MacKaben v. MacKaben
871 N.W.2d 617
| S.D. | 2015Background
- Tom and Annette MacKaben divorced after a 14-year marriage; they have one minor child. Court granted divorce and ordered sale of the marital home.
- The IRS had a substantial lien on the home from unpaid taxes, interest, and penalties arising from Tom’s failure to timely file/pay taxes for multiple years; parties later filed returns and began repayment.
- The circuit court treated the underlying unpaid tax liability as marital debt but assigned interest and penalties (accrued due to Tom’s willful failure to file/pay) as Tom’s nonmarital debt.
- The court ordered Tom to continue paying monthly mortgage/insurance/property-tax payments until sale, pay $22,187 to Annette from sale proceeds (with Tom receiving first $5,000 and remaining proceeds split equally), and to pay $1,000/month spousal support to Annette for 10 years following sale.
- Tom appealed, arguing (inter alia) misallocation of IRS interest/penalties, improper allocation of ongoing housing expenses, defective execution of the IRS-debt division, errors in spousal-support findings (amount/duration and whether it terminates on his death), and challenging deference to findings drafted by prevailing counsel.
- The Supreme Court of South Dakota affirmed the circuit court in all respects and awarded Annette appellate attorney fees of $7,587.49.
Issues
| Issue | Plaintiff's Argument (Annette) | Defendant's Argument (Tom) | Held |
|---|---|---|---|
| Standard-of-review for findings prepared by counsel | Findings prepared at court request are valid and court may adopt them after opposing party review | Findings drafted by prevailing counsel deserve limited deference because counsel prepared them | Court declined to alter established standards; reviews remain: facts (clearly erroneous), property/spousal support (abuse of discretion), conclusions of law (de novo) |
| Whether spousal support must be specified to terminate at obligor's death; whether award (amount/duration) was an abuse of discretion | Support order is within court's discretion given length of marriage, income disparity, and overall equitable division; no requirement to state death-termination now | Court should have specified termination on death; amount/duration unreasonable and tied to uncertain sale date | Issue of death-termination not ripe; court did not abuse discretion on amount/duration or delayed start tied to sale (award affirmed) |
| Classification and execution of IRS debt (underlying tax vs. interest/penalties) | Underlying tax is marital; penalties/interest resulting from Tom's willful failures are his nonmarital debt; credits were properly applied to principal | Interest/penalties should be divided marital; court erred in attributing payments solely to principal and not accounting for payments made before sale | Court properly followed Meints principle: underlying tax marital, accrued interest/penalties attributable to Tom; application of payments was acceptable and not an abuse of discretion |
| Allocation of mortgage/insurance/property-tax payments until sale; remedial relief and appellate fees | It was equitable to require Tom to make payments to preserve the asset; overall property division remains equitable; award of appellate fees justified by income disparity | Payments should reflect each party's proportional interest in the asset; Foley requires proportionality; Tom should get credit for ongoing tax payments before sale | Court overruled Foley to the extent it requires proportional payments; ordering Tom to pay all such costs until sale was within discretion; court did not err in declining a pre-sale credit formula; Tom must pay Annette appellate fees |
Key Cases Cited
- Huffaker v. Huffaker, 823 N.W.2d 787 (affirming standard that property division reviewed for abuse of discretion)
- Gartner v. Temple, 855 N.W.2d 846 (clarifying abuse-of-discretion and clearly-erroneous standards for appellate review)
- Meints v. Meints, 608 N.W.2d 564 (Neb. 2000) (holding underlying tax liability may be marital but penalties/statutory interest from dilatory spouse can be nonmarital)
- Foley v. Foley, 429 N.W.2d 42 (S.D. 1988) (discussed and limited/overruled insofar as it required mortgage payments to be proportional to asset interest)