Danel Jacobs-Raak, n/k/a Danel Jacobs, Plaintiff, Appellee and Cross-Appellant
Daniel Raak, Defendant, Appellant and Cross-Appellee
from the District Court of Burleigh County, South Central
Judicial District, the Honorable Sonna M. Anderson, Judge.
IN PART, REVERSED IN PART, AND REMANDED.
E. Pagel, 1715 Burnt Boat Drive, Madison Suite, Bismarck,
N.D. 58503, for plaintiff, appellee and cross-appellant.
V. Fleck, P.O. Box 6178, Bismarck, N.D. 58506-6178, for
defendant, appellant and cross-appellee.
VandeWalle, Chief Justice.
1] Daniel Raak appealed and Danel Jacobs-Raak, now known as
Danel Jacobs, cross-appealed from a divorce judgment
distributing their marital property and ordering Raak to pay
child support. Except with regard to the division of the
mineral estate, we conclude the district court did not err as
a matter of law, did not abuse its discretion, and its
findings of fact are not clearly erroneous. We affirm in
part, reverse in part and remand for an identical division of
the mineral interest or, in the alternative, further
explanation concerning the division of the mineral interest.
2] Raak and Jacobs were divorced in October 2015 after a
15-year marriage. The district court awarded Raak a net
marital property distribution of $436, 234 and Jacobs a net
marital property distribution of $499, 051. The court awarded
primary residential responsibility for the couple's three
children to Jacobs and ordered Raak to pay $1, 452 per month
for child support effective September 1, 2015. The court
denied Jacobs' requests that Raak pay her spousal support
and her attorney fees.
3] Both parties challenge the district court's valuation
of certain items of marital property.
4] Section 14-05-24(1), N.D.C.C., requires the district court
in a divorce case to "make an equitable distribution of
the property and debts of the parties." In
Kostelecky v. Kostelecky, 2006 ND 120, ¶ 8, 714
N.W.2d 845, this Court explained:
The value a trial court places on marital property depends on
the evidence presented by the parties. See Fox v.
Fox, 2001 ND 88, ¶ 22, 626 N.W.2d 660. Because a trial
court is in a far better position than an appellate court to
observe demeanor and credibility of witnesses, we presume a
trial court's property valuations are correct.
See Hoverson v. Hoverson, 2001 ND 124,
¶ 13, 629 N.W.2d 573. We will not reverse a trial
court's findings on valuation and division of marital
property unless they are clearly erroneous. See
Corbett v. Corbett, 2001 ND 113, ¶ 12, 628 N.W.2d 312.
"A finding of fact is clearly erroneous if it is induced
by an erroneous view of the law, there is no evidence to
support it, or if, although there is some evidence to support
it, on the entire evidence the reviewing court is left with a
definite and firm conviction a mistake has been made."
Kautzman v. Kautzman, 1998 ND 192, ¶ 8, 585
N.W.2d 561. "A choice between two permissible views of
the evidence is not clearly erroneous if the trial
court's findings are based either on physical or
documentary evidence, or inferences from other facts, or on
credibility determinations. " Hoverson, at
(quoting Olson v. Olson, 2002 ND 30, ¶ 7, 639
N.W.2d 701). A property valuation within the range of
evidence presented at trial is not clearly erroneous.
See, e.g., Hoverson v. Hoverson, 2013 ND
48, ¶ 11, 828 N.W.2d 510.
5] Raak argues the district court erred in determining the
value of his accounting business.
6] Raak is a certified public accountant who in 2009
purchased an accounting firm in Bismarck for $300, 000. Raak
operated the business as Raak & Associates until November
1, 2014, when Raak merged Raak & Associates, the
parties' major marital asset, into Capital Accounting
Services, PC, without giving notice to Jacobs in violation of
the restraining provisions on selling, encumbering, or
dissipating marital assets contained in the divorce summons.
Neither party obtained an appraisal of Raak's accounting
business. At the divorce trial, the certified public
accountant from whom Raak purchased the business in 2009
testified she and her accounting business broker calculated
the sale price by using a formula of 125 percent of the prior
year's gross receipts. She also testified a reduction for
loss of client revenue should also be considered in the sale
price. One of Raak's partners in Capital Accounting
Services, PC, testified the multiplier rate had dropped to
below 100 percent of the prior year's gross revenues at
the time of trial because of the increase in the number of
accounting businesses being sold in the area. Raak also
presented a list of lost clients and claimed his client loss
for the year before the merger totaled $87, 170.
7] The district court determined it had insufficient evidence
to value the new accounting firm created after the merger,
and decided to value Raak & Associates as of October 31,
2014. The court valued the business at 125 percent of the
gross receipts for 2014. The court decreased that amount by
$55, 000 for lost client revenue rather than the $87, 170
claimed by Raak because of "the low level of credibility
the Court has for Daniel's testimony" based on his
dissipation of assets after commencement of the divorce
action and his testimony given during earlier divorce
proceedings. The court further reduced the amount by the debt
remaining to be paid for Raak & Associates and arrived at
a $208, 245 net value for the business.
8] Raak argues the district court erred in using the 125
percent multiplier used when Raak purchased the business in
2009 from the former owner because there was "no
evidence to support it was the current standard in the
industry." Because the parties did not present an
appraisal on the value of the business to the court, the
court was therefore required to determine the value on the
evidence before it. See Olson, 2002 ND 30,
¶ 7, 639 N.W.2d 701. Not only may an owner of property
testify about its value, see Heggen v.
Heggen, 452 N.W.2d 96, 99 (N.D. 1990), but the woman who
sold the business to Raak was herself an accountant and Raak
acquiesced in the sale using this method of valuation.
Although Jacobs contends no deduction should be made for lost
client revenue without considering potential new client
revenue, the former owner acknowledged the value should be
lower if clients leave and Raak, also an accountant,
testified potential new clients are not considered in the
sale price. Raak complains that the court should have
deducted $87, 170 instead of $55, 000 for lost client revenue
because there were no grounds to question his credibility.
"In bench trials, the credibility of witnesses and the
weight to be given their testimony are both exclusively
functions of the trial court." Weber v. Weber,
512 N.W.2d 723, 727 (N.D. 1994). We conclude the court's
valuation of Raak & Associates is within the range of the
evidence presented and is not clearly erroneous.
9] Raak argues the district court erred in placing a $12, 580
value on a motorcycle awarded to him rather than his $9, 000
valuation. However, Raak testified he would pay $12, 000 for
the motorcycle, Jacobs testified she would take the
motorcycle at the $12, 580 valuation she estimated, and
Jacobs presented an exhibit indicating the suggested retail
value of this type of motorcycle was in excess of the
court's valuation. The court noted Raak "had custom
work done on the bike after he bought it" and the
evidence showed he "highly prizes his motorcycles"
and "the bike is likely in excellent condition." We
conclude the court's valuation of the motorcycle is not
10] Raak claims the court erroneously valued jewelry at $1,
000 instead of his estimate of $17, 500. Jacobs valued the
jewelry at $2, 500 before trial. However, during trial both
parties agreed to eliminate the value of the most expensive
pieces of jewelry if Jacobs would give the parties'
children those pieces when ...