Messmer v. Messmer
2020 ND 62 (2020)
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Rule of Law:
Under N.D.C.C. § 14-05-24(1), if parties to a divorce do not mutually agree on a valuation date for the marital estate, the court has no discretion and must value the property as of the date of service of the summons or the date of separation, whichever occurred first.
Facts:
- Robert Messmer and Clare Messmer were married in 1984 and engaged in farming and ranching.
- During the marriage, Robert Messmer's mother executed and recorded a deed granting Robert a remainder interest in 320 acres of land, while retaining a life estate for herself.
- The deed was recorded before the parties' separation, but neither Robert nor Clare Messmer was aware of the transfer at that time.
- The parties initiated divorce proceedings and separated.
- After the initial divorce trial, the parties discovered the existence of the recorded deed for the 320 acres.
- Subsequent to the discovery of the deed but before a second trial, Robert Messmer's mother passed away, extinguishing her life estate and vesting full ownership of the 320 acres in Robert.
- After learning of the gift, Robert Messmer did not renounce or reject it.
Procedural Posture:
- Clare Messmer initiated divorce proceedings against Robert Messmer in the District Court of Stark County.
- Following a trial, the court entered a judgment on August 22, 2018.
- Robert Messmer, the defendant, filed a post-trial motion for a new trial.
- Clare Messmer, the plaintiff, filed a motion to amend the judgment to include 320 acres of land discovered after the trial.
- The district court granted both motions, ordering a new trial and ruling that the 320 acres were part of the marital estate.
- The district court set the valuation date for the 320 acres as the date of the second trial, rather than the date of separation.
- Following the amended judgment, Robert Messmer (appellant) appealed the district court's decision to the Supreme Court of North Dakota; Clare Messmer is the appellee.
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Issue:
Does a district court have the discretion under N.D.C.C. § 14-05-24(1) to select a valuation date for a marital asset that is different from the date of service or separation when the parties have not mutually agreed upon a date?
Opinions:
Majority - Jensen, Chief Justice
No. The statute N.D.C.C. § 14-05-24(1) is unambiguous and does not grant the district court discretion to select its own valuation date when the parties fail to agree on one. The statute's third sentence provides a mandatory directive: '[i]f the parties do not mutually agree upon a valuation date, the valuation date for marital property is the date of service of a summons...or the date on which the parties last separated, whichever occurs first.' Reading judicial discretion into this sentence would render the legislature's specific directive meaningless. The court also affirmed the inclusion of the 320 acres in the marital estate, reasoning that the recording of the deed by the grantor created a rebuttable presumption of delivery and acceptance. Because Robert Messmer did not renounce the gift after learning of it, the property was a completed gift and part of the marital estate.
Concurring in part and dissenting in part - McEvers, Justice
Yes. The statute should be interpreted to grant the court discretion to determine a just and equitable valuation date, even when the parties do not agree. The majority's interpretation leads to an absurd result where a court's equitable power is only available when parties agree, but not when they disagree—the very time such discretion is most needed. Reviewing the legislative history, the dissenting justice concluded that the legislature intended the statutory dates to be a default, with the ultimate decision on valuation left to the court's discretion to achieve an equitable division. The statute is ambiguous and should be construed to allow for judicial discretion in all circumstances to avoid unjust outcomes.
Analysis:
This decision establishes a bright-line rule for the valuation of marital property in North Dakota, significantly curtailing judicial discretion. By strictly interpreting N.D.C.C. § 14-05-24(1), the court prioritizes statutory text and predictability over a court's ability to adjust for post-separation changes in asset values, which can occur during prolonged litigation. The ruling clarifies that the date of separation or service is a mandatory valuation point, not a default, in the absence of party agreement. The dissent's call for legislative reconsideration highlights the potential for this rigid rule to create inequitable outcomes in volatile economic conditions or complex property disputes.
