No. 89-177
IN THE SUPREME COURT OF THE STATE OF MONTANA
IN RE THE MARRIAGE OF
KERRIAN T. GARNER,
Petitioner and Respondent,
and
MARGARET S . GARNER,
Respondent and Appellant.
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APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable Russell Fillner, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Camille T. Ventrell; Harris & Ventrell, ~illings,
Montana
For Respondent:
Mark Parker; Parker Law Firm, Billings, Montana
Submitted on Briefs: Aug. 17, 1989
Decided: October 25, 1989
Filed:
1 Clerk
Justice R. C. McDonough delivered the Opinion of the Court.
The parties' marriage was dissolved by decree dated
February 1, 1989, in the District Court for the Thirteenth
Judicial District, Yellowstone County. Wife appeals various
aspects of the decree and the findings of fact and
conclusions of law contained therein. We affirm.
The issues in this case are:
1. Whether the District Court abused its discretion in
failing to award interest on property settlement payments?
2. Whether the District Court erred in finding that
appellant was not entitled to maintenance?
3. Whether the District Court erred in failing to award
attorney's fees?
Margaret S . Garner (Margaret) and Kerrian T. Garner
(Kerrian) married on March 18, 1966 in Pueblo, Colorado. Two
children were born during the marriage. Both children had
reached the age of majority before this action was filed.
During the course of the marriage, Kerrian was
continuously employed outside the home. Margaret was a
homemaker, raised the children and assisted Kerrian in his
various employments. She also attended Eastern Montana
College and obtained a degree in psychology.
In 1978, Kerrian and Margaret opened up a business which
eventually became Kerrian's, Inc., a retail shoe store.
During the first year of operation, Kerrian and Margaret were
the only employees for the business. In 1980, the family
business was incorporated. Kerrian was issued 51% of the
outstanding shares and Margaret was issued 49% of the
outstanding shares. For seven years, until 1985, they were
both active participants in the business, involving
themselves in the daily managerial activities.
In 1985, Margaret moved to San Francisco, California to
attend law school at Hastings School of Law. During her
absence, Kerrian continued to operate the business. While at
law school, she relied upon Kerrian for financial support.
At the time of trial she was on academic suspension due to a
low grade point average. It was her intention to return to
school and complete the requirements necessary for her degree
which were estimated to take approximately one year.
Kerrian filed the petition for dissolution in December
of 1987. The issues at trial were distribution of the
marital estate, maintenance for Margaret and attorney's fees
for Margaret.
The District Court addressed the distribution of the
marital estate in two parts: first, the assets and
liabilities of the parties, excluding the family business;
and second, the family business. In part one the District
Court found that the net distribution to each party should be
on a 50-50 basis. In part two, the District Court found that
the value of Kerrian's, Inc. should be divided on the basis
of stock ownership, a 51-49 percentage basis.
Because animosity between the parties made it impossible
for Kerrian and Margaret to continue in a business
relationship, the court ordered Kerrian to buy Margaret's
interest in the business and to pay her a total of
$97,785.00. The court valued Margaret's share of the
corporation at $85,970.50. In order to equalize the property
distribution, the court further ordered Kerrian to pay
$11,814.50. Thus, the total amount owed Margaret equaled
$97,785.00. Kerrian was to pay her $3,000 per month until
the debt was paid. This plan did not provide any provision
for interest. The court also found that Margaret was not
entitled to maintenance and further ordered both parties to
pay their own attorney's fees and costs in the action. This
appeal followed.
Margaret argues that the trial court abused its
discretion in the distribution of the marital estate by
failing to award interest on the property settlement
payments. According to the lower court's judgment, Kerrian
must make monthly payments of $3,000.00, without interest,
for 32.59 months until Margaret's cash award of $97,785.00 is
fully paid. Margaret contends that this method of payment
has the effect of devaluing her equity in the marital estate,
and thus is an abuse of discretion on the part of the trial
court. We disagree.
At the outset, we note that it is the stated objective
of this Court to "pay a great amount of deference to the
judgment of the District Court regarding property divisions."
In re Marriage of Burleigh (1982), 200 Mont. 1, 8, 650 P.2d
753, 756. The standard of review of a lower court's judgment
is whether the district court acted arbitrarily without
employment of conscientious judgment or exceeded the bounds
of reason resulting in substantial injustice. In re Marriage
of Rolfe (1985), 216 Mont. 39, 45, 699 P.2d 79, 83.
The division of the marital property in a dissolution
action is governed by the provisions of S 40-4-202, MCA.
This statute dictates that a court take the needs and
characteristics of the parties into account. The statute
does not, however, mandate that the marital property be
divided equally. Equity, not equality, guides a court's
discretion in dividing the marital estate. In re Marriage of
Fitzmorris (1987), 745 P.2d 353, 354, 44 St.Rep. 1809, 1811.
Margaret argues that the method of payment, dictated by
the court below, has the effect of devaluing her share of the
marital estate. It is her contention that the cash award is
necessarily devalued because it is paid over time. In order
to accurately divide the estate, according to the stated goal
of a 51-49 percentage, she should be awarded interest
payments.
This argument, however, ignores the fact that the
allowance of interest is within the discretion of the
District Court. In re Marriage of Jacobson (1979), 183 Mont.
517, 600 P.2d 1183; In re Marriage of Wessel (1986), 220
Mont. 326, 715 P.2d 45.
A review of the facts does not support Margaret's
contentions that the District Court abused its discretion.
Personal property, acquired during the marriage, was split on
a 50-50 basis. Kerrian's, Inc., was split according to stock
ownership, or on a 51-49 percentage basis. In making this
apportionment, the District Court made extensive findings
with regard to the parties' needs and potentialities. It
found that because of her employment skills, acquired through
experience gained as assistant manager of the family
business, and her education, including future graduation from
a prominent law school, Margaret has an excellent opportunity
for future acquisition of capital assets and income.
We do not disagree with these findings. A Juris
Doctorate degree is a valuable income producing asset.
Margaret testified that the top graduates from Hastings earn
on the average of $40,000 to $65,000 a year. In contrast,
Kerrian has only one year of college. He has worked in the
family business for all of his adult life while Margaret
received a college education at Eastern Montana College and
two years of law school at Hastings. In light of these facts
we hold that the trial court's property division was not an
abuse of discretion.
I1
Margaret next argues that the District Court erred by
refusing to award her maintenance. Again, we disagree.
An award of maintenance is appropriate if the spouse
seeking maintenance "lacks sufficient property to provide for
[her] reasonable needs; and is unable to support [herself]
through appropriate employment. . .I1 Section 40-4-203, MCA.
Margaret maintains that the court failed to take these
principles into account when it refused to award her any
maintenance. At trial, she requested maintenance until she
completed her law school degree and gained admission to the
bar. It was her contention that after distribution of the
marital estate, she lacked "sufficient property" to provide
for her reasonable needs. She further argued that she is
unable to obtain appropriate employment until she is
qualified to practice law.
Margaret was awarded the following property, at her
request: a cabin at Flathead Lake, the liabilities against
which exceed the value; the cash value of a life insurance
policy; an IRA; her interest in a retirement/profit sharing
plan; personal property; and the cash award of $97,785.00.
She maintains that none of this property is income producing.
Therefore, it cannot provide for her "reasonable needs."
According to the record, the cabin at Flathead Lake is
subject to two separate mortgages of $84,769.00 and
$22,315.00 each. The monthly payments on these liabilities
total approximately $1500.00. These payments, it is argued,
render the cabin an income-consuming piece of property, which
will force Margaret to consume her property settlement
payments to meet her financial needs. Therefore, the award
of the cabin is not "sufficient property" as that term is
used in 5 40-4-203 (1)(a), MCA.
We agree that the cabin is not income producing
property. However, we also take note that Margaret insisted
upon receiving the cabin during the entire dissolution
proceeding. Kerrian wanted to sell the cabin to reduce the
drain on the family cash. Our review of the court file
reveals that Kerrian asked the court for an order allowing
him to sell the property so that neither party would be faced
with meeting the cabin's payments. Margaret resisted this
motion. Therefore, in light of these facts, we hold that the
trial court did not abuse its discretion in failing to order
maintenance payments which are not necessitated by Margaret's
"reasonable" needs but rather through her voluntary decision
to choose a piece of property which consumed income.
Margaret also contends that she is entitled to
maintenance because she cannot support herself through
appropriate employment until she completes her law degree and
gains admission to the bar. During the divorce proceeding,
Margaret testified that prior to the filing of this action,
she required approximately $3,000.00 a month to live on. Her
expenses included $800.00 for apartment rent, and $110.00 to
park her car. During separation and preceding the
termination of the marriage, Kerrian paid Margaret $1500.00 a
month maintenance. In the final judgment, however, the trial
court did not award any maintenance.
The court based its decision, in part, on its
determination that Kerrian was unable to pay any maintenance
after meeting his own needs. Evidence at trial established
that his disposable income averaged approximately $2,350.00 a
month. We agree with the trial court that Kerrian would not
be capable of providing Margaret with $3,750.00 a month
maintenance.
The lower court also found that, contrary to Margaret's
contentions, she is capable of supporting herself through
a p p r o p r i a t e employment. M a r g a r e t argued t h a t b e c a u s e o f h e r
low grades and her disqualified status (i.e. academic
suspension), she is incapable of supporting herself.
However, t h e r e c o r d c l e a r l y shows and s h e t e s t i f i e d t h a t s h e
c o u l d work a s a law c l e r k f o r $10.00 an h o u r . Additionally,
it was r e v e a l e d , that a t one p o i n t she received $800.00 a
week w h i l e c l e r k i n g f o r a San F r a n c i s c o law f i r m .
T h i s C o u r t f i n d s , t h e r e f o r e , t h a t t h e D i s t r i c t Court d i d
not abuse its discretion in refusing to award Margaret
alimony. As stated earlier, she received roughly fifty
p e r c e n t of t h e m a r i t a l p r o p e r t y a f t e r d i s t r i b u t i o n . As part
of t h i s p r o p e r t y d i s t r i b u t i o n , t h e c o u r t o r d e r e d K e r r i a n t o
pay M a r g a r e t $3,000.00 a month f o r a p e r i o d o f o v e r two and a
half years. This income, realized from the property
settlement, together with the excellent employment
o p p o r t u n i t i e s a v a i l a b l e t o her a s a r e s u l t of her attendance
at a law school, is adequate to supply her "reasonable
needs. "
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Finally, Margaret maintains that the court erred in
f a i l i n g t o award h e r a t t o r n e y ' s f e e s and c o s t s p u r s u a n t t o
t h e provisions of § 40-4-110, MCA. W find t h a t the court's
e
d e t e r m i n a t i o n i n t h i s m a t t e r was r e a s o n a b l e and w i t h i n i t s
discretion. W e affirm.
Justice
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Justices
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Justice John C. Sheehy, concurring and dissenting:
I concur with all of the majority opinion, except that
part which denies the wife interest on the deferred payments
to be made by the husband to her.
There is an internal conflict in the order of the
District Court and in the majority opinion on the subject of
interest. The District Court found, and the majority agree,
that the value of Kerrian's, Inc., should be divided between
husband and wife in the ratio of 51-49. Then the District
Court provided that the husband should pay wife the 49%
amounting to $97,785 over a period of time (calculated at
32.59 months) at the rate of 3,000 per month without
interest. Thus the husband will have the use of the wife's
funds over a 2 $ year period interest-free. I do not think
the District Court, nor any member of the majority would see
anything but injustice in such an arrangement if anyone of
them were forced to the small end of the same deal. The
value of the wife's award has been decreased by at least
$7,500 under the District Court's order, and to me that is
substantial enough to require fixing. I would reverse and
remand for that single purpose.
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