#26106-rev & rem-SLZ

2012 S.D. 21

IN THE SUPREME COURT

OF THE

STATE OF SOUTH DAKOTA

* * * *

JAMIE LOUANN FARLEE, Plaintiff and Appellant,

v.

CLAYTON LEE FARLEE, Defendant and Appellee.

* * * *

APPEAL FROM THE CIRCUIT COURT OF

THE FOURTH JUDICIAL CIRCUIT

ZIEBACH COUNTY, SOUTH DAKOTA

* * * *

THE HONORABLE JEROME A. ECKRICH, III

Judge

* * * *

PATRICIA A. MEYERS

Rapid City, South Dakota Attorney for plaintiff

and appellant.

ROSE ANNE WENDELL

Pierre, South Dakota Attorney for defendant

and appellee.

* * * *

CONSIDERED ON BRIEFS

ON FEBRUARY 14, 2012

OPINION FILED 03/21/12
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ZINTER, Justice

[¶1.] After six years of marriage, Jamie and Clayton (Clay) Farlee divorced. 

Jamie appeals the circuit court’s division of property. We reverse and remand for 

the entry of findings of fact and conclusions of law resolving the parties’ disputes on

property valuations and whether certain property is part of the marital estate.

Facts and Procedural History

[¶2.] Jamie and Clay married in May 2003. Prior to the marriage, Jamie 

inherited approximately $700,000. Jamie kept her inheritance in a separate bank 

account to which Clay did not have access. Although Jamie controlled the spending 

of her inheritance, she used a substantial part of it for household expenses,

numerous family vehicles, and recreation. Clay entered the marriage as a rancher

with 156 head of cattle, a mobile home, five acres of land, a pickup, and some debt. 

During the marriage, Clay expanded his ranching operation. Jamie raised their 

three children, did the bookkeeping for the ranch, and operated two home-based 

businesses.

[¶3.] The family initially lived in Clay’s premarital mobile home, which was

located on Indian trust land.

1 In 2007, Clay and Jamie bought a modular home for 

$150,000 and located it on that property. Jamie made a $15,000 down payment 

from her inheritance, and she paid most of the mortgage payments. Clay used 

$10,000 in profits from the sale of his mobile home for concrete work around the 

new home.

 

1. Clay is an enrolled member of the Cheyenne River Sioux Tribe.
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[¶4.] In May 2009, the parties separated, and Jamie filed for divorce. The 

parties disagreed on the value of many assets. They also disagreed whether certain 

assets were marital property. One of the disagreements involved the value of the 

cattle existing at the time of trial and whether they were marital property. The 

court valued Clay’s premarital cattle herd (156 head) at $125,000. The court valued

the herd existing at the time of trial (346 head) at $248,800. The court found that 

both Jamie’s inheritance and Clay’s effort contributed to the increase in the cattle 

herd. The court ruled that “[t]he cattle are included in the marital estate with

consideration given to the herd Clay owned prior to the marriage.” (Emphasis 

added.)

[¶5.] The second disagreement involved the value of the marital home. The 

circuit court found that its market value on trust land was $100,000. The court, 

however, also found that the home’s “in-use value” was $150,000. The court did not 

indicate which value it assigned for purposes of the property division.

[¶6.] The third disagreement involved the marital status of personal 

property that was traceable to Jamie’s inheritance. There is no dispute that 

$300,000 to $450,000 of the inheritance was unaccounted for at the time of trial. 

The court noted that “Jamie [had] simply consumed a significant portion of 

inheritance without evidence of tangible benefit.” The court did, however, trace “the 

surviving remnants of [Jamie’s] inheritance to horses, tack, trailers, Jamie’s 

business inventory, vehicles, the marital residence, and her current home in Belle 

Fourche.” Jamie argued that because those assets were traceable to her

inheritance, they were nonmarital property. In ruling on this argument, the court
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determined that a suburban and a “platinum horse trailer” were nonmarital 

property.

[¶7.] Finally, the parties disagreed on the value of certain personal 

property. The dispute involved the value of eighty acres of land, horses, a Chevrolet 

pickup, a New Holland tractor, Jamie’s jewelry business, a four wheeler, a “rhino,” a 

deck, a flatbed trailer, generators, a portable barn, a storage shed, corral panels, a 

lawn mower, water tanks, and saddles and tack. The court valued the eighty acres 

of land, the horses, the New Holland tractor, and Jamie’s jewelry business. The 

court did not value the remaining property.

[¶8.] The court granted the divorce, divided the property, and ordered Clay 

to pay Jamie $48,000 to equalize the property division without indicating the total 

value of the assets awarded to Clay and Jamie. The court denied Jamie’s 

subsequent motion for reconsideration or clarification of the property division. 

Jamie appeals contending that the court erred in failing to classify disputed assets 

as marital or nonmarital and in failing to value certain marital property. “We 

review a court’s property division for an abuse of discretion.” Lovejoy v. Lovejoy, 

2010 S.D. 39, ¶ 16, 782 N.W.2d 669, 674.

Decision

[¶9.] Jamie argues that the circuit court abused its discretion in failing to 

assign a value to the disputed marital property. She contends that this Court 

cannot properly review the property division for an equitable distribution without

those values. We agree. The circuit court “must place a value upon all of the 

property held by the parties and make an equitable distribution of that property.”
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Guthmiller v. Guthmiller, 2003 S.D. 120, ¶ 6, 670 N.W.2d 516, 517. The “failure to 

value a marital asset constitutes an abuse of discretion and is reversible error.” Id.

[¶10.] In this case, the record reflects an unresolved $50,000 difference in the 

valuation of the home. An additional unresolved $27,430 difference exists in the 

valuation of the Chevrolet pickup, the four wheeler, the rhino, the deck, the flatbed 

trailer, the generators, the portable barn, the storage shed, the corral panels, the 

lawn mower, the water tanks, and the saddles and tack. It is not enough for the 

circuit court to surmise that property is worth “something” and then distribute the 

property. Id. The circuit court must set a value and that value must be “based 

upon the evidence or within a reasonable range of values presented to [the court].” 

Id. ¶ 8. The failure to value all disputed property requires a remand for the entry of

valuation findings and a reconsideration of an equitable division of the property.

Id.; see also Guindon v. Guindon, 256 N.W.2d 894, 898 (S.D. 1977).

[¶11.] With respect to marital property, “South Dakota is an ‘all property 

state,’ meaning all property of the ‘divorcing parties is subject to equitable division 

by the circuit court, regardless of title or origin.’” Halbersma v. Halbersma, 2009 

S.D. 98, ¶ 9, 775 N.W.2d 210, 214 (citing Endres v. Endres, 532 N.W.2d 65, 68 (S.D. 

1995) (quoting Radigan v. Radigan, 465 N.W.2d 483, 486 (S.D. 1991))); see also 

SDCL 25-4-44 (“When a divorce is granted, the courts may make an equitable 

division of the property belonging to either or both, whether the title to such 

property is in the name of the husband or the wife.”). This includes inherited 

property, Halbersma, 2009 S.D. 98, ¶ 12, 775 N.W.2d at 215, and premarital 

property, Muenster v. Muenster, 2009 S.D. 23, ¶ 16, 764 N.W.2d 712, 717. “In 
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arriving at an equitable division of property, a circuit court must classify property 

as ‘marital’ or ‘non-marital.’” Halbersma, 2009 S.D. 98, ¶ 10, 775 N.W.2d at 215.

[¶12.] In this case, the circuit court did not clearly classify all the disputed 

property as marital or nonmarital. With respect to the cattle, the court noted that 

“[t]he appreciated value of a cattle herd may be considered a marital asset even if 

the herd might be considered non-marital.” (Emphasis added) (citing Bennett v. 

Bennett, 516 N.W.2d 672, 674 (S.D. 1994)). The court later concluded that “the 

cattle” were marital property, and that it was giving “consideration” to the herd 

Clay owned prior to the marriage. From these rulings, we are unable to determine 

what cattle were classified as marital property and the meaning of the 

“consideration” that was allowed for Clay’s premarital cattle. Further, based on the 

court’s findings and conclusions relating to property traceable to Jamie’s 

inheritance, we cannot determine why a suburban and the platinum horse trailer

were specifically classified as nonmarital property while much of the remaining 

traceable property was not explicitly classified. We conclude that the circuit court 

erred in failing to definitively rule on the parties’ competing claims regarding all 

disputed marital property. See Midzak v. Midzak, 2005 S.D. 58, ¶ 24, 697 N.W.2d 

733, 740 (“The trial court abused its discretion in not properly determining the 

status of all assets first as either separate or marital, and then making an equitable 

distribution of all assets determined to be marital in nature.”).

[¶13.] Because of uncertainties regarding the marital classification of all 

disputed property, and because we are unable to determine the circuit court’s 

valuation of all marital property, we are unable to review whether the circuit court 
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arrived at an equitable division.

2 Consequently, we reverse and remand for 

reconsideration of the property division after the entry of findings of fact and 

conclusions of law on the existing record clearly resolving the valuation and marital 

property issues. See Edinger v. Edinger, 2006 S.D. 103, ¶¶ 10-11, 724 N.W.2d 852, 

856 (reversing and remanding because this Court was unable to duplicate the 

circuit court’s property values and ascertain the reasoning for the property 

division). Both parties’ requests for appellate attorney’s fees are denied.

[¶14.] GILBERTSON, Chief Justice, and KONENKAMP, SEVERSON, and 

WILBUR, Justices, concur.

 

2. “The law requires an equitable, not necessarily equal, division of assets.” 

Halbersma, 2009 S.D. 98, ¶ 7, 775 N.W.2d at 214.