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COURT OF APPEALS DECISION DATED AND RELEASED April 3, 1996 |
NOTICE |
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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. 95-0683
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT II
In re the Marriage of:
JAMES ELMER LEFEBER,
Petitioner-Appellant,
v.
BONNIE JEAN LEFEBER,
Respondent-Respondent.
APPEAL from a judgment
of the circuit court for Fond du Lac County:
HENRY B. BUSLEE, Judge. Affirmed
in part; reversed in part and cause remanded.
Before Anderson, P.J.,
Nettesheim and Snyder, JJ.
PER
CURIAM. James Elmer Lefeber appeals from a judgment divorcing
him from Bonnie Jean Lefeber. On
appeal, he challenges the property division, maintenance and child support
provisions of the judgment. Although we
conclude that the circuit court properly exercised its discretion in
determining child support and maintenance, we reverse and remand for further
proceedings as necessary to address an issue relating to the property
division: interest on a $17,000 debt
secured by a second mortgage to James' parents.
PROPERTY DIVISION
James argues that the
trial court erroneously exercised its discretion in determining the amount of
and interest owed on funds loaned to the parties by James' parents. James also contests the court's valuation of
the parties' livestock, farm machinery and equipment.
Property division is
within the circuit court's discretion, and we will sustain its decision if the
court examined the relevant facts, applied a proper legal standard and reached
a reasonable conclusion using a demonstrated rational process. See Sharon v. Sharon,
178 Wis.2d 481, 488, 504 N.W.2d 415, 418 (Ct. App. 1993). In dividing the parties' property, the court
is required to consider the factors set out in § 767.255(3), Stats.
The valuation of a particular marital asset is a finding of fact which
we will not upset unless it is clearly erroneous. Liddle v. Liddle, 140 Wis.2d 132, 136, 410 N.W.2d
196, 198 (Ct. App. 1987); see also § 805.17(2), Stats.
At trial, Bonnie
presented evidence that the debt to James' parents was $17,000. She submitted a financial statement James
signed under oath in April 1992 for First Wisconsin National Bank indicating
that this debt was $17,000.[1] James and his father testified that the
senior Lefebers lent additional sums totaling $62,124 which, with 6% interest,
amounted to $235,392 owed.
The trial court found
that no amount had ever been repaid on the debt, that Bonnie was "a fifth
wheel" in financial dealings between James and his family, and that the
alleged $235,392 debt was "nothing more than an attempt to increase the
liability of [James] and [Bonnie] and thereby deplete or diminish the marital
estate." The court also considered
that if it were to value this debt at the full amount urged by James and his
father, James "would receive a substantial asset for which there is no
testimony that he has to or will ever repay.
This would certainly constitute a hardship on [Bonnie] and a windfall to
[James], which would result in a complete inequitable distribution of the
marital estate." The court found
that including the $235,392 debt in the property division would deny Bonnie's
contribution to the value of the parties' farm through her efforts during the
marriage and result in an unequal and unfair division of the marital
estate.
The record supports the
trial court's findings regarding the debt to James' parents. The trial court found that Bonnie's
testimony was more credible than that of James and his father as to how the
debt was incurred, the amount of the debt and whether the debt was intended to
be repaid. As the finder of fact, it
was the trial court's function to make this credibility assessment. See Village of Big Bend v.
Anderson, 103 Wis.2d 403, 410, 308 N.W.2d 887, 891 (Ct. App.
1981).
Although we have upheld
the trial court's discretionary determination regarding the value of the second
mortgage debt to the senior Lefebers, we reverse and remand to permit the trial
court to consider interest on this debt for purposes of the property
division. It was undisputed at trial
that the original April 1976 $28,000 note bore interest at the rate of 6%. In their testimony, the parties and James'
father, Roy Lefeber, referred to the 6% interest requirement; the parties'
posttrial position statements also referred to the 6% interest provision. However, the trial court's memorandum
decision does not address interest on the $17,000 balance due.
We reject James'
challenge to the trial court's decision to value the parties' cash-on-hand as
of the July 19, 1993 temporary hearing rather than as of the October 5, 1994
trial. The court found that the amount
of cash-on-hand at the trial had been reduced by several thousand dollars since
the temporary hearing and that "[i]t was apparent from the testimony that
cash had been withdrawn from this account [by James] to reduce this asset at
the time of the divorce." This
determination required an assessment of the credibility of the witnesses. We see no error in the trial court's
exercise of its discretion in this regard.
James also disputes the
trial court's valuation of livestock, farm machinery and equipment. At trial, James testified that he agreed
with the values contained in an appraisal prepared by O'Brien Brothers;
however, the appraisers did not testify.
O'Brien's appraisal valued the machinery and equipment at $58,625
and the livestock at $85,100.
Bonnie presented the testimony of her appraiser, Dennis Badtke, that the
machinery and equipment were worth $56,550 and the livestock was worth
$113,000. The trial court made a
credibility determination and accepted Badtke's values. It was within the trial court's authority to
make this determination, and the record supports the trial court's decision.
CHILD SUPPORT AND MAINTENANCE
James
contests the trial court's finding that he could realize net income of $39,919
in 1994 and subsequent years for purposes of calculating child support and
maintenance. James argues that the
court's use of the $39,919 figure for his 1994 income was without any rational
basis, particularly since his tax returns for the seven preceding years did not
indicate income approaching that level.
In arriving at the
$39,919 figure, the trial court stated that it was "[u]sing the previous
years of income as examples ...."
While the trial court did not so state, it is clear that it relied upon
Bonnie's Exhibit 13, which was her estimate of James' profit or loss from
farming for 1994. Bonnie testified that
Exhibit 13 was prepared using James' September 30, 1994, third-quarter income
statement. Projections regarding income
and expenses for 1994 required estimating fourth-quarter income and
expenses. This was done by averaging
the previous three-quarters' income and expenses and adding the averages to the
figures on James' third-quarter 1994 income statement.[2]
James complains that
Exhibit 13 does not take into consideration approximately $30,000 in farm
accounts payable. We disagree. In using actual expense figures from James'
third-quarter income statement and estimating the fourth-quarter expenses and
income to arrive at a total estimate for 1994, Exhibit 13 necessarily took into
account that additional expenses (and hence accounts payable) would be
generated in 1994.
James also complains
that Exhibit 13 improperly added in depreciation, thereby depriving him of that
deduction from his income. Although the
trial court agreed that James should not receive a depreciation deduction, it
appears from the trial court's memorandum decision and the exhibits presented
at trial that the court did not actually deprive James of the depreciation
deduction when it estimated his 1994 income.
Bonnie's Exhibit 14 indicated that if depreciation were added in for
1994, James' total income would be $58,115.
The $39,919 figure used by the trial court does not reflect added in
depreciation.[3]
We turn to James'
challenge to the trial court's requirement that he pay Bonnie $100 per week
maintenance and its decision to relieve Bonnie of the obligation to pay child
support. The trial court discussed the
fairness and support objectives of maintenance. See LaRocque v. LaRocque, 139 Wis.2d 23, 33,
406 N.W.2d 736, 740 (1987). The court
considered that this was a lengthy marriage (twenty-three years), that the
parties had reached a stage in life where they could enjoy an enhanced standard
of living, and that it could not require Bonnie to rely upon her property
division in lieu of maintenance.
The trial court further
noted that Bonnie desired $100 per week in maintenance as long as she was not
required to pay child support,[4]
that Bonnie's budget indicated a shortfall of $78 per month, and that part of
her monthly income was overtime which was not guaranteed to her.[5] The court noted that if fairness required,
it could set maintenance at a level exceeding Bonnie's budget. See Hefty v. Hefty, 172
Wis.2d 124, 135-36, 493 N.W.2d 33, 37 (1992).
The court also considered that James has the ability to increase his
farm income and that Bonnie's ability to increase her income is limited in the
absence of a post-high school education.
The court also considered Bonnie's financial needs and what would be
required to permit her to live at the same standard of living enjoyed during
the marriage.
The court then turned to
the issue of child support and noted that it could depart from the percentage
standard child support guidelines under § 767.25, Stats., if it found that use of the percentage standard would
be unfair to the children or to either of the parties. See § 767.25(1m). The court noted that child support is
intended to maintain the children at the economic level they would have enjoyed
in the absence of divorce. The court
specifically found in this case that the children were living in the same
economic circumstances they enjoyed prior to the divorce. The court concluded that ordering Bonnie to
pay child support was not warranted given the financial hardship to her and the
fact that the children had not suffered economically as a result of the
divorce. The court further found that
Bonnie's "relinquishment of a larger maintenance payment for the
extinguishment of any support payment is fair and equitable ...."
As a general rule, we do
not endorse setting-off maintenance and child support in the manner employed by
the trial court. However, the court's
decision to do so in this case can be upheld because of the court's specific
finding that the children's economic condition had not suffered as a result of
the divorce. The court had a reasonable
basis for relieving Bonnie of child support and for ordering James to pay
Bonnie $100 per week in maintenance.
James argues that the
trial court did not consider his inability to pay maintenance and Bonnie's lack
of need. We have already addressed the
maintenance factors as they apply to Bonnie.
James' contention that he is unable to pay is based upon his rejection
of the trial court's estimation of his 1994 income at $39,919. Because we have already sustained the trial
court's income determination as not clearly erroneous, we need not address this
argument.
In sum, we affirm the
trial court's determinations on maintenance and child support but reverse and
remand on the property division to permit the court an opportunity to address
the issue of interest on the $17,000 second mortgage debt. The court has discretion to address this
issue with or without further proceedings.
The court also has discretion to address any other aspects of the
judgment of divorce affected by any subsequent interest determination. However, we do not require or invite further
proceedings relating to nonproperty division aspects of the judgment of
divorce.
No costs to either
party.
By the Court.—Judgment
affirmed in part; reversed in part and cause remanded.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.
[1] The note and mortgage to James' parents were executed in April 1976 for $28,000 at 6% interest. The note was renewed twice.
[2] James contends that Exhibit 13 was accepted into evidence without foundation. However, there was no objection at trial to the admissibility of Exhibit 13 or to the testimony relating to it. Therefore, this claim is waived. See State v. Hartman, 145 Wis.2d 1, 9-10, 426 N.W.2d 320, 323 (1988).
[3] Even if the trial court did deprive James of the depreciation deduction in determining his 1994 income, such would have been within the court's discretion. Whether depreciation is to be included for purposes of evaluating income "is discretionary depending upon the facts of the case." Overson v. Overson, 140 Wis.2d 752, 761, 412 N.W.2d 896, 899 (Ct. App. 1987); see also State ex rel. S.M.D. v. F.D.L., 125 Wis.2d 529, 535, 372 N.W.2d 921, 923 (Ct. App. 1985) (calculating income without a depreciation deduction can be an appropriate exercise of discretion).