AREN FIELD v. MATTHEW FIELD

[¶2.] Aren and Matt Field were married in 2001. The two began dating

when they were both students at South Dakota State University. Matt later

graduated with a bachelor's degree in animal science and moved to Iowa to work at

a commercial hog facility. Aren joined him and eventually obtained a bachelor's

degree, also in animal science, from Iowa State University.

[¶3.] The couple moved back to South Dakota in 2002 and settled on an

acreage they purchased from Matt's grandmother near Lake Preston. Both Matt

and Aren obtained jobs connected to agriculture, but Matt's long-held ambition was

to have his own farm and livestock operation. Aren supported Matt's aspiration,

and the two started modestly by acquiring some livestock.

[¶4.] Over time, Matt grew close to his relative, Dennis Ryland, who farmed

east of Lake Preston. Matt helped Dennis for several years with all aspects of

Dennis' row-crop farming operation, and eventually Matt and Aren rented some of

the land for their own crops. Dennis saw Matt as a hard worker with an earnest

#28901

-2-

desire to farm for himself. In 2006, Dennis granted "to Matthew Field and Aren

Field” an option to purchase his farm (the Ryland Farm)1 for $300,000, which was

significantly below its market value.

[¶5.] Dennis was interested in keeping the land in the family after he was

done farming. During his trial testimony, Dennis explained that the land was

homesteaded in 1878 by his great-grandfather and has been owned and farmed by

family members ever since.

[¶6.] Dennis' effort to plan for his succession was impacted by the fact that

his only child lived out of state and did not want to farm. However, Dennis came to

view Matt as a worthy successor because of his strong work ethic and kinship. As a

result, Dennis set the purchase price for his farm substantially below its market

value to allow Matt and Aren the chance to operate the farm without incurring a

prohibitive amount of debt.

[¶7.] In 2010, Aren and Matt exercised their option to purchase the Ryland

Farm. The terms of the sale were incorporated into a contract for deed that

required payment of the $300,000 purchase price in annual principal payments of

$15,000 and applied an interest rate of 5% to the unpaid balance. Both Aren and

Matt signed the contract for deed, which described them as joint tenants with rights

of survivorship. Prior to the couple's separation, they made the periodic principal

and interest payments using money from their joint checking account.



1. The record contains differing acreage amounts for the Ryland Farm, varying

from 467 acres to 478 acres.

#28901

-3-

[¶8.] Aren worked outside of the home for much of the marriage, but in

2014, she quit her full-time job and worked at home, raising the parties' three

children and assisting Matt in various aspects of the family farming operation.

Aren later returned to full-time employment after the parties separated. Matt also

maintained other employment over the course of the parties' marriage and was

working as a contracted seed dealer at the time of trial.

[¶9.] The parties' marriage deteriorated, and Aren commenced this divorce

action in May 2016. She moved out of the marital home with the parties' children a

short time later. The parties stipulated to a divorce on the grounds of irreconcilable

differences, but they were unable to reach an agreement concerning the division of

marital property and child custody. They agreed to try these issues separately, and

the circuit court conducted a court trial to determine an equitable division of the

marital estate. The principal issue before the court was whether the Ryland Farm

should be treated as Matt's separate property.

[¶10.] Matt argued that the Ryland Farm was essentially a gift from Dennis

solely to him, and it should therefore not be subject to equitable division. Matt

introduced evidence indicating the farm was worth $1,826,000 in 2010 when he and

Aren purchased it and was worth $2,200,000 at the time of trial. He proposed

including only the discounted $300,000 purchase price and the appreciated value of

$374,000 in the marital estate. Matt claimed the remaining $1,526,000 should be

excluded from the marital estate as his separate property because it represented

the value of Dennis' gift to only him, not Aren.

#28901

-4-

[¶11.] For her part, Aren argued the entire value of the Ryland Farm should

be subject to the court's equitable division as an asset of the marital estate because

it was not exclusively given to Matt. Through the presentation of her testimony and

other witnesses, Aren also contended that she had contributed directly and

indirectly to the acquisition of the Ryland Farm and its maintenance and operation.

[¶12.] The circuit court accepted Matt's view and determined $1,526,000

should be excluded from the marital estate and treated as Matt's separate property.

The court's decision turned on its determination of Dennis' donative intent.

[I]t was very clear to this Court that Dennis Ryland wanted this

land to go to a family member that farms the property and the

only one . . . was Matt. Matt is a relative and he farmed with

Dennis for a period of time and it's clear that Dennis wanted to

offer him a chance to farm. Dennis was impressed with Matt's

work ethic.

* * * *

And it really did not matter whether [Matt] was married,

whether he was single, who he was married to, the fact is

Dennis Ryland would not have sold him that land for a

discounted price of $300,000 on a piece of property that was

valued at 1.8 million unless he was Matt Field, his relative.

[¶13.] Although the circuit court made a general finding that both parties

had contributed equally to the accumulation of property, the court excluded the

$1,526,000 gift because Matt was the reason for Dennis' benevolence. Beyond this,

though, the court did not make specific findings concerning the extent that Aren

contributed, directly or indirectly, to the acquisition or maintenance of the Ryland

Farm.

[¶14.] Aren appeals, presenting the single issue of whether the circuit court

abused its discretion by excluding $1,526,000 of the Ryland Farm's appraised value

from the marital estate.

#28901

-5-

Analysis

[¶15.] We review a circuit court's decision to determine whether property is

marital or non-marital for an abuse of discretion. Anderson v. Anderson, 2015 S.D.

28, ¶ 8, 864 N.W.2d 10, 14. We have recently reaffirmed our formulation of the

abuse of discretion standard, describing it as "a fundamental error of judgment, a

choice outside the range of permissible choices, a decision, which, on full

consideration, is arbitrary or unreasonable.” State v. Delehoy, 2019 S.D. 30, ¶¶ 21-

22, 929 N.W.2d 103, 108-09 (quoting Thurman v. CUNA Mut. Ins. Soc'y, 2013 S.D.

63, ¶ 11, 836 N.W.2d 611, 616). In so doing, however, we did not abandon the selfevident corollary that an error of law is never within the range of permissible

choices and necessarily constitutes an abuse of discretion. Lewis v. Sanford Med.

Ctr., 2013 S.D. 80, ¶ 27, 840 N.W.2d 662, 668.

[¶16.] We have described South Dakota, in general terms, as an "all property

state,” which means that "all property of both of the divorcing parties [is] subject to

equitable division by the [circuit] court, regardless of title or origin.” Billion v.

Billion, 1996 S.D. 101, ¶ 61, 553 N.W.2d 226, 237 (citation omitted). This principle

reflects an uncomplicated interpretation of SDCL 25-4-44, which provides as

follows:

When a divorce is granted, the courts may make an equitable

division of the property belonging to either or both, whether the

title to such property is in the name of the husband or the wife.

In making such division of the property, the court shall have

regard for equity and the circumstances of the parties.

[¶17.] Spouses are certainly "entitled to maintain separate property and do

with it as they see fit.” Halbersma v. Halbersma, 2009 S.D. 98, ¶ 9, 775 N.W.2d

#28901

-6-

210, 215. However, gifted or inherited property is not automatically deemed

separate and "ipso facto excluded from consideration in the overall division of

property.” Anderson, 2015 S.D. 28, ¶ 7, 864 N.W.2d at 14 (quoting Novak v. Novak,

2006 S.D. 34, ¶ 5, 713 N.W.2d 551, 553). In making its decision whether to include

inherited or gifted property, a circuit court may consider "other evidence . . .

including the origin and treatment of . . . property and the direct or indirect

contributions of each party to the accumulation and maintenance of the property.”

Halbersma, 2009 S.D. 98, ¶ 12, 775 N.W.2d at 215.

[¶18.] We have often held that the question of whether to exclude property

from the marital estate should be guided by the same factors used to determine an

equitable division for a divorcing couple's assets and liabilities. See, e.g., Novak,

2006 S.D. 34, ¶ 4, 713 N.W.2d at 552 (listing seven factors considered to determine

an equitable division of marital assets). However, the principal rule for analyzing a

discrete claim of separate property provides that "[o]nly where one spouse has made

no or de minimis contributions to the acquisition or maintenance of an item of

property and has no need for support, should a court set it aside as 'non-marital'

property.” Novak, 2006 S.D. 34, ¶ 5, 713 N.W.2d at 552-53 (citation omitted).

[¶19.] Here, the court's finding that Dennis intended to keep his farm in the

family is certainly supported by the record, as is its additional finding that Matt

was the sole familial connection. However, this evidence only explains why Dennis

made a partial gift, not to whom. The bare fact that Matt was the but-for cause of

Dennis' gift does not necessarily foreclose the possibility that Dennis gave the land

to Matt and Aren.

#28901

-7-

[¶20.] In this regard, there is no evidence that Dennis, Matt, or Aren

anticipated a divorce when Dennis granted the Fields an option to purchase the

Ryland Farm in 2006 or when they exercised the option in 2010. The option

expressly included both Matt and Aren, and the subsequent contract for deed listed

them as joint tenants with rights of survivorship. Both documents were drafted by

an attorney and contain no restrictions on Dennis' transfer of the Ryland Farm.

The couple made annual payments during the marriage with marital funds to which

Aren contributed her earnings. Although the circuit court was free to consider

Dennis' donative intent, it cannot be used to revise the historical facts associated

with Dennis' gift which, the undisputed evidence establishes, included Aren. We

previously rejected a similar effort to reconceptualize donative intent associated

with a gift to a married couple who later divorced. See Godfrey v. Godfrey, 2005

S.D. 101, ¶¶ 25-27, 705 N.W.2d 77, 82.

[¶21.] In Godfrey, we held that the circuit court abused its discretion when it

excluded a lifetime gift of real estate given by a husband's parents from the

divorcing parties' marital estate. Id. ¶ 28, 705 N.W.2d at 82-83. After concluding

that the court had failed to consider the wife's contribution to the acquisition or

maintenance of the property, we further determined that the land conveyed to the

parties as joint tenants "was a gift to both [the husband and wife].” Id. ¶ 27, 705

N.W.2d at 82. In doing so, we noted testimony from the husband's father who

claimed years later during the couple's divorce trial, "Well, that's what it says on

the sheet, but that isn't the way we worded it when we gave it to them.” Id. ¶ 26,

705 N.W.2d at 82. We determined this to be a belated effort to recast the nature of

#28901

-8-

the gift2 and concluded that the court should have considered the gifted land as

marital property. Id. ¶¶ 27-28, 705 N.W.2d at 82-83.

[¶22.] We have similar concerns here. Dennis granted the option to purchase

the Ryland Farm to Matt and Aren and later sold it to both of them using a contract

for deed prepared on his behalf that listed the couple as joint tenants with rights of

survivorship. Although we have recognized that a circuit court in a divorce action is

not bound by the form of a deed or, in this case, a contract for deed, the purposeful

act of conveying real estate to a husband and wife as joint tenants can be

"convincing evidence of the realty's status as marital property.” Id. ¶ 23, 705

N.W.2d at 82. In his testimony, Dennis acknowledged he could have made the

partial gift to Matt only but stated "they were married at the time.”

Q: [by Aren's counsel]: But you instead you sold it to Matt

and Aren, right?

A: [Dennis Ryland]: Yes.

Q: When is the first time that you started calling this a gift?

A: Well, I never really did call it a gift.

Q: Did you ever tell Matt that this was a gift to him?

A: Not really.

Q: Did you ever tell Aren that it was a gift to her and Matt?

A: No. I'm sure they realized that probably.

[¶23.] Although we have previously held that "the donor's intent must be

shown in order to determine that a gift has been made,” we have never specifically



2. The husband's parents had also filed federal gift tax returns designating

husband and wife individually as owners of the gifted land. Id. ¶ 7, 705

N.W.2d at 79.

#28901

-9-

stated the point at which intent must be judged. Albrecht v. Albrecht, 2000 S.D. 54,

¶ 15, 609 N.W.2d 765, 769 (citation omitted). However, our cases strongly suggest

that a donor's intent should be judged at the time of the gift or purported gift. See

Godfrey, 2005 S.D. 101, ¶ 27, 705 N.W.2d at 82 (holding donor's testimony favorable

to his son in a divorce action "ten years after” the donor's real estate gift "was

insufficient to overcome the evidence . . . establishing joint tenancy . . . .”); Albrecht,

2000 S.D. 54, ¶ 15, 609 N.W.2d at 770 (stating post-divorce theory that real estate

sale from husband's parents was a gift to husband "seems to have been birthed

solely for the purposes of this divorce action”); see also Koerner v. Nielsen, 8 N.E.3d

161, 165 (Ill. App. Ct. 2014) ("Donative intent is determined at the time of the

alleged transfer of property, and is controlled by what the parties said or did at the

time of the transaction, and not what is said at a later time.”).

[¶24.] Synthesizing these cases into a rule that we view to be justified by both

legal and practical considerations, we now hold that a donor's, or putative donor's,

intent must be judged at the time of the alleged gift. Applying the rule here, the

circuit court's findings about Dennis' intent to keep the Ryland Farm in the family,

though supported by the evidence, cannot sustain the broader conclusion that

Dennis intended to gift the land solely to Matt. Dennis' testimony in this regard

appears to be a product of the divorce action—not the intent he expressed years

earlier at the time of the gift when there was no discernible effort to distinguish

between Matt and Aren. The circuit court's determination regarding this separate

property issue is not supported by our cases, and we must therefore vacate the

#28901

-10-

court's order dividing the property and remand the case with instructions to include

the entire value of the Ryland Farm in the marital estate.

[¶25.] Though not necessary to our disposition here, we write further to

explain how the operation of our decisional law would require us to remand the case

even if the disputed portion of the Ryland Farm's value was solely a gift to Matt. In

such an event, the circuit court would have been obligated to continue its analysis

by considering evidence of Aren's contributions and her need for support. Only if it

determined she had made no or merely a de minimis contribution to the acquisition

and maintenance of the Ryland Farm and had no need for support could the court

have excluded the gifted property value from the marital estate. This equitable

principle has a strong basis in our decisions. We have consistently held that

spouses can provide valuable contributions to the acquisition and maintenance of

inherited or gifted property by acting as homemakers or working separately to

assist the other spouse in maintaining inherited or gifted property.

[¶26.] In Anderson, for example, we affirmed the circuit court's decision to

treat two quarter sections of farmland—one gifted to the husband and the other

inherited by the husband—as marital property. 2015 S.D. 28, ¶ 11, 864 N.W.2d at

16. The gifted land was held by the husband and wife jointly, and both quarters

were transferred well after the parties' marriage. Id. ¶ 3, 864 N.W.2d at 12-13. We

determined the circuit court had acted within its discretion by crediting the wife's

contribution as a mother and a homemaker because it "afforded [her husband] the

time he needed to maintain the farm equipment, plant crops, harvest crops, and

other similar tasks.” Id. ¶¶ 8-9, 864 N.W.2d at 14-15.

#28901

-11-

[¶27.] Citing a similar contribution inquiry, we also affirmed the circuit

court's decision to treat assets held only in a wife's name as marital property in

Ahrendt v. Chamberlain, 2018 S.D. 31, ¶ 14, 910 N.W.2d 913, 919. The circuit

court's findings in Ahrendt were based upon the husband's indirect contributions,

which included "work efforts [that] allow[ed] the other spouse to maintain inherited

property separately . . . that otherwise would be required for the support and

maintenance of the family.” Id. ¶ 13, 910 N.W.2d at 919 (quoting Terca v. Terca,

2008 S.D. 99, ¶ 25, 757 N.W.2d 319, 326).

[¶28.] Here, there is evidence that Aren acted as the principal homemaker

and caretaker for the children. She also worked outside of the home and

contributed to the family's income. Her earnings were deposited into a joint account

that was used to make payments on the Ryland Farm. There is also evidence that

Aren assisted directly with the couple's overall farming operation by, among other

things, bottle-feeding lambs, delivering grain, driving truck during harvesting, and

preparing and delivering meals to Matt and Dennis in the field. However, the

circuit court did not consider whether these seemingly beneficial contributions were

merely de minimis or whether Aren had a demonstrated need for support before it

excluded a portion of the Ryland Farm's value from the marital estate.

[¶29.] By overlooking this inquiry, the circuit court applied a rule that would

conclusively prevent the entire value of the Ryland Farm from ever being

considered marital property regardless of Aren's contributions. Such a rule, if

accepted, would be in irreconcilable tension with our existing decisional law.