*1 DAVIS, Plaintiff-Appellant, Lyle James DAVIS,
Paula Catherine
Defendant-Appellee.
Civ. No. 9473.
Supreme Court of North Dakota.
July *2 Christensen, Forks,
Pearson & Grand appellant; by Garry plaintiff argued A. Pearson, Grand Forks.
Shaft, Fisher, Forks, McConn & Grand appellee; argued by for defendant and Pat- Fisher, rick W. Grand Forks. PAULSON, Justice. plaintiff, Lyle James Davis [herein- defendant, Lyle],
after and the Paula Cath- Paula], erine Davis were mar- [hereinafter 23, ried in on July Grand Forks 1972. Pau- previously la had been married and divorc- There ed. were two born as the children marriage, first namely, issue her Rachel 4, Ann, 1970, Mary born March Caro- 1971, 7, lyn, July born both of whom were adopted Lyle in 1975. Two children marriage, born were as issue their name- Davis, ly, Michael James born October Davis, Septem- and Patrick born ber this action commenced divorce 1976, alleging
November of irreconcilаble 24, 1976 differences. On November Paula answered, denying allegations of complaint requesting dismissal of parties’ divided the pursuant property, March action. On and awarded parties, attorney Paula amended stipulation of fees. counterclaimed, alleg- her and also answer We are first confronted with the divorce, for a adultery, praying question of whether or not motion children, support, custody of the four trial, for a new solely upon based newly division of the alimony, equitable and an evidence, discovered which motion was de *3 action was tried to the court property. The court, by nied the district limits Lyle’s ap judgment and September on and peal single to this issue. When party a 15,1977. There- was entered on November appeals from denying trial, an order a new and, Lyle moved for a new trial after after the review in this court is limited to those 2, court, February on hearing, a the grounds which were presented to the dis denying an a new trial. entered order However, trict court. when there is an judgment the and appealed from appeal judgment, from the the appeal is not denying a new trial. The from the order limited to those issues raised in a motion for to Paula on the granted court a divorce new trial. All issues which were properly district court ground adultery. of The preserved at the trial appeal and raised on following property the to Paula: awarded are reviewable. homestead, subject mortgage; (1) the We shall now discuss the presented issues therein; (3) the (2) personal property the court, to this which are as follows: children; (4) the four minor custody of (1) Whether the or not trial court’s distri- support per in the sum of $200.00 bution of property and the award of child; (5) alimony in the month for each clearly were erroneous. month; (6) person- her of sum (2) Whether or not the trial court com- account; (7) checking and the sum of al mitted reversible error in its applica- settlement, a cash which sum concerning tion of the law the distri- $10,000.00pаyable follows: was divided as bution of under the divorce days to Paula within 90 after the date decree the to children. remaining judgment, the the balance (3) Did the trial court err in that interest, $70,000.00,plus payable thirty- appellee the did not have sufficient equal monthly installments with interest six moneys attorney to her fees and unpaid percent the rate of 7 on the at the amount of balance, first to commence the reasonable? 1, 1982, except that the annual October payments interest amount Lyle requests this court to reverse the shall be on or before per year $1,600.00per trial court’s award to Paula of anniversary days following each date month also the property and award commencing in 1978 con- judgment, $80,000.00. Lyle to Paula of also requests 1979,1980, through tinuing in attorney this court to reduce the fees which 30,1982. The interest September attorney. trial court awarded to Paula’s support were be in addition to other child to However, Lyle ground does not contest the alimony. granted which Paula was a divorce. appeal Nor does he custody award of following awarded to The court Paula, the four minor children to the award (1) all of his stock Davis Jew- property: monthly support payments for $200.00 Inc.; (3) (2) Trepanier building; elry, during each of the minor children their name; (4) presently accounts in his all bank minorities, rеspective or the award to Paula him; by (5) presently stock owned all other home, of the Belmont together with its presently pos- in his personal property all furnishings. session; Manvel, (6) the residence at Dakota, subject indebtedness. North to adopted has the rule court appealed judgment has from that the review of the on appeal judgment findings in which the trial court limited to whether or not the divorce to provi- give within the must consideration erroneous This court also clearly fact are 14-05-25, N.D.C.C., provides: 52(a) North Dakota of Rule sions thus, and, Procedure, we will of Civil alimony— Rules Security “14-05-25. findings they unless are set those not aside court of homestead. —The Disрosition stated This court clearly require party give erroneous. either reasona- may N.W.2d Haugeberg, security or Haugeberg providing ble maintenance required under the making any payments (N.D.1977): chapter, may en- provisions of this clearly erroneous fact finding of “A appointment of a re- the same force evidence when, there is some although applicable by any remedy or ceiver court on it, reviewing sepa- When the wife has to the case. definite is left evidence entire give proper her a rate estate sufficient has a mistake conviction and firm may in its discretion support, Kosteleeky, Kostelecky v. made. been any her out of withhold allowance *4 (N.D.1977); Ram 400 N.W.2d supra 251 the The property of separate husband. (N.D. Rambel, 856 bel divorce, court, rendering the decree of in Elmer, 210 N.W.2d 1977); re Estate of In or such may assign the homestead (N.D.1973).” 815 may just, to as to the court seem thereof or party, absolutely either the innocent on court’s determinations The trial according to the period, a limited alimony, and divi support, matters of the and in consonance facts in case of findings as are treated property of sion The dis- relating to homesteads. the law on matters fact, such review of and our court, by the position of the homestead 52(a), by Rule N.D.R.Civ.P. appeal limited tоuching the orders and decrees and all Haugeberg, supra. party alimony and maintenance of either educa- marriage custody, and for the to a determining the trial court whether tion, support sub- and of the children are Lyle dividing property erred in the between particu- ject appeal to revision on in all Paula, governed by provi- we are the lars, including which are stated those 14-05-24, the North of of Dakota sions the in the discretion of court.” Code, Century grants which district urges Lyle that the award of in power in the to make court a divorce action the per year sum of during Pau- of real equitable an distribution the such la’s or lifetime until she remarries is unreal- personal property may just seem as exorbitant, comparison istic and in with the 14-05-24, N.D.C.C., pro- proper. Section property him, and, which was awarded to as follows: vides places specifically, unusual an financial bur- “14-05-24. Permanent —Di- den him in view of his condi- financial property. vision a divorce is of —When tion, as by shown the evidence adduced in granted, court make equi- the shall such thereof. testified that he personal table distribution the real and his employment commenced during the Fall parties may just seem (a of 1971 with Jewelry, Davis Inc. close may compel either proper, corporation) by owned his father and moth- parties provide for the maintenance er. Prior to that time he was employed by marriage, children and to make persons other outside the State of North such allowances to the par- suitable The jewelry Dakota. store by was founded ty for or for a support during life shorter Davis, father, Roy Lyle’s 1937, in and was period may just, as to seem operated by Roy owned and Davis and his having regard to the circumstances majority wife as stockholders August until parties respectively. The court from 1, Lyle purchased majority stock may its modify time to time orders in by Roy (323 shares) owned Davis respects.” these (10 shares). Vonnie Davis 773 loan are in the payments on SBA Jewelry, December Davis On $5,700.00, Inc., monthly payments Subchapter corporation, had a total form S payments commenced on September shares, of 509 which were owned as follows: 1,1977, monthly and continue on a basis for Roy Davis . 323 years five with interest at the rate of 9½ Vonnie Davis. 10 Lyle Davis. T76 percent. prerequisite As a making 509 loan, prescribed conditions, certain acquired his shares as follows: pertinent which are herein set forth in part: 24, 10 . (1) Lyle’s salary was limited to December 30,1971 . December per year during the life of the loan. 31, . December (2) Inc., Jewelry, Davis prohibited was 31,1974 . December paying any dividends until the marriage, Lyle’s of his During years loan paid was in full. basis, weekly as fol- sаlary on a (3) The rental were to $200.00; $250.00; 1973, 1972, lows: abeyance be held in until the SBA $300.00; $250.00; and in monthly payments and all other cor- Inc., at end of Jewelry, Davis $350.00. porate paid. bills had been a dividend year, paid either a bonus or each securing (which Prior to the loan is also stock, as well as on the on shares of individually guaranteed by Lyle), Lyle was by Roy and Vonnie Davis. shares owned required to submit a financial statement. income was returned to the Lyle’s dividend The statement shows a total net worth of shares of corporation in order to for his $243,000.00. A further detailing of this stock, his state and federal as well as for *5 statement reveals: Lyle further testified that income taxes. estate, (а) Trepanier Real salary he lived on the which he Paula and $143,000.00 building house on Belmont Road was received. The 140,000.00 Inc., Jewelry, (b) stock Davis the sum Spring in the of 1973 for purchased $32,900.00. The down of 20 Lyle’s indebtedness to Less $6,580.00, made from percent, or was 40,000.00 Roy acquired, prior also savings Lyle account. Net worth . interest in the marriage, a one-half to his Lyle urges that the cost value of the real building in which the Davis Jew- Trepanier estate, is, $143,000, that is not the market building The was elry, Inc. store is located. value and he testified that the value of the at a rental of jewelry store leased building was and the full market $2,000.00 per The rental income month. purposes value for assessment for tax was taxes, insur- subject payments was $99,000.00. building at the located maintenance, ance, depreciation. corner of Third Avenue and De Mers remaining one-half Lyle purchased the located in one of the older sections of the Trepanier building from his interest Grand Forks business district. then, brother, Lyle Davis. on Au- Wayne the 323 shares of gust 1977 redeemed Jewelry, Lyle further testified that Davis and the 10 shares of from his father stock Inc., profits years showed for the his mother. financed stock from through August 1977 as follows: Business through a Small purchases stock .$33,315.00 $271,- loan in the sum Administration 50,256.00 1974 . 000.00, as follows: which was distributed 98,826.00 1975 . 118,439.00 1976 . Davis, Roy and Vonnie 33,633.00 1977 . of stock their shares repayment loan Additional profits in 1977 was the The reduction 40,000.00 Roy Davis declining prices farm and because result Trepa- Payment on of balance luxury pur- item. also jewelry is 14,000.00 building nier Manvel, Dakota, a home at North chased Repayment on a loan $29,000.00, percent with a 20 7,000.00 for the sum of Wayne Davis 1977). payable was and the balance Such deduction made in ac- downpayment cordance with monthly principles installments. of accounting, Erickson, testified Dale the certified that Lyle further contends district public accountant. value of court erred in $295,394.00, jewelry stock fur- to comprehend In order rather in- ther asserts the actual value volved financial of Davis Jewelry, structure $105,894.00; urges further stock was Inс., it to examine its necessary balance sum only the court deducted August sheet as of which is $28,500.00 (5 monthly SBA of the record is herein set forth: *6 important finan- inventory and other resume necessary to set forth also It is (1) de- tant in such evaluation are: court in its memorandum the earn- The district ings (sales being of the business volume a valuation of assets cision arrived at will; test); (2) (3) good ultimate previous the tes- the valuation from and determined merchandise; (4) weight- records of sales of review the exhibits. A timony and average earnings per ed share. After is, exhibit, August the balance sheet factors, considering all of these the certified $105,894.00 is the value shows that accountant, Erickson, рublic Mr. valued the upon Lyle’s business based account- figure business at a between does not procedure. The balance sheet $339,000.00. court, The after hearing factors enumerated Dale consider the together Mr. Erickson’s testimony, with re- accountant, Erickson, public the certified viewing records, the other business found length concerning the valu- who testified at corporate stock had a value of testimony His is unre- ation of the stock. $295,000.00. findings of fact of a dis- futed. trict court in determining divi- the balance sheet perusal A further sion in a divorce action will not be set aside the sum of does not reveal appeal they on unless are clearly erroneous. deducted, being but it does show that We do not find the determination of the was in- from the SBA loan property clearly division of erroneous. Furthermore, there liability. cluded as a Lyle strenuously urges that the district could be no deduction court’s inequitable award August on the loan on requests he court to reduce the was the on which the loan as that date excessive; because it is that the trial court completed and the first loan erred in had an assured September commenced on $61,375.00 per year, income of which is as addition, a review of the resume re- follows: (1) important factors: a dramatic veals two *7 ($25,000.00, Personal income inventory increase in the from December $49,000.00 $24,000.00 rentals) salary plus 31, 1977, 31, 1976, in the sum of July to building expense, Less $64,000.00; (2) corresponding de- 5,625.00 on 1976 based crease in the total current liabilities of the $43,375.00 31, 1976, from December to corporation 1,1977 August Income to 28,000.00 (balance sheet) $20,- nearly in the sum of July being exclusive of the SBA loan. $61,375.00 000.00 of stock in a close
The evaluation division, In addition to the Paula process. an intricate The rec corporation is $1,600.00 was awarded alimony per in-depth an evaluation of month; ord reveals that per month for child $800.00 case was ($200.00 in the instant corporation child); together for each with the Erickson, public $80,000.00 by ($10,000.00 made Dale the certified paid sum of to be impor- days judgment The criteria which are within 90 after the accountant. monthly monthly support payment paid $800.00 in $70,000.00 to remaining she the which receives her estimated commencing in 1982 after installments monthly expenses, there remain estimated $271,000.00 SBA in full of payment per month Pau- expenses at to receive interest loan); and Paula pay own must from her resources. la ($4,900.00) on per year percent rate of aggregat- payment, deferred urges that since the mar- Lyle further $33,700.00. duration, income of yearly relatively a total this riage was of short follows: are as monthly expenses given should have been consideration Paula’s factor determining аlimony. in $350.00 Groceries living How- expenses. did not detail his 50.00 Milk ever, year year his income from to not 250.00 Household utilities household Miscellaneous assured, dependent entirely but is eco- 50.00 repairs & maintenance existing conditions in Grand Forks nomic & contributions Church area, surrounding expertise, and and its his 25.00 gifts ability profit his maintain sales and mar- expense 80.00 . Car Clothing & for Paula greater previ- to or than gins equal at least 200.00 children inflation, impact sales because of the ous Family 75.00 entertainment costs, salaries, taxes, other merchandise enter- Paula’s individual 50.00 tainment expenses. Lyle is neither entitled business Babysitting 50.00 his any to receive rental months from Tre- toys& 40.00 Hobbies building until panier SBA activities Children’s paid corporate all other bills have been lessons, plus (swimming etc.) birthday parties, 30.00 each, any he year, nor can receive bonuses Replacement household corporation until or dividends from the furniture, appliances, Accordingly, loan is in full. carpeting, 50.00 etc. (includes expenses $25,000.00 per year salary School is limited to a lunches) 50.00 school year. a rental income of children’s Miscellaneous are not of the fact that We unmindful activities 50.00 taxes, insurance, obligated is still expense, & Paula Dental 10.00 children repairs, Trepanier and maintenance on the Insurance building, any or not he receives whether House insurance course, building, subject income. The (estimate) 25.00 depreciation year expenses, 12.00 each and the Car insurance Shield 80.00 Blue Cross-Blue year than depreciation, 325.00 House $9,876.00; 1975, $7,364.00; and were 1976, $5,625.00. subject His income is also these amounts show A review of Lyle, state and income federal taxes. could be to the children allocated amounts addition, subject course usual follows: food, clothing, his expenditures own $300.00 and milk Groceries 200.00 medical, utilities housing expenses. Household 160.00 Clothing Hertz, In Hertz v. Bntertainment 75.00 children Court, (Minn.1975), Supreme the Minnesota 40.00 toys& Hobbies Subchapter corporation, considering S expenses & School stated: 80.00 activities medical Subchapter corpora- “A closely held Dental S *8 $935.00 80.00 expenses tion, Manufacturing, as Hertz beаrs such corporation esti- characteristics of both with a total a Paula would leave This As proprietorship. proprietor- Ac- a with a monthly expenditure $935.00. mated legally to estimate, ship, is entitled with- her total defendant to own cording Paula’s funds from the business to (including those of the draw excess monthly expenses necessary he or $1,852.00. If deduct the the extent that deems children) are we determining “2. In it the amount a di- proprietorship, Also as with proper. necessary pay support it will become well that vorced father should of a may be net income for a share of future wife, to retain alimony minor child and to a former A court purposes. trial capital business only the court must be mindful not should, therefore, this factor into take wife, the child of the former needs of amount determining the consideration father; but of the divorced and while he reasonably be avail- that could of income pay child support should the years.” in future to defendant able can, as best he he should not be burdened corpora- the Hertz, the owner of supra, In to the extent that all incentive is to be indicate any evidence to did not offer tion destroyed but some balance must be of funds of future retention the amount child, found between the needs of the the the business. necessary might which wife, ability former and the fаther’s to evidence was offered the instant case In pay.” earnings of the cor- concerning the future carefully considering After all of the evi- profits. affect its which would poration record, we dence believe that much considera- give court did not The trial finding of fact with reference to the alimo- The evidence should to such evidence. tion ny clearly is erroneous. We conclude that given greater weight. have been Paula and Lyle the interests of can best be as follows: summarized Paula’s income is by modifying served the divorce decree so $19,200.00 alimony payments; per year $1,600.00 is reduced from $9,600.00 support pay- per year fоr child $1,200.00 per per month to month. the rate of ments, with interest at together $70,000.00 proper- deferred on the percent Lyle further contends the trial court $4,900.00) (or until the SBA ty settlement in its which awarded erred aggregates yearly which repaid, is loan parties. to the minor children of the As a $33,700.00. income is Paula’s income of required finding, of such chil- monthly expenses for her subject to Lyle pay from his income to each $1,852.00. totaling Her and herself dren children, the minor that Paula act as subject to interest received alimony and trustee, that, trustee, as she would be, state income taxes. contrast federal and governed by the trust laws of the State of consisting of Lyle hаs an income provision incorporat- North Dakota. This $24,000.00 probable rental year, plus operate ed in the decree of divorce and is to averaging (subject expenses to income children, agreement as a trust for his him an income per year), leaving any remaining payable are to be sums $41,500.00 per year. approximately attaining age them each of twen- income, obligated Lyle is Prom this stated, previously 14- ty-two years. As alimony, annual $19,200.00 yearly Paula N.D.C.C., 05-24, provides that the court $9,600.00, and interest of “may compel parties pro- either of the $33,700.00. totaling annually, vide for the maintenance of the children of remaining income thеn has a N.D.C.C., 14-05-25, marriage”. Section $24,000.00 an- $7,800.00 (assuming that provides “may require that the court either subject to the restric- nual rental give security provid- reasonable party loan). His imposed under tions any payments making maintenance or taxes, state subject to federal and income is required provisions of chap- under the this personal living expenses. well as his ter, may by appoint- enforce same stated, court must take As by any remedy ment of a receiver or of a divorced the maintenance into account applicable to the case”. Larson, N.W.2d 861 Larson v. father. In the instant case the trial court created Hoster, 216 N.W.2d Hoster v. (N.D.1975); рrovided trust which that certain mon- Larson, su (N.D.1974). This court edu- Hoster, respective held in trust for the eys be su approval pra, quoted of the children and held: cational benefit of each syllabus, ¶ pra, 2 of the *9 778 We determine that the was not a administered in would be trust the governing trusts interpretation the laws clearly erroneous 14- §§ accordance addition, provid the court In State. 14-05-25, or N.D.C.C. 24 Am.Jur.2d 05-24 this. from accumulations any interest ed that 843; Annot., Separation Divorce and 56 § may be ex beneficiary fund each child’s 1207; 319(5). A.L.R.2d 27B C.J.S. Divorce § medical or their educational
pended for
adopt
We
the rationale in those cases
the trus
the discretion of
at
dental needs
Annot.,
award
denying
order
the motion for a new trial.
position
in
place
will
Paula
a better
ground
The motion was made on the
fees from her own resources.
of
attorney
her
evidence,
This
unpersuasive.
newly
contention is
discovered
consisting of a
Fischer,
court,
in Fischer v.
financial
of
Jewelry,
statement
Davis
Inc.
14-05-23, N.D.
(N.D.1966),
construing
31,1977,
§
ending
for the ten months
October
C.C.,
in the discre
money
that suit
held
plan
shopping
and a floor
of a
center under
will
the trial court and its decision
tion of
City
construсtion in the
of Grand Forks.
with unless it is shown
not be interfered
supported by
The motion was not
affidavits
an abuse of discretion.
that there has been
any
Lyle
of
kind. The court found that
had
but
discretion is never assumed
Abuse of
diligence
not exercised reasonable
Fischer,
affirmatively established.
be
must
found that no evidence
presented
was
nation as Procedure, requires Dakota Rules of Civil disposition by made 1.I believe determination that the decision of the dis- view equitable court is fair and trial erroneous, trict clearly court was not if the circumstances. The trial court all of erroneous at all. account, majority opinion took into not, the fact that the husband’s income 3. If it were true that Paula is receiving does tо, years, five as limited his more she is majority for the next than entitled voluntary agreement to the terms of an this court should follow its own often-stated loan, and unrealistic policy considering awarding is an artificial fault in ali- S.B.A. opinion mony making bases its con- figure. majority property divisions. The punishment and unrealistic excess should be clusion artificial attributed to $25,000 $24,- salary and figure, up wrongdoer. made The divorce in this case adultery, and ground, on a fault granted party is Paula. In accordance the innocent expressed majority’s frequently
with the fault, punishing the conduct of the
policy of
parties awarding should be considered division. with the happen disagree policy
I cases, divorce but I
considering fault majority should be
suggest that the consist its own rule.* applying
ent
CONCLUSION judg-
I would affirm the district court’s particulars, except
ment in all that I would to the district court to
remand case provision remaining as to the
modify trust,
corpus, any, if at the termina- trust, majori- provided
tion of the respects,
ty opinion. including all alimony,
the award of I would affirm the
judgment of the trial court.
In the Interest of W. M. V. OHLSEN, O. Director of Grand
Clarence County Service Board and
Forks Social V., Appellants,
A. M. Petitioners and
v. S., Respondent Appellee.
J. No. 9445.
Civ. of North
Supreme Court Dakota.
July * expressions majority’s (N.D.1978), Haugeberg Haugeberg, views For recent Nastrom, mine, (N.D.1977). see Nastrom v. 258 N.W.2d