No. 8 6 - 1 9 7
IN THE SUPREME COURT OF THE STATE OF MONTANA
1987
IN RE THE MARRIAGE OF
JERRY C. TONNE,
Petitioner and Appellant,
and
SUSAN K. TONNE,
Respondent and Respondent.
APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable John McCarvel, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Baiz & Olson; Kenneth R. Olson, Great Falls, Montana
For Respondent:
Howard Strause, Great Falls, Montana
Submitted on Briefs: Oct. 2, 1 9 8 6
Decided: March 4, 1987
Filed:
-
MAR 4 181
97
&
Clerk
Mr. Chief Justice J. A. Turnage delivered the Opinion of the
Court.
Jerry C. Tonne appeals the property, visitation and
child support provisions of a January 10, 1986, decree of the
Eighth Judicial District Court, Cascade County.
Jerry raises three issues for our review:
1. Did the District Court abuse its discretion in
dividing the marital property equally?
2. Did the District Court abuse its discretion in
ordering the sale of the family ranch to satisfy the division
of marital property?
3. Did the District Court abuse its discretion in
setting the terms of child support and visitation?
We affirm on Issues 1 and 3. We remand on Issue 2.
Jerry Tonne and Susan Tonne were married in Great Falls
on December 21, 1974. Two children were born of the mar-
riage. At the time of the marriage, Susan and Jerry each had
a Bachelor's degree in education. From 1974 until 1976,
Susan taught school full-time in Geraldine, Montana. Jerry
worked on his family ranch, which he and his brother had
purchased from their mother in 1972.
From 1976 until 1980, Susan continued to teach part-
time, and also helped Jerry with the ranch work. In 1982,
Jerry and his brother sold the Geraldine ranch. Jerry re-
ceived $350,000 for his half-interest. He used the money to
purchase a smaller ranch near Fort Shaw for $235,000.
In 1984, Jerry filed for divorce. He continues to work
the Fort Shaw ranch, although he has moved out of the ranch
home. Susan now works as a bookkeeper and continues to live
in the ranch home with the children.
Issue 1
Did the trial court abuse its discretion in dividing
the marital property equally?
In its findings, the District Court concluded "that
Jerry and Susan contributed equally to the accumulation of
the marital estate." Under the personal property division,
Jerry received $55,200, and Susan received $27,032 with
another $28,767 payable upon sale of the ranch. The net
balance from the sale of the ranch would then be divided
equally between Susan and Jerry.
Our standard of review for the division of marital
property was outlined in In Re Marriage of Rolfe (Mont.
1985), 699 P.2d 79, 83, 42 St.Rep. 623, 626, where we held:
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
discretion is whether the trial court
acted arbitrarily without employment of
conscientious judgment or exceeded the
bounds of reason resulting in substan-
tial injustice.
Jerry contends that he brought a much larger net worth
into the marriage and is therefore entitled to more than half
of the marital estate upon dissolution.
In examining the facts we note that Susan brought
$4,000 worth of personal property into the marriage, and no
real property. Early in the marriage, Susan also withdrew
$4,500 from her teacher's retirement account to buy a family
car.
Jerry Tonne's estate, at the time of the marriage in
1974, consisted exclusively of his interest in the ranch.
Jerry and Wayne Tonne bought the ranch under a contract for
deed from their mother for $60,000, although the fair market
value of the ranch was approximately $150,000. A second
contract for deed conveyed the farm machinery and livestock
to Jerry and Wayne for $23,900. By the date of Jerry's
marriage, the brothers had paid $12,600 on the real property
and $11,600 on the personal property.
Both Susan and Jerry commissioned appraisers in 1985 to
estimate the value of the Geraldine ranch in 1974. Jerry's
appraiser fixed the ranch's value at $354,700. After sub-
tracting the outstanding debts from this figure, the apprais-
er estimated Jerry's net worth at $180,000. Susan ' s
appraiser fixed the ranch's value at $235,000, with Jerry's
net worth at $125,000. The court adopted the valuation of
Susan's appraiser.
Although Jerry's net worth greatly exceeded Susan's net
work on the date of their marriage, S 40-4-202 (11, MCA,
states that the court shall:
... finally equitably apportion be-
tween the parties the property and
assets belonging to either or both ...
In making apportionment, the court shall
consider the duration of the marriage
... the needs of each of the parties;
custodial provisions ... and the
contributions of a spouse as a homemaker
or to the family unit. In dividin
property acquired prior - - marriagz
to tre
... the court shall consider those
contribution - - other spouse - -
of the to the
marriage, including ... (b) the extent
- which such contributions have facili-
to
tated the maintenance - -
-- of this property
... [Emphasis added. ]
The Tonne marriage lasted eleven years and produced two
children. The findings of the District Court list numerous
and specific contributions by Susan, which facilitated the
maintenance of the ranch. She contributed her skills as a
ranchworker and homemaker, including domestic chores for
Wayne while he lived with Jerry and Susan on the Geraldine
ranch. Also during the marriage Susan contributed $31,700 in
non-ranch income to the household.
We discussed spousal contributions in In Re Marriage of
Brown (1978), 179 Mont. 417, 587 P.2d 361, where a ranch was
owned solely by the husband. Upon dissolution of the mar-
riage, we held that the wife had "acquired a vested interest
in the major marital asset, the ranch property, regardless of
its source and title. She did so by virtue of her fourteen
years as a mother, housewife, and part-time ranch hand."
Brown, 179 Mont. at 423, 587 P.2d at 365.
Under the guidelines of Brown, the District Court acted
well within its bounds of discretion and fully documented its
conclusions. As we held in In Re Marriage of Keepers (Mont.
1984), 691 P.2d 810, 813, 41 St.Rep. 2163, 2167, premarital
property is a factor the court shall consider, but the court
is not bound to restore the parties to their premarital
status. We affirm the court's equal division of the marital
estate.
Issue 2
Did the District Court abuse its discretion in ordering
the sale of the family ranch to satisfy the division of
marital property?
In its findings, the District Court stated:
Although this court is aware of Jerry
Tonne's desire to keep and maintain the
Fort Shaw ranch, this court concludes
that it would not be possible for Mr.
Tonne to retain the Fort Shaw ranch and
at the same time support himself, help
support his children, and pay to Susan
Tonne the reasonable value of her share
of the marital estate . .. The real
--
roperty should be listed - - for sale
Torthwith and aftersale and the payment
of all liens and encumbrances, including
real property taxes, real estate commis-
sions and closing costs, the balance
remaining should be divided as follows:
Susan Tonne should receive $28,767.00
(the difference in the amount of the
personal property awarded to Jerry
Tonne) and the balance should be divided
equally between the parties. [Emphasis
added. ]
In reviewing the forced sale of a family ranch, we note
that public policy in Montana favors the preservation of the
family ranch, following the division of the marital property.
In Re Marriage of Glass (Mont. 1985), 697 P. 2d 96, 100, 42
St.Rep. 328, 331. However, this policy must be balanced
against the spouse's property rights. " [T]he policy of
keeping a family ranch intact cannot be used to deprive a
spouse of his or her equitable share of the marital estate."
In Re the Marriage of Garst (Mont. 1983), 669 P.2d 1063,
1067, 40 St.Rep. 1526, 1531.
Jerry testified that he bought the Fort Shaw ranch
because he wanted to specialize in the registered cattle
business. Jerry contends that he can feasibly operate the
ranch, plus pay for child support and Susan's equitable share
of the marital estate. Jerry asserts that he could pay off
Susan's remaining share over time with a low interest rate,
where Susan's share is secured by a lien on the land. Jerry
argues that a forced sale in the current market amounts to a
"fire sale." As a life-long rancher, he requests the chance
to pay his debt to Susan, while being allowed to keep his
livelihood.
Susan counters that the ranching operation has been
marginal throughout their marriage. She contends that Jerry
cannot realistically operate the ranch while making child
support payments and estate payments. Susan argues that the
ranch must be sold as soon as possible, so that she can
recover her share of the marital estate.
In deciding this issue, we note In Re the Marriage of
Gomke (1981), 627 P.2d 395, 38 St.Rep. 578, with facts simi-
lar to the present case. In Gomke, the farm was held solely
in the husband's name. The wife insisted that the farm be
sold. She contended that the husband could not generate
sufficient income from the farming operation and from his
outside employment to pay her annual installments, plus pay
his other indebtedness. The net value of the Gomke marital
estate was $207,000. We affirmed the District Court when it
allowed the husband to pay the wife's $88,000 share in four
annual installments of $22,000 each, together with annual
interest at 7 percent. The court also gave the wife a lien
on the property for the outstanding balance. The farmland
was heavily encumbered, and the husband paid $900 per month
in child support while earning $650 per month from non-farm
employment. In light of this data, the Court stated: "Given
the husband's relatively low yearly income, he will quite
possibly have to refinance the property or arrange for pri-
vate loans in order to make the annual payments to the wife."
Gomke, 627 P.2d at 397.
Similarly, the Fort Shaw ranch is currently appraised
at $176,000 and is held solely in Jerry's name. The Fort
Shaw ranch is currently encumbered by a $62,000 mortgage,
which Jerry assumed from the previous owners, payable in
annual installments of $7,800. Jerry is also obligated for
$500 per month in child support. He presented evidence that
he earns over $1,000 per month from both ranch and non-ranch
work.
We are faced with a delicate issue. On one hand, the
District Court acted within its discretion based on the
findings, when it ordered the sale of the ranch. On the
other hand, the worst economic times in fifty years have
crippled the market for ranches. Jerry purchased the Fort
Shaw ranch for $235,000. The District Court found that the
ranch is now worth only $176,000. Drought and deflation have
driven down the value of the land. To force a sale now would
deprive both Jerry and Susan of the value that the ranch
would possess in a market closer to historical norms.
If the sale is made in a more favorable market, both
Jerry and Susan's shares will be increased. Therefore, in
equity, we are remanding this issue with the suggestion that
the District Court allow Jerry thirty-six months to sell the
ranch. If the ranch remains unsold after thirty-six months,
the District Court might then order a forced sale. To pro-
tect Susan's security interest in the ranch, Susan's personal
property share of $28,767 could constitute a judgment lien on
the ranch, earning 10 percent annual interest until fully
paid. Upon sale of the ranch, Susan could receive half of
any net proceeds after her personal property share has been
deducted.
In the alternative and within the District Court's
discretion, the parties might elect to liquidate Susan's
share of the marital estate through a structured buyout
similar to the one in Gomke. If Jerry fails to make timely
payments, his option to retain the ranch would terminate, and
the property would be sold as the District Court orders. If
Jerry would choose to sell the ranch before Susan is fully
paid, she would receive her balance due from the net pro-
ceeds. This equitable buyout would allow Susan to retain a
security interest in the land, while allowing Jerry an oppor-
tunity to sell the ranch in a better market or to retain the
ranch.
Therefore, we remand this issue and suggest that the
District Court, in its discretion, modify its decree to
provide Jerry with thirty-six months to sell the ranch.
Alternatively, the District Court might also modify the
decree, with the agreement of Jerry and Susan, to allow a
Gomke-type buyout.
Issue 3
Did the District Court abuse its discretion in setting
the terms of child support and visitation?
The District Court ordered Jerry to pay support of $250
per child per month. The court also ordered that any unpaid
child support would be a lien upon the proceeds of the ranch
when it is sold. In setting the amount of child support, the
District Court noted that Jerry has personal property valued
at over $55,000. The court also considered Jerry's earning
capacity and stated in its findings: "Taking into considera-
tion Jerry Tonne's education background, his income potential
is greatly in excess of $1,000 per month."
In reviewing child support issues, our standard is that
the "award made by the District Court will not be disturbed
on appeal unless there has been a clear abuse of discretion
resulting in substantial injustice." Grenfell v. Grenfell
(1979), 182 Mont. 229, 232, 596 P.2d 205, 207.
Jerry argues that the court failed to consider the
financial resources of Susan. We note otherwise. The court
specifically found that Susan earns $763 per month in net
income, but her living expenses with Brett and Lisa greatly
exceed that amount. In addition, Jerry presented evidence to
the court that he could earn $750 per month in non-farm
income, but his living expenses are substantially less than
that amount. Jerry also presented evidence that he could
earn several hundred dollars per month in farm income.
Therefore, Jerry's own evidence places him in a better finan-
cial position than Susan.
We held in In Re the Marriage of Carlson (1984), 693
P.2d 496, 500, 41 St.Rep. 2419, 2423, that the allocation of
child support between the parties should be based upon the
needs of the children and the parties' respective abilities
to pay. Furthermore, 5 40-4-204, MCA, states that the court
must consider the financial resources of the parents and the
needs of the children when ordering child support. We find
that the District Court followed the provisions of
5 40-4-204, MCA, when it established the child support. pay-
ments. We find no abuse of discretion on this issue.
On the issue of visitation, the court granted joint
custody to both parents, with physical custody to Susan. The
court noted that both children expressed discomfort about
living with Jerry. It granted Jerry visitation rights on
alternate weekends, alternate holidays, an alternate week
night, Father's Day and three non-consecutive weeks in the
summer. Jerry argues that the court negated the effect of
joint custody by severely limiting Jerry's right to visit his
children.
Section 40-4-217(1), MCA, states: "A parent not grant-
ed custody of the child is entitled to reasonable visitation
rights .
. ."
In light of the findings, the court's visita-
tion schedule is reasonable. Furthermore, the court's visi-
tation schedule accords with In Re Marriage of Alt (Mont.
1985), 708 P.2d 258, 261, 42 St.Rep. 1621, 1625, where we
held that visitation on alternate weekends, alternate holi-
days, one evening per week, and two weeks in the summer was
reasonable. Therefore, we find no abuse of discretion in the
court's visitation schedule.
In summary, we affirm on Issues 1 a n d 3. We remand on
Issue 2.
kgh
Chief Justice
We c o n c u r :