Simplot v. Simplot
Idaho Supreme Court
526 P.2d 844 (1974)
- Written by Whitney Kamerzel , JD
Facts
Before Don Simplot (defendant) married Sharidon Lee Simplot (plaintiff), Don owned 610 shares of Apex Corp., which was a holding company that owned shares of J. R. Simplot Co. Don consequently owned 8.4 percent of J. R. Simplot. During the marriage, J. R. Simplot’s retained earnings increased from $6 million to over $44 million. Don did not have the ability to benefit from this increase in J. R. Simplot’s value other than by selling his stock. Moreover, dividends were not issued to stockholders, and instead J. R. Simplot’s directors used their business judgment to reinvest the earnings into property and equipment. Don served on J. R. Simplot’s board of directors, and his salary adequately compensated the community for his labor. There was no evidence that Don convinced the board to reinvest the earnings to deprive the community of dividend profits. Upon the Simplots’ divorce, the trial court held that Don’s interest in Apex and J. R. Simplot was his separate property. Sharidon appealed, arguing that the increase in retained earnings during the marriage was profit made on Don’s separate property and was therefore community property.
Rule of Law
Issue
Holding and Reasoning (McQuade, J.)
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