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Docket Number

No. 81CA0547

Attorney(S)

Brenman, Epstein, Zerobnick, Raskin Friedlob, P.C., Martin Zerobnick, for appellant-cross-appellee. Andersen and Gehlhausen, P.C., John Gehlhausen, for appellee-cross-appellant. Division I.

Judges

Opinion by JUDGE TURSI.

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Smart Summary

Case Summary

Factual and Procedural Background

The parties, Lonie Jean Hoffman (wife) and Harold Lee Hoffman (husband), were married in 1963 and had one child. A decree of dissolution was entered in October 1980. Matters of child custody and support, property division, maintenance, and attorneys' fees were tried to the court in January and March 1981, and final orders were entered March 12, 1981 (District Court of Bent County, Hon. Lewis T. Babcock).

The trial court awarded custody of the minor child to the wife, with reasonable visitation for the husband, and ordered the husband to pay $250 per month in child support. No maintenance was awarded, and each party was required to pay their own attorneys' fees. The wife received the family home; the husband received most remaining assets, principally the family farm and equipment. To equalize the distribution, the husband was ordered to pay the wife approximately $100,000, either in cash or by a 20-year promissory note bearing 10% interest, secured by a deed of trust and payable in monthly or annual installments.

The wife appealed the property division and the denial of attorney's fees. The husband cross-appealed the portion of the order concerning a $19,000 check he received from his mother. The Colorado Court of Appeals issued its opinion on August 12, 1982.

Legal Issues Presented

Whether the trial court's property division was inequitable or an abuse of discretion because of the delayed first payment and the option to pay by a 20-year note at 10% interest.
Whether the trial court erred in denying the wife's request for attorneys' fees (and the denial as to husband) in the dissolution proceeding.
Whether the trial court erred in its treatment/classification of a $19,000 check received by the husband from his mother (i.e., whether it was a gift, a loan, or otherwise).

Arguments of the Parties

Appellant (Wife)'s Arguments

The division of property was inequitable and an abuse of discretion because the husband had a 15-month delay in making the first payment and because the note could be paid over 20 years.
The trial court erred in denying her request for attorneys' fees.

Appellee (Husband)'s Arguments — Cross-Appeal

The trial court erred in failing to classify the $19,000 check from his mother properly (as either a gift or a loan), affecting the property division.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
In re Marriage of Lodholm, 35 Colo. App. 411, 536 P.2d 842 (1975)	Trial court has broad discretion in division of property in dissolution cases.	The court relied on this precedent to support that the trial court's property division is reviewed for abuse of discretion.
In re Marriage of Lucas, 631 P.2d 1175 (Colo. App. 1981)	Trial court's discretion extends to whether interest should be allowed on a promissory note.	Used to support the trial court's authority to allow interest on the note and to structure payment terms.
In re Marriage of Newman, 44 Colo. App. 307, 616 P.2d 982 (1980)	Trial court's discretion whether to award attorneys' fees.	Supported the appellate court's conclusion that denying attorneys' fees was within the trial court's discretion.
In re Marriage of Harding, 533 P.2d 947 (Colo.App. 1975) (not selected for official publication)	Illustrates concept of awarding interest as substitute for investment opportunities when a lump sum is not awarded.	Queried by the court to explain that awarding interest on installment payments substitutes for the investment opportunities wife would have had with a lump sum.
Gebhardt v. Gebhardt, 198 Colo. 28, 595 P.2d 1048 (1979)	Standard of appellate review: factual findings by a trial court sitting without a jury are not to be disturbed unless clearly erroneous and unsupported by the record.	The court applied this standard in reviewing the trial court's factual findings, and found the trial court's classification of the $19,000 check unsupported by the record.

Court's Reasoning and Analysis

The court began by recognizing the broad discretion afforded trial courts in property division, including decisions on whether to allow interest on promissory notes and whether to award attorneys' fees. The trial court had considered the statutory factors enumerated in § 14-10-113(1), C.R.S. 1973, and had divided the parties' property equally.

With respect to the property division and the payment terms, the appellate court found no abuse of discretion in permitting the husband to choose between cash or a 20-year note at 10% interest. The court explained the trial court's objective: to allow the husband to continue operating the farm as a viable business while giving the wife "interest on her money as a substitute for the investment opportunities" she would have had if given a lump sum. The court also concluded that it was within the trial court's discretion to order payment terms designed not to force the sale or further encumbrance of the farm. The denial of attorneys' fees to both parties was similarly upheld as within the trial court's discretion.

On the cross-appeal concerning the $19,000 check from the husband's mother, the appellate court applied the clearly erroneous standard for factual findings. The trial court's order and its denial of a new hearing were found unclear as to the check's classification. The record, however, contained a check notation "tractor" and unrebutted testimony that the money was received to purchase a tractor. There was no support in the record for the trial court's finding that the check evidenced a promissory note for purchase of land. Because the husband's testimony was conflicting as to whether the money was a loan or a gift, the appellate court concluded the proceeds should have been characterized either as a gift (separate property under § 14-10-113(2)(a), C.R.S. 1973) or as a marital debt subject to division.

Based on that analysis, the court held the portion of the judgment dealing with the $19,000 check to be in error and remanded for determination of the character and disposition of those funds and modification of the property division if appropriate. All other portions of the judgment were affirmed.

Holding and Implications

The appellate court affirmed the trial court's judgment in all respects except for the portion relating to the $19,000 check from the husband's mother, which it reversed and remanded.

Direct consequences:

The trial court's overall property division (wife awarded the home; husband awarded the farm and equipment; husband to pay approximately $100,000 in cash or by a 20-year, 10% note) and the denial of attorneys' fees were upheld as within the trial court's discretion.
The portion of the judgment concerning the $19,000 check was reversed and remanded for the trial court to determine whether the funds were a gift (separate property under § 14-10-113(2)(a)) or a loan/marital debt, and to modify the property division if appropriate.

The opinion did not announce a new rule of law; it applied existing standards of discretion in property division and the clearly erroneous standard for factual findings.

Source: Colorado Court of Appeals, No. 81CA0547, decided Aug. 12, 1982. Opinion by Judge Tursi; Judges Coyte and Van Cise concur.

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In re the Marriage of: Lonie Jean Hoffman, Appellant-Cross-Appellee, and Harold Lee Hoffman, Appellee-Cross-Appellant.

Opinion by JUDGE TURSI.

In this dissolution of marriage proceeding, Lonie Hoffman (wife) appeals from the trial court's division of property, and refusal to award attorney's fees, and Harold Hoffman (husband) appeals from the portion of the trial court's order concerning a $19,000 check received by him from his mother. We affirm in part and reverse in part.

The parties were married in 1963 and one child was born to the marriage. A decree of dissolution was granted in October 1980, and matters of child custody and support, property division, maintenance, and attorneys' fees were tried to the court in January and March 1981.

In its final orders entered March 12, 1981, the trial court granted custody of the parties' minor child to wife, with reasonable rights of visitation in husband. Husband was ordered to pay child support in the sum of $250 per month. No maintenance was awarded and the parties were required to pay their respective attorneys' fees. Wife was awarded the family home, and husband was awarded most of the remaining assets, which, basically, consisted of the family farm and its equipment. To equalize the award, the husband was ordered to pay wife the difference between the awards, or approximately $100,000. He was given the option to do so in cash or by a note bearing interest at the rate of 10 per cent per annum. The note was to be secured by a deed of trust on certain real property and payable in either monthly or annual installments over a 20-year period.

Wife argues that the trial court's division of property was inequitable and an abuse of discretion because of a 15 month delay in receiving the first payment from husband, and the 20-year period over which the note was to be paid. She also contends that the court erred in denying her attorney's fees. We disagree.

It has been repeatedly held that in matters of division of property the trial court is imbued with broad discretion. In re Marriage of Lodholm, 35 Colo. App. 411, 536 P.2d 842 (1975). This discretion extends to the determination of whether interest should be allowed on a promissory note, In re Marriage of Lucas, 631 P.2d 1175 (Colo.App. 1981), and whether attorneys' fees should be awarded. In re Marriage of Newman, 44 Colo. App. 307, 616 P.2d 982 (1980).

Here, the trial court considered the factors enumerated in § 14-10-113(1), C.R.S. 1973, and equally divided the parties' property. We find no abuse of discretion in giving husband the option to pay in cash or by a 20-year note bearing 10 per cent interest. The trial court's order was intended to allow husband to continue operation of the farm as a viable business enterprise, while wife received "interest on her money as a substitute for the investment opportunities that would have been available if she had the lump sum." See In re Marriage of Harding, 533 P.2d 947 (Colo.App. 1975) (not selected for official publication). It is within the trial court's discretion to order terms of payment which will not require husband to sell or further encumber the farm in order to meet his obligation to wife. Further, we find no abuse of discretion in the trial court denying attorneys' fees to both sides.

Husband contends on cross-appeal that the trial court erred in failing to classify a $19,000 check received from his mother as either a gift or a loan. We agree.

On appeal, the factual findings of the trial court sitting without a jury are not to be disturbed unless clearly erroneous and not supported by the record. Gebhardt v. Gebhardt, 198 Colo. 28, 595 P.2d 1048 (1979). The trial court's order denying husband's motion for a new hearing is unclear as to the classification of the $19,000 check. To the extent that the trial court found the $19,000 check to be the basis of a different debt to his mother, evidenced by a promissory note, for the purchase of a portion of the family farm, there is no support in the record. The check introduced into evidence contained the notation "tractor" and the unrebutted testimony was that husband had received the money from his mother for the purchase of a tractor. Thus, the trial court erred in finding that the check was a loan for the purchase of land.

However, husband's testimony was conflicting as to whether this money was received as a loan or as a gift from his mother. The proceeds therefrom should either have been characterized as a gift and therefore separate property pursuant to § 14-10-113(2)(a), C.R.S. 1973, or a marital debt subject to division.

That portion of the judgment pertaining to the $19,000 check is reversed, and the cause is remanded to the trial court for a determination as to the character and the disposition of the $19,000 from husband's mother, and modification, if appropriate, in the division of property.

The judgment in all other respects is affirmed.

JUDGE COYTE and JUDGE VAN CISE concur.

IN RE MARRIAGE OF HOFFMAN