Opinion ID: 1863924
Heading Depth: 1
Heading Rank: 3

Heading: did the trial court err in including $30,000 in the marital property as david's hidden equity in his father's farm corporation?

Text: David worked full time for a farm corporation owned by his father and mother. David's father was the president and major stockholder of the corporation but was disabled and had retired from an active management role in the farming operation. As a result, David was considered the foreman of the operation. In addition to his services as foreman, David invested significant personal finances in the corporation. Because of Mary's support, David was able to invest a large part of his own earnings in the operation. Despite David's contributions of labor and finances to the corporation, David and his father both testified that David held no office, stock or interest in the corporation. They contended that David had no assurance of obtaining an interest in the corporation at any time in the future although David stated that he hoped he would. Both David and his father denied that David was ever paid any wages by the corporation or that the corporation owed David any wages. David did acknowledge that he had a loose business arrangement with the corporation. However, David maintained that the only sort of compensation he ever received was an occasional loan or gift when he needed financial assistance. During the trial Mary sought discovery of the farm corporation's financial records to ascertain the nature and extent of David's interest in the corporation. David resisted Mary's discovery request and discovery was ultimately denied. The financial records of the corporation proving unavailable, Mary's evidence of David's interest in the corporation was limited to her own testimony and to cross-examination of David and his father. Mary testified that at the beginning of the marriage she thought that David and his father were operating on a one-third and two-thirds basis respectively. Mary further testified that David told her during the last year of the marriage that he and his father were operating half and half. It is clear that the trial court was troubled by the issue of David's interest in the corporation. Apparently based upon the value of David's services to the corporation during the marriage, the trial court ultimately included $30,000 in the marital assets as David's hidden equity in the corporation. David contends that this valuation was speculative and contingent and therefore clearly erroneous. Accordingly, David argues that it was error for the trial court to include this $30,000 in the marital assets. This court's standard of review with regard to the valuation of marital property is whether the trial court divided the assets in an equitable manner. Herrboldt, supra . Again, the only time this court interferes with the valuations determined by the trial court is when the trial court has made a clearly erroneous valuation finding. Id. In this regard, this court accepts the evidence including any reasonable inferences which are favorable to the trial court's determination. Id. Further, this court will give due regard to the trial court's opportunity to judge the credibility of witnesses. Hersrud v. Hersrud, 346 N.W.2d 753 (S.D. 1984). Here the trial court clearly discredited the testimony of David and his father concerning David's interest in the farm corporation. The trial court characterized their testimony as less than candid, evasive and vague. Having rejected the contention that David had no interest in the farm corporation, it became incumbent upon the trial court to place a value on David's corporate interest as a marital asset. See Laird v. Laird, 322 N.W.2d 254 (S.D.1982); Guindon v. Guindon, 256 N.W.2d 894 (S.D.1977) (in making a property division a trial court must place a value upon all property held by the parties). In making this valuation, the trial court was not obligated to arrive at an exact figure. Hanks v. Hanks, 296 N.W.2d 523 (S.D.1980). All that was required was that the trial court's valuation be within a reasonable range of the evidence before it. Id; Moser v. Moser, 422 N.W.2d 594 (S.D.1988). Based upon our review of the record in this matter we are not convinced that the trial court's valuation of David's corporate interest was clearly erroneous. David's father, the president of the corporation, gave the testimony concerning the monthly value of David's services as a farm hand. Multiplying this figure by the number of months in the marriage in and of itself yields $24,000. Moreover, we observe that David was much more than a mere farm hand, having served as foreman of the farm operation. Clearly this would have increased the value of David's services to the corporation. Added to the value of these services would be the value of David's financial contributions to the corporation over the duration of the marriage. With regard to the corporation, David's father testified that it operated an extensive farming operation consisting of some 850 acres of tillable land and anywhere from 200 to 400 acres of pasture and hay land. The corporation also owned the farm machinery and approximately 200 cows and calves. David's father testified that the livestock and machinery were all debt free. Despite references to the depressed farm economy, David's father testified that there were no sizeable debts against the corporation and that he wanted and expected the existing debts to be paid off by year's end. Given the extensive and relatively debt free nature of the assets held by the corporation and considering the value of David's services and financial contributions to the corporation during the marriage, we find that the trial court's valuation of David's corporate interest at $30,000 was within a reasonable range of the evidence. Although such a valuation is to be based upon hard evidence ( Hanks, supra ) the trial court based its valuation on the only evidence it had before it and we decline to state that such valuation was clearly erroneous. In considering the appropriate factors ( Senger v. Senger, 308 N.W.2d 395 (S.D. 1981)), we approve Mary's petition for attorney's fees in the amount of $1,240. Affirmed. WUEST, C.J., and MORGAN and MILLER, JJ., concur. HENDERSON, J., concurs in result.