N.W.2d 715, 719-720 (N.D.1993). Rehabilitative spousal support is ordered to give a disadvantaged spouse time and resources to acquire an education, training, work skills, or experience that will allow the spouse to become self-supporting. Id. Permanent spousal support is ordered to maintain a somewhat comparable standard of living for a spouse who is incapable of adequate rehabilitation. Id.

¶19 Bill contends permanent support is inappropriate because Mary is presently employed and self-supporting. We have clarified, however, that permanent support is not limited to a spouse who is incapable of any rehabilitation, but may also be awarded to a spouse who is incapable of adequate rehabilitation or self-support. Wald, 556 N.W.2d at 296; Wiege, 518 N.W.2d at 711. As Wald at 296-297, and W...