981 N.W.2d 620
S.D.2022Background
- Christopher Dunham and Susan Sabers married in 2002, separated in 2013, and have two children (born 2003 and 2005); Sabers is a sitting judge and was the parties’ primary earner during the marriage.
- Disputes centered on custody (allegations of physical incidents involving Dunham and a child), child support, valuation/classification of business interests and buy-out proceeds (Fuller & Sabers and Dakota Law), post‑separation life‑insurance proceeds Dunham invested, and disclosure of Estate/Trust interests.
- Dunham purchased the Dunham Company in 2013 and refused to produce Estate/Trust financial information during litigation; Sabers received buy‑out payments earlier and spent them during separation.
- After a five‑day trial, the circuit court: granted divorce on irreconcilable differences, awarded joint legal custody and Sabers sole physical custody (children choose visitation parameters), ordered child support (including Schedule E income) with upward deviation for parochial tuition, divided marital property roughly 50/50 with a cash equalization payment to Sabers, and awarded Sabers $50,000 in attorney fees.
- On appeal, Dunham challenged visitation, inclusion of Schedule E income, credits against child support, property classification/valuation, Trust consideration, attorney fees, and the tax‑return exchange order; Sabers cross‑appealed property classification, division, denial of extreme cruelty, and fees.
Issues
| Issue | Plaintiff's Argument (Dunham) | Defendant's Argument (Sabers) | Held |
|---|---|---|---|
| Visitation & counseling | Court should have ordered counseling and regular visitation schedule; not let children set terms | Experts recommended not forcing visitation; children’s preferences matter | No abuse of discretion: experts and child preference supported court’s approach; counseling not mandated |
| Inclusion of Schedule E income in child support | Schedule E reported amounts were not actually received/distributed; Dunham lacked control over distributions | Dunham had de facto control of business decisions and distributions; Schedule E reflects means | Affirmed: court properly considered Schedule E income under Nace factors showing control |
| Credits against child support for Sabers’ use of buy‑out funds | Dunham seeks credit for Sabers’ post‑separation use of buy‑out funds to pay children’s expenses | Such use of marital funds is addressable in property division, not as child‑support credit | Affirmed: denial of credit was proper; child support based on current income, not expenditures by other spouse |
| Parochial tuition (upward deviation) | No written agreement; cannot be ordered to pay tuition | Parents jointly liable for necessary education; court may deviate with specific findings | Affirmed: court made required findings and tuition was a necessary education expense supporting deviation |
| Classification of buy‑out funds (Dakota Law, Fuller & Sabers) | Funds spent by Sabers should be marital or Dunham entitled to credit | Court found funds spent and not in existence at trial; Sabers contributed to accumulation | Reversed and remanded on this narrow issue: court failed to apply marital‑classification factors and must reexamine whether buy‑out funds were marital |
| Treatment of life‑insurance proceeds invested post‑separation | Proceeds were personal (nonmarital) and Dunham should receive offset | Sabers made indirect contributions that allowed maintenance of proceeds; contributions were more than de minimis | Affirmed: court reasonably found Sabers’ indirect contributions justified treating proceeds as marital |
| Valuation issues (Wells Fargo acct, Milestone ownership & rent credit) | Wells Fargo had balance; Milestone not 100% Dunham; owed rent should reduce value | Court credited Sabers’ testimony that account was depleted; tax records and admissions showed Dunham 100% owner | Affirmed: trial court credibility and valuations not clearly erroneous |
| Consideration of Dunham’s discretionary Trust interest for ability to pay | Discretionary trust interest is nonmarital and cannot be used to assess obligations | Nonmarital assets may be considered to determine financial condition/ability to pay | Affirmed: court did not include trust as marital, but permissibly considered likelihood of distributions when assessing ability to pay |
| Attorney fees award ($50,000 to Sabers) | No fees or lesser amount; Dunham argued inability to lump‑sum pay | Sabers sought more; argued Dunham prolonged litigation and had resources | Affirmed: court applied Evens factors and fee necessity; not an abuse of discretion |
| Annual exchange of tax returns post‑divorce | Violates confidentiality; unnecessary; fosters litigation | Children’s interest in support outweighs privacy; needed given Dunham’s prior nondisclosure and fluctuating income | Partially reversed: court has authority to require exchanges, but ordering them sua sponte without considering protective measures was error — remanded for further proceedings |
| Grounds for divorce (extreme cruelty) | N/A (Dunham contested aspects) | Sabers argued extreme cruelty; sought that ground | Affirmed: court’s finding of irreconcilable differences was not clearly erroneous; no extreme cruelty finding required |
Key Cases Cited
- Pieper v. Pieper, 841 N.W.2d 781 (S.D. 2013) (trial court has broad discretion in custody and visitation decisions)
- Fuerstenberg v. Fuerstenberg, 591 N.W.2d 798 (S.D. 1999) (child’s preference may be considered when of sufficient age)
- Roberts v. Roberts, 666 N.W.2d 477 (S.D. 2003) (standard of review and that child support aligns with parents’ means)
- Nace v. Nace, 754 N.W.2d 820 (S.D. 2008) (factors to determine control over corporate retained income for support calculations)
- Tegegne v. Andalo, 866 N.W.2d 550 (S.D. 2015) (credit for pre‑order direct payments and in‑kind support requires evidence of actual payments)
- Roseth v. Roseth, 829 N.W.2d 136 (S.D. 2013) (parents’ agreement not required for court to allocate educational expenses when necessary)
- Ahrendt v. Chamberlain, 910 N.W.2d 913 (S.D. 2018) (factors for classifying/dividing marital property)
- Osdoba v. Kelley‑Osdoba, 913 N.W.2d 496 (S.D. 2018) (South Dakota is an all‑property state; equitable division standard)
- Field v. Field, 949 N.W.2d 221 (S.D. 2020) (inherited/gifted property may be included in marital estate based on contributions and treatment)
- Terca v. Terca, 757 N.W.2d 319 (S.D. 2008) (indirect contributions can justify treating inherited property as marital)
- Evens v. Evens, 951 N.W.2d 268 (S.D. 2020) (two‑step attorney‑fee analysis: reasonableness and necessity considering relative resources)
- Billion v. Billion, 553 N.W.2d 226 (S.D. 1996) (nonmarital assets may be considered in determining a party’s financial condition)