NO. 86-420
IN THE SUPREME COURT OF THE STATE OF MONTANA
1987
IN RE THE MARRIAGE OF
ROBERT M. BOWMAN,
Peti.tioner and Appellant,
and
ROSE-MARIE BOWMAN,
Respondent and Respondent.
APPEAL FROM: ~ i s t r i c tCourt of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable James B. Wheelis, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Datsopoulos, MacDona1.d & Lind; David B. Cotner,
Missoula, Montana
For Respondent:
Terry A. Wallace, Missoula, Montana
Submitted on Briefs: Dec. 18, 1986
Decided: March 12, 1987
Filed: MAR 1 U 8
97
8
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Clerk
Mr. Justice William E. Hunt, Sr., delivered the Opinion of
the Court.
Appellant, Rose-Marie Bowman appeals from the property
settlement and maintenance provisions of the findings of fact
and conclusions of law and order entered in the Fourth
Judicial District.
We reverse and remand to the District Court with
instructions to enter judgment consistent with this
Opinion.
The appellant raises several issues on appeal which we
consolidate into the following five issues:
1. Whether the District Court acted arbitrarily and
unreasonably by ordering appellant to make house payments and
accept total responsibility for all costs should foreclosure
occur when it also directed that respondent need not
contribute to those payments or provide any maintenance to
appellant even though the court's findings verify that
appellant required such financial assistance.
2. Whether the District Court abused its discretion
when it determined that the parties had abandoned their
settlement agreement.
3. Whether the District Court abused its discretion
when it denied appellant a proportionate share of
respondent's pension.
4. Whether the District Court abused its discretion and
acted arbitrarily without employment of conscientious
judgment when it determined that actuarial tables do not
consider individuals with health problems similar to
respondent's and failed to use the actuarial tables in
determining respondent's lifespan and consequential valuation
of his retirement pension.
5. Whether the District Court acted unreasonably and
arbitrarily when it instructed the parties to take turns
choosing items of personal property.
Appellant, Rose-Marie Bowman, and defendant, Robert M.
"Mike" Bowman were married in 1956. Rose-Marie was 18 and
had graduated from high school. Mike was 21 and attending
classes at the University of Washington from which he
received a B.S. in forestry in 1959. Between 1958 and 1966
the couple had 5 children. One died in infancy. Of the
other four children, three were emancipated adults at the
time of trial. The youngest, Kelly, age 18, was living with
his mother while he completed high school.
Throughout most of their marriage Rose-Marie did not
seek employment outside the home. She and Mike agreed that
it would be best for the family to have her at home. She
did, however, work at various times when the family needed
her additional financial support. Due to Mike's career and
service in the Army, the family moved to many different
locales including New York, Texas, Alaska, California, Idaho
and Washington, D.C. In 1979, the family moved to Missoula,
Montana, where Mike worked for the forest service and
Rose-Marie worked fulltime as a secretary at the University.
She continues to work there in a managerial position. In
1981, Mike suffered a stroke and Wallenburg's Syndrome. He
returned to fulltime work within a year. He continues to
experience some symptoms such as difficulty reading fine
print and instability of equilibrium and balance. In the
spring of 1985, after 29 years of marriage, Nike and
Rose-Marie separated. Mike moved out. Rose-Marie and their
youngest son, Kelly, remained in the family home. On April
1, 1985, the parties entered into a separation agreement
which provided for financial arrangements such as their tax
refund distribution and the payment of debts, loans and
monthly accounts. Also, Mike agreed to pay $1,300 per month
toward Rose-Marie's expenses which included the house payment
and providing food, shelter and clothing for Kelly. The
agreement was to have remained in effect until replaced by
other formal legal documents. Although not replaced by other
formal legal documents, Mike discontinued payments in July,
1985. When Mike stopped his contributions Rose-Marie was
unable to meet the monthly house payments.
Mike retired from his employment in September, 1985.
His position had been abolished in Missoula. He chose to
retire rather than relocate and be away from his family. At
the time of the trial Mike was unemployed but seeking
employment as a fire control consultant, a position which
pays approximately $100 per day. Mike's monthly expenses
total $1,705. His retirement benefits total $1,861 per month
if a deduction is made for survivor's benefits in
Rose-Marie's name and $2,043 without survivor's benefits.
The purpose for the survivor's benefits was to protect.
Rose-Marie and enable her to meet the parties' monthly debt
on their real property in the event of Mike's death. The
District Court found that the benefits were too expensive and
could be reasonably provided from another source. The court
ordered that Mike provide insurance equal to the survivor's
benefits until the parties' real property was sold.
Rose-Marie's monthly take home pay is $1,445.89. Her
monthly expenses are $2,676.63. The District Court valued
Mike's pension at $249,900, basing this calculation upon an
estimated lifespan of 11.54 years. It valued Rose-Marie's
pension and retirement plans at $6,733, as it wil-1 not mature
until she reaches age 50. The District Court ordered Mike to
make support payments in the amount of $300 per month until
June, 1985, at which time Kelly would graduate from high
school. The court found Mike a-hle to pay this sum.
It is clearly established in Montana that this Court
will not disturb a lower court's findings of fact and
conclusions of law unless they are found to be "clearly
erroneous." Carr v. Carr (Mont. 1983), 667 P.2d 425, 427, 40
St.Rep. 1263, 1265, and determines that the lower court
"acted arbitrarily without employment of conscientious
judgment, or exceeded the bounds of reason in view of all the
circumstances." In Re the Marriage of Jorgensen (1979), 180
Mont. 294, 299, 590 P.2d 606, 609.
The discretion of the District Court is very broad. "We
will not substitute our judgment for the trier of
fact. .. We will view the evidence in a light most favorable
to the prevailing party, recognizing that substantial
evidence may be weak or conflicting with other evidence yet
still support the findings." Wallace v. Wallace (1983), 203
Mont. 255, 259, 661 P.2d 455, 457 citing in re Marriage of
Bosacker (1980), 187 Mont. 141, 145, 609 P.2d 253, 256.
I.
On appeal, Rose-Marie raises the issue of whether the
District Court acted arbitrarily and unreasonably by first
finding that she required maintenance, but not awarding any
to her and second, that she take full responsibility for the
parties1 monthly house payments.
After determining an equitable property distribution as
provided for in 5 40-4-202, MCA, the court may award
maintenance if the spouse seeking maintenance " (a) lacks
sufficient property to provide for [her] reasonable needs;
and (b) is unable to support herself through appropriate
employment. . ." Section 40-4-203 (1)(a)(b), MCA. If a court
determines that a spouse meets these requirements, as it did
in this case, it must consider several additional
requirements, including "the ability of the spouse from whom
maintenance is sought to meet his needs while meeting those
of the spouse seeking maintenance." Section 40-4-203(2) ( f ) ,
MCA. The language of S 40-4-202, MCA and 40-4-203, MCA
intertwines an award of maintenance with the distribution of
marital property.
In this case, the District Court ordered that the
parties' real property be sold and the proceeds divided with
4/5 going to Rose-Marie, 1/5 to Mike. Rose-Marie was held.
responsible for the family house payments up until the time
it was sold and ordered to pay Mike the value of his equity
in the house should it be foreclosed upon. In its findings,
the court credits this order to the fact that Mike is in poor
health and his potential for future employment should not be
considered in light of others of his age and experience.
The District Court considered Mike and Rose-Marie's 29
years of marriage and found that the marital contributions of
each party were equal. The marital estate was distri-butedas
follows:
Mike -
Rose-Marie
Real Property $ 9,088.00 $ 36,352.00
Personal Property 11,452.50 11,452.50
Mike's Pension 249,900.00
Rose-Marie's Retirement Pension 6,733.00
Rose-Marie's Annuities 7,481.00
The record shows that the District Court thoroughly
considered the statutory requirements and found that
Rose-Marie did meet the maintenance requirement under S
40-4-203, MCA, even after the distribution of property.
However, the court found. further that Mike was unable to pay
any maintenance due to his health and potentially fixed
income. Without employment Mike's expendable income every
month is approximately $338.00. Rose-Marie's monthly
expenses exceed her monthly income h y approximately
$1,230.74. The District Court did not necessarily abuse its
discretion by distributing the marital property as it did and
by not awarding a maintenance allowance to Rose-Marie. A
seemingly disproportionate distribution, with or without an
award of maintenance, must be considered in light of the
overall property distribution, the requirements of S 40-4-202
and 5 40-4-203 and whether there is substantial credible
evidence to support the District Court's division.
11.
In this case, the crux of whether the entire property
division is equitable and not an abuse of the court's
discretion rests on whether the District Court clearly abused
its discretion by concluding that the parties' April 1, 1985
separation agreement was abandoned by both parties as of July
1, 1985. The record shows no evidence to suggest that the
agreement was, in fact, abandoned by the parties. The record
does show that Mike breached the agreement by failing to make
bi-monthly payments of $650 as the parties agreed was
necessary to make house payments and meet other expenses of
Rose-Marie and Kelly. The record also shows that Rose-Marie
continued to rely on the terms of the agreement through
August, 1985. The agreement specifically states that it is
to be in effect until it is replaced by other formal legal
documents. No such documents had replaced the agreement at
the time of trial.
Section 40-4-201(4) (a), MCA, provides that unless the
court finds a separation agreement unconscionable or
unsatisfactory as to disposition of property or maintenance
and unsatisfactory as to support, the terms "shall be set
forth in the decree of dissolution ... and the parties
shall be ordered to perform them. " The District Court found
the agreement neither unconscionable nor unsatisfactory in
any way. The court simply concluded that "The April 1, 1985
agreement between the parties should not be considered in the
equitable division of the marital estate, as both parties had
abandoned it as of July 1, 1985." The statutory divisions
found in the Uniform Marriage and Divorce Act were developed
to protect such settlement contracts. It is the duty of the
courts to acknowledge and enforce these contracts barring any
statutorily provided exceptions.
The District Court clearly abused its discretion when it
concluded that the parties abandoned their separation
agreement and failed to incorporate it into the findings of
facts, conclusions of law and order.
The real property division was critical to the overall
property distribution in this case. If Rose-Marie had been
awarded the family home with some feasible arrangement
enabling her to make house payments, it would have been a
valuable asset. Instead, the court awarded her a piece of
property which was about to be foreclosed upon and ordered
her to reimburse Mike upon foreclosure for any equity which
he had acquired in the house. Rose-Marie's inability to make
the house payments was due to Mike's breach of the parties'
separation agreement. The effect of the court's order was to
diminish Rose-Marie's share of the real property distribution
from $36,352 to $21,852, making the "equitable" distribution
of property between the parties even more unequal and placing
full responsibility for a default upon Rose-Marie. When a
court finds the parties' contribution to the marriage was
equal, as it did in this case, it does not mean that the
marital estate must be divided equally. Kowis v. Kowis
(1983), 202 Mont. 371, 378, 658 P.2d 1084, 1088. Section
40-4-202, MCA, does not mandate equal distribution. As long
as the court considers the statutory requirements, bases its
findings and conclusions on credible evidence on record and
does not clearly abuse its discretion or act arbitrarily and
unreasonably, the findings and conclusions of the lower court
will not be disturbed. By concluding that the parties'
separation agreement of April 1, 1985 (which provided for
maintenance to Rose-Marie) was abandoned; by distributing the
marital estate 4 to 1 favoring Mike; by ordering Rose-Marie
fully responsible for the family home payments and liable to
Mike for his equity in the house upon default; and by not
providing for any maintenance to make these payments after
finding that she was in need of such maintenance, the
District Court clearly abused its discretion by acting in an
unreasonable and arbitrary manner.
The next issue raised by Rose-Marie is whether the
District Court abused its discretion by not awarding
Rose-Marie a portion of Mike's retirement pension.
When considering Mike's retirement pension, the Court
properly included it in the marital estate. "It is well
established in this state ... that retirement benefits are
part of the marital estate." In Re Marriage of Rolfe (Mont.
1985), 699 P.2d 79, 83, 42 St.Rep. 623, 627. As a part of
the marital estate to which both parties have been found to
have contributed equally, the pension does not have to be
distributed equally. As long as the lower court considers
the requirements outlined in § 40-4-202, it has broad
discretion to equitably apportion the individual assets. The
trial court may not have abused its discretion by not
awarding any of Mike's pension to Rose-Marie. It may,
however, need to reconsider the total property distribution
on remand, in light of the above discussion concerning the
separation agreement and maintenance.
In Glasser v. Glasser (Mont. 1983) , 669 P. 2d 685, 689,
40 St.Rep. 1518, 1523, this Court cites ways in which
retirement benefits can be analyzed in terms of equitable
distribution.
For example: 1) The distribution should generally
be based on the contributions made during the
marriage. 2) The Courts should continue to strive
to disentangle the parties as much as possible by
determining, where equitable, a sum certain to be
paid rather than a percentage based upon expected
future contingencies. 3) In determining whether a
lump sum award is appropriate, courts should
consider the burden it would place on the paying
spouse in view of required child support, spousal
support, and other property distribution. 4) Where
courts determine that the parties will share in the
benefits on a proportional basis, the parties
should also share the risks of future
contingencies, e.g., death of the employe [sic]
spouse or delayed retirement of the employe spouse,
and payment should be to the receiving spouse as
the employe spouse receives the retirement pay. 5 )
Courts should consider, where appropriate, an award
of a portion of retirement benefits where other
property awarded is not adequate to make equitable
distribution. Citing Matter of the Marriage of
Rogers and Rogers (Ore. 1980), 609 P.2d 877,
882-883.
Intertwined with the division of the pension is the
issue of whether the court abused its discretion by ordering
survivor's benefits or other "equal insurance" to be provided
for Rose-Marie only until the parties' real property is sold.
The record does not show any testimony or other evidence that
$182.00 per month for survivor's benefits is "too expensive."
Nothing on the record indicates that a comparable annuity
could be purchased for less. To terminate Rose-Marie's
survivor's benefits jeopardizes her 29 year investment in the
marital estate. The District Court found that Rose Marie
relied upon the fact that Mike's retirement plan continued to
grow when she made plans regarding her own retirement. By
awarding Mike his full pension and ordering Rose-Marie's
survivor's benefits terminated, the court effectively
destroyed Rose-Marie's retirement plans.
Upon remand we suggest that the District Court, in its
discretion, reconsider the division of the pension and
survivor's benefit in light of its finding that the parties
contributed equally to the marital estate and i.n
consideration of the fact that upon dissolution the parties
should receive equitable treatment from the court.
IV.
Rose-Marie raises an additional issue as to whether the
District Court abused its discretion and acted arbitrarily
without employment of conscientious judgment when it valued
Mike's pension at $249,900.
The proper test for determining the value of a pension
is present value. Kis v. Kis (1982), 196 Mont. 296, 639 P . 2 d
1151. In - this Court acknowledged that the value of the
Kis,
retirement benefits may be effected by the contingency of
failing to reach the levels used by the court. 639 P.2d at
1153. To aid the court in valuing Mike's pension, both
parties retained the same expert witness to make the
technical calculations. In its findings, the lower court
seemingly disregarded this witness' testimony and instead
used an 11.54 year expected lifespan. The court derived this
number by taking the 2.5 increase of Mike's life insurance
policy and dividing it into the actuarial table's expected
lifespan of 28.84 years. Although, on its face, this
calculation may seem logical, the record shows that it is not
substantiated by any sound, traditionally used present value
determinations. While the use of actuarial tables
necessarily involves speculation regarding the number of
years a specific individual will live, these tables, based on
nationwide statistics, offer the most reliable method for
arriving at a. specific figure regarding life expectancy. The
Distrj-ct Court found that the actuarial tables failed to
consider individuals with health problems similar to Mike's.
Based on the record, it. is not an abuse of the court's
discretion to make such a finding. It is, however, an abuse
of discretion to arbitrarily pick a method of calculation
which enjoys no support from the record and, in fact, is
refuted by both parties' expert witness as very speculative.
Whether the court takes judicial notice of the actuarial
tables and consequentially relies upon them as accurate for a
person of Mike's age and health falls under the discretion of
the District Court judge. However, the court is required to
justify its use of a particular method and select a method of
calculation in a less arbitrary manner than that which it
employed.
v.
The final issue raised by Rose-Marie is whether the
District Court acted unreasonably and arbitrarily when it
instructed the parties to take turns chosing personal
property. Although the parties had already agreed to a
division of these personal property items, it is not an abuse
of the court's discretionary power to select a different
method for distribution. There is no allegation that the
distribution is unconscionable or unfair. If carried out by
the parties it can result in a 50/50 equitable division which
is not unreasonable or arbitrary.
VI .
The District Court ordered that Mike pay six months of
child support in the amount of $300 per month for the support
of the parties' 18 year year old son, Kelly. On appeal, Mike
contends that because Kelly is legally an adult, he is not
obligated to make these payments. Section 40-4-208(5), MCA,
provides as follows: "Unless otherwise agreed in writing or
expressly provided in the Decree, provisions for the support
. . ."
of a child are terminated by emancipation of the child
This statute clearly empowers the District Court to provide
in the conclusions of law and order that the support of the
child may be extended beyond the age of emancipation.
Awarding $300 per month child support to Rose-Marie through
June, 1985, when Kelly would graduate from high school, is
totally within the bounds of the court's power.
Reversed and remanded.
We Concur:
Chief Justice