Amity Beth Peet v. Steven Michael Peet

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
June 6, 2023
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.
Appeal No. 2022AP1036 Cir. Ct. No. 2020FA253
STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT III
IN RE THE MARRIAGE OF:
AMITY BETH PEET,
PETITIONER-RESPONDENT,
V.
STEVEN MICHAEL PEET,
RESPONDENT-APPELLANT.
APPEAL from a judgment of the circuit court for Barron County:
MAUREEN D. BOYLE, Judge. Affirmed in part; reversed in part and cause
remanded with directions.
Before Stark, P.J., Hruz and Gill, JJ.
Per curiam opinions may not be cited in any court of this state as precedent
or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).
No. 2022AP1036
¶1 PER CURIAM. Steven Peet appeals from a judgment of divorce,
challenging the circuit court’s award of maintenance to his former wife, Amity
Peet, and the court’s division of the parties’ property.1 We reject each of Steven’s
arguments regarding maintenance. We also reject Steven’s argument that the
court erred by awarding certain items of personal property to Steven at their
purchase prices, rather than at their fair market values. We conclude, however,
that the court erroneously exercised its discretion when assigning a value to
Steven’s premarital interest in the land where the parties’ residence is located.
¶2 We therefore affirm the circuit court’s judgment as to maintenance,
but we reverse that portion of the judgment pertaining to the property division.
We remand for the court to reconsider the value of Steven’s premarital interest in
the land where the parties’ residence is located and to adjust its division of the
parties’ property accordingly.
BACKGROUND
¶3 The parties were married in October 2002, and Amity filed for
divorce in December 2020. At the time of filing, Amity was forty-five years old,
and Steven was fifty-eight. The parties had one child together, who was over
eighteen at the time of filing.
¶4 The circuit court held a contested divorce hearing on January 7 and
February 3, 2022. Following an oral ruling in March 2022, the court issued its
“Findings of Fact, Conclusions of Law, and Judgment of Divorce.” The court
1
Because the parties share a surname, we refer to them by their first names throughout
the remainder of this opinion.
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No. 2022AP1036
found that Amity had an “annual earning capacity” of $26,832, “based upon [her]
earning $13.00 per hour and working 40 hours per week.” The court found that
Steven had “annual earnings” of $45,408, “based upon [him earning] $22.00 per
hour and working 40 hours per week.” After considering the factors set forth in
WIS. STAT. § 767.56 (2021-22),2 the court ordered Steven to pay Amity $550 per
month in maintenance, for a period of five years. The court divided the parties’
property equally after crediting Steven $17,000 for his premarital interest in the
land on which the parties’ residence was located, and it ordered Steven to make an
equalization payment of $67,729.10 to Amity.
¶5 Steven now appeals, arguing that the circuit court erred in various
ways with respect to maintenance and the division of the parties’ property.
Additional facts are included below as relevant to Steven’s arguments.3
DISCUSSION
¶6 The division of property at divorce and the determination of
maintenance are entrusted to the circuit court’s discretion, and we will not disturb
a court’s decisions on these issues unless the court erroneously exercised its
discretion. LeMere v. LeMere, 2003 WI 67, ¶13, 262 Wis. 2d 426, 663 N.W.2d
789. A court properly exercises its discretion when it examines the relevant facts,
2
All references to the Wisconsin Statutes are to the 2021-22 version unless otherwise
noted.
3
Amity did not file a brief in this appeal. Although this court may summarily reverse a
circuit court’s decision based on the respondent’s failure to file a brief, see WIS. STAT.
RULE 809.83(2), we decline to do so here, as the record provides support for all but one of the
circuit court’s challenged rulings.
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applies a proper standard of law, and uses a demonstrated rational process to reach
a reasonable conclusion. Id.¶7 Our review of a circuit court’s discretionary decisions may involve
underlying questions of law and fact. See Covelli v. Covelli, 2006 WI App 121,
¶13, 293 Wis. 2d 707, 718 N.W.2d 260. We review any questions of law
independently, but we will not disturb the circuit court’s factual findings unless
they are clearly erroneous. See id. “Although the proper exercise of discretion
contemplates that the circuit court explain its reasoning, when the court does not
do so, we may search the record to determine if it supports the court’s
discretionary decision.” Randall v. Randall, 2000 WI App 98, ¶7, 235 Wis. 2d 1,
612 N.W.2d 737.
I. Maintenance
A. Amity’s income
¶8 Steven first argues that when calculating maintenance, the circuit
court erred by assigning an “earning capacity” to Amity that was less than her
actual income. Steven argues that a court may consider a party’s earning capacity,
rather than the party’s actual income, only when it determines that the party is
shirking. See Chen v. Warner, 2005 WI 55, ¶20, 280 Wis. 2d 344, 695 N.W.2d
758 (explaining that, when calculating child support, a circuit court “would
consider a parent’s earning capacity rather than the parent’s actual earnings only if
it has concluded that the parent has been ‘shirking[]’”); see also Scheuer v.
Scheuer, 2006 WI App 38, ¶¶8-9, 290 Wis. 2d 250, 711 N.W.2d 698 (applying a
shirking analysis in the context of a maintenance award). Because the court did
not make a finding of shirking in this case, Steven contends that the court was
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required to use Amity’s actual income when calculating maintenance, rather than
her earning capacity.
¶9 Although the circuit court used the term “earning capacity” in its
oral ruling and written decision, our review of the record indicates that the court
did not actually consider Amity’s earning capacity when calculating maintenance.
Instead, it appears from the record that the court attempted to estimate Amity’s
actual income at the time of divorce, to the best of its ability, based on the limited
evidence that the parties’ provided.
¶10 At the contested divorce hearing, Amity testified to working at a
number of low-wage, part-time jobs throughout the parties’ marriage. She also
testified that, for at least some period of time, she did not work and instead stayed
home with the parties’ son. On the whole, Amity’s past employment history was
sporadic and did not provide a clear picture of her income over time. Although
Steven’s expert witness opined that Amity had the ability to earn between $27,040
and $35,360 per year, assuming a forty-hour work week, the circuit court found
that witness’s testimony to be “incredibly biased and really not helpful.” “When
the [circuit] court acts as the finder of fact, it is the ultimate arbiter of the
credibility of the witnesses and of the weight to be given to each witness’s
testimony.” Lessor v. Wangelin, 221 Wis. 2d 659, 665, 586 N.W.2d 1(Ct. App. 1998).
¶11 Amity testified that at the time of the contested hearing, she was
working part-time at Premium Retail, earning $13 per hour. Amity testified that
she typically worked about twelve hours per week for Premium Retail, but “[i]t
can be more.” Amity also testified that she was working part-time for Barron
County Developmental Services (BCDS), with somewhat variable hours, making
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No. 2022AP1036
$12.50 per hour. Amity explained that she had recently accepted a full-time
position with BCDS, but she did not know when she would begin her full-time
employment. She anticipated working thirty-five hours per week in that position,
with the possibility for additional hours. She also testified that she anticipated
continuing her part-time work at Premium Retail after she began her full-time
position with BCDS.
¶12 Based on this evidence, the circuit court estimated that Amity’s
annual income would be $26,832, using an hourly wage of $13 and assuming that
Amity would work forty hours per week. This estimation of Amity’s income was
reasonable, given Amity’s testimony that she was currently employed at jobs that
paid $12.50 and $13 per hour, respectively, and that she anticipated beginning
full-time employment with BCDS at some point in the near future.
¶13 Steven argues that the circuit court erred because Amity’s monthly
income from Premium Retail at the time of the contested hearing was $670.80
(based on twelve hours of work per week), and Amity anticipated earning monthly
income of $1,881.25 from BCDS (based on thirty-five hours of work per week).
Adding those amounts together, Steven argues that Amity’s actual income at the
time of the contested hearing was $2,552.05 per month, or $30,624.60 per year.
¶14 Steven has failed to show that the circuit court erroneously exercised
its discretion by estimating Amity’s annual income at $26,832. Notably, while
Amity testified that she had recently accepted a full-time position with BCDS, she
had not yet started that position, and she could not say exactly how many hours
she would be working or what her hourly wage would be. Furthermore, Steven’s
calculation of $30,624.60 is based on the assumption that, once Amity began her
full-time position at BCDS, she would continue working twelve hours per week at
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No. 2022AP1036
Premium Retail and would therefore work a total of forty-seven hours per week.
Although Amity testified that she intended to continue working part-time at
Premium Retail after she began her full-time employment with BCDS, she
explained that she sometimes worked only eight hours per week at Premium
Retail. Thus, it is not clear that Amity would have consistently worked
forty-seven hours per week after beginning her full-time job at BCDS.
¶15 In any event, it would not have been unreasonable for the circuit
court to conclude that once Amity actually began her full-time job at BCDS, she
might not want to—or have the time to—continue her part-time employment at
Premium Retail. Moreover, given that the court determined Steven’s income
based on a projected forty-hour work week, the court could reasonably conclude
that it would be unfair to base Amity’s income on the assumption that she would
work forty-seven hours per week. On these facts, the court’s estimation of
Amity’s actual income at $26,832—using an hourly wage of $13 and a forty-hour
work week—was not an erroneous exercise of discretion.
B. Steven’s income
¶16 Steven next argues that the circuit court erred by assigning an
income to him that is not supported by the record. At the contested divorce
hearing, Steven testified that he was self-employed as an HVAC contractor and
that his business was a sole proprietorship. He submitted a financial disclosure
statement asserting that his income was $2,700 per month, or $32,400 per year.
Rather than accepting that amount and using it to calculate Steven’s maintenance
obligation, the court determined that Steven’s annual income was $45,408, based
on an hourly wage of $22 and the assumption that Steven would work forty hours
per week. Steven contends that the court erroneously exercised its discretion by
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No. 2022AP1036
“disregard[ing] and ignor[ing]” the income stated on his financial disclosure
statement and “fabricat[ing]” an annual income for him based on an “assumed”
hourly wage.
¶17 Steven emphasizes that the circuit court never found that the
monthly income reported on his financial disclosure statement was inaccurate. It
is clear, however, that the court made an implicit finding in that regard. An
implicit finding of fact is sufficient when the facts of record support the circuit
court’s decision. State v. Echols, 175 Wis. 2d 653, 672, 499 N.W.2d 631 (1993).
¶18 Here, the evidence supports the circuit court’s implicit finding that
the income reported on Steven’s financial disclosure statement was inaccurate.
Steven did not produce any documentary evidence to support his claim that he
made only $2,700 per month. In addition, he testified that the $2,700 figure was
only an average—some months he makes less than $2,700, and other months he
makes more. Steven further explained that instead of paying himself a salary from
his business, he simply takes whatever money is leftover after the business’s
expenses are paid. When asked what documents he had reviewed to arrive at the
$2,700 figure, Steven responded, “What’s been billed and what’s been paid. And
expenses to that point.”
¶19 Steven also introduced copies of his income tax returns from 2020,
2019, and 2018. The tax returns showed that Steven’s business had gross income
of $570,767 in 2020, $587,676 in 2019, and $548,120 in 2018. However, the
2020 return listed Steven’s income as only $10,060, which Steven testified was his
business’s “net profit” during that year. Steven’s income was listed as $22,752 on
the 2019 return and $21,500 on the 2018 return. Steven testified that his business
pays various expenses for him, including a fuel bill, health insurance, business
8
No. 2022AP1036
insurance, truck insurance, his cell phone bill, a portion of his utilities, a portion of
his real estate taxes,4 and his vehicle registration. Steven’s tax returns reflected
that he was able to utilize tax deductions for some of those expenses.
¶20 Based on this evidence, the circuit court could reasonably find that
the income reported on Steven’s financial disclosure statement did not accurately
reflect his actual earnings. In its oral ruling, the court noted that Steven’s business
“covers some of his [personal] expenses and he deducts those expenses; so while
they may be expenses for him they are deductible expenses. And so they’re not
the same thing as expenses he gets to apply that against the income he receives
from the business.” The court then noted that Steven’s “hourly rate” was not clear
from the record and commented, “It’s surprising he doesn’t apparently charge an
hourly rate, but that would have been helpful to know.”
¶21 The circuit court next observed that Steven’s tax returns reflected
that his business’s sales were “fairly significant,” in that they were consistently
over $500,000 per year. While the court acknowledged that the business also had
a “significant amount of expenses,” the court emphasized that Steven “has
expenses related to the home, the cars, the insurance, things that are actually
deductible here on the tax return that to some extent I think have to be included in
his business income.”
¶22 Given the dearth of information regarding Steven’s “actual salary,”
the circuit court adopted Amity’s attorney’s suggestion to “utilize what [Steven]
pays out for expenses in terms of generating an actual annual income for him.”
4
Steven explained that his business is located on the same property as his home, but in a
separate building.
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No. 2022AP1036
The court stated that, under the circumstances, “there’s really no other way to
calculate [Steven’s income].”
¶23 Based on the amount of Steven’s expenses, as reported on his
financial disclosure statement, the circuit court determined it was reasonable to
conclude that Steven was earning $22 per hour, which resulted in an annual
income of $45,408, assuming a forty-hour work week. The court explained that in
determining this amount,
I gave him credit for the expenses that he would have to
pay out of that hourly rate for his business. And looked at
the expenses that he had every month, and came up with a
rate of $22 an hour based on what the expenses were he had
each month that he was covering.
The court further explained that Steven “doesn’t separate out his expenses from
his income. He doesn’t have an accountant. There’s no business appraisal.
There’s no way for me to figure this out because he is his business. And so I had
to create a way to generate a number, and that’s how I generated it.”
¶24 The circuit court’s determination of Steven’s income was not an
erroneous exercise of discretion, given the limited information regarding Steven’s
actual earnings. The court could reasonably reject the $2,700 figure reported on
Steven’s financial disclosure statement, as it was not supported by any
documentary evidence or by a detailed explanation of how Steven arrived at that
amount. In addition, accepting Steven’s reported income of $2,700 per month
would have meant that Steven was earning about $15 per hour—just $2 more per
hour than the wage that the court attributed to Amity. The court could reasonably
agree with Amity’s attorney that, given Steven’s experience in his trade, “$15 an
hour … defies common sense.” Furthermore, as Amity’s attorney noted, if
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No. 2022AP1036
Steven’s income was actually as low as he reported on his financial disclosure
statement, he would “likely qualify for BadgerCare.”
¶25 The circuit court could also reasonably conclude that the income
shown on Steven’s tax returns did not accurately portray his earnings, given that
the tax returns reflected even less income than Steven had reported on his financial
disclosure statement. Under these circumstances, the court could reasonably
decide that the most accurate method of determining Steven’s income would be to
use the amount of his reported expenses to calculate an hourly wage, as Amity’s
attorney suggested. The court’s determination of Steven’s income was based on
the facts of record and was not unreasonable, given the limited information about
Steven’s actual earnings, the lack of documentation supporting his claimed
monthly income, and Steven’s testimony that his business paid some of his
personal expenses. We therefore reject Steven’s argument that the court
erroneously exercised its discretion when determining his income.
C. Financial benefit to Amity from cohabitation
¶26 Next, Steven argues that the circuit court erred by “failing to
consider the financial benefit flowing to Amity from her cohabitation
arrangement.” As noted above, the contested divorce hearing in this case took
place over two days: January 7 and February 3, 2022. During the first day of the
hearing on January 7, Amity testified that she was living with a significant other,
who helped to pay some of her expenses, including the majority of her rent.
¶27 The parties did not finish presenting their evidence on January 7. As
a result, the circuit court and the parties agreed that the contested hearing would
continue on February 3. At the parties’ request, the court granted the parties a
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No. 2022AP1036
judgment of divorce at the end of the January 7 hearing but reserved ruling on the
issues of property division and maintenance. Amity’s attorney then stated:
Your Honor, my only concern when we have these
spillover hearings is that sometimes then parties go and try
to gather new evidence or such. Given that the Court had a
clear scheduling order my position would be that witnesses
have already been disclosed, exhibits have already been
disclosed. And so in that regard I don’t anticipate new
discovery between now and February. So with that caveat I
have nothing else.
Steven’s attorney agreed with Amity’s counsel’s position. The court then stated:
Yeah, I agree as well. We technically should have finished
today. Sometimes that does happen. And I agree … that
we need to make that clear that things are what they are.
And, of course, that doesn’t mean if for some reason
between now and February 3rd the parties reach an
agreement that can certainly happen. But definitely
discovery is closed. We’re going to go with what we have
here today. And I expect to hear, you know, more
testimony from [Steven] yet and perhaps rebuttal
testimony. So that certainly [will] be allowable.
¶28 Thereafter, during the second day of the contested hearing on
February 3, Amity testified that she was no longer living with her significant
other, who had “left” her the day after the January 7 hearing. Steven’s attorney
objected to this testimony, asserting it was “improper rebuttal” because it had
“nothing to do with any testimony made by [Steven] or his witnesses.” When
Amity’s attorney argued that this testimony was relevant to “the claims for
maintenance,” Steven’s attorney responded, “Your Honor, but for not having
enough time at the last hearing what she’s talking about would not even be
considered by the Court. And, again, I’ll restate it’s not proper rebuttal
testimony.”
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No. 2022AP1036
¶29 The circuit court agreed with Steven’s attorney that “had we
completed the testimony related to property division and maintenance on
January 7th I wouldn’t even know about this.” The court stated, however, that the
testimony had not been completed on January 7, that the court still needed to make
a determination regarding maintenance, and that Amity’s testimony regarding the
end of her cohabitation would “perhaps” be relevant to that issue. The court then
noted, “[I]n other circumstances where there have been changes in circumstance
from one hearing to the other … I’ve allowed parties to provide information
related to finances.” The court stated it was “going to think about this and figure
out if I can rely on that additional information that’s been presented today.”
Ultimately, the court did not return to this topic and did not make a formal ruling
on Steven’s objection.
¶30 During its subsequent oral ruling, the circuit court addressed each of
the statutory factors that a court must consider when awarding maintenance. See
WIS. STAT. § 767.56. Based on those factors, the court awarded Amity $550 per
month in maintenance for a period of five years. In its discussion of maintenance,
the court did not specifically address Amity’s cohabitation with her significant
other or indicate whether that fact had any bearing on the court’s decision.
¶31 Steven contends that the circuit court erred because it was required
to consider the financial benefit that Amity received as a result of her cohabitation
arrangement. See Woodard v. Woodard, 2005 WI App 65, ¶10, 281 Wis. 2d 217,
696 N.W.2d 221 (holding that a court must consider “a financial benefit flowing
from cohabitation” when awarding maintenance). Steven further asserts that the
court could not consider Amity’s testimony from the February 3 hearing that she
was no longer living with her significant other because the court had ruled, at the
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No. 2022AP1036
end of the January 7 hearing, that discovery was closed and that the parties would
not be allowed to submit new evidence.
¶32 We conclude that Steven has forfeited his argument regarding the
circuit court’s failure to consider Amity’s cohabitation arrangement. During its
oral ruling, the court did not address Amity’s cohabitation with her significant
other in any way. Steven was therefore aware that the court had not considered
that issue. At the end of its oral ruling, the court specifically asked the parties
whether there were any other issues that needed to be addressed. Steven did not
inform the court that it was required to consider Amity’s cohabitation arrangement
when awarding maintenance or that he believed the court had erred by failing to
address that factor. Had Steven done so, the court could have corrected its alleged
error at that point, obviating the need for us to consider this issue on appeal.
Under these circumstances, we deem Steven to have forfeited his claim that the
court erred by failing to consider Amity’s cohabitation arrangement, and we do
not address it further. See Tatera v. FMC Corp., 2010 WI 90, ¶19 n.16, 328
Wis. 2d 320, 786 N.W.2d 810 (“Arguments raised for the first time on appeal are
generally deemed forfeited.”); Bishop v. City of Burlington, 2001 WI App 154,
¶8, 246 Wis. 2d 879, 631 N.W.2d 656 (“A litigant must raise an issue with
sufficient prominence such that the [circuit] court understands that it is being
called upon to make a ruling.”).
D. Steven’s ability to pay maintenance
¶33 Steven next argues that the circuit court erred by failing to consider
his ability to pay maintenance. He relies on Poindexter v. Poindexter, 142
Wis. 2d 517, 530, 419 N.W.2d 223 (1988), where our supreme court stated that the
predecessor statute to WIS. STAT. § 767.56 “does require that the maintenance
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No. 2022AP1036
award be based upon a consideration of several factors such as the parties’ needs
and ability to pay.” Steven contends that, in this case, the court’s oral ruling is
devoid of any indication that the court considered his ability to pay $550 per
month in maintenance to Amity. Steven further asserts that the court’s
determination that his income is equal to his reported expenses is inconsistent with
a conclusion that he has the ability to pay maintenance in any amount.
¶34 Steven is correct that the circuit court did not expressly address his
ability to pay $550 per month in maintenance. We may search the record,
however, to determine whether it supports the court’s discretionary decision in that
regard. See Randall, 235 Wis. 2d 1, ¶7. Based upon our review of the record, we
conclude the court could reasonably determine that Steven had the ability to pay
monthly maintenance of $550.
¶35 In particular, we note that although the circuit court estimated
Steven’s income based on the amount of the expenses that he reported on his
financial disclosure statement, the court emphasized that Steven’s business paid
some of his personal expenses and that Steven was then able to deduct those
expenses on his taxes. In addition, while the court estimated Steven’s hourly rate
at $22, based on the amount of his reported expenses, the court noted that “for a
tradesman of [Steven’s] experience,” an hourly rate of $30 “or more” would not be
unreasonable. Under these circumstances, the court could reasonably conclude
that despite the amount of Steven’s reported expenses, he had the ability to pay
$550 per month in maintenance.
¶36 In addition, when deciding whether to award Amity maintenance
and in what amount, the circuit court had to weigh Steven’s ability to pay against
the fairness objective of maintenance. See LaRocque v. LaRocque, 139 Wis. 2d
15No. 2022AP1036
23, 33, 406 N.W.2d 736 (1987). The fairness objective recognizes that one of the
goals of a maintenance award is “to ensure a fair and equitable financial
arrangement between the parties in each individual case.” Id. Here, the court
could reasonably conclude that if it did not award Amity maintenance, she would
be in a worse position financially than Steven, which would be contrary to the
fairness objective of maintenance. The court could further reasonably conclude
that if Amity had a need for $550 per month in maintenance, it would be fair to
order Steven to pay that amount for the limited period of five years, even if doing
so required Steven to reduce his own expenses. For these reasons, we reject
Steven’s argument that we must reverse the maintenance award because the court
failed to consider his ability to pay.
E. Amity’s need for maintenance
¶37 Steven also argues that the circuit court erred by awarding Amity
$550 per month in maintenance for a period of five years without considering her
need for maintenance in that amount. See Jasper v. Jasper, 107 Wis. 2d 59, 70,
318 N.W.2d 792 (1982) (stating that a maintenance award “is based upon the
needs and income producing abilities of the parties, with consideration of other
supplementary factors”). Steven asserts that the court “made no reference to
Amity’s claimed or anticipated monthly expenses, made no finding as to what
amount she needed to meet those monthly expenses and made no finding relative
to any contributions made from her cohabitation arrangement to those monthly
expenses.”
¶38 We conclude that the circuit court’s oral ruling, when read as a
whole, adequately addressed Amity’s need for maintenance. First, the court
emphasized that the parties had a long-term marriage. Given the length of the
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No. 2022AP1036
marriage, the court sought to equalize the parties’ income, at least for a limited
period of five years. In a case involving a long-term marriage, “it is reasonable to
consider an equal division of total income as a starting point in determining
maintenance.” LaRocque, 139 Wis. 2d at 39.
¶39 Second, the circuit court noted that Steven was “a self-employed
tradesman with years and years of experience in the trade.” In contrast, the court
observed that Amity had been “a stay-at-home mom for a period of time” and was
otherwise employed “sporadically” throughout the marriage, working “different
type[s] of jobs, mostly minimum wage jobs, nothing at a skilled level.” The court
also emphasized that, because of the nature of Steven’s business, he was able to
“utilize deductions for expenses that he’s incurred that are related to his personal
life,” while Amity “won’t be able to deduct from any particular business that she
has.” The court stated that Steven’s ability to take those deductions was a benefit
to him, which the court needed to consider in its maintenance analysis.
¶40 Third, the circuit court found that Steven was the “main
breadwinner” during the parties’ marriage. The court observed that Steven had
paid the majority of Amity’s expenses of daily living during the marriage and that,
going forward, Amity would “have to fund all of that herself.”
¶41 Fourth, the circuit court noted that although the parties’ lifestyle
during the marriage was not “so extravagant or exorbitant,” they “obviously led a
pretty decent life.” The court found that absent maintenance, Amity would not
“be able to achieve the same lifestyle where maybe she could go on a vacation
each year and have a place, a roof over her head, a decent car to drive, and other
things in her home.” Nevertheless, the court concluded that after “some length of
time” Amity would be capable of becoming self-supporting at the same standard
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No. 2022AP1036
of living that she had enjoyed during the marriage. The court rejected Amity’s
argument that it would take her nine years to achieve that result and instead
determined that it was appropriate to award Amity maintenance for a period of
five years.
¶42 Thus, the circuit court clearly concluded that Amity had a need for
maintenance. While the court did not specifically address the amount of Amity’s
expenses, we note that Amity’s financial disclosure statement reflected monthly
expenses of $2,484.57. The court determined that Amity’s monthly income was
$2,236. Given these facts, the court could reasonably conclude that Amity needed
maintenance simply to cover her expenses—not to mention becoming
self-supporting at the same lifestyle that she had enjoyed during the marriage.
Under these circumstances, the court’s decision to award Amity $550 in monthly
maintenance for a period of five years was not an erroneous exercise of discretion.
II. Property division
A. Valuation of personal property
¶43 Steven next argues that the circuit court erred when dividing the
parties’ property because the court awarded certain items to Steven in the property
division at their purchase prices, rather than at their fair market values. At the
contested divorce hearing, Steven testified that during the marriage, he had used
inherited funds to purchase a Can-Am UTV, a refrigerator, a washing machine, a
stove, a microwave, a sofa and loveseat, and a mattress set. Because Steven had
purchased those items using inherited funds, he asked the court to exclude them
from the property division. He submitted Exhibit 28, a handwritten list showing
what he had allegedly paid for each of the items. He also submitted a printout
from Kelley Blue Book’s website showing the trade-in value of the Can-Am UTV.
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No. 2022AP1036
¶44 The circuit court concluded that Steven had transmuted his inherited
funds to marital property when he used those funds to “purchase property for the
[parties’] mutual enjoyment and use during the marriage.” The court therefore
concluded that the items in question were “marital assets,” and it included them in
the property division. The court awarded the Can-Am UTV to Steven at its Kelley
Blue Book value, and it awarded the remaining items to Steven at the purchase
prices listed on Exhibit 28.
¶45 Steven contends that the circuit court erred because “fair market
value is the proper method of valuing property for purposes of divorce.” See
Corliss v. Corliss, 107 Wis. 2d 338, 345, 320 N.W.2d 219 (Ct. App. 1982). Be
that as it may, Steven failed to provide any evidence of the fair market values of
any of the disputed items, except for the Can-Am UTV. The court awarded the
Can-Am UTV to Steven at its fair market value, but it had no way of determining
the fair market values of the other items. Under these circumstances, the court
reasonably determined the values of those items using the only evidence available
to it—namely, Steven’s evidence of what he had paid to purchase the items.
Having failed to present evidence of the fair market values of any items other than
the Can-Am UTV, Steven cannot now argue that the court erroneously exercised
its discretion by awarding those items to him at their purchase prices, rather than
at their fair market values.
B. Valuation of Steven’s premarital interest in real estate
¶46 Finally, Steven argues that the circuit court erred when assigning a
value to his premarital interest in the twenty-acre parcel of land where the parties’
residence is located. It is undisputed that Steven owned the land before the
parties’ marriage and that the land was not subject to a mortgage at that time.
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No. 2022AP1036
Steven testified that he and his previous wife had purchased the land for $13,000
in 1994. Steven and Amity built a home on the property in 2004, two years after
their marriage, taking out a mortgage to pay for the home’s construction. At the
contested divorce hearing, Amity conceded that Steven should receive a credit in
the property division for the value of the land that he brought to the marriage.
¶47 Both parties had the real estate appraised. Amity’s appraiser,
Timothy Williamson, valued the entire property—the land and the
improvements—at $350,000. Williamson valued the land alone at $60,000.
Steven’s appraiser, Christopher Drost, valued the entire property at $316,000 and
valued the land alone at $50,000.
¶48 During its oral ruling, the circuit court mistakenly stated that there
was “about a $17,000 difference in terms of the value assigned to this property.”
The actual difference between the appraisers’ valuations of the property was
$34,000. The court then stated that it had “no idea what to make” of the
appraisers’ valuations of the land alone. The court explained:
Mr. Williams[on] at least in his report indicated that it was
based on a certain value per acre that he assigned to the
land value. But, again, that’s land value in 2021 not land
value in 1994 when this land was purchased and before it
was even developed. And so I have no idea what the value
of the land was at that.
And I really don’t think either of these appraisals gives me
any guidance in terms of assessing value to the land at this
point. And, frankly, I agree with [Amity’s counsel] that it’s
not the value of the land today that the Court has to take
into consideration in terms of determining premarital value
for [Steven]. I’d need to know what the premarital value
was by looking at what was the purchase price when this
land was purchased back in 1994.
That might have been helpful information, but it’s not on
the deed. I did look to see if there was any documentation
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No. 2022AP1036
about what was this land purchased for? What was it
assessed at in 1996? Or even what it was assessed … when
they built the house. I would think that the, you know,
even the property tax records might have shown that. It
would have given us some idea of what the value of that
land was before the marriage and before the land was
further developed.
Notably, the court did not acknowledge Steven’s testimony that the purchase price
of the land was $13,000 in 1994.
¶49 The circuit court continued its discussion of the land value by
stating:
At this point I really don’t have any information about what
the value—what the premarital value of that land was.
Now that house has been on that land since 200[4], that’s
the marital home has been on that land. It’s developed. It’s
now developed property. Maybe not all 20 acres of it, but a
portion of it. That certainly increases the value. And I
have no idea what portion of the land in and of itself, you
know, just vacant land what the value of that is.
I mean, the land value took into—by both appraisers—took
into account all 20 acres, not just the vacant land, but all 20
acres which clearly encompass the house and outbuildings.
So I really don’t have any evidence here for me to
determine what a premarital value is of that land. I just—I
have no way of determining that.
¶50 The circuit court subsequently concluded that Steven “essentially
converted [the land] into marital property by developing this land and not taking
any action … to maintain its character as premarital property.” The court later
reiterated—again, incorrectly—that the parties’ appraisals were “about $17,000
apart.” The court then stated:
So what I’m going to do is simply assign a value of
$17,000 to [Steven] for the premarital land. And then I will
assess—so assessing a total value of the property of
$350,000, but giving [Steven] a credit of $17,000 for the
land, premarital. That does not get included in the value.
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No. 2022AP1036
So, essentially, the value that I’m going to start with
is … $316,000.
In other words, the court stated that it would award the real estate to Steven in the
property division at a value of $316,000.
¶51 Amity’s attorney then pointed out that $350,000 minus $17,000 is
actually $333,000, not $316,000. The court then clarified that it was awarding the
real estate to Steven at a value of $333,000, with “$17,000 of credit to” him for the
premarital value of the land. The court further stated: “So I want to make that
clear. I’m valuing the property at $350,000, giving [Steven] the credit for
$17,000, which makes it $333,000. Which is $316,000 plus $17,000…. So the
value of the property is $333,000.”
¶52 We conclude, for three reasons, that the circuit court erroneously
exercised its discretion when determining the value of Steven’s premarital interest
in the land that he brought to the marriage. First, the court’s decision was based
on a mistake of fact. The court repeatedly stated that the difference between the
appraisers’ valuations was $17,000, rather than $34,000. It is clear that the court
relied on this mistaken belief when determining the credit that Steven should
receive for his premarital interest in the land.
¶53 Second, even if the circuit court had correctly stated that the
difference between the appraisers’ valuations was $34,000, there is no apparent
connection between that difference and the value of Steven’s premarital interest in
the land. Williamson valued the land alone at $60,000, while Drost valued the
land alone at $50,000. The difference between their valuations of the land was
therefore $10,000. The court was clearly concerned that the appraisers’ valuations
of the land did not accurately reflect its value at the time of purchase in 1994.
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No. 2022AP1036
However, there is nothing in the record to explain why the court believed that the
difference between the appraisers’ valuations of the entire property—both the land
and the improvements—was an accurate representation of Steven’s premarital
interest in the land alone.
¶54 Third, the circuit court incorrectly stated that there was no evidence
regarding the purchase price of the land in 1994. As noted above, Steven testified
that he and his former wife had purchased the land for $13,000. The court
acknowledged that the property’s purchase price in 1994 would have been relevant
to determining the value of Steven’s premarital interest in the property, but it
apparently overlooked Steven’s testimony regarding the purchase price.
¶55 For these reasons, we conclude that the circuit court erroneously
exercised its discretion when it assigned a value of $17,000 to Steven’s premarital
interest in the parties’ real estate. The court’s decision on that issue was based on
a mistake of fact, and the record does not show that the court used a demonstrated
rational process to reach its decision. See LeMere, 262 Wis. 2d 426, ¶13. We
therefore reverse that portion of the court’s judgment relating to the division of the
parties’ property. We remand for the court to reconsider the value of Steven’s
premarital interest in the real estate and to adjust its division of the parties’
property accordingly.
By the Court.—Judgment affirmed in part; reversed in part and cause
remanded with directions.
This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.
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