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Adams v. Adams

Supreme Court of North Dakota

August 24, 2016

John Duane Adams, Plaintiff and Appellee, and Cross-Appellant
v.
Sandra Kathleen Adams, Defendant and Appellant, and Cross-Appellee

         Appeal from the District Court of Cass County, East Central Judicial District, the Honorable Susan Lynne Bailey, Judge.

          James R. Brothers, for plaintiff and appellee, and cross-appellant.

          Jerilynn Brantner Adams, and Joshua Benson (on brief), for defendant and appellant, and cross-appellee.

          OPINION

          Crothers, Justice.

         [¶ 1] Sandra Adams appeals and John Adams cross-appeals from a district court order calculating and dividing profits earned by the parties' jointly-owned businesses. The order also requires her to reimburse him for payments he made relating to the Radisson Hotel renovation and pay one-half of the parties' 2012 taxes. We affirm in part, reverse in part and remand.

         I

         [¶ 2] The district court granted the parties a divorce in April 2013 and after an October 2013 trial issued an amended supplemental judgment in June 2014 dividing the parties' complex marital estate valued at approximately $46, 500, 000. Sandra Adams appealed the decision and this Court affirmed in Adams v. Adams, 2015 ND 112, 863 N.W.2d 232.

         [¶ 3] The judgment dividing the marital estate required the parties to equally share the profits of their jointly-owned businesses from April 2, 2013, through January 2014. The parties disagreed over the profits generated from the businesses during that time. Each party hired an accountant to calculate the business profits. The parties' profit calculations differed by approximately $1.5 million in cash retained by the businesses due to depreciation expenses. John Adams' accountant deducted the $1.5 million from his profit calculation. Sandra Adams' accountant included the $1.5 million in his profit calculation.

         [¶ 4] After a hearing where the accountants testified the district court used John Adams' profit calculation and found the parties' businesses generated net profits of approximately $1, 134, 000 from January 2013 through January 2014. The court also found John Adams made tax payments, credit card payments and payments relating to the Radisson Hotel renovation on Sandra Adams' behalf. After crediting Sandra Adams for her share of the profits the court ordered her to reimburse John Adams $342, 191 for payments made on her behalf.

         II

         [¶ 5] Sandra Adams and John Adams each raise issues on appeal and cross-appeal regarding the district court's determination of the parties' business profits. Sandra Adams argues the court erred by failing to add back non-cash deductions for depreciation and amortization. John Adams argues the court erred by including profits earned in January, February and March 2013.

         [¶ 6] The district court's determination of business profits are a finding of fact subject to the clearly erroneous standard of review. See, e.g., Keller v. Bolding, 2004 ND 80, ¶ 24, 678 N.W.2d 578 (district court's determination of damages for lost profits is a finding of fact). A finding of fact is clearly erroneous if no evidence supports it, it is induced by an erroneous view of the law or after reviewing all the evidence we are left with a definite and firm conviction a mistake has been made. Gabaldon-Cochran v. Cochran, 2015 ND 214, ¶ 5, 868 N.W.2d 501. "This Court views the evidence in the light most favorable to the findings, and the district court's findings of fact are presumptively correct." Id. (quoting Feist v. Feist, 2015 ND 98, ¶ 4, 862 N.W.2d 817).

         [¶ 7] Paragraph 43 of the amended supplemental divorce judgment requires the parties to share the business profits:

"Consistent with the parties' interim agreement, for the period April 2, 2013 through January 31, 2014, the combined profits or losses resulting from the parties' jointly owned business enterprises shall be shared equally, making appropriate allowances for the monthly draws each party has received pursuant to paragraph 1 of that agreement. The parties shall be expected to agree as to the selection of any accountant required to make the necessary computations. If they are ...

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