Lead Opinion
[¶ 1] Following a thirty-seven year marriage, Richard and Carol Marschner were divorced. After the divorce trial, Carol Marschner moved for a new trial, alleging, among other things, that the district court erred in including her inheritance from her mother in the marital estate and in not awarding spousal support. The district court denied the motion, and Carol Marschner appealed. We reverse and remand for further proceedings.
I
[¶ 2] Carol Marschner was married to Richard Marschner in 1962. At the time of trial she was 58 years old. Her married life was spent on the farm where she fulfilled the usual duties of a wife and mother and, like many women married to men who farm, assisted in the farming operation in various ways. Carol Marschner has some health problems, but the primary obstacles to meaningful employment are limited skills needed in the job market.
II
[¶ 3] Because Carol Marschner did not receive her inheritance until after she was separated from her husband, she argues her inheritance is separate property and should not be included in the marital estate. An asset accumulated while spouses are still married is includable in the marital estate even though the spouses are separated. Keig v. Keig,
[¶ 4] Equitable distribution of marital prbperty is based upon the facts and circumstances of each case. Zuger v. Zuger,
[¶ 5] North Dakota law requires inclusion of inheritance in the marital estate even if the parties have separated. Keig,
Ill
[¶ 6] Carol Marschner argues the district court erred in not awarding her spousal support. There are two types of spousal support. Permanent spousal support, to provide traditional maintenance, is appropriate for a spouse who is incapable of rehabilitation. Heley v. Heley,
[¶ 7] Spousal support determinations are findings of fact and will not be reversed on appeal unless” they are clearly erroneous. Young v. Young,
[¶ 8] The district court specifically enumerated each factor under the Ruff Fischer guidelines. The district court sought to preserve the family farm by awarding it to Richard Marschner. In doing so, the court found a “substantial disparity” existed in the distribution and therefore ordered Richard Marschner to provide Carol Marschner cash in the amount of $50,000 to be paid either in a lump sum or over ten years with interest. The district court specifically found neither party was disadvantaged, and although Richard Mar-schner may have had “an income-earning advantage,” the cash payoff and interest awarded to Carol Marschner resulted in no disadvantage to either party.
[¶ 9] The Ruff Fischer guidelines to consider include:
the respective ages of the parties, their earning ability, the duration of the marriage and conduct of the parties during the marriage, their station in life, the circumstances and necessities of each, them health and physical condition, their financial circumstances as shown by the property owned at the time, its value at the time, its income-producing capacity, if any, whether accumulated before or after the marriage, and such other matters as may be material.
Riehl v. Riehl,
A
[¶ 10] “Upon granting a divorce, the trial court may compel either of the parties to make such suitable allowances to the other for support as the court may deem just.” Schiff v. Schiff,
[¶ 11] The district court concluded Carol Marschner acquired bookkeeping and typing skills during the marriage, and those skills would help her obtain employment. Further, the court found, even though Richard Marschner presently has a greater earning ability, the settlement payment and liquid nature of Carol Mar-schner’s distribution resulted in no advantage to either party. Further, the district court suggested the depressed farm economy may mitigate Richard Marschner’s presently greater income-earning ability.
[¶ 12] The trial court found Carol Mar-schner was not a disadvantaged spouse because once Carol Marschner received her cash inheritance, and once payments began on the liquid cash settlement, there would be no disadvantage to either party. But that finding conflicts with the record which clearly reflects both Carol Mar-schner and Richard Marschner devoted a large portion of their lives to the family’s farm. Carol Marschner will no longer be able to work the family farm in order to receive a return from that investment. The trial court found Carol Marschner has been, for the majority of the marriage, a homemaker, although she had accumulated some work skills prior to the marriage and she did the bookkeeping for the farming operation. It is apparent that as a result of Carol Marschner’s responsibilities as a homemaker and helper to Richard Mar-schner in the family operation she is a disadvantaged spouse who has “ ‘foregone opportunities or lost advantages as a consequence of the marriage and who has contributed during the marriage to the supporting spouse’s increased earning capacity.’ ” Riehl v. Riehl,
B
[¶ 13] Relevant to a spousal support determination is the distribution of marital property, the liquid nature of the property, and the income-producing nature of property. Wetzel v. Wetzel,
[¶ 14] The district court awarded each party a virtually equal share of the family assets, either in cash or in property. The farm, an income-producing asset, was awarded to Richard Marschner. The district court specifically found “the family farm has not been very profitable” and noted the farm economy is depressed.
[¶ 15] Richard Marschner testified his income from selling milk had dropped by a third, he was receiving over two dollars less per bushel for his grain, and he had been able to plant only one-third of his crop due to heavy moisture. The court also found the liquid nature of Carol Mar-schner’s distribution and cash settlement would burden Richard Marschner and would essentially equalize any advantage he had over her. Our cases discussing
[¶ 16] We have held that a disadvantaged spouse is not required to deplete her property distribution in order to live. Fox v. Fox,
[¶ 17] The marital estate here, as in Sateren, is small. The trial court was understandably concerned that requiring Richard Marschner to pay spousal support, in addition to the cash payment of $50,000 to be paid as property distribution, was a financial burden. The district court sought to preserve the family farm by awarding it to Richard Marschner. We have numerous times recognized the importance of preserving the viability of a business operation like a family farm. See, e.g., Gibbon v. Gibbon,
[¶ 18] Preserving the family farm is not to be done at all costs nor should it engulf all other factors. Rather, we have said its purpose is to avoid “the potential for economic hardship” if the farm is divided or sold. Gibbon,
[¶ 19] Although this distribution may not be characterized as a “windfall” to Richard Marschner, the effect of the property distribution is to require Carol Mar-schner to forego spousal support because she is to receive her property distribution in a cash payment. As a result, she will be required to deplete her property distribution for living expenses. Richard Mar-schner will retain the farm. The farm may be encumbered after the payments are made to Carol Marschner but Richard Marschner will retain an income-producing asset while Carol Marschner will have depleted her share of the property distribution to find a residence and otherwise subsist. Property distribution and spousal support are overlapping issues and are to be considered together. Sateren. The property division, viewed in a vacuum, may appear equitable, but when the denial of spousal support is included in the analysis, it is not equitable.
[¶ 20] Although our decisions recognize liquidation of an ongoing farming or business operation is ordinarily a last resort, e.g. Gibbon, this may be such a case. This may be the situation in which it is not possible to preserve the family farm. If it is not an economically viable enterprise, it should be sold and the proceeds divided between the parties. See, e.g., Schoenwald v. Schoenwald,
[¶ 21] The trial court recognized Richard Marschner has greater earning ability but suggested the depressed farm economy may reduce his greater income-earning ability. It may. It may not. A depressed farm economy, although a too common occurrence, may improve in future years. If immediate spousal support cannot be paid in this case, the trial court should have reserved the issue. Then, when Richard Marschner has finished paying Carol Mar-schner her property distribution and has the total income from the farm for his own use and she has no income because she used her share of the property distribution to survive, the possibility of an award of spousal support may be considered, van Oosting v. van Oosting,
[¶ 22] We have affirmed the finding that the property Carol Marschner inherited should be included for purposes of property distribution. However, the net effect is to award Carol Marschner $50,000, payable over ten years at Richard Marschner’s option, out of the estate the parties accumulated during 38 years of marriage. This result should be a factor favoring Carol Marschner in a spousal support award.
[¶ 23] We hold the trial court’s finding that the preservation of the farm was the overreaching goal of the divorce proceeding, thereby denying any form of spousal support to Carol Marschner, was induced by an erroneous view of the law and therefore was clearly erroneous under N.D.R.Civ.P. 52(a). We remand to the trial court to further consider the matter of spousal support. The trial court may further consider an award of spousal support under the same or similar property distribution, it may order the sale of the farm and divide the proceeds, or it may consider some form of delayed spousal support. Although we believe the property distribution was an equitable distribution as ordered by the trial court, because issues of property division .and spousal support are intertwined, Fox v. Fox,
[IT 24] We reverse the judgment and remand for further proceedings consistent with this opinion.
Dissenting Opinion
dissenting.
[¶ 26] On appeal, the question is not whether the district court could have awarded spousal support to Carol Mar-schner, but' whether the district court clearly erred by not awarding support. Van Klootwyk v. Van Klootwyk,
A
[¶ 27] Our cases have uniformly held a “spouse must be disadvantaged as a result of the divorce for rehabilitation or maintenance to be appropriate.” Wiege v. Wiege,
that finding conflicts with the record which clearly reflects both Carol Mar-schner and Richard Marschner devoted a large portion of their lives to the fami*346 ly’s farm. Carol Marschner will no longer be able to work the family farm in order to receive a return from that investment.... It is apparent that as a result of Carol Marschner’s responsibilities as a homemaker and helper to Richard Marschner in the family operation she is a disadvantaged spouse who has “ ‘forgone opportunities or lost advantages as a consequence of the marriage and who has contributed during the marriage to the supporting spouse’s increased earning capacity.’ ”
(Emphasis added). The majority substitutes the phrase “[i]t is apparent” for evidence; it substitutes stereotypes for facts in the record.
[¶ 28] The majority ignores Carol Mar-schner’s award of nearly $84,000 in cash plus $50,000 with interest over the next ten years. The evidence does not support the conclusion that Carol Marschner has forgone any opportunity or lost any advantage as a result of her marriage. Further, the evidence does not establish Richard Marschner has an increased earning capacity. Rather, he has an asset that may or may not produce income, while Carol Marschner has cash.
[¶29] Although Carol Marschner can no longer derive income from the farm, it is illogical to conclude that the $134,000 she will receive cannot generate income. The majority’s conclusion presupposes that Richard Marschner has an increased earning capacity, but the record does not support this supposition. At ¶ 15, the majority recognizes Richard Marschner may be unable to earn a living. At ¶ 13, the majority also recognizes that the liquid nature and income-producing nature of property are relevant to a spousal support determination. I agree with the district court, the farm may be an income-producing asset. I also agree Carol Marschner’s cash settlement may be an income-producing asset. But I do not believe the majority should embrace one finding while ignoring the other.
[¶ 30] “We have held, if our Court can understand the factual basis upon which the trial court reached its conclusions from its findings of fact, we will not remand.” Young v. Young,
[¶ 31] The conclusion Carol Marschner was disadvantaged seems logical if one presupposes Richard Marschner has a greater earning ability. But the nearly equal property division and the findings of the district court adequately demonstrate that both parties have a nearly equal earning ability, “so neither is unfairly disadvantaged by the divorce.” Id. at ¶ 30.
B
[¶ 32] Although the district court might have better articulated both parties’ needs and Richard Marschner’s ability to pay, the record demonstrates the district court considered these factors in reaching its conclusion. Even if Carol Marschner was disadvantaged, the majority does not address the needs of both parties and Richard Marschner’s ability to pay. See Moilan v. Moilan,
[¶ 34] At trial, when asked whether she had lasting effects from her aneurysm, Carol Marschner replied, “I sure don’t think so.” She proceeded to explain she feels even better without “all the pressures that was [sic] put on me out there at the farm.” She did, however, testify she suffers from asthma, rheumatoid arthritis, blood pressure ailments, and a heart condition. The district court discounted these claimed ailments, stating they “do not warrant any special consideration.”
[¶ 35] The district court concluded Carol Marschner acquired bookkeeping and typing skills during the marriage, which would help her obtain employment. Carol Marschner testified she has sold seed grain and has been employed as a bus driver.
[¶ 36] Richard Marschner testified regarding his diminished income and corresponding ability to pay support. He testified his income from selling milk had dropped by a third, he was receiving over two dollars less per bushel for his grain, and he had been able to plant only one-third of his crop due to heavy moisture. The district court specifically cited the depressed farm economy and lack of profit on the family farm in equitably distributing the marital property.
[¶ 37] The record demonstrates the district court properly weighed the parties’ needs and Richard Marschner’s ability to pay. Although Carol Marschner was unemployed at the time of trial and may have had to temporarily and minimally deplete her property settlement in order to live, the district court’s findings establish Richard Marschner’s earning advantage, if any, would be ephemeral. It is logical to also presume Richard Marschner will have to deplete his property settlement. Both parties are reaching their advanced years, and, unfortunately, because of their limited marital assets, both will likely have to work after the divorce.
[¶ 38] Our equitable distribution cases encourage trial courts to consider factors such as the income-producing nature or the liquid nature of an asset. Wetzel v. Wetzel,
C
[¶ 39] Whether the district court could have awarded spousal support to Carol Marschner is not at issue. Our query is whether the district court clearly erred by not awarding spousal support. Because the district court’s findings are supported by the record, I would affirm. Because the majority has substituted its judgment for that of the district court, I respectfully dissent.
Dissenting Opinion
dissenting.
[¶ 41] I, too, respectfully dissent. I believe the majority has retried the case, based on the evidence and on.the facts in the record.
[¶42] As has been pointed out, the parties’ farming operation faces a very uncertain future. The trial court has tried to spread the risk of that uncertainty fairly and equitably. While I might have found facts somewhat differently, and particular