IN THE SUPREME COURT
STATE OF NORTH DAKOTA
| Kandas K. Wold, | ) | |||||
| ) | ||||||
| Appellee/ Cross Appellant | ) | |||||
| ) | ||||||
| vs. | ) | |||||
| ) | ||||||
| Kirk R. Wold, | ) | |||||
| ) | ||||||
| Defendant/Appellant. | ) | |||||
| McKenzie Co. Civil Case No. 03-C-050 | ||||||
| Supreme Court No.: 20060342 | ||||||
BRIEF OF APPELLEE / CROSS APPELLANT,
KANDAS K. WOLD
Appeal from District Court
Williams County District Court
Northwest Judicial District
The Honorable Judge Gerald H. Rustad, Presiding
| H. Malcolm Pippin |
| Attorney for Appellee / Cross Appeallant |
| I.D. #04682 |
| P.O. Box 1525 |
| Williston, ND 58802-1525 |
TABLE OF CONTENTS
| Table of Authorities | Page ii | |||||||
| Statement of the Issues | Page 1 | |||||||
| Statement of Case | 1 | |||||||
| Statement of Facts | 8 | |||||||
| Law and Argument | 18 | |||||||
| I. | Standard of Review | 18 | ||||||
| A. | Division of Property | 18 | ||||||
| B. | Spousal Support | 19 | ||||||
| II. The Appellant has Failed to Prove the Trial Court's Findings | ||||||||
| Regarding the Valuation and Division of Property were Clearly | ||||||||
| Erroneous | 20 | |||||||
| III. The Trial Court Erred when it did not Find Economic Misconduct | ||||||||
| on Behalf of Kirk Wold and Erred to not Include the Value of the | ||||||||
| Cheetah Business as a Marital Asset | 35 | |||||||
| IV. The Trial Court Erred in Adopting Sliwoski's Asset Approach | ||||||||
| Valuation for the Panther Business and Should have Adopted the | ||||||||
| Kainz Valuation | 49 | |||||||
| V. The Trial Court's Spousal Support Award was not Clearly Erroneous | 62 | |||||||
| VI. The Trial Court Erred when it Refused to Order that Kirk Wold | ||||||||
| Provide Security for the Spousal Support Payments | 79 | |||||||
| VII. | Attorneys Fees Should be Awarded to Kandas on Appeal | 85 | ||||||
| Conclusion | 89 | |||||||
| Certificate of Service | Page 34 | |||||||
TABLE OF AUTHORITIES
| CASES | |||||
| Amsbaugh v. Amsbaugh, 2004 ND 11, 21, 673 N.W.2d 601 | 21, 23 | ||||
| Bader v. Bader, 448 N.W.2d 187, 189 (N.D. 1989) | 35 | ||||
| Bagan v. Bagan, 382 N.W.2d 645, 646 (N.D. 1986) | 64 | ||||
| Bakes v. Bakes, 532 N.W.2d 666, 669 (N.D.1995) | 86 | ||||
| Donarski v. Donarski, 1998 ND 128, 6, 8, 581 N.W.2d 130 | 77 | ||||
| Donlin v. Donlin, 2007 ND 5, 10, 725 N.W.2d 905 | 18 | ||||
| Dvorak v. Dvorak, 2006 ND 171, 24, 719 N.W.2d 362 | 85 | ||||
| Ebach v. Ebach, 2005 ND 123, 21, 700 N.W.2d 684 | 85 | ||||
| Gierke v. Gierke, 1998 ND 100, 26, 578 N.W.2d 522 | 81 | ||||
| Henry v. Henry, 1998 ND 141, 26, 581 N.W.2d 921 | 85 | ||||
| Holden v. Holden, 2007 ND 29, 9, 728 N.W.2d 312 | 18 | ||||
| Horner v. Horner, 2004 ND 165, 16, 686 N.W.2d 131 | 22, 35 | ||||
| Hoverson v. Hoverson, 2001 ND 124, 13, 629 N.W.2d 573 | 20, 22, 35, 36 | ||||
| Jorgenson v. Ratajczak, 1999 ND 65, 16, 592 N.W.2d 527 | 86 | ||||
| Kautzman v. Kautzman, 1998 ND 192, 12, 585 N.W.2d 561 | 18, 77 | ||||
| Kostelecky v. Kostelecky, 2006 ND 120, 8, 714 N.W.2d 845 | 20 | ||||
| LaVoi v. LaVoi, 505 N.W.2d 384, 387 (N.D. 1993) | 87 | ||||
| Marschner v. Marschner, 2002 ND 67, 4, 642 N.W.2d 857 | 18 | ||||
| Matter of Estate of Gustafson, 287 N.W.2d 700, 704 (N.D. 1980) | 82 | ||||
| May v. May, 589 S.E.2d 536, 541 (W.V. 2003) | 50 | ||||
| Nastrom v. Nastrom, 262 N.W.2d 487, 493 (N.D. 1978) | 49 | ||||
| Neidviecky v. Neidviecky, 2003 ND 29, 10, 657 N.W.2d 255 | 21 | ||||
| Peterson v. Peterson, 1999 ND 191, 9, 600 N.W.2d 851 | 37 | ||||
| Quamme v. Bellino, 2002 ND 159, 20, 652 N.W.2d 360 | 83 | ||||
| Riehl v. Riehl, 1999 ND 107, 11, 595 N.W.2d 10 | 77, 78 | ||||
| Roen v. Roen, 438 N.W.2d 170, 172 (N.D. 1989) | 64 | ||||
| Seablom v. Seablom, 348 N.W.2d 920, 924 (N.D. 1984) | 82 | ||||
| Shields v. Shields, 2003 ND 16, 7, 656 N.W.2d 712 | 63 | ||||
| Sommers v. Sommers, 2003 ND 77, 9, 660 N.W.2d 586 | 49, 51, 52, 58, 63 | ||||
| Staley v. Staley, 2004 ND 195, 7, 688 N.W.2d 182 | 19 | ||||
| Stoutland v. Estate of Stoutland, 103 N.W.2d 286, 291 (N.D. 1960) | 82 | ||||
| Striefel v. Striefel, 2004 ND 210, 7, 689 N.W.2d 415 | 21 | ||||
| Theis v. Theis, 534 N.W.2d 26 (N.D. 1995) | 22, 37 | ||||
| Ulsaker v. Ulsaker, 2006 ND 133, 14, 717 N.W.2d 567 | 23 | ||||
| Volk v. Volk, 376 N.W.2d 16, 18 (N.D. 1985) | 21 | ||||
| Wagner v. Wagner, 2007 ND 33, 5, 728 N.W.2d 318 | 19 | ||||
| Weir v. Weir, 374 N.W.2d 858, 864 (N.D. 1985) | 64, 65, 78 | ||||
| Young v. Young, 1998 ND 83, 11, 578 N.W.2d 111 | 23 | ||||
| Zuger v. Zuger, 1997 ND 97, 19, 563 N.W.2d 804 | 77 | ||||
| STATUTES | ||
| N.D.C.C. § 14-05-23 | 85, 86 | |
| N.D.C.C. § 14-05-24.1 | 62 | |
| N.D.C.C. § 14-05-25 | 81 | |
| N.D.C.C. § 14-05-25.2 | 81 | |
| N.D.C.C. § 14-09 | 81 | |
| N.D.C.C. § 47-07-10 | 50 | |
| N.D.C.C. § 47-07-11 | 50 | |
STATEMENT OF THE ISSUES
I. WHETHER THE TRIAL COURT'S PROPERTY DIVISION WAS CLEARLY ERRONEOUS.
II. WHETHER THE TRIAL COURT'S SPOUSAL SUPPORT AWARD WAS CLEARLY ERRONEOUS.
III. WHETHER THE TRIAL COURT ERRED IN NOT FINDING MARITAL ECONOMIC MISCONDUCT.
IV. WHETHER THE TRIAL COURT ERRED IN NOT INCLUDING THE VALUE OF CHEETAH RENTALS AS A PART OF THE MARITAL ESTATE.
V. WHETHER THE TRIAL COURT ERRED IN ADOPTING THE SLIWOSKI VALUATION OF THE MARITAL BUSINESS.
VI. WHETHER THE TRIAL COURT ERRED IN NOT ORDERING SECURITY FOR PAYMENT OF SPOUSAL SUPPORT.
VII. WHETHER THE SUPREME COURT SHOULD AWARD ATTORNEYS FEES ON APPEAL.
STATEMENT OF THE CASE
1 A divorce action was commenced in this matter on June 17, 2003.
2 Thereafter a Trial of the matter took place on August 15-19, 2005.
3 Subsequent to Trial, the Trial Deposition of witness Tammy Wilson was taken on August 22, 2005.
4 On November 18, 2005, the Court issued its Findings of Fact, Conclusion of Law and Order for Judgment.
5 Thereafter, Motions for Reconsideration were filed by the parties and the Court issued its decision regarding those Motions on May 22, 2006.
6 Thereafter, Judgment was ultimately entered on September 21, 2006.
7 This Appeal and Cross Appeal followed.
STATEMENT OF THE FACTS
8 The parties were married on July 28, 1990. Shortly thereafter, in January of 1991, the parties purchased the family owned business, Panther Pressure Testers. The purchase of the business was made with the financial assistance of Kandas' parents, Matt and Lois Dettling, who loaned the parties approximately $20,000 to provide operating funds for the business. (Tr. p. 15). In other words, but for Kandas' parents, it would not have been possible to purchase the business in the first place.
9 Throughout the marriage, Kandas has worked a number of different jobs (Exhibit 65) on top of household obligations, child obligations, and her work obligations with Panther which entailed providing all bookkeeping, secretarial and other business functions to the family owned business. At trial, Kirk acknowledged that the functions she performed around the home were important (Tr. pp. 38-39) and also that the work she performed for Panther were important functions performed for the business. (Tr. p. 18). In fact, while Kandas was never paid a salary or wage for her work with Panther, after the parties separated Kirk almost immediately started paying his live-in girlfriend wages for the very same functions. (Tr. p. 19).
10 As reflected in the tax returns (Exs. 4, 5, 6, 7 and 8), throughout the marriage, the business provided a very comfortable lifestyle for the parties and even allowed the parties (prior to separation) to make $5,000 monthly payments on the home mortgage (Ex. 66) when their monthly obligation on the mortgage was approximately $4,200 less per month. The business provided net incomes in the $250,000 plus range after taxes.
11 A significant portion of the Panther Pressure Tester business was derived from the renting of oilfield tools to the oil rigs. Specifically, the primary tools that panther rented were mud check valves, pressure washers and diesel pumps.
12 On or about June 1, 2003, Kirk Wold voluntarily vacated the marital home and moved in with his girlfriend, Tammy Wilson. (Tr. p. 19).
13 Subsequent to moving out of the home on June 1, 2003, Kirk Wold engaged in an incredible pattern of misappropriation of marital assets and other economical fault to the marital estate, with all of the misappropriations benefiting either himself or his live-in girlfriend, Tammy Wilson, to wit:
1. In the Fall of 2003, Wold unilaterally decided to cease renting out tools any more to the oil rigs on behalf of Panther (Tr. p. 68);
2. As absolutely no coincidence, at the exact same time that Panther quit renting tools to the oil rigs, a new company called "Cheetah Rentals" started renting out mud check valves, pressure washers, and diesel pumps to the oil rigs. (Tr. p. 6). The alleged owner of "Cheetah Rentals" is Tammy Wilson, Kirk Wold's live-in girlfriend;
3. Kirk Wold testified that he loaned her the money ($40,000) to get the business going (Tr. p. 87), gave her input on the manufacturing of the equipment (Tr. p. 71), gave her information on customer contacts, customer and technical advice (Tr. p. 77), picked up and delivered equipment for Cheetah (Tr. p. 76), and filled out invoices for Cheetah (Trial Ex. 51, Tr. p. 76). Further, Cheetah conveniently used the same phone number (572-2578) and address (Box 1109) as Panther (Tr. p. 89). See Ex. 52. (Supp. App. p. 119).
4. Kirk Wold testified that there was no delay between the time that Panther quit renting these tools to the oil rigs and the time that Cheetah starting renting out the same tools to the oil rigs. (Tr. p. 69). He further testified that when Panther quit renting the tools out (at the exact same time as Cheetah started renting tools out), he let the tools just sit in the Panther garage - completely unused with absolutely no effort, of any kind, made to rent the equipment out. (Tr. pp. 75, 80, 96).
5. Kirk Wold testified that in June of 2003, the Panther Pressure Tester business was enjoying the revenue from both the pressure testers, as well as the rental and was able to do so. (Tr. p. 67). Nevertheless, he unilaterally just quit renting out the Panther tools at the exact same time as Cheetah starts renting out the exact same types of tools!
6. Exhibit 31 was received into evidence that represented a transcribed conversation that attorney Pippin had with Perry Jundt. Perry Jundt is a close friend of Kirk Wold's and was an alleged "silent partner" in the rental aspect of the Panther business. In that conversation, Jundt readily admitted that Wold told Jundt to pull his tools until the divorce was final. Where did Jundt end up putting his tools into? Cheetah Rentals.
7. Tammy Wilson testified in her Trial Deposition that Kirk Wold had input on manufacturing of the mud check valves for Cheetah (Wilson Tr. p. 55), loaned Cheetah money to get started (Wilson Tr. p. 58), gave her information on customer contacts, customers and technical advice (Wilson Tr. p. 62), filled out invoices for Cheetah (Wilson Tr. p. 64), picked up equipment, ordered equipment and assembled tools (Id.) Furthermore, Cheetah used the Panther shop, rent free, from day one (Wilson Tr. pp. 81-82).
8. Wilson further testified and acknowledged that she had previously testified during an April 6, 2004 hearing before the Court (Wilson Tr. p. 80) that Wold had taught her "everything there is on the rental business." (Wilson Tr. pp. 46-47; Supp. App. pp. 125-126).
9. Wilson testified that once Cheetah started renting out the mud check valves, pressure washers, and diesel pumps that Panther immediately quit doing so. (Wilson Tr. p. 61).
10. Within close proximity prior to June of 2003, Wilson had filed bankruptcy (Ex. 23) and had recently been divorced (Ex. 22). Notwithstanding, after Cheetah Rentals commenced business, the rental numbers were staggering as reflected on the financial Exhibits introduced during her Trial Deposition. The mud check valves rented for $100 per day, the pressure washers for $35 per day, and the diesel pumps for $25 per day. In 2003 alone, Cheetah billed out $128,082.50 for rentals (Ex. 48; Wilson Tr. p. 75; Trial Ex. 26; Supp. App. p. 60).
11. Dale Karpyak (Iron Horse products), who manufactured the mud check valves for Panther Pressure and Kirk Wold in the first place, testified to the following: (1) there was nothing wrong with the Panther mud check valves in June of 2003 (Tr. p. 141); (2) that Kirk Wold contacted him to build mud check valves for Cheetah and told him what kind he wanted (Tr. p. 142); (3) in Mr. Karpyak's mind, it was clear that Kirk Wold was in charge of Cheetah (Tr. p. 143); (4) it was his understanding that the mud check valves that Wold ordered for Cheetah (20 in number) were to replace the mud check valves that Panther had (Tr. p. 144); and (5) that Kirk Wold made statements to him that led him to believe that Cheetah was going to be replacing Panther (Tr. p. 145; Trial Exs. 33 and 55 setting forth the Iron Horse Orders and Cheetah invoices). (Supp. App. p. 122).
12. With respect to the business Cheetah Rentals, Wold admitted that he assisted his live-in girlfriend in all aspects of the business - from providing her with customer names, contact names, setting prices, ordering equipment, assembling equipment, providing her with credit, providing her with loan monies, providing her with technical advise, filling out invoices for Cheetah, and even utilizing the same phone numbers and answering service that Panther has.1 In fact, Wold even allows Cheetah to store and use the marital owned shop at no rent of any kind! (Tr. pp. 76-77).
13. In addition, the sworn testimony of Perry Jundt where he admitted and acknowledged his previous sworn testimony of April 6, 2004 to this Court wherein he stated that Wold may very well have asked him to pull his equipment until the divorce was over. In fact, Jundt was even sure of Tammy Wilson's last name! Guy Dodge also testified that Wold told him that the unused equipment sitting in the shop was Kandas' and that it was not going to be rented out. The argument that Jundt was such a key player in this "game" is a joke and a fraud upon the Court. Jundt reported roughly $13,000 of rental income on his 2003 tax return (Ex. 30) for the entire year. Panther, on the other hand, had almost $100,000 in rental revenue in 2003 (Ex. 67) for just the first six months or so of
2003 up until Wold shut it down and transferred everything over to Cheetah!
14. After Tammy Wilson is turned down at the bank (Ex. 39; Supp. App. p. 97) for a loan to purchase a pickup for Cheetah, Kirk Wold "loans" his girlfriend $40,000 in the summer of 2003 (Exs. 53 and 54; Supp. App. pp. 120-121) to buy a pick-up (a necessity for the rental business) after the bank turns her loan application down due to a previous bankruptcy and poor credit problems (Ex. 39; Supp. App. p. 95). Wilson then runs off and buys the new pick-up (Exs. 59 and 60).
15. Kirk Wold puts a snowmobile in Wilson's name (Ex. 68), but he continues to make monthly loan payments to Sheffield Financial on a monthly basis on the snowmobile in the amount of approximately $250 per month. (Tr. pp. 99-100). Better yet, he then tries on the 8.3 to not claim the snowmobile (even though he is paying for it) because it is titled in Tammy Wilson's name. One can only wonder how many other assets and cash are being hidden from the marital estate by Kirk Wold.
16. The rental business provides mammoth profits for those who have the contacts and business connections in the oilfield. In this case, Kirk Wold conspired with his live-in girlfriend, Tammy Wilson, for Wold to quit the Panther Pressure rental business and to then turn over everything to Cheetah in a specific and directed plan to divert significant sums of money from the marital estate. See, for example, the listing of Cheetah equipment listed on Ex. 27 - it is the exact same equipment that Panther had been renting out to the oil companies. He was involved in every aspect of the business.
17. When Tammy Wilson went to the bank in the summer of 2003 to get a loan for a pickup that was needed for Cheetah, she was turned down for the loan (Ex. 39) due to her poor credit and a recent bankruptcy (Ex. 23). Tammy Wilson advised bank officials that she was "taking over boyfriend's business - so has additional income". (Ex. 39). That statement pretty much summarizes exactly what took place in the case - Kirk Wold intentionally misappropriated the rental business of Panther to himself and his girlfriend so as to deprive Kandas, his own son Tanner, and the marital estate of significant income and assets.
18. Kirk Wold is running around buying things with marital estate funds like the money is play money. Within the last 60 days before trial, he purchased a $45,000 motor home (paid in cash) (Ex. 46; Supp. App. p. 112), purchased $15,000 of custom cabinets, and purchased a new 2006 Ford pick-up (Exs. 21 and 76).
19. Thereafter, while Kandas continues in her job as a bank teller making $15,000 per year, Tammy Wilson now has the means to go out and purchase new homes, new vehicles, and pay off existing debt loads that existed at the time that her and Wold started Panther. See trial deposition of Tammy Wilson. With a newfound income of well over $200,000 per year, she can now do so as contrasted with her pre-Cheetah financial situation wherein she filed bankruptcy and couldn't get a car loan because of her poor credit.
14 After the divorce, Kandas will continue at her job at McKenzie County Bank making roughly $15,000 per year. On the other hand, much as he does now, Kirk Wold continues to enjoy the significant income generated from the family business as illustrated by the following chart:
1
2003 income:
2004 taxable income:
Kandas
$14,587 (Ex. 6;
Supp. App. p. 1)
$15,858 (Ex. 7)
Kirk
$224,683 (Ex. 8;
Supp. App. p. 5)
$323,063 (Ex. 9;
Supp. App. p. 9)
See also Social Security Earnings Statement of Kandas (Ex. 15; Supp. App. p. 57).
15 Kirk Wold and his girlfriend are attempting to make a mockery of fairness and justice by dissipating the marital estate right in front of everyone's eyes under the pathetic guise that Wilson simply started up a business in the oilfield and just happened to walk into it - with the complete assistance and encouragement of Kirk Wold who just so happened to thereby quit the Panther rental business at the very same time.
16 It is anticipated that Kirk Wold will argue, in an attempt to somehow justify his misappropriations, that the Panther B.O.P. division was already at capacity in the summer of 2003 and he couldn't handle the rental business any more. Question: Then why didn't he make any efforts of any kind to look for help or other workers? He testified that he made absolutely no efforts of any kind to look for extra help. (Tr. pp. 96-97). Question: If he had no time to work in the Panther rental division, how did he, all of a sudden, have all kinds of time to devote to Cheetah with respect to setting up the business, ordering equipment, parts, delivering rentals, writing up invoices and everything else with the business? His claims in this regard are a complete farce and are an insult to all concerned.
17 Furthermore, his tortured claims that the business continued to make even more money now and that the ceasing of the rental division hasn't hurt the business is also ridiculous. (Tr. p. 253). There exists absolutely no evidence that the rental division could not have continued to fully operate, in addition to the B.O.P. business. Simply put, Kirk Wold wanted to misappropriate the rental over to himself and his girlfriend (going so far as to ask his friend, Perry Jundt, to pull his equipment until the divorce is over). (Tr. p. 242). The increase in the B.O.P. business for Panther is a product of the increase in the oil field activity, not a product of abandoning the very lucrative oil field rental business that Panther had. To suggest otherwise is tantamount to a fraud upon the Court.
LAW AND ARGUMENT
I. Standard of Review.
A. Division of Property.
18 A district court's determinations on valuation and division of property are findings of fact, subject to the clearly erroneous standard. Holden v. Holden, 2007 ND 29, 9, 728 N.W.2d 312; see also Donlin v. Donlin, 2007 ND 5, 10, 725 N.W.2d 905. On appeal, the burden is on the complaining party to demonstrate that a trial court's findings of fact are clearly erroneous. Marschner v. Marschner, 2002 ND 67, 4, 642 N.W.2d 857; see also Kautzman v. Kautzman, 1998 ND 192, 12, 585 N.W.2d 561 (stating appellant had "heavy burden to overcome the presumption of correctness" the North Dakota Supreme Court accords to a trial court's property distribution).
B. Spousal Support.
19 A spousal support determination is a finding of fact which will not be reversed on appeal unless it is clearly erroneous. Wagner v. Wagner, 2007 ND 33, 5, 728 N.W.2d 318. Absent a finding that the support award is clearly erroneous, the North Dakota Supreme Court will not reverse a district court's award merely because they may have viewed the evidence differently. Staley v. Staley, 2004 ND 195, 7, 688 N.W.2d 182.
II. The Appellant has failed to prove the Trial Court's findings regarding the Valuation and Division of Property were clearly erroneous.
20 In regards to the valuation of property, the value a trial court places on marital property depends on the evidence presented by the parties. Kostelecky v. Kostelecky, 2006 ND 120, 8, 714 N.W.2d 845. A district court is in a far better position than an appellate court "to observe demeanor and credibility of witnesses..." Kostelecky at 8. A choice between two permissible views of the evidence is not clearly erroneous if the trial court's findings are based either on physical or documentary evidence, or inferences from other facts, or on credibility determinations. Hoverson v. Hoverson, 2001 ND 124, 13, 629 N.W.2d 573. A court's valuation is not clearly erroneous if it is within the range of the evidence presented. Kostelecky at 9. In fact, the North Dakota Supreme Court "presume[s] a trial court's property valuations are correct" and will not reverse the court's valuations unless they are clearly erroneous. Id. at 8.
21 In regards to division of property, all of the assets must be considered to ensure the division is equitable. Amsbaugh v. Amsbaugh, 2004 ND 11, 21, 673 N.W.2d 601. When all of the assets and debts have been included, the district court can apply the Ruff-Fischer guidelines. Neidviecky v. Neidviecky, 2003 ND 29, 10, 657 N.W.2d 255; see also Striefel v. Striefel, 2004 ND 210, 7, 689 N.W.2d 415 (stating the district court must consider the Ruff-Fischer guidelines when distributing property). Under these guidelines, the court considers: the respective ages of the parties to the marriage; their earning abilities; the duration of the marriage and the conduct of each during the marriage; their station in life; the circumstances and necessities of each; their health and physical conditions; their financial circumstances as shown by the property owned at the time; its value and income-producing capacity, if any, and whether it was accumulated or acquired before or after the marriage; and such other matters as may be material. Volk v. Volk, 376 N.W.2d 16, 18 (N.D. 1985).
22 Furthermore, fault of a party is conduct to be considered under the Ruff-Fischer guidelines. Horner v. Horner, 2004 ND 165, 16, 686 N.W.2d 131 (economic fault has long been recognized as a proper factor for the trial court to consider in dividing marital property); and Theis v. Theis, 534 N.W.2d 26 (N.D. 1995) (there is little question it is proper to consider and give significant weight to economic fault). Economic misconduct, also referred to as financial misconduct or economic fault, is the conduct the trial court may consider when applying the Ruff-Fischer guidelines. This court has also long recognized that both economic and noneconomic fault are proper factors for the trial court to consider in dividing marital property. Hoverson at 17.
23 North Dakota law does not mandate a set formula or method to determine how marital property is to be divided; rather, the division is based on the particular circumstances of each case. Ulsaker v. Ulsaker, 2006 ND 133, 14, 717 N.W.2d 567. Furthermore, a property division need not be equal to be equitable, but a substantial disparity must be explained. Amsbaugh at 23; see also Young v. Young, 1998 ND 83, 11, 578 N.W.2d 111.
24 In his brief, Kirk Wold claims that $133,116 of assets were included as part of the Panther business valuation but nevertheless awarded to Kandas with the claim being that if the assets were awarded to Kandas, the valuation of Panther must be reduced. He is mistaken.
25 If the Court is to adopt that position, then the Court must also add back $127,835.59 of debts listed on Schedule E of the Court's 8.3, which were also deducted from the value of the Panther business valuation. In other words, the debts were included to reduce the value of Panther by Sliwoski, but were then also listed as separate debts of Kirk Wold in the Court's decision on Schedule E. In other words, the same $127,835.59 of debt were deducted twice - once via a reduction of the Panther business valuation and once again on Schedule E.
26 In his valuation, Sliwoski used the debt figures provided by CPA Joan Rustad (Trial Exhibit J). The liabilities Joan Rustad listed (as of 12/31/04) were the suburban debt ($18,515), the home mortgage ($77,898), and the pick-up loan ($41,215) for a total of $137,628 of debt.
27 At the time of trial, as shown on Exhibit E of the 8.3, the home mortgage debt had been reduced to $75,959.88, the suburban debt reduced to $16,193.21, and the pick-up loan debt to the amount of $32,022.05 for a total of $124,175.14 of debt. See Appendix hereto representing Court's filled-in portion of Exhibit E attached to the Court's Memorandum and decision.
28 As such, it is clear that the debt amount of $127,835.59 listed on Schedule E (App. 41) for Kirk Wold, which he was separately given credit for in the Court's decision, must be negated as the debt has already been deducted once as a part of the Panther business valuation.
29 In summary, if the Court determines that it must adjust the valuation of Panther in the amount of $133,116 (or some other amount) to reflect the alleged assets awarded to Kandas that were included as a part of the Panther business valuation, the Court must also adjust the accounting by the amount of $127,835.59 representing the amount of liability used in the Panther business valuation that Kirk Wold has also listed separately on Schedule E. In other words, Kirk Wold can't deduct the debt twice, once as part of the Panther business valuation and once again as a part of the Schedule E Individual Debt Distribution.
30 It must also be noted that Sliwoski used $137,628 of liabilities in his analysis. At trial, at most, the liabilities would be the $127,835.59 listed on Schedule E which would result in $9,793 of excess liabilities being attributed to Panther that didn't exist at trial. An adjustment in this respect would also need to be made.
31 In addition, the following adjustments would likewise need to be made if the Court were to second guess the Trial Court.: $10,000 in extra cash: At trial, the Defendant in his sworn testimony before the Court, readily acknowledged that his checking account balance was $121,393.50 rather than $111,393.50. This results in an additional $10,000 awarded to him, which should be accounted for. Specifically, at pages 58-59 of the transcript, he testifies that he reduced the business checking account balance by $10,000 because he wrote a check to himself. However, at the time of trial, he had not deposited the $10,000 check but was holding it. As such, the balance in his account should be increased by $10,000. $7,000 snowmobile: In its decision on page 4 of the 8.3, the Court awarded a 2004 Mountain Cat snowmobile at a value of $7,000 to Kandas. This snowmobile was purchased by Kirk Wold for his girlfriend, Tammy Wilson, and exhibits and testimony at trial indicate that Kirk Wold and Panther were paying for the snowmobile which was placed in Tammy Wilson's name. See Trial Exhibit 68.
32 In the Court's decision, the Court gave the snowmobile to Kandas for $7,000 (even though titled in Tammy Wilson's name) but then gave the debt on the snowmobile to Kirk Wold. The end result is that Kandas cannot obtain the snowmobile yet is allocated $7,000 for the asset.
33 In summary, while Kandas submits the snowmobile should be included in the marital estate (given that it was purchased by Kirk Wold and paid for by Kirk Wold and/or Panther), it is not an asset that can possibly be awarded to her as it is titled in Tammy Wilson's name. As such, the $7,000 snowmobile set forth on the 8.3 should be listed as an asset of Kirk Wold rather than as an asset to be awarded to Kandas Wold.
34 Summary: If this Court were to adopt the arguments of Kirk Wold herein, then various adjustments would likewise need to be made to those assets awarded to her as follows:
a. Kirk Wold's side of the fence is reduced (at most) by $133,116 representing alleged assets awarded to the Plaintiff but that were included in the Panther business valuation;
b. $127,835.59 is added to Kirk Wold's side of the fence as those debts were already deducted in the Panther Pressure valuation and cannot be deducted twice;
c. $10,000 was added to the Defendant's side of the fence representing the extra cash in the checking account that he testified to during trial;
d. Kandas' column is reduced by $7,000 for the Tammy Wilson snowmobile and Kirk Wold's side is increased by that amount representing the $7,000 snowmobile that he titled in Tammy Wilson's name but that he and/or Panther Pressure is making the monthly payments on; and
e. $9,793 liability adjustment: A $9,793 adjustment for Kirk Wold reflecting the difference between the liability amount Sliwoski used ($137,628) and the date of trial liabilities ($127,835.59) for Panther.
III. The Trial Court Erred When it did not Find Economic Misconduct on Behalf of Kirk Wold and Erred to not Include the Value of the Cheetah Business as a Marital Asset.
35 In determining the equitable distribution, economic fault has long been recognized as a proper factor for the trial court to consider. Horner at 16; see also Theis, 534 N.W.2d 26 (N.D. 1995) (stating there is little question it is proper to consider and give significant weight to economic fault); Bader v. Bader, 448 N.W.2d 187, 189 (N.D. 1989) (stating economic fault is very relevant); and Hoverson at 17 (stating economic misconduct, also referred to as financial misconduct or economic fault, is conduct the trial court may consider when applying the Ruff-Fischer guidelines).
36 Economic misconduct is misconduct that results in a wasted asset or in the reduction of the net marital estate. Hoverson at 24. The North Dakota Supreme Court has affirmed a finding of economic fault in a number of situations where one party has dissipated marital assets.
37 For example, in Peterson v. Peterson, 1999 ND 191, 9, 600 N.W.2d 851, the Court affirmed a finding of economic misconduct where the husband had deposited a check from the sale of the parties' former home into his personal account and attempted to transfer assets to his children without informing the wife. See also Theis at 27 (affirming economic fault where a wife absconded with marital assets approximating $70,000 and spent marital assets on gifts for her boyfriend).
38 Furthermore, after a finding of economic fault, the Supreme Court has stated that a party who is not at economic fault may be entitled to a greater portion of the marital assets.
39 In this case, the gravity of Kirk Wold's dissipation of marital assets and economical fault is massive. In the summer of 2003, he transferred a very significant oil rental business to Cheetah Rentals, which now enjoys a net income in excess of $200,000 per year. See Exhibit 26. Per expert Don Kainz, the value of Cheetah Rentals alone is valued at $900,000, and the Defendant did not provide or introduce any testimony with respect to a different valuation figure for Cheetah Rentals (Exhibit 12).
40 As stated earlier, Kirk Wold simply handed everything over to Cheetah Rentals and assisted Cheetah Rentals in every possible way from providing customer names, customer contacts, ordering equipment, assembling equipment, providing technical advice, delivering of equipment, answering the phone, writing out invoices, and introducing Tammy Wilson to customer representatives. Simply put, Cheetah Rentals, as the name suggests, is simply Panther Pressure Testers with a different name and now attempted to be hidden in the name of Tammy Wilson by Kirk Wold and Tammy Wilson.
41 Despite the fact that Panther was a marital business (started in part with loan monies from Kandas' parents), Kirk Wold went ahead and did all these things without consulting or advising Kandas. To the contrary, Kandas only found out about the dissipation through the divorce litigation process Now, while Kandas continues in her bank teller job at McKenzie County Bank making approximately $15,000 per year, Cheetah (reported on Tammy Wilson's tax return) is enjoying net income well in excess of $200,000 per year.
42 Further economic fault of Kirk Wold is illustrated by his loaning of money to his girlfriend, significant unaccounted funds, and putting roughly $35,000 into his father's home, but now claiming that his father's estate does not owe the marital estate any monies because of it.
43 The specific dollar amount of Kirk Wold's economical fault cannot be quantified as it is massive. Just since June of 2003, it is estimated that he has misappropriated in excess of $300,000 in addition to misappropriating the business which is now called Cheetah Rentals which has a business valuation of $900,000.
44 The testimony at trial from a variety of witnesses, including Guy Dodge, Dale Karpyak, Perry Jundt, Kirk Wold, and Tammy Wilson, all illustrate exactly what took place which is best summarized by Tammy Wilson's statement to bank officials as set forth on Exhibit 39 wherein she states that she was taking over boyfriend's business and that her income will significantly increase.
45 Kirk Wold, in violation of any and all North Dakota legal authority as well as the underlying Summons in this case, transferred a very lucrative rental division business to Cheetah Rentals, which has resulted in significant economic waste to the marital estate to the specific detriment to Kandas and her son, Tanner.
46 The Trial Court found that he did not commit economic fault. (App. 23). It is the position of Kandas Wold and her counsel that if Kirk Wold's conduct in this matter does not constitute blatant economic misconduct, then it would be an impossibility for anyone to ever commit economic misconduct.
47 The Trial Court failed to include the $900,000 value of the Cheetah business as a marital asset and also failed to take into account the clear and blatant economic misconduct of Kirk Wold in its decision in this matter.
48 In accordance with fairness, equity, and North Dakota law, Kandas requests the Court to make the necessary monetary adjustments to the awards in this case by taking into account the significant economical fault in marital dissipation of assets that Kirk Wold has engaged in throughout this case. In addition, Kandas submits it was in error for the Trial Court to not include the Cheetah business as a marital asset, or at a minimum, a portion of it.
IV. The Trial Court Erred in Adopting Sliwoski's Asset Approach Valuation for the Panther Business and Should have Adopted the Kainz Valuation.
49 In valuing a business enterprise, the trial court must include at a minimum the interest in the office equipment, furniture, fixtures, and the accounts receivable. Sommers v. Sommers, 2003 ND 77, 9, 660 N.W.2d 586. In addition to these things, the North Dakota Supreme Court has indicated that the goodwill of a divorcing party's business interests must also be considered in valuing the parties' marital property and that it is reversible error to not consider it. See Nastrom v. Nastrom, 262 N.W.2d 487, 493 (N.D. 1978).
50 The goodwill of a business is the expectation of continued public patronage, and is transferable. N.D.C.C. §§ 47-07-10; 47-07-11. There are two types of goodwill - personal and enterprise. May v. May, 589 S.E.2d 536, 541 (W.V. 2003). Although there are two different types of goodwill, a large number of courts, including North Dakota, make no distinction between the two. Id. at 543. In fact, North Dakota has taken the position that both personal and enterprise goodwill in a professional practice constitutes marital property. Id.
51 The Supreme Court of North Dakota stated: "Ordinarily, fair market value, not liquidation value, is the proper method of valuing property in a divorce. Fair market value is the price a buyer is willing to pay and the seller is willing to accept under circumstances that do not amount to coercion." Sommers at 10. Thus, because the Court did not make a distinction between good will and value, they implicitly are stating that personal goodwill should be included in the value of the business. In this case, it is clear that Leonard Sliwoski was paid to testify as to a liquidation value of Panther Pressure Testers. Mr. Sliwoski attempted to do this in the past but the North Dakota Supreme Court specifically rejected his liquidation value analysis in Sommers, Id.
52 The gravity of how far Mr. Sliwoski will go in testifying for his client is illustrated by the following:
A. Sliwoski testified that he used an "asset approach" to value the Panther Pressure Testers business; (Tr. p. 594);
B. He testified that the criteria of when an expert, such as himself, uses an asset approach for valuing business has not changed over the years;
C. Previously, in the litigation Sommers, Sliwoski stated in his expert report that the "asset approach" was only utilized in valuing the following three types of businesses: (1) businesses which are non operating businesses such as holding companies; (2) businesses that have no established earnings history such as start-up businesses and troubled businesses with volatile earning patterns; and (3) businesses which are unprofitable or marginally profitable. (Tr. p. 607);
D. In trial in this case, Sliwoski admitted that none of these criteria applied to the Panther Pressure Testers business. To the contrary, Sliwoski testified that the business was exceptionally profitable and has a well-established earnings history. Notwithstanding that none of the criteria for using the asset approach applied, and notwithstanding his sworn testimony to the same effect, Sliwoski went ahead anyway and used the asset approach in what was clearly a result oriented decision - reach the result first, and then try to figure out a way to justify it. (Tr. pp. 611-613). However, the problem was that Sliwoski could not justify his valuation approach based upon the fact that none of the three specific criteria, as Sliwoski had previously stated in sworn testimony to other Courts in other cases, applied to Panther Pressure Testers.
E. Then, when Sliwoski uses his asset approach, he arrives at a figure of $168,000, which he arrives at by including and deducting the home mortgage in an amount of $77,898, notwithstanding the fact that the home mortgage of Kirk and Kandas Wold is in their personal names (Ex. 89) and has never been deducted on their business tax return. See tax returns introduced at trial as Exhibits 1, 2, 3, 4, and 5. To the contrary, the parties' joint tax returns (Exhibits 1 - 5) have always deducted the home mortgage interest on Schedule A (personal itemized deductions) and not as any type of business expense on Schedule C.
F. In his "analysis", Sliwoski does not attribute one penny to any of his business good will of any kind, even through witnesses such as rig manager, Perry Jundt, readily acknowledged that when you hire "Panther" to come out to location to perform a job, it doesn't matter which employee shows up to perform the job (i.e. it certainly isn't necessary for Kirk Wold to show up).
G. Sliwoski attempts to paint the issue of good will in this case as if Kirk Wold were a heart surgeon - certainly with a heart surgeon, you are hiring the surgeon himself or herself and the surgeon's specific skills cannot be transferred to other workers. This case is completely dissimilar. Both Guy Dodge and Kirk Wold readily acknowledged and testified that after a brief training in period, several other workers within Panther are qualified to perform the B.O.P. testings. This is exemplified by Kirk Wold's testimony that other workers were covering for him while he was in trial and while he was away with respect to Chase Wilson's recent accident.
53 In this case, there are a number of items that are not disputed. The first is that Panther Pressure Testers is extremely profitable with an excess of $300,000 of pre-tax earnings in 2004 alone. Furthermore, the industry outlook is exceptional. All information from the industry is that the expectation for 2005, 2006, 2007, and 2008 were at least as strong as 2004. No testimony was provided by Mr. Sliwoski to counter the industry outlook.
54 There is a tremendous value in intangible assets including good will which can be transferred to a subsequent purchaser (much like the business good will of the Panther Rental Business was transferred to Cheetah) with respect to such things as customer names, customer contacts, business methodologies, and bookkeeping methodologies.
55 Sliwoski's valuation of $168,000 (which would be adjusted to a minimum of $245,898 because he mistakenly included the personal home mortgage in his calculations) is less than one year of net profit from Panther Pressure Testers. In other words, under a willing buyer / willing seller scenario, a purchaser of the business would recoup his or her entire investment in less than a year and would thereafter have all profit from the investment as the investment would be recouped within eight or nine months of purchase.
56 There is absolutely no question that what Sliwoski did was use a liquidation value which is the exact opposite of a going concern valuation as he purported to testify to.
57 Nevertheless, in absolute direct contradiction to other representations he has made to the Court in other cases as far as when the asset approach can be used, Dr. Sliwoski proceeded to use it anyway even though none of the three distinct circumstances were present in this case. In other words, Sliwoski used a valuation methodology (asset approach) that did not even fit into any of the three distinct categories of businesses that he has previously stated (as an expert before the Court) are the types of businesses that can be valued by utilizing the asset approach!
58 It is clear that Sliwoski used the asset approach simply in an effort to value the business as low as possible and he was unable to offer any justification of any kind in trying to reconcile his previous recommendations to the Court (in Sommers) with his methodology used in this case where he was clearly inconsistent and in utilizing an approach (asset approach) that unequivocally and clearly did not fit the facts and circumstances of the case.
59 The Kainz valuation, on the other hand, did not use the asset approach because, simply put, it was not applicable to the facts and circumstances in this case - even according to other expert reports that Sliwoski has submitted in other cases before the Court.
60 The Kainz report and analysis were based upon the income approach and represented a thorough analysis as to why the Court should have adopted his valuation based upon the type of income that the business is generating, year in and year out. See Trial Exhibit 13. On the other hand, the Eide Bailly valuation was supported by industry data, an analysis of the business, and a very close analysis of the financial figures of the business.
61 The Trial Court erred when it adopted the Sliwoski valuation approach, even with the carious adjustments that the Court made. To suggest that a business that generates this type of income is only worth $168,000 (with adjustments thereto) is neither appropriate or equitable.
V. The Trial Court's Spousal Support Award was not Clearly Erroneous.
62 Upon granting a divorce, after taking into consideration the circumstances of the parties, the court may require one party to pay spousal support to the other party for any period of time. See N.D.C.C. § 14-05-24.1.
63 When determining the amount and duration of spousal support the district court must apply the Ruff-Fischer guidelines, which require the court to consider the following factors: respective ages of the parties to the marriage; their earning abilities; duration of the marriage and the conduct of each during the marriage; their station in life; circumstances and necessities of each; their health and physical conditions; their financial circumstances as shown by the property owned at the time; its value and income producing capacity, if any, and whether it was accumulated or acquired before or after the marriage; and such other matters as may be material. Shields v. Shields, 2003 ND 16, 7, 656 N.W.2d 712; see also Sommers at 9.
64 The North Dakota Supreme Court has stated that a "disparity in the earning abilities of the parties justifies the award" of spousal support. Roen v. Roen, 438 N.W.2d 170, 172 (N.D. 1989) (quoting Weir v. Weir, 374 N.W.2d 858, 864 (N.D. 1985)). Continuance of a standard of living can enter into the equation. Bagan v. Bagan, 382 N.W.2d 645, 646 (N.D. 1986). "The determinative factor is the sufficiency of income to permit each party to maintain apart the standard of living enjoyed together." Id. (emphasis added).
65 The Supreme Court has stated in another case, where a wife had a limited work history, limited education, limited job opportunities, and was then age 47, that "[i]t is unlikely that [the wife] can be economically rehabilitated to the extent that she will attain an earning capacity comparable to that of her husband or sufficient to maintain the standard of living she enjoyed during the marriage." (emphasis added). Weir v. Weir, 374 N.W.2d 858, 864 (N.D. 1985). The court went on to say "[o]ften, in deciding spousal support, the determinative factor is the sufficiency of income to permit each party to maintain apart the standard of living enjoyed together." Id.
66 In this case, after fifteen years of marriage, Kandas found herself making $15,000 per year while Kirk Wold has taken control of the marital business, which generates net after tax income well in excess of $200,000 per year (even after he gave away the rental aspect of the business to his girlfriend Tammy Wlson. In addition, the business provided vehicles, gasoline, and pays for all kinds of other expenses for Kirk Wold on a personal level, which are nevertheless deducted on the income tax return of Panther Pressure Testing.
67 His ability to pay significant spousal support in this case is not in dispute. During the interim period, he was able to pay the house payment, house insurance, car insurance, car payment, and $2,800 per month to Kandas for combined child support and spousal support. Notwithstanding these various payments, Kirk Wold was able to purchase motor homes, purchase vehicles, go on lavish vacations, and spend and go through money almost as if it was "monopoly play money."
68 Kandas has significant needs for spousal support. She has nominal education and has limited job opportunities. Her work history as shown in her resume (Ex. 65) and her Social Security Earnings Statement (Ex. 15) show that while she has worked throughout the marriage, the types of positions that she has been allowed to undertake in light of her education and job experience only provide her with a nominal earning capacity. On the other hand, Kirk Wold enjoys significant earning capacity through Panther Pressure Testing which provides well in excess of $200,000 - $300,000 per year of income.
69 At the present time, Kandas is pretty much at the peak of her earning ability which reflects that in 2004, she made $15,116.00 as a teller at McKenzie County Bank (Ex. 7).
70 While attorney Greenwood attempted at trial to impeach Kandas as listing of estimated expenses on the 8.3, his own expert, Thomas Ribb, testified that even excluding attorney fee payments (Exs. E and F), Kandas' living expenses were in the area of $60,000 per year. (Tr. p. 778). This is reflected on the summaries that Mr. Ribb introduced as Exhibits E and F at trial.
71 Furthermore, Mr. Ribb, who was hired by Kirk Wold and Mr. Greenwood to comb through each and every check and expenditure that Kandas has made since January 1, 2003 to the date of trial, offered absolutely no testimony of any kind that any of the expenses, as set forth in his summaries, were outrageous, out of line, or questionable in any respect.
72 Furthermore, it is hard to comprehend that Kirk Wold feels that he should be allowed to walk out of the marriage with an earning capacity of well in excess of $250,000 per year when Kandas is left with an earning capacity of roughly $15,000 per year.
73 At trial, Kandas introduced CPA Steve Oyloe who introduced Exhibit 16 (Supp. App. p. 127) which indicated that based off a five-year average, and taking into account tax ramifications as well as the payment of child support, that an amount of monthly spousal support of $4,600 would roughly provide each party with a comparable standard of living at this time. It must be noted that this was based off a five-year average and the most recent earnings in 2003 and 2004 were considerably greater than in earlier years. What this means is that the present disparity between the earnings of Kirk Wold and Kandas Wold are significantly greater than $4,600 per month as shown by the net earnings summary contained in Exhibit 16. This takes into account that the spousal support payments are fully deductible by Kirk Wold for income tax purposes and includable as income for Kandas.
74 It must also be noted that the calculations of Steve Oyloe did not include the significant income generated by Cheetah which is also part of this marital estate although hidden under Tammy Wilson's name (Cheetah's net income in 2004 alone was $260,280 even after taking $112,188 of depreciation expense). See Trial Exhibit 26, Schedule C (Supp. App. p. 60).
75 In this case, the Trial Court's award was consistent with the evidence and in accord with the law. Simply put, absent such an award, Kandas would have walked out of this marriage on nowhere near the standard of living that she enjoyed during the marriage and also nowhere near the standard of living that Kirk Wold will enjoy walking out of the marriage. To the contrary, she will only earn about 1/20th of what he will earn coming out of this marriage. Such a disparity would be unjust and unfair and not in accordance with North Dakota law.
76 Even if the North Dakota Supreme Court believes that it was permanent spousal support that was awarded by the Honorable Gerald Rustad, the award is still justified and should be upheld as not clearly erroneous.
77 Permanent spousal support is appropriate in a myriad of situations. For example, permanent spousal support is generally appropriate when the disadvantaged spouse cannot be equitably rehabilitated to make up for the opportunities lost in the course of the marriage. Riehl v. Riehl, 1999 ND 107, 11, 595 N.W.2d 10. Furthermore, "permanent spousal support is appropriate where [a] wife's earning capacity will never approach [her] [husband's] and the parties enjoyed a 'very comfortable standard of living" Kautzman at 19, 20; see also Zuger v. Zuger, 1997 ND 97, 19, 563 N.W.2d 804 (permanent spousal support is appropriate when there is a substantial disparity between the earning abilities of the spouses). The North Dakota Supreme Court has also found that a wife's limited marketable job skills and the substantial disparity in income between the parties' justified award of permanent spousal support. Donarski v. Donarski, 1998 ND 128, 6, 8, 581 N.W.2d 130 (overruled on other grounds). Finally, the North Dakota Supreme Court has found that permanent spousal support should be ordered to maintain a somewhat comparable standard of living for a spouse who is incapable of adequate rehabilitation. Zuger at 18.
78 Even when the disadvantaged spouse is capable of rehabilitation, the North Dakota Supreme Court has recognized permanent spousal support as an appropriate remedy to ensure the parties equitably share the overall reduction in their separate standards of living. Riehl at 18 (citing Weir, 374 N.W.2d at 864 ("permanent support appropriate because disadvantaged spouse 'is likely to have a much lower income producing capacity than [the other spouse], which earning capacity she added . . . in obtaining").
VI. The Trial Court Erred When it Refused to Order that Kirk Wold Provide Security for the Spousal Support Payments.
79 In the Court's Memorandum and Order, the Court did not identify whether or not some type of security would be imposed to secure Kirk Wold's spousal support obligation either during his lifetime or in the event of death.
80 Thereafter, Kandas Wold requests that security be ordered by the Trial Court. The Trial Court declined the request and ordered that the Court would not impose any type of security. Kandas respectfully submits that this was in error.
81 Under N.D.C.C. § 14-05-25, a trial court may require reasonable security for a maintenance obligation and may employ any "remedy applicable to the case" to enforce spousal support. Gierke v. Gierke, 1998 ND 100, 26, 578 N.W.2d 522, citing, Martian v. Martian, 399 N.W.2d 849, 851-52 (N.D. 1987). See also N.D.C.C. § 14-05-25.2 (spousal support order may be enforced in any manner provide for enforcement of child support under N.D.C.C. § 14-09). The Court in Gierke went on to state that under this authority, a trial court has discretion to order security for a spousal support obligation.
82 In Stoutland v. Estate of Stoutland, 103 N.W.2d 286, 291 (N.D. 1960), the Supreme Court held a spousal support obligee was entitled to payments from the obligor's estate where the divorce decree directed the obligor to make monthly alimony payments to the obligee until the obligee's remarriage or death. See also Seablom v. Seablom, 348 N.W.2d 920, 924 (N.D. 1984) (obligor's death does not necessarily terminate spousal support); Matter of Estate of Gustafson, 287 N.W.2d 700, 704 (N.D. 1980) (alimony payments did not terminate upon obligor's death).
83 Furthermore, in Quamme v. Bellino, 2002 ND 159, 20, 652 N.W.2d 360, the Court stated: "absent modification language in the support award, the obligee is entitled to spousal support from the obligor's estate if the obligor predeceases the obligee."
84 With respect to providing coverage to secure the spousal support obligation in the event of the death of Kirk Wold, Kandas would request a life insurance policy listing her as co-owner (so that he cannot drop the insurance or otherwise alter the policy) and naming her as the primary beneficiary to ensure that she will be provided with all spousal support payments, as ordered, and will have sufficient security for those payments in the event of death.
VII. Attorneys Fees Should be Awarded to Kandas on Appeal.
85 Pursuant to N.D.C.C. § 14-05-23, attorney's fees may be awarded for an appeal in a divorce action. Dvorak v. Dvorak, 2006 ND 171, 24, 719 N.W.2d 362. "In deciding whether to award attorney's fees under N.D.C.C. § 14-05-23, a court must balance the parties' needs and ability to pay and should consider the property owned by each, their relative incomes, whether property is liquid or fixed assets, and whether the actions of either party have increased the time spent on the case." Id. (citation omitted). The trial court and North Dakota Supreme Court have concurrent jurisdiction to award attorney's fees for an appeal in a divorce. Id. However, the North Dakota Supreme Court prefers the district court decide attorney's fees related to a divorce appeal. Id. (citation omitted). As such, the North Dakota Supreme Court generally remands the matter to the district court to determine whether appellate attorney's fees are appropriate, and if so, in what amount. Id.; see also Ebach v. Ebach, 2005 ND 123, 21, 700 N.W.2d 684; see also Henry v. Henry, 1998 ND 141, 26, 581 N.W.2d 921.
86 The standard for awarding attorney's fees in divorce action was summarized in Bakes v. Bakes, 532 N.W.2d 666, 669 (N.D.1995), and restated in Jorgenson v. Ratajczak, 1999 ND 65, 16, 592 N.W.2d 527, as follows:
"The trial court has authority in a divorce case to award attorney fees for proceedings in the trial court and upon appeal. N.D.C.C. § 14-05-23. The principal standards guiding an award of attorney fees in a divorce action are one spouse's need and the other's ability to pay. (Citation omitted.) The court should consider the property owned by each party, their relative incomes, whether property is liquid or fixed assets, and whether the action of either party has unreasonably increased the time spent on the case." (Citation omitted.)
87 "One of the principal considerations in determining whether or not to award attorney fees in marital disputes is each party's ability to pay attorney fees." See LaVoi v. LaVoi, 505 N.W.2d 384, 387 (N.D. 1993) (verifying that a determination of attorney's fees on appeal is typically left to the trial court upon remand.)
88 In this case the Appellant has endless sums of money to litigate this case forever. On the other hand, Kandas is confined to her $15,000 per year job at McKenzie County Bank. Equity and fairness warrant that attorneys fees be imposed against the Appellant in an amount to be determined by the District Court after the parties have had an opportunity to undertake further discovery.
CONCLUSION
89 For the foregoing reasons, and based upon the record before the Court, Kandas requests the following relief:
1. For the Court to not grant the Appellant his requested relief;
2. For the Court to find that the Trial Court erred in not finding that Kirk Wold committed economic misconduct;
3. For the Court to find the Court erred in not including the value of Cheetah Rentals as a marital asset or in otherwise sanctioning or penalizing Kirk Wold for his marital economic misconduct;
4. For the Court to determine that if it finds that monetary adjustments to the awards need to be made as requested by the Appellant, that the Court also order the Trial Court to make the adjustments as set forth by Kandas Wold herein;
5. For the Court to find that the Trial Court erred in adopting Sliwoski's valuation methodology and amount and for the Court to adopt the kinds valuation methodology and amount for Panther Pressure;
6. For the Court to Order the Trial Court ot mandate that Kirk Wold obtain life insurance in an amount, listing Kandas Wold as a co-owner of the policy, in an amount to pay off any remaining spousal support payments in the event of his death,
7. For the Court to award attorneys fees on appeal in an amount to be determined by the Trial Court upon remand.
| RESPECTFULLY SUBMITTED this 26th day of July, 2007. | ||||||||||||
| NILLES LAW FIRM | The Plainsman Building | |||||||||||
| 3-4th St. E., Suite 206 | ||||||||||||
| P. O. Box 1525 | ||||||||||||
| Williston, ND 58802-1525 | ||||||||||||
| Telephone: (701) 577-5544 | ||||||||||||
| ATTORNEYS FOR APPELLEE AND CROSS APPELLANT | ||||||||||||
| BY:H. Malcolm Pippin | ||||||||||||
| N.D. Id. # 04682 | ||||||||||||
1 Prior to Cheetah Rentals starting, Tammy Wilson had recently filed for bankruptcy (Ex. 23), made approximately $30,000 per year (Ex. 25) and had recently been fired from her job at Impact (telemarketing firm) in Watford City, ND. Now, as her tax return for 2004 indicates (Ex. 26), she is now enjoying well in excess of $250,000 per year from the rental business alone - all handed to her on a silver platter by her boyfriend, Kirk Wold, to the detriment of the marital estate.