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Halbersma v. Halbersma

November 10, 2009

BARBARA R. HALBERSMA, PLAINTIFF AND APPELLANT,
v.
LAWRENCE M. HALBERSMA, DEFENDANT AND APPELLEE.



APPEAL FROM THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT MINNEHAHA COUNTY, SOUTH DAKOTA HONORABLE STUART L. TIEDE Judge.

The opinion of the court was delivered by: Severson, Justice.

ARGUED AUGUST 25, 2009

[¶1.] Barbara Halbersma appeals the circuit court's property division decision on remand. Lawrence Halbersma also raises three issues by notice of review. We affirm in part, reverse in part, and remand.

FACTS

[¶2.] The underlying facts of this case are set forth in Halbersma v. Halbersma (Halbersma I ), 2007 SD 91, 738 NW2d 545. Lawrence and Barbara were married on October 15, 1955. In 1986, Barbara inherited real and personal property from her mother, which, at the time of trial, was valued at approximately $1,799,779.00. The bulk of the inheritance consisted of real property, including a residence located near Brandon, South Dakota. After selling their farm near White, South Dakota, Barbara and Lawrence moved into the Brandon residence in 2003. Barbara filed for divorce in 2005.

[¶3.] The only contested issue in the divorce proceeding was the division of Barbara's inherited property. The circuit court in Halbersma I found that Barbara's mother intended to pass the land and money to Barbara alone, that Barbara kept her inherited property and money separate from the marital estate, and that Lawrence had no control over the property and did not participate in any decisions regarding it. The circuit court found Lawrence's contribution to the inherited property to be de minimis. The circuit court also noted Lawrence had no need for support. Accordingly, the inherited property was excluded from the marital estate. Lawrence appealed.

[¶4.] In Halbersma I , this Court, in a divided three to two opinion with one concurrence, reversed the circuit court's exclusion of the inherited property from the marital estate upon determining the court overlooked Lawrence's indirect contribution to the inherited property. 2007 SD 91, ¶16, 738 NW2d at 549. The circuit court was ordered on remand "to determine an equitable division of property that includes Barbara's inherited property." Id. ¶24.

[¶5.] The remand hearing was held on September 3, 2008. The circuit court determined the Brandon residence should be included in the division of property as it became marital property when the couple moved into it in 2003. The circuit court awarded Lawrence one-half of the home's equity, $111,250.00, less the sum of $7,500.00 previously awarded for his contribution to the residence, for a net award of $103,750.00. The circuit court excluded the remainder of Barbara's inheritance from the marital estate. Furthermore, the circuit court, sua sponte , included in the marital estate monies Lawrence inherited in the early 1970s and 1980s. These inheritances totaled approximately $50,000.00, which the circuit court determined had a present value of $143,670.00 after factoring in investment earnings, inflationary discounts, and taxes. As a result, Barbara was ordered to pay Lawrence an additional $247,420.00, plus interest, at the rate of 5% per year from and after October 6, 2006. Barbara appeals, raising three issues:

1. Whether the circuit court abused its discretion and erred in the application of law in its division of the parties' marital estate.

2. Whether, in the alternative, Lawrence's indirect contribution should have been determined by awarding Lawrence an appropriate share in the appreciation of value of Barbara's inherited properties.

3. Whether the circuit court erred by assessing Barbara interest during a period of delay caused by Lawrence and the court.

Lawrence filed a notice of review, identifying three issues: 1. Whether the circuit court abused its discretion by awarding Lawrence approximately 15% of the value of Barbara's previously excluded inherited assets and thereby awarding Barbara approximately 72% of the total assets and Lawrence approximately 28% of the total assets.

2. Whether the circuit court erred by utilizing a valuation methodology for determining the value of Lawrence's equitable interest in the previously excluded inherited assets, where such methodology was not advocated by either party, no evidence was offered to support the methodology, and which was different than the property stipulation of the parties that had been accepted by the circuit court.

3. Whether the circuit court erred by limiting the judgment interest awarded to Lawrence to 5%, rather than the Category B rate of interest specified in SDCL 64-3-5.1.

To prevent repetition, we combine and restate the issues.

STANDARD OF REVIEW

[¶6.] The applicable standard of review varies depending on whether the issue is one of fact or one of law. A circuit court's findings of fact will not be set aside unless they are clearly erroneous. SDCL 15-6-52(a). The question is not whether this Court would have made the same findings the circuit court did, but whether on the entire evidence, "we are left with a definite and firm conviction that a mistake has been committed." New Era Mining Co. v. Dakota Placers, Inc., 1999 SD 153, ¶7, 603 NW2d 202, 204 (citations omitted). By contrast, conclusions of law are reviewed under a de novo standard, giving no deference to the circuit court's conclusions of law. Id

[¶7.] It is well established that a circuit court's division of property "is not bound by any mathematical formula." Johnson v. Johnson, 2007 SD 56, ¶44, 734 NW2d 801, 812 (quoting Grode v. Grode, 1996 SD 15, ¶9, 543 NW2d 795, 800). See Endres v. Endres, 532 NW2d 65, 71 (SD 1995); Kost v. Kost, 515 NW2d 209, 213 (SD 1994); Kappenmann v. Kappenmann, 479 NW2d 520, 524 (SD 1992); Hanson v. Hanson, 252 NW2d 907, 908 (SD 1977). We will not overturn a property division unless the circuit court abused its discretion, which occurs when a court exercises its discretion "to an end or purpose not justified by, and clearly against, reason and evidence." Kost , 515 NW2d at 212 (citation omitted). The inquiry is not whether we would have made a like ruling, but whether "a judicial mind, in view of the law and the circumstances of the particular case, could reasonably have reached such a conclusion." DeVries v. DeVries, 519 NW2d 73, 75 (SD 1994) (citation omitted). The law requires an equitable, not necessarily equal, division of assets. Halbersma I , 2007 SD 91, ¶28, 738 NW2d at 551 (Konenkamp, J., concurring).

DECISION

[¶8.] 1. Whether the circuit court abused its discretion on remand in making an equitable division of property that included Barbara's inherited property.

[¶9.] South Dakota is an "all property state," meaning all property of the "divorcing parties is subject to equitable division by the circuit court, regardless of title or origin." Endres , 532 NW2d at 68 (quoting Radigan v. Radigan, 465 NW2d 483, 486 (SD 1991)). SDCL 25-4-44 provides:

When a divorce is granted, the courts may make an equitable division of the property belonging to either or both, whether the title to such property is ...


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