Title: Fraase v. Fraase

State: north-dakota

Issuer: North Dakota Supreme Court

Document:

315 N.W.2d 271 (1982) Jewel M. FRAASE, Plaintiff and Appellee, v. Mark R. FRAASE, Defendant and Appellant. Civ. No. 10057. Supreme Court of North Dakota. January 21, 1982. *272 Irvine, Ramstad, Quam & Briggs, Detroit Lakes, Minn., for plaintiff and appellee; argued by John C. Quam, Detroit Lakes, Minn. Wegner, Fraase, Nordeng & Johnson, Fargo, for defendant and appellant; argued by Mervin Nordeng, Fargo. ERICKSTAD, Chief Justice. Jewel M. Fraase commenced an action for divorce from Mark R. Fraase on the grounds of irreconcilable differences. Mark counterclaimed on the grounds of irreconcilable differences and later amended his counterclaim to request a divorce on the grounds of adultery. Both parties sought custody of the children. The trial was held in the District Court of Traill County. The court granted the divorce on grounds of irreconcilable differences, awarded custody of the children to Jewel, set the child support, and divided the property. Mark moved for a new trial and to amend the findings of fact, conclusions of law, order for judgment, and judgment. Those motions were denied. Mark has appealed from the judgment and the orders denying his motions. On appeal, Mark contends that the trial court erred in awarding custody of the children to Jewel, that the property distribution was inequitable, and that the established child support payments are too high. In divorce actions, the trial court's determination on matters of child custody, child support, and division of property are treated as findings of fact and will not be set aside unless they are "clearly erroneous". DeForest v. DeForest, 228 N.W.2d 919, 923 (N.D.1975); Bender v. Bender, 276 N.W.2d 695, 697 (N.D.1979). We have reviewed the trial court's findings and affirm in part, modify in part, and remand with instructions. Jewel and Mark were married on June 26, 1970, at Jacksonville, North Carolina. At the time of the marriage, Jewel was in the Marine Corps and pregnant with Mark's child. Jewel miscarried that child three *273 days after the marriage. The couple eventually had two children during their 11-year marriage. Mark was 35 years old at the time of the marriage. He was engaged in the practice of law and had accumulated real and personal property which he brought into the marriage. Jewel had essentially no assets at the time of the marriage. After their marriage in 1970, Jewel worked for a time at Northwestern Bell and, in 1977, started babysitting full time. During the 11-year marriage, the couple accumulated additional property. The trial court, in essence, described, evaluated, and divided the property in its findings of fact as follows: Mark argues that this division of property was not equitable and therefore did not fall within the guidelines enumerated in Ruff v. Ruff, 78 N.D. 775, 52 N.W.2d 107 (1952) and Fischer v. Fischer, 139 N.W.2d 845 (N.D.1966) (Ruff-Fischer guidelines). Specifically, he argues concerning the division of property: In its conclusions of law, the trial court said it applied the guidelines of Ruff-Fischer. Those guidelines are as follows: We first address Mark's argument that the court erred by ignoring in its distribution of property certain property brought into the marriage by him. He takes issue with the trial court's finding that he "ends up the marriage with ... all the property he owned at the time of the marriage...." He asserts that the court ignored $4,000 worth of growing crops, $4,200 worth of stored grain, a ring worth $600 and a life insurance policy cashed in during the marriage of a value of $6,000, all of which he brought into the marriage. The Ruff-Fischer guidelines do encourage trial courts to consider the property owned *274 by the parties and whether it was "accumulated or acquired before or after the marriage...." Id. Although we have recognized that the time of the acquisition of property and its source is significant, we have nevertheless held that property acquired prior to the marriage by one spouse should be considered as part of the marital estate in determining what an equitable division would be. Fine v. Fine, 248 N.W.2d 838, 841 (N.D.1976); Hultberg v. Hultberg, 259 N.W.2d 41, 44 (N.D.1977). We have never said that the trial court must make an express finding as to each of the factors enumerated by the guidelines. Instead, we have said that the guidelines are solely an aid to the equitable division of marital property. Nastrom v. Nastrom, 284 N.W.2d 576, 581 (N.D.1979). The ultimate objective in dividing the marital estate in a divorce case is to make an equitable distribution, and the determination of what is an equitable division lies within the discretion of the trial court. Id. at 580; Piper v. Piper, 239 N.W.2d 1 (N.D.1976). After reviewing the findings of fact, we conclude that the trial court did consider the items disputed by Mark. The court, however, said it had "very little information as to other assets in that no evidence was presented to establish value." In reviewing the evidence presented, we do not conclude the court's findings to be clearly erroneous or the division of property inequitable. The trial court discussed in its findings of fact all the property brought into the marriage by Mark and in its award distributed approximately $215,000 more in property to Mark than to Jewel. The $215,000 is accounted for by the farm land and lake lot owned by Mark prior to the marriage. While Mark did bring additional property into the marriage, the trial court is not required to award all that property to him. The fact that property subject to distribution was acquired by one of the parties prior to the marriage is a consideration weighing in favor of that party, but it does not prevent the court from awarding part or all of the property to the other party should an equitable distribution require it. Fine v. Fine, 248 N.W.2d 838, 841 (N.D.1976); Hultberg v. Hultberg, 259 N.W.2d 41, 44 (N.D.1977). Except for the farm land valued at approximately $223,000, and the lake lot valued at $3,500, Mark received approximately $38,000 in value and Jewel received approximately $48,000 in value. When we consider that the court treated $10,000 of the $25,000 mortgage as an obligation incurred by Mark prior to marriage, the values are approximately equal. The court could reasonably have concluded that Jewel's contributions to the marriage as a homemaker justify such a share, notwithstanding that Mark brought into the marriage or contributed to the marital estate another $14,800 which may or may not be traceable at this time. The court might also have reasonably considered that Jewel gave up career opportunities to care for Mark and their children and that her resulting earning capacity is much less than Mark's. Mark's second argument concerning the property distribution is that the trial court erred in finding that Mark's interest in his law firm had increased by $35,000 over its value on the date of his marriage. The trial court included that $35,000 value in the marital estate which it divided in making a distribution of property. Mark argues that his law practice was actually worth less at the time of the divorce than it was at the time of his marriage to Jewel. In fact, he asserts that if he were to walk away from the partnership he would receive nothing. He therefore contends that his interest is worthless. We disagree. In finding of fact 38, the trial court said: We do not accept Mark's argument that his interest in the law firm has no value. The trial court must make findings of fact. See Rule 52(a), N.D.R.Civ.P. Those factual findings are made by reviewing the evidence, listening to the testimony, and judging the credibility of the witnesses. A partner's interest in a law firm, where not otherwise provided by contract, includes as a minimum his interest in the office equipment, furniture, fixtures, and the accounts receivable. Those accounts receivable include finished as well as unfinished business. We are not convinced that a mistake was made in this determination and thus this determination is not clearly erroneous. Mark also argues that the trial court's inclusion of the law firm value in the marital estate for property division purposes and then using his income-earning capacity to determine the child-support award is actually considering Mark's income twice, thereby dividing it twice. Because we have determined that the trial court's finding that Mark's interest in his law firm had a value of $35,000 without considering his future income was not clearly erroneous, Mark's argument that the trial court used his income-earning capacity twice is without merit. Mark's third argument concerning the property distribution is that the court imposed debts upon him which it did not include in its findings of values. He contends that the trial court did not consider the $4,000 which it required him to pay for Jewel's attorney's fees, a $2,000 credit card debt, approximately $5,000 additional income taxes resulting from the transfer of the joint tenancy house to Jewel, and approximately $4,500 in income tax liability accruing because the court did not require Jewel to join in a joint tax return. Although the trial court did not include these debts in its listing of the distribution of property, it did consider the debts. In finding of fact 53, the trial court said: The trial court, in this finding of fact, found Mark obligated to pay all debts incurred by the parties during their marriage, including taxes. In his motion to amend the findings of fact, conclusions for law, and order for a new judgment, Mark requested that Jewel be required by the court to join him in an amended joint income tax return. At the hearing on that motion, Jewel agreed to join in a return if Mark were to reimburse her $875 for the taxes she paid for 1980. Mark argued that he was not liable for the entire $875 because $348 of that amount was due for self-employment social security payments. The *276 trial court said that it intended Mark to be responsible for all taxes for which Jewel was liable, including social security payments. The court then denied Mark's motion. We believe the trial court's denial of Mark's motion resulted in an unnecessary penalty to him. The court might have granted Mark's motion requiring Jewel to sign a joint income tax return and at the same time ordered Mark to reimburse Jewel $875 for the taxes she paid. During arguments presented at the hearing on Mark's motion, however, his attorney indicated that the Internal Revenue Service had given Mark until September 15, 1981, to file a joint return. That time has since passed. We reverse the order as to this possible amendment of the judgment and remand for a determination of whether or not an amended joint return may still be filed. Mark should not have been required to reimburse Jewel for her contributions to social security because those contributions relate solely to her retirement. If the trial court concludes that the amendment may still be made, we herewith order the trial court to order an amendment to the judgment accordingly. Mark contends that the trial court should have ordered Jewel to execute a quitclaim deed in order to clear the title to his condominium. He argues alternatively that the title could be cleared under Minnesota Title Standards by placing the legal description of the property in the judgment and having that judgment recorded. We agree with Mark that the trial court should have either included the legal description of the property in the findings of fact, conclusions of law, and order for judgment so that it would be in the judgment, or it should have required Jewel to execute a quitclaim deed. On remand, we ask that the trial court so order. The trial court found that the best interests of the two minor children would be best served by placing them in the custody of Jewel with visitation rights in Mark. Mark contends that this finding is "clearly erroneous". After a review of the testimony and other evidence, we conclude that this finding is not clearly erroneous. Mark argues that the trial court was predisposed to granting custody to Jewel because she was the mother. He also argues that Jewel's life style did not create a healthy environment in which to raise the children. He contends that Jewel ridiculed him in front of the children and that there was evidence that Jewel physically abused one of the children. The record indicates that the trial court was aware of the evidence relating to the above arguments and still concluded that the best interests of the children would be served by granting custody to Jewel. The trial court stated in its findings of fact and conclusions of law that it considered the best interests of the children in deciding which parent should be granted custody. In finding of fact 23, the trial court extensively discussed the factors listed at Section 14-09-06.2, N.D.C.C.[1] The trial court said: We have reviewed the transcript and have determined that there is a substantial evidence to support the trial court's finding. In any case, the finding as to custody does not appear to be clearly erroneous. The trial court ordered Mark to pay $250 per month per child in child support. It also ordered Mark to provide the children with health insurance. The objective of the trial court in setting child support payments must be to strike a balance between the needs of the children and the ability of the father to pay. Kostelecky v. Kostelecky, 251 N.W.2d 400, 403 (N.D.1977). Mark does not argue against the needs of the children, but only that he doesn't have the financial ability to make monthly child support payments in the amount of $500. The trial court found that Mark's net income was approximately $2,000 per month. Mark contends that because he was ordered to pay the debts of the marriage, child support payments of $500 per month plus insurance is too high. The major debts of which Mark complains are $9,500 for income tax, a farm mortgage of $25,000, and a $15,000 note on an investment home. In analyzing the debts, we have concluded that the tax debt could likely have been reduced if Mark had cooperated by reimbursing Jewel $875 for the taxes which she *278 paid. It may still be reduced on remand if an amended tax return is determined to be possible. The other two major debts are on income-producing property which should generate enough income to repay the debts. We therefore conclude that the trial court's finding that Mark was capable of paying $500 monthly for child support was not "clearly erroneous". Mark contends that the trial court's finding which says: "Defendant shall be obligated to furnish health and hospital insurance for the two minor children ...", should require him to pay to Jewel the amount of money necessary for her to purchase insurance for the children. He argues that she can purchase insurance as the custodial parent for less money than he would have to pay for the same coverage. He testified at trial that he would have to purchase a family plan in order to have the children covered. He asserts that Jewel would only need to purchase a single plus dependents policy. He testified to the following costs: During the hearing on Mark's motion for an amended findings of fact, conclusions of law and order for judgment, the trial court said: If what Mark suggests is legally and ethically possible, there is no reason the trial court should not issue an order accordingly. On remand we ask the court to so order if this method of paying for medical and hospital insurance will be less expensive. For the reasons stated in this opinion, we affirm the judgment in part, modify it in part, and remand with instructions. VANDE WALLE, PEDERSON and PAULSON, JJ., concur. SAND, Justice, concurring specially. Basically, I agree with the legal concepts employed in the opinion and its conclusions. However, I am compelled to express reservations with the commingling of tax issues, whether they be entitled benefits, breaks, exclusions, or taxability, with the equitable division of property in a divorce action. Federal tax matters are generally not within the jurisdiction of the courts which have jurisdiction over domestic matters. The federal tax issues are invariably decided by other legal bodies, either legislative (Congress), administrative (administrative agencies), or judicial (tax courts), and in some instances in conjunction with all three. Thus, the final decision is not with the state court making the equitable distribution of the property. After a final decision has been reached on the tax matters then the court (having jurisdiction of domestic matters) would be in a better position to take into consideration such tax matters. But if these have not been resolved, the tax matters are mere possibilities and probabilities. Furthermore, what may appear to be "settled tax matters" may be changed abruptly without notice and even before the concepts relied upon in the property distribution are or can be implemented or carried out. I believe it is much better to let the parties work out their tax problems rather than to saddle the courts with the problem of finding a solution for them. However, if the parties stipulated as to what they will consider the tax decision to be and agree to be bound by such agreement a different situation would result and the court would simply approve such stipulations as it does in any other proceedings affecting property settlement between the parties involved. Basically, I believe it is unfair to impose upon the court the tax problems that may arise as a result of property division. In *279 any event, the parties should present to the court reliable material and answers to the tax questions rather than to have the court speculate as to what the tax situation will be. [1] "1. The love, affection, and other emotional ties existing between the parents and child. "2. The capacity and disposition of the parents to give the child love, affection, and guidance and to continue the education of the child. "3. The disposition of the parents to provide the child with food, clothing, medical care, or other remedial care recognized and permitted under the laws of this state in lieu of medical care, and other material needs. "4. The length of time the child has lived in a stable, satisfactory environment and the desirability of maintaining continuity. "5. The permanence, as a family unit, of the existing or proposed custodial home. "6. The moral fitness of the parents. "7. The mental and physical health of the parents. "8. The home, school, and community record of the child. "9. The reasonable preference of the child, if the court deems the child to be of sufficient intelligence, understanding, and experience to express a preference. "10. Any other factors considered by the court to be relevant to a particular child custody dispute." § 14-09-06.2(1-10), N.D. C.C.