No. 88-557
I N THE SUPREME COURT O F THE STATE O F MONTANA
1989
I N RE THE MARRIAGE O F
MARY LOU M I L L E R ,
P e t i t i o n e r and A p p e l l a n t ,
and
DALE L E E M I L L E R ,
R e s p o n d e n t and R e s p o n d e 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 F i f 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 of R o o s e v e l t ,
T h e H o n o r a b l e M. J a m e s S o r t e , Judge p r e s i d i n g .
COUNSEL O F RECORD:
For A p p e l l a n t :
Joan M e y e r N y e ; N y e & Meyer, B i l l i n g s , Montana
For R e s p o n d e n t :
J a m e s D. Rector; Rector & McCarvel, Glasgow,
Montana
S u b m i t t e d on B r i e f s : M a y 11, 1 9 8 9
Decided: July 18, 1989
Mr.J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion o f t h e
Court.
T h i s i s an a p p e a l from t h e F i f t e e n t h J u d i c i a l D i s t r i c t
Court, Roosevelt County, Montana, the Honorable M. James
Sorte presiding. In this marriage dissolution action,
appellant appeals that portion of the District Court's
findings of fact, and c o n c l u s i o n s o f law p e r t a i n i n g t o t h e
property d i s t r i b u t i o n of the marital e s t a t e . W r e v e r s e and
e
remand.
Mary Lou and Dale M i l l e r were m a r r i e d on March 7 , 1964
and remained m a r r i e d f o r a p e r i o d o f some twenty-four years.
Three c h i l d r e n were born o f t h e m a r r i a g e , two s o n s , b o t h of
l e g a l age a t t h e t i m e o f the dissolution, and one d a u g h t e r
who h a s s i n c e r e a c h e d m a j o r i t y .
Respondent Dale M i l l e r (hereinafter referred t o a s the
husband) h a s been a farmer/rancher most o f his life. The
appellant, Mary Lou M i l l e r (hereinafter referred t o as the
w i f e ) c a r e d f o r t h e f a m i l y home, raised the three children,
a s s i s t e d w i t h v a r i o u s farm d u t i e s and worked o u t s i d e t h e home
a t a s s o r t e d jobs. Those j o b s i n c l u d e d work a s a s u b s t i t u t e
school teacher, s c h o o l bus driver and r e t a i l sales clerk.
The w i f e f i l e d h e r p e t i t i o n f o r d i s s o l u t i o n o f m a r r i a g e
on A p r i l 5 , 1985, and r e q u e s t e d t h e c o u r t d i v i d e t h e m a r i t a l
and personal property equally between the parties. The
husband answered t h e p e t i t i o n on A p r i l 1 8 , 1985, and a d m i t t e d
t h a t t h e c o u r t should d i v i d e t h e property equally. However,
two y e a r s l a t e r , t h e husband f i l e d w i t h t h e D i s t r i c t Court
two r e p o r t s , one on J u n e 1, 1987 and one on June 2 9 , 1987,
regarding h i s premarital property. These r e p o r t s claimed
totally different marital assets. The husband a s s e r t e d i n
t h e s e two r e p o r t s t h a t he had owned v a r i o u s p e r s o n a l p r o p e r t y
and land prior to the marriage. The husband requested the
District Court deduct the value of his premarital property
from the total of the marital estate before it made its
determination and distribution, and that the value of his
premarital property should be awarded solely to him. In
addition, the husband asserted that part of the value of the
land the parties acquired during the marriage should also be
deducted from the marital estate prior to division and be
awarded to the husband as his sole premarital and gifted
property.
On August 23, 1988, the District Court entered its
Findings of Fact, Conclusions of Law and Decree and found the
net worth of the marital estate to be:
Total assets: $318,936.50
Total liabilities: $12,950.00
Total (net) marital estate: $305,986.50
The District Court distributed the total net estate as
follows: $70,812 to the wife (or 23% of the total marital
estate) and $235,174.50 to the husband (or 77% of the total
marital estate).
On appeal the wife claims the District Court's division
of property was not supported by the record. She takes
specific objection to the court deducting, prior to division,
the following: the present value of all personal property the
husband claimed he owned at the time of the marriage but did
not own at the time of the dissolution; the full value of
land both parties received by gift in 1970 from the husband's
mother; the claimed discount below market value in the
purchase price at which the husband's parents sold certain
land to the parties during the marriage; and all premarital
land of the husband.
The husband claimed that, with personal funds owned
prior to the marriage, he paid for all land the parties
purchased during the marriage, specifically from the
husband's parents. In addition to land the husband purchased
in 1954, he claimed sole personal ownership, prior to the
marriage of the following items: 1958 MM GB tractor; 1956
Oliver 88 tractor and loader; 1952 Ford 8N tractor; 1957 Ford
2-ton truck; 1954 Oliver 33 combine; 1953 MF 10 baler; 1957
IHC swather; 1958 Cockshutt tool bar; 1957 John Deere disk;
John Deer plow; 1961 Farmhand rake; 1963 Ford pickup; 1954
Ford pickup; pickup camper; Aluma Craft boat and trailer with
40 hp Johnson motor; water well; 85-90 head of cows; 12
bulls; 2 horses; saddle; 500 bushels alfalfa seed; hay, oats
and barley; cow shed; buildings moved from other place;
fences; two 1100-bushel steel bins; 2 fuel tanks; cattle
chute; tools and chain saws; approximately 9 guns; and $7,000
in savings bonds.
It should be noted that the wife's original attorney
dropped out of the case a month or two prior to the case
being heard by the District Court and certain matters were
stipulated or allegedly stipulated to prior to new counsel
taking the case. Part of the alleged stipulation went to the
above-listed premarital property. The wife's counsel
objected, alleging a stipulation as to the deduction of
premarital assets was never entered. Testimony at trial
concerning the value of the husband's premarital property was
not supported by qualified estimates or appraisals, as
reflected in the husband's testimony on cross-examination:
Q [By wife's attorney] Do you know what
the price of registered cows were on
March 7th, 1964?
A No.
Q So that this figure of a thousand
dollars is just a guess, isn't it?
A Yes.
Q Is the camper, boat, motor and trailer
still in existence?
A It was traded in since then.
Q And you don't have any appraisal or no
written documents to reflect what its
value was on March 7th, 1964, do you?
A No.
Q So then that value is speculation as
well.
A Yes.
The extent of the wife's contribution to the farm
operation and its many related tasks, was disputed by both
parties. The District Court heard testimony regarding the
wife's contribution to the farm operation from the husband,
the wife, one of their sons and various friends and
neighbors. After hearing the testimony, the District Court
found that the wife made a "negligible contribution" to the
farm and the ranch operation.
This Court finds error with the District Court finding
the wife made a "negligible contribution." The record
reveals just the opposite; she raised the parties' three
children, was a helping hand on the ranch, was primarily
responsible for the ranch home and town home, and worked
outside of the home at various jobs.
The wife objects to the District Court's findings of
fact, specifically Nos. 15, 16, 19 and 20. In finding No. 15
the wife objects to the court's finding that while she had
received a $3,700 settlement for a personal injury, an injury
incurred prior to the marriage and the settlement received
after the marriage, that the District Court found " [tlhe
$3,700.00 was not used for any land payments or as
contribution towards the marital estate."
In finding No. 16 the wife objects to the court's
finding that the husband paid for the land purchased from his
parents during the marriage with money " [dl irectly traceable
.
and attributable to the premarital assets of the [husband] "
In finding No. 19 the wife objects to the court's
finding that the she " [dloes have an opportunity for future
acquisition of substantial capital assets through
inheritance" from her father if she out-lives him. The
District Court did not note that she is one of eight children
in her family, and according to the wife's testimony at trial
the oil wells owned by her father were not in operation due
to the shutdown of many of the oil fields in eastern Montana.
In finding No. 20 the wife objects to the court's
finding that the husband " [hlas little or no opportunity for
the acquisition of capital assets or income," even though the
record indicates that he received money from mineral leases
on the property and that during the years of the parties'
marriage, he has received substantial income from those
mineral leases.
Following trial, the wife moved for a new trial,
presenting bank documents to show that findings 15 and 16
were clearly erroneous. Her motion for a new trial was
denied and the District Court adopted the summary order
prepared by the husband's attorney. The wife now appeals
that distribution.
Numerous issues have been presented on appeal, but in
view of the fact that we are returning this matter to the
District Court, only two issues will be discussed to clarify
the matter on remand. Those issues are:
1. Did the District Court err in applying the "not
unconscionable" standard of 5 40-4-201, MCA, instead of the
"equitable" standard under 5 40-4-202, MCA, for division of
property by the court where the parties had no agreement on
division of property?
2. Did the District Court abuse its discretion in
setting over $218,220 of the marital estate to the husband
before dividing the marital property, without properly
considering the wife's contributions to the marriage,
resulting in an inequitable division of the marital estate?
The "not unconscionable" standard is contained in
§ 40-4-201, MCA, which in pertinent part states:
(2) [tlhe terms of the separation
agreement ... are binding upon the
court unless it finds, after considering
the economic circumstances of the parties
and any other relevant evidence produced
by the parties ... that the separation
agreement is unconscionable.
The foregoing section limits the application of the standard
of unconscionability to the case where a separation agreement
is presented to the court. No agreement was proposed in the
present case.
As a result, the appropriate standard required of the
court is contained in 5 40-4-202, MCA, which states in
pertinent part:
(1) In a proceeding for dissolution of a
marriage, ... the court, without regard
to marital misconduct, shall, ...
finally equitably apportion between the
parties the property and assets belonging
to either or both, however and whenever
acquired and whether the title thereto is
in the name of the husband or wife or
both. In making apportionment, the court
shall consider the duration of the
marriage . .,
. the age, health, station,
occupation, amount and sources of income,
vocational skills, employability, estate,
liabilities and needs of each of the
parties; ... and the opportunity of
each for future acquisition of capital
assets and income.
Clearly, the standard of equitable apportionment set forth in
5 40-4-202, MCA, is not comparable to the standard of
unconscionability set forth in 5 40-4-201, MCA. In the
present case, the District Court adopted without significant
change the property description proposed by the husband, and
in doing so applied a standard that the proposal was not
unconscionable. That does not meet the statutory test of
§ 40-4-202, MCA.
In the present case, the court was required to "finally
equitably apportion" the property and assets and was further
required to take into consideration a number of factors which
are not even mentioned in the other code section. We
conclude that the District Court ' s "not unconscionable"
finding does not constitute a finding of equitable
apportionment. We conclude that the District Court must
review all of the elements contained in 5 40-4-202, MCA, and
make a determination of equitable apportionment following the
provisions of that section. We hold that the application of
the "not unconscionable" standard of § 40-4-201, MCA, in the
present case constitutes reversible error.
The second issue is whether the court abused its
discretion in setting over $218,220 of the marital estate to
the husband before dividing the marital property, without
considering the wife's contributions to the marriage.
This Court in In re Marriage of Brown (1978), 179 Mont.
417, 422, 587 P.2d 361, 364, noted the standard of review
where we set forth the following:
The standard for reviewing the
property division in a dissolution
decreed by a District Court is well
settled in Montana. The apportionment
made by the District Court will not be
disturbed on review unless there has been
a clear abuse of discretion as manifested
by a substantially inequitable division
of the marital assets resulting in
substantial injustice. In re Marriage of
Blair (1978), Mont., 583 P.2d 403, 405,
35 St.Rep. 1256; Vivian v. Vivian (1978),
Mont., 583 P.2d 1072, 1074, 35 St.Rep.
1359; Eschenburg v. Eschenburg (1976),
171 Mont. 247, 557 P.2d 1014,
... Porter v. Porter (1970), 155 Mont,
451, 473 P.2d 538.
In addition, in In re Marriage of Hall (Mont. 1987),
740 P.2d 684, 686, 44 St-Rep. 1321, 1323, we noted:
We have concluded that in a property
distribution review in marriage
dissolution, 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.
the case bar, the District Court ' s findings
setting over to the husband all premarital property and all
property derived from his parents, are very similar to the
district court's findings in Brown. We note, however, the
unfairness of the order herein where the gift of land by the
husband's mother to the parties was not made to just one
party but to both the husband and the wife, and such land has
been in both of their names. Here the duration of the
marriage was substantial, twenty-four years, considerably
longer than the fourteen years in Brown. We note in the case
at bar the District Court went further than the district
court in Brown. The court here gave full credit for
unappraised personal property which the husband claimed he
owned at the time of the marriage. As a direct result, the
court divided the property with 77% going to the husband and
only 23% to the wife. The record does not disclose evidence
which establishes that the unappraised personal property was
still in existence at the time of the dissolution or that it
was "acquired in exchange" for such property, as referred to
and described in S; 40-4-202, MCA. The District Court also
did not grant any value to the wife's contribution to the
ranch and marriage.
With regard to the 640 acres of land, the court did not
have valuations or appraisals as of the date of dissolution.
The only values given were those in effect prior to the
marriage.
With regard to the property owned by the husband prior
to marriage, there is no evidence that any part of this
property is still in existence. There were no adequate
appraisals of the values of such property, only estimates.
The court valued the property at $129,900 without
substantiated appraisals.
We also conclude that in the absence of evidence
disclosing that such $129,900 worth of property was in
existence or was traceable to property now in existence, such
property could not be considered. As stated in Glasser v.
Glasser (1983), 206 Mont. 77, 87, 669 P.2d 685, 690, "if
inheritance funds are not traceable, then they may not be
considered as separate property of the spouse." While the
trial court has discretion to select or reject appraisal
values, provided there is substantial credible evidence to
support the values, there must be evidence to support the
trial judge. See In re Marriage of Williams (Mont. 1986),
714 P.2d 548, 554, 43 St. Rep. 319, 327. We conclude that it
was an abuse of discretion to set over to the husband
$129,900 in value of property on the basis of the alleged
premarital personal property brought into marriage by the
husband.
In addition, we find that the trial court abused its
discretion in setting over to the husband the full value of
land deeded by the husband's mother:
240 acres - gift from mother in 1970
108 acres of farmland at $155 per acre . .
$16,740
132 acres of grassland at $35 per acre. . . 4,620
Total gift - $21,360
It is undisputed that the husband's mother transferred title
to both the husband and the wife. There is no evidence that
the gift was intended entirely for the husband, nor did
testimony indicate whether $20,000 of the parties' marital
savings was paid to the husband's mother for this land. The
court failed to make any findings as to a claim by wife of
payment for the land.
While the couple separated in early 1985, we note the
husband was in full possession of all cropland, some of which
had been in the names of both husband and wife, because the
mother gave it to the parties jointly. Yet, the wife
received no proportionate share of income from that land
between the time of the separation and the time of the final
dissolution decree. During the husband's testimony under
cross-examination, he admitted that the wife had some
interest in the land by virtue of her name appearing on the
deed. In 1987, during the period between the separation and
the final decree, the income from the land (which included
government payments and total crop production) was declared
for tax purposes at $38,895.
In 1986, the total farm income, calculated for taxation
purposes, including depreciation, government payments,
etcetera, showed a cash flow in excess of $20,000 after
taxes. Additionally in 1985, the year the parties separated,
the farm had a cash flow of approximately $11,000. We
conclude the District Court erred by inequitably dividing the
marital property.
Reversed and remanded for proceedings consistent with
this opinion.
We concur:
Chief Justice
Justices
12
Mr. Chief Justice J. A. Turnage, dissenting:
I respectfully dissent from the majority decision finding
error in the division of the marital estate and remanding this
cause for further proceedings. I would affirm the decree of the
District Court.
The majority, in part, appears to be concerned about valuation
of certain marital property. In Finding of Fact No. 12, the court
found that the parties had prepared and filed a stipulation as to
the value of the marital estate. In light of that finding, there
should be no dispute about valuations.
The standard of review needs no citation. However, as a
reminder, we have adopted this standard:
A District Court has far-reaching discretion
in dividing the marital property. Our stan-
dard of review is that the District Court's
judgment, when based upon substantial credible
evidence, will not be altered unless a clear
abuse of discretion is shown.
In Re Marriage of Stewart (Mont. 1988), 757 P.2d 765, 767, 45
St.Rep. 850, 852. The obvious reason for adopting this standard
of review in marital cases was the recognition that the District
Court inevitably is called upon to exercise its discretion based
upon the court's opportunity to personally observe the witnesses
and hear the testimony in relation to the discrete circumstances
of the marriage of the parties. This opportunity afforded the
District Judge is not available to this Court, and we should not
presume to second-guess the District Judge.
The findings of the District Court fairly establish that the
wife has, for a considerable period of time during the marriage,
found employment away from the farm and the husband has continuous-
ly devoted his time to the management of the farm. The result of
the individual effort of the parties in their separate endeavors
produced almost equal incomes over a five-year average with the
wife's income exceeding somewhat that of the husband.
Recent agricultural history would indicate operations com-
parable to that of the husband's farm are barely break-even
propositions. If the agricultural assets were to be distributed
in part to both parties, it would be almost inevitable that this
family farm would cease to exist.
Chief Justice
Mr. Justice L. C. Gulbandson and Mr. Justice William E. Hunt,
Sr., join in the foregoing dissent of Mr. Chief Justice J. A.
2 fl
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Turnage. ,'
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