CONSIDERED ON BRIEFS ON AUGUST 28, 2017
FROM THE CIRCUIT COURT OF THE FIRST JUDICIAL CIRCUIT MCCOOK
COUNTY, SOUTH DAKOTA THE HONORABLE PATRICK T. SMITH Judge
PATRICK T. DOUGHERTY of Dougherty & Dougherty, LLP Sioux
Falls, South Dakota Attorneys for plaintiff and appellant.
VICTORIA M. DUEHR of Bangs, McCullen, Butler, Foye &
Simmons, LLP Sioux Falls, South Dakota Attorneys for
defendant and appellee.
Adam and Dena Richarz were married in 2007 and obtained a
divorce in 2016. In dividing their property, the circuit
court awarded Adam his interest in an LLC, it required Adam
to pay 25% of Dena's student-loan debt, and it ordered
Adam to make a cash-equalization payment. Adam appeals. We
and Procedural History
Adam and Dena were childhood friends. They began dating in
2005 before Dena's senior year of high school. They
became engaged in 2006, shortly after Dena began attending
college. They were married in September 2007.
Adam worked on his parents' farm. He was paid a salary of
$1, 200 per month by G&L, Inc., a corporation owned by
his mother. Before the marriage, Adam and his parents formed
Richarz Properties, LLC. Adam contributed $50, 000 and his
parents contributed $45, 000. The contributions were used to
purchase an 8.51-acre parcel of land (the "Lauck
land") in McCook County. In 2008, the LLC purchased a
143.47-acre parcel of land referred to as the "Farrell
land." Although Adam initially had slightly more than a
50% interest in the LLC, he transferred approximately 2% of
that interest to his father in 2011-leaving Adam with a
48.63% interest. The transfer was in exchange for
improvements made by Adam's parents to the Lauck land.
Dena continued her college education after getting married.
She stayed with Adam during weekends, breaks, holidays, and
summer vacations. When at home with Adam, Dena worked on the
farm and in the household. After completing her undergraduate
degree, Dena began applying to veterinary schools and was
eventually accepted at a school in Scotland. She moved to
Scotland in August 2011 and graduated in July 2016. Adam
stayed in South Dakota and continued to work for his parents
at the farm. Dena accumulated $397, 822 in student-loan debt
during the marriage.
Adam filed for divorce in December 2014. The parties agreed
to a divorce on the grounds of irreconcilable differences.
They proceeded to trial to divide the property. The primary
disputes involved the division of Adam's interest in the
LLC and the responsibility for Dena's student-loan debt.
Adam and Dena retained experts to value the land and the LLC.
Adam retained Tom Souvignier, a licensed real estate broker
and real estate auctioneer, to value the land. Souvignier
valued the Lauck land at $257, 900 and the Farrell land at
$665, 000. Adam retained Jay Fullerton to value the LLC.
Using Souvignier's land values, Fullerton valued
Adam's interest in the LLC at $248, 000, which included
discounts for lack of marketability and lack of control.
Dena retained Merle Miller, a licensed real estate broker and
certified appraiser, to value the land. Miller valued the
Lauck land at $210, 000 and the Farrell land at $1, 004, 250.
Dena retained Ericka Heiser to value Adam's interest in
the LLC. Using Miller's value of the Farrell land, Heiser
valued Adam's interest in the LLC at $595, 000. Although
Heiser testified she would apply lower discounts than
Fullerton, she was of the opinion that Adam's interest
should not be discounted at all.
The circuit court classified three items of property as
marital: an investment worth $211, a bank account worth $502,
and Adam's interest in the LLC. The court then adopted
Miller's valuation of the land and Heiser's valuation
of Adam's interest in the LLC. The court valued
Adam's interest in the LLC at $595, 000, but it
subtracted the $50, 000 that Adam had invested before the
marriage. Adam was then awarded his interest in the LLC and
the $211 investment, for a total value of $545, 211. Because
the court determined that Dena should be awarded one-half the
value of the marital assets, it awarded her the $502 bank
account, and it ordered Adam to make a cash-equalizing
payment of $272, 354.50. Finally, the court ordered that Dena
would be responsible for paying her student loans but that
Adam was allocated 25% of the responsibility ($99, 455.50) in
addition to the ...