"iditiii~t Respondent,
p r 3 i s t r i c t l u r t of t h e F i r s t Judicial. D i s t r i c t ,
Yonorable P e t e r Xeloy, Judge p r e s i d i n g .
; o u ~ ~ s e L Record :
of
For Appellant:
P a t r i c k F. Hooks a r g u e d , Townsend, Montana
Gough, Booth, Shanahan and J o h n s o n , H e l e n a , Montana
'Jard A, Shanahan a r g u e d , H e l e n a , Montana
Submitted: August 31, 1976
Decided : $EF 16 1
m
Mr. J u s t i c e Frank I . Haswell d e l i v e r e d t h e Opinion of t h e C o u r t .
T h i s i s a n a p p e a l by d e f e n d a n t J a m e s A. Roe from a
d i v i s i o n of p r o p e r t y i n a d i v o r c e d e c r e e e n t e r e d i n t h e d i s t r i c t
c o u r t of Broadwater County. Defendant d o e s n o t a p p e a l from t h e
g r a n t o f d i v o r c e t o p l a i n t i f f Irma Roe, b u t c o n t e n d s t h a t t h e
d i s t r i c t c o u r t abused i t s d i s c r e t i o n i n i t s d i v i s i o n of p r o p e r t y
between him and p l a i n t i f f .
The f a c t s o f t h i s c a s e a r e n o t s e r i o u s l y i n d i s p u t e , f o r
t h e d i s t r i c t c o u r t a d o p t e d t h e d e f e n d a n t ' s proposed f i n d i n g s of
f a c t a s i t s own, w i t h c e r t a i n e x c e p t i o n s n o t p e r t i n e n t h e r e .
P l a i n t i f f and d e f e n d a n t were m a r r i e d i n 1966. N children
o
were born of t h i s m a r r i a g e , b u t b o t h p a r t i e s had c h i l d r e n from
previous marriages. A t t h e t i m e o f t h e m a r r i a g e , d e f e n d a n t owned
a b a r c a l l e d t h e Pagan Room i n Lewiston, I d a h o , w h i l e p l a i n t i f f
owned e q u i t y i n a r e s i d e n c e and a p a r t i n t e r e s t i n a l o t i n
Coeur d ' Alene, Idaho I n summary f a s h i o n , we w i l l s e t f o r t h t h e
v a r i o u s f a m i l y and b u s i n e s s t r a n s a c t i o n s which t o o k p l a c e d u r i n g
t h e marriage.
P l a i n t i f f s o l d h e r e q u i t y i n t h e Coeur d ' Alene r e s i d e n c e
and used it a s a down payment on a r e s i d e n c e f o r t h e i r f a m i l y i n
Lewiston. The p a r t i e s a c q u i r e d a b a r c a l l e d t h e M a r t i n i Room i n
Lewiston. A f t e r defendant acquired an i n t e r e s t i n p l a i n t i f f ' s
Coeur d ' Alene l o t , t h a t p r o p e r t y was p l e d g e d as s e c u r i t y f o r t h e
money t o s t a r t t h e M a r t i n i Room. The l i q u o r l i c e n s e f o r t h e
Pagan Room w a s i n d e f e n d a n t ' s name, and t h e l i q u o r l i c e n s e f o r
t h e M a r t i n i Room was i n p l a i n t i f f ' s name. Defendant managed t h e
Pagan Room u n t i l i t s s a l e i n 1969, and p l a i n t i f f managed t h e
M a r t i n i Room u n t i l i t s s a l e i n 1967. During t h i s p e r i o d , de-
f e n d a n t opened a n e x h a u s t r e p a i r shop. A f t e r t h e s a l e of t h e
M a r t i n i Room, p l a i n t i f f worked some s h i f t s a t t h e Pagan Room
and a l s o w a s employed a s a b a r t e n d e r a t a l o c a l h o t e l .
I n 1 9 7 1 , d e f e n d a n t purchased t h e Mint B a r and Cafe i n
Townsend, Montana. The f o l l o w i n g p r o p e r t i e s were t r a d e d i n
t h i s purchase: t h e Lewiston r e s i d e n c e , t h e Coeur d ' Alene l o t ,
and t h e b a l a n c e d u e on t h e M a r t i n i Room c o n t r a c t of s a l e . De-
f e n d a n t assumed f u r t h e r i n d e b t e d n e s s i n t h e t r a n s a c t i o n . Plain-
t i f f i s n o t a named p a r t y t o t h e Mint c o n t r a c t nor i s h e r name on
t h e deed i n escrow. P l a i n t i f f worked p a r t t i m e a t t h e Mint B a r
p e r i o d i c a l l y from 1971 t o 1973. A t t h e time of t r i a l , defendant
c o n t i n u e d t o o p e r a t e t h e Mint Bar.
I n 1973, p l a i n t i f f and d e f e n d a n t s e p a r a t e d . Defendant
made a down payment on a r e s i d e n c e i n Coeur d ' Alene f o r p l a i n -
t i f f u s i n g f u n d s from t h e Mint Bar and borrowed f u n d s . Plaintiff
l i v e d i n t h i s home a t t h e t i m e of t r i a l . A l s o i n 1973, t h e p a r t i e s
constructed an A & W d r i v e - i n f a c i l i t y i n P o s t F a l l s , Idaho. This
was p a r t i a l l y a c q u i r e d w i t h t h e p r o c e e d s from t h e s a l e o f t h e
Pagan Room o r M a r t i n i Room, o r b o t h , and t i t l e was h e l d j o i n t l y .
Defendant o b t a i n e d t h e money n e c e s s a r y t o a c q u i r e t h e A & W
franchise. P l a i n t i f f worked f u l l t i m e managing t h e A & W, and made
t h e monthly payments on t h e Coeur d ' Alene r e s i d e n c e . During
t h e t i m e p l a i n t i f f managed t h e A & W s h e r e c e i v e d a l l t h e monthly
payments from t h e c o n t r a c t of sale of t h e Pagan Room. The A & W
was s o l d under c o n t r a c t s h o r t l y b e f o r e t r i a l .
Other p r o p e r t i e s i n v o l v e d i n t h e s e t t l e m e n t i n c l u d e d r e a l
p r o p e r t y i n Montana and A r i z o n a , and m i s c e l l a n e o u s p e r s o n a l prop-
erty.
The d i s t r i c t c o u r t ' s f i n d i n g s o f f a c t s t a t e a t o n e p o i n t
t h a t d u r i n g t h e e n t i r e t e r m of t h i s m a r r i a g e , " * * * the parties
had o r a c q u i r e d and s o l d v a r i o u s p r o p e r t i e s - often using t h e s a l e
p r o c e e d s of one p r o p e r t y t o a c q u i r e a n o t h e r p r o p e r t y * * *." The
f i n d i n g s of f a c t conclude with t h e following statement:
"7. It i s impossible f o r t h e Court t o determine
w i t h e x a c t i t u d e t h e amount o f f i n a n c i a l c o n t r i -
b u t i o n s made by b o t h p a r t i e s t o t h e i r p r e s e n t
property i n t e r e s t s . I t is q u i t e apparent t h a t
t h e s u c c e s s o f t h e v a r i o u s e n t e r p r i s e s h a s been
due t o t h e h a r d work of b o t h and c o n s i d e r a b l e
good b u s i n e s s judgment."
The d i s t r i c t c o u r t d e c r e e d a b s o l u t e d i v o r c e t o t h e p l a i n t i f f
and made i t s d i v i s i o n of t h e p a r t i e s ' p r o p e r t y i n t e r e s t s . Plaintiff
was awarded t h e Coeur d l Alene r e s i d e n c e s u b j e c t t o i t s i n d e b t e d -
ness, the A & W c o n t r a c t s u b j e c t t o a Small B u s i n e s s Administra-
t i o n i n d e b t e d n e s s , t h e Pagan Room c o n t r a c t b a l a n c e , t h e Arizona
r e a l p r o p e r t y s u b j e c t t o t h e b a l a n c e d u e on t h e p u r c h a s e c o n t r a c t ,
c e r t i f i c a t e s o f d e p o s i t , and p e r s o n a l p r o p e r t y . Defendant was
awarded t h e Mint Bar and Cafe p r o p e r t i e s s u b j e c t t o i t s i n d e b t e d -
n e s s , t h e o t h e r Montana p r o p e r t y , and p e r s o n a l p r o p e r t y . I n addi-
t i o n , d e f e n d a n t w a s o r d e r e d t o pay a p o r t i o n of t h e A & W property
s a l e s commission and a p o r t i o n of t h e A & W accounts payable. The
r e s u l t of t h i s d i v i s i o n was t h a t t h e p a r t i e s r e c e i v e d p r o p e r t y
of r o u g h l y e q u a l d o l l a r v a l u e .
The main i s s u e i s whether t h e d i s t r i c t c o u r t abused i t s
d i s c r e t i o n i n making t h e p r o p e r t y d i v i s i o n d e s c r i b e d above. De-
f e n d a n t a l s o c o n t e n d s t h a t t h e d i s t r i c t c o u r t s h o u l d have g r a n t e d
h i s motion t o withdraw i t s f i n d i n g s of f a c t and c o n c l u s i o n s of
law, and e n t e r new f i n d i n g s and c o n c l u s i o n s and d i r e c t e n t r y o f
a d i f f e r e n t judgment.
The e n t i r e b a s i s of d e f e n d a n t ' s c l a i m of e r r o r i s t h a t
t h e d i s t r i c t c o u r t a r r i v e d a t a n e q u a l d i v i s i o n of t h e p r o p e r t y
i n a mechanical manner w i t h o u t c o n s i d e r i n g t h e u n i q u e circum-
s t a n c e s of t h e p a r t i e s . Defendant c r i t i c i z e s t h i s " a r i t h m e t i c "
a p p r o a c h a s a v i r t u a l a p p l i c a t i o n of "community p r o p e r t y law"
t o p r o p e r t y d i v i s i o n s i n a s t a t e where community p r o p e r t y p r i n -
c i p l e s do n o t obtain. A n a l y s i s c f t h i s argument d i s c l o s e s de-
f e n d a n t ' s d e s i r e f o r t h e a p p l i c a t i o n o f a s t a n d a r d more c l o s e l y
connected t o t h e i n d i v i d u a l f i n a n c i a l c o n t r i b u t i o n s of each
party. U n f o r t u n a t e l y f o r d e f e n d a n t , h i s c o n t e n t i o n s have been
a r g u e d and r e j e c t e d i n t h i s C o u r t on numerous p r e v i o u s o c c a s i o n s .
A d i s t r i c t j u d g e ' s r e s o l u t i o n of p r o p e r t y d i v i s i o n s i s
" f e t t e r e d o n l y by t h e r a n g e of r e a s o n and h i s judgment w i l l n o t
be d i s t u r b e d i n t h e a b s e n c e o f a n a b u s e o f d i s c r e t i o n . " Cook v .
Cook, 159 Mont. 98, 1 0 3 , 495 P.2d 591; F i n l a y s o n v . F i n l a y s o n ,
160 Mont. 64, 500 P.2d 225. The Supreme C o u r t ' s r o l e i n p a s s -
i n g on t h e lower c o u r t ' s a b u s e of d i s c r e t i o n was a p t l y d e s c r i b e d
i n P o r t e r v . P o r t e r , 155 Mont. 451, 457, 473 ~ . 2 d538:
" * * * a reviewing c o u r t i s never j u s t i f i e d
i n s u b s t i t u t i n g i t s d i s c r e t i o n f o r t h a t of t h e
trial court. I n determining whether t h e t r i a l
c o u r t abused i t s d i s c r e t i o n , t h e q u e s t i o n i s n o t
whether t h e reviewing c o u r t a g r e e s w i t h t h e t r i a l
court, but, rather, did the trial court i n the
exercise of i t s d i s c r e t i o n a c t a r b i t r a r i l y without
t h e employment o f c o n s c i e n t i o u s judgment o r e x c e e d
t h e bounds o f r e a s o n , i n view o f a l l t h e c i r c u m -
stances, ignoring recognized p r i n c i p l e s r e s u l t i n g
i n s u b s t a n t i a l i nj u s t i c e . "
The a p p r o a c h u r g e d by d e f e n d a n t , t h a t t h e d i s t r i c t c o u r t
abused i t s d i s c r e t i o n b e c a u s e d e f e n d a n t made more f i n a n c i a l c o n t r i -
butions t o t h e m a r i t a l e n t i t y ' s wealth than p l a i n t i f f , does not
comport w i t h t h e s e t t l e d l a w i n Montana. I n Cook w e s a i d a t 1 0 3 :
"The d i s t r i c t c o u r t a p p a r e n t l y c o n s i d e r e d more
i n t h i s c a s e t h a n mere f i n a n c i a l c o n t r i b u t i o n s .
The l a w h a s n e v e r c o n f i n e d ' j o i n t e f f o r t s ' t o
s u c h a narrow meaning. The m a r i t a l p a r t n e r s h i p
i s more t h a n a b u s i n e s s r e l a t i o n . The p e c u n i a r y
and p r o p r i e t a r y f r u i t s of t h e m a r r i a g e are
f r e q u e n t l y a c q u i r e d by j o i n t e f f o r t , even t h o u g h
a c t u a l f i n a n c i a l o u t l a y may be more t h e c o n t r i -
b u t i o n of o n e s p o u s e t h a n t h e o t h e r . "
Numerous c a s e s p r e c e d i n g and f o l l o w i n g Cook a r e t o t h e same e f f e c t .
See: Johnson v. Johnson, 137 Mont. 11, 349 P.2d 310; T o l s o n v .
T o l s o n , 145 Mont. 87, 399 P.2d 754; F i n l a y s o n v . F i n l a y s o n , s u p r a ;
Hunnewell v . Hunnewell, 160 Mont. 1 2 5 , 500 P.2d 1198; F r a n c k e v .
F r a n c k e , 1 6 1 Mont. 98, 504 P.2d 990.
The power o f t h e d i s t r i c t c o u r t t o e x e r c i s e i t s d i s c r e t i o n
i n t h e d i v i s i o n of property i n t e r e s t s i s a necessary i n c i d e n t of
i t s equitable jurisdiction i n divorce actions. Johnson v . J o h n s o n ,
supra.
- 5 -
A s s t a t e d i n Cook a t 1 0 2 :
" * * * t h e t r i a l c o u r t may make a n e q u i t a b l e
d i v i s i o n of t h e l i t i g a n t s ' property i n a divorce
a c t i o n r e g a r d l e s s of t h e s t a t e of t i t l e t o t h a t
p r o p e r t y and r e g a r d l e s s o f a c t u a l f i n a n c i a l
contribution. * * *"
A l o n g l i n e o f Montana c a s e s a r e i n harmony w i t h t h i s r u l e . See:
Bloom v . Bloom, 150 Mont. 5 1 1 , 437 P.2d 1; Hodgson v . Hodgson,
156 Mont. 469, 482 P.2d 1 4 0 ; L i b r a v . L i b r a , 157 Mont. 252, 484
P.2d 748; F i n l a y s o n v . F i n l a y s o n , s u p r a ; Aksamit v . A k s a m i t , 1 6 2
Mont. 266, 511 P.2d 1 0 ; L a P l a n t v . L a P l a n t , Mont . , 551
P.2d 1014, 33 St.Rep. 580.
I t i s a l s o w e l l s e t t l e d i n Montana t h a t where u n d i s p u t e d
f i n d i n g s i n d i c a t e s u b s t a n t i a l f i n a n c i a l and p e r s o n a l c o n t r i b u t i o n s
by b o t h p a r t i e s , a n e q u a l d i v i s i o n o f t h e p r o p e r t y i n t e r e s t s i s
n o t unreasonable. J o h n s o n v . J o h n s o n , s u p r a ; Cook v . Cook, s u p r a .
T h e r e i s no a u t h o r i t y i n law o r r e a s o n f o r t h e p r o p o s i t i o n t h a t
u n d e r s u c h c i r c u m s t a n c e s a n e q u a l d i v i s i o n o f p r o p e r t y between
t h e p a r t i e s somehow c o n v e r t s Montana i n t o a community p r o p e r t y
state. See: Cook v . Cook, s u p r a .
Based on t h e s e p r i n c i p l e s , w e f i n d t h a t t h e d i s t r i c t
c o u r t d i d n o t a b u s e i t s d i s c r e t i o n i n i t s judgment, nor i n i t s
r e f u s a l t o e n t e r new f i n d i n g s and c o n c l u s i o n s and a d i f f e r e n t judgment.
The judgment o f t h e d i s t r i c t c o u r t i s a f f i r m e d .
Justice
C Mr. J u s t i c e J o h n Conway H a r r i s o n c o n c u r r i n g and d i s s e n t i n g :
I c o n c u r i n t h e r e s u l t and d i s s e n t o n l y a s t o t h e e x p e n s e s
charged a g a i n s t defendant regarding t h e s a l e o f t h e A & W i n Idaho.
T h i s I f e e l i s a n a b u s e o f d i s c r e t i o n and I would c h a r g e a l l t h o s e
e x p e n s e s and d e b t s t o t h e p l a i n t i f f .
7 t
Justice