No. 89-100
IN THE SUPREME COURT OF THE STATE OF MONTANA
1989
IN RE THE MARRIAGE OF:
SHARON DARLENE GEBHARDT,
Petitioner and Respondent,
and
LeROY GEBHARDT ,
Respondent and Appellant.
APPEAL FROM: District Court of the Fourth Judicial District
In and for the County of Missoula
The Honorable James G. Wheelis, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Richard A. Reep, Graham & Reep, Missoula, Montana
For Respondent:
Jon E. El..lingson, Ellingson & Moe, Missoula, Montana
Submitted on Briefs: September 21, 1989
Decided: December 5, 1989
Filed:
Justice Diane G. Barz delivered the Opinion of the Court.
LeRoy Gebhardt (LeRoy) appeals from a Decree of
Dissolution entered in the District Court of the Fourth
Judicial District, Missoula County, Montana, the Honorable
James B. Wheelis presiding. We affirm in part, reverse in
part and remand.
LeRoy and Sharon Gebhardt (Sharon) were married on
October 7, 1967, in Seattle, Washington. LeRoy completed his
Ph.d in Mechanical Civil Engineerinq shortly before the
marriage of the parties. Sharon's education consisted of two
years of college and a two-year x-ray technology course.
Immediately after the marriage, the parties moved to
California where LeRoy worked first for TRW and later for
Agbabian & Associates. At the time of separation, Sharon had
worked outside the home as an x-ray technician for a total of
twelve days.
Six children were born to LeRoy and Sharon: Connie in
1968, Chris in 1970, Theresa in 1971, Beth in 1975, JoAnna in
1977, and Jennifer in 1981. Both Connie and Chris were
emancipated at the time of trial. In 1978, the parties moved
from California to a farm in Ronan, Montana. The purpose of
the move was to enhance the family life and provide more
interaction between LeRoy and the children. The parties'
primary source of income from 1978 until the present was a
California trailer park purchased as an investment in 1969.
LeRoy did the original investigation of the property and has
overseen its management almost exclusively.
In 1974, LeRoy established an irrevocable trust for the
benefit of his children. The primary source of the trust
corpus was an inheritance from LeRoy's mother, althouqh LeRoy
contributed certain other inheritances and income, and
LeRov's brother, Guy, made contributions as well. Guy
Gebhardt is the trustee for the benefit of the children. The
trust expires when the youngest child reaches twenty-five.
In 1984, Sharon and the children moved to Missoula so
that the children, each of whom had experienced some degree
of academic difficulty, could attend school there. The
parties then purchased a home on Mount Avenue in Missoula.
On July 16, 1986, Sharon filed for dissolution. The assets
owned by the parties at that time included: the farm and
related assets in Ronan, the Mount home, the California
trailer park, a Franklin Fund account and personal property.
The farm, the trailer park and the home were all encumbered
by outstanding debt. By stipulation dated September 4, 1986,
the parties agreed to an equal division of both the Franklin
Fund account and the proceeds of the sale of the farm assets
as well as to a division of the trailer park income. The
only assets not disposed of by this agreement were the Mount
home and the parties1 personal property. Both parties
acquired certain assets between the time of filing and
dissolution. In particular, IleRoy purchased a home
encumbered by a mortgage.
On May 2, 1988, LeRoy and Sharon entered into an
Agreement for Partial Settlement of Marital Estate. Pursuant
to that agreement, LeRoy executed a promissory note in favor
of Sharon as partial consideration for her share of the Ronan
farm and its remaining assets. LeRoy also agreed to
indemnify Sharon for any liability on the underlying contract
for deed.
Sharon testified as to eight incidents of LeRoyls abuse
of either her or the children. Sharon s and LeRoy ' s
testimony conflicted as to who instigated separate
confrontations involving LeRoy and Sharon and LeRoy and
Chris. Both parties agreed that corporal punishment was an
acceptable form of discipline.
LeRoy's specifications of error fall into three
categories:
1. The District Court abused its discretion by its
wholesale adoption of Sharon's Findings of Fact and
Conclusions of Law in light of the lack of substantial,
credible supporting evidence.
2. The District Court failed to consider statutory
factors.
3. The District Court exceeded its jurisdiction in
ordering the parties to prevail upon the assets of the LeRoy
Gebhardt Trust for payment of the children's medical and
dental expenses.
The findings of the District Court are presumed
correct. In re the Marriage of Johnson (1987), 225 Mont.
404, 405-06, 732 P.2d 1345, 1346. We will- not reverse the
District Court's ruling absent an abuse of discretion. In re
the Marriage of Johns (Mont. 1989), 776 P.2d 839, 840, 46
St.Rep. 1249, 1251; In re the Marriage of Stephenson (Mont.
1989), 772 P.2d 846, 848, 46 St.Rep. 700, 702. Although we
have consistently encouraged district courts to employ
conscientious judgment and active participation in preparing
findings, adoption verbatim of one party's proposed findings
is not error - -
per se. In re the Marriage of Watson (19871,
227 Mont. 383, 387-88, 739 P.2d 951, 954; In re the Marriage
of Sessions (Mont. 1988), 753 P.2d 1306, 1307, 45 St.Rep.
744, 746. Reversible error exists only where substantial
credible supporting evidence is lacking. In re the Marriage
of Stewart (Mont. 1988), 757 P.2d 765, ?67, 45 St.Rep. 850,
852. Neither is the District Court required to make specific
findings related to each statutory factor set forth in either
SS 40-4-202 or 40-4-204, MCA. In re the Marriage of Reid
(1987), 226 Mont. 116, 120, 733 P.2d 1302, 1304. However,
the findings must clearly reflect consideration of these
factors. In re the Marriage of Syljuberget (Mont. 1988), 763
P.2d 323, 326, 45 St.Rep. 1825, 1828. LeRoy asserts that the
District Court made incredible findings and failed to
consider statutory factors in its division of marital
property, establishment of child support and visitation. We
will address each area separately.
Marital Property
LeRoy first contends that the District Court failed to
consider certain of his obligations in apportioning the
marital estate and thus effected an inequitable division.
The debts at issue are as follows:
Note to Sharon Gebhardt (Ranch) $17,404.26
Contract for Deed to
MacGillivary (Ranch) 65,191.49
Home Loan 42,165.00
Personal Loan -- Guy Gebhardt 16,000.00
Ranch Taxes & Water Assessment 4,241.81
1988 Income Tax -- Estimate 3,054.00
TOTAL $148,056.56
This case is analogous to In re the Marriage of Wagner
(1984), 208 Mont. 369, 679 P.2d 753. Husband and wife in
Wagner divided their marital assets and embarked upon
divergent financial paths. Wagner, 679 P.2d at 755. Wife
aggressively pursued development of her ranch assets whi1.e
husband proceeded to divest himself of certain property and
Wagner, 679 P.2d
to encumber substantially all that remained. - -
at 755. We held in Wagner that:
To include in the valuation of the
marital estate any accumulation of
financial wealth or, conversely, the
increase in financial liabilities of
either spouse subsequent to the
termination of the "marital relationship"
may effectuate an injustice and frustrate
the intended purpose of division of
marital property.
Wagner, 679 P.2d at 757-58.
LeRoyls first three listed liabilities were incurred
subsequent to the filing of the petition and the parties'
"financial" separation. The terms of the parties' Agreement
for Partial Settlement of Marital Estate required LeRoy to
execute a promissory note payable to Sharon as consideration
for her interest in the ranch. LeRoyls separately incurred
obligation represented by the note is thus not a marital
debt. Similarly, pursuant to the same Agreement, LeRoy
agreed to indemnify Sharon both for any amount she becomes
obligated to pay pursuant to the MacGillivary contract for
deed and for any liability related to ranch taxes and
irrigation fees. LeRoy assumed liability for all three debts
as part of his resolution to hold the farm property and
render it profitable. Sharon should not be penalized for
LeRoyls investment decisions once their paths diverged in
regard to financial matters. These debts are therefore not
marital obligations subject to division. By his own
testimony, LeRoy purchased a home on North Avenue with
proceeds from the sale of the farm assets after the parties
stipulated to equally distribute the farm sale proceeds. The
record is unclear as to the origin of the debt to Guy
Gebhardt and the 1988 Estimated Taxes. We remand for further
proceedings regarding the nature and timing of these
obligations and disposition consistent with our determina-
tions above.
Secondly, LeRoy asserts as error the District Court's
award of all the equity in the Mount home and the personal
property to Sharon despite its equal division of other, more
significant assets. Section 40-4-202, MCA, mandates an
equitable apportionment of marital property. Equitable does
not necessarily mean equal. In re the Marriage of Fitzmorris
(Mont. 1987), 745 P.2d 353, 354, 44 St.Rep. 1809, 1811. We
will not reverse the district court absent an abuse of
discretion. In re the Marriage of Stewart (Mont. 1988), 757
P.2d 765, 767, 45 St.Rep. 850, 852. We do not find an abuse
of discretion in the District Court's award of the Mount home
and its contents in light of Sharon's custody of the four
minor children. We affirm.
Thirdly, LeRoy specifies as error the District Court's
order which he claims divests both parties of substantially
all control over the California trailer park. The District
Court found that "[nleither party should manaqe the trailer
park except as a short term interim manager between hired
managers." We find the District Court's order lacked
sufficient, credible supporting evidence. Substantial
credible evidence will persuade a reasonable person and
should be of such a character that reasonable persons would
not disagree as to its meaning. Kukuchka v. Ziemet (1985),
219 Mont. 155, 157-58, 710 P.2d 1361, 1363. We are not
convinced that LeRoy's past management of the trailer park
warrants his complete exclusion from the same in the future.
Under LeRoy's supervision, this investment increased in value
from $120,000 to $700,000 over a nineteen year period. The
Gebhardt family has relied on this asset for its support
since 1978. No evidence supports the District Court's
conclusion that LeRoy should not continue to oversee the
management of the trailer court. The lower court's order
that the parties relinquish hands-on control of this
singularly important asset is clearly an abuse of discretion.
We remand for additional proceedings and redetermination of
management of the trailer park during the period the parties
hold the same as co-tenants.
Child Support
LeRoy claims the District Court improperly imputed
excessive income to him and minimal income to Sharon in
establishing the child support obligations of both parties.
Furthermore, he asserts the District Court failed to consider
statutory factors in its award of child support.
The District Court imputed income to LeRoy of $40,000
per year based solely on LeRoy's testimony that he supposed
his salary would have doubled had he remained in California
and the speculation of LeRoy's former co-worker that LeRoy
could probably find a job in the aerospace industry.
Additionally, the lower court found Sharon capable of earning
barely over $3,000 per year.
We stated upon adopting the Uniform Child Support
Guidelines that District Courts may properly impute income to
under-employed or unemployed parents. Uniform District Court
Rule on Child Support Guidelines (Mont. 1987), 44 St.Rep.
828. However,
In cases where the obligor parent is not
working or is not working at full earning
capacity, the reasons for such a
limitation on earnings should be
examined. If the reason is a matter of
choice, the local job market should be
reviewed to determine what a person with
the obligor parent's trade skills and
capabilities could earn. Those typical
earnings can then be imputed to the
obligor parent for use in this guide.
This approach is most useful when the
obligor parent has a relatively stable
and recent work history. The approach
can also be used when the obligor parent
has minimal skills and no work history by
ascribing earnings based on a minimum
wage for a full work week.
Uniform District Court Rule on Child Support Guidelines, 44
District Courts are obliged to consider the employment
opportunities available in the local job market for
unemployed or under-employed parents. The record does not
reflect the District Court's consideration of local
employment opportunities in imputing income to either of the
parties. Sharon's income was established at approximately
$3,000 per year with only her previous year's earnings as
support for that finding. The court imputed $40,000 of
income to LeRoy based only on his conjecture that had he
remained in California, his salary might have doubled.
Obviously, LeRoy did not remain in California. The findings
of the trial court "[mlust realistically reflect what the
parents are capable of earning using their actual earnings as
a guideline. " In re the Marriage of Mitchell (Mont. 1987),
746 P.2d 598, 602, 44 St.Rep. 1936, 1941, (quoting In re the
Marriage of Carlson (1981), 214 Mont. 209, 216, 693 P.2d 496,
500). Neither LeRoy's nor Sharon's earning capacity was
realistically reflected in the District Court's findings due
to the lack of sufficient supporting evidence.
Adequate consideration of statutory factors is absent
in the District Court's findings as well. We find no
indication that the lower court considered the needs of the
children, their lifestyle prior to dissolution or LeRoy's
financial resources. In re the Marriage of Anderson (Mont.
1988), 748 P.2d 469, 471, 45 St.Rep. 40, 43. We remand for a
calculation of both parties' child support obligation based
on a reasonable imputation of income and in light of the
statutory considerations set forth above.
LeRoy also specifies as error the District Court's
award of retroactive child support. The District Court may,
once the issue of child support is properly before it, award
retroactive child support. In re the Marriage of Shirilla
!1987), 225 Mont. 106, 110, 732 P.2d 397, 399; In re the
Marriage of DiPa-squale (1986), 220 Mont. 497, 499, 716 P.2d
223, 225. Because the District Court abused its discretion
in its imputation of income to both parties, the award of
retroactive child support based on that calculation is error.
Sharon did not seek modification of the parties' stipulation
during the pendency of this action and only raised the issue
of retroactive child support upon filing her Proposed
Findings of Fact and Conclusions of Law. There was no
testimony to support such an award. In light of the above,
we remand for redetermination of the propriety of retroactive
child support based on both parties' actual and reasonably
imputed income.
Visitation
LeRoy contends the District Court erred by imposing
limitations on his visitation with his two youngest child-ren.
We agree. Section 40-4-217, MCA (1987), states that "a
parent not granted custody of the child is entitled to
reasonable visitation rights unless the court finds, after a
hearing, that visitation would endanger seriously the child's
physical, mental, moral, or emotional health." While
portions of Sharon's proposed findings, adopted verbatim by
the District Court, were self-serving beyond the point of
advocacy, nowhere is there reflected a potential for serious
endangerment. "Error occurs only when the proposed findings
are relied upon to the exclusion of proper consideration of
the facts and the failure to exercise independent judgment."
In re the Marriage of Jacobsen (Mont. 1987), 743 P.2d 1025,
1029, 44 St.Rep. 1678, 1683.
The District Court ordered:
Summer visitation of six weeks on the
condition that [LeRoy] employs a
responsible, live-in adult to provide
assistance with care for the children
during this period. This adult must be
sufficiently independent of [LeRoy] and
sufficiently committed to the children to
be able to intervene on behalf of the
children to interrupt any physical abuse
directed at them by [LeRoy] . If [LeRoy]
is unwilling to hire such an adult, then
he shall have visitation with JoAnna and
Jennifer during the summer consisting of
two one week periods separated by at
least a three week period. Given the age
of the children and [LeRoy's]
responsibilities on the farm, [LeRoy]
shall have the obligation to obtain child
care assistance during these visitations.
What the court failed to set forth was any indication of
LeRoy's ability to meet this potentially onerous financial
burden which appears to foreclose any summer visitation. The
District Court did not employ its independent judgment and
abused its discretion by making findings not based on
substantial, credible evidence. In re the Marriage of J.A.M.
& D.A.M. (Mont. 1988), 750 P.2d 1097, 1099, 45 St.Rep. 437,
440. F e reverse and remand for further determination of a
7
reasonable visitation schedule.
LeRoy Gebhardt Trust
The District Court, in Conclusion of Law No. 11,
ordered the parties to prevail upon the trustee of the LeRoy
Gebhardt Trust for payment of "medical insurance and expenses
for the children including dental and ocular expenses and any
extraordinary expenses .. ."
The LeRoy Gebhardt Trust is an irrevocable trust
created for the benefit of the children of LeRoy and Sharon
Gebhardt. During the trust term, the trustee may "distribute
to or for the benefit of Trustor's [LeRoylsl children . ..
such amount or amounts of income or principal as Trustee in
his sole discretion deems to be necessary for the health,
education and maintenance of the beneficiaries." LeRoy's
clear intention was to create an irrevocable trust for the
benefit of his children. Thus, the LeRoy Gebhardt Trust is
not marital property and the District Court erred in
attempting to dispose of it as such. In re the Marriage of
Malquist (Mont. 1988), 763 P.2d 1116, 1119, 45 St.Rep. 2020,
2023-24.
We reverse the order of the District Court and remand
for further proceedings regarding the parties' responsibility
for the medical and dental insurance needs of their children
consistent with this opinion.
Affirmed i-n part, reversed in part and remanded.
47 .
~
We concur:
f
C 'ef Justice