#23787-a-JKM
2006 SD 34
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
* * * *
SHELLY NOVAK, Plaintiff and Appellee,
v.
BRANDON G. NOVAK, Defendant and Appellant.
* * * *
APPEAL FROM THE CIRCUIT COURT OF
THE FIRST JUDICIAL CIRCUIT
YANKTON COUNTY, SOUTH DAKOTA
* * * *
HONORABLE GLEN W. ENG
Judge
* * * *
WANDA L. HOWEY-FOX of
Harmelink and Fox Attorneys for plaintiff
Yankton, South Dakota and appellee.
MELISSA B. NICHOLSON of
Nicholson & Peterson Attorneys for defendant
Sioux Falls, South Dakota and appellant.
* * * *
CONSIDERED ON BRIEFS
ON FEBRUARY 13, 2006
OPINION FILED 04/05/06
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MEIERHENRY, Justice
[¶1.] In this divorce case, the trial court included as part of the marital
estate farm property inherited by the husband during the marriage. The trial court
awarded one-half of the farm property to the wife, and the husband appeals. We
affirm.
FACTS
[¶2.] Brandon and Shelley Novak were married on August 20, 1988. Over
the course of their marriage, the couple had five children. Approximately nine
years into their marriage, Brandon inherited farm property from his great uncle on
his mother’s side of the family. The family had owned the farm for over one
hundred years. Seven years after Brandon inherited the property, Shelley sued for
divorce. After hearing the evidence at trial, the court ordered the division of the
marital assets and liabilities and awarded both parties, as tenants in common, the
real estate inherited by Brandon, which consisted of 389 acres of farm land near
Verdigre, Nebraska. Brandon appeals from the trial court’s judgment and decree of
divorce. He argues that the trial court erred by granting Shelley a one-half interest
in the farm.
DECISION
[¶3.] We review a trial court’s division of marital property under the abuse
of discretion standard. Godfrey v. Godfrey, 2005 SD 101, ¶11, 705 NW2d 77, 80.
We find an abuse of discretion when discretion is exercised “to an end or purpose
not justified by, and clearly against, reason and evidence.” Id. (citation omitted).
Our inquiry is not whether we would have made the same decision, but “whether ‘a
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judicial mind, in view of the law and the circumstances of the particular case, could
have reasonably reached such a conclusion.’” Id. (citation omitted). In an appeal of
a divorce decree, we uphold findings of fact unless they are clearly erroneous. Id.
[¶4.] When a trial court grants a divorce, SDCL 25-4-44 allows the court to
equitably divide the marital estate regardless of the ownership of the property. The
statute provides:
When a divorce is granted, the courts may make an equitable
division of the property belonging to either or both, whether the
title to such property is in the name of the husband or the wife.
In making such division of the property, the court shall have
regard for equity and the circumstances of the parties.
SDCL 25-4-44. We have identified certain factors for a trial court to consider when
dividing marital property. Billion v. Billion, 1996 SD 101, ¶18, 553 NW2d 226, 231.
The factors also apply to the trial court’s determination of whether to include
inherited property in the marital estate. Id. ¶21, 553 NW2d at 232. The factors to
be considered are: (1) the duration of the marriage; (2) the value of the property
owned by the parties; (3) the ages of the parties; (4) the health of the parties; (5) the
competency of the parties to earn a living; (6) the contribution of each party to the
accumulation of the property; and (7) the income-producing capacity of the parties’
assets. Id.
[¶5.] Only where one spouse has made no or de minimis contributions to the
acquisition or maintenance of an item of property and has no need for support,
should a court set it aside as “non-marital” property. Id. Consequently, inherited
property “is not ipso facto excluded from consideration in the overall division of
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property.” Id. ¶20, 553 NW2d at 232 (citations omitted). Likewise, a donor’s intent
is not determinative. Godfrey, 2005 SD 101, ¶19, 705 NW2d at 81.
[¶6.] Brandon claims that the trial court did not adequately address the
seven factors before including the farm in the marital estate. He claims that it was
his great uncle’s intent that the farm remain in the family and that the history of
the family farm should weigh in favor of excluding it from the marital estate. The
history of the farm involves over one hundred years of ownership by Brandon’s
mother’s family. At some point the ownership vested in the great uncle. Because
the great uncle had no children, the uncle relied on Brandon to help him with the
farm work. While working together, the two developed a close relationship,
described by Brandon as a “father-son” relationship. It is this relationship, along
with the great uncle’s intention of keeping the farm in the family, which Brandon
asserts prompted his uncle to leave the land to him, rather than other members of
Brandon’s family such as the great uncle’s niece (Brandon’s mother). Additionally,
Brandon claims that Shelley had little, if any, involvement in or control of the farm
and that she made no contribution to its accumulation or improvement. Thus,
Brandon argues that the trial court abused its discretion by awarding Shelley one-
half of the farm inherited by Brandon.
[¶7.] Consequently, our task is to determine whether it was an abuse of
discretion for the trial court to include the farm, valued at close to $200,000, in the
marital estate. The couple’s total assets, including the farm, were valued at
$266,741; their indebtedness was $70,696. Thus, the farm was the major asset in
the marital estate. Had the court set aside the farm as inherited property belonging
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only to Brandon, the marital debt would have exceeded the assets, and Shelley
would have been left with no assets while Brandon would have retained an asset
valued at approximately $200,000. 1
[¶8.] The trial court was faced with deciding what was equitable under the
circumstances. In making the decision, the court took evidence concerning all of the
seven relevant factors. At the time of trial, Shelley was 36 and Brandon was 37.
The couple had been married for over 16 years and had five children, the oldest
born in 1989 and the youngest born in 1996. Both parties received post-high school
education—Brandon a two-year auto mechanic program and Shelley a four-year
criminal justice program. During the marriage, Shelley worked several jobs before
attending school, after which she worked as a jail officer. Brandon worked in
manufacturing, as a postal carrier, and for the National Guard. Brandon’s monthly
gross income was $3,298, while Shelley’s monthly gross income was $1,235. Neither
claimed any health problems, and therefore both were competent to earn a living.
[¶9.] The only asset which produced income was the farm. As the trial court
stated when announcing his decision, “[t]he primary consideration here as everyone
knows is the farmstead, or the farm.” The court acknowledged that the great uncle
transferred title to Brandon and that the intent was to keep the farm in the family.
Nevertheless, other evidence persuaded the court to consider it as marital property
and award one-half to Shelley. The trial court entered findings of fact as follows:
1. Brandon’s proposed property distribution divided the assets $34,409 to
Shelley and $222,102 to him. His proposal did not indicate how the
indebtedness should be divided, but at trial Brandon offered to assume the
majority of the debt.
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46. The primary asset for division in this divorce action is the
Nebraska real estate.
...
50. The Nebraska real estate was transferred to [Brandon]’s
name.
51. The stated intent of the transfer was to keep the real
estate in [Brandon]’s name.
52. At the time of the transfer, the parties’ had been married
ten (10) years.
53. [Brandon]’s great uncle gave [Shelley] $10,000.00 even
though no monies were given to any of the other in-laws
with the exception of [Brandon]’s father, Larry Novak.
54. The gift of the monies to [Shelley] by [Brandon]’s great
uncle reflects that [Brandon]’s great uncle thought highly
of the Plaintiff.
55. The Court also looks at the operation of the Nebraska real
estate.
56. This is not a situation where the real estate is all suitable
for row crops.
57. Part of the real estate is an acreage, part of the real estate
is crop ground, part of the real estate is hay land and part
of the real estate is pasture.
58. The money from the Nebraska real estate was not kept
separate.
59. No attempt was made by [Brandon] to segregate the
money.
60. The money received from the Nebraska real estate was
used for various things including purchasing items used
in the marriage.
61. The Court has adopted the Defendant’s valuation of the
Nebraska real estate in the amount of $200,000.00.
62. When the Court is dealing with a long term marriage, all
of the parties’ assets are to be considered.
63. The parties have been married over sixteen (16) years.
64. The Nebraska real estate is not an asset of recent origin,
and thus, is not an asset which would not be subject to
distribution.
65. [Brandon]’s inheritance was received in 1998 during the
course of the parties’ marriage and the Court believes
that [Brandon]’s great uncle believed that the parties’
marriage would continue.
[¶10.] Weighing in Shelley’s favor was the timing of the inheritance, that is,
ten years into a sixteen year marriage. The court also noted the great uncle’s
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relationship with Shelley and the couple’s use of farm assets for marital needs.
Further, the court considered evidence of Shelley’s involvement with the farm,
which consisted of more than de minimis involvement.
[¶11.] Without the inclusion of the inherited property, Shelley would have
received nothing but debt from the marriage. Because the trial court divided the
inherited property, he denied Shelley any alimony. The trial court explained:
I am not awarding alimony. The court looks at it in two ways:
One, the court has divided the debt equally. That debt includes
the education debt. The court believes that by requiring Mr.
Novak to pay for part of that education debt, he is in effect
paying an alimony because it’s—she’s already had the education.
He in effect has to help provide her with that by paying half of
the debt. In addition, the court by dividing the inheritance,
believes that it’s probably more than any alimony would ever be
considered by this court.
Sympathetic to Brandon’s desire to keep the farm in the family, the trial court gave
Brandon six months from the date of the divorce decree to purchase Shelley’s
interest in the farm for $93,801.
[¶12.] As we said in Billion, “Only in the case where one spouse has made no
or de minimis contributions to the acquisition or maintenance of an item of property
and has no need for support, should a court set it aside as ‘non-marital’ property.”
1996 SD 101, ¶21, 553 NW2d at 232. In order to reverse the trial court here, we
would have to find that the court exercised its discretion “to an end or purpose not
justified by, and clearly against, reason and evidence.” Godfrey, 2005 SD 101, ¶11,
705 NW2d at 80. Based upon the record, we are unable to reach that conclusion.
Therefore, the court’s judgment is affirmed, and Shelley is awarded appellate
attorney’s fees as requested in the amount of $1,625.
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[¶13.] Affirmed.
[¶14.] GILBERTSON, Chief Justice, and SABERS, KONENKAMP, and
ZINTER, Justices, concur.
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