Cook v. Cook

#29810-r-SRJ
2022 S.D. 74

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

****

ALICE MARIE COOK, Plaintiff and Appellee,

v.

VERNON ROY COOK, Defendant and Appellant.

****

APPEAL FROM THE CIRCUIT COURT OF
THE SIXTH JUDICIAL CIRCUIT
LYMAN COUNTY, SOUTH DAKOTA

****

THE HONORABLE M. BRIDGET MAYER
Judge

****

DAVA A. WERMERS
Mitchell, South Dakota Attorney for defendant
and appellant.

ROSE ANN WENDELL
Pierre, South Dakota Attorney for plaintiff
and appellee.

****

CONSIDERED ON BRIEFS
MAY 25, 2022
OPINION FILED 12/07/22
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JENSEN, Chief Justice

[¶1.] The circuit court granted Alice Cook and Vernon Cook a divorce on the

grounds of irreconcilable differences. The court equitably divided the marital

property and ordered Vernon to pay Alice a cash payment of $201,830. The cash

equalization payment included $140,000 for marital assets that the court found

Vernon had dissipated in violation of SDCL 25-4-33.1. The court also ordered

Vernon to pay Alice permanent alimony of $1,500 per month. Vernon appeals,

arguing that the circuit court abused its discretion by including his military

retirement pay and veteran disability benefits as marital assets subject to equitable

division and clearly erred in finding that he dissipated marital assets in violation of

SDCL 25-4-33.1. Vernon also claims the circuit court’s alimony award was an abuse

of discretion. We reverse and remand.

Facts and Procedural History

[¶2.] Vernon and Alice were married on July 12, 1993. The parties

separated in April 2019 after Alice left the marital home in Lyman County. At the

time of trial, Vernon was 79 years old and in reasonably good physical health but

had significant mental health conditions. Alice was 78 years old and had health

issues that included possible dementia.

[¶3.] Prior to their marriage, Vernon served in the U.S. Army Special Forces

(Green Beret). He concluded his military career in 1979. Vernon suffers from

severe and chronic post-traumatic stress disorder (PTSD) and major depression

stemming from combat military service in Vietnam. He suffered nightmares and

daymares, often lashing out at Alice in anger and isolating himself in his bedroom

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for days on end. Vernon had previously been determined to be 100% combat-related

disabled because of these conditions.

[¶4.] Throughout their lengthy marriage, Alice was a homemaker and

emotionally and physically supported Vernon as he suffered with his disability. She

worked outside the home as a waitress for a short time early in their marriage.

Vernon received veteran service related benefits during the marriage and was also

employed as a union representative, assisting federal employees. He retired from

this work years before the divorce. Vernon and Alice had no debt and lived a

comfortable lifestyle. Vernon enjoyed buying gifts for Alice and provided financial

support to her family throughout the marriage.

[¶5.] At the time of trial, Vernon and Alice owned a home and an

unimproved lot in Lyman County. The court found Vernon received the following

monthly income: $1,553 in social security benefits, $1,877 in combat-related special

compensation, $481.41 in military retirement pay, and $3,227.58 in military

disability benefits for a total of approximately $7,140. Alice received $550 per

month in social security benefits.

[¶6.] In May 2019, Alice filed a complaint for separate maintenance alleging

she feared for her safety living with Vernon. In accord with SDCL 25-4-33.1, the

summons Alice served with the complaint included a temporary restraining order

prohibiting the parties from “transferring, encumbering, concealing or in any way

dissipating or disposing of any marital assets, without the written consent of the

other party or an order of the Court, except as may be necessary in the usual course

of business or for the necessities of life.”

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[¶7.] After separating from Vernon, Alice initially stayed with her grandson.

She then rented a small home in Oacoma that was in poor condition. At the time of

trial, Alice lived in a trailer bought by Alice’s daughter, Michelle Schoeppner

(Shelly), and Shelly’s husband. Shelly remodeled the trailer with the hope that

Alice would be able to reimburse her for the home. During the parties’ separation,

Alice had little money to provide for necessities, and her family assisted her

financially and physically. Shelly testified that Alice needed a daily in-home

caretaker and she and her husband were taking turns staying with Alice.

[¶8.] Alice sought interim spousal support in May 2019, claiming her

monthly expenses were $2,145. In her application, Alice alleged that Vernon had

become hostile, ordered her out of the marital home, took away her vehicle, and

threatened to cut her off from financial support. Prior to a hearing, the parties

stipulated to the entry of an order for Vernon to pay Alice $1,000 a month in

spousal support and to make an additional one-time payment of $1,950 for Alice’s

apartment rent and deposit.

[¶9.] Alice obtained a protection order against Vernon in January 2020

requesting the court to remove him from the home so that she could return. Vernon

agreed to the entry of a protection order but did not admit to the allegations

contained in Alice’s petition. Vernon was ordered out of the home. Later, Alice

voluntarily moved out of the home and Vernon moved back in.

[¶10.] Subsequently, Alice filed a motion seeking an increase in interim

spousal support. Alice claimed monthly expenses of approximately $1,700.

Following an evidentiary hearing, the circuit court ordered Vernon to pay Alice

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$2,500 per month for interim support beginning June 1, 2020. The court also

ordered Vernon to pay Alice an additional $10,000 payment that was ultimately

credited to him in the final property division.

[¶11.] In March 2020, Alice moved to amend the complaint for separate

maintenance to a complaint for divorce. At the start of trial on March 19, 2021,

Vernon agreed to Alice’s motion to amend her complaint for a divorce on the

grounds of irreconcilable differences. Vernon and Shelly testified at the trial. Alice

was unable to attend the trial and did not testify. Vernon detailed his mental

health issues and described the parties’ marriage and separation. Vernon also

testified about his and Alice’s finances and banking, explaining that they each had

personal bank accounts and a joint bank account. Shelly’s testimony focused on

Vernon’s treatment of Alice, Alice’s deteriorating health, and Alice’s financial needs.

[¶12.] The circuit court found that the joint bank account had a balance of

$126,000 at the time of the separation and that the account balance was

approximately $10,000 at the time of trial. 1 Vernon was unable to provide a specific

accounting of this spending. In July 2019, Vernon withdrew almost $29,000 from

1. The parties introduced bank account records from the joint account and
Vernon’s individual account from the beginning of 2018 until the time of trial.
The bank records reveal that the joint account had a minimal balance at the
time of the separation, while Vernon’s account had a balance of $136,000 at
the time of the separation and approximately $10,000 at the time of trial.
The monthly bank statements from the beginning of 2018 show that both
parties’ social security benefits, as well as Vernon’s retirement pay and
disability benefits, were paid into the joint account each month. Vernon
would then transfer his monthly income into his individual account. Most of
Vernon’s spending and cash withdrawals were from his individual account.
The bank records also show that Vernon would transfer funds from his
personal bank account to Alice’s account from time to time.

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the account that he was unable to explain. However, the evidence showed that

Vernon paid $25,000 for the purchase of a boat that month. Vernon also explained

that he used cash to pay for regular purchases and usually carried approximately

$500 for gas, meals, and other basic living expenses. Vernon also testified that

Alice had withdrawn money from the joint bank account at the time of the

separation and that he had given Alice money to purchase a car during the

separation. Vernon claimed he was also forced to replace items of significant value,

such as leather recliners and a riding lawn mower, that Alice had taken from the

marital home.

[¶13.] Vernon acknowledged that in addition to the purchase of the boat, he

purchased a pickup for $35,000 in November 2019. When Vernon was questioned

whether he believed these purchases were an appropriate use of the money under

the restraining order, Vernon stated, “I didn’t care. . . . By that time I was pretty

fed up.”

[¶14.] The circuit court entered findings of fact and conclusions of law and a

decree granting a divorce on the grounds of irreconcilable differences. The court

also entered amended findings of fact and conclusions of law in response to Vernon’s

post-trial objections. The court divided the parties’ marital property and, for the

most part, adopted Vernon’s valuation of the parties’ assets. The court awarded

Vernon the marital home while Alice received the unimproved lot. The court also

divided the other marital property in existence at the time of trial and ordered

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Vernon to pay Alice $61,830 to equalize the value of the property divided between

them. 2

[¶15.] The circuit court also determined that Vernon had spent up to

$280,000 in what the court deemed to be marital assets in violation of SDCL 25-4-

33.1. The court found that Vernon’s “massive cash spending, without receipts” was

unfair to Alice as she “scrimped and saved” and that Vernon’s spending had been

largely frivolous. The circuit court acknowledged that some of Vernon’s

expenditures were for necessities and to replace items Alice took from the marital

home, but ultimately awarded Alice an additional sum to reflect Vernon’s

dissipation of the marital assets.

[¶16.] In calculating the sum that Vernon had spent, the court considered the

$116,000 difference between the bank account balance in April 2019, and the

account balance at the time of trial. Additionally, the circuit court found that

Vernon failed to account for more than $164,000 that he received from his social

security, military retirement, and disability benefits in the twenty-three months

after the entry of the temporary restraining order, and when adding these amounts,

the court determined that Vernon had spent $280,000 in violation of the court

2. The court adopted Vernon’s property valuations in the spreadsheet showing
that he was responsible to make a cash payment of $68,804 to Alice to
equalize the property division. However, in its written findings and
conclusions, the circuit court referenced two different cash equalization
amounts, $68,804 and $61,830. The court ultimately ordered Vernon to pay a
cash equalization payment of $61,830. Vernon objected to the circuit court’s
proposed findings of fact and conclusions of law identifying that the cash
equalization payment specified on the court’s joint property exhibit and in the
findings of fact and conclusions of law were inconsistent, but neither party
has addressed the issue on appeal.

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order. Based upon its findings, the court ordered Vernon to pay an additional cash

equalization payment of $140,000 to Alice. The circuit court ordered Vernon to pay

Alice a total property cash equalization payment of $201,830 ($140,000 plus

$61,830) within ninety days after the entry of the divorce decree.

[¶17.] In awarding Alice permanent alimony of $1,500 per month, the court

found that Vernon financially supported the couple during their 28-year marriage

but recognized Alice’s contributions as a homemaker and supportive companion to

Vernon along with her willingness to endure Vernon’s behavior caused by his

mental health conditions. The court found that both parties were no longer capable

of physical labor, both parties had health issues, Alice’s medical needs will continue

to grow, and Alice will lose the Medicare supplemental health insurance benefits

provided as part of Vernon’s military retirement once the divorce decree is entered.

The court also recognized that Vernon had significant monthly income while Alice

did not, and the parties were debt-free. Although the parties stipulated to a divorce

on the grounds of irreconcilable differences, the court found that Vernon was

primarily at fault for the breakdown of the marriage. Finally, the circuit court

concluded that it was appropriate to consider Vernon’s total income, including his

military retirement pay, disability benefits, and social security, in determining

spousal support.

[¶18.] Vernon appeals and raises the following issues:

1. Whether the circuit court abused its discretion in
classifying Vernon’s retirement income and disability
benefits as marital property subject to equitable division.

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2. Whether the circuit court clearly erred in finding that
Vernon dissipated marital property in violation of the
temporary restraining order.

3. Whether the circuit court abused its discretion in
awarding Alice permanent alimony.

Analysis

1. Classification of Vernon’s retirement income and
disability benefits.

[¶19.] This Court reviews the circuit court’s division of marital property for

an abuse of discretion. Osdoba v. Kelley-Osdoba, 2018 S.D. 43, ¶ 10, 913 N.W.2d

496, 500. The court’s classification of property as marital or non-marital is also

reviewed for an abuse of discretion. Green v. Green, 2019 S.D. 5, ¶ 21, 922 N.W.2d

283, 290. “An abuse of discretion occurs when discretion is exercised to an end or

purpose not justified by, and clearly against, reason and evidence.” Id. ¶ 11, 922

N.W.2d at 288 (citation omitted). We review the circuit court’s findings of fact

“under the clearly erroneous standard of review. ‘We will overturn the [circuit]

court’s findings of fact on appeal only when a complete review of the evidence leaves

[this] Court with a definite and firm conviction that a mistake has been made.’”

Osdoba, 2018 S.D. 43, ¶ 9, 913 N.W.2d at 500 (alterations in original) (citations

omitted) (quoting Miller v. Jacobsen, 2006 S.D. 33, ¶ 19, 714 N.W.2d 69, 76).

[¶20.] Vernon argues (1) that the circuit court erred as a matter of law in

concluding that his military retirement pay and disability benefits were marital

property subject to division under federal law and (2) that the circuit court abused

its discretion by failing to apply the established state law rules to determine

whether the $280,000 the court found Vernon had dissipated during the proceedings

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should be treated as marital property. Alice argues that the circuit court properly

treated Vernon’s total income received post-separation and the pre-separation bank

account funds as marital property because Vernon failed to maintain the property

separately and Alice had need for support and made significant contributions

toward the accumulation of these funds.

a. Application of federal law to Vernon’s disability benefits.

[¶21.] Under federal law, Vernon argues that his military retirement pay and

disability benefits are not subject to division by a state court. However, his

argument fails to acknowledge the significant differences between the treatment of

military retirement pay and military disability benefits upon divorce under federal

law. Urbaniak v. Urbaniak, 2011 S.D. 83, ¶ 13, 807 N.W.2d 621, 625. Military

“[r]etirement benefits are for military service members who serve for a specific

period, usually twenty years or more[,]” and are determined by the number of years

served and rank achieved, whereas “a military service member who becomes

disabled as a result of military service is eligible for disability benefits.” Id. ¶¶ 13,

14. The veteran’s disability benefits are determined by “the seriousness of the

disability and the degree to which the veteran’s ability to earn a living has been

impaired.” Id. ¶ 14. Notably, “[d]isability benefits are not assignable and are

exempt from attachment, levy, seizure, and taxation.” Id. “A military retiree who

is also disabled may receive disability benefits (and incur tax-exempt status) only if

he or she waives a corresponding amount of military retirement pay.” Id.; see also

Howell v. Howell, 581 U.S. 214, 137 S. Ct. 1400, 1403, 197 L. Ed. 2d 781 (2017)

(“[T]o prevent double counting, . . . federal law typically insists that, to receive

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disability benefits, a retired veteran must give up an equivalent amount of

retirement pay. And, since retirement pay is taxable while disability benefits are

not, the veteran often elects to waive retirement pay in order to receive disability

benefits.”).

[¶22.] This distinction in the treatment of military retirement pay and

military disability benefits began following the U.S. Supreme Court’s decision in

McCarty v. McCarty. McCarty declared that military retirement pay could not be

treated as community property divisible at divorce. 453 U.S. 210, 235, 101 S. Ct.

2728, 2742, 69 L. Ed. 2d 589 (1981), superseded by statute, Uniformed Services

Former Spouses’ Protection Act, Pub. L. No. 97-252, 96 Stat. 718 (1982) (codified in

part at 10 U.S.C. § 1408), as recognized in Howell, 137 S. Ct. at 1403. In response,

Congress enacted the Uniformed Services Former Spouses’ Protection Act

(USFSPA) in 1982, authorizing states to “treat veterans’ ‘disposable retired pay’ as

divisible property, i.e., community property divisible upon divorce.” 3 Howell, 137 S.

Ct. at 1403 (quoting 10 U.S.C. § 1408(c)(1)). However, the USFSPA “expressly

excluded from its definition of ‘disposable retired pay’ amounts deducted from that

pay ‘as a result of a waiver . . . required by law in order to receive’ disability

benefits.” Id. (quoting 10 U.S.C. § 1408(a)(4)(A)(ii)).

[¶23.] Following Congress’s enactment of the USFSPA, the U.S. Supreme

Court declared in Mansell v. Mansell that federal law preempts state marital

property law and prohibits state courts from treating military disability benefits,

3. “The language of the [USFSPA] covers both community property and
equitable distribution States[.]” Mansell v. Mansell, 490 U.S. 581, 584 n.2,
109 S. Ct. 2023, 2026 n.2, 104 L. Ed. 2d 675 (1989).

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received after the waiver of military retirement pay, as marital property subject to

division. 490 U.S. at 594–95; see also Hisgen v. Hisgen, 1996 S.D. 122, ¶ 6, 554

N.W.2d 494, 496 (“[T]he USFSPA denies authority to state courts to treat disability

payments as [marital] property when military retirement payments have been

waived to receive such disability amounts.”). 4 Under the USFSPA, a state divorce

court may treat a veteran’s total monthly retirement pay, except any portion of

anticipated retirement pay that was waived to receive military disability benefits,

as marital property divisible between a veteran and a former spouse upon divorce.

[¶24.] The U.S. Supreme Court’s decision in Howell v. Howell further

clarified the USFSPA’s preemption of state marital property law as to the

treatment of disability benefits received after the waiver of military retirement pay.

137 S. Ct. at 1402. In Howell, a veteran waived a share of his military retirement

pay to receive disability benefits after the entry of a divorce decree that divided his

military retirement pay. Id. The Court concluded that the former spouse could not

be indemnified for the portion of the military retirement pay lost from the veteran’s

post-divorce waiver because the USFSPA preempts state marital property law and

prohibits a state court from treating military disability benefits received as a result

4. Our decision in Hisgen v. Hisgen upheld a stipulated property division in a
divorce decree that divided all future military benefits 50/50 between a
veteran and his spouse, despite the veteran subsequently waiving a
significant portion of his military retirement pay in order to receive military
disability benefits after the divorce decree was entered. 1996 S.D. 122, ¶ 10,
554 N.W.2d at 498. This holding appears to run afoul of Howell, in which the
U.S. Supreme Court faced a similar issue and held any order that treats
military disability benefits as marital property “displace[s] the federal rule
and stand[s] as an obstacle to the accomplishment and execution of the
purposes and objectives of Congress.” Id. at 1406.

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of a waiver of military retirement pay as divisible marital property. Id. at 1405.

The Court specifically rejected the former spouse’s argument that she was seeking

indemnification for the loss of the military retirement pay, not an order to divide

marital property, explaining that states cannot avoid federal preemption by relying

on arguments rooted in semantics. Id. at 1406. The Court concluded, “[w]e see

nothing in this circumstance that makes the reimbursement award to [former

spouse] any the less an award of the portion of military retirement pay that

[veteran] waived in order to obtain disability benefits. And that is the portion that

Congress omitted from the Act’s definition of ‘disposable retired pay[.]’” Id. at 1405

(citation omitted).

[¶25.] The circuit court could treat Vernon’s military retirement pay as

marital property under the USFSPA; however, the circuit court could not treat the

military disability benefits Vernon received each month during the parties’ twenty-

three month separation as a marital asset subject to SDCL 25-4-33.1. There is no

dispute that $5,104.58 of the money Vernon received each month during the

separation was military disability benefits Vernon received due to his combat-

related disability. 5 The circuit court’s order mandating Vernon to reimburse Alice

5. The circuit court found that $1,877 of the $5,104.58 monthly disability pay
that Vernon received was combat-related special compensation (CRSC). In
order to be eligible for CRSC, a veteran must be entitled to retirement pay
and have a combat-related disability. 10 U.S.C. § 1413a(c)(1)–(2). CRSC is
not retired pay under federal law. 10 U.S.C. § 1413a(g). Other jurisdictions
considering CRSC pay have held that it cannot be treated as marital property
under the USFSPA. See, e.g., Foster v. Foster, 949 N.W.2d 102, 112 (Mich.
2020), reh’g denied, 945 N.W.2d 842 (Mich. 2020) (“Because CRSC is not
‘retired pay’ under Title 10, it would not be subject to division as a marital
asset under 10 USC 1408(c). Any amounts waived that lead to the receipt of
(continued . . .)
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for the spending of his military disability benefits rested on the circuit court’s

conclusion that Alice was entitled to these benefits as a marital asset under SDCL

25-4-33.1. Federal law precluded the circuit court from treating the $117,405 in

total monthly disability benefits Vernon received during the twenty-three month

separation as a marital asset subject to SDCL 25-4-33.1. See Howell, 137 S. Ct. at

1405 (“[F]ederal law completely pre-empts the States from treating waived military

retirement pay as divisible community property.”). The circuit court “necessarily

abuse[s] its discretion if it base[s] its ruling on an erroneous view of the law[.]”

Corcoran v. McCarthy, 2010 S.D. 7, ¶ 13, 778 N.W.2d 141, 147 (first and second

alterations in original) (citation omitted).

[¶26.] SDCL 25-4-33.1 restrains a party from dissipating marital assets.

“Spouses are certainly ‘entitled to maintain separate property and do with it as they

see fit.’” Field v. Field, 2020 S.D. 51, ¶ 17, 949 N.W.2d 221, 224 (citation omitted).

Based on our determination that Vernon’s military disability benefits cannot be

treated as marital property under federal law, the circuit court’s determination that

Vernon dissipated the disability benefits in violation of SDCL 25-4-33.1 was error.

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(. . . continued)
CRSC would likewise not be divisible in this manner.”); In re Marriage of
Cassinelli, 229 Cal. Rptr. 3d 801, 808 (Cal. Ct. App. 2018) (“Because CRSC is
not retired pay—just as veteran’s disability benefits are not retired pay—
under [USFSPA] as construed in Mansell, a state court does not have
jurisdiction to treat CRSC as community property.”). The parties have not
argued that the CRSC benefits Vernon received each month should be treated
any differently under the USFSPA than military disability benefits.

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b. Application of State law to Vernon’s retirement income.

[¶27.] Vernon also argues under state law that the circuit court abused its

discretion in classifying his monthly military retirement pay and military disability

benefits as marital property because the benefits were earned for Vernon’s military

service that ended prior to the marriage and Alice did not contribute to Vernon’s

receipt of these benefits. Since Vernon’s military disability benefits cannot be

treated as marital assets under federal law, we only consider whether the circuit

court erred in treating his monthly military retirement pay as a marital asset under

SDCL 25-4-33.1. 6

[¶28.] “South Dakota is an all property state, meaning all property of the

divorcing parties is subject to equitable division by the circuit court, regardless of

title or origin.” Osdoba, 2018 S.D. 43, ¶ 18, 913 N.W.2d at 502 (quoting Nickles v.

Nickles, 2015 S.D. 40, ¶ 32, 865 N.W.2d 142, 153); see also SDCL 25-4-44. The

“circuit court must classify property as marital or non-marital” in determining the

equitable division of property. Osdoba, 2018 S.D. 43, ¶ 19, 913 N.W.2d at 502. The

circuit court has broad discretion in classifying property as marital or non-marital.

Id.

[¶29.] We have identified seven factors for the circuit court to consider in

classifying property:

(1) the duration of the marriage; (2) the value of the property
owned by the parties; (3) the ages of the parties; (4) the health of

6. Vernon has not argued that the circuit court erred in treating the social
security payments he received prior to the trial as a marital asset under
SDCL 25-4-33.1. As such, we decline to address the court’s treatment of the
social security benefits.

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the parties; (5) the competency of the parties to earn a living; (6)
the contribution of each party to the accumulation of the
property; and (7) the income-producing capacity of the parties’
assets.

Id. (citation omitted). Additionally, the circuit court must set aside property as non-

marital when “one spouse has made no or de minimis contributions to the

acquisition or maintenance of an item of property and has no need for support[.]”

Id. (citation omitted). This Court reviews the circuit court’s determination “that one

spouse made a de minimis contribution for clear error.” Conti v. Conti, 2021 S.D.

62, ¶ 31, 967 N.W.2d 10, 18.

[¶30.] In classifying Vernon’s retirement income as marital property, the

circuit court found that Alice made non-economic contributions to the accumulation

of the parties’ assets during the marriage and considered some of the relevant

factors for determining whether to exclude property from the marital estate. See

Field, 2020 S.D. 51, ¶ 18, 949 N.W.2d at 225. However, the circuit court failed to

address the extent to which Alice needed Vernon’s military retirement pay for

support. See Id. ¶¶ 28, 30, 949 N.W.2d at 227. On remand, the circuit court should

classify Vernon’s monthly military retirement pay of $481.41 received during the

separation as marital or non-marital by determining whether Alice contributed to

Vernon’s receipt of these funds and whether Alice needed these funds for support. 7

7. The circuit court included both the pre-separation funds in the bank account
and the monthly retirement pay and disability benefits received by Vernon
post-separation as marital property in determining that Vernon improperly
spent $280,000 of marital assets. Vernon does not challenge the circuit
court’s classification of the pre-separation bank account funds as marital
property, under either federal or state law. “We will consider only those
issues that the parties actually briefed.” Daily v. City of Sioux Falls, 2011
(continued . . .)
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2. Dissipation of marital assets.

[¶31.] Vernon argues that in addition to the circuit court’s improper

classification of his military disability benefits and retirement pay as marital

property, the court clearly erred in finding that he spent $280,000 in violation of

SDCL 25-4-33.1. To determine whether a spouse dissipated marital assets, we have

identified that the circuit court should consider “whether the transfers were

improperly made to deplete the marital estate.” Pennock v. Pennock, 356 N.W.2d

913, 915 (S.D. 1984) (explaining that if the spouse made fraudulent transfers, then

the property should have been included in the marital estate); see also Johnson v.

Johnson, 471 N.W.2d 156, 161 (S.D. 1991) (“If the trial court finds, based on the

evidence presented at the original trial, that husband fraudulently dissipated

marital assets, they should be included in the marital estate and charged against

him.”). We have explained, however, that “SDCL 25-4-33.1(1) does not require

evidence of bad faith or a design to deplete the marital estate[.]” Ahrendt v.

Chamberlain, 2018 S.D. 31, ¶ 17, 910 N.W.2d 913, 920 (holding the circuit court

acted within its discretion in finding the transfer of an account by one spouse to her

son for college expenses, without the consent of the other spouse prior to the divorce

trial, to be a violation of SDCL 25-4-33.1(1)).

[¶32.] We agree with Vernon that the circuit court’s finding that he spent

$280,000 in violation of SDCL 25-4-33.1 is clearly erroneous. In fact, the court

________________________
(. . . continued)
S.D. 48, ¶ 10 n.6, 802 N.W.2d 905, 910 n.6. Therefore, we decline to consider
whether the court abused its discretion in classifying the $126,000 that
existed in Vernon’s bank account at the time of the separation as marital
property.

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acknowledged that a portion of the $280,000 spent included “necessities and

replacement of things taken by Alice out of the marital home.” The court did not

attempt to calculate the amount Vernon spent on his own necessary living expenses

during the two-year separation but appears to have estimated the portion of the

$280,000 Vernon improperly spent to be “generally in the amount of $200,000.” The

court also determined Vernon was entitled to a credit from this amount for the

$60,000 he spent on the pickup and boat during the separation, which the court had

already “considered as an asset in Vernon’s column” as part of the property division.

However, in deducting for Vernon’s “necessities” and vehicle purchases, it is unclear

whether the court considered the $43,000 in court ordered interim support that

Vernon paid to Alice, and at least another $10,000 he paid to Alice during the

separation. 8

[¶33.] The court ultimately determined that Vernon should pay Alice

$140,000 as an additional property award to reflect his improper expenditures

during the separation. 9 Based upon the circuit court’s clear error in its findings on

8. In addition to other money Vernon claims to have given to Alice during the
separation, Vernon presented undisputed evidence that Alice withdrew
$4,000 from the account when she left the marital home, that he gave Alice at
least $1,950 for apartment rent and rental deposit, and that he transferred
$5,000 to Alice’s account and testified that Alice used the money to purchase
a vehicle.

9. The circuit court’s findings and conclusions lack clarity whether the $140,000
figure represented one half of the $280,000 that the court found was
improperly spent by Vernon in violation of SDCL 25-4-33.1, or if the figure
was intended to represent the net amount that should be included as part of
the marital estate. If it was the latter, the court failed to make an equitable
division of this asset, and instead awarded the entire amount to Alice. See
Taylor v. Taylor, 2019 S.D. 27, ¶ 16, 928 N.W.2d 458, 465 (discussing the
(continued . . .)
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this award, the court’s error in failing to properly apply federal law to the military

disability pay Vernon received during the separation, and the court’s error in failing

to classify his military retirement pay under state law, we reverse and remand this

award for reconsideration by the circuit court in accordance with this opinion.

3. Permanent Alimony.

[¶34.] “We review decisions on alimony for an abuse of discretion. But we

review questions of law bearing on an alimony award de novo.” Urbaniak, 2011

S.D. 83, ¶ 13, 807 N.W.2d at 624–25 (citation omitted). The circuit court has

discretion to “compel one party to make such suitable allowance to the other party

for support during the life of that other party or for a shorter period, as the court

may deem just, having regard to the circumstances of the parties represented[.]”

SDCL 25-4-41. The party requesting alimony bears the burden of proving “that

they have a need for support and that their spouse has sufficient means and

abilities to provide for part or all of the need.” Kolbach v. Kolbach, 2016 S.D. 30,

¶ 16, 877 N.W.2d 822, 828 (citation omitted).

[¶35.] South Dakota law authorizes permanent alimony, which “is intended

as an allowance for support and maintenance for such things as food, clothing,

habitation and other necessaries.” Lowe v. Schwartz, 2007 S.D. 85, ¶ 12, 738

N.W.2d 63, 67 (emphasis and citation omitted). When determining whether

alimony is warranted, the circuit court considers:

________________________
(. . . continued)
court’s discretion to divide marital property by considering the seven factors
for property division.)

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(1) the length of the marriage; (2) each party’s earning capacity;
(3) their financial conditions after the property division; (4) each
party’s age, health, and physical condition; (5) their station in
life or social standing; and (6) the relative fault in the
termination of the marriage.

Urbaniak, 2011 S.D. 83, ¶ 27, 807 N.W.2d at 628 (quoting Lovejoy v. Lovejoy, 2010

S.D. 39, ¶ 7, 782 N.W.2d 669, 672). “[A] circuit court is required to consider the

allocation of property and spousal support together.” Osdoba, 2018 S.D. 43, ¶ 26,

913 N.W.2d at 504 (citation omitted). “It is ‘[t]he symbiotic relationship between

property division and spousal support [that] requires consideration of the two

together, as an award of more assets can eliminate or reduce the need for spousal

support and vice versa.’” Id. (alterations in original).

[¶36.] Vernon initially argues that the circuit court was prohibited by federal

law from considering his military disability benefits in determining alimony.

Contrary to Vernon’s claim, it is well-established that the circuit court may consider

military disability benefits in determining support. Urbaniak, 2011 S.D. 83, ¶ 20,

807 N.W.2d at 627; see also Howell, 137 S. Ct. at 1406 (explaining that a state court

may consider the reduction in value of military retirement pay from a waiver to

obtain disability benefits in determining spousal support). The circuit court did not

err in considering Vernon’s disability benefits in establishing the amount of

alimony.

[¶37.] Vernon also argues that the circuit court abused its discretion by

failing to consider his financial condition and Alice’s need for support after the

property division award. Alice asserts that the circuit court made sufficient

findings regarding Alice’s need for support and Vernon’s ability to pay when it

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found that Vernon had a monthly income of approximately $7,140 and that

“[a]lthough the court has set out a fair division of the assets above, it is also clear

that Alice’s retirement income is nowhere near what Vernon will have each month

and Alice’s needs will only grow with her age.”

[¶38.] While the court’s findings are sparse concerning the extent of Alice’s

need for support and Vernon’s ability to pay—particularly after the court’s order for

Vernon to pay a significant cash payment as a part of the property division—we

need not determine whether the circuit court’s alimony award was an abuse of

discretion in light of our reversal of the property division award. Under these

circumstances, we vacate the alimony award and remand the issue of alimony for

the court to determine after it reconsiders the property division. See Scherer v.

Scherer, 2015 S.D. 32, ¶ 11, 864 N.W.2d 490, 494 (reversing and remanding the

circuit court’s alimony award when it failed to consider alimony and property

division together). On remand, after dividing the property consistent with this

opinion, the circuit court should consider the parties’ financial condition, including

Alice’s need for support and Vernon’s ability to pay support.

4. Appellate attorney fees.

[¶39.] Both parties moved for appellate attorney fees pursuant to SDCL 15-

26A-87.3 and SDCL 15-30-6 and attached itemized statements of the legal services

rendered. “To determine whether attorney fees are proper in domestic relation

cases, we consider the property owned by each party, the relative incomes, the

liquidity of the assets and whether either party unreasonably increased the time

spent on the case.” Barton v. Barton, 2012 S.D. 44, ¶ 25, 815 N.W.2d 553, 559

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(quoting Larson v. Larson, 2007 S.D. 47, ¶ 22, 733 N.W.2d 272, 278). This Court

“also examine[s] the fee request from the perspective of whether the party’s

appellate arguments carried any merit.” Trumm v. Cleaver, 2013 S.D. 85, ¶ 16, 841

N.W.2d 22, 26 (quoting Roth v. Haag, 2013 S.D. 48, ¶ 21, 834 N.W.2d 337, 342).

Although Vernon’s appeal was meritorious, we decline to award either party

appellate attorney fees, as neither party unreasonably increased the time spent on

this case and Alice has a more limited income than Vernon.

[¶40.] Reversed and remanded.

[¶41.] KERN, SALTER, DEVANEY, and MYREN, Justices, concur.

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