NO. 85-403
I N THE SUPREME COURT OF THE STATE OF MONTANA
1986
IN RE THE MARRIAGE OF
M B E RINGLING ANDERSON,
AL
P e t i t i o n e r and A p p e l l a n t ,
and
RUSSELL ALVIN ANDERSON ,
Respondent and Respondent.
APPEAL FROM: D i s t r i c t Court of t h e F i f t h Judicia.1 District,
I n a n d f o r t h e County of Madison,
The H o n o r a b l e F r a n k D a v i s , J u d g e p r e s i d i n g .
COUNSEL O RECORD:
F
For Appellant:
L i n e b e r g e r & H a r r i s ; P e t e r S. L i n e b e r g e r , Bozeman,
Montana
K e l l y M. Hogan, Bozeman, Montana
For Respondent :
J a r d i n e , McCarthy & Gra.uman; J o h n J a r d i n e , W h i t e h a l l ,
Montana
B e r g , C o i l , S t o k e s & T o l l e f s o n ; Ben B e r g , Bozeman,
Montana
S u b m i t t e d on B r i e f s : Dec. 19, 1985
Decided: APR 3 19%
Filed: &+% 4
Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.
The wife appeals from a judgment and order of the
Madison County District Court dividing the marital estate
between the parties. She claims that the District Court
abused its discretion by miscalculating the value of certain
marital assets and inequitably dividing the marital estate,
and that the District Court's decision was not based on
substantial credible evidence. We affirm in part and reverse
and remand for additional findings.
Mabel Ringling and Russell Anderson were married on
November 12, 1949. Before their separation in May 1981 and.
their divorce in April 1985, they jointly acquired and
operated ranch properties. The down payment on the Harrison
Ranch, the first property acquired, was made possible by
financial assistance from the wife's family. The wife's
family later partially financed some additional property and
farm equipment for the ranch. The parties repaid loans from
the family during the course of their marriage. In 1968, the
parties acquired additiona.1 properties using jointly held
assets. The parties negotiated a sale of these properties in
1976, reserving 191 acres of the Harrison Ranch for their
home. The proceeds from the sales were initially deposited
into joint accounts and securities. Later, after their
separation, the parties agreed to divide the payments
equally. The wife has occupied the Harrison Ranch since
their separation.
In December 1978, the parties purchased a one-half
interest in the "Bruce-Ridder contract." The husband
testified that, when he and the wife separated, they agreed
she would have the Harrison Ranch, he would have the
Bruce-Ridder contract and that these were about equal in
value. The wife disputes both the agreement and the
valuation of this contract.
The husband, in partnership with others, entered into
two business ventures, the "Cameron Group" investment and the
"Blue Anchor Bar and Cafe" in 1980 and 1981. The District
Court found that he invested $21,000 of marital funds; that
these investments, made only in the husband's name, have
proved unprofitable; and that the husband currently
discharges these obligations through monthly payments.
Prior to their separation, the parties made a number of
other investments using jointly held funds. Some lost money.
Some were profitable. Generally, the parties shared the
losses and profits equally.
The District Court excluded the cash value of one-half
of the investments in the Cameron Group and Blue Anchor Bar
and Cafe, in addition to the wife's share of her family
trust, from the net value of the marital estate. The wife
received her family trust shares and the cash value of these
investments. The District Court then divided the remaining
amount equally, awarded the Harrison Ranch to the wife and
awarded the Bruce-Ridder contract to the husband. They
shared the income from the ranch sales equally. The husband
also received his interest in the Cameron Group and Blue
Anchor Bar and Cafe investments, some securities, his current
home in Butte, one-half interest in his business partnership,
and his personal property. The wife also received
securities, her Arabian horse breeding business, her personal
property, and some miscellaneous assets.
In order to effect equal distribution, the District
Court ordered the wife to pay the husband $82,912.24 or
assign to him the equivalent of that sum from the ranch sale
contracts.
We address two issues on appeal:
(1) Did the District Court correctly value the marital
assets and the total marital estate?
(2) Did the District Court equitably divid-e the marital
estate?
The parties agree on the standard of review.
... In dividing property in a marriage
dissolution the District Court has far-reaching
discretion and its judgment will not be altered
without a showing of clear abuse of discretion.
The test of abuse of discretion is whether the
trial court acted arbitrarily without employment of
conscientious judgment or exceeded the bounds of
reason resulting in substantial injustice ...
[Citations omitted. ]
In re Marriage of Perry (Mont. 1985), 704 P.2d 41, 43, 42
The wife argues in the first issue that the District
Court clearly abused its discretion by accepting the
husband's valuations of assets and the total estate. The
evidence shows no substantial difference between the parties'
valuation of assets claimed by and assigned to the wife. The
parties disagree only on the value of the Bruce-Ridd.er
contract, the Cameron Group, the Blue Anchor Bar and Cafe,
and the husband's share of the R & J Amusements business, all
claimed by and assigned to the husband.
The District Court expressly valued the Eruce-Ridder
contract using a 25% discount of the net value, with the
husband's interest then valued. at $100,766.63. The wife
argues that a discount in the value is unrealistic when the
balance of the contract was due within one year of the trial
date, as in this case. The husband testified that applying a
discount of 25% is a normal procedure in the purchase and
sale of contracts in the secondary market. He also testified
that the upcoming balloon payment would probably not be made.
As we stated in Marriage of Summerfelt (Mont. 1984) , 688 P.2d
8, 11, 41 St.Rep. 1775, 1778, the fair market value of a
contract rarely, if ever, equals the balance due. Under
these circumstances, the District Court did not abuse its
discretion when he adopted the husband's valuation of the
Bruce-Ridder contract.
The District Court found that the parties had orally
agreed the wife would receive the Harrison Ranch and the
husband would receive the interest in the Bruce-Ridder
contract and found that these properties were substantially
equal in value. The wife contends the District Court abused
its discretion in finding the parties reached an agreement on
this division of property. The wife's past financial
statements listed the ranch as her property and the husband's
financial statements listed the Bruce-Ridder contract as his
property. The wife lived at the ranch and testified that, up
to the time of trial, this division had been carried out.
During the husband's testimony on the agreement, she objected
only that the testimony was inadmissible as evidence of
compromise negotiations. Even ignoring his testimony, the
District Court had sufficient evidence with the wife's
testimony and the parties' financial statements to award the
Harrison Ranch to the wife and the Bruce-Ridder contract to
the husband. We find no abuse of discretion on this point.
The District Court's finding that the properties were
approximatel-y equal in value is harmless error. Erroneous
findings of fact that are not necessary to support the
District Court's decision are not grounds for reversal.
Eaton v. Morse (Mont. 1984), 687 P.2d 1004, 1010, 41 St.Rep.
1708, 1715. Prior to their separation, the parties together
owned the Harrison Ranch, valued at about $253,000 and
one-half of the Bruce-Ridder contract, with a face value of
about $135,000. Clearly these are not equal in value.
However, the value of these assets did not affect which party
received them and the lack of equivalent value had. no effect
on the overall equitable division of property. Thus, this
finding, although erroneous, is unnecessary to support the
District Court's decision and is harmless. Therefore, we
decline to reverse the decision on this basis.
The financial statements submitted by the parties
reflect contradicting values of the Cameron Group and the
Blue Anchor Bar and Cafe. The wife asks for a return of
one-half of the joint funds invested in these ventures. She
questions the District Court's apparent acceptance of the
husband's valuation of the net value of the properties and
its finding that $15,000 and $6,000, respectively, of joint
funds were invested initially. She concurs with the District
Court's reduction of the marital estate by one-half of the
amount of joint funds invested.
This Court will not disturb a district court's findings
unless there is a clear preponderance of evidence against
such findings, Cameron v. Cameron (1978), 179 Mont. 219, 227,
587 P.2d 939, 944. In this case, the record shows no support
for valuing the joint funds invested in Cameron Group at
$15,000. The husband's financial statement suggests an
investment of $23,000 and the wife's evidence, part of the
husband's tax return, shows a contribution of $20,000. The
evidence on the amount of joint funds invested in the Blue
Anchor Bar and Cafe is unclear as well. Since the evidence
does not support the finding that a total of $21,000 of joint
funds were invested in these ventures, we remand to the
District Court for new findings on the amount of joint funds
invested.
The difference in the partiesi estimates of the total
net value of the marital estate, excluding the Bruce-Ridder
contract, result from the difference in their estimates of
the net values of the Cameron Group, the Blue Anchor Bar and
Cafe, and R & J Amusements. The District Court made no
specific findings on the value of each of these investments
and valued the total marital estate at $1,776,024.49. This
finding must be reversed for lack of supporting evidence.
Using the husband's valuation of their net worth, which
did not include $10,000 worth of the wife's personal
property, the total comes to $1,716,024.49. Using the wife's
statements of value, the total net worth comes to
$1,832,165.83. Neither figure reflects that used by the
District Court, although a mathematical error may explain the
difference between the District Court's and the husband's
figures. This Court cannot determine the net worth from the
findings. Given the wide disparity between the parties'
valuations and an apparent mathematical error on the part of
the District Court, we reverse and remand for findings which
reflect the basis of the net worth.
The wife questions the District Court's equal division
of marital assets in the second issue. She asserts that
without her family's funds and borrowing power, the parties
would not have acquired their marital estate and wants a
substantially larger share of the estate on this basis.
This Court will not disturb an apportionment made by the
District Court "unless there has been a clear abuse of
discretion as manifested by a substantially inequitable
division of the marital assets resulting in substantial
injustice." In re Marriage of Brown (1978), 179 Mont. 417,
422, 587 P.2d 361, 364. Section 40-4-202, MCA, requires a
district court to consider property received by gift or
bequest when apportioning marital assets. In re Marriage of
Herron (1980), 186 Mont. 396, 401, 608 P.2d 97, 99-100. It
goes on to require a District Court to consider the
contributions of the non-acquiring spouse when dividing the
property. "In determining the exact distribution of this
type of marital asset, no set formula can be established as
to how the assets should be equitably distributed. Each case
has to be decided on its own merits." Herron, supra. In
this case, funds borrowed from the wife's family during the
early years of the marriage were mostly repaid from the
parties' joint funds. Money inherited from the wife's family
was invested in jointly-held property. The record shows the
substantial marital estate resulted from the joint efforts of
both parties in contributing to the maintenance and
appreciation of their property throughout their thirty-five
years of marriage. Where a gift or inheritance is not
traceable and both parties contribute to the increasing
value, "it is inequitable to award the non-acquiring spouse
only a fraction of the value of the asset on dissolution."
Herron, 186 Mont. at 404, 608 P.2d at 101. We hold that the
District Court's division of property is an equitable one and
shows no abuse of discretion.
We reverse and remand for additional findigg~"consistent
,/
with the above opinion.
We Concur: -