No. 8 7 - 5 4 8
IN THE SUPREME COURT OF THE STATE OF MONTANA
1988
IN RE THE MARRIAGE OF
CAROL C. DALLEY,
Petitioner and Appellant,
and
MARK F. DALLEY,
Respondent and Respondent.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable G. Todd Baugh, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Davidson & Poppler; Doris M. Poppler, Billings,
Montana
For Respondent:
Sandall, Cavan, Smith & Grubbs; John J. Cavan,
Billings, Montana
Submitted on Briefs: March 31, 1 9 8 8
Decided: June 7, 1.989
Filed: gua y
Clerk
Mr. Justice R. C. McDonough delivered the Opinion of the
Court.
This appeal from the Thirteenth Judicial District
involves the division of a marital estate in a dissolution
proceeding. Appellant Carol C. Dalley (Carol) contends that
the District Court erred in arriving at her share of the
estate, and respondent and cross-appellant, Mark F. Dalley
(Mark) makes the same claim in regard to his share on
cross-appeal. We affirm the division made by the District
Court.
The issues presented for review on appeal are as
follows:
(1) Whether the Court abused its discretion in
apportioning the parties' marital assets?
(2) Whether the Court erred in failing to award Carol
assets traceable as gifts from her relatives.
(3) Whether the Court erred in failing to date the
value of the parties' assets in 1976?
The issue presented on cross-appeal is:
Whether the Court abused its discretion in arriving at
Mark's share of the marital assets?
The relevant facts are briefly as follows: The parties
married on June 28, 1946, and the lower court dissolved the
marriage by interlocutory order on April 10, 1987. The
property division went to trial on April 23, 27, 28, and 30,
1987. After the trial on November 10, 1987, the District
Court's decree divided the parties' assets. Under the decree
Carol received property valued at $766,988.60, and Mark
received property valued at $379,001.40.
The lower court made extensive findings on the
contributions of the parties toward acquiring and maintaining
the assets in the marital estate. In summary, the lower
court found that: in the early years of the marriage both
parties worked and contributed their income to the expenses
of the marriage; that later Carol cared for the parties'
children and Mark worked to support the family; that gifts of
money, stock, and financial assistance to Carol from her
father, aunt, and uncle before the marriage, and other gifts
from her father during the marriage, were used during the
marriage to suppl-ement the parties' income; that the parties'
bought and sold a Billings tavern during the marriage; that
Carol started her own business during the marriage; that the
parties own their own home; that Carol holds investment
assets which produce income from interest and dividends; that
Carol acquired other investment assets with investment
earnings; that Mark was gifted stock from Carol's father
during the marriage and used the stock and his share of sale
proceeds from the tavern to borrow money for a business
venture which has lost money; that since 1975 the parties
contributed separately to a joint account used to cover
household expenses; that in 1976 the parties began to file
individual income tax returns; that from 1975 to 1986, Carol
contributed $112,076.93 to family living expenses while Mark
contributed $53,550; and that in the near future Carol would
receive an inheritance from her deceased father's estate.
The lower court listed the parties' assets as follows:
ASSETS
1. 6,672 shares Arnoco $497,064
2. 667 shares Cypress Minerals 14,174
3. 1,185 shares Lehman Brothers 19,849
4. 160 shares Mont. Power Co. Preferred 4,280
Tax exempt bonds-face value $155,000 183,966
Money Market Account 13,808
IRA (wife) 15,455
CD 60,000
1978 Oldsmobile 3,000
Manpower, Inc. 15,000
CD 100,000
IRA (husband) 7,500
Mont. Power Co. (Husband-savings) 4,328
Cash value life insurance 5,066
Contract-sale of poker & keno machines 42,000
1981 Chrysler 3,000
Country Club membership 5,000
Money Market CD 87,000
Family home and contents per Ex. C 70,000
TOTAL ASSETS .... $1,1501490
The lower court did not list Carol's expected inheritance as
an asset in the marital estate.
From the total asset figure the lower court subtracted
Mark's liabilities of $180,252, to arrive at a net value of
the parties' assets of $970,238. The District Court then
made the division as follows:
Asset items 1 and 2 shall be wife's because
these are stocks gifted to her by her family and
the proceeds of stock splits and spinoffs from
those gifts.
Asset items 3 through 10 shall be wife's but
the values of asset items 3 through 10 shall be
divided 70% to wife and 30% to husband because she
has been substantially more instrumental in the
acquisition, preservation, management and
accumulation of these assets and because gifts from
her family were also important to her ability to
put together these assets; 30% to husband fairly
reflects his contribution to preservation of these
assets.
Asset items 11 through 18 are set over to
husband because these items have been managed by
him and it is necessary that he have these items to
achieve an equitable apportionment.
Asset item 19 is set over to wife but the
value thereof shall be equally split for this is an
equitable apportionment of the family home and its
contents.
The liabilities, items 20 and 21 are set over
to husband because he is responsible for their
creation and continued existence and he has the
assets which are pledged as security for their
payment.
Issue I.
Carol contends that the lower court abused its
discretion in dividing the parties' assets. First, she
argues that the division is unfair because the majority of
her share is traceable to gifts from her relatives. Carol
also contends under this issue that the lower court failed to
consider her father's contribution to the construction of the
family home, and failed to consider her right to half the
proceeds from the sale of the tavern in Billings.
In reviewing a district court's division of marital
property this 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 the Marriage of Hall (Mont. 1987), 740 P.2d 684, 686,
44 St.Rep. 1321, 1323.
We reject Carol's contentions on this issue because S
40-4-202, MCA, gives the lower court the discretion to
consider factors in addition to the source of the property.
In re the Marriage of Vance (1983), 204 Mont. 267, 275, 664
P.2d 907, 912. Here, the lower court found that:
Wife's investments have been substantially
more successful than husband's and the generosity
of her family has played a substantial part in the
accumulation of the assets the parties own. But
husband worked and earned a good income during the
entire marriage. That income and wife's income
have been used by the parties to rear the children,
support the family, and to some extent, have aided
wife in accumulating, saving, maintaining and
increasing those assets managed by her.
In addition to this finding, the lower court also found that
Carol would be more likely to acquire greater capital assets
than Mark, that Carol would shortly receive a substantial
inheritance, and that Mark had contributed to the acquisition
and maintenance of the family home and the tavern. These
findings are supported by substantial evidence, they weigh in
favor of distributing a portion of assets contested by Carol
on appeal to Mark, and they demonstrate that the
contributions of Carol's relatives were considered. Thus,
there is no clear abuse of discretion here, and we affirm on
this issue.
Issue 11.
Carol maintains that inasmuch as spouses may conduct
financial transactions independently, (see §§ 40-2-301 to-
302, MCA; § 40-2-202, MCA; § 40-2-106, MCA), and inasmuch as
Mark's contribution to acquiring and maintaining her
investment assets was minimal, we should conclude that the
District Court abused its discretion by not awarding more of
the investment assets to Carol. Carol fails to specify which
assets should have been awarded to her under this theory, but
we must assume from the facts of this case that the assets
she complains of are the items numbered 3-10 in the lower
court's asset list. Carol received 70% of these assets, and
Mark received 30%.
First, in regard to the statutes cited, the "application
of these statutes to married couples is undeniable, but there
is no intimation that they are at all controlling upon
dissolution of the marriage by di.vorce." Cook v. Cook
(1972), 159 Mont. 98, 102, 495 P.2d 591, 593. We hold here
that they do not control over the more particular provisions
of 5 40-4-202, MCA. Thus, we are not persuaded to reverse by
their citation.
Second, Carol contends that we should follow the
rationale employed by the Oklahoma Supreme Court in
Mothershed v. Mothershed (Okla. 1985), 701 ~ . 2 d 405, a
dissolution property dispute where the Court stated:
The gift of property to a spouse during marriage is
considered separate property of such spouse and
upon divorce it cannot be considered as having been
acquired by the joint industry, or efforts of the
parties to the subject marriage. ... I' If one
spouse brings separate property to the marriage,
increased or enhanced value of the property will
not constitute jointly acquired property during
coveture unless the enhancement value was the
result of joint efforts, skill or funds of both
spouses.I'
Mothershead, 701 P.2d at 408 (quoting Templeton v. Templeton
(Okla. 1982), 656 P.2d 250, 252). We have held similarly
that where none of the value of gifted property is a product
of contribution from the marital effort, the District Court
can justifiably find that the non-acquiring spouse has no
interest in the property. In re the Marriage of Herron
(1980), 186 Mont. 396, 404, 608 P.2d 97, 101. However, we
also stated in Herron that 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, 608 P.2d at 100.
As stated in regard to the first issue, the lower court
awarded some of Carol's investment assets to Mark because of;
Carol's superior ability to acquire capital assets and her
recent inheritance, Mark's current indebtedness, and Mark's
contributions of income during the marriage which to some
extent aided Carol's investment ventures. The consideration
of these facts as affecting the distribution of gifted
property is proper under S 40-4-202, MCA, and the facts
themselves distinguish this case from Herron. Thus, there is
no clear abuse of discretion on this issue and we affirm.
Issue 111.
Carol contends that the District Court abused its
discretion by failing to value the marital assets in 1976.
She maintains that in 1976 the parties terminated their
marital relationship and began to change their financial
status due to individual initiative. Thus, according to
Carol, In re the Marriage of Wagner (Mont. 1984), 679 P.2d
753, 41 St.Rep. 409, mandates valuation of the assets in
1976. Mark responds that the marriage relationship was not
terminated in 1976, and that Wagner may be distinguished from
the case at hand.
First, in Wagner, this Court held that the parties'
unique financial circumstances mandated a valuation of
marital assets two years before the date of formal legal
dissolution because: (1) the assets were acquired after the
marital relationship was irretrievably broken, (2) the
disparity of the parties' business acumen resulted in a
change of the parties' financial status after the separation
so that selection of the later date would create an unjust
distribution. Wagner, 679 P.2d at 758. In this dispute,
unlike in Wagner, the evidence preponderates against a
finding that the marriage was irretrievably broken in 1976.
The parties here lived together and shared expenses until
June of 1986 when Carol filed her petition for dissolution.
Thus, there is no separation of the parties and their assets
as in Wagner, and the rule from Wagner does not apply.
Furthermore, the award of some of the appreciation of Carol's
investment holdings is supported by the findings we have
referred to in the first two issues. Thus, we affirm on all
issues presented on Carol's appeal.
On cross-appeal Mark contends that the District Court
failed to properly value his contribution to the parties'
asset accumulation. Specifically, Mark contends that as the
chief breadwinner of the family, his contributions of income
entitle him to a larger portion of the marital assets. We
reject this contention. The record shows that Carol
contributed her labor as homemaker during much of the period
that Mark claims credit for as the "chief breadwinner", and
the record also reveals that gifts to Carol - Mark of stock
and
from Carol's relatives furthered the establishment and
accumulation of marital assets. Section 40-4-202, MCA,
mandates consideration of Carol's contribution and the
contribution of her relatives. Thus, the District Court did
not abuse its discretion by undervaluing Mark's contribution.
Mark also argues that the District Court should have
included the value of Carol's expected inheritance in the
marital estate. A district court may commit error by failing
to consider an expected inheritance in distributing the
marital estate. In re the Marriage of Alt (Mont. 1985), 708
P.2d 258, 260, 42 St.Rep. 1621, 1626. However, property
gifted during the marriage may be excl-uded from the marital
estate where an objecting spouse can claim no contribution to
the property's value. Becker v. Becker (Mont. 1985), 707
P.2d 526, 528, 42 St.Rep. 1541, 1544. It follows from Becker
that an expectation of property where an objecting spouse can
claim no contribution may be properly excluded from the
marital estate. That is the case here, and the District
Court properly excluded Carol's expected inheritance. All
issues are affirmed.
Justice
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