Court Opinion

ID: 9584190
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:45:19.265926+00
Date Added: 2024-06-11T15:06:57.761125
License: Public Domain

The opinion of the court was delivered by
Miller, J.;
This is an appeal from an order dividing the property of the parties following the granting of a divorce. This action was commenced in the district court of Russell County by the plaintiff, Mary Jane Reich, against the defendant, Dale Reich, seeking a divorce, division of property, alimony, attorney fees, and costs. A divorce was granted on November 23, 1982, on the grounds of mutual incompatibility, and no appeal was taken from that order. Both parties have since remarried.
After a full trial, the trial court divided the property between the parties, denied alimony or attorney fees, and taxed the costs to the plaintiff wife. The journal entry was filed on February 17, 1983, and it is from that order that the husband appeals. Three issues are raised: Whether the court abused its discretion in dividing the property; whether the court abused its discretion by failing to consider the tax consequences of its property division; and whether the wife’s proposed findings concerning alimony and division of property were erroneously admitted evidence of compromise.
The first issue requires us to review the facts. Plaintiff and defendant married on June 6, 1954. The couple started with little or nothing, but acquired substantial assets over the years. Much of the wealth consists of family ranch operations which the husband’s father started during the 1930’s and then gradually transferred to his son. Defendant paid for some of the land, but *340the bulk came to him by gift. Additionally, some other land has been purchased. The husband has been primarily a rancher and cattleman; the wife has not been employed outside the home. She has an artificial hip and a ruptured disc, anticipates additional surgery, and is unable to work.
The trial court awarded the entire ranch, including the almost-new home thereon, all of the stock, cattle, machinery and equipment, and a small Colorado property, to the husband. The court divided the mineral interests equally between the parties, with the provision that the wife’s portion be for life only and that upon her death her interest would revert to the surface owner of the land. The trial court awarded the wife a judgment in the amount of $500,000, payable $200,000 in cash, and the balance of $300,000 payable in twelve equal annual installments of $25,000 each, the first installment to have been paid February 1, 1984, with interest at eight percent per annum on the unpaid balance to have commenced accruing on that date. The judgment is made a lien upon the ranch. The trial court also awarded the wife a residence in Colorado. The trial court denied the wife’s request for alimony and attorney fees, and taxed the costs to her.
The property or interests passing to the parties under the court’s decree may be summarized as follows:
TO THE WIFE:
Money judgment $500,000.00
Life estate in minerals 85,000.00
Pitkin, Colorado, property 60,300.00
Total value .................... $645,300.00
(The parties are in agreement as to the foregoing values.)
WIFE’S HUSBAND’S
TO THE HUSBAND: VALUATION VALUATION
Cattle $ 192,170.00 $ 125,750.00
Minerals 85.000.00 85.000.00
Pasture land 463.230.00 409.394.00
Crop land 276.877.00 276.877.00
Farmstead & improvements 132.750.00 109.101.00
Equipment 203.241.00 182.100.00
Tin Cup Colo., property 10.000.00 10.000.00
Gross value $1,363,268.00 $1,198,222.00
Less current indebtedness 50,000.00 50,000.00
Net Value $1,313,268.00 $1,148,222.00
*341Disregarding the minerals, which the parties will share, the husband received all of the income-producing property — the ranch, machinery, equipment, cattle and feed. Total net value of that property is, by either party’s computation, well over a million dollars. Plaintiff s judgment is approximately half of that amount. We have not included in our computation the interest which may accrue in future years on plaintiff s judgment, or the income which may be earned or accrue to the husband in future years.
The statute which guides the courts in the division of property in divorce actions is K.S.A. 60-1610(h). That statute reads:
“(b) Financial matters. (1) Division of property. The decree shall divide the real and personal property of the parties, whether owned by either spouse prior to marriage, acquired by either spouse in the spouse’s own right after marriage or acquired by the spouses’ joint efforts, by: (A) a division of the property in kind; (B) awarding the property or part of the property to one of the spouses and requiring the other to pay a just and proper sum; or (C) ordering a sale of the property, under conditions prescribed by the court, and dividing the proceeds of the sale. In making the division of property the court shall consider the age of the parties; the duration of the marriage; the property owned by the parties; their present and future earning capacities; the time, source and manner of acquisition of property; family ties and obligations; the allowance of maintenance or lack thereof; dissipation of assets; and such other factors as the court considers necessary to make a just and reasonable division of property.”
The earlier forms of this statute have been held to vest the trial court with broad discretion. In Bohl v. Bohl, 232 Kan. 557, 561, 657 P.2d 1106 (1983), we said:
“There is no disagreement on the rules governing division of property pursuant to divorce. The trial court 'is under a duty to divide the marital property in a just and reasonable manner.’ K.S.A. 1981 Supp. 60-1610(d). In determining a just and reasonable division of the property the trial court should consider: (1) the ages of the parties; (2) the duration of the marriage; (3) the property owned by the parties; (4) the present and future earning capacities of the parties; (5) the time, source and manner of acquisition of property; (6) family ties and obligations; (7) the question of fault when determined; and (8) the allowance of alimony or the lack thereof. Powell v. Powell, 231 Kan. 456, 459, 648 P.2d 218 (1982); Parish v. Parish, 220 Kan. 131, 133-34, 551 P.2d 792 (1976).
“ Tn a divorce action the district court is vested with broad discretion in adjusting property rights, and its exercise of that discretion will not be disturbed on appeal absent a clear showing of abuse.’ Powell, 231 Kan. at 459. See also Downing v. Downing, 218 Kan. 549, 542 P.2d 709 (1976). ‘[Discretion is abused only where no reasonable [person] would take the view adopted by the trial court. If reasonable [persons] could differ as to the propriety of the action taken by the trial court then it cannot be said that the trial court abused its discretion.’ *342Powell, 231 Kan. at 459. Stayton v. Stayton, 211 Kan. 560, 562, 506 P.2d 1172 (1973).”
The statute today remains substantially as it has been for many years, the only notable exception being the deletion of “fault” from the items which the trial court must consider, and appellant does not contend that that item was considered here.
Appellant contends that he will be required to sell the ranch, or at least liquidate a major portion of his assets, in order to satisfy the judgment which the trial court awarded to the plaintiff. Appellant cites a number of cases from other jurisdictions which espouse the desirability of keeping the family farm together as a matter of public policy. He also cites the following .language from Bohl v. Bohl:
“However, we recognize and acknowledge it would be unfair to require Mr. Bohl to liquidate his company and turn the proceeds over to Mrs. Bohl with nothing left for him. If this were the case it would defeat the trial court’s goal of dividing the marital property equally.” 232 Kan. at 565.
We do not disagree with the statements quoted above, but feel that they are not applicable here. First, Mr. Reich testified that he wanted to keep the ranch together and wished to take his son in as a partner and pass the ranch along to him. The trial judge awarded the entire property to Mr. Reich, thus indicating his intention that the property should be kept together and in the family. The judge also heard argument that the proposed judgment would cause the defendant to liquidate the ranch, but he was not required to accept such contentions. In any event, the evidence does not show that Mr. Reich is left with nothing, nor does it show that the trial court’s goal of dividing the property equally has been defeated.
Mrs. Reich presented testimony that a local bank had extended to her a letter of credit for the sum of $750,000 and that the bank would extend similar credit to the defendant. In addition, the trial court had before it testimony that the defendant had substantial cash flow, including a net cash flow for the first nine months of 1981 of more than $70,000, and that he had purchased large amounts of new equipment within the past few years without borrowing money to do so. There was also evidence that defendant’s taxable income for the years 1980 and 1981 was not large, but defendant’s tax returns were in evidence and the trial court had an opportunity to examine the figures contained *343therein. Upon a thorough examination of the evidence, we are not convinced that the defendant will be compelled to liquidate the ranch in order to meet the payments required of him by the trial court’s judgment. True, he may be required to borrow; but that is not grounds for setting aside the trial court’s judgment.
In Stayton v. Stayton, 211 Kan. 560, 506 P.2d 1172 (1973), we said:
“We have said many times that the district court is vested with wide discretion in adjusting the financial obligations of the parties in a divorce action and that its exercise of that discretion will not be disturbed on appeal in the absence of a showing of clear abuse. ... In determining the amount in each case the trial court may, among other things, take into consideration the conduct of the parties, their financial situation, the needs and the earning capacities of the parties, and make such an award as will be just and reasonable under all' the circumstances. The discretion of the trial court is, of course, subject to appellate review and correction where there has been a clear-cut abuse of discretion. In its exercise a judge may not be arbitrary or whimsical. We have held on a number of occasions that abuse of judicial discretion, as that term is ordinarily used, implies not merely an error in judgment, but perversity of will, passion or moral delinquency when such discretion is exercised to an end or purpose not justified by, and clearly against, reason and evidence.
“Judicial discretion is abused when judicial action is arbitrary, fanciful or unreasonable, which is another way of saying that discretion is abused only where no reasonable man would take the view adopted by the trial court. If reasonable men could differ as to the propriety of the action taken by the trial court then it cannot be said that the trial court abused its discretion. All judicial discretion may thus be considered as exercisable only within the bounds of reason and justice in the broader sense, and only to be abused when it plainly overpasses those bounds.” 211 Kan. at 561-562.
Applying those rules to the facts before us, we do not find that the trial court’s action was “arbitrary, fanciful or unreasonable,” or that “no reasonable man would take the view adopted by the trial court.” We hold that the trial court did not abuse its discretion.
Next, we turn to the issue of tax consequences. The defendant contends that the trial court failed to consider the tax consequences of its order. Defendant would obviously prefer a more modest award to the wife, and one which would permit the payment to be tax deductible to him. While the trial court did not specifically state on the record that it was taking into consideration the various provisions of the Internal Revenue Code, the trial court was presented with much evidence and argument *344regarding the tax aspects of any proposed order in this case. We cannot say that the trial court ignored that evidence.
Finally defendant contends that the trial court erred when it permitted the plaintiff to testify that she was willing to pay the defendant $700,000 for his interest in the ranch. This was not an offer of compromise but a statement of the plaintiff s proposed valuation and division of property. K.S.A. 60-452, relating to the nonadmissibility of evidence of offers to compromise damage or loss, is inapplicable. The evidence was relevant and admissible.
Defendant’s primary argument is that he will be required to liquidate the ranch in order to pay the judgment, and that the trial court should have made the payments taxable to the wife as alimony, rather than taxable to the husband as division of property- The trial court exercised its judgment in ordering the payments specified, and we cannot say that it abused its discretion. The matter of forced liquidation is one of argument, which was not persuasive when made to the trial court and is not persuasive here. The matter of to whom the payments are taxable will vary from case to case, depending upon the type of payment ordered. Here, the trial court denied alimony but decreed an equitable division of property. We find no abuse of discretion and no reversible error.
The judgment is affirmed.