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Richarz v. Richarz

Supreme Court of South Dakota

November 8, 2017

ADAM DUANE RICHARZ, Plaintiff and Appellant,
v.
DENA KAY RICHARZ, Defendant and Appellee.

          CONSIDERED ON BRIEFS ON AUGUST 28, 2017

         APPEAL 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.

          ZINTER, Justice.

         [¶1.] 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 affirm.

         Facts and Procedural History

         [¶2.] 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.

         [¶3.] 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.

         [¶4.] 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.[1]

         [¶5.] 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.

         [¶6.] 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.

         [¶7.] Dena retained Merle Miller, a licensed real estate broker and certified appraiser, to value the land. Miller valued the Lauck land at $210, 000[2] 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.

         [¶8.] 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 ...


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