No. 14282
I N THE S P
U- CCUKC OF THE STATE OF MONTANA
1978
IN RE THE MARRIAGE OF'
E. G. BALSAM, J 3 . t
Petitioner and Respondent,
Respondent and Appellant.
Appeal fran: D i s t r i c t Court of the Thirteenth Judicial D i s t r i c t ,
Homrable Charles Luedke, Judge presiding.
Counsel of Record:
For Appellant:
Berger, Anderson, Sinclair & Murphy, Billings, Mntana
James J. Sinclair argued, Billings, Pbntana
For Respondent:
I;ongan & Holmstrcan, Billings, Montana
J m s C. Capser argued, Billings, Mntana
a e
Submitted: November 15, 1978
Filed: $mf. 5 1979
Mr. Justice Daniel J. Shea delivered the Opinion of the Court.
Wife appeals from judgment of the Yellowstone County
District Court finally distributing marital assets after
dissolution of her marriage to respondent-husband.
The parties were married in January 1964. During their
thirteen year marriage, they had three children. The husband
petitioned for dissolution which was granted on March 9,
1977. Custody, support, visitation, maintenance and property
distribution were to be settled later. Mutual agreement was
reached as to all matters except property division. The wife
would retain custody of the three minor children. Husband
was obligated to pay $250.00 per month per child for support
until each attained the age of majority. No provision was
made for maintenance; none was pleaded. Only the issue of
property distribution was presented to the District Court.
The property before the Court included:
(1) family home appraised at $92,800.00
(2) household furnishings and
personal property in possession
of wife 17,000.00
(3) household furnishings and
personal property in possession
of husband 3,000.00
(4) 1972 Mercury station wagon 2,275.00
(5) 34 shares Balsam, Inc. stock 58,549.36
(6) 1 share Hornoi Transport,
Ltd. stock no value
(7) 215 shares Hornoi Transport,
Inc. stock 54,487.45
The marital debts were:
(1) Unsecured notes from First National
Bank, Miles City, Montana $19,000.00
(2) Note payable to Midland, Inc.
for construction materials used
in construction of marital home 6,190.00
On December 9, 1977, the District Court issued its memorandum-
order determining the wife's entitlement to the above assets
and liabilities. The court engaged in a reasoned analysis
as follows:
Family Home. Prior to their marriage, husband was
given a trust fund by his parents. After marriage and
construction of the marital home, he withdrew monies from
the trust fund and reduced the construction price of $66,800.00
by 41%. Documentation of this transaction was received into
evidence without objection. The court ruled that only 59% of
the home's present value was includable in the marital
estate for division.
Balsam Inc. Stock. Husband was given 19 shares of
Balsam, Inc. stock and 50 shares of Northern Tank Lines, Inc.
stock by his parents. Husband later traded the Northern
Tank Lines, Inc. stock for 15 more shares of Balsam, Inc.
stock, giving him a total of 34 shares. The court noted no
increase in the value of this gifted stock discernible from
the evidence presented and that its value is adversely
affected by transfer restrictions. The Balsam, Inc. stock
was not included in division of the marital property.
Hornoi Transport, --
Ltd. Stock. During the marriage,
husband and his brother combined the dividends received from
Northern Tank Lines, Inc. stock and purchased inter-provincial
authority to transport petroleum products from Canada into
the United States. The new concern, named Hornoi Transport,
Ltd., generated substantial income until about a year after
its inception when the Canadian government imposed a heavy
export tax on petroleum products thereby causing a complete
cessation of business. The corporation has produced no
income since and was considered valueless at marital dissolution.
Hornoi Transport, --
Inc. Stock. With the funds generated
while Hornoi Transport, Ltd. was profitable, husband and
his brother purchased certain Montana-North Dakota intrastate
authority to haul petroleum products around which they
formed Hornoi Transport, Inc. Husband held a 50% interest in
Hornoi Transport, Inc. valued at $54,487.45. The court
included this amount in the marital estate.
Ultimately, the assets in which the wife was deemed
entitled to share included:
(1) family home to extent of (59%) $54,752.00
(2) furnishings and personal property 20,000.00
(3) automobile 2,275.00
(4) Hornoi Transport, Inc. 54,487.45
$131,514.45
Deducting the marital debts ($25,190.00), her one-half
share was deemed $53,162.22. Out of this figure, the court
awarded the home furnishings and personal property in wife's
possession ($17,000.00) and the automobile leaving a balance
of $33,887.22. The court recommended that if the wife remain
in the home with the children, an arrangement be made whereby
when the youngest child attains majority, the home be sold
and its proceeds divided in proportion to their respective
interest, i.e., 63.48% to husband, and the balance to the
wife.
The issue presented is whether the District Court's
distribution of the marital property was an abuse of discretion.
Our standard of review in disputes over a District
Court's division of marital property is whether in the exercise
of its discretion the court acted arbitrarily, unreasonably
or without regard to recognized principles resulting in
substantial injustice. Porter v. Porter (1970), 155 Mont.
451, 457, 473 P.2d 538, 541. This case was submitted with
an agreed statement of record on appeal pursuant to Rule
9(d), Mont.R.App.Civ.P., hence we confine our inquiry to
whether there was substantial evidence in that record and
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the exhibits to support the court's findings and order of
property disposition. Martinez v. Martinez (1978), Mont .
Wife argues that her award of $53,162.22 when compared
to $234,848.49 is manifestly inequitable. Our preliminary
observation is that the wife's valuation of the marital
estate is not supported by the record. The $234,848.49
figure is derived from the chart attached to her brief,
ostensibly for this Court's convenience. The wife values
the Balsam, Inc. stock without discount. The uncontraverted
testimony of husband's certified public accountant was that "if
value were to be determined by use of book values, then the
stock in Balsam, Inc. would have to be discounted for minority
interest." Exhibit 2, fixing the discounted value, was then
admitted without objection. Likewise, the only evidence on
value of the Hornoi Transport, Ltd. stock was that it had no
present value. Since these valuations were accepted by the
District Court without objection by wife's counsel, we
cannot consider her recalculations on appeal. Sikorski v.
Olin and Rolin Mfg., Inc. (1977), Mont . , 568 P.2d
571, 574, 34 St.Rep. 1042, 1046 (citing cases).
Essentially, the wife maintains it is inequitable that
she has no source of income while the husband does. She
forsees the eventual exhaustion of property awarded her by
the time their youngest child attains the age of majority.
Husband aptly characterizes this as a "maintenance argument",
which assumes she will never work or remarry. Like the
valuation she ascribes to the marital assets, wife's contention
that the amount awarded will not enable her to maintain her
station in life was not an issue raised in the District
Court. In view of the fact that the wife had remarried at
the time of trial, property disposition as an alternative to
a maintenance was indeed a moot issue.
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The parties are agreed that section 48-321(1), R.C.M.
1947, provides the statutory guidelines for distribution
of marital property at dissolution. The wife contends
however, the court failed to consider her non-monetary
contributions in its disposition. We disagree. The court
acknowledged the wife's non-monetary contribution with
respect to 59% of the current value of the family home, all
the home furnishings and personal property, the automobile
and the Hornoi Transport, Inc. stock. With reference to the
stock, the court reasoned:
"Although this asset [Hornoi Transport,
Inc.] came as a product of the husband's
gifted stock interest in Northern Tank
Line, being a dividend associated with
such stock ownership, its development
accrued during the marriage and can properly
be considered a marital asset in which the
wife would be entitled to some interest."
The rationale underlying the court's treatment of the
Balsam, Inc. stock was also outlined in the court's memorandum:
.
". . the gifted stock he now has in
Balsam, Inc., has not been the product of
any marital effort by either of them, but
is purely a gift toward which the wife has
made no contribution and, therefore, any
entitlement in her should take this factor
into account. If there has been any increase
in the value of the stock over the period of
the marriage, it is not discernible from the
evidence before the Court."
The court thus exercised reasonable discretion in dis-
allowing wife a half interest in the Balsam, Inc. stock.
In valuing the family residence, the court apparently
adopted the husband's contention as stated in the court's
memorandum:
". . . the amount of gifted trust money
he put into the family home amounted to
41% of its construction price so that 41%
of its present value should be his, exclusive
of any interest in the wife. In other words, he
regards 59% of the home to be marital estate
and suggests that a 50-50 division of that
interest would be appropriate."
This formula is troubling in light of a recent case. In Vivian
v. Vivian (1978), Mont. , 583 P.2d 1072, 1074-75,
35 St.Rep. 1359, 1362, this Court disapproved deducting an
inheritance received during marriage, assuming it was
invested in home improvements, from the value of the marital
home before dividing the marital assets. It seems the
appreciated value of the home should be considered a product
of the marital partnership and therefore includible in the
marital estate. Vivian is distinguishable from the instant
case however, because in Vivian no evidence was presented on
the husband's expenditure for home improvements, and the
inheritance was received during the marriage. Here, the
gifted funds were received before marriage and evidence of
husband's expenditure was clearly presented at trial. We do
not approve the percentage deduction of monies invested in
marital assets which have appreciated during marriage.
In this case, however, we find no abuse of discretion.
The District Court's memorandum-order disposing of
marital assets reflects a reasoned application of section
48-321(1), R.C.M. 1947, to division of the marital estate.
All the marital assets were before the court. No abuse of
discretion has been shown.
The District Court's judgment is affirmed.
We Concur:
Chief Justice
i Justices .