Court Opinion

ID: 9513858
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:41:36.386117+00
Date Added: 2024-06-11T09:06:04.371044
License: Public Domain

MARING, Justice,
concurring in part and dissenting in part.
[¶ 28] I concur in parts I, II, III, and V of the majority opinion and respectfully *371dissent from part IV. I am of the opinion the district court clearly erred in distributing the parties’ marital property.
[¶ 29] “In reviewing a property distribution, we start with the assumption the property should be divided equally and, while a property division need not be equal to be equitable, the district court must explain any ‘substantial disparity.’ ” Linrud v. Linrud, 552 N.W.2d 342, 345 (N.D.1996). We remanded this case in Dvorak v. Dvorak, 2005 ND 66, 693 N.W.2d 646, with instructions to the district court. The district court in its May 28, 2004, Findings of Fact, Conclusions of Law, and Order for Judgment said:
This creates a substantial disparity. In making the division, the Court has considered the Rujf-Fischer guidelines, specifically, the Court has given weight to when the property ivas accumulated. According to the evidence, the plaintiff had a net worth of $644,647 in 1988, when they started to live together. It is appropriate for the Court to consider all the time the parties have lived together in dividing their marital property. Since 1988, his net worth has increased by $237,097. Thus, for there to be an equitable division, the defendant needs an offsetting monetary award of $114,190.00 to be paid within 90 days from the entry of the judgment.
(Emphasis added.) We held “[t]he district court did not articulate its reason for using the net income amounts, and it did not explain why there was a substantial disparity in the property amounts.” Dvorak, 2005 ND 66, ¶23, 693 N.W.2d 646. We remanded with instructions to the district court to provide further specific findings on the issue and to sufficiently explain the inequitable distribution. Id. at ¶¶ 23-24. However, although on remand the district court considered the Ruff-Fischer guidelines in its Findings of Fact, Conclusions of Law, and Order for Judgment dated September 22, 2005, it again relied heavily on the fact that Bob Dvorak had brought “substantial assets” into the marriage. The district court also again concluded that “[s]ince 1988, [Bob Dvorak’s] net worth has increased by $237,097. Thus, for there to be an equitable division, the defendant needs an offsetting monetary award of $213,000.00 an increase of $98,981.00 ...” Thus, the district court’s reason for not dividing the property more equally did not change from its first decision to its decision on remand.
[¶ 30] The only additional explanation the district court gave for not dividing the property more equally was that “[i]t would be inequitable to divide the assets equally because it would destroy his ability to earn a living and provide the necessary support to Defendant and the children.” However, having made this finding, the district court then found: “As set forth in his testimony, it has been difficult for him to earn a living from this farm/ranch operation, and his living expenses have come from the equity in the property.” This does not indicate a well managed or viable operation. The district court also found that based on his 1999-2003 tax returns, Bob Dvorak has an average self-employment income for child support purposes of $16,413.40 per year. This finding also does not indicate successful operation of the farming enterprise as an economic unit. See Schoenwald v. Schoenwald, 1999 ND 93, ¶ ¶ 22-23, 593 N.W.2d 350 (affirming equal division of property where there was a long-term marriage and the family farm was not an economically viable business and distinguishing cases where there was an economically viable business operation). The district court in this case was not presented with evidence of a farming operation that was a strong thriving source of income for a family with five children.
*372[¶ 31] I recognize that “we have recognized the importance of preserving the viability of a business operation like a family farm, and the potential for economic hardship if those type of entities are divided.” Gibbon v. Gibbon, 1997 ND 210, ¶ 7, 569 N.W.2d 707. However, at an income of $16,413.40 per year resulting in child support of $510 per month for five children, this family is already in “economic hardship.” It may be time for Bob Dvorak to find another way to earn a living and support his family.
[¶ 32] The district court also found that the total farm assets as of March 16, 2004, amounted to $1,252,026 and that the total farm liabilities amounted to $383,622 for a net worth of $868,404. This is a substantial net marital estate. The parties own 3,400 acres of land with equity of $533,378 ($917,100-$383,622), approximately of which half was purchased during the marriage. That leaves debt free all machinery, vehicles, equipment, crops, livestock and other farm assets which the court found valued at $334,926.00 as of March 16, 2004. With this amount of equity, it is difficult to understand the district court’s logic in concluding it would be inequitable to divide the assets more equally. Our Court has said, “[t]he goal of preserving a business, however, does not call for a windfall for one spouse.” Linrud, 552 N.W.2d at 346. The district court can structure the property division to allow for relative equality by distribution of farm assets to one spouse with an offsetting monetary award to the other spouse or an award to each spouse of assets, such as real estate. Liquidation is another option, although usually one of last resort.
[¶ 33] Preservation of a farming operation that is not generating enough income for Bob Dvorak to support himself let alone his five children is not a reason to refuse to divide more equally the property of the marriage. Bob Dvorak has an obligation to support his family and may need to get a job just like his former wife, Kathleen Dvorak will need to get a job.
[¶ 34] We have recognized that long-term marriages support an equal distribution of property. Schoenwald, 1999 ND 93, ¶ 23, 593 N.W.2d 350; Horner v. Horner, 2004 ND 165, ¶ 12, 686 N.W.2d 131. The parties were married September 8, 1990, and divorced June 10, 2004, resulting in close to a fourteen-year marriage. In addition, they lived together for two and one-half years. We have held it is appropriate for a court to consider the time parties live together when dividing property if they then marry. See Homer, at ¶ 13. These parties had a sixteen and one-half year relationship. They had five children who, at the time of the divorce, ranged in age from fourteen to nine years old. Kathleen Dvorak was awarded custody of the five children. The district court ordered Kathleen Dvorak to return with the children to North Dakota. She has no job and thus no income. The district court found she quit working when the parties’ first child was born and from 1991 to 2003, and she worked outside the home only for ten months in 1999. In the one year preceding the divorce, she earned $1,500 as a massage therapist. She will receive spousal support of $1,000 per month for four years and $510 per month child support for the five children. This provides her an income of $18,120.00 per year until she can find a job. She received no income-producing property in the distribution of the marital property. She received a cash award of $213,000, which Bob Dvorak can pay over two years with interest at our judgment rate; the personal property in her possession, which is listed on the Rule 8.3, N.D.R.Ct., Property and Debt Listing at a value of $1,915; and, one-half of the minerals under Bob Dvorak’s real estate. Kathleen Dvorak was also given the debt *373in her possession. Kathleen Dvorak will incur expenses relocating to North Dakota. She and the five children have no home. Kathleen Dvorak will undoubtedly need to use her cash property division to support herself and the parties’ five children. See Marschner v. Marschner, 2001 ND 4, ¶ 16, 621 N.W.2d 339 (holding a disadvantaged spouse is not required to deplete her property division in order to live).
[¶ 35] The district court is required under the Ruff-Fischer guidelines to consider the circumstances of the parties financially, including whether they receive any income-producing property. Bladow v. Bladow, 2003 ND 123, ¶ 7, 665 N.W.2d 724. The district court very superficially touches on these factors in its findings, reiterating the evidence presented by the parties on the circumstances and necessities of each and the property. The district court never recognizes that this was a long-term marriage. It also never recognizes the dire financial situation in which it has left Kathleen Dvorak and the parties’ five children.
[¶ 36] Finally, I am at a loss why the “farm assets” aside from the real estate are not part of the division of the marital estate. The award of property to Kathleen Dvorak is based on the district court’s calculation of the increase in the “farm net worth” from 1988 to 2004 of $223,757. I am of the opinion that the livestock, crops, hay and machinery were marital assets that should not have been considered by the district court in calculating what property Bob Dvorak brought into the marriage. A review of the machinery and equipment listed on the Rule 8.3, N.D.R.Ct., Property and Debt Listing indicates a significant amount was purchased after 1988. Also, the property listing indicates the parties owned $99,000 worth of breeding cows, 24 bulls worth $19,200, and 28 bred heifers worth $12,600. The parties also owned hay, straw oats, feed barley, and hard Red Spring Wheat valued at $60,350 at the time of the divorce. Although, it appears that Bob Dvorak brought into the marriage livestock, crops, machinery and equipment, these are the types of assets that are sold and replaced. The income from the sale of livestock and crops is used to provide the family income and to grow the farm operation. These are the types of assets that are difficult to trace and become co-mingled in the parties’ accounts and after acquired property. I am unable to find a list of the machinery and equipment in the record that Bob Dvorak brought into the relationship in 1988. If such were in evidence then it could be compared to the equipment listed on the Rule 8.3, N.D.R.Ct., listing and it could be determined whether any of that equipment or machinery is still in the parties’ possession. Bob Dvorak has not carried his burden of proof in that regard.
[¶ 37] After a review of this record and our case law, I am of the opinion the district court misapplied the Ruff-Fischer guidelines in determining the division of the parties’ property, and I am left with a firm and definite conviction a mistake has been made. I would reverse and remand for the district court to equally divide the marital estate between the parties.
[¶ 38] Mary Muehlen Maring