This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The case involves a divorce between the parties, who were married from 1980 to 1991. During the marriage, the Husband was a 50% partner in Jurado Farms, a diversified business that was his separate property. The value of Jurado Farms increased significantly during the marriage, and both parties contributed labor to the business. The Wife worked intermittently as a bookkeeper and real estate agent, while the Husband managed the business full-time. The trial court found that both parties were undercompensated for their labor, which contributed to the growth of the business (paras 4-6).
Procedural History
- District Court, January 1992: The trial court issued a divorce decree and later resolved property and child support issues. It awarded the Wife a lien on the Husband's separate property for the enhanced value attributable to community labor and calculated child support based on the Husband's draws from the business (paras 1, 25).
Parties' Submissions
- Husband: Argued that the trial court erred in awarding the Wife a lien on the increased value of his separate property, failed to account for natural appreciation, and used an arbitrary rate of return. He also challenged the admission of certain exhibits and the calculation of child support (paras 2, 22, 25).
- Wife: Contended that the trial court erred in its child support calculation by deviating from the New Mexico Child Support Guidelines without sufficient justification. She also argued that she should have been awarded prejudgment interest on the community lien from the date of valuation (paras 3, 25, 33).
Legal Issues
- Whether the trial court erred in awarding the Wife a lien on the increased value of the Husband's separate property (para 2).
- Whether the trial court properly accounted for natural appreciation in its valuation of the Husband's separate property (para 2).
- Whether the trial court erred in its calculation of child support by deviating from the New Mexico Child Support Guidelines (para 3).
- Whether the Wife was entitled to prejudgment interest on the community lien from the date of valuation (para 3).
Disposition
- The trial court's award of a lien to the Wife on the Husband's separate property was affirmed (para 37).
- The trial court's calculation of child support was reversed and remanded for further proceedings (para 37).
- The trial court's decision not to award prejudgment interest on the community lien was affirmed (para 37).
Reasons
Per Pickard J. (Alarid and Bosson JJ. concurring):
Lien on Separate Property: The court upheld the trial court's application of the Dorbin formula, which apportions the increase in value of separate property between separate and community interests. The evidence supported the trial court's finding that the undercompensated community labor of both parties contributed to the growth of Jurado Farms. The 10% rate of return used by the trial court was within the range of evidence presented and included natural appreciation (paras 10-21).
Child Support: The trial court's deviation from the New Mexico Child Support Guidelines was reversed. The court found that the trial court failed to make sufficient findings or rely on substantial evidence to justify the deviation. Specifically, the Husband did not provide evidence of how much of Jurado Farms' income needed to be reinvested as an ordinary and necessary business expense. The case was remanded for further proceedings consistent with the principles established in Roberts v. Wright (paras 25-32).
Prejudgment Interest: The court held that the award of prejudgment interest in divorce cases is discretionary. The trial court's decision to award interest only from January 1, 1994, was reasonable and did not constitute an abuse of discretion. The court noted that the 10% interest rate was high and likely accounted for any delay in payment (paras 33-36).