Kemmett v. Kemmett, 2024
The Supreme Court of North Dakota reviewed the decree and decisions of the district court in this divorce action. The supreme court upheld the valuation of certain land as it was not clearly erroneous because it was within the range of evidence. Further, the supreme court determined that the district court’s determination of the value of the husband’s dental practice was not clearly erroneous because the findings were based on the experts’ valuations and constituted a proper credibility determination.
The supreme court reversed and remanded in part in some of the other issues, primarily the distribution of marital assets and the lack of clarity thereof. This digest deals with the land and dental practice valuations and not the other issues, which are clearly covered in the opinion.
Clearly erroneous review.
“Valuations of marital property within the range of the evidence presented are not clearly erroneous. A choice between two permissible views of the evidence is not clearly erroneous if the district court’s findings are based either on physical or documentary evidence, or inferences from other facts, or on credibility determinations.” The district court determined credibility issues, not to be second-guessed on appeal.
Appeal.
On appeal, among other things, the wife argued the district court’s valuation of land was erroneous and the court’s computations contained errors. The husband cross-appealed and argued, among other things, that the value of his dental practice was clearly erroneous “and the court abused its discretion by failing to allow for cross-examination of Keisha
Kemmet’s expert witness.”
The parties were married in September 2016 and separated in June 2021. At trial, two experts testified as to the value of the dental practice, and one expert testified as to the value of the land in Kidder County.
An appellate court will review the district court’s distribution of property as a finding of fact and will not reverse unless the findings were clearly erroneous. A choice between two views of the evidence was not clearly erroneous if the district court’s findings were based on, among other things, credibility determinations. “In a bench trial, the district court determines credibility issues, which we will not second-guess on appeal.” (Wald v. Wald)
The Kidder County land.
This asset was land that had been in the Lindell (the husband) Kemmett’s family for decades. In 2019, the husband’s father executed a quit claim deed retaining a life interest with the remainder to the husband and a sibling. Both parties presented evidence of the value of the land. The wife argued the value of the land was clearly erroneous because her appraiser was more credible and “his estimate was accurate.” “A court’s valuations of marital property are not clearly erroneous if they are within the range of evidence presented.… In a bench trial, the district court determines credibility issues, which we will not second-guess on appeal.” (Berdahl)
Supported by the wife’s appraiser, the wife valued the land at $3,110,000, the remainder interest at $1,137,129 (0.36390) with half of that, $568,564, being the husband’s interest.
The husband testified to the value “as an owner.” He valued it at $2,500,000 with a remainder of 0.3639 and half of that at $454,875. He determined the value as a cost per acre plus the value of the homestead.
The district court found “the methods used by [the appraiser] in conducting his appraisal are not reflective of reality, rendering his valuation inapplicable[.]” The district court found the appraisal the husband and his father gave to be more accurate since they are more familiar with the land. The district court valuation was within the range of evidence presented. “The court’s choice between two permissible views of the evidence is not clearly erroneous.”
The husband’s dental practice.
The husband argued that the district court’s valuation of his dental practice was erroneous. He argued that his expert was more experienced and presented a more accurate valuation. Both parties presented evidence and reports and testimony from experts. The husband valued the practice at $999,000, and the wife valued it at $1.3 million.
The husband’s expert used the income approach and took a DLOM. He used a tax rate of 10%. The wife’s expert used the income and market approaches, both methods reaching essentially the same value. The wife’s expert did not take a DLOM and used a 38% tax rate.
The district court determined a value of the business at $1,300,000. The district court found both experts to be credible witnesses but found the wife’s expert to be more credible. Also, the husband’s expert admitted that his tax rate of 19% was inaccurate, but, had he corrected the taxes, the value would have been lower.
The district court’s factual findings were presumptively correct. The district court’s findings were a credibility determination, a choice between two permissible views of the evidence. “The district court’s findings are not clearly erroneous.”