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COURT OF APPEALS
DECISION
DATED AND FILED
August 4, 2009
David
R. Schanker
Clerk of Court of Appeals
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NOTICE
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This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official
Reports.
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See Wis. Stat. § 808.10 and Rule 809.62.
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Appeal No.
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STATE OF WISCONSIN
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IN COURT OF
APPEALS
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DISTRICT III
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In re the marriage of:
Nancy Jane Smith,
Petitioner-Appellant,
v.
Mark Charles Smith,
Respondent-Respondent.
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APPEAL
from orders of the circuit court for Taylor
County: ANN
KNOX-BAUER, Judge. Affirmed.
Before Hoover,
P.J., Peterson and Brunner, JJ.
¶1 PER CURIAM. Nancy Smith appeals an
order after remand and the denial of a motion for reconsideration. On a previous appeal, we determined a farm Nancy acquired from her
grandmother during the course of her marriage was not entirely gifted or
inherited, and remanded for a determination of what portion of the farm was
gifted. Nancy now claims the increased value of the
gifted portion remained individual property.
She also challenges the method of valuation. We affirm.
¶2 The facts were discussed previously in Smith v. Smith, No. 2006AP2403,
unpublished slip op. (WI App July 17, 2007).
Approximately six years prior to her divorce, Nancy entered into a land contract for the purchase
of the 278-acre farm that belonged to her grandmother. The land contract provided for a purchase
price of $80,000. Nancy’s
grandmother reserved a life estate for herself and Nancy’s mother. The land contract also provided that if Nancy’s grandmother died before the contract was fully
paid, payments should continue to Nancy’s
mother and children. The land contract
did not include an interest rate.
¶3 Payments were made to Nancy’s
grandmother in the amount of $500 monthly from April 1999 until she died on May
1, 2003. Prior to her death, Nancy’s grandmother executed a will
reiterating that payments after her death shall be made to “my estate or to the
heirs.” The will also indicated Nancy would no longer be
required to pay interest on the unpaid balance after the date of her
death. At the time of her grandmother’s
death, Nancy
signed promissory notes in which she promised to pay her mother and siblings
until the notes were paid in full.
¶4 The circuit court found the farm was worth $295,000 in 2005 at
the time of the divorce. No evidence was
introduced at the final divorce hearing as to the fair market value at the time
Nancy entered
into the land contract in 1999. The court
found the farm was intended to be a gift or inheritance and therefore excluded
it from the marital estate. We reversed,
concluding the farm was not entirely gifted or inherited. We reasoned Nancy
received the farm as a result of a transfer of the property by land contract
during her grandmother’s life and Nancy
was to continue payments to other heirs of the estate if the land contract was
not fully paid by the time of her grandmother’s death. Her grandmother’s will also specifically
mentioned the land contract and referred to it as a sale.
¶5 We therefore remanded for a determination of what portion of
the farm may have been a gift to Nancy
from her grandmother. We also instructed
the circuit court to value the farm at the time of the acquisition and revisit
the statutory property division factors as regards the farm property.
¶6 After conducting an evidentiary hearing upon remand, the
circuit court concluded the land contract was a partial gift and partial
sale. It valued the gifted portion of
the farm at $85,100, which consisted of a fair market value of $165,100 minus
the $80,000 purchase price. The court
also analyzed the statutory property division factors and concluded it should
not deviate from an equal division of the marital property. The court subsequently denied Nancy’s motion for
reconsideration.
¶7 Nancy
now argues on appeal the increased value of the gifted portion of the farm during
the marriage was individual property and not subject to property division. Nancy also contends the circuit court erred
by using an appraised value in determining the farm’s fair market value in 2005
at the time of the divorce but using the real estate tax assessment for the
value at the time of acquisition in 1999.
Nancy notes
the property was not appraised in 1999 and contends a more accurate reflection
of the farm’s value would be found using the fair market value from the tax
assessments for both years.
¶8 A circuit court’s decision on property division is
discretionary and will be sustained if the court examined the relevant facts,
applied a proper standard of law and reached a rational conclusion that a
reasonable judge could reach. See Liddle
v. Liddle, 140 Wis.
2d 132, 136, 410 N.W.2d 196 (Ct. App. 1987).
The valuation of assets is a factual finding that will not be disturbed
unless clearly erroneous. See id.
¶9 Here, the circuit court did not erroneously exercise its
discretion by concluding the increase in the farm’s value during the marriage was
marital property. The court found the
farm was purchased, maintained and improved with marital funds. The court noted its original findings at the
divorce hearing were that “all of the debts and activities arising from this
farm were paid for through Ms. Smith’s own account.” The court also determined rental proceeds generated
from the gifted portion of the farm were marital funds. See Metz v. Keener, 215 Wis. 2d 626, 633-34, 573 N.W.2d 865 (Ct.
App. 1997). The rental proceeds and Nancy’s marital payroll
check were co-mingled into her individual checking account. The court concluded the increase in value
could not be apportioned in any logical manner between the gifted, purchased or
improved portions of the farm.
¶10 Nancy insists any appreciation in value was due solely to
general economic conditions and appreciation of the real estate and therefore
should be considered individual property pursuant to Plachta v. Plachta, 118 Wis. 2d 329, 348 N.W.2d
193 (Ct. App. 1984), and its progeny. Nancy’s citations are
inapposite, however, as the character and identity of the gifted portion of the
farm was not preserved in the present case.
The farm increased in value, but contributions were made by the marital
estate in the form of substantial improvements and maintenance. The court found there was no legitimate
manner by which to apportion the appreciation of the gifted portion of the farm
from the marital portion under the facts of this case. As the court correctly observed, there was
“no evidence in the record from which the court could conclude that the
increase in the farm’s value was due to economic conditions or due to the
improvements on the farm.” The court
indicated it “would have to guess or speculate as to how those improvements
increased the value of the property, and what percentage could or should be
assigned to those improvements.” We reject Nancy’s argument that any increase in value
was due solely to general economic conditions.
¶11 We also conclude the circuit court’s finding of fair market
value based upon the 2005 appraisal was not clearly erroneous. See Wis. Stat. § 805.17(2). At the final divorce hearing, the court
determined the farm’s value based on Nancy’s
appraisal, an amount much lower than the appraisal submitted by her ex-husband. At the remand hearing, the 1999 tax bills for
the farm were introduced. The court
found this to be the best available evidence presented at the hearing of the
property’s value when it was conveyed to Nancy,
and it was entitled to do so. Nancy argues the farm was
not appraised in 1999 but, “[i]f there was one would assume it would be higher
than the fair market value shown on the 1999 tax statement.” We are unpersuaded. As the court observed in its order denying
reconsideration, “the court cannot assume that the FMV on the tax bill is not a
fair comparison to the FMV on an appraisal.”
The court’s finding based upon the 2005 appraisal was not clearly erroneous.
By the Court.—Orders affirmed.
This
opinion will not be published. See Wis.
Stat. Rule 809.23(1)(b)5.