Rueschenberg v. Rueschenberg

Jubie Rueschenberg (plaintiff) and Scott Rueschenberg (defendant) married in 1998. At the time of the marriage, Scott owned Desert Mountain Medical (DMM), a medical-hardware business. During the marriage, Jubie worked as DMM’s manager of operations, and the community received nearly all of DMM’s net distributable profits. Jubie filed for divorce in 2005 and sought a share of DMM’s increased value. Scott challenged, arguing that the increased value during the marriage was solely due to outside market forces, not to community efforts. It was undisputed that DMM itself was Scott’s separate property. The trial court found that Scott was entitled to $550,000 of DMM’s $1.44 million value as a fair return on his separate-property investment. The remaining $890,000, which represented DMM’s increased value, was apportioned two-thirds to community efforts and one-third to outside market forces. The trial court awarded Jubie approximately $297,000, representing one-half of the community’s two-thirds interest in DMM’s increase in value. Scott appealed, arguing that (1) the community was not entitled to a share of DMM’s increased value in addition to the profits the community had already received, which represented a fair salary for the community’s labor; and (2) there was insufficient evidence to support the trial court’s decision to apportion two-thirds of the increased value to the community.