Scherer v. Scherer
2015 SD 32
S.D.2015Background
- Robert and Betty Scherer married in 2002 after living together; both were ~60 at divorce in 2014; Betty disabled and on SSDI, Robert developed several businesses and had higher earning capacity.
- Parties kept separate bank accounts and divided household expenses during the marriage; Robert controlled business finances.
- In 2010–2011 Robert sold portions of three businesses (Scherer Properties, Scherer Corrugating & Machine, Scherer Design) to family/employees for amounts far below later appraisals; trial court found these transfers showed a pattern to minimize the marital estate.
- Trial court included Robert’s remaining business interests in the marital estate, valuing the net marital estate at $5,081,715, and awarded Robert the businesses but ordered him to pay Betty $2,000,000 (with installment schedule) and $10,000/month alimony for life or until remarriage.
- The circuit court granted Betty a divorce on the grounds of extreme cruelty. Robert appealed, arguing (inter alia) improper inclusion of premarital/business property, erroneous alimony findings (and extension to obligor’s estate), failure to apply equitable factors, and insufficient findings on extreme cruelty.
Issues
| Issue | Plaintiff's Argument (Scherer) | Defendant's Argument (Betty) | Held |
|---|---|---|---|
| Inclusion of premarital/business property in marital estate | Businesses were premarital/separate under SDCL 25-2-4 and should be excluded | Court may equitably divide property in divorce; inclusion justified given factors and Betty’s need | Court affirmed: trial court did not abuse discretion including businesses in marital estate |
| Whether contributions/need require setting businesses aside as non-marital | Betty’s contributions were de minimis so assets should be non-marital | Even if contributions were minimal, Betty has need for support; court may include assets | Affirmed: trial court reasonably included assets given Betty’s health/need and statutory factors |
| Alimony award without explicit integration with property division | Alimony was excessive and court failed to consider property division and Betty’s admission she wouldn’t need alimony if awarded sufficient property | Betty sought both property and alimony; claimed need for support | Reversed in part: trial court abused discretion by awarding life alimony without adequately considering property division and Betty’s testimony; remand to consider property division and spousal support together |
| Extending alimony as ongoing obligation of obligor’s estate | Alimony should terminate at obligor’s death absent agreement | Trial court extended obligation to Robert’s estate | Reversed: court abused discretion extending alimony beyond obligor’s death without record support for need after obligor’s death |
| Grant of divorce on extreme cruelty | Insufficient findings and conclusions to support extreme cruelty | Betty testified and court found fault, including sexual conduct and neglect; court awarded divorce | Reversed: findings and conclusions on extreme cruelty were insufficient; remand for proper findings |
Key Cases Cited
- Strickland v. Strickland, 470 N.W.2d 832 (discusses trial court discretion to consider premarital assets in marital division)
- Novak v. Novak, 713 N.W.2d 551 (lists factors for property division)
- Fausch v. Fausch, 697 N.W.2d 748 (factors to consider for alimony and standard of review)
- Krage v. Krage, 329 N.W.2d 878 (property division and spousal support considered together)
- Lodde v. Lodde, 420 N.W.2d 20 (general rule that alimony obligation ceases at obligor’s death absent agreement)
- Barton v. Barton, 815 N.W.2d 553 (addresses extending alimony beyond obligor’s death and need for record support)