Case Title: HOFFMAN v. HOFFMAN

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 2004-06-16T00:00:00Z

Document:
HOFFMAN v. HOFFMAN2004 WY 6891 P.3d 922Case Number: 03-133Decided: 06/16/2004
APRIL 
TERM, A.D. 2004

 

                                                                                                            

 

DAVID 
MARK HOFFMAN,

 

Appellant(Defendant),

 

v.

 

MARLA 
KIM HOFFMAN,

 

Appellee(Plaintiff).

 

 

Appeal 
from the District Court of Lincoln County

 

Representing 
Appellant:

Kenneth 
S. Cohen, Jackson, Wyoming 

 

Representing 
Appellee:

Ronald 
G. Pretty, Cheyenne, Wyoming 

 

 

Before 
HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.

 

 

 

GOLDEN, 
Justice.

[¶1]           
This 
is an appeal from the property division portion of a divorce decree.  Finding no abuse of discretion, we 
affirm.

 

 

ISSUE

 

[¶2]           
Appellant 
presents only one issue: 

 

Did 
the district court abuse its discretion in this case by allocating all of the 
parties' business debts to the husband?

 

 

FACTS

            

[¶3]           
David 
Mark Hoffman (hereinafter "Husband") and Marla Kim Hoffman (hereinafter "Wife") 
met in 1998 and lived together in Kemmerer from January 1999 until the fall of 
1999.  At that time, Wife moved to 
Pinedale to work as a nurse.  
Husband was an engineer with P & M Mine in Kemmerer.  The couple married in 2001.  Husband promised Wife she would not have 
to work again so Wife quit her nursing job in Pinedale and moved to 
Kemmerer.  There are no children of 
the marriage.  

 

[¶4]           
Shortly 
after the marriage, the couple decided to open an auto parts store.  Wife did not really want to start the 
business but Husband talked her into it.  
Husband maintained his job at P & M Mine. Wife managed the auto parts 
store during the day, and Husband handled the business finances and helped run 
the store on weekends.  The couple 
organized a corporation as the business entity for the auto parts store.  Husband owned 51% of the corporate stock 
while Wife owned 49%.  The original 
operating capital for the business came from a loan by Husband from his personal 
retirement account and further loans to the business.  The auto parts store had financial 
trouble from the beginning.  The 
business borrowed more money to continue operations.  Husband was highly critical of Wife's 
running of the business.  Wife 
freely admits that she had no experience in running a business, and this was 
well-known to Husband before they opened the auto parts store. 

 

[¶5]           
The 
marriage quickly broke down, and by early 2002, Wife decided she wanted a 
divorce.  When Husband learned that 
Wife was planning to divorce him, he withdrew $30,000 from the business account 
and sent it to his brother so Wife could not access it.  This cash withdrawal further intensified 
the financial troubles of the business.  
Business operations became even more difficult as the parties contested 
control of the business during the pendency of the divorce proceedings.  Each party ended up taking money out of 
the business account to pay personal bills.  Ultimately, before the divorce trial, 
the couple ended up selling the business for a loss estimated at between 
$150,000 and $175,000.1  

 

[¶6]           
At 
the divorce trial, evidence regarding the corporate finances was scant.  There was no evidence that either party 
personally guaranteed any amount borrowed by the corporation or that any 
corporate debts were in any other way personal debts of Husband or Wife.  The trial court specifically found that 
the debts testified to were debts of the corporation.  Also regarding the corporation, there 
was some evidence that there were accounts receivable still outstanding.  

 

[¶7]           
For 
purposes of allocating ownership of the corporation, the trial court found that 
Husband invested his personal finances in the business, exercised majority 
control over the business, and unilaterally withdrew a large majority of funds 
from the business accounts, increasing the financial stress on the 
business.  In contrast, Wife 
contributed only sweat equity to the business.  The trial court awarded all ownership 
interest in the corporation to Husband.  
The trial court also ordered that Husband be solely responsible for any 
personal indebtedness the parties may have with regard to any corporate 
debt.  

 

[¶8]           
The 
trial court also awarded Husband the real property acquired by the parties 
during their marriage and the full amount of any marital accrual in his 
retirement benefits.  The trial 
court split their personal credit card debts equally in half.  The trial court approved the agreement 
of the parties concerning the division of their personal property.  Finally, the trial court ordered each 
party to bear their own attorneys' fees and costs.  Husband timely 
appealed.

 

DISCUSSION

 

Standard 
of Review

 

[¶9]           
The 
division of marital property is within the trial court's sound discretion, and 
we will not disturb that division absent an abuse of discretion.  Carlton v. Carlton, 997 P.2d 1028, 1032 (Wyo. 2000).  We afford 
the trial court considerable discretion to form a distributive scheme 
appropriate to the peculiar circumstances of each individual case, and we will 
not disturb such a scheme absent a showing that the trial court clearly abused 
its discretion.  The division of 
property in a divorce case should not be disturbed except on clear grounds as 
the trial court is usually in a better position than the appellate court to 
judge the parties' respective merits and needs.  Metz v. Metz, 2003 WY 3, ¶6, 61 P.3d 383, ¶6 (Wyo. 2003).  The trial 
court is also in the best position to assess the witnesses' credibility and 
weigh their testimony.  Raymond 
v. Raymond, 956 P.2d 329, 332 (Wyo. 1998).  We, therefore, give considerable 
deference to its findings.  
Id.  To the extent 
findings of fact are in question, we consider only the evidence of the 
successful party, ignore the evidence of the unsuccessful party, and grant the 
successful party every favorable inference that can be drawn from the 
record.  Holland v. Holland, 
2001 WY 113, ¶8, 35 P.3d 409, ¶8 (Wyo. 2001).

 

[¶10]      The 
ultimate question in determining whether an abuse of discretion occurred is 
whether the trial court could reasonably conclude as it did.  Metz, ¶6. An abuse of discretion 
occurs when the property disposition shocks the conscience of this Court and 
appears to be so unfair and inequitable that reasonable people cannot abide 
it.  Davis v. Davis, 980 P.2d 322, 323 (Wyo. 1999).  

 

 

Property 
Division

 

[¶11]      We 
begin by noting that Husband bears the burden of clearly demonstrating that the 
evidence adduced before the district court did not support the property division 
as a whole.  Odegard v. 
Odegard, 69 P.3d 917, 921 (Wyo. 2003).  
Husband only takes issue with the allocation of all business debts to 
him.  Husband argues that the 
business and the debts associated with the business were the only property items 
subject to allocation by the trial court because Wife, during her testimony at 
the divorce trial, testified that she was not seeking any interest in the 
marital home or Husband's retirement fund.  
Wife's attorney, however, through trial examination, presented evidence 
regarding these other assets and argued in closing that Wife expected the trial 
court to take these assets into account when allocating any personal debt. 

 

[¶12]      In 
fact, a trial court is obliged to take all marital property into account when 
deciding how to allocate marital property.  
A trial court divides marital property pursuant to Wyo. Stat. Ann. §  20-2-114 (LexisNexis 
2003):

 

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.   

 

A 
just and equitable distribution is as likely as not to be unequal.  This Court evaluates whether the trial 
court's property division is, in fact, equitable from the perspective of the 
overall distribution of marital assets and liabilities rather than from a narrow 
focus on the effects of any particular disposition.  Carlton, 997 P.2d  at 
1032.

 

[¶13]      The 
order from the trial court distributes all the marital assets at issue.  Husband was awarded the real property 
and the entire amount of his retirement fund.  Personal credit card debt was split 
equally in half.  The trial court 
granted Husband exclusive ownership interest in the corporation.  On appeal Husband argues that Wife was 
awarded the accounts receivable.  
Husband clearly does not understand the import of the order.  The accounts receivable belong to the 
corporation.  By awarding him 
exclusive ownership of the corporation, the trial court awarded Husband the 
accounts receivable.  Finally, the 
trial court ordered the parties to bear their respective attorney's fees and 
costs.  Given the state of the 
record, we cannot say that the trial court abused its discretion in its 
distribution of the marital property.

 

[¶14]      Husband 
makes no argument that the property distribution as a whole is inequitable.  He only argues that he should not be 
solely responsible for the entire corporate debt.  Even if we were to focus solely upon the 
corporation, Husband's argument is still too narrow.  Considering that the record reflects 
that starting the business was Husband's idea, which Wife initially resisted, 
Husband invested his personal funds as capital for the business, Husband owned 
51% of the stock of the corporation, and Husband's withdrawal of cash from the 
business limited the operating success of the business, we fail to see any 
potential abuse of discretion by the trial court in awarding the corporation to 
Husband.

 

[¶15]      To 
the extent Husband is focusing on debt, no evidence was presented that either 
Wife or Husband ever personally guaranteed any of the debts of the 
corporation.  There was no evidence 
presented regarding any marital debt except for the personal credit cards.  The trial court split responsibility for 
this debt equally between Husband and Wife.  Perhaps Husband is upset because he is 
one of the creditors of the business and somehow thinks Wife should be 
responsible for his loss of investment in the business.  This is not, however, an argument he 
presented either to this Court or the trial court.  Suffice it to say that starting a small 
business is always a risk.  
Hopefully Husband understood the risk when he invested his personal 
money.  Regardless, the only 
evidence presented was that Wife initially did not want to start a business and 
that her contribution was limited to sweat equity.  Even if the issue had been before the 
trial court, allocating to Husband a loss on an investment of Husband's personal 
funds as decided on and made by Husband would not constitute an abuse of 
discretion.

 

[¶16]      In 
his final, desperate attempt to prove the trial court abused its discretion, 
Husband argues that Wife testified at the divorce trial that it would not be 
fair for Husband to be responsible for all the debts of the business.  Husband argues that, because Wife must 
be considered a reasonable person, and she didn't think it was fair, it must 
meet our standard for abuse of discretion that no reasonable person could abide 
by the result.  Husband's argument 
fails for several reasons.  First, 
the record is unclear what the foundation or the context was for this comment by 
Wife.  More importantly, it is the 
trial court that decides the equitable distribution of property.  The trial court hears all the evidence, 
judges the credibility of the witnesses on all issues, and makes its 
determination regarding property distribution of all marital property after 
considering the statutory factors.  
Wife's isolated comment is but one piece of the puzzle and is not 
definitive for any purpose.

 

[¶17]      Husband 
presents no argument adequately supporting, nor can we find based upon our 
review of the record, an abuse of discretion by the trial court in its 
distribution of the marital property in this case.  Wife, in her brief, argues that 
Husband's appeal lacks merit and this Court should impose sanctions against him 
pursuant to W.R.A.P. 10.05, which provides that this Court may sanction an 
appellant if it certifies that there was no reasonable cause for the 
appeal.  Such sanctions are rare, 
and we cannot say that this appeal is so lacking in merit as to qualify for 
sanctions, especially since it challenged a discretionary decision by the trial 
court.  See Wood v. Wood, 964 P.2d 1259, 1268 (Wyo. 1998).

 

 

CONCLUSION

 

[¶18]      The 
judgment of the trial court allocating the marital property of the parties is 
affirmed.  Sanctions under W.R.A.P. 
10.05 are denied.

 

FOOTNOTES

1Only the corporate assets such as the rights to the ongoing business and 
all inventory were sold.  Husband 
and Wife remained the owners of the corporate stock, which included accounts 
receivable and accounts payable.