remanding for the circuit court to determine if the absence of an interest rate on deferred-property payment was an integral part of the property division
How later courts described this case
- remanding for the circuit court to determine if the absence of an interest rate on deferred-property payment was an integral part of the property division
- holding 1% interest rate did not meet the exception
- “Amajority of jurisdictions have adopted the same rule as the Brown court, that all pensions, whether vested or nonvested, are marital property subject to distribution.” (citations omitted)
Written by the judges who cited it.
The opinion
GILBERTSON, Justice
(concurring in part and dissenting in part).
[¶45] The only income producing asset that is at issue in this action is the family *805 farm. The trial court determined that it was in everyone’s best interest to try to “keep this ship afloat enough so that he survives and she gets some money because if the ship goes under, she doesn’t get anything anyway.” 1 The trial court reasoned that the farm was in a difficult financial condition. In an attempt to keep the farm going as an income producing asset, the trial court found it necessary to set a lower than normal interest rate on payments due Rose and to authorize Bruce to acquire operating loans to put in a crop. To permit Bruce to seek such financing, the trial court allowed the creditors a preferred position to protect their loans by not providing Rose a security interest in the farm assets awarded to Bruce.
[¶ 46] This court has repeatedly faced the issue of trying to keep a family farm intact, yet uphold the policy of an equitable division of assets. In Miller v. Miller, 83 S.D. 227 , 157 N.W.2d 537, 541 (1968), we recognized that keeping a family farm operating after a divorce was appropriate and the trial court’s valuation of the farm which endangered that goal, was an abuse of discretion. In Kittelson v. Kittelson, 272 N.W.2d 86, 90 (S.D.1978), we reversed an inequitable division of assets recommending to the trial court on remand that it consider two options, both of which would have continued the viability of that unit. However, in Hanson v. Hanson, 252 N.W.2d 907 (S.D.1977), we stated that while in Miller we had expressed a reluctance to require a lump sum payment that would necessitate a sale of a farm and thus put the farmer out of business, we must also make an award that is fair to the spouse. We concluded that absent making adequate arrangements for the spouse, “the court must acknowledge that an equitable division of the property is paramount to defendant’s interest of keeping the ranch intact.” Id. at 910.
[¶ 47] Nevertheless in Krage v. Krage, 329 N.W.2d 878, 880 (S.D.1983), we affirmed a property division keeping the ranch intact and refusing to reverse as it would “destroy the ranch as an economic unit and create undue tax liability.” In O’Connell v. O’Connell, 340 N.W.2d 700, 702 (S.D.1983), we held that the ranch could be divided and each portion maintain its economic viability and thus no destruction of the unit would occur by such a division. Most recently in Bennett v. Bennett, 516 N.W.2d 672 (S.D.1994), we affirmed the doctrine of Hanson concerning the paramount duty of an equitable division. However, we noted that there was no evidence in the record that continued viability of the ranching operation required a deferred payment schedule for a property award. Id. at 676.
[¶ 48] These cases do not easily reconcile themselves to each other on all points. Perhaps that is because they are all fact-specific and are resolved on appeal by an abuse of discretion standard of review. However, they do suggest that for a trial court to consider attempting to keep the farm or ranch going as an economic unit it must find that: (1) there is evidence of a potential of economic viability if the unit stays intact; (2) the unit cannot maintain economic viability if it is divided; (3) this is the most reasonable method available for asset allocation to the parties and; (4) there must be an equitable division of assets.
[If 49] An equitable division of assets is mandated by SDCL 25-4-44. However, we should be mindful of SDCL 47-9A-1 which sets forth a legislative declaration of public policy as to the value of family farms to this state; “[t]he Legislature of the state of South Dakota recognizes the importance of the family farm to the economic and moral stability of the state....” As statutes are to be construed together, Meyerink v. Northwestern Public Serv. Co., 391 N.W.2d 180, 184 (S.D.1986), in application of SDCL 25-4-44, the public policy of SDCL 47-9A-1 should be heeded.
*806 [¶ 50] Turning to the case before us, the trial court attempted to do just that. It does Rose little good to have a higher interest rate set or give her a security interest that will cut off access to operating loans to keep the farm afloat. She is entitled to the $108,-000 awarded her by the trial court which would be ultimately paid if the farm survives. The trial court, recognizing the economic difficulties before it, attempted to be fair to both parties in distributing the available property. This is not an easy task. Judges are not dispensers of manna from heaven. All too often “there are simply too few dollars to meet even the most modest standard of living ... (and judges) are called upon to apportion poverty and its accompanying mi-sery_” Ochs v. Nelson 538 N.W.2d 527, 531 (S.D.1995) (citing State ex. rel. V.K.H. v. S.W., 442 N.W.2d 920, 925 (S.D.1989)(Gilbertson, Circuit Judge, concurring)). 2
[¶ 51] It is appropriate to allow a creditor willing to make an operating loan priority over Rose so that the farm may continue in operation. However, no case is made for not granting Rose a security interest against other subsequent creditors. "While there are risks involved in the trial court’s plan, 3 it allocated assumption of those risks to both parties in a fair manner with the exception of not allowing Rose a security interest against subsequent creditors other than operating loans.
[¶ 52] In all other respects I agree with the majority opinion.
. Bruce was purchasing real estate from his father under a contract for deed which Rose claims is valued at $323,300.00 with only $125,-578.00 debt remaining. The problem is that Bruce has not always been current on his payments to his father and may face foreclosure if the farm cannot cash flow the principal and interest. If foreclosure results, with the repeal of SDCL 21-50-2 no equitable adjustment exists and not only would the farming operation cease, the equity in the land would also disappear.
. Rose and Bruce are not the only persons who have a vested interest in the continued viability of the farm. Payment of Bruce’s child support obligation of $638 per month for his two sons was also an issue with which the trial court was faced in this case.