Court Opinion

ID: 9663055
Source: CourtListenerOpinion
Date Created: 2023-08-23 23:26:54.693101+00
Date Added: 2024-06-11T18:14:45.285028
License: Public Domain

*564MORGAN, Justice.
Douglas L. Temple (Douglas), the defendant in the underlying divorce action, appeals from the portion of the trial court’s divorce decree which awarded the plaintiff, Judith L. Temple (Judith), alimony and attorney fees and from the property division, particularly the portion which included twenty-five percent of certain Pitchfork Ranch assets and improvements to a house owned by Douglas’ mother, Georgiana Temple (Georgiana), in the marital estate. Judith filed a notice of review based on her contention that one-half, rather than one-fourth, of the ranch assets should have been included in the marital estate. We affirm.
Douglas and Judith had very few assets when they married in 1959 at approximately ages 18 and 16 respectively. In 1961, Douglas inherited $13,515, including a one-half interest in 480 acres of deeded land from his father, Allen Temple (Allen). Georgiana acquired sole ownership of all land and property held jointly with her husband, Allen, and approximately $277,-295 in land, equipment, livestock, and cash through inheritance when he died. The trial court found that these assets, along with assets she owned individually before Allen's death, were used for the operation and expansion of the ranch and were generally considered ranch assets at the time of the trial.
From the beginning of the marriage in 1959 until 1972, Douglas worked full-time on his family’s ranch. He was paid $125 per month and was permitted to raise his own cattle herd of approximately sixty cows on the ranch. During this time, Douglas apparently covered his and his family’s personal expenses with additional draws from the operation. In. 1972 Douglas and Georgiana reached an agreement under which he was to receive a one-fourth interest in the profits generated by the ranch in exchange for his services as Ranch Manager. Since 1972, Douglas has substantially increased the Pitchfork Ranch profits which, throughout Douglas’ tenure at the ranch, have been plowed back into the operation for the accumulation of ranch assets. Capital generated by the ranch was primarily used to purchase land which was titled to Douglas and Georgiana in joint tenancy.
The trial court found that Douglas was able to accumulate the assets and benefits that constitute the Pitchfork Ranch operation and Douglas and Judith’s marital estate because of the business relationship between Douglas and Georgiana. Georgia-na drew approximately $6,000 per year from the ranch operation to cover her personal expenses. Although the amount Douglas withdrew for his family’s expenses was somewhat greater, evidence and testimony was presented which indicated that the parties lived moderately. The trial court specifically found that remaining ranch profits were used to acquire land and other property and to pay other costs of expansion.
The trial court also found that under the agreement between Douglas and Georgia-na, alloting Douglas one-fourth of the ranch operation profits, Douglas was intended to receive a one-fourth interest in the value generated to the ranch.1 As a result of this finding, twenty-five percent of Pitchfork Ranch assets the trial court found to have been acquired with profits from the ranch operation were included in the marital estate. The total fair market value of the ranch assets acquired in this manner was $1,292,477 at the time of trial. Total ranch liabilities at that time were $16,000.
The trial court found that as a result of Douglas’ service as Ranch Manager under his 1972 agreement with Georgiana, he had an interest in twenty-five percent of the ranch assets, reduced by twenty-five percent of ranch liabilities. The trial court apparently determined Douglas’ interest in Pitchfork Ranch under the laws governing partnership and decided that Judith’s argument, that the law of joint tenancy gov*565erned, was not supported by the facts of this situation. The trial court also included assets that Douglas owned individually or jointly with Judith in the marital estate. The trial court valued these total individual assets at $565,533 and the total individual liabilities at $32,150 and added $533,383 to twenty-five percent of the net value of the ranch assets to arrive at the marital estate. After arriving at the net marital estate, the trial court properly considered the six factors set out in Hanson v. Hanson, 252 N.W.2d 907 (S.D.1977), in order to equitably divide the property.
The trial court worked out an intricate plan in order to protect Pitchfork Ranch as an ongoing enterprise and ruled that Douglas should pay Judith the dollar value of a proportionate amount of the net marital estate, which included Douglas’ share of the ranch assets. The trial court awarded Judith specific assets valued at $16,194 and a cash award of $310,000 as her share of the marital estate.2 Douglas was awarded the land, the leases and mineral interests, the livestock and equipment, certain personal property and bank accounts, and all of the parties’ liabilities. Judith was also awarded $500 per month alimony and Douglas was ordered to pay her attorney fees.
Douglas has raised four issues in his appeal: (1) Whether the trial court was inconsistent and erroneous when it initially found that Douglas had agreed to accept twenty-five percent of the ranch profits, and then included twenty-five percent of the ranch assets in the marital estate? (2) Whether the trial court erred when it included improvements to the parties’ residence, located on Georgiana’s land, in the marital estate and, thereby, among the assets subject to division? (3) Whether the trial court abused its discretion when it awarded Judith alimony? (4) Whether the trial court abused its discretion when it ordered Douglas to pay Judith’s attorney fees?
The rationale behind the property division plan and the alimony award is set out in the trial court’s Findings of Fact and Conclusions of Law. This court reviews a trial court’s findings of fact under the “clearly erroneous” standard and overturns a trial court’s conclusions of law only when the trial court has erred as a matter of law. Wefel v. Harold J. Westin & Associates, Inc., 329 N.W.2d 624 (S.D.1983); Hartpence v. Youth Forestry Camp, 325 N.W.2d 292 (S.D.1982).
In applying the clearly erroneous standard, this court’s function is not to decide factual questions de novo. The question is not whether this court would have made the same findings the trial court made, but whether on the entire evidence this court is left with a definite and firm conviction that a mistake has been made. Cunningham v. Yankton Clinic, P.A., 262 N.W.2d 508 (S.D.1978); In Re Estate of Hobelsberger, 85 S.D. 282, 181 N.W.2d 455 (1970). The trial court’s findings of fact are presumptively correct and the burden is upon appellant to show error. Hilde v. Flood, 81 S.D. 25, 130 N.W.2d 100 (1964).
With respect to property divisions in divorce actions, the trial court has broad discretion and its judgment will not be set aside unless it clearly appears that the trial court abused its discretion. Prentice v. Prentice, 322 N.W.2d 880 (S.D.1982); Laird v. Laird, 322 N.W.2d 254 (S.D.1982); Palmer v. Palmer, 316 N.W.2d 631 (S.D.1982). This court’s review is limited to a determination of whether there was an equitable property division. Krage v. Krage, 329 N.W.2d 878 (S.D.1983).
Douglas argues first that while his 1972 agreement with Georgiana entitled him to twenty-five percent of the ranch profits, the trial court included twenty-five percent of the ranch assets in the marital estate. Douglas also contends that certain livestock and realty improvements which be*566long to Georgiana were characterized as ranch assets and improperly placed in the marital estate.
Given the variety and extent of the ranch assets, the informality of the 1972 agreement, and the absence of bookkeeping records, it would have been impossible to precisely designate the ownership of each ranch asset at the time of trial. In his reply brief filed with this court, Douglas cites SDCL 48-4-2 for the proposition that “property acquired with partnership funds is partnership property.” When dividing property, trial courts may consider when and how property was acquired. Swenson v. Swenson, 85 S.D. 320, 181 N.W.2d 864 (1970). The trial court characterized all property that was not clearly owned by Douglas or Georgiana individually as ranch property. The trial court then treated their business relationship as a partnership and allocated a share of the total ranch assets to each of them, based on the percentages found in the 1972 agreement. The trial court allocated Georgiana seventy-five percent and Douglas twenty-five percent of the ranch operation.
A partnership is an association of two or more persons who carry on a business as co-owners. Fredrickson v. Kluever, 82 S.D. 579, 152 N.W.2d 346 (1967). There is no arbitrary test for determining the existence of a partnership; therefore, each case is governed by its individual facts and the existence of the relationship is a question for the trier of fact, except when the evidence is conclusive. Widdoss v. Donahue, 331 N.W.2d 831 (S.D.1983); Munce v. Munce, 77 S.D. 594, 96 N.W.2d 661 (1959). The existence and scope of a partnership may be evidenced by a written or an oral agreement, or implied by conduct of the parties. Lewis v. Gallemore, 173 Neb. 211, 113 N.W.2d 54 (1962); Gangl v. Gangl, 281 N.W.2d 574 (N.D.1979).
We agree that the Douglas-Geor-giana relationship is most properly characterized as a partnership. Douglas and Georgiana obviously considered themselves partners when they worked out the 1972 agreement to share profits. SDCL 48-3-8. The fact that Douglas and Georgiana owned property in joint tenancy and shared the profits from the property does not, standing alone, establish a partnership. (SDCL 48-1-6). The rules used to determine whether or not a partnership exists are found in SDCL'48-1-5 to 48-1-8. Receipt of a share of the profits of a business is prima facie evidence of partnership status. SDCL 48-2-8. The trial court specifically found that the assets Georgiana received upon her husband’s death and her other individual assets were used in the operation and expansion of the Pitchfork Ranch and remained a part of the operation at the time of trial. Property originally brought into a partnership and property subsequently acquired on account of the partnership is partnership property. SDCL 48-4-1. Property acquired with partnership funds is also partnership property. SDCL 48-4-2. The seventy-five percent of the ranch assets carved out for Georgiana easily encompassed and exceeded the value of the property she acquired and owned prior to her 1972 agreement with Douglas and the proportion of the share designated to her is the same as provided by that agreement.
The trial court’s inclusion of twenty-five percent of the ranch assets in the marital estate is not inconsistent with its finding that Douglas and his mother agreed that he would share twenty-five percent of the profits. The ranch expansion and the acquisition of the assets resulted directly from the ranch profits and were the fruit of his family’s labor and sacrifice. Apparently, in this unique and industrious family operation, almost every penny above basic minimal expenses was plowed back into the operation. The only partnership “profits” available for allocation to the partners are in the ranch assets and because funds, assets, and expenses have been intermingled for twenty years, it has become almost impossible to distinguish individual marital property from ranch property.
*567SDCL 48-4-2 provides: “Unless a contrary intention appears, property acquired with partnership funds is partnership property.” The evidence here is sufficient to show that the parties intended a 75/25 split of the ranch assets that were acquired with ranch profits. The rights of partners in relation to the partnership are determined, subject to any agreement between them, by the rules set out in SDCL 48-3-2 to 48-3-9, inclusive. SDCL 48-3-1. See Brooks, Inc. v. Brooks, 86 S.D. 676, 201 N.W.2d 128 (1972). All property acquired by the partnership with partnership funds is partnership property (SDCL 48-4-1, -2) and each partner has property rights in specific partnership property. SDCL 48-4-10. Partners hold their interests in specific partnership property as tenants in partnership, not in joint tenancy. The property acquired with partnership funds may be treated as partnership property in accordance with the terms of the agreement between Douglas and Georgiana.
Title does not control the distribution of property in a divorce action. SDCL 25-4-44. In Shumway v. Shumway, 106 Idaho 415, 679 P.2d 1133 (1984), the Supreme Court of Idaho held that an interest in farm property acquired as a gift to one party in a marriage may be considered separate property, but a partnership interest in a farm operation may be divided.
The law is clear that a wife’s performance of typical domestic duties as a housewife and mother constitutes a valuable contribution to the accumulation of property, i.e., farm or ranch property. O’Connor v. O’Connor, 307 N.W.2d 132 (S.D.1981); Kittelson v. Kittelson, 272 N.W.2d 86 (S.D.1978). Douglas and Judith were married for twenty-two years and together raised six children. They had very little property when they married and with Georgiana’s help built a sizeable ranch operation.
In Prentice, supra, this court held that the trial court abused its discretion when it failed to divide farm property as part of the marital estate. The husband in Prentice took over a farm upon which his father had paid half of the purchase price. The parties to the divorce paid off the balance due on the farm from farm proceeds and this court held that the husband’s interest in the farm should be divided between them as part of the marital estate. The Prentice Court found that the wife helped pay off the balance due on the farm, that together they improved the residence, and that both parties worked to increase the size and value of the farm; consequently, the wife was entitled to a share of her husband’s interest in the farm operation. Given the expansion and increased value of the ranch in this case, the situation is similar to that presented in Prentice and the substance and result of the Douglas-Georgiana agreement must be considered over its form. Judith is entitled to a share of Douglas’ interest in the ranch.
Douglas also contends that the trial court was clearly erroneous when it included improvements to the parties’ home in the marital estate. The residence is located on real property owned by Georgiana. The trial judge found that the total value of the residence, $10,750, encompassed improvements valued at $10,000. The money for the improvements came from ranch profits and $10,000 was therefore added to the total Pitchfork Ranch assets, one-fourth of which then went into the marital estate.
A divorce court must consider equity and the circumstances of the parties when it divides the marital property. SDCL 25-4-44. “Tracing” is an equitable principle which allows a party with the right to property to trace that property through any number of transactions in order to reach the final proceeds or result. In Shumway, supra, the parties’ house was built on the husband’s parents’ property with partnership funds. The husband argued that consequently the house belonged to his parents and was not a partnership asset. Id. The Idaho Supreme Court refused to disturb a magistrate’s finding that partnership funds paid for the house and that Court then looked to the Uniform Partnership Act, adopted in South *568Dakota at SDCL Title 48, for the proposition that property acquired with partnership funds is partnership property. See SDCL 48-4-2.
Under the 1972 agreement, Douglas was to stop paying personal expenses with ranch funds, thus the $10,000 expended for home improvements should actually have been profit for the ranch operation. We agree that Judith is entitled to a share of all profits generated to Pitchfork Ranch, including the $10,000, and she may trace the profits to the improvements and obtain her share of their value. Douglas may not shelter the entire $10,000 under the legal principle that property affixed to realty, including building improvements, becomes the property of the owner of the realty. Cf. 63 Am.Jur.2d § 16, Property Affixed to Realty; SDCL 43-1-2, -3.
The third issue raised on this appeal is based on Douglas’ contention that the trial court, in light of the $310,000 property award to Judith over twenty years, abused its discretion when it further awarded her $500 per month alimony. We note, as we did in Krage, supra, and Wallahan v. Wallahan, 284 N.W.2d 21 (S.D.1979), that this court will hesitate before modifying judgments in divorce decrees that follow a well-considered pattern of distribution. Krage, supra. The alimony award and the property division will be considered together in determining whether the trial court has abused its discretion. Wallahan, supra.
While SDCL 25-4-45.1 precludes the consideration of fault in a property division, fault is still considered in awarding alimony to either of the parties. Hanks v. Hanks, 296 N.W.2d 523 (S.D.1980). Alimony awards are also based upon the respective financial conditions of the parties after the property division and the parties’ standard of living. Id.; Kittelson, supra; Guindan v. Guindon, 256 N.W.2d 894 (S.D.1977).
The trial judge specifically found that Douglas had destroyed the marriage. He stated in his Findings of Fact:
That, at all times during the marriage of the parties hereto, defendant has followed a course manifesting a complete lack of affection and concern for the Plaintiff, her happiness and welfare, and the welfare of the marriage union itself; that the Defendant is belligerent and argumentative toward the Plaintiff; and that as a result of such acts and omissions by the Defendant, as above set out, Defendant has caused Plaintiff grievous mental and physical suffering with the result that the purposes of the marriage union have been destroyed.
The trial court's Findings of Fact and Conclusions of Law indicate that the factors listed above for consideration in property divisions and alimony awards, including fault, were considered in the decision to award alimony. The amount of alimony awarded, $500 per month or $6,000 per year, when added to the annual property settlement payment of $11,750, provides Judith an annual income of $17,750. This amount is not exorbitant, nor an abuse of the trial court’s discretion.
The record is clear that Judith contributed as a homemaker and mother during twenty-two years of marriage, she dropped out of high school as a result of the marriage, all income she earned outside the home went toward the family, and she contributed to the growth of the family ranch operation for twenty-two years.
While it is true that ‘[ajlimony will not be awarded in such an amount as would allow a wife capable of work to sit in idleness,’ ... it is equally true that alimony ‘will [not] be denied merely because she may be able to obtain employment and support herself.’
Wallahan, 284 N.W.2d at 27 (citation omitted) (brackets in original). The trial court properly considered Judith’s lack of education and the probability that she will not earn above the minimum wage. Considering the evidence as a whole, there was no abuse of discretion in the property division or the alimony award.
*569Finally, Douglas questions the trial court’s award of attorney fees. SDCL 15-17-7 permits the award of attorney fees in divorce cases. Each case rests on its own facts and there is nothing to be gained by comparing situations. This decision is also within the trial court’s discretion. Lien v. Lien, 278 N.W.2d 436 (S.D.1979). On review, this court will examine the trial court’s consideration of the elements involved in fixing legal fees generally: (1) the amount and value of the property involved, (2) the intricacy and importance of the litigation, (3) the labor and time involved, (4) the skill required to draft pleadings and try the case, (5) the discovery procedures utilized, (6) the existence of complicated legal problems, (7) the time required, (8) whether briefs were required, and (9) whether an appeal to this court is involved. Id.; Holforty v. Holforty, 272 N.W.2d 810 (S.D.1978).
In this case the assets, business dealings, and financial information involved were extensive. The record fills a 3' x 2' X 1 ½' box. Depositions were taken, the case was tried and then appealed to this court. At the circuit court level there were temporary restraining orders, orders to show cause, and several pretrial hearings based upon affidavits and motions. The attorneys furnished itemized statements outlining the time spent on this case.
In making this determination [to award attorney fees], the trial judge should consider the property owned by each party; their relative incomes, Jameson v. Jameson (S.D.1976), [90 S.D. 179] 239 N.W.2d 5; whether the wife’s property is in liquid or fixed assets, Iverson v. Iverson (S.D.1976), [90 S.D. 374] 241 N.W.2d 583; whether the actions of the wife increased unreasonably the time spent on the case, DeWitt v. DeWitt, [86 S.D. 59, 191 N.W.2d 177 (1971)]; and whether the actions of the husband increased unreasonably the time spent on the case, Rock v. Rock, 89 S.D. 583, 236 N.W.2d 191 (1975).
Lien, 278 N.W.2d at 443.
Considering these factors in relation to this action and to these parties, we find no abuse of discretion in the trial court’s determination that Douglas should pay Judith’s attorney fees.
We affirm.
FOSHEIM, C.J., WOLLMAN, J., and DUNN, Retired Justice, concur.
HENDERSON, J., dissents.
WUEST, Circuit Judge, Acting as a Supreme Court Justice, not participating.

. Douglas stated in Defendant’s Answers to Plaintiffs Interrogatories, dated January 22, 1981, that he owned a "One-quarter interest in the Pitchfork Ranch.” (Interrogatory 50).

. The sum of $75,000 to be paid within ninety days of the decree and the balance in twenty equal annual installments at ten percent (10%) interest on the unpaid balance from year to year. Prepayment was permitted without penalty.