COURT OF APPEALS DECISION DATED AND RELEASED September 6, 1995 |
NOTICE |
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 94-1712
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT II
In re the Marriage of:
CARSON J. WARD,
Petitioner-Respondent-
Cross Appellant,
v.
ROSEMARY J. WARD,
Respondent-Appellant-
Cross Respondent.
APPEAL and CROSS-APPEAL
from a judgment of the circuit court for Walworth County: JOHN R. RACE, Judge. Affirmed.
Before Anderson, P.J.,
Brown and Snyder, JJ.
SNYDER, J. This
is an appeal and cross-appeal from the terms of a judgment of divorce. The issues raised are: (1) maintenance, (2) marital waste, (3)
division of the marital estate and (4) division of the property interests in
three life insurance policies.
At the time of the
trial, Carson and Rosemary Ward had been married for thirty-four years. Until the birth of their first child,
Rosemary had worked to support Carson while he earned undergraduate and
graduate degrees. Rosemary and Carson
ultimately had four children. During
the years that the children were growing up, Rosemary worked outside the home
occasionally, but never earned more than $12,000 per year. Carson was successful in industry, and at
the time of the trial was the president and chief operating officer of Star
Manufacturing Company, earning in excess of $100,000 annually.[1]
Prior to the divorce,
Carson and Rosemary had enjoyed a high standard of living and had amassed
considerable assets. Among these was an
interest in Bell's Store, a convenience store in Williams Bay, Wisconsin. Rosemary was largely responsible for
managing the store, but ceased her involvement when Carson announced that he
was going to commence a divorce action.
For the next fifteen months, Carson oversaw the daily operation of the
store, until the store went out of business.
Bell's Store was
subsequently sold at a loss. Prior to
its closing, Carson borrowed $25,000 against an annuity and used the money to
pay off the corporate debt of the store.
The family court commissioner found this to be in violation of a
temporary order, held Carson in contempt and recommended that the marital
estate be reimbursed. Trial on that
issue was de novo; the trial court determined that the borrowing and
expenditure were an attempt to protect the parties' investment and in
furtherance of the marital estate.
Rosemary raises three
issues on appeal. She disputes the
grant of a $20,192 tax credit to Carson, argues that the $25,000 borrowed and
infused into Bell's Store should not have been characterized as in furtherance
of the marital estate, and claims the trial court abused its discretion when it
did not divide the marital estate sixty/forty in her favor. We address each issue in turn.
A court's distribution
of property is discretionary and will not be reversed unless a misuse of
discretion is evident. See Lang
v. Lang, 161 Wis.2d 210, 230, 467 N.W.2d 772, 780 (1991). The trial court does not misuse its
discretion if a determination reflects a reasoned approach based upon proper
considerations and articulable reasons.
See Enders v. Enders, 147 Wis.2d 138, 142, 432
N.W.2d 638, 640 (Ct. App. 1988). The
trial court must attempt to ensure a fair and equitable financial
arrangement. Brabec v. Brabec,
181 Wis.2d 270, 277, 510 N.W.2d 762, 764 (Ct. App. 1993).
Rosemary first contends
that the trial court erred when it granted a $20,192 tax credit to Carson
before determining maintenance. A trial
court properly considers the tax consequences to the parties. See Sommerfield v. Sommerfield,
154 Wis.2d 840, 854, 454 N.W.2d 55, 61 (Ct. App. 1990). Section 767.26(7), Stats., lists tax consequences to the parties as one factor
the court may consider. The court
addressed the tax issue by determining that Carson's state and federal tax
liability should be subtracted from his gross income before Rosemary's
maintenance was calculated.[2] The trial court appropriately reviewed the
statutory guidelines, determined that the tax consequences were relevant and
the subsequent calculations were not improper.
The trial court's grant of the tax credit is upheld.
Rosemary next disputes
the trial court's finding that the $25,000 Carson borrowed and used to pay the
debt on Bell's Store was in furtherance of the marital estate. The court has authority to consider the
contributions of each party to the marriage; this also allows the court to
consider destruction or waste of the marital assets by either party. Anstutz v. Anstutz, 112 Wis.2d
10, 12-13, 331 N.W.2d 844, 846 (Ct. App. 1983). Furthermore:
Spouses are not trustees or guarantors toward each other. ... A spouse is not bound always to succeed in
matters involving marital property ventures, but while endeavoring to succeed
in a venture, must proceed with an appropriate regard for the property interests
of the other spouse and without taking unfair advantage of the other spouse.
Gardner
v. Gardner, 175 Wis.2d 420,
426, 499 N.W.2d 266, 268 (Ct. App. 1993) (quoting the Unif. Marital Property Act § 2 cmt.).
It was apparent to the
trial court that both Carson and Rosemary shared the blame for the
unprofitability of Bell's Store and its subsequent sale. Rosemary's refusal to manage the store
during the divorce proceedings, coupled with Carson's inability to effectively
oversee its operations, resulted in a net loss. After a determination that the infusion of the $25,000 was an
attempt to keep the store operating and thus more saleable, the trial court
characterized the loan as being in furtherance of the marital estate. On the issue of marital waste, we affirm the
trial court.
Finally, Rosemary
appeals the trial court's fifty/fifty division of the marital estate as an
erroneous exercise of discretion. It is
not an erroneous exercise of discretion if the trial court's determination
reflects a reasoned approach and is based upon a proper consideration of the
law. Enders, 147 Wis.2d
at 142, 432 N.W.2d at 640. We will
uphold the trial court's discretionary decision if there are facts of record to
support that decision. Id.
at 149, 432 N.W.2d at 642. Under §
767.255(3), Stats., property is
to be divided equally between the parties, but such division may be altered
upon a consideration of relevant factors.
At the end of the trial,
the court was presented with two proposals for property division, one calling
for a fifty/fifty split of assets and the other for a sixty/forty
division. Based on the evidence
presented, the court adopted a fifty/fifty settlement which was a modification
of the two proposals submitted. The
court enumerated its reasons for the parties, including the high standard of
living enjoyed during the marriage and the court's belief that Rosemary would
unlikely be able to equal the parties' predivorce income level. While Rosemary's position was that a
departure from the fifty/fifty norm was necessary to compensate her for marital
waste committed by Carson, the court had already determined that the $25,000
borrowed was “in the final analysis spent in furtherance of the marriage and I
will make no adjustment therefore.” The
court equally apportioned any loss from the sale of Bell's Store. Because the court properly applied the
relevant factors in § 767.255(3), Stats.,
we affirm the division of the marital estate.
Carson cross-appeals
from a requirement that he maintain two life insurance policies naming Rosemary
as beneficiary and reinstate a third policy which he had surrendered. Carson was awarded the cash value of the two
whole-life policies and was directed to continue premium payments in order to
ensure Rosemary's maintenance. It is
not uncommon for the party paying maintenance to be required to maintain life
insurance naming the former spouse as beneficiary. See, e.g., Wilharms v. Wilharms, 93 Wis.2d
671, 679-81, 287 N.W.2d 779, 784 (1980) (noting that not until the divorce is
finalized is it known whether the wife will be retained as beneficiary under a
policy); Washington v. Hicks, 109 Wis.2d 10, 325 N.W.2d 68 (Ct.
App. 1982).
There are two distinct
property interests in a life insurance policy:
(1) ownership of the policy, which includes the power to name and change
beneficiaries and to surrender the policy for its cash value; and (2) the
interest of the named beneficiary. Bersch
v. VanKleeck, 112 Wis.2d 594, 596-97, 334 N.W.2d 114, 116 (1983). It is well settled in Wisconsin that division
of property is within the sound discretion of the trial court. See Trieschmann v. Trieschmann,
178 Wis.2d 538, 541, 504 N.W.2d 433, 434 (Ct. App. 1993). A life insurance policy is property within
the jurisdiction of the court. Prince
v. Bryant, 87 Wis.2d 662, 671, 275 N.W.2d 676, 680 (1979).
We affirm the award of
the beneficent interest in the policies to Rosemary. As noted by the court, this was a long marriage, and Rosemary is
at risk of losing all maintenance should Carson die unexpectedly. Carson is fifty-five years old, and there is
a family history of heart disease.
Retaining Rosemary as beneficiary protects her interest during the term
that maintenance is required.[3]
The cross-appeal also
raises the issue of a third policy issued by Aetna. This policy insured Carson's life and was required by the lender
for Bell's Store. The policy was
surrendered when the business was sold in 1993, but that fact was not brought
to the court's attention by either Carson or his attorney. We find this to be manifest error, pursuant
to § 805.17(3), Stats. Failure to bring a motion for
reconsideration to correct such error constitutes a waiver of the right to have
the issue considered on appeal. Schinner
v. Schinner, 143 Wis.2d 81, 93, 420 N.W.2d 381, 386 (Ct. App. 1988). Therefore, we decline to address this issue
on appeal.
By the Court.—Judgment
affirmed.
Recommended for
publication in the official reports.
[1] While Carson reports his salary is set at $76,800, he also receives fees for consulting, which totaled approximately $2000 per month in 1992. The trial court made a finding that Carson's gross income exceeded $100,000 per year and used $100,000 as the touchstone for the maintenance calculations.
[2] Rosemary also claims error because the court used the higher Wisconsin income tax rates rather than the applicable Illinois rates in calculating the tax credit. She concedes, however, that the social security tax burden was not divided. Neither of these issues were raised below, and we decline to address them here.
[3] We note that the trial court did not classify the $205 per month cost of the insurance to Carson. While the policies were purchased during the marriage with marital funds, the continuing monthly cost cannot be considered marital property. See Bloomer v. Bloomer, 84 Wis.2d 124, 127 n.1, 267 N.W.2d 235, 237 (1978) (contributions to a retirement fund after a divorce are not assets of the marital estate). This would appear to be analogous to the more common stipulation whereby a supporting parent is required to maintain life insurance in order to ensure the availability of funds for minor children. Such a requirement is considered a part of child support. See Vaccaro v. Vaccaro, 67 Wis.2d 477, 483, 227 N.W.2d 62, 65 (1975); Duhame v. Duhame, 154 Wis.2d 258, 263-64, 453 N.W.2d 149, 151 (Ct. App. 1989). Logic would dictate that Carson's $2460 yearly expenditure to continue these policies be treated as maintenance, although we leave this to the determination of the trial court.