Opinion ID: 1865151
Heading Depth: 1
Heading Rank: 5

Heading: Property Valuation and Division

Text: Donna worked outside the home on a full time basis for the entirety of the marriage, taking two six-week maternity leaves on accumulated sick leave so there was no loss of income. Larry retired from the highway patrol in 1988, and then worked seasonally for the highway patrol and Mount Rushmore. The court determined that the contributions to the marital estate were substantially equal, and the record reveals that the property division was also substantially equal. Larry disputes the valuation of the marital home, which was awarded to Donna, subject to the indebtedness of a first and second mortgage. The parties had lived in Rapid City until they moved into the house in Black Hawk, South Dakota, in May 1989. At the time of trial, Donna presented an appraisal showing the market value of the home at $68,000, and further presented an estimated statement showing all costs that would be incurred upon sale of the house, including brokerage commission, real estate taxes, and other fees. Thus, the net value of the home for purposes of the property division was $19,417. Larry disputes the valuation, specifically arguing that the closing costs were inflated, and that they should not be included in the valuation. According to Larry's brief, the house was not being sold; thus, he characterizes the closing costs as imaginary. First, we note that Larry failed to present any evidence at trial to dispute the appraisal and valuation of the house. Second, the record indicates that there were, during the pendency of the divorce in the lower court, plans to sell the house. The record includes an August 1992 affidavit from Larry, wherein he twice states that he was helping Donna to fix up the home for possible sale. We also note that Larry, in his refusal to execute a quitclaim deed to Donna following the decree of divorce, argues that, She would sell [the house] tomorrow given the chance. [2] There was sufficient evidence on the record to support a conclusion that the sale of the house was clearly contemplated by the parties. Other courts have directly addressed the issue of whether the costs of selling a marital home may properly be included in valuation of the house for purposes of making an equitable division of the property. As one court stated: [E]ven if neither party contemplated selling the home, the costs of sale must still be deducted. Valuation is nothing more than a function of what the home is worth if it were to be presently sold; therefore, the costs of achieving that value should be considered. Moreover, any number of events could occur that would require the home to be sold at virtually any time. Thus, [the court] did not err by including costs of sale in the net equity of the marital home. Zeigler v. Zeigler, 365 Pa.Super. 545, 530 A.2d 445, 447 (1987) (citations omitted). Likewise, another court has stated that, Where a trial court, acting within its discretion, determines that an equitable division of property can best be achieved by considering the net equity rather than the gross equity of the property, this court will not interfere with that determination. In re Marriage of Woodrum, 618 P.2d 732, 734 (Colo.App.1980). Still another court found abuse of discretion in the lower court's refusal to take into account the costs of selling a home, including payment of a sales commission, payment of pro-rated taxes and other incidental expenses in connection with the sale, when valuating a home for purposes of property division in a divorce. Payne v. Payne, 5 Va.App. 359, 363 S.E.2d 428, 433 (1987). See also Wright v. Wright, 469 A.2d 803, 806 (Del.Fam.Ct.1983) (noting that the parties properly agreed to reduce the fair market value appraisal of the house by eight percent, to cover selling costs). Thus, even if sale of the home were not immediately contemplated, it was reasonable for the trial court to consider the net value of the house to the party who received it. Additionally, Larry presents no contrary evidence regarding the amount of the closing costs. We will not overturn a valuation unless it is clearly erroneous. Johnson, 471 N.W.2d at 162 (citing Herrboldt v. Herrboldt, 303 N.W.2d 571, 572 (S.D.1981)). We find no error in the circuit court's valuation of the marital home. Larry additionally argues that if Donna intended to sell the home, the court should have awarded it to Larry as part of his property award. Larry urges that he and his son could have made use of it and salvaged the marital home for them and their descendants. First, we note that the parties had lived in the house for less than three years at the time of the filing of the divorce. This was not ancestral property for which there need be serious concern in regard to keeping it in the family. Second, Donna has indicated her willingness to sell it to Larry at the appraised valuewhich could likely be accomplished by his tendering Donna's share of the net equity as calculated by the court. Finally, in Larry's August 1992 affidavit, he states that he was involved in cleaning up the home for possible sale; thus, Larry knew during the pendency of the divorce that sale of the home was contemplated by the parties. Finally, Larry disputes the trial court's calculations regarding the parties' pensions as marital property. This court has repeatedly held that retirement plans accrued during the marriage, whether contributory or non-contributory, are divisible marital assets. Bell v. Bell, 499 N.W.2d 145, 147 (S.D.1993) (citing Kanta v. Kanta, 479 N.W.2d 505, 510 (S.D.1991); Stemper v. Stemper, 403 N.W.2d 405, 408 (S.D.1987); Stubbe v. Stubbe, 376 N.W.2d 807, 809 (S.D. 1985)). In this instance, the marital estate included three pension plans: (1) Larry presently receives a pension due to his retirement from the highway patrol; (2) Larry may receive a pension in the future from the National Guard; and (3) Donna may receive a federal employee pension (FERS) in the future. Larry does not appear to challenge the court's calculations regarding his pensions, [3] but urges that the trial court abused its discretion in failing to valuate Donna's possible future pension in terms of present value. We note that Larry presented no evidence at trial in this regard, but only presented a post-trial memorandum on the subject. In its findings of fact, the court noted that Donna's Federal Employee Retirement System (FERS) service included six years of service during the marriage. Larry would be entitled to one-half of any FERS pension attributable to the service credited during the marriage, if and when Donna becomes eligible to receive such a pension. Thus, for example, if Donna retires after eighteen years of service, Larry would be entitled to one-half of 6/18ths of Donna's pension. Since Donna could leave federal employment and withdraw contributions to the FERS program at the time, the trial court provided that Larry should receive the appropriate share of any withdrawal if that takes place in lieu of a pension. The calculations of the trial court appear correct and reasonable. Radigan v. Radigan, 465 N.W.2d 483, 486 (S.D.1991) (citing Hautala v. Hautala, 417 N.W.2d 879, 880 n. 1 (S.D.1988)). This court may not set aside the trial court's property division unless we find a clear abuse of discretion. Radigan, 465 N.W.2d at 487 (citing Henrichs v. Henrichs, 426 N.W.2d 569, 572 (S.D.1988)). We find no abuse of discretion in the trial court's present and prospective divisions of either Larry's or Donna's pensions. Radigan, 465 N.W.2d at 487. In regard to the overall property settlement, we reiterate that, We have consistently held that trial courts have broad discretion in making division of property and that the same will not be set aside unless a clear abuse of discretion appears. Fait v. Fait, 345 N.W.2d 872, 872 (S.D.1984) (citations omitted). In his dissent, wherein Justice Henderson discusses the division of property, he notes that, He [Larry] did not want a divorce. His wife [Donna] wanted a divorce. Identification of the party who wanted the divorce is irrelevant to the property settlement. Apparently, Justice Henderson would have us consider the relative fault of the parties. Although fault is a factor in awards of alimony ... it is not applicable here.  Id. at 873 (emphasis added) (citations omitted). See Cole v. Cole, 384 N.W.2d 312, 314 (S.D.1986) (Generally, fault will not be taken into account with regard to an award of property.); Hanks v. Hanks, 296 N.W.2d 523, 527 (S.D.1980) (noting that relative fault of the parties has generally been removed as consideration with respect to property division); Price v. Price, 278 N.W.2d 455, 458 (S.D.1979) (We will not discuss the faults and circumstances leading up to the divorce as a factor to be considered in the analysis of the property division, because fault was not relevant to the acquisition of the marital property.); Adam v. Adam, 254 N.W.2d 123, 130 (S.D.1977) (noting that SDCL 25-4-45.1 removes fault from consideration in property awards). Even if fault were a factor in property divisions, which it is not, we note that Donna and Larry stipulated that a divorce could be granted to both parties on the grounds of irreconcilable differences. Thus, in adopting the stipulation, the trial court made no finding of fault. Parsons v. Parsons, 469 N.W.2d 581, 582 (S.D.1991). The trial court in this case had no duty to make findings of fact on fault, which was an immaterial and undisputed issue; and it would be equally improper for this court to attempt the same.