Case Title: France v. France

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1995-09-12T00:00:00Z

Document:
France v. France1995 WY 150902 P.2d 701Case Number: 94-225Decided: 09/12/1995Supreme Court of Wyoming
Gregory 
Alan FRANCE, 

Appellant 
(Plaintiff),

v.

Kathie 
Sue FRANCE, 

Appellee 
(Defendant).

 

Frank 
J. Jones, Wheatland, for appellant.

David 
D. Uchner, Cheyenne, and James N. Wolfe, Cheyenne, for 
appellee.

Before 
GOLDEN, C.J., and THOMAS, MACY, TAYLOR and LEHMAN, JJ.

THOMAS, 
Justice.

[¶1]      The only issue in 
this case arises from a disparate division of the property of the parties by the 
district court in granting a divorce. Gregory Alan France, the husband 
(husband), asserts the division of the property was so unequal an abuse of 
discretion by the district court is manifest from that fact alone. In order to 
magnify the disparate division, the husband also disputes the valuation assigned 
by the trial court to stock in a ranching corporation. The trial court set over 
to Kathie Sue France, the wife (wife), as her separate property the stock in the 
ranching corporation and traceable cash she had inherited from her parents, a 
diamond ring she had inherited from her grandmother, other property she had 
inherited, and property she brought to the marriage. We hold, when all of the 
statutory factors which the trial court is entitled to consider in making a 
property division in a divorce are taken into account, there was no abuse of 
discretion by the district court. We affirm the Findings of Fact, Conclusions of 
Law and Decree of Divorce entered in the district court.

[¶2]  In the Brief of Appellant, filed in 
behalf of the husband, the issue is stated in this way:

Did 
the trial court abuse its discretion in distributing the marital estate by 
awarding 93.72% ($1,380,630.00) of the marital estate to the wife and 6.28% 
($92,456.00) to the husband?

In 
the wife's Brief of Appellee, the following issues appear:

I. 
Whether or not the trial court accurately considered the respective merits of 
the parties and the condition in which they and their daughter of tender age 
would be left following the divorce.

II. 
Whether or not a proper determination was made concerning through whom the 
property was acquired and the burden imposed upon the property for the benefit 
of either party and the child.

[¶3]      By the time the 
case went to trial, the only matter in dispute between husband and wife was the 
division of their property. Following the trial, the district court entered 
detailed Findings of Fact, Conclusions of Law, and Decree of Divorce. The 
Findings of Fact pertinent to this appeal are:

8. 
The parties own 10,985.3 shares of stock in Petsch and Rollins, Inc. Petsch and 
Rollins, Inc. is a closely-held ranching corporation which was established and 
operated by the Defendant's parents. The stock ownership is divided between 
Plaintiff and Defendant pursuant to an estate tax minimization plan.

9. 
All but 790 shares of the Petsch and Rollins, Inc. stock was inherited by 
Defendant from her parents in 1991. The balance of the stock was gifted to 
Defendant by her parents.

10. 
After inheriting the stock, Defendant gifted a portion of it to Plaintiff in 
1992 pursuant to the parties' estate plan.

* 
* * * * *

14. 
The parties hold a promissory note from Petsch and Rollins, Inc. in the 
principal amount of $130,000.00. The cash loaned pursuant to the note was 
inherited by Defendant from her parents' estate in 1991.

15. 
The Defendant holds an Individual Retirement Account, valued at $19,550.00, 
which consists entirely of funds inherited from the Defendant's mother in 
1991.

[¶4]  The trial court, in its Conclusions of 
Law, stated:

28. 
The division of property need not be equal to be equitable and the Court should 
view many factors in arriving at its decision relative to the division of 
property including, but not limited to:

a. 
Length of marriage;

b. 
The length of time the parties have owned the respective property and whether 
they have contributed to its increase in value if it was at one time the 
separate property of the other;

c. 
The merits of the parties' position;

d. 
The party through whom the property was acquired;

e. 
Also, the condition in which either of the parties or the children may be left 
after the distribution and the need of the property for the benefit of one or 
the other parties or their children. W.S. § 20-2-114 (1977), Bricker v. Bricker, 
[877 P.2d 747] Slip Opinion 93-200 July 13, 1994.

29. 
Based upon the appropriate factors for consideration in property division, as 
set forth in finding no. 28, above, the property given to or inherited by the 
Defendant from her parents should be set over to the Defendant. Such property 
includes all stock in Petsch and Rollins, Inc., the promissory note from Petsch 
and Rollins, Inc., the IRA, the coin collections and the silver dollars. The 
respective merits of the parties, the source and time of acquisition of such 
property, and the fact that the parties have not contributed to any increase in 
value of such property support this conclusion.

30. 
The Defendant should receive the ring she inherited from her 
grandmother.

31. 
The other property of the parties should be divided between them as indicated on 
attached Exhibit "A".

The 
Findings of Facts and Conclusions of Law demonstrate that, aside from the stock 
in the ranching corporation, the cash traceable to the wife's inheritance from 
her parents, and other property inherited by the wife, the trial court divided 
the property by awarding property worth approximately $95,256 to the husband and 
property worth approximately $82,827 to the wife.

[¶5]      After the decree 
was entered by the trial court, the husband filed a Motion to Make Additional 
Findings and Conclusions of Law and a Motion for New Trial on Issue of Property 
Distribution. The trial court reaffirmed its earlier findings with some 
clarification, and the motion for new trial was denied. The husband then 
appealed the case to this court.

[¶6]      In resolving the 
question of whether the trial court committed an abuse of discretion with 
respect to the division of property, we begin with the pertinent statute, WYO. 
STAT. § 20-2-114 (1994), which provides:

In 
granting a divorce, the court shall make such disposition of the property of the 
parties as appears just and equitable, having regard for the respective merits 
of the parties and the condition in which they will be left by the divorce, the 
party through whom the property was acquired and the burdens imposed upon the 
property for the benefit of either party and children. * * *.

In 
Lund v. Lund, 849 P.2d 731, 738-39 (1993), we summarized prior cases relating to 
the division of marital property, saying:

We 
have held, on numerous occasions, that the division of marital property is 
within the discretion of the trial court and, absent a manifest abuse of that 
discretion, we do not disturb that result. Neuman v. Neuman, 842 P.2d 575 (Wyo. 
1992); Mair v. Mair, 823 P.2d 538 (Wyo. 1992) (citing Williams v. Williams, 817 P.2d 884 (Wyo. 1991); and Blanchard v. Blanchard, 770 P.2d 227 (Wyo. 1989)). The 
trial court determines the appropriate disposition of the marital property and 
alimony under the statute as an exercise of its sound discretion. Kennedy v. 
Kennedy, 761 P.2d 995 (Wyo. 1988) (citing Broadhead v. Broadhead, 737 P.2d 731 
(Wyo. 1987)). Our rule is that an abuse of discretion occurs when the 
disposition shocks the conscience of the court and appears so unfair and 
inequitable that reasonable persons could not abide it. Neuman; Grosskopf v. 
Grosskopf, 677 P.2d 814 (Wyo. 1984) (citing Paul v. Paul, 616 P.2d 707 (Wyo. 
1980), and Kane v. Kane, 577 P.2d 172 (Wyo. 1978)). In applying these standards, 
we review the evidence on appeal in the favor of the successful party below, 
ignoring the evidence of the unsuccessful party, and granting the successful 
party every reasonable inference that can be drawn from the record. Kennedy 
(citing Grosskopf).

[¶7]      The property 
which is subject to division under our statute consists of property which is the 
product of the marital union and was acquired during the course of the marriage 
by the joint efforts of the parties. The statute requires such property to be 
disposed of in a just and equitable manner between the parties in the exercise 
of judicial discretion. We have held a just and equitable division is as likely 
as not to be unequal. Blanchard v. Blanchard, 770 P.2d 227 (Wyo. 1989). WYO. 
STAT. § 20-2-114 includes as a factor, "the party through whom the property was 
acquired * * *." In Warren v. Warren, 361 P.2d 525 (Wyo. 1961), we held 
property, which was inherited by or given to that party, can properly be awarded 
to the party by whom it was inherited or given. In Paul v. Paul, 616 P.2d 707 
(Wyo. 1980), we held it is not an abuse of discretion to award to a party the 
property he brought to the marriage.

[¶8]      We examine the 
factual situation before the court in this case in light of this statute and its 
previous interpretation. The Frances' marriage endured for twenty years. They 
were married on December 29, 1973, and the husband filed for divorce on February 
4, 1994, seeking equitable division of their property. The husband finished 
college at the end of the fall term in 1975 and took a job in Laramie until the 
wife graduated in the spring of 1976. They then moved to the Petsch and Rollins 
ranch located near Lingle. The ranch was owned by a closely-held corporation, 
the stock of which was owned by the wife's parents and her grandfather. The 
husband worked full-time for the corporation for seventeen and one-half years as 
a ranch hand. The wife's father made the management decisions for the ranch 
during that period of time, and the husband was paid a salary which grew from 
$800 per month to $2,100 per month. This was above the average salary for ranch 
hands. In addition, he had the benefit of a house, utilities, and gasoline. The 
wife worked on the ranch part-time during busy seasons and, after a year and a 
half, she began working, also part-time, at Eastern Wyoming Community College. 
That position developed into a full-time position and was a source of some of 
the marital discord.

[¶9]      Although the wife 
had some property, neither the husband nor the wife had any significant assets 
at the time they were married. Over the twenty years, they did acquire some 
marital assets. With respect to the property in dispute here, the wife's parents 
both died in June of 1990, within hours of each other. The record demonstrates 
the wife inherited somewhere between $187,000 and $211,000 in cash from them. 
She also received their shares of the stock in the ranching corporation. She 
then gave ten shares of stock to her husband so that he might be named as a 
member of the board of directors and president of the company, as required by 
the bylaws of the corporation. At that point in time, they agreed he should 
manage the ranch. The next year, the wife gave sufficient stock to her husband 
to constitute him a forty-five percent shareholder. This was done to effectuate 
an estate plan designed to minimize inheritance taxes and provide the maximum 
estate for their daughter who is learning disabled.

[¶10]   In 1989, in 1991, and in 1992, the 
corporation, on three occasions, redeemed stock from the wife's grandmother and 
two aunts who had become minority shareholders by virtue of the shares inherited 
from the wife's grandfather. During the probate of the wife's parents' estate, 
the corporation borrowed cash from their estates to finance one redemption. 
Subsequently, the corporation borrowed $130,000 from the wife and the husband to 
complete the redemption of the stock of the minority shareholders.

[¶11]   In 1994, when the husband filed for 
divorce, the wife answered and filed a counterclaim seeking custody of the 
daughter, dismissal of the divorce, a judicial separation, and an equitable 
division of the property of the parties. She also requested child support and 
alimony. Subsequently, her pleading and counterclaim were amended so that she 
sought an absolute divorce along with other customary relief.

[¶12]   We are satisfied this record 
justifies the property division ordered by the district court. In the Findings 
of Fact, the trial judge traced the stock in the ranching corporation and the 
cash back to the source, the wife's parents. The evidence is not disputed with 
respect to the corporate stock and establishes that the wife received 790 of a 
total of 10,985.3 shares by gifts from her parents. The remaining shares were 
inherited by the wife from her parents. The $130,000 which was borrowed by the 
corporation came from cash inherited by the wife from her parents. The wife 
owned an individual retirement account which also was traced to funds inherited 
from her mother. It is equally clear a substantial portion of the furniture 
owned by the parties was inherited by the wife from her parents. Based on all 
the evidence, the trial court concluded the stock in the ranching corporation, 
the funds represented by the IRA, the funds represented by the promissory note, 
some coin collections and certain silver dollars, and a ring inherited by the 
wife from her grandmother should be set over to the wife. The court based its 
conclusion on the factors articulated in WYO. STAT. § 20-2-114, particularly the 
respective merits of the parties, the source of acquisition of the property, and 
the fact the parties did not contribute to any increase in the value of the 
property.

[¶13]   The husband testified he did not 
earn, and was not entitled to, any stock in the ranching corporation as a result 
of his employment. He explained he had worked as a ranch hand up to the time of 
the death of the wife's parents and made no decisions with respect to management 
of the ranch prior to the death of the wife's father. The value of the stock 
decreased rather than increased after he became the manager. It was profitable 
up until he decided to change from a yearling operation to a cow-calf ranch 
operation. This change increased the indebtedness of the corporation, and it 
sustained sizable operating losses because of the investment in livestock and 
equipment after the conversion. In Bricker v. Bricker, 877 P.2d 747, 751 (Wyo. 
1994), we upheld a ruling by the trial court that the separate property of the 
wife be set over to her, where it was purchased before she met her husband, and 
the record disclosed the husband "made absolutely no contribution, by way of 
capital or effort, to the appreciation of that property." To the same effect is 
Karns v. Karns, 511 P.2d 955 (Wyo. 1973).

[¶14]   In this case, the husband does 
contend he is the owner of forty-five percent of the stock in the ranching 
corporation because of the shares given to him by his wife. The testimony of 
both the husband and wife discloses the purpose of the first gift of stock was 
to enable the husband to be named a member of the board of directors so he could 
serve as president of the company. They also testified the reason for the major 
gift was to effectuate an estate plan designed to minimize inheritance taxes in 
order to provide the maximum estate for the benefit to their daughter. The 
testimony of the wife with respect to the gifts of stock to her husband 
was:

Q. 
When it came time to do this estate planning to - Well, when that came up, what 
is your recollection of how that all transpired?

A. 
My recollection is that as we were settling the estate - There was not one 
estate. There were two estates. I would like to clarify that for the 
Court.

As 
we were going through this process, we realized that because there were two 
estates, we weren't able to avoid an estate tax problem, and my recollection to 
me is with Greg, you know, Kathie, when these estates are settled, we have got a 
real estate tax problem. When something happens to you, Adeena and I are going 
to go lose the ranch. There is no way we will be able to hold on to it, so we 
need to do some estate planning. The estate was settled in March of 1991, so at 
some point after that we approached Larry Weaver. That's my 
recollection.

Q. 
And it culminated in November of 1992 when you sat down in his office and 
transferred the stock; is that correct?

A. 
Yeah, that's correct.

Q. 
When you met with your husband and Mr. Weaver in Mr. Weaver's office, do you 
recall how much stock it was that Mr. France wanted you to gift to 
him?

A. 
He wanted 50 percent.

Q. 
Was there some discussion about that? 

A. 
Yes. I was uncomfortable with that. I knew that my dad was probably rolling over 
in his grave at the time, and I don't know, I just had this gut feeling that I 
needed to maintain a majority stock owner status, and so we discussed that. Greg 
kind of sat there during the discussions between Larry and I, and Larry and I 
came up with the 45/55 percent split.

Q. 
What was your intention when you were making this? What did you want to happen 
to the ranch? What were your thoughts?

A. 
My thought was that I wanted this ranch to continue. I didn't want it to be sold 
because of inheritance tax. I was very concerned about our daughter Adeena and 
that she may need help her entire adult life financially, and I wanted to make 
sure that at least that asset was there to support her through her 
life.

Q. 
Did you discuss that? Did you and Mr. France jointly discuss that?

A. 
Yes, we did. In fact, we had a discussion on the phone within the last, I 
believe, two to three weeks, and I said to him then, you know, we don't know if 
Adeena is going to be able to support herself as an adult; and he said yes, I 
know; and I said we need to make sure that she is provided for, and he agreed 
that we did.

Q. 
When you were making this gift of stock to him that, in essence, divided the 
ownership of this corporation almost in two, so that it made it into two 
estates, the same as with your mother and father; is that correct?

A. 
That is correct.

It 
is apparent that the purpose of the gift of stock to the husband was to 
effectuate the estate plan on the assumption they still would be married when 
the first one died. In fact, at the time of that major gift, the attorney asked 
the husband if they had a solid marriage, and he replied, "Rock 
solid."

[¶15]   We are satisfied, given this record 
demonstrating the stock and cash came to the parties by virtue of the wife's 
inheritance from her parents and the purpose for which the gift of stock was 
made to the husband, that the trial court did not abuse its discretion. The 
distribution of the property made by the court was fair, just, and manifested an 
exercise of discretion that is unassailable. The court carefully made a record 
as to its application of WYO. STAT. § 20-2-114 and its consideration of all of 
its factors, in accordance with our prior cases.

[¶16]   With respect to the asserted issue 
about the valuation of the stock in the ranching corporation, our affirmance of 
the decision of the trial court to set that stock over to the wife makes any 
debate with respect to its value moot. Consequently, we do not address that 
issue.

[¶17]  The Findings of Fact, Conclusions of 
Law, and Decree of Divorce entered by the trial court are affirmed.