NO. 88-118
I N THE SUPREME COURT O F THE STATE O F MONTANA
1988
I N RE THE MARRIAGE O F
ROBERT J . T U R B E S ,
P e t i t i o n e r and R e s p o n d e n t ,
and
E D I T H YVONNE T U R B E S ,
R e s p o n d e n t and A p p e l l a n t .
A P P E A L FROM: D i s t r i c t C o u r t of t h e S i x t e e n t h J u d i c i a l D i s t r i c t ,
I n and f o r t h e C o u n t y o f C u s t e r ,
T h e H o n o r a b l e A.B. M a r t i n , Judge p r e s i d i n g .
COUNSEL O F RECORD:
For A p p e l l a n t :
L a r r y D. Herman, L a u r e l , Montana
For R e s p o n d e n t :
G e o r g e W. Huss; Brown & Huss, M i l e s C i t y , Montana
S u b m i t t e d on B r i e f s : Aug. 11, 1 9 8 8
Decided: S e p t e m b e r 27, 1988
Filed: SEP 2 7 t988l
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Clerk
Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.
Edith Turbes appeals from the February 3, 1988 judgment
of the Custer County District Court dissolving her marriage
to Robert Turbes and dividing their property. We affirm the
judgment of the District Court but remand the case for
payment of the temporary maintenance as previously ordered by
the District Court.
Robert J. Turbes and Edith Yvonne Turbes were married
on May 12, 1984. Their marriage lasted 34 months to the date
of separation and three and one-half years to the date of
trial. There were no children born of the marriage, though
Robert's two children of a previous marriage lived with the
parties in Cody, Wyoming, during the first year of the
marriage. Both parties had been married previously.
Five years prior to their marriage, Robert Turbes was
injured in an industrial accident, for which he received a
net settlement of approximately $110,000. Mr. Turbes used
portions of this settlement to construct a house which he
owned free and clear at the time of the marriage ($58,000);
to secure a loan to start a True Value lumber business
(Turbes Lumber) ($40,000); and to purchase a Ford Bronco.
Respondent held these assets, his personal belongings, and
approximately $14,000 in cash at the time of the marriage.
Testimony of the husband placed his net worth at
approximately $250,000 at the time the parties married. The
wife's testimony established a net worth of approximately
$4,000 at the time of the marriage. This consisted of a 1979
Fiat automobile, a savings account containing approximately
$2,500 and her personal belongings. Evidence conflicted. on
the amount owing on these assets.
Approximately one year after the parties married, they
sold the home Robert had built prior to marriage and
proceeded to use the proceeds to construct a new home.
Conflicting evidence was introduced as to the cost of
materials and services which went into the house. At trial
Robert produced a record showing the cost was approximately
$95,000, while Edith testified she believed the cost was
closer to $75,000 to $80,000. The parties obtained an
$80,000 mortgage on the property placing the money obtained
from the mortgage back into their account in anticipation of
expanding Turbes Lumber. Both Robert and Edith contributed
substantial amounts of their time to finishing the house,
though Edith admitted Robert put in more time.
During the first two years of their marriage, Edith
worked for Turbes Lumber. For her time, she was paid between
$900 and $1,000 per month. She produced evidence at the
hearing that she used a portion of her income to pay off the
debts she brought to the marriage and some of their living
expenses. Edith acknowledged that Robert contributed from
his earnings at Turbes Lumber toward their living expenses.
In approximately June of 1986, the lumber company began
experiencing financial problems and Edith went to work for
Marathon Oil in Cody, Wyoming. Edith quit working for
Marathon Oil in early August, 1986, and returned to Turbes
Lumber where she worked without pay until Turbes Lumber was
liquidated on August 16, 1986.
After liquidation of Turbes Lumber, approximately
$20,000 remained owing on the loan Robert had taken out to
finance the business. To secure payment of this obligation
the parties executed a second mortgage on the marital home.
Prior to this time the parties had transferred their
bank account of approximately $110,000 to Minnesota and
placed it in Robert's brother's name. This was done in
anticipation of pending legal problems involving Turbes
Lumber. The couple then moved to Minnesota, and borrowed
$35,000 to start a business from a trust created by Edith's
parents. This business opportunity fell through, and they
returned the money borrowed from the trust. They moved to
Portland, Oregon and then back to Cody, Wyoming. In January
of 1987, the parties reached an accord and satisfaction where
they deeded their house in Cody to the bank in lieu of
foreclosure of the mortgages on the property. Robert then
obtained work in Miles City, Montana, where the parties were
living at the time of their separation on March 15, 1987.
Prior to the separation, Robert transferred
approximately $104,000 from the joint bank account to a
separate account in his name. When the parties separated,
Edith removed most of their personal property and took both
her Fiat automobile and the Ford 1,TD purchased during their
marriage. Robert subsequently filed for dissolution of the
marriage. Edith later received a check for stock which
Robert had earned through Turbes Lumber's membership in True
Value. She cashed the check in the amount of $1,389.77, but
did not spend the money.
Pursuant to the District Court's temporary order of May
27, 1987, Robert was given possession of the Ford LTD with
its accompanying debt, and Edith was given possession of the
Ford Bronco. Edith was also ordered to return those personal
property items of Robert's which she had taken.
The court heard the parties' dissolution action on
December 18, 1987, and issued its decree of dissolution on
February 3, 1988. The court awarded to Robert the following:
the remaining monies in his bank account (approximately
$98,000); the Ford LTD (along with its accompanying debt);
the Ford Bronco; insurance proceeds from claims upon the
vehicles; and that personal property which he brought to the
marriage. Edith received the proceeds from the sale of her
Fiat and her personal possessions, but she was directed to
return the proceeds of the check issued from True Value to
Robert.
The following issues are presented for our
consideration:
1. Did the District Court abuse its discretion in
adopting the husband's proposed findings of fact and
conclusions of law?
2. Did the District Court abuse its discretion in not
considering the nonmonetary contributions of the appellant to
the marriage and to the preservation of the marital assets?
3. Did the District Court abuse its discretion in not
adjusting the property rights reasonably and equitably?
4. Did the District Court abuse its discretion by not
considering the income tax consequences attendant to the
accord and satisfaction of the mortgages?
In reviewing the issues presented on appeal of a
property distribution, this Court's function is "extremely
limited. " In re Marriage of Hundtoft (Mont. 1987) , 732 P.2d
401, 402, 44 St.Rep. 204, 205. "[Tlhis Court will reverse a
district court only upon a showing that the district court
has acted arbitrarily or has committed a clear abuse of
discretion, resulting in either instance in substantial
injustice." In re Marriage of Hall (Mont. 1987), 740 P.2d
684, 686, 44 St.Rep. 1321, 1323. If the District Court's
findings of fact and conclusions of law properly address the
considerations in § 40-4-202, MCA, this Court will not
reverse the determination made by the District Court.
Issue #l.
Did the District Court abuse its discretion in adopting
the husband's proposed findings of fact and conclusions of
law?
This Court will uphold the district court if its
decision is supported by the law and the evidence. In re
Marriage of Sessions (Mont. 1988), 753 P.2d 1306, 1307, 45
St.Rep. 744, 746. In the case at hand, the District Court
prefaced its adoption of the husband's findings by stating:
It is not the usual practice of this
court to adopt the proposed findings of
fact or conclusions of law of counsel,
but after hearing testimony, examining
exhibits, and considering briefs of
counsel, the Court adopts petitioner's
proposed findings of fact and conclusions
of law as follows:
This statement by the District Court shows the District
Court did not adopt the petitioner's proposed findings
haphazardly. The question for this Court is whether the
adopted findings are supported by the law and the evidence.
Section 40-4-202, MCA, is the controlling statute for
division of property in a dissolution action. This statute
directs the court to divide the property equitably between
the parties without regard to marital misconduct. The court
must consider all assets owned jointly or individually,
however or whenever acquired, regardless of the manner in
which title is held. The court shall then consider the
duration of the marriage, previous marriages, the earning
potential of each party, their liabilities and their
opportunities for future acquisition of capital assets and
income. The court shall consider contributions to and
dissipation of the parties' individual estates. When a court
considers property acquired prior to marriage, as in this
case, the court shall consider contributions of the other
spouse to the marriage, including:
(a) the nonmonetary 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 40-4-202 ( I ) , MCA.
The following findings by the District Court illustrate
due consideration of S 40-4-202(1), MCA: The court found
that the marriage was of a short duration (34 months), that
no children resulted from their union, both parties had
marketable job skills, that neither had health problems
affecting their employability, and that no antenuptial
agreement existed. Further the court found that a bank
account containing approximately $98,000 was the major
existing asset at the time of dissolution. Substantial
credible evidence was presented at trial which supports these
findings and we hold that the District Court did not err in
adopting these findings.
Appellant contends the District Court erred in awarding
all the monies in the existing bank account to the husband
and less than $2,000, representing temporary maintenance to
the wife. Appellant first contends that the respondent did
not bring cash into the marriage in the amount of $14,000.
However, our review of the evidence and transcript shows the
respondent did not spend the entire amount of his settlement.
$40,000 was set aside to cover operating expenses of their
business, however this money was not entirely spent. This is
further evidenced by the fact that after sale of the
premarital home one year into the marriage (netting $97,000)
the parties' bank account showed a balance in excess of
$115,000. Respondent testified this amount represented
proceeds from his personal injury settlement. Appellant's
evidence does not disprove this claim.
Appellant next claims that she should have received
$2,000 under the court's order for temporary maintenance,
but actually only received $1,000. Appellant is correct
in her claim and respondent admits Edith only received
$1,000. However, this Court finds the error is correctable
and does not arise to the level of reversible error.
The third error claimed by the appellant is that the
bank account did not represent respondent's premarital
personal injury settlement, but rather proceeds from the home
the parties built. Here the court was presented with
conflicting evidence on the cost of building the marital
home, but both parties acknowledge that all the financing for
the construction came from the proceeds of the husband's
personal injury settlement and the proceeds of the sale of
the premarital home. Both parties contributed their labor to
the building of the home and the appellant admitted the
husband spent more time in its construction. After examining
the conflicting evidence on the cost of the marital home, the
court adopted the husband's figures which approximated the
amount of the loans on the home at the time it was deeded
back to the bank in satisfaction of the mortgages. It is
granted that $20,000 of this amount secured debts of the
business after liquidation. Appellant has acknowledged,
however, that the business provided her with a job, and that
the parties used profits from the business, both before and
after its liquidation, to live on. It is not unreasonable
for the court to find she received a benefit from the
business justifying her obligation. As the asset did not
generate income or property for the parties, the court did
not abuse its discretion in finding the appellant failed to
generate a claim aqainst the husband's premarital assets.
The final error claimed in the proposed findings is
that the appellant had an irrevocable interest in a trust
fund which provided her with the opportunity to generate
future capital assets and income. While direct reference is
not made to the existence of appellant's interest in the
trust, evidence was introduced of its existence, the fact she
could borrow against the trust and that the trust had been
created by appellant's parents. Therefore, we do not find
reversible error.
Having examined the record and the court's findings we
do not find that the District Court abused its discretion.
Issue #2.
Did the District Court abuse its discretion in not
considering the nonmonetary contributions of the appellant to
the marriage and to the preservation of the marital assets?
Appellant maintains the court should consider the
nonmonetary contributions of a spouse when dividing the
marital assets. This assertion is correct. See
S 40-4-202 (I), MCA; and Eschenberg v. Eschenberg (1976), 171
Mont. 247, 251, 557 P.2d 1014, 1016; In re Marriage of Dow
(Mont. 1988), 750 P.2d 1064, 45 St.Rep. 317. In this case
however, the court did consider the contribution of the
appellant toward maintaining the marital assets.
Unfortunately the court determined her contribution toward
the marital assets were lost when the parties deeded back the
marital hone to the bank in satisfaction of the mortgages on
the property. The husband's contribution of his time and
effort was also lost at that time. Further, while the
parties experienced a reduction in their net worth over the
length of the marriage, the court appears to have attempted
to return appellant to her maximum net worth at the time of
the marriage. In light of the short duration of the marriage
and the reduction of the husband's premarital net worth this
does not appear to be an inequitable division.
Issue #3.
Did the District Court abuse its discretion in not
adjusting the property rights reasonably and equitably?
In her third issue, appellant maintains the court's
division of the marital property is unfair in light of her
contributions toward the marital assets. In essence this
issue is a rehashing of the first two issues. In the case of
In re Marriage of Keepers (Mont. 1984), 691 P.2d 810, 41
St.Rep. 2163, this Court stated:
Reasonable minds could differ on what
would be the most equitable distribution
of the parties' property. That the case
may be decided differently is not the
inquiry on appeal, the question is
whether the fact determination of the
court below is clearly erroneous. Rule
52(a), M.R.Civ.P.
Keepers, 691 P.2d at 813, 41 St.Rep. at 2167.
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In Keepers, as in this case, review of the record
showed the District Court's findings contained an error.
There this Court found the error did not result in a finding
that the District Court clearly abused its discretion. The
error we find in this case, the fact that Edith only received
$1,000 of temporary maintenance, is correctable and does not
constitute an abuse of discretion by the District Court.
Issue #4.
As its final issue, appellant raises the question of
whether or not the District Court abused its discretion by
failing to consider the tax consequences of the marital
property distribution. The findings of fact and conclusions
of law adopted by the lower court do not address the issue
directly.
Appellant contends the lower court's distribution of
the marital assets constitutes a "triggering" event, making
her liable for state and federal income taxes on the accord
and satisfaction of the marital home. This contention is
without merit. The triggering event in this instance was the
accord and satisfaction itself, which created any resulting
tax liability at that time. "[Wlhere a property distribution
ordered by a court includes a taxable event precipitating a
concrete and immediate tax liability, such tax liability
should be considered by the court before entering its final
judgment." In re Marriage of Beck (Mont. 1981), 631 P.2d
282, 285, 38 St.Rep. 1054. But, "a District Court does not
abuse its discretion by refusing to consider theoretical tax
consequences when the court-ordered property distribution
does not contemplate any taxable event which triggers present
tax liability." Beck, 631 P.2d at 285, 38 St.Rep. at 1058.
See In re Marriage of Gilbert (Mont. 1981), 628 P.2d 1088, 38
Finally, appellant failed to produce adequate evidence
at the hearing upon which the court could make a
determination of the existence of the tax consequences. The
only evidence was testimony by the appellant that she would
experience a taxable gain on the accord and satisfaction for
the marital home. Appellant relied on her unsubstantiated
belief on the cost of building the house, which conflicts
with evidence presented by the husband. Because of the
theoretical nature of the contention, we hold the court did
not abuse its discretion by refusing to consider the tax
consequences.
In light of our determination that the District Court
was in error in finding appellant had received the $2,000
which had been ordered, but only received $1,000, we remand
to the District Court to compel payment of the sum of $1,000
by respondent husband to the wife as previously ordered.
Judgment affirmed, subject t o the above procedu
f P L f
W e concur:
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