Preview:

2002  WI  App  25
COURT OF APPEALS OF WISCONSIN
PUBLISHED OPINION
Case No.:                                                                  01-1064
Complete Title of Case:
                                                                           IN RE THE MARRIAGE OF:
                                                                           GARY DELBERT RICHMOND,
                                                                           PETITIONER-APPELLANT,
                                                                           V.
CAROL KAY RICHMOND,
RESPONDENT-RESPONDENT.
Opinion Filed:                                                             December 28, 2001
Submitted on Briefs:     December 10, 2001
JUDGES:                                                                    Cane, C.J., Hoover, P.J., and Peterson, J.
Concurred:
Dissented:
Appellant
ATTORNEYS:                                                                 On behalf of the petitioner-appellant, the cause was submitted on the
                                                                           briefs of Timothy D. Anderson of Chippewa Falls.
Respondent
ATTORNEYS:                                                                 On behalf of the respondent-respondent, the cause was submitted on the
brief of Stephanie L. Finn and Herrick, Hart, Duchemin, Spaeth, Sullivan
& Schumacher, S.C. of Eau Claire.




COURT OF APPEALS                                                                                                                                        2002  WI  App  25
DECISION
DATED AND FILED                                                                                                                                         NOTICE
                                                                                                                                                        This opinion is subject to further editing.   If
                                                                                                                                                        published, the official version will appear in
December 28, 2001                                                                                                                                       the bound volume of the Official Reports.
Cornelia G. Clark                                                                                                                                       A party may file with the Supreme Court a
Clerk of Court of Appeals                                                                                                                               petition to review an adverse decision by the
                                                                                                                                                        Court of Appeals.   See WIS. STAT. § 808.10
                                                                                                                                                        and RULE 809.62.
                                                                                                                                                        Cir. Ct. No.   98-FA-191
Appeal No.                                                                              01-1064
STATE OF WISCONSIN                                                                                                                                      IN COURT OF APPEALS
IN RE THE MARRIAGE OF:
GARY DELBERT RICHMOND,
PETITIONER-APPELLANT,
V.
CAROL KAY RICHMOND,
RESPONDENT-RESPONDENT.
APPEAL from a judgment of the circuit court for Chippewa County:
THOMAS J. SAZAMA, Judge.   Reversed and cause remanded with directions.
Before Cane, C.J., Hoover, P.J., and Peterson, J.
¶1                                                                                      HOOVER, P.J.    Gary Richmond appeals his judgment of divorce
from Carol Richmond.   He argues that the trial court erroneously exercised its
discretion when it included in the property division the appreciation in value of the




No.   01-1064
farm gifted to Gary by his parents.   He contends the trial court applied the wrong
legal  standards  and  that  the  appreciation  was  not  a  product  of  the  marital
partnership, but resulted exclusively from changes in the market.   Gary also argues
that the trial court erred when it reserved the issue of child support, did not apply
the percentage standards for a split custody situation and failed to make specific
findings as required in order to deviate from the percentage standards.
¶2                                                                                       We conclude that the trial court did not specifically (1) find whether
the contributions of Carol or Gary were in fact a catalyst for the rapid increase in
the value of the farm between  1995 and  1999, or  (2) make the child support
findings required by WIS. STAT. § 767.25(1n).1   Under § 767.25(1n), the trial court
must state on the record or in writing why applying the percentage standards
would be unfair to a child or parent, what the support would have been if the
percentage standards had been applied, the amount by which the award deviates
from the percentage standards, its reasons for finding that use of the percentage
standards is unfair, the basis for its modification of the award and its reasons for
the amount of modification.   Therefore, we reverse the judgment and remand for
findings consistent with this opinion.
1  WISCONSIN STAT. § 767.25(1n) provides:
If the court finds under sub.(1m) that use of the percentage
standards is unfair to the child or the requesting party, the court
shall state in writing or on the record the amount of support that
would be required by using the percentage standards, the amount
by which the court’s order deviates from that amount, its reasons
for finding that use of the percentage standards is unfair to the
child or the party, its reasons for the amount of modification and
the basis for the modification.
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No.   01-1064
BACKGROUND
¶3                                                                                       Gary and Carol Richmond were married in  1982 and have three
children.   After they were married, Gary and Carol moved to a dairy farm owned
by Gary’s parents.   Gary’s parents gifted the farm to him in 1995.   Gary filed for
divorce on September 10, 1998.   The trial court granted Gary’s petition for divorce
on March 17, 2000.
¶4                                                                                       On  September  20,  2000,  the  court  tried  the  issues  of  property
division, maintenance and child support.   The trial court found that the value of the
farm was $165,600 at the time of the gift in 1995.   It found the farm appreciated to
a value of $329,000 in 1999.   The court considered contributions made by Carol
and Gary throughout the sixteen-year marriage and determined that the increase in
value was due to the “efforts and abilities of this marital partnership and not solely
to inflation and market forces” and included the $163,400 appreciation as a marital
asset to be divided.    The trial court ordered Gary to pay Carol an equalizing
payment of $86,645.
¶5                                                                                       The trial court granted custody of one child to Gary and custody of
the other two children to Carol.   It also decided, “Child support shall be reserved
for now, as I find that each party is financially able to and shall support the
children primarily placed in his or her care.”   Gary appealed.
DISCUSSION
A.  PROPERTY DIVISION
¶6                                                                                       Gary argues that the farm’s appreciation was due solely to market
forces and did not involve efforts of  the marital partnership.    The trial court
considered  the  proper  legal  standards  for  determining  whether  to  include  the
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No.   01-1064
appreciation in value of gifted property in the marital estate.    Nevertheless, it
erroneously exercised its discretion when it considered only contributions to the
marriage as a whole and failed to determine whether Carol or Gary’s contributions
to the marital partnership throughout the marriage were in fact a catalyst for the
rapid  increase  in  the  farm’s value  after  1995.    WIS. STAT.  § 805.17(2).    We
therefore remand for the court to make that finding.
¶7                                                                                       As indicated, the trial court identified and applied the correct legal
standards.   It stated:
Section 767.255 of the Wisconsin Statutes provides for the
exclusion  from  the  marital  estate  subject  to  division
property that is either acquired by gift or inheritance or paid
for  with  funds  so  acquired.    However,  where  gifted  or
inherited  property  has  appreciated  in  value  during  the
marriage  due  to  the  efforts  of  both  the  owning  and
nonowning spouses, that appreciation will be included in
the marital estate.   Schwegler v. Schwegler, 142 Wis.2d
362,  366  (Ct.App.1987).                                                                “Thus, if during the marriage,
both  spouses  contribute  to  the  acquisition  of  property
through their abilities and efforts, that property is part of
the  marital  estate.    The  property  acquired  may  be  the
appreciation in value of an asset separately owned by one
of the spouses.”   Haldemann v. Haldemann, 145 Wis.2d
296, 302 (Ct.App.1988).
Where the appreciated value of separate property is due
solely to general economic conditions, such as inflation or
normal  appreciation  of  real  estate  values,  the  property
remains separate.   Plachta v. Plachta, 118 Wis.2d 329, 334
(Ct.App.1984).     However,  where  the  appreciation  of
separate property is due to the efforts and abilities of the
marital partnership, that appreciation becomes part of the
marital estate.   Lendman v. Lendman, 157 Wis.2d 606,
612 (Ct.App.1990).
¶8                                                                                       The trial court looked to what the parties did throughout the sixteen-
year history of the marriage and found that their mutual contributions and efforts
caused  appreciation  in  the  farm’s  value.    However,                                “merely  maintaining  the
marital relationship and performing the customary obligations of one spouse to the
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No.   01-1064
other does not constitute a contribution of the nonowning spouse which requires
that the appreciation in value of separately owned property be treated as part of the
marital estate.”   Haldemann v. Haldemann, 145 Wis. 2d 296, 302, 426 N.W.2d
107 (Ct. App. 1988).   The contributions must be related to the increase in value in
order for the appreciation to become part of the marital estate and divisible at
divorce.   See Plachta v. Plachta, 118 Wis. 2d 329, 334, 348 N.W.2d 193 (Ct. App.
1984).    Here,  the  trial  court  did  not  specifically find  that  Carol’s  or  Gary’s
contributions actually were a catalyst to the rapid appreciation of the farm after
1995.
¶9                                                                                           Trial court findings that there was an appreciation in the value of the
farm and that efforts of the spouses contributed to an increase in the property’s
value are insufficient to attribute the entire increase in value to the work of the
marital partnership.   Theoretically, years of efforts could lay the foundation for a
later rapid appreciation of an asset.   For example, a couple could plan and prepare
to turn the farm into a subdivision.   Later, the years of planning could come to
fruition when a market for the subdivision materializes.    The property’s value
would then likely appreciate rapidly, as hoped and anticipated.   However, it is at
least as likely that the contributions of both spouses may have only contributed to
the value of the farm as of the time it was gifted to the donee (1995, in this case).
This does not necessarily demonstrate that the marital efforts contributed to a later
significant appreciation in value over a short period of time.
¶10    Thus, we remand for the trial court to clarify whether efforts by
Carol and Gary throughout the marriage were in fact a catalyst for the rapid
appreciation of the farm’s value from 1995 to 1999, or whether the rapid increase
in value was due to market forces.   If the trial court finds the contributions were
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No.   01-1064
not a catalyst, then it should consider the respondent’s hardship argument, which it
did not reach in light of its initial ruling.
B.   CHILD SUPPORT
¶11    Gary also argues the trial court erred when it reserved the issue of
child  support  and  did  not  apply the  percentage  standards  for  a  split  custody
situation.   He contends that court did not make the findings required under WIS.
STAT. § 767.25(1m) and (1n). We agree.
¶12    The interpretation of a statute and its application to a set of facts are
questions of law we review de novo.   Reyes v. Greatway Ins. Co., 227 Wis. 2d
357, 364-65, 597 N.W.2d 687 (1999).   A trial court may modify the amount of
child support payments determined by application of the percentage standards if it
deems them unfair after considering the factors set forth in § 767.25(1m).   Then
the court must state in writing or on the record why the use of the percentage
standards would have been unfair to a parent or child, what the support would
have been if the percentage standards had been applied, the amount by which the
court’s order deviates from the standards, its basis for adjusting the payments and
its reasons for the amount of modification.   WIS. STAT. § 767.25(1n).
¶13    The  record  demonstrates  that  the  trial  court  did  not  make  these
required  findings,  thereby  erroneously  exercising  its  discretion.    WIS.  STAT.
§ 805.17(2).   We reverse the court’s child support determination and remand to the
trial court to make the statutorily required findings.
By  the  Court.—Judgment  reversed  and  cause  remanded  with
directions.
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