No. 8 7 - 9 5
IN THE SUPREME COURT OF THE STATE OF MONTANA
1987
IN RE THE MARRIAGE OF
.
ROBERT H ROULLIER,
Petitioner and Appellant,
and
ERICA LEE ROULLIER,
Respondent and Respondent.
APPEAL FROM: The District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable Douglas Harkin, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Jon E. Ellingson; Ellingson & Moe, Missoula, Montana
For Respondent :
Datsopoulos, MacDonald & Lind; Ronald B. MacDonald,
Missoula, Montana
Submitted on Briefs: Sept. 10, 1 9 8 7
Decided: December 10, 1987
Filed: DEC l o 1987
-
Clerk
Mr. Justice John Conway Harrison delivered the Opinion of the
Court.
This is a dissolution case heard before the Honorable
Douglas Harkin without a jury in May of 1986. The
petitioner-husband, Robert H. Roullier (hereinafter, Robert),
appeals the District Court decision. The respondent-wife is
Erica Roullier (hereinafter, Erica). We modify the portion
of the judgment ordering a payment from Robert to achieve the
purpose of equalizing the division of the marital estate, and
affirm in all other respects.
Robert and Erica were married September 24, 1977 and
remained married for approximately seven years. One child, a
daughter named Rikki, was born to the marriage on September
15, 1978. Robert filed for dissolution February 26, 1985.
At that time, Robert was 38 years of age and Erica was 34
years of age.
A decree of dissolution was entered December 30, 1985.
The parties were unable to agree on the issues of child
custody, support, maintenance, and the division of the
marital estate, and these matters were reserved for trial.
Pending trial, the parties stipulated to joint custody with
Erica as the primary custodial parent, child support of $350
per month, and temporary maintenance of $1,000 per month
beginning May 15, 1985.
Robert is president and chairman of the board of Davis
Transport, Inc., a trucking corporation, and controls 57.16%
of the corporate stock. He also controls the same percentage
interest in a related partnership, Trade Street Enterprises.
Previously, Robert worked as an accountant. His current
salary is approximately $18,000 per month. A large portion
of that salary is utilized to amortize stock purchase
obligations resulting from his purchase of his interest in
Davis Transport, and his take-home pay after the payment of
this obligation is approximately $4,112.97 per month. Erica
holds a college degree in elementary education but has never
held a full-time position in that field. Erica held the
primary responsibility of maintaining the household and
caring for their daughter Rikki. At the time of trial, Erica
was attending paralegal training classes in Billings and
earning approximately $600 per month as a part-time file
clerk.
A bench trial began on May 14, 1986 and the District
Court issued findings of fact and conclusions of law October
2, 1986, and a judgment on October 7, 1986. After
subtracting certain assets owned by Robert prior to the
marriage, the marital estate was divided in an equal fashion.
Joint custody was granted with Erica as the primary custodial
parent. Child support in the amount of $450 per month was
ordered. Erica is to receive maintenance of $1,000 per month
for four years, and $500 per month for the following two
years. Erica was awarded attorney fees in the amount of
$8,622.22.
Robert raises eight issues on appeal:
(1) Did the District Court properly value Robert's
interest in Trade Street Enterprises?
(2) Did the District Court properly value assets owned
by Robert prior to the marriage?
(3) Did the District Court correctly calculate the
amount that Robert must pay to Erica to achieve an equal
division of the marital estate?
(4) Did the District Court correctly find that Robert
agreed to pay for all costs of a four-year college curriculum
for his minor daughter?
(5) F a the award o f maintenance excessive in amount
7s
and duration?
(6) Was the award of child support excessive in
amount ?
(7) Did the District Court properly award attorney's
fees?
Did the District Court commit error by ordering
(8)
Robert to indemnify Erica for joint debts he was ordered to
assume?
I. THE VALUATION OF TRADE STREET ENTERPRISES.
Robert holds a 57.16% interest in a partnership entity
referred to as Trade Street Enterprises (T.S.E.). The
District Court found the partnership had no positive or
negative value for the purposes of determining the property
distribution and therefore assigned a zero valuation to
Robert's interest. T.S.E. is a partnership created by the
owner-managers of Davis Transport, Inc. The sole source of
income for T.S.E. comes from Davis Transport. At trial,
Robert chose to serve as his own expert witness. Robert
testified that T.S.E. was operating at a loss and valued the
fair market value of his interest in this entity at negative
$299,745. Robert's contention is that Erica failed to
present any evidence as to the value of T.S.E. and that his
negative valuation must therefore be accepted.
The District Court refused to find Robert's valuations
sufficiently credible and stated,
[Gliven the discrepancies in [Robert's]
preparation of financial documentation
for various purposes, his apparent
willingness to create values for his own
purposes, the Court is unable to adopt
his assessment evaluation ...
[of]
Trade Street Enterprises."
The record sufficiently supports this finding. Accordingly,
the District Court properly refused to accept Robert's
valuation and we will not order the District Court to accept
a valuation which is not credible.
The District Court's task of valuing T.S.E. was
complicated by the fact that Erica's expert witness was not
retained to specifically value T.S.E. Erica's expert witness
clearly stated he was not rendering a specific opinion as to
the value of T.S.E. and its assets. Erica contends the
following testimony by her expert supports a valuation of
zero:
Q. You have not been retained to do an
appraisal of the equipment in Trade
Street, have you?
A. No, I have not.
Q. You d.id render an opinion in direct
examination that with regard to Trade
Street where they are able to acquire in
excess of $3,000,000 worth of trucks in
late '84 and '85 and experience a two
hundred plus thousand dollar cash
shortfall, which was handled by Davis,
and still render Davis profitable that,
as I understand it, Trade Street was more
or less operating at a wash; is that
correct?
A. Yes.
Q. So do you have an opinion as to the
value based on just that phenomenon of
Trade Street Enterprises as of December
31, 1985?
A. Not specifically, because it is a lot
more complex than to just say off the top
of my head.
Q. All right. If we assume for a moment
that the value of Trade Street is zero,
assuming that--
A. Okay.
Q. Taking the December 31, 1985, balance
sheet or financial statement, did you,
during the recess, calculate the value of
Davis Transport for the purpose of coming
to an asset valuation based on your
figures?
A. Yes. What I did was, taking like you
mentioned, Davis Transport at zero,
putting in 236,787 as an asset,
eliminating the debt, you end up with a
net worth of approximately four hundred
seventy to $500,000.
Q. Do you feel it appropriate to assume
that Trade Street Enterprises has a value
of zero for this purpose?
A. It seems reasonable.
Although this testimony may indicate Erica's expert suspected
T.S.E. was operating "at a wash," it fails to offer
sufficient evidence alone to support the zero valuation.
The District Court was faced with a situation where one
party suggested a valuation which was not credible and the
other party failed to provide a specific valuation. The
problem was compounded because the determination of a value
for an entity such as T.S.E. is complex. Still, the District
Court heard and considered an extensive amount of evidence
regarding the value of T.S.E.: gross revenues of T.S.E. for
1984 and 1985; the source of those gross revenues (i.e. Davis
Transport, Inc. ) ; recent truck acquisitions for 1984 and
1985, and the truck values; state and federal tax
"write-offs" associated with T.S.E.; tax benefits passing
from T.S.E. in interest expenses and depreciation; the
condition and resale value of trucks owned by T.S.E.; the
ability of T.S.E. to meet operating expenses, amortize
capital acquisition debts, and other debt obligations;
documents demonstrating the cash flow analysis for T.S.E. for
1981 to 1985; federal tax document returns for 1984 and 1985;
T.S.E. depreciation schedules; and the T.S.E. partnership
agreement. Although Erica's expert did not give a specific
value for T.S.E., he did offer a significant amount of
testimony regarding the general financial status of T.S.E.
and its relationship with Davis Transport. Finally, there
was a large amount of evidence as to the worth of Davis
Transport, Inc., an entity which is significantly related to
T.S.E. There is a lack of an arms-length relationship
between the entities and Rohert testified he did not believe
they could operate on an independent or separate basis. The
consideration of the value of Davis Transport inevitably
involved considerations of the value of T.S.E. In In Re
Marriage of Johnston (Mont. 1986), 726 P.2d 3 7 2 , 325, 43
St.Rep. 1808, 1812, we stated:
In valuing the assets in a marital
dissolution case, it must he noted that
the District Court has broad discretion
to determine net worth.
Although it may be true that the District Court was not
given the best possible evidence to value the partnership,
the value determination will stand unless clearly erroneous.
In Re Marriage of Laster (1982), 197 Mont. 470, 477, 643 P . 2 d
597, 601. We affirm the District Court's valuation of T.S.E.
11. THE PREMARITAL ASSETS.
Robert contends the District Court incorrectly
calculated the amount and number of assets owned by him prior
to the marriage. The District Court determined that two
premarital assets should he awarded outright to Robert:
(1) stock in Junkermier, Clark, Campanella, and Stephens;
and ( 3 ) a duplex located at 1005 Rollins. Robert contends
the court ignored a long list of personal assets owned by
Robert prior to the marriage:
Cash on hand $ 3,669.96
Bonus receivable 7,091.00
Investments 1,065.00
Art works (cost) 2,250.00
Personal residence 68,500.00
Real estate investments
Duplex-2312 55th Street 70,000.00
P4iller Creek land 24,000.00
Park Drive partnership 1,500.00
Personal property 29,330.00
Robert's added assets,
allegedly unaccounted for
by the Court, which existed
prior to the marriage $207,405.96
Following a decree of dissolution of marriage, the
District Court shall,
[Elquitably apportion between the parties
the property and assets belonging to
either or both, however and whenever
acquired and whether the title thereto is
in the name of the husband or wife or
both.
Section 40-4-203 (1) , MCA. Further, in dividing property
acquired before the marriage:
[Tlhe court shall consider those
contributions of the other spouse to the
marriage, including:
(a) the non-monetary contribution of a
homemaker;
(b) the extent to which such
contributions have facilitated the
maintenance of this property; and
(c) whether or not the property division
serves as an alternative to maintenance
arrangements.
Section 40-4-203 (1), MCA.
We have been faced with similar issues on prior
occasions. In In Re Marriage of White (Mont. 1985), 708 P.2d
267, 269, 42 St.Rep. 1634, 1636, we stated:
This Court has recognized that when
property acquired by one party prior to
marriage is subject to division in a
dissolution proceeding, the District
Court must consider the origin of the
property. Herron v. Herron (1980), 186
Mont. 396, 608 P.2d 97. But the - -
property
acquired . prior to marriage is stili
subject to division. In re the Marriage
of Keepers (1984), 691 P.2d 810, 41
St.Rep. 2163. Equitable apportionment
does not require the parties be returned
to their premarital status. - Id.
Robert claims the District Court failed to consider
that the listed assets were owned by him prior to the
marriage. This contention is without merit. The District
Court specifically addressed and considered this issue
regarding the personal residence, the duplex at 2312 55th
Street, and the Miller Creek land. Additionally, the
District Court heard and considered testimony regarding many
of the other items on the list. For example, during Robert's
testimony the following exchange took place:
Q. Now, I assume you don't know what
happened to the cash on hand in terms of
where that money went?
A. No.
Q. And I assume that bonus receivable
was intended at some point in time?
A. That's right.
Q. It went into the marriage, is that
true?
A. I would say so.
Q. And I note that you indicate that you
had personal property worth $29,330. I
realize it's some time ago, but what did
that consist of?
A. It would have been consisting of our
automobiles, boat, furniture, personal
effects.
Q. Same boat which you have now?
A. No.
Q. Same furniture that you have now?
A. Probably not, some of it may still
exist.
Q. Can you identify any of the personal
property that you had then that you have
now that has a value of say in excess of
say $2,000?
A. Okay. You're asking for the value
--excuse me, the personal property that I
had then that I still have now?
Q. Right.
A. We don't have any of the vehicles. I
can't think of anything off the top of my
head.
The record demonstrates that the District Court heard
and considered evidence regarding the premarital assets.
Additionally, the list of premarital assets proposed by
Robert is actually taken from an unaudited balance sheet
prepared several months after the marriage. Finally, the
District Court did actually award Robert two significant
assets outright on the basis that they were premarital
assets. For all these reasons, we affirm the District
Court's determination of which assets should be awarded
outright as premarital assets.
111. PAYMENTS REQUIRED TO ACHIEVE AN EQUAL DIVISION.
After awarding certain premarital assets to Robert, the
District Court intended to equally divide the remainder. To
achieve this goal it was necessary that Robert make a payment
to Erica. Under the initial division, Robert received
property valued at $184,485.33 and Erica received property
valued at $131,753. The total difference equals $52,732.33,
and the District Court ordered Robert to pay Erica this
amount. Robert is correct in asserting that only one-half
that amount should have been awarded to achieve the goal of
equalizing the division.
Robert filed a motion to amend the District Court's
judgment on October 17, 1986, and in a subsequent supporting
brief he requested that this calculation be amended so that
he would pay only one-half, $26,366.17. Erica now appears to
agree with this position by stating in her brief that the
District Court judgment "should be amended to provide for a
transfer from Husband to Wife of one-half the difference in
properties held before transfer or $26,366.16." There is
some confusion on this matter because the District Court
previously amended its decision and directed Robert to make a
payment of $28,866 in an order dated December 1, 1986 and
filed on December 4, 1986. Since both parties now
essentially agree that the correct amount of the payment
should be $26,366.16, the District Court decision and order
shall be modified to reflect such an amount.
IV. COLLEGE EXPENSES
The District Court found that Robert testified:
[H]e will pay for the costs of secondary
education for the minor child of the
parties, and the court finds that based
upon his agreement he shall be
responsible for the costs of books, room,
board, tuition, and fees for a four year
college curriculum acceptable to the
parties.
This finding is based on the following testimony by Robert:
Q. Do you have any commitment that
you're willing to make with regard to
college education for your child?
A. Well, I have maybe strange and
different ideas on college education. I
feel like I put myself through school. I
feel like I really accomplished
something. I didn't get any help at all.
I would like to help my children. I
don't want to see them get a full ride
and be able to goof off during the summer
and really not get any kind of a self
satisfaction of having completed school.
Q. Do you have a commitment that you're
willing to make in terms of defining what
you are willing to do with regard to
college education?
A. I'm going to help my children through
school.
Q. Is there any agreement that you're
willing to reach with regard to your
minimum requirements?
A. Well, I hate to place a minimum
requirement on me from the standpoint
that I don't even know what my financial
capabilities are going to be, but if I'm
in a position where I can pay for
basically all the books, tuition and the
kids end up having to, depending on where
they're living, if they're living out of
town or whatever if they're going to come
up with their own spending monies and
stuff like that, that's the kind of
arrangement that I would like to see; but
I'm hesitant to say, fine, go ahead and
sign on the dotted line where I'm going
to provide that they're going to go to
school. What would happen if I said that
and I had no input, for example, on where
Rikki went to school and all of a sudden
she's going to school in Italy and it's
costing me $2,000 a month and I can't
afford it. Believe me, I want to take
care of my children.
Parties to a dissolution may agree to an obligation of
support for their children beyond the age of eighteen. See,
Herrig v. Herrig (1982), 199 Mont. 174, 182, 648 P.2d 758,
762. Robert contends his testimony does not represent an
agreement to pay for his daughter's college education.
The cited testimony demonstrates a desire to assist in
paying for college expenses. Additionally, Robert indicates
his assistance ought to have reasonable limitations and
expresses an understandable concern that, depending upon his
future income and the costs of education, he may not be able
to afford this expense. We be.lieve these potential problems
were adequately addressed by the District Court's judgment
which provided:
In lieu of maintenance beyond the time
set forth herein, the Husband shall be
responsible for all costs of secondary
college education of the minor child
including, but not limited to, costs of
books, room, board, tuition, fees, and
travel, for a four year colleqe
curriculum acceptable - -the parties.
to -
(Emphasis added. )
The District Court made it clear that the college curriculum
must be "acceptable to the parties." Therefore, both Robert
and Erica must find the curriculum acceptable. Also, if
Robert's future circumstances render him unable to pay this
obligation he may petition for modification pursuant to
$j 40-4-208, MCR.
V. MAINTENANCE
The District Court ordered maintenance in the amount of
$1,000 per month to commence on July 1, 1986 and end on June
1, 1990. Thereafter, payments of $500 per month were ordered
for an additional two years. Robert contends the maintenance
order is excessive in duration and amount. Robert states he
began maintenance payments of $1,000 per month on May 15,
1985 pending trial, and that the four year period of
maintenance in that amount should have begun at that time.
Additionally, he states that this amount of maintenance
carries no reasonable relationship to the time it will take
Erica to complete paralegal training, since she could finish
that training at her current rate in less than four years.
Erica's testimony supports the contention that it will
take three to four years to complete her paralegal training.
More importantly, pursuant to 5 40-4-203, MCA, the District
Court considered a variety of factors including Erica's
financial resources, the standard of living established
during the marriage, and Robert's ability to meet his needs
while meeting the maintenance requirement. All these factors
were specifically considered by the District Court in
addition to the time Erica will need to complete her
training. Maintenance is "a matter of judgment essentially
within the broad discretion of the District Court which we
may not set aside unless the District Court is clearly
erroneous. In Re the Marriage of Schenck (Mont. 1984), 692
P.2d 6, 9, 41 St.Rep. 2137, 2139. We find no abuse of
discretion.
VI CHILD SUPPORT
The District Court found the needs of the minor child
to amount to an expense of $590.33 per month and ordered
Robert to pay $450 per month in child support. The District
Court arrived at this amount by using as a guideline the
formula suggested in In Re the Marriage of Carlson (Mont.
1984), 693 P.2d 496, 500, 41 St.Rep. 2419, 2423. Robert
contends the order is excessive in amount because the figure
$4,112.97 was incorrectly used as his net income. Robert
argues that his monthly maintenance payment of $1,000 should
be deducted from his income and added to Erica's income
before the formula is applied.
Additionally, Robert argues that monthly child support
of $500 owing on two children from a prior marriage should be
deducted in calculating his net income. Robert cites
virtually no authority in support of his position. We note
however that a consideration of other child support
obligations may be appropriate. See, Uniform Child Support
Guidelines (Mont. 1987), 44 St.Rep. 830, 835. Without doubt,
Robert has the duty to provide for his children of a previous
marriage. Still, we find no evidence that the District Court
did not consider this matter. If Robert's income was reduced
by $500 and the Carlson formula were strictly applied, his
support obligation would equal a greater amount then that
ordered by the District Court.
This Court has stated that the Carlson formula does
call for the use of a net income rather than a gross income.
See, In Re Marriage of Revious (Mont. 1987), 735 P.2d 301,
304, 44 St.Rep. 674, 678. However, the ultimate answer as to
the proper amount of child support is not calculated with the
exact precision suggested by these terms and must ultimately
depend on the facts in each case. The Carlson formula was
clearly presented as a guideline, and not as a strict formula
to be precisely followed in all cases. Carlson specifically
stated that the figures representing the earnings of the
parents "must realistically reflect what the parents are
capable of earning using their actual earnings as a
guideline." (Emphasis added.) Carlson, 693 P.2d at 500.
See also, In Re the Marriage of Isaacs (Mont. 1986), 728 P.2d
1345, 1347, 43 St.Rep. 2145, 2148. The record reflects that
the District Court used the Carlson formula as a guideline
and we find no abuse of discretion.
There is an additional reason why we affirm the
District Court on this issue. Robert fails to suggest how to
take into account that the maintenance payments at the
current level will last four years and an additional two
years at a lower level, while the child support payments
represent an obligation extending until his daughter achieves
the age of majority in the year 1996. Similarly, he fails to
state the time length of his previous child support
obligations. It is uncertain when Robert will be relieved of
those payments.
Robert's income is significant. Erica' s income
however, is quite modest and expected to remain so. Their
daughter probably would have continued to experience an
upper-middle class lifestyle had the marriage remained
intact. All of these present relevant factors which must be
considered. Section 40-4-204, MCA. We find no abuse of
discretion by the District Court.
VII ATTORNEY'S FEES
Robert contends the District Court improperly awarded
Erica attorney's fees in the amount of $8,622.22 The
District Court found that Erica's income level was low and
Robert's cash flow levels were more adequate to pay
attorney's fees. The award of attorney's fees in such
situations is addressed by $ 40-4-110, MCA, which states:
The court from time to time, after
considering the financial resources of
both parties, may order a party to pay a
reasonable amount for the cost to the
other party of maintaining or defending
any proceeding under chapters 1 and 4 of
this title and for attorney's fees,
including sums for legal services
rendered and costs incurred prior to the
commencement of the proceeding or after
entry of judgment. The court may order
that the amount be paid directly to the
attorney, who may enforce the order in
his name.
We have stated that the above section,
Allows the District Court to award
attorney fees after considering the
financial resources of both parties. An
award of attorney fees under the statute
is "largely discretionary with the
District Court and we will not disturb
its judgment in the absence of an abuse
of that discretion." (Citations
omitted. )
In Re the Marriage of Shirilla (Mont. 1987), 732 P.2d 397,
399, 44 St.Rep. 75, 78. See also, In Re the Marriage of
Johnston (Mont. 1986), 726 P.2d 322, 326, 43 St.Rep. 1808,
1812-1813; and, In Re the Marriage of Milanovich (Mont.
1985), 697 P.2d 927, 929, 42 St.Rep. 436, 439. The record
indicates that the financial resources of both parties were
considered. We find no abuse of discretion in the award of
attorney's fees.
VIII INDEMNIFICATXON ORDER
Robert alleges the District Court abused its discretion
by ordering him to indemnify Erica for the joint debts he was
ordered to assume, while not requiring a reciprocal order
directed toward Eri.ca. The District Court entered an order
December 1, 1986 which added the following to the judgment:
"Respondent shall hold Petitioner harmless for all debts she
incurs pursuant t o the Judgment." This amendment clearly
solves any possible problem which Inay have resulted from this
contention by Robert.
For the foregoing reasons, w e affirm the decision of
the District Court, except for the modification relating to
the payment by Robert to equalize the division of the marital
estate.