Appeal from the District Court of McLean County, South Central Judicial District, the Honorable David E. Reich, Judge.
The opinion of the court was delivered by: Sandstrom, Justice.
[¶1] Harold Tweeten appeals from a divorce judgment dissolving his marriage with Roxann Tweeten and dividing the parties' property. Harold Tweeten argues the district court erred in failing to enforce the terms of the parties' premarital agreement. We reverse the judgment, and remand for further proceedings.
[¶2] Harold and Roxann Tweeten were married in 1990, and have four children together. Before the wedding, Harold and Roxann Tweeten executed a premarital agreement, providing that each would retain title, management, and control of the property disclosed in the agreement to the same extent as if they had remained single:
Each of the parties shall retain the title, management and control of the estates now owned by each of them, whether real, personal or mixed, and all increase or addition thereto, entirely free and unmolested by the other party and may encumber, sell, dispose, give or provide by will for the disposition of any or all of such estates so separately owned and possessed.
Each of the parties separately waives any and all rights by dower, homestead, surviving spouse award, inheritance, descent or any other marital right arising by virtue of statute or otherwise in and to any parcel of the estate now owned and possessed by the other . . . .
[¶3] A disclosure statement listing each party's property and the value of the property was included in the premarital agreement. Roxann Tweeten listed 640 acres of farmland in McLean County, known as the "L Ranch property," which she inherited after her first husband's death in 1987. She also listed annuities, life insurance proceeds, farm machinery, and cattle. The agreement stated Roxann Tweeten's property had a value of $510,000. Roxann Tweeten testified the L Ranch property had debts totaling over $300,000, which were not disclosed in the agreement. Harold Tweeten's disclosure statement listed farm machinery and 720 acres of farmland in McLean County, known as the "Tweeten property," worth $454,000. Harold Tweeten testified he owned approximately 5 or 6 acres of the Tweeten property before the premarital agreement was signed, but had an option to purchase the remaining property from his parents for $100,000, which was significantly less than the fair market value. He testified he did not know whether he told Roxann Tweeten he did not own most of the Tweeten property when they signed the premarital agreement. Shortly after the parties married, they paid $50,000 for 31 acres of the Tweeten property containing the residence and other buildings, using life insurance proceeds Roxann Tweeten had received following the death of her first husband. Harold and Roxann Tweeten paid for the rest of the Tweeten property, including most of the farmland, in yearly installments.
[¶4] In 1991, the parties transferred the entire L Ranch and Tweeten properties by warranty deed to themselves, as husband and wife, as joint tenants with the right of survivorship. Roxann Tweeten testified they transferred the property for financing purposes, and she did not think about whether the transfer had any effect on the premarital agreement.
[¶5] In 2003, the parties sold the Game and Fish Department a twenty- year easement for the L Ranch property for $160,000 and used the money to pay off some of the debt on that property. The Tweetens paid off the rest of the debt on the L Ranch property in 2005 using the proceeds from the sale of a portion of the Tweeten property.
[¶6] In June 2006, Roxann Tweeten filed for divorce. Harold and Roxann Tweeten stipulated to child custody and visitation, and a partial judgment was entered in May 2007, incorporating their stipulation. Both parties testified at a June 2008 hearing on property division. In September 2008, the district court issued an order distributing the parties' property, and an amended order was entered in October 2008. The district court awarded Roxann Tweeten the L Ranch property, the 31 acres of Tweeten property containing the residence and other buildings, and half of the remaining Tweeten property. The court awarded Harold Tweeten the remaining half of the Tweeten property. Both parties were awarded their personal property, any vehicles in their possession, and the retirement accounts and life insurance in their name. A judgment was subsequently entered.
[¶7] The district court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 27-05-06. The appeal was timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, §§ 2 and 6, and N.D.C.C. § 28-27-01.
[¶8] Harold Tweeten argues the district court erred in failing to distribute the parties' property in accordance with the terms of the premarital agreement and award him the Tweeten property. He also contends that if the premarital agreement is not enforceable, the court's property distribution is clearly erroneous because the court did not include the L Ranch property in the marital estate, the property distribution is disproportionate, and the court awarded Roxann Tweeten a portion of the Tweeten property Harold Tweeten purchased before the marriage. Roxann Tweeten contends the premarital agreement did not apply to the Tweeten property because Harold Tweeten did not have an ownership interest in the property when they signed the premarital agreement, the agreement is unenforceable because Harold Tweeten did not disclose that he only had an option to purchase, and the parties had transferred both the Tweeten and L Ranch properties to each other as joint tenants, voiding the agreement's protection. She argues the district court equitably distributed the parties' marital property, applying the Ruff-Fischer guidelines.
[¶9] A district court's decision on the division of martial property is a finding of fact, which may be reversed on appeal only if it is clearly erroneous. Kovarik v. Kovarik, 2009 ND 82, ¶ 8, 765 N.W.2d 511. A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, the evidence does not support the finding, or this Court is convinced, on the basis of the entire record, that a mistake has been made. Id.
[¶10] When a divorce is granted, the court must equitably distribute the parties' property and debts. N.D.C.C. § 14-05-24. Courts must include all of the parties' assets and debts in the marital estate, regardless of their source, and apply the Ruff-Fischer guidelines to equitably divide the property. Kovarik, 2009 ND 82, ¶ 9, 765 N.W.2d 511; Fischer v. Fischer, 139 N.W.2d 845 (N.D. 1966); ...