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Muenster v. Muenster

April 8, 2009



The opinion of the court was delivered by: Kern, Circuit Judge


[¶1.] Theodore Roosevelt Muenster (Ted) appeals from a judgment and decree of divorce granted to Carleen Ann Muenster (Carleen) challenging the trial court's division of property, the determination of child support and the finding that he was in contempt of court. We affirm the property division and contempt finding and reverse and remand for recalculation of Ted's child support.


[¶2.] Ted and Carleen were married on October 19, 1996. At the time of the marriage, the parties were living in a home owned by Ted on St. Paul Street in Sioux Falls, South Dakota. Carleen had obtained a bachelor's degree in business administration and was working for Specialized Card Services, earning $32,000 per year. Ted had not yet earned his bachelor's degree and was working for his mother, Karen Muenster, maintaining her rental properties. Ted had previously bought and sold several real properties in Sioux Falls. In 1997, Ted completed his undergraduate degree and the parties' first child, Emily, was born September 14, 1997.

[¶3.] In August 1998, the parties moved to Vermillion so Ted could pursue a law degree. In October 1998, Carleen obtained a job at the law school in the Dean's Office, earning a salary of $32,000 per year and the job provided medical insurance for the children. The parties lived with Carleen's mother for the first eight months.

The parties sold the house on St. Paul Street in Sioux Falls for approximately $79,000. With the proceeds they paid off marital debts, including some of Ted's undergraduate expenses, and purchased two rental properties in Vermillion: 217 and 225 N. University (University) and 515 E. Clark (Clark) in which they resided.

The parties sold the University property to clear debt and purchased a duplex at 200 and 202 N. Pine Street (Pine). All the properties were titled jointly by the parties. The parties received about $2,000 per month in net income from the rental properties.

[¶4.] The parties' second child, Alexander, was born October 22, 2000. Carleen enrolled in graduate school in 2001. Ted graduated from law school in 2003, and elected not to take the bar exam but continued to manage the rental property on Pine Street and work with his mother in real estate ventures. In 2003, the parties moved to Sioux Falls as Carleen obtained a paid internship at "West Central" as a counselor. The parties lived rent-free in a furnished home located on Harriet Lee belonging to Ted's parents. The parties' third child, Olivia, was born January 1, 2004. Carleen obtained her master's degree in the spring of 2004.

[¶5.] As the couple now had three small children, they decided Carleen should remain at home with the children. Alex had ADHD and she began home schooling him. Ted worked at Wells Fargo and Home Depot, earning between $10 and $13 per hour. He later obtained employment as the director of the Chiesman Foundation at a salary of $38,000 per year. His position was eliminated after three months and he collected unemployment benefits for eight months. Ted obtained his real estate license and worked at Century 21 but never sold a house.

[¶6.] On June 13, 2007, Carleen filed for divorce, interim custody of the parties' children, child support and interim spousal support. At the time of the divorce proceeding, Carleen was unemployed and Ted indicated he was working full time as a real estate agent and managing the rental properties the parties owned in Vermillion. Their only income was the $1,300 per month they were now receiving as net income from the rental properties. The trial court ordered Ted to pay Carleen her one-half share of the rental income ($650) and the court ordered both parties to obtain employment. Carleen promptly obtained employment with Capital Card Services at a salary of $47,705 per year.

[¶7.] On August 16, 2007, Carleen filed motions to compel answers to interrogatories, to hold Ted in contempt for failing to pay the $650 per month and for modification of support. A hearing was held on September 24, 2007, at which time the parties agreed that the answers to interrogatories had been received and that the accounting regarding the rental income would be produced in two weeks. Prior to the hearing, Ted satisfied the child support arrearages generated by the court's prior order of $650 per month. The trial court ordered Ted to immediately seek gainful employment and ordered that the remaining $650 in equity from the parties' rentals would be given to Carleen to assist with her child care expenses, which now exceeded $840 per month, and as temporary support. The court also ordered that on or before October 8, 2007, Ted would comply with Carleen's discovery request to provide a full accounting of the rental income received.

[¶8.] On October 31, 2007, Carleen filed a second motion seeking to have Ted held in contempt of court for failing to comply with the court's order directing him to produce the financial information and for failing to pay 100 percent of the rental income to Carleen.

[¶9.] A hearing was held on December 10, 2007, and counsel for the parties again agreed that an accounting of the rental income would be made within two weeks to Carleen's counsel. Counsel also obtained clarification from the court regarding the September 24, 2007, order which provided that Ted would pay Carleen 100 percent of the net income from the rental property.

[¶10.] On December 12, 2007, Karen Muenster delivered to the sheriff a notice to quit and vacate the property at 2304 Harriet Lee, thereby beginning eviction proceedings against Carleen and the children who were still residing in the Muenster residence. Carleen vacated the property voluntarily and obtained an apartment for herself and the couple's three children. On January 8, 2007, Karen Muenster filed mechanic's liens totaling $44,910 against the Pine Street property ($33,563) and against the Clark Street property ($11,347) for taxes paid, repairs, improvements and property management fees beginning in 2002 and ending December 31, 2007. At the time of the divorce, the Clark Street property was valued at $70,152 and had a mortgage of $60,185. The Pine Street property was valued at $109,087 and had a mortgage of $70,496. The parties' combined equity in both properties was $48,558. Thus, the mechanic's liens were nearly equal to the parties' equity in the two properties.

[ΒΆ11.] The case proceeded to a trial before the court on March 6, 2008. At trial, Ted testified and produced some evidence that he brought into the marriage approximately $177,000 in premarital assets obtained from the sale of several properties he had purchased prior to marriage and the proceeds from the sale of the St. Paul Street residence in Sioux Falls in 1998. Carleen testified that Ted had not paid her the $1,300 per month ordered by the court. Ted testified that he was working for his brother but not ...

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