Dunham v. Sabers

#29558, #29582-aff in pt & rev in pt-SRJ
2022 S.D. 65

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

****

CHRISTOPHER ALAN DUNHAM, Plaintiff and Appellant,

v.

SUSAN MICHELLE SABERS, Defendant and Appellee.

****

APPEAL FROM THE CIRCUIT COURT OF
THE FIRST JUDICIAL CIRCUIT
UNION COUNTY, SOUTH DAKOTA
****

THE HONORABLE RODNEY J. STEELE
Retired Judge

****

ELIZABETH A. ROSENBAUM
MEGAN R. DEDONCKER of
Elizabeth A. Rosenbaum, P.C.
Sioux City, Iowa Attorneys for plaintiff
and appellant.

WILLIAM P. FULLER
MOLLY K. BECK of
Fuller, Williamson, Nelsen &
Preheim, LLP
Sioux Falls, South Dakota Attorneys for defendant
and appellee.

****

ARGUED
MAY 25, 2022
OPINION FILED 10/26/22
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JENSEN, Chief Justice

[¶1.] The circuit court granted a divorce to Christopher Dunham and Susan

Sabers on the grounds of irreconcilable differences. The court resolved issues

involving child custody and support, the valuation and division of marital assets,

and attorney fees. Dunham appeals portions of the circuit court’s rulings on each of

these issues. Sabers filed a notice of review appealing the circuit court’s rulings

regarding the grounds for divorce, property division and valuation, and attorney

fees. We affirm in part, reverse in part, and remand.

Facts and Procedural History

[¶2.] Dunham and Sabers began dating in 1997. At the time, Sabers owned

her own home (Belmont House). Dunham moved in with Sabers in 1998. They

were married in 2002, and two children were born during the marriage, Q.S.D.

(DOB 5/31/2003) and Z.S.D. (DOB 4/11/2005). In 2004, Sabers sold the Belmont

House. Dunham and Sabers used the proceeds as a down payment to build a new

home (Marital Home).

[¶3.] Sabers was a partner at the law firm of Woods, Fuller, Shultz & Smith

P.C. (Woods Fuller) at the time of the marriage. Sabers left Woods Fuller in

January 2006 to begin a law practice with William Fuller called Fuller & Sabers

LLP (Fuller & Sabers). Sabers received a buy-out from Woods Fuller and

contributed the funds to buy into Fuller & Sabers and Dakota Law, LLC (Dakota

Law), an entity that owned the building where Fuller & Sabers was located. Sabers

and Dunham each owned a 25% interest in Dakota Law, while Fuller and his

spouse owned the other 50% interest. Sabers left Fuller & Sabers in 2013 when she

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was appointed as a circuit court judge in the South Dakota Second Judicial Circuit.

She received buy-outs from Fuller & Sabers of $86,670 and Dakota Law of

$216,410.22. Sabers continues to serve as a judge in the Second Circuit.

[¶4.] Dunham was working in residential real estate sales with his mother,

Karen Dunham, when the parties were married. Later, Dunham was involved in

real estate development and other business operations with his father, Donald

Dunham Jr. In 2012, Dunham began working at the Dunham Company, a real

estate development and management company owned by Donald.

[¶5.] During the parties’ marriage, Dunham acknowledged that Sabers “was

the breadwinner of the family.” There was also testimony that Dunham had some

business setbacks during the marriage and that he and Sabers received some

financial assistance from Donald. Dunham claimed he contributed to the marriage

by supporting Sabers in her career, staying home with the children, and helping

plan and construct the Dakota Law building. Sabers disputed Dunham’s assertions

and testified that she did most of the caretaking and housework and that nannies

had helped care for the children until at least 2009. Sabers also claimed that

Dunham made no financial contribution to Fuller & Sabers or Dakota Law and that

all the equity in the building represented contributions from her buy-outs from

Woods Fuller and Fuller & Sabers. Sabers also claimed that she supported

Dunham professionally by helping Dunham with the design and sale of homes built

by Dunham’s company, Milestone Consulting and Construction Services

(Milestone), and by providing legal services for Dunham’s business ventures.

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[¶6.] Donald passed away in January 2013, and Dunham was named the

personal representative in the probate of Donald’s will (Estate). Donald had also

created the Living Trust of Donald Dunham Jr. (Trust) in 2006. Donald’s will

provided that the assets he owned at the time of his death would pour into the

Trust so that all of Donald’s assets would be owned by the Trust. Dunham is the

primary discretionary beneficiary of the Trust. After Donald’s death in 2013,

Dunham received approximately $322,000 in life insurance proceeds outside the

Estate.

[¶7.] Dunham began discussions to purchase the Dunham Company in the

spring of 2013 but did not inform Sabers until September 2013. This disclosure

caused major problems in their relationship and ultimately led to their separation.

Sabers was concerned about the financial risk this purchase may have had on the

parties’ finances. Upon her request, Dunham transferred the title to the Marital

Home, vehicles, and joint bank account to Sabers to protect the assets from business

debt taken on by Dunham. Dunham bought 100% of the Dunham Company for $1.5

million in the fall of 2013.

[¶8.] Dunham left the Marital Home in September 2013 and moved in with

his mother Karen. Dunham moved into a townhome owned by Milestone in 2016.

Sabers paid the mortgage and interest payments on the Marital Home during the

marriage and following the separation.

[¶9.] In July 2016, Dunham filed a complaint for a divorce from Sabers on

the grounds of irreconcilable differences and extreme cruelty and sought shared

legal and physical custody of the children and child support. Sabers answered the

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complaint and counterclaimed seeking a divorce on the grounds of irreconcilable

differences and extreme cruelty. She requested sole legal and physical custody of

the children, child support, alimony, and attorney fees. Dunham subsequently

amended his complaint to include a request for alimony and attorney fees. He later

abandoned his alimony claim.

[¶10.] Sabers retained physical custody of the children since the separation.

In July 2016, the court entered a parenting time order that provided Dunham time

with the children every Wednesday evening and rotating Saturdays and Sundays

every other week. In January 2018, the court ordered supervised parenting time for

Dunham following a hearing where Sabers presented evidence of several physical

altercations between Dunham and Q.S.D. 1 Dunham claimed the incidents were

disciplinary responses to Q.S.D.’s behaviors. Subsequently, Dunham filed a motion

seeking an order for the children to attend counseling and an order for a custody

evaluation. The court denied Dunham’s request for counseling. However, the court

ordered Dr. Stephan Langenfeld, a licensed psychologist in Sioux Falls, to interview

and assess both Q.S.D. and Z.S.D. Following the assessment, Dr. Langenfeld

opined that neither child needed counseling and that Q.S.D. should not be ordered

to have parenting time with Dunham. The court denied three subsequent motions

by Dunham seeking counseling with the children.

1. Sabers claimed that the most recent altercation occurred on December 2,
2017. Sabers testified that Q.S.D. told her that Dunham punched him in the
face and pushed him to the ground. Sabers submitted photos of Q.S.D.
showing injuries to his face and arms.

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[¶11.] In March 2018, the court ordered a custody evaluation to be conducted

by Dr. Judy Zimbelman. Dr. Zimbelman opined that Sabers had contributed to

Dunham’s strained relationship with the children, but that Dunham’s physical

abuse was the primary cause of the estrangement. Dr. Zimbelman recommended

that Dunham initially attend counseling, before including the children, and that

Sabers should have sole physical custody with parenting time for Dunham

consistent with the order already in place.

[¶12.] Dunham was initially ordered to pay child support in 2018.

Previously, Dunham had voluntarily paid for a portion of the children’s parochial

school tuition expenses for the 2014–2015 school year but had not provided any

other child support to Sabers since their separation in 2013. Q.S.D. and Z.S.D. were

in high school at the time of the divorce trial, and both had attended parochial

school since they began their schooling.

[¶13.] Throughout the proceedings, Dunham refused to produce information

related to the Estate and the Trust. Sabers filed three motions to compel in the

divorce action in May 2019, October 2019, and May 2020. Sabers also filed five

motions for continuance of the trial because of Dunham’s refusal to produce

discovery. The court granted four of the five motions for continuance.

[¶14.] A five-day divorce trial was held in August 2020. Each party called a

financial expert and presented evidence concerning the valuation of various

business interests owned by Dunham and Sabers. At the time of the trial, the court

found Dunham, individually, had a 100% ownership interest in the Dunham

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Company, a 50% interest in American Land Development Company (ALDC), 2 and a

100% interest in Milestone. 3 The evidence was undisputed that in 2014 Dunham

invested $141,000 into ALDC and $82,000 into Milestone from the life insurance

proceeds that he received after Donald’s death. Additionally, Sabers and Dunham

each owned 50% of QAZ, LLC (QAZ), a holding company formed for estate planning

purposes in 2008. QAZ owned 20% of Dunham Partnership, a real estate

development entity, and 10% of Dunham Equity Management, the latter of which

both experts agreed had no value.

[¶15.] Donald’s Estate remained open at the time of trial. Prior to trial, the

Estate acquired the 20% interests in Dunham Equity Management and Dunham

Partnership that Dunham’s two half-brothers each owned. Dunham bought their

separate interests in 2016 and then transferred those interests to the Estate in

2017. Dunham explained that the Estate did not have the funds to acquire these

interests, and therefore he served as the conduit for the purchases. The Estate also

purchased a 92% interest in Tatar Quincey, another real estate holding company,

for $1.8 million in 2018. Dunham testified that the Estate obtained a loan for $1.4

million to finance the purchase.

2. ALDC is a holding company that was started by Dunham and Karen in 2014
and owns an 8% interest in Tatar Quincey, LLC (Tatar Quincey), an office
building where the Dunham Company is located, a storage facility, and a
95.24% interest in Hospitality Apartments and Bar.

3. Dunham’s tax returns and other legal documents presented at trial showed
Dunham owned a 100% interest in Milestone. The court rejected testimony
from Dunham and Karen that they each owned a 50% interest in Milestone
as a “constructive partnership.” The only remaining asset in Milestone at the
time of trial was the townhome in which Dunham resides.

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[¶16.] The circuit court granted the parties a divorce on the grounds of

irreconcilable differences, finding that the parties had difficulties in their

relationship for years, stemming from their different personalities. The court

awarded the parties joint legal custody, awarded Sabers sole physical custody, and

gave Dunham unsupervised visitation privileges. However, the court permitted the

children to choose the time, location, and length of these visits.

[¶17.] The court also ordered Dunham to pay ongoing monthly child support

to Sabers in the amount of $1,119, along with back child support from 2013, interest

on the child support, and unreimbursed medical expenses in the total amount of

$119,729. In calculating child support, the court included all of Dunham’s Schedule

E income from his federal tax returns. The court also entered findings for an

upward deviation to the statutory child support guidelines and ordered Dunham to

reimburse Sabers for half of the children’s past parochial school tuition expenses in

the amount of $26,905 and half of the children’s future parochial school tuition

expenses on a monthly basis. The court declined Dunham’s request for a credit

against child support for the buy-out funds from Dakota Law and Fuller & Sabers

that Sabers used to support herself and the children during the separation. The

court also denied Dunham’s requested credit of $217,115 for in-kind contributions

he claimed to have made for the children’s benefit before a child support order was

entered in 2018. The court ordered the parties to exchange future tax returns, to

calculate child support until Z.S.D. graduated or reached the age of majority.

[¶18.] The circuit court also classified, valued, and divided the marital

property, with Dunham receiving $1,199,979 in marital assets and Sabers receiving

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$674,159 in marital assets. The court equalized the property division to a 50/50

split of marital property by ordering Dunham to pay Sabers a cash equalization

payment of $262,905.

[¶19.] Relevant to this appeal, the court awarded Sabers the Marital Home

with a value of $675,000, less a non-marital offset of $78,804 for the down-payment

Sabers contributed from the sale of the Belmont House and personal bank accounts.

The court also awarded Sabers the South Dakota Retirement System (SDRS)

account, valued at $163,088 with a non-marital offset of $149,308, reflecting

contributions made to the account after the separation; the Supplemental

Retirement account for $4,171 with a non-marital offset of $3,966; and a Wells

Fargo checking account at zero dollars. The court did not include the Fuller &

Sabers and Dakota Law buy-out funds, which Sabers controlled and spent during

the separation, as marital property.

[¶20.] The court valued and awarded to Dunham the following property: 2001

Ford F-150 for $2,025; 1969 Firebird for $18,000; the Dunham Company for

$171,000; QAZ’s 20% ownership of the Dunham Partnership at $260,000; QAZ’s

interest in Dunham Equity Management at zero dollars; 50% interest in ALDC for

$330,000; and 100% interest in Milestone at $105,000. The court excluded as non-

marital property the Estate’s interests in Tatar Quincey, Dunham Equity

Management, and Dunham Partnership.

[¶21.] The circuit court denied Dunham’s requested non-marital offset for the

life insurance proceeds from his father that he invested in ALDC and Milestone in

the amounts of $141,000 and $82,000, respectively. The court also denied

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Dunham’s request for a credit of $40,907 for rent he claimed he owed to Milestone.

The court also excluded the Yukon from the marital estate.

[¶22.] Dunham raises thirteen issues on appeal, and Sabers cross-appeals

four issues. 4 We restate Dunham’s issues as follows:

1. Whether the circuit court abused its discretion in its
visitation order.

2. Whether the circuit court abused its discretion by
including income from various entities owned by Dunham
to determine child support, in denying Dunham’s claimed
credits against his child support, and in ordering an
upward deviation to Dunham’s child support obligation
for parochial school tuition.

3. Whether the circuit court abused its discretion in
classifying certain property as marital or non-marital.

4. Whether the circuit court erred in its valuations of certain
marital property.

5. Whether the circuit court erred in considering Dunham’s
interest in the Trust when determining his financial
condition.

6. Whether the circuit court abused its discretion in
awarding Sabers $50,000 in attorney fees.

7. Whether the circuit court abused its discretion by
mandating the parties to exchange tax returns every year
until the expiration of the child support order.

4. Dunham’s briefs and statements at oral argument are interspersed with
suggestions that he was treated unfairly, while Sabers was given favorable
treatment by the circuit court because of her position as a judicial officer.
Dunham’s claims of judicial bias are wholly unsupported by the record and
unbefitting of the professionalism this Court expects of appellate counsel. To
the contrary, our review of the record reveals that the circuit court was
patient and treated both parties fairly and respectfully throughout more than
four years of contentious litigation.

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Sabers raises the following issues by notice of review:

1. Whether the circuit court abused its discretion in its
classification of certain business entities as non-marital
property.

2. Whether the circuit court abused its discretion in its
equitable division of the marital property.

3. Whether the circuit court abused its discretion in failing
to grant Sabers a divorce on the grounds of extreme
cruelty.

4. Whether the circuit court abused its discretion in
awarding Sabers $50,000 in attorney fees.

Analysis

1. Child custody orders.

[¶23.] “The trial court has broad discretion in awarding custody of minor

children and likewise visitation rights; therefore, the trial court’s decision can only

be reversed upon a clear showing of an abuse of that discretion.” Pieper v. Pieper,

2013 S.D. 98, ¶ 11, 841 N.W.2d 781, 785 (citation omitted). Likewise, “[t]rial courts

possess broad discretion in deciding the best interests of a child[.]” Fuerstenberg v.

Fuerstenberg, 1999 S.D. 35, ¶ 22, 591 N.W.2d 798, 807. “An abuse of discretion is ‘a

discretion exercised to an end or purpose not justified by, and clearly against,

reason and evidence.’” Pieper, 2013 S.D. 98, ¶ 11, 841 N.W.2d at 785 (citation

omitted).

[¶24.] This Court has recognized that “[i]n most instances, ‘it will be in the

best interests of children that they receive the love, affection, training, and

companionship of their noncustodial parent.’” Id. ¶ 15, 841 N.W.2d at 786 (citation

omitted). However, “where the evidence establishes that exercise of visitation will

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be harmful to the welfare of the children[,] . . . the right of the noncustodial parent

to visit with [the] children can be limited . . . .” Id. (citation omitted).

[¶25.] The circuit court denied several pretrial motions by Dunham to require

counseling with the children to address their animosity toward him. In the final

order, the court granted Dunham visitation privileges with Z.S.D., but permitted

Z.S.D. to choose the time, location, and length of the visits. Dunham argues that

the circuit court abused its discretion by not ordering counseling and in permitting

Q.S.D. and Z.S.D. to decide the parameters for visitation with Dunham. 5

[¶26.] Both experts retained to address the custody issues opined that the

children should not be forced to attend visitation with Dunham, and neither expert

recommended mandatory counseling for the children. Further, the circuit court

interviewed both children about their preferences for visitation. Z.S.D., who was 15

years old at the time of the trial, expressed a preference for a flexible schedule to

visit his father. The court may consider the child’s preference “[i]f the child is of a

sufficient age to form an intelligent preference[.]” Fuerstenberg, 1999 S.D. 35, ¶ 30,

591 N.W.2d at 809 (quoting SDCL 25-4-45). “[I]t is especially important to give

attention to the needs and wishes of children either approaching or in adolescence.”

Id. In view of all the evidence, the circuit court acted within its discretion by not

mandating counseling and in allowing Z.S.D. to choose his visitation with Dunham.

5. Custody and visitation orders involving Q.S.D. are now moot as Q.S.D. has
reached the age of majority.

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2. Calculation of child support.

[¶27.] This Court will not disturb an award of child support “unless the trial

court clearly abused its discretion.” Roberts v. Roberts, 2003 S.D. 75, ¶ 8, 666

N.W.2d 477, 480 (citation omitted). We review findings of fact “under the clearly

erroneous standard. This Court must be left with a definite and firm conviction

that a mistake has been made to overturn a circuit court’s findings.” Id. (citation

omitted). “Questions of law are reviewed de novo.” Id. (citation omitted).

a. Inclusion of Dunham’s Schedule E income in the
calculation for past and current child support.

[¶28.] Dunham argues that the circuit court erred by including the Schedule

E income shown on his federal income tax returns to calculate child support. 6 He

asserts that he did not receive most of the Schedule E income shown on the returns

and did not have control over the distribution of income from these entities.

[¶29.] “The duty to provide for one’s children is a parent’s first duty.”

Sazama v. State ex rel. Muilenberg, 2007 S.D. 17, ¶ 20, 729 N.W.2d 335, 343 (citing

Taecker v. Taecker, 527 N.W.295, 298 (S.D. 1995); SDCL 25-7-6.1). A parent’s

obligation to provide child support “must be in accordance with the means of the

6. “Income from rents, royalties, partnerships, S corporations, estates, and
trusts. Schedule E of Form 1040 is used to report supplemental income and
loss on the U.S. individual income tax return.” Miscellaneous Income, West’s
Tax Law Dictionary § M1320. “Quite often, the income reported on Schedule
E . . . is the distributive share of a larger investment in which the taxpayer
owns an interest. Regardless of whether the interest is a minority or
controlling interest, the distributive share reported on Schedule E may not in
fact have been distributed. It may only be a paper allocation of the investor’s
share without the actual cash distribution.” R. Victor Haas, Jr., Valuation
Strategies in Divorce § 2.32 Supplemental Income and Loss (Form 1040,
Schedule E) (5th ed. 2021).

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parent.” Roberts, 2003 S.D. 75, ¶ 11, 666 N.W.2d at 480; see SDCL 25-7-6.1. “The

‘means’ of a parent include [the] income, if that income is sufficient to meet the

child’s needs, or [the] income and assets if income alone is not sufficient.” Roberts,

2003 S.D. 75, ¶ 11, 666 N.W.2d at 480; see SDCL 25-7-6.5. A parent’s income “must

be received from those sources identified by SDCL 25-7-6.3[]” before it is included in

the parent’s monthly gross income. Roberts, 2003 S.D. 75, ¶ 17, 666 N.W.2d at 482

(emphasis added). “A parent ‘receives’ income when the allotted amount could be

used by the parent to ‘support himself/herself and, thus, [the] child.’” Nace v. Nace,

2008 S.D. 74, ¶ 7, 754 N.W.2d 820, 823 (quoting Roberts, 2003 S.D. 75, ¶¶ 14–15,

666 N.W.2d at 482). “[W]hen a parent can control whether or not a corporation

distributes income to that parent, some or all of corporation’s retained earnings can

be counted in the parent’s gross income.” Roberts, 2003 S.D. 75, ¶ 21, 666 N.W.2d

at 483. “A shareholder may be considered to have control over and to have received

retained company income if the shareholder has the ability to direct distributions.”

Nace, 2008 S.D. 74, ¶ 8, 754 N.W.2d at 823. A parent’s control over the

distributions “is a fact specific inquiry.” Id.

[¶30.] To determine whether a person has control over a company’s

distributions, the court may consider:

(1) comparison of the amount of retained income versus the
parent/obligor’s gross income and percent of ownership; (2) a
history or pattern of past retained income; (3) the company’s
need to retain income to “maintain or increase past or current
levels of income production as opposed to unnecessary,
premature, unrelated or overly aggressive expansion of
business[]”; (4) whether the retained income is acquired from the
current year’s profits or out of past year(s)’ savings; (5)
comparison of the ordinary rate of return for a similar
investment; (6) the ability to receive favorable or fictitious loans

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(constructive distributions) from the company; and (7) “any
other factor that bears on the issue of whether the obligor is
manipulating his or her income in an effort to avoid the proper
payment of child support.”

Id. ¶ 9, 754 N.W.2d at 823 (internal citations omitted).

[¶31.] In finding that Dunham had control of the income on Schedule E of his

return, the circuit court examined the factors from Nace and found that all of the

business decisions for the Dunham Company, ALDC, Tatar Quincey, Milestone, and

Hospitality Apartments and Bar “are either wholly or de facto controlled by

[Dunham].” The record supports the court’s determination that Dunham had the

ability to control the income from the various business entities as well as the

Estate. While Karen had an interest in some of the entities at issue, Dunham is

Karen’s only child, and the court found that they have a close relationship. On this

record, the circuit court did not abuse its discretion by including Dunham’s

Schedule E income to calculate child support.

b. Denial of Dunham’s claimed child support credits.

[¶32.] Dunham argues that the Dakota Law and Fuller & Sabers buy-out

funds were marital property and that he should have been given a credit against his

child support obligation for Sabers’s use of these funds to pay for the children’s

school tuition and living expenses while the divorce was pending. Dunham also

asserts that he should have received credit for the food and entertainment expenses

he incurred for the children during his parenting time.

[¶33.] A court may provide a noncustodial parent with a child support credit

for any direct payments made for the benefit of a child prior to the entry of a child

support order. See State, ex rel., Tegegne v. Andalo, 2015 S.D. 57, ¶ 20, 866 N.W.2d

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550, 556 (holding that a child support referee did not commit clear error in giving

credit to the noncustodial father who presented evidence that he made mortgage

payments for the home where the children lived and purchased food for them prior

to the entry of a child support order). In upholding the credit in Tegegne, this Court

stated “there is nothing in SDCL 25-7-6.1 or our cases suggesting that, when there

is no order specifying the manner of making support, an obligor’s support may only

be made by cash payments to the obligee.” Id. ¶ 14, 866 N.W.2d at 554–55.

[¶34.] The credit in Tegegne was limited to actual payments made by the

noncustodial parent for expenses relating to the children. Id. ¶ 15, 866 N.W.2d at

555. Dunham does not cite any authority from South Dakota to support his claim

that a noncustodial parent is entitled to credit against child support for the

custodial parent’s use of marital funds to pay expenses for the children. Rather, to

the extent one spouse used marital funds during the separation for child support or

other purposes, the issue should be addressed in the division of property, not as a

credit against child support. As the circuit court correctly determined in its

memorandum decision, child support is generally calculated from the current

income. The circuit court’s reasoning is consistent with our statutory scheme of

calculating child support obligations based upon current income, not assets owned.

See SDCL 25-7-6.2 and SDCL 25-7-6.3. On this record, we find no abuse of

discretion by the circuit court in denying a child support credit to Dunham for

alleged marital funds expended by Sabers to care for the children.

[¶35.] Dunham also seeks credit for expenditures he claims to have made

from December 2012 through November 2018 when there was no child support

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order in place. With respect to these expenditures, the circuit court found that

Dunham did not satisfy his evidentiary burden to support his requested credit for

in-kind support contributions. See Tegegne, 2015 S.D. 57, ¶ 20, 866 N.W.2d at 556

(finding sufficient evidence to support an award for in-kind contributions when the

father presented receipts for food purchases). Dunham’s evidence consisted of a

ledger he prepared containing general descriptions of purchases, but the ledger did

not include receipts. Many of the expenditures were for discretionary expenses,

such as entertainment, hotels, and eating out. Further, there was evidence that

some of the expenditures were not directly for the children’s benefit and that some

were prior to the separation. “[A]s we have often noted, ‘the fact finder . . . ha[s] the

advantage of hearing testimony of witnesses and [can] directly judge their

credibility.’” Id. ¶ 19, 866 N.W.2d at 556 (alterations in original) (quoting Orth v.

Stoebner & Permann Constr., Inc., 2006 S.D. 99, ¶ 77, 724 N.W.2d 586, 602).

Dunham has failed to show a clear error in the circuit court’s findings, and we find

no abuse of discretion in the circuit court’s rejection of the in-kind expenditures for

which Dunham sought credit.

c. Reimbursement for parochial tuition expenses.

[¶36.] Dunham argues that the circuit court abused its discretion in deviating

from the child support schedule under SDCL 25-7-6.2 by ordering him to pay half of

the children’s future parochial school tuition costs and reimburse Sabers for the

past tuition to which he did not contribute. He relies on Roseth v. Roseth, 2013 S.D.

27, ¶ 16, 829 N.W.2d 136, 143, to argue that because the parties did not have a

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formal written agreement binding him to pay tuition expenses, he is not obligated to

provide for the additional costs incurred for the tuition expenses.

[¶37.] Under SDCL 25-7-6.1, parents are jointly liable for the necessary

education expenses of their children. The court may deviate from the child support

schedule in SDCL 25-7-6.2 “upon the entry of specific findings” for “[a]ny necessary

education . . . of the child[.]” SDCL 25-7-6.10. Contrary to Dunham’s assertion,

SDCL 25-7-6.1 and SDCL 25-7-6.10 do not require the parents to enter into a formal

written agreement for the court to order child support for necessary education

expenses. Further, the Legislature has not defined the types of expenses that are

“necessary” education expenses. Rather, SDCL 25-7-6.10(3) provides that “[a]ny

necessary education or . . . needs of the child” may support an upward deviation in

child support. Thus, the circuit court has discretion, considering the circumstances

of each case, to determine whether an upward deviation from the child support

schedule is appropriate for education expenses the court finds to be necessary.

[¶38.] The evidence is undisputed that the children attended parochial

schools since elementary school. Both parents had the means to pay school tuition

and had been fully supportive of the children’s parochial schooling since the start.

Further, Dunham agreed to keep the children in parochial school after the

separation and paid tuition for the 2014–2015 school year. The circuit court made

specific findings as required by SDCL 25-7-6.10 to support its upward deviation

from the child support schedule and did not abuse its discretion in determining the

children’s parochial school tuition was a necessary education expense.

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3. Classification and division of the marital property.

[¶39.] “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 v. Kelley-Osdoba, 2018 S.D. 43, ¶ 18, 913 N.W.2d 496, 502

(quoting Nickles v. Nickles, 2015 S.D. 40, ¶ 32, 865 N.W.2d 142, 153). “Before

dividing property, the court must classify it as marital or nonmarital.” Ahrendt v.

Chamberlain, 2018 S.D. 31, ¶ 8, 910 N.W.2d 913, 918. “[T]he principal rule for

analyzing a discrete claim of separate property provides that ‘[o]nly where 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, should a court set it aside as

“non-marital” property.’” Field v. Field, 2020 S.D. 51, ¶ 18, 949 N.W.2d 221, 225

(citation omitted). “The court has broad discretion in classifying property as marital

or nonmarital.” Ahrendt, 2018 S.D. 31, ¶ 10, 910 N.W.2d at 918.

[¶40.] In “divid[ing] property in divorce proceedings, ‘there is no rigid formula

that must be followed, nor any fixed percentage to which either party is entitled.’”

Osdoba, 2018 S.D. 43, ¶ 19, 913 N.W.2d at 502 (citation omitted). “[T]he law does

not require perfection that would approach mathematical certainty.” Id. ¶ 18, 913

N.W.2d at 502 (citation omitted). The court should consider the following factors

when classifying and dividing 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
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.

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Ahrendt, 2018 S.D. 31, ¶ 10, 910 N.W.2d at 918 (quoting Terca v. Terca, 2008 S.D.

99, ¶ 20, 757 N.W.2d 319, 325).

[¶41.] Dunham and Sabers both challenge the circuit court’s classification

and division of marital property on appeal. Dunham objects to the circuit court’s

classification of certain personal property including the 2001 Ford F-150, 1969

Firebird, and 2008 Yukon. He also claims that the Dakota Law and Fuller &

Sabers buy-out funds spent by Sabers during the separation should have been

treated as marital property for which he should have received a credit in the

property division. Dunham also argues the life insurance proceeds, from his father,

that he invested into ALDC and Milestone after the separation should have been

treated as non-marital property. Sabers asserts that the circuit court abused its

discretion in dividing the property 50/50 because she made a greater economic

contribution to the accumulation of the parties’ assets. She also argues that the

circuit court abused its discretion in classifying interests held by the Estate in Tatar

Quincey, Dunham Equity Management, and Dunham Partnership as non-marital

property.

a. Ford F-150, 1969 Firebird, and 2008 Yukon.

[¶42.] Dunham argues that the Ford F-150 and the Firebird were gifts to him

from Donald and that Sabers made no contribution to the acquisition and

maintenance of the vehicles. “[G]ifted or inherited property is not automatically

deemed separate and ‘ipso facto excluded from consideration in the overall division

of property.’” Field, 2020 S.D. 51, ¶ 17, 949 N.W.2d at 224–25 (quoting Anderson v.

Anderson, 2015 S.D. 28, ¶ 7, 864 N.W.2d 10, 14). To determine “whether to include

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the inherited or gifted property, a circuit court may consider ‘other evidence . . .

including the origin and treatment of . . . property and the direct or indirect

contributions of each party to the accumulation and maintenance of the property.’”

Id. ¶ 17, 949 N.W.2d at 225 (quoting Halbersma v. Halbersma, 2009 S.D. 98, ¶ 12,

775 N.W.2d 210, 215). The record supports the circuit court’s inclusion of the Ford

F-150 and Firebird in the marital estate. The Ford F-150 and Firebird were gifted

during the marriage by transferring the titles to Dunham, but Sabers testified,

without dispute, that she paid for registration, insurance, and maintenance on both

vehicles. As to the Yukon, the record shows that Q.S.D. has driven it for several

years and the parties have treated it as his vehicle. The circuit court did not abuse

its discretion in its classification of the vehicles.

b. Non-marital property credits.

[¶43.] Dunham asserts that the circuit court abused its discretion by

applying different standards to award Sabers an offset for her Belmont House and

SDRS retirement accounts while denying Dunham a similar offset for the life

insurance proceeds that he used to invest into Milestone and ALDC after the

separation. In Dunham’s view, the court should have treated these post-separation

investments as separate property and granted him an offset for the use of these

proceeds because Sabers made no contribution to the acquisition of the life

insurance proceeds or the use of those proceeds post-separation. 7 Dunham argues

7. Dunham argues that the circuit court also abused its discretion in not giving
him an offset for his “gifted” 20% interest in Dunham Partnership because he
received the interest from his father in 1989. However, the 20% interest of
(continued . . .)
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that there is no meaningful distinction between the credit the court gave Sabers for

post-separation retirement contributions the court found Dunham made no

contribution to, and the post-separation contributions he made from the life

insurance proceeds that Sabers made no contribution toward.

[¶44.] Sabers contends that the court properly deemed the post-separation

portion of her retirement accounts non-marital because Dunham did not contribute

to the retirement funds. She also asserts that the circuit court properly granted her

an offset in the valuation of the Marital Home because she owned the Belmont

House before the parties began dating. Sabers also argues that the circuit court did

not abuse its discretion in treating the life insurance proceeds as marital property

because she had a need for support and she contributed to Dunham’s business

ventures by paying the family living expenses and caring for the children, which

allowed Dunham to pursue business opportunities.

[¶45.] We find no clear error in the court’s findings that Dunham made less

than de minimis contributions to the Belmont House and Sabers’s contributions to

her retirement accounts. See Conti v. Conti, 2021 S.D. 62, ¶ 31, 967 N.W.2d 10, 18

(“[W]e review a circuit court’s finding that one spouse made a de minimis

contribution for clear error.”). Sabers owned the Belmont House prior to the

marriage, made all the mortgage payments and other expenses for the home, owned

a premarital bank account, and applied those proceeds as a down payment on the

________________________
(. . . continued)
Dunham Partnership was held by QAZ since at least 2008 and Dunham
presented evidence that QAZ was marital property.

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Marital Home. 8 Similarly, the post-separation contributions Sabers made to the

retirement accounts were also properly excluded. Dunham makes no claim that

either asset was necessary for his support, and the court acted within its discretion

to exclude these items from the marital estate.

[¶46.] We also find no abuse of discretion in the circuit court’s treatment of

the life insurance proceeds from Dunham’s father as marital property. Life

insurance proceeds and inherited property may be considered marital property. See

Taylor v. Taylor, 2019 S.D. 27, ¶ 26, 928 N.W.2d 458, 468. “In evaluating the seven

principal factors listed above, a circuit court may consider other evidence to

determine whether inherited or gifted property should be excluded from the marital

estate, including the origin and treatment of inherited or gifted property and the

direct or indirect contributions of each party to the accumulation and maintenance

of the property.” Halbersma, 2009 S.D. 98, ¶ 12, 775 N.W.2d at 215. See Terca,

2008 S.D. 99, ¶ 23, 757 N.W.2d at 325 (finding the fact that inherited property was

received nine years into an eighteen-year marriage supported its inclusion in the

marital estate where spouse made indirect contributions during the nine years).

Further, property should only be excluded 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[.]” Field, 2020 S.D. 51, ¶ 18, 949 N.W.2d at

225 (citing Novak, 2006 S.D. 34, ¶ 5, 713 N.W.2d at 552–53).

8. Although Dunham testified that he made non-economic contributions to the
household during the first two years of the marriage, before the Belmont
House was sold, Sabers disputed this testimony and such factual
determinations are for the circuit court, not this Court, on appeal.

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[¶47.] Dunham does not dispute that he received the life insurance proceeds

before the parties separated in 2013. In evaluating Dunham’s requested offset for

the life insurance proceeds, the circuit court found that Sabers contributed

substantially to the accumulation of marital property, and that this support by

Sabers contributed indirectly to Dunham’s ability to invest the life insurance

proceeds in ALDC and Milestone after the separation. The circuit court found this

contribution was more than de minimis, despite the close proximity in time between

the receipt of the life insurance proceeds and the separation. In Terca, we affirmed

the circuit court’s classification of inherited property of one spouse as marital

property when the evidence showed that the other spouse had made indirect

contributions as a “housewife and mother” to the maintenance of property. Id.

¶¶ 13, 25, 757 N.W.2d at 323, 326. “An indirect contribution can occur when one

spouse’s work efforts allows [sic] the other spouse to maintain inherited property

separately and avoid commingling assets that otherwise would be required for the

support and maintenance of the family.” Id. ¶ 25.

[¶48.] Dunham acknowledged that Sabers was the breadwinner of the family,

and the record shows that Sabers provided most of the family’s income during the

marriage. Sabers paid the parties’ living expenses and mortgage on the Marital

Home and contributed as both a housewife and mother in caring for the children.

These contributions by Sabers permitted Dunham to maintain the life insurance

proceeds separately, albeit for a short period of time, and avoid comingling the

funds to support the family. Additionally, for most of the eight-year separation,

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Sabers continued to exclusively provide for the living expenses for herself and the

children, while Dunham provided little financial support.

[¶49.] In applying the abuse of discretion standard for classifying and

dividing marital property, “we do not inquire whether we would have made the

same decision. Instead, we decide only whether the circuit court could reasonably

reach the conclusion it did in view of the applicable law and the circumstances of

the case.” Maxner v. Maxner, 2007 S.D. 30, ¶ 12, 730 N.W.2d 619, 622. Having

concluded there was no clear error in the circuit court’s findings that Sabers made

more than de minimis indirect contributions to the life insurance proceeds, it was

within the circuit court’s discretion to deny the offset for them.

[¶50.] Dunham also claims that the circuit court abused its discretion in not

including the Dakota Law and Fuller & Sabers buy-out funds in the property

division. The circuit court placed no value on either of the Dakota Law or Fuller &

Sabers buy-out funds and excluded them from the property division after finding

the funds were not in existence at the time of trial and were spent in good faith on

living expenses for Sabers and the children.

[¶51.] While the finding that Sabers used the buy-out funds in good faith, on

living expenses, may support a conclusion that she did not violate SDCL 25-4-33.1,

it does not resolve the question of whether the buy-out funds were marital property.

In particular, the circuit court failed to consider whether Dunham made any

contribution to the accumulation of the buy-out funds. Further, the circuit court

failed to apply the factors for determining whether property should be treated as

marital. See Ahrendt, 2018 S.D. 31, ¶ 10, 910 N.W.2d at 918.

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[¶52.] While Sabers made significant contributions toward the accumulation

of these funds, there was evidence that Dunham contributed to the design and

development of the Dakota Law building. Dunham was a 25% owner of Dakota Law

until it was sold. Dunham also testified that he supported Sabers in her legal

career and in her efforts to seek a judicial position. “[O]nly where 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[ ] should a court set it aside as [nonmarital]

property.” Conti, 2021 S.D. 62, ¶ 31, 967 N.W.2d at 18 (alterations in original)

(quoting Ahrendt, 2018 S.D. 31, ¶ 10, 910 N.W.2d at 918). Dunham made no claim

that he needed these funds for support but he claimed that he made more than a de

minimis contribution to the buy-out funds.

[¶53.] Sabers relies on Anderson to argue that because the buy-out funds

were not in existence at the time of the trial, the circuit court did not abuse its

discretion by not including the funds in the marital estate. Anderson, 2015 S.D. 28,

¶ 12, 864 N.W.2d at 16. However, Anderson is inapposite. In Anderson, the wife

took funds out of the parties’ bank account upon separation, and the husband had

exclusive use of the parties’ farm and marital household during the separation. Id.

The circuit “court found that ‘[b]oth parties used marital assets throughout their

period of separation[,]’” and declined to include bank account funds in the marital

estate. Id. Here, the court made no findings that Dunham used any marital

property during the separation. Rather, Sabers and the children lived in the

Marital Home and Dunham transferred title to the Marital Home, the parties’

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#29558, #29582

vehicles, and the joint savings account to Sabers in 2013 when the parties

separated.

[¶54.] Because the circuit court’s findings were insufficient to support its

conclusion that the buy-out funds should be excluded from the marital estate, the

court abused its discretion in setting aside the property as non-marital. On

remand, we direct the circuit court to apply the appropriate factors identified above

and enter findings specifically addressing whether the Dakota Law and Fuller &

Sabers buy-out funds should be classified as marital or non-marital property.

c. 50/50 Marital Property Division.

[¶55.] By notice of review, Sabers argues that the circuit court abused its

discretion in dividing the marital estate 50/50. She asserts that the circuit court

improperly weighed the factors for property division and failed to consider that she

primarily contributed to the accumulation of the parties’ assets and that Dunham

received the income-producing assets.

[¶56.] In dividing the property 50/50, the circuit court properly analyzed the

property division factors and found that the parties had been married for

approximately eighteen years, both were in reasonably good health, and both were

competent to earn a living. The circuit court further found that both parties

contributed to the accumulation of the marital property, as Dunham contributed

income-producing business assets while Sabers paid for most of the family’s

expenses. Further, the court did not find that either party was in need of support.

[¶57.] Sabers asserts that the circuit court should have considered that it was

Dunham’s contemptuous behavior that made the division and valuation of assets

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difficult. The circuit court may “consider a party’s ‘lack of candor . . . and lack of

cooperation’ in the court’s proceedings” as an additional factor when dividing

property. Taylor, 2019 S.D. 27, ¶ 29, 928 N.W.2d at 468 (quoting Giesen v. Giesen,

2018 S.D. 36, ¶ 31, 911 N.W.2d 750, 758). The circuit court found that Dunham’s

actions during discovery unreasonably prolonged the litigation and considered this

finding in awarding attorney fees to Sabers. However, the court did not enter any

findings that Dunham’s resistance to financial inquiries concerning the Estate

caused the court to question the value of marital assets, or that the conduct was

otherwise relevant to the division of property. See id. ¶ 31, 928 N.W.2d at 469

(finding that a husband’s lack of disclosure in discovery and court orders justified a

valuation of property that favored the wife). Based on the record, we cannot say the

court abused its discretion when the court examined all the applicable factors in

conducting the division of property between the parties.

d. Tatar Quincey, Dunham Equity Management, and
Dunham Partnership.

[¶58.] Sabers also argues, by notice of review, that the circuit court should

have classified the Estate’s 92% interest in Tatar Quincey, 20% interest in Dunham

Equity Management, and 40% interest in Dunham Partnership as marital property.

The circuit court classified these interests as non-marital property and excluded

them from the marital estate.

[¶59.] Regarding the Estate’s interest in Tatar Quincey, Sabers asserts that

the circuit court should have included the entirety of Tatar Quincey in the valuation

of the marital estate because Dunham purchased a 100% interest in Tatar Quincey

through ALDC and then impermissibly transferred a 92% interest into the Estate to

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hide the marital asset. Dunham responds that the circuit court properly excluded

the 92% interest in Tatar Quincey because the Estate obtained financing to

purchase the interest.

[¶60.] While the timing of the transaction and Dunham’s lack of

transparency are concerning, there is no evidence that Dunham used marital funds

to obtain the Estate’s 92% interest in Tatar Quincey. Dunham’s testimony that the

Estate borrowed $1.4 million against future revenue to obtain Tatar Quincey

supported the circuit court’s conclusion that the asset was non-marital. The record

also reflects that the Estate, not Dunham personally, obtained the $1.4 million loan

and that the liability remained with the Estate. Moreover, Sabers failed to provide

any proof that Dunham used marital funds for this purchase or that Sabers made

any contribution to the purchase.

[¶61.] Regarding both Dunham Equity Management and Dunham

Partnership, Sabers asserts that Dunham used marital funds totaling $661,570 to

purchase his brothers’ interests for the Estate and those interests should have been

valued in the marital estate. Dunham argues that the court properly excluded

Dunham Equity Management and Dunham Partnership because these assets were

owned by the Estate, the purchases were made post-separation, and none of the

funds used to purchase his brothers’ interests came from marital assets.

[¶62.] While the sources of the funds Dunham used to purchase his brothers’

interests in Dunham Partnership and Dunham Equity Management are not fully

clear, Dunham facilitated these purchases for the Estate more than three years

after the separation. Further, there is no evidence that Dunham used marital

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assets to facilitate the purchase of these assets. Rather, the evidence is undisputed

that Sabers controlled essentially all the marital assets after the separation, and

Dunham had no access to marital funds during this time. Sabers wanted nothing to

do with the Dunham businesses and she presented no evidence that she made any

contribution toward Dunham’s purchase of his brothers’ interests. Based on this

record, we cannot say that the circuit court abused its discretion in determining

that Dunham Partnership and Dunham Equity Management was an asset of the

Estate and, therefore, non-marital property.

4. Valuation of the marital property.

[¶63.] Dunham challenges the circuit court’s valuations of the Wells Fargo

account and Dunham’s interest in Milestone. This Court does “not attempt to place

valuations on the assets because that is a task for the trial court as the trier of fact.”

Giesen, 2018 S.D. 36, ¶ 26, 911 N.W.2d at 757 (citation omitted). Rather, we “will

interfere with the circuit court’s valuation when the valuation is clearly erroneous.”

Id. Under a clearly erroneous review, “this Court ‘will overturn the trial 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.”’ Schieffer

v. Schieffer, 2013 S.D. 11, ¶ 15, 826 N.W.2d 627, 633 (alteration in original) (citation

omitted). The circuit court’s valuation of assets does not have to be exact. However,

it “must fall ‘within a reasonable range of figures,’ based on the evidence presented

at trial.” Conti, 2021 S.D. 62, ¶ 26, 967 N.W.2d at 17 (internal quotation marks and

citation omitted). “The trial court’s findings of fact are presumptively correct and

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the burden is upon appellant to show error.” Taylor, 2019 S.D. 27, ¶ 15, 928 N.W.2d

at 465 (quoting Grode v. Grode, 1996 S.D. 15, ¶ 19, 534 N.W.2d 795, 801).

a. Sabers’s Wells Fargo bank account.

[¶64.] Dunham argues that the circuit court accepted self-serving testimony

from Sabers in valuing the Wells Fargo bank account at zero dollars, despite the

most recent statement prior to trial showing a balance in the account. He contrasts

the court’s treatment of her testimony with the court requiring him to provide

receipts for all of his in-kind contributions for the children. At the time of trial,

Sabers explained that she depleted the funds from the Wells Fargo account every

month to pay for living expenses and credit card debt. The circuit court found this

testimony credible and valued the Wells Fargo bank account at zero dollars. “[W]e

must defer to the judge’s firsthand perception of the witnesses and the significance

the judge gave to their testimony.” Parsley v. Parsley, 2007 S.D. 58, ¶ 15, 734

N.W.2d 813, 817 (citation omitted). Based on the record, the court did not clearly

err in valuing the Wells Fargo bank account.

b. Milestone Valuation.

[¶65.] Dunham argues that the circuit court erred in finding that he owned

100% of Milestone and in failing to subtract the rent he owed to Milestone.

However, Dunham’s tax returns from 2013 to 2018 represent that he owned 100% of

Milestone. Dunham also admitted in discovery that he was the 100% owner of

Milestone. In view of this evidence, the circuit court found that the testimony from

Dunham and Karen that they each owned a 50% interest in Milestone was not

credible. The circuit court made these credibility determinations, “and it is not an

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appellate court’s place to interfere.” Grode, 1996 S.D. 15, ¶ 21, 543 N.W.2d at 801.

Based upon the court’s finding that Dunham owned a 100% interest in Milestone,

the court was also within its discretion in refusing to reduce the value of Milestone

by $40,907 for the rent he claimed to owe to Milestone.

5. The court’s consideration of Dunham’s interest in
the Trust when determining his financial condition.

[¶66.] Dunham argues that the circuit court abused its discretion in

considering his interest in the Trust to determine his financial condition because he

only has a discretionary interest in the Trust. A discretionary interest in a trust

may not be considered in the division of marital property under SDCL 55-1-30.

However, it is well-established that non-marital assets may be considered in

determining a party’s financial condition. See Billion v. Billion, 1996 S.D. 101, ¶ 37,

553 N.W.2d 226, 234 (finding that the circuit court erred when it did not consider

non-marital assets in determining a party’s need for support and financial

condition).

[¶67.] The circuit court did not include Dunham’s discretionary interest in

the marital estate and did not order Dunham to use Trust funds to satisfy his

obligations. Rather, the court merely considered the likelihood that Dunham would

receive distributions from the Trust as the discretionary beneficiary to determine

whether Dunham had the ability to fulfill his monetary obligations under the

court’s order. 9

9. During oral argument, Dunham claimed for the first time on appeal that the
circuit court abused its discretion by not establishing a structured payment
plan over time to pay the large judgment entered by the circuit court.
(continued . . .)
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6. Award of attorney fees.

[¶68.] Both parties argue that the circuit court abused its discretion by

ordering Dunham to pay Sabers $50,000 in attorney fees. Dunham contends the

court erred by awarding any fees, and Sabers argues the court should have awarded

her more attorney fees. A circuit court may award attorney fees in a divorce action.

SDCL 15-17-38. We apply a two-step analysis:

First, the court must determine what constitutes a reasonable
attorney’s fee. This requires consideration of: (1) the amount
and value of the property involved; (2) the intricacy and
importance of the litigation; (3) the labor and time involved; (4)
the skill required to draw the pleadings and try the case; (5) the
discovery utilized; (6) whether there were complicated legal
problems; (7) the time required for the trial; and (8) whether
briefs were required. Second, it must determine the necessity
for such fee. That is, what portion of that fee, if any, should be
allowed as costs to be paid by the opposing party. This requires
consideration of the parties’ relative worth, income, liquidity,
and whether either party unreasonably increased the time spent
on the case.

Evens v. Evens, 2020 S.D. 62, ¶ 44, 951 N.W.2d 268, 282 (citation omitted).

[¶69.] “We will not overturn the trial court’s award of attorney fees absent an

abuse of discretion.” Grode, 1996 S.D. 15, ¶ 39, 543 N.W.2d at 804. The circuit

court entered detailed findings of fact and conclusions of law considering the

appropriate factors that supported the award of $50,000 in attorney fees to Sabers.

________________________
(. . . continued)
Dunham indicated in his post-trial objection to the circuit court that he would
be unable to pay a lump sum amount, but he did not request, or present, a
proposed payment plan for the court’s consideration. We have stated that
“[a] party may not raise an issue for the first time on appeal, especially in a
reply brief when the other party does not have the opportunity to answer.”
Ellingson v. Ammann, 2013 S.D. 32, ¶ 10, 830 N.W.2d 99, 102 (citation
omitted). Even if the argument has not been waived, we find no abuse of
discretion by the circuit court in not ordering a payment plan on this record.

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The circuit court found that each party owns substantial assets, that Sabers was

awarded a cash equalization payment of $262,902 but Dunham was awarded the

income-producing assets, that each party earns a substantial income, and that their

earning capacities are nearly equal. The court also analyzed the work and time

spent by the attorneys throughout the litigation and found that Dunham

unreasonably prolonged the divorce litigation. The circuit court did not abuse its

discretion in awarding Sabers $50,000 for attorney fees. 10

7. Annual exchange of tax returns.

[¶70.] Dunham argues the circuit court’s order requiring the parties to

exchange tax returns every year violates his right to confidentiality, improperly

subjects him to frequent child support reviews, and only fosters continued litigation

in the case. Sabers asserts that Dunham has no right to privacy in his tax returns

for purposes of calculating child support, and, if he did, the children’s interest in

obtaining support from their father supersedes his privacy interests.

[¶71.] The circuit court has “the authority to require periodic adjustments in

the support.” SDCL 25-7-6.11. SDCL 25-7A-22(1) provides that a party may only

file a petition to modify a support order within three years of the date of the order

upon a showing of “a substantial change in circumstances.” The current child

support order was entered as part of the judgment and decree of divorce on

February 6, 2021. However, SDCL 25-7-6.13, was amended during the 2022

legislative session to provide that a court is authorized to modify “[a]ll orders for

10. Both parties moved for appellate attorney fees pursuant to SDCL 15-26A-
87.3 and attached itemized statements of the legal services rendered. We
decline to award either party appellate attorney fees.

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support entered and in effect prior to July 1, 2022, . . . in accordance with this

chapter without requiring a showing of a change in circumstances from the entry of

the order.” 11

[¶72.] Dunham failed to pay child support until the entry of the 2018 support

order and withheld financial information during the case necessary to enable the

court to determine Dunham’s support obligation. The calculation of Dunham’s child

support obligation is further complicated because Dunham is self-employed with

fluctuating annual income. Dunham’s current child support obligation is based on

outdated information as it reflects his income from 2018 and earlier because he

resisted disclosing his financial information at the time of trial. Given the court’s

authority to periodically modify a child support order and the circumstances of the

case, the circuit court may very well have had the discretion to order the parties to

exchange tax returns until Z.S.D. is no longer eligible for support.

[¶73.] However, as Dunham correctly observes, the court entered the order

without a request from either party or without any apparent consideration of the

need to protect any sensitive financial information or other confidential information

contained in the tax returns. Before sua sponte ordering the production of the

parties’ tax returns post-divorce, the court should have sought input from the

parties on the relevant considerations for a protective order under SDCL 15-6-26(c)

and the need for a protective order for some or all of the information contained in

11. The 2022 amendment to SDCL 25-7-6.13 was in response to the adjustments
to the child support guidelines in SDCL 25-7-6.2 that were recommended to
the Legislature by the 2021 South Dakota Commission on Child Support, as
part of the quadrennial review of the child support guidelines required by
SDCL 25-7-6.12.

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the tax returns. Therefore, we vacate the order and remand for further proceedings

on this issue consistent with this opinion.

8. Failure to grant Sabers a divorce on the grounds of
extreme cruelty.

[¶74.] The circuit court granted the parties a divorce pursuant to SDCL 25-4-

2(7) on the grounds of irreconcilable differences. Sabers argues that the circuit

court should have granted her a divorce on the grounds of extreme cruelty under

SDCL 25-4-2(2) based on Dunham’s anger issues, emotional and physical abuse of

the children, and emotional abuse of her. SDCL 25-4-2 permits a court to grant a

divorce on the grounds of extreme cruelty, which is defined as “the infliction of

grievous bodily injury or grievous mental suffering upon the other, by one party to

the marriage.” SDCL 25-4-4.

[¶75.] The court fully considered the evidence and found that the parties had

mutual conflict for many years that led to the irreparable breakdown of the

marriage. The record supports this determination, and we find no clear error in the

court’s decision to grant a divorce on the grounds of irreconcilable differences rather

than extreme cruelty. See Evens, 2020 S.D. 62, ¶ 20, 951 N.W.2d at 276 (“We

review a circuit court’s determination of the grounds for divorce for clear error.”).

[¶76.] Affirmed in part, reversed in part, and remanded for further

proceedings consistent with this opinion.

[¶77.] KERN and MYREN, Justices, and DAY and CONNOLLY, Circuit

Court Judges, concur.

[¶78.] DAY, Circuit Court Judge, sitting for SALTER, Justice, who deemed

himself disqualified and did not participate.

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[¶79.] CONNOLLY, Circuit Court Judge, sitting for DEVANEY, Justice, who

deemed herself disqualified and did not participate.

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