IN RE THE MARRIAGE OF PROBASCO 676 N.W.2d 179 (2004) CASE BRIEF

IN RE THE MARRIAGE OF PROBASCO

676 N.W.2d 179 (2004)

NATURE OF THE CASE: W appealed the alimony and property division of her dissolution decree. H cross-appealed. The court of appeals affirmed on the appeal and cross-appeal. H appealed for further review in which he challenged the court of appeals decision affirming the district court's award of reimbursement alimony.

FACTS: H and W developed an intimate relationship, resulting in the birth of their child, Kally, on October 30, 1985. The parties then began living together. W had a child, Kallen, from a previous marriage. Kallen was three years old when H and W began living together. Kallen lived with the parties until they separated. At the time of trial Kallen was attending college in Alabama. H and W stipulated that they have been married since November 1985. Following graduation, H began working for New York Life Insurance Company as a salesperson. W worked in the home, caring for the children. W handled all of the household finances and assisted H in keeping track of his business with New York Life. Throughout 1987 and 1988, they lived primarily on borrowed money from a number of sources because H's income from New York Life was low. In 1989, because H was without a driver's license, W had to drive H to his business appointments. H's income that year was $5,118. They thought about opening a restaurant. H focused his efforts on the acquisition and development of a franchise. W worked for the Census Bureau in 1990 and eventually landed a permanent position with Wilson Trailer of Sioux City in January 1991. W also assisted H in the evenings on the Perkins franchise project. The family had to rely on W's income over the next four years. In 1990, H's father, Gene, who was an attorney, formed CGP, Inc. to own and operate the 'Perkins Family Restaurant' franchise in downtown Sioux City. The application stated that Gene would be a shareholder. Gene had to submit a separate application. In that application, Gene stated he had a special interest in helping H operate a family restaurant. Gene paid the initial fee of $5000 and had to provide financial information about himself because H could not meet the financial requirements to obtain the franchise. H and Gene formed a partnership, known as Probasco Properties, to own the land and building at the downtown location. Gene made an initial loan of $250,000 to Probasco Properties. Waitt contributed $200,000 in return for 40% of the stock in CGP, Inc. H received 60% of the stock for his sweat equity in the corporation. CGP paid a $30,000 fee to corporate Perkins for a Perkins franchise that ran for 20 years. Without Waitt's investment and influence, CGP, Inc. would not have been able to obtain the franchise. Probasco Properties leased the downtown property to CGP, Inc. for 20 years with four five-year options. At the time of trial, thirteen years were left on the lease. When the restaurant opened, W continued her employment with Wilson Trailer to maintain health insurance for the family. They used their home for an office. In January 1994, terminated her employment and became accounts payable coordinator at the restaurant. Her initial salary was $18,000 per year and that later increased to $32,000 per year. The business was so successful that it became the highest volume Perkins in the system with annual sales in excess of $3,800,000. W worked in the restaurant from January 1994 through late October 1998, when the serious marital problems the parties had been experiencing came to a head. After October 1998, W no longer worked in the restaurant. H filed for dissolution of marriage action. They were living in a home they had purchased in 1986 with a loan of $60,000. Contrary to W's wishes, H borrowed over $400,000 to remodel the house. At the time of trial, the homestead had a market value of $350,000 and an encumbrance in excess of $433,000. The parties agreed that W should move. H borrowed $160,000 to purchase the home for her and had the property deeded to her without any encumbrance. The court found that CGP, Inc. had a fair market value of $1,282,051. H's sixty percent interest, the court found, was therefore $769,000. Regarding Probasco Properties, the court found it had a fair market value of $1,960,000. After deducting the $537,000 debt against Probasco Properties, the court found H's fifty percent interest had a fair market value of $711,500. The court awarded one-half of that interest ($740,250) to H and one-half to W. The court gave H credit against W's half for the $160,000 home that Craig purchased for her. That reduced W's award to $580,250. The court granted W judgment against H for $580,250 and ordered him to pay the judgment as follows: $100,000 on or before May 1, 2001 with the balance of $480,250 to be paid in seven annual installments of $68,607.14 at 8.052% interest. The court awarded W assets totaling $225,832 and ordered her to assume debts of $5000. In accordance with that same stipulation, the court awarded H assets totaling $493,803 and ordered him to assume debts of $517,983. In sum, W received net assets of $801,082, and H received net assets of $716,070. The district court awarded W reimbursement alimony of $60,000 per year for thirteen years payable on the first day of April of each year commencing in 2001. Both appealed court determinations. H challenged the district court's award of reimbursement alimony of $60,000 per year for thirteen years.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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