No. 92-081
IN THE SUPREME COURT OF THE STATE OF MONTANA
1992
IN RE THE MARRIAGE OF
AILEEN D. SCOTT,
Petitioner and Appellant,
and
CARL D. SCOTT,
Respondent and Respondent.
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Ravalli,
The Honorable Douglas G. Harkin, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Paul Neal Cooley, Skelton & Cooley, Missoula,
Montana
For Respondent:
Jeffrey H. Langton, Attorney at Law, Hamilton,
Montana
Submitted on Briefs: June 11, 1992
Decided: July 21, 1g92
Filed:
Justice John Conway Harrison delivered the opinion of the Court.
The marriage of Aileen Scott (Aileen) and Carl Scott (Carl)
was dissolved in the Fourth Judicial District, Missoula County,
Montana. The District Court entered the Final Decree of
Dissolution on August 5, 1991, which divided the property of the
parties and made no provision for maintenance. Aileen moved the
court to amend the decree and filed a motion for a new trial. The
District Court denied both motions and Aileen appeals. We affirm.
The parties were married on December 14, 1979 in Missoula,
Montana and the marriage lasted over eleven years. Both parties
had previously been married and had children from those
relationships. They had no children from their marriage to each
other. Prior to the marriage Aileen was employed by Safeco Title
Insurance Company as an office worker. She was educated through
the eighth grade and completed two years of a business school
program. Carl, who never progressed beyond the ninth grade, became
quite successful by buying land and constructing houses, some of
which he sold on contract. After complications with his arm in
1977, Carl ceased construction activities and lived off his
investments. About that time, Carl established a horse trading
business and owned several mares.
Carl entered the marriage with an approximate net worth of
over $500,000 and Aileen approximately $18,000. In 1980, shortly
after the parties married, they established a horse racing
operation starting with the horses Carl owned prior to the
marriage. The couple devoted their full attention to this venture
2
throughout the course of their marriage, The horse racing business
included racing, breeding, raising, and training of race horses.
Carl managed the business aspects of the operation while Aileen
became a licensed horse trainer and trained the horses they owned.
Aileen also traveled to the race locations and dealt with the
operation from that end.
The couple first lived in St. Ignatius, Montana, until moving
to Ellensburg, washington in 1982. Sometime in 1983, Carl
purchased property at Lake Lenore, washington and in July 1989, the
parties moved to Cowallis, Montana. The parties were unsuccessful
in making the horse racing business profitable and sustained losses
totaling over $230,000 between 1981 and 1990.
The parties lived apart for over a year when, in April 1990,
Aileen departed for Canada to run horses. In late May, ~ i l e e n
received a substantial inheritance after the death of her mother
consisting of approximately $100,000 in cash and 392 acres of real
property near Butte, Montana. In early June, Carl asked Aileen not
to return to the family home even though the parties had lived
separately for over a year. Aileen initiated dissolution
proceedings and was granted temporary maintenance of $1,000 per
month which was later reduced to $500 per month.
Trial was held on June 25 and 26, 1991, and on July 20, 1991
the District Court entered Findings of Fact, Conclusions of Law and
Order. On August 5, 1991 the District Court entered the Final
Decree of Dissolution which distributed the assets of the parties
and eliminated all maintenance to Aileen. On August 20, 1992,
Aileen filed a motion to amend the final decree as well as a motion
for a new trial. The District Court denied both motions on October
1, 1991 and Aileen now appeals to this Court.
This Court's recent opinion of In Re Marriage of Danelson
(Mont. 1992), No. 91-255, decided July 9, 1992, stated:
This Court has recently clarified that our standard of
review in regard to the factual findings of the district
court relating to the division of marital property is
whether the district court's findings are clearly
erroneous. In re Marriage of Sacry (Mont. 1992), 49
St.Rep. 452. Concerning this Court's review of
conclusions of law made by a lower court we have stated
that " [w]e are not bound by the lower court's conclusions
and remain free to reach our own.'' Schaub v. Vita Rich
Dairy (1989), 236 Mont. 389, 391, 770 P.2d 522, 523. The
basis for simply determining if the lower court's
conclusions are correct is that there is no discretion in
determining a question of law. The lower court either
correctly or incorrectly applies the law. Steer, Inc. v.
Department of Revenue (1990), 245 Mont. 470, 803 P.2d
601.
In adopting these standards of review in division of
marital property cases, this Court is not in any way
discounting the considerable discretionary power that
must be exercised by district courts in these cases. The
courts are obligated to fashion a distribution which is
equitable to each party under the circumstances. In re
Marriage of Jones (1987), 229 Mont. 128, 745 P.2d 350;
§ 40-4-202, MCA. The courts, working in equity, must
seek a fair distribution of the marital property using
reasonable judgment and relying on common sense.
Obtaining this equitable distribution will at times
require the lower court to engage in discretionary action
which cannot be accurately categorized as either a
finding of fact or a conclusion of law. These
discretionary judgments made by the trial court are
presumed to be correct and will not be disturbed by this
Court absent an abuse of discretion by the lower court.
Meridian Minerals v. Nicor Minerals, Inc. (1987), 228
Mont. 274, 742 P.2d 456.
Danelson, Slip Op. at 8-9.
Aileen alleges numerous errors at the District Court level all
related to property distribution and maintenance which can be
combined into the following dispositive issue: Did the District
Court err in dividing the marital estate and in not providing for
maintenance to Aileen.
PROPERTY DISTRIBUTION
Section 40-4-202, MCA sets forth the criteria for the division
of property in a dissolution proceeding as follows:
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 and prior marriage of either party; the age,
health, station, occupation, amount and sources of
income, vocational skills, employability, estate,
liabilities, and needs of each of the parties; . . .
whether the apportionment is in lieu of or in addition to
maintenance; and the opportunity of each for future
acquisition of capital assets and income.
Section 40-4-202(1), MCA.
In making property distribution we conclude that the District
Court did take into consideration the items found in 5 40-4-202(1),
MCA. For instance, the court acknowledged the age of the parties
and the eleven-and-one-half year duration of the marriage. The
court also addressed the employability of the parties and their
vocational skills by stating that Carl had not worked in
construction for the last seventeen years while Aileen was an
experienced horse trainer. Further, the court indicated that, with
training, Aileen could return to work in an office position.
similarly, the District Court addressed the other items contained
in the statute and the record supports each finding.
Section 40-4-202(1), MCA, also addresses property division
with regard to property acquired prior tothe marriage relationship
as follows:
In dividing property acquired prior to the marriage;
property acquired by gift, bequest, devise, or descent;
property acquired in exchange for property acquired
before the marriage or in exchange for property acquired
by gift, bequest, devise, or descent; the increased value
of property acquired prior to marriage; and property
acquired by a spouse after a decree of legal separation,
the court shall consider those 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(1), MCA. The record reflects that Carl owned
substantial assets prior to his marriage to Aileen. He entered the
marriage with extensive investments resulting from his efforts as
a contractor totalling approximately $500,000. Even the horses
that comprised the beginning of the couple's horse racing venture
were bought and paid for by Carl prior to the marriage. Aileen
entered the marriage with an approximate net worth of $18,000.
While Aileen made a contribution as a homemaker, it cannot be said
that she made a contribution to maintenance of Carl's pre-marriage
property. In fact, the record indicates that Aileen knew virtually
nothing about Carl's construction business or his investments as
evidenced by Aileen's own testimony:
Question: Now, you've testified that--repeatedly that
Carl was quite secretive about his business affairs?
Aileen: He was.
Question: Do you have any idea what his net worth was at
6
the date of the marriage?
Aileen: No, he never discussed that with me . . .
Question: Now, did land that Carl owned as of the date of
the marriage, did you, yourself, put any money into any
of that land?
Aileen: No.
The court also addressed Aileenf inheritance of cash and real
s
property. Aileen objects to the District Court's consideration of
her inheritance as part of the marital estate. However, we find,
after a close review of the Findings of Fact, that t h e court was
stating that Carl was not entitled to any portion of ~ileen's
inheritance by listing only the remaining unspent balance of the
inheritance in the Findings. The court observed that Aileen had
already spent $52,000 of the inheritance and simply clarified that
the remaining unspent $48,000 belonged solely to Aileen. Even
without the inheritance as a component of the marital estate we
conclude that while Aileen may not have received an equal portion
of the marital estate, she received an equitable portion according
to In re Marriage of Wersland (1991), 249 Mont. 169, 174, 814 P.2d
991, 994; citing In re the Marriage of Fitzmorris (1987), 229 Mont.
96, 745 P.2d 353.
We also mention that Aileen makes much out of the fact that
some of the property divided between the parties was located in the
state of Washington. She suggests that the property should
therefore be divided according to community property standards
under Washington law. We do not agree. T h i s C o u r t is not bound by
Washington law. The dissolution proceeding was initiated by Aileen
in Montana and the proceeding is now subject to adjudication
accordingly.
Generally, Aileen objects to the amount she received in the
dissolution proceeding based on percentage comparisons that
indicate the disproportionate nature of the property division.
After reviewing the record it is evident the District Court placed
emphasis on the fact that Carl entered the marriage with
substantially more than Aileen. Aileen's contribution to the
maintenance of Carl's pre-marriage property was minimal, despite
the eleven year marriage. Even the assets acquired during the
marriage, namely the horse racing operation, was acquired with
Carl's pre-marriage funds. The record indicates that the operation
almost continuously operated at a loss, therefore, Aileen's efforts
in this area did not facilitate the maintenance of the pre-marital
property. Section 40-4-202(1), MCA, refers to a spouse's
contribution to Iftheincreased value of property acquired prior to
marriage," and in the case at bar there has been no such increase,
since the horse racing venture lost approximately $231,000 from
1981 to 1990. All these factors were properly reflected in
Aileen's award from the dissolution proceeding.
It is well settled in Montana that property division in a
dissolution proceeding does not need to be equal but instead must
be equitable. In re Marriage of Wersland (1991), 249 Mont. 169,
174, 814 P.2d 991, 994; citing In re the Marriage of Fitzmorris
(1987), 229 Mont. 96, 745 P.2d 353.
A review of the record indicates that the District Court
properly considered all the components mentioned in § 40-4-202 (I),
MCA, when dividing the parties' property and assets. Therefore,
the District Court did not err in dividing such property.
MAINTENANCE
An award of maintenance is governed by 5 40-4-203 (1), MCA,
which provides that:
In a proceeding for dissolution of marriage or legal
separation or a proceeding for maintenance following
dissolution of the marriage . . . the court may grant a
maintenance order for either spouse only if it finds that
the spouse seeking maintenance:
(a) lacks sufficient property to provide for his
reasonable needs: and
(b) is unable to support himself through appropriate
employment. . . .
Section 40-4-203(1), MCA.
The District Court found that Aileen did not lack sufficient
property to provide for her reasonable needs. To that end, we note
that Aileen repeatedly stated she was not asking for maintenance
and that she felt she could support herself. The court properly
considered her inheritance, her statements, her current income and
future income potential. Thus, the court did not provide for
maintenance.
Aileen also makes much out of the fact that what remains of
her inheritance will soon be gone, as she anticipates those funds
will go towards covering various costs of stabling her horses,
motel bills, travel expenses, feed and other related expenditures.
It is her choice to remain dedicated to a losing business
proposition and neither the District Court nor Carl can be held
responsible for that choice.
We conclude that after considering the requisite elements of
§ 40-4-203(1), MCA, the District Court properly determined that
Aileen was not entitled to maintenance. Failing to meet the
threshold questions in 5 40-4-203 (I), MCA, we need not progress to
the standards set forth in 5 40-4-203 (2)(a) through (f), MCA. In
re Marriage of Overturf (Mont. 1992), No. 92-125, decided July 9,
1992, Slip Op. at 5.
After a review of the record in the case at bar, we find that
the District Court's division of the marital estate and denial of
maintenance was not clearly erroneous. Accordingly, we affirm.