Orwig v. Orwig, 955 N.W.2d 34

Background

Steven sued Mary for divorce in 2016; the parties jointly owned three closely held corporations (OLS, OTI, MVP). Corporate litigation alleging Mary misused corporate funds was consolidated with the divorce.
The district court issued preliminary injunctions, ordered return of corporate property, and later ordered sale of Arizona real property; contempt proceedings and interlocutory appeals occurred earlier in the litigation.
After a bench trial the court found Mary committed marital and corporate waste, breached fiduciary duties, and diverted assets; it awarded the corporations and most related real property to Steven to disentangle the parties’ business ties.
The court valued and divided the marital estate (Steven net +$1,137,719.53; Mary net +$1,090,720.71), awarded Mary $5,500/month spousal support for ten years, and ordered Steven to pay $105,000 of Mary’s attorney fees.
On appeal the Supreme Court affirmed the property division and spousal support award, held admission of certain evidence and judicial notice were not reversible error, but reversed the attorney-fee award for lack of supporting documentation and remanded regarding fees.

Issues

Issue	Steven's Argument (Plaintiff)	Mary’s Argument (Defendant)	Held
Judicial notice / pretrial review of files	Court may review its case files and take judicial notice of related dismissed action	Court’s pretrial review and judicial notice of dismissed related case tainted process	Court did not abuse discretion; judicial notice of related prior case permissible and not error
Admission of Petersen deposition	Deposition admissible under rules; used as needed	Deposition improper because witness available at trial; hearsay and not limited to impeachment	Admission discretionary; any error harmless in bench trial; not reversible
Resolving corporate claims and awarding corporations to Steven	Corporations’ claims may be resolved in divorce to disentangle parties; award avoids ongoing conflict	Disgorgement and penalty-like relief improper	Court may resolve closely held-corp disputes in divorce and award corporations to disentangle parties; no error
Valuation of OLS/OTI and inclusion of manufacturing facility	Valuations by accredited appraisers credible and included special-use facility in business value	Court undervalued businesses and improperly excluded real estate/fixtures	Court’s valuations were within range of evidence and not clearly erroneous
Value of R&J Orwig interest	R&J interest has some income and should have value	Interest not presently vested; essentially expectancy	Court correctly treated interest as speculative and assigned $0; any error harmless
Unpaid salary/rent from corporations	any unpaid compensation should be included in distribution	Corporations owed both; Mary’s wastes outweigh amounts owed to her	Court considered claims and wastes; excluding unpaid salary/rent was supported by findings
Spousal support (permanent vs rehabilitative; imputing income)	Support should reflect Steven’s greater earning capacity; Mary’s waste considered	Court improperly imputed income and relied on speculative horse business income; permanent support needed	Court made Ruff‑Fischer findings, imputed earning capacity and income-producing property; award of $5,500/month for 10 years not clearly erroneous
Mary’s attorney’s fees award	Mary needed fees and Steve can pay; awarded under N.D.C.C. § 14‑05‑23	Award unsupported by evidence of fees; no invoices or affidavits	Fee award reversed: district court abused discretion by awarding fees without documentation; remand to permit proof
Steven’s request for fees (sanctions/frivolous claims & appeal)	Seeks fees under § 28‑26‑01 and Appellate Rule 38 for frivolous litigation/appeal	Mary’s appeals and claims not frivolous	Court declines to address new district‑court fee request; appellate fee request denied — Mary’s appeal not frivolous

Key Cases Cited

State v. Soucy, 2020 ND 119, 943 N.W.2d 755 (standard for judicial notice/abuse of discretion)
Frisk v. Frisk, 2006 ND 165, 719 N.W.2d 332 (courts may notice evidence from closely related cases involving same judge/parties)
State v. Cook, 2020 ND 69, 940 N.W.2d 605 (court need not take judicial notice of matters already in the case record)
Heng v. Rotech Med. Corp., 2006 ND 176, 720 N.W.2d 54 (trial court’s discretion on admitting depositions)
Rath v. Rath, 2018 ND 138, 911 N.W.2d 919 (in bench trials appellate presumption that judge considered only competent evidence)
Haas v. Hudson & Wylie LLP, 2020 ND 65, 940 N.W.2d 650 (bench trial evidence/admission principles)
Grinaker v. Grinaker, 553 N.W.2d 200 (closely held corporation disputes may be resolved in divorce to avoid ongoing conflict)
Fisher v. Fisher, 1997 ND 176, 568 N.W.2d 728 (preference to disentangle spouses’ business interests)
Wald v. Wald, 2020 ND 174, 947 N.W.2d 359 (standards for valuation and division review)
Tarver v. Tarver, 2019 ND 189, 931 N.W.2d 187 (spousal support standard and Ruff‑Fischer factors)
O’Keeffe v. O’Keeffe, 2020 ND 201, 948 N.W.2d 848 (permanent vs rehabilitative spousal support guidance)
Paulson v. Paulson, 2010 ND 100, 783 N.W.2d 262 (present vested interest required to include asset in marital estate)
Allmon v. Allmon, 2017 ND 122, 894 N.W.2d 869 (attorney‑fee awards require supporting evidence)
N.D. Private Investigative & Sec. Bd. v. TigerSwan, LLC, 2019 ND 219, 932 N.W.2d 756 (definition of frivolous claim)
Frontier Fiscal Servs., LLC v. Pinky’s Aggregates, Inc., 2019 ND 147, 928 N.W.2d 449 (standards for awarding appellate fees under Rule 38)