NO. 93-163
IN THE SUPREME COURT OF THE STATE OF MONTANA
1993
IN RE THE MARRIAGE OF
DONNA L. DOWD,
Petitioner and Respondent,
and
JAMES J. DOWD,
Respondent and Appellant.
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable John S. Henson, Judge presiding.
COUNSEL OF RECORD::
For Appellant:
Arthur D. Agnellino, Attorney at Law, Missoula
Montana
For Respondent:
P. Mars Scott; Mulroney, Delaney & Scott, Missoula
Montana
Submitted on Briefs: July 29, 1993
Decided: November 2, 1993
Filed:
Justice John Conway Harrison delivered the Opinion of the Court.
Appellant, James J. Dowd (Jim), appeals the Fourth Judicial
District Court's findings of fact, conclusions of law and decree of
dissolution entered October 5, 1992, which distributed the marital
property and debts of the couple.
We affirm.
Jim presents the following issues for our review:
1. Did the District Court err by not considering § 40-4-
202 (1) I MCA, when it divided the marital estate?
2. Did the District Court err by not considering Jim%
contribution as the homemaker when it awarded Donna the bakery?
3. Did the District Court err when it awarded Donna the
bakery and concluded in its findings that if the bakery was not
awarded to Donna the court probably would have awarded Donna
maintenance?
4. Did the District Court err in awarding both parties a one-
half interest in the proceeds from the land and family home when
the court also ordered Jim to make the land payments on the
property?
5. Did the District Court err by failing to consider that
Donna previously paid the marital debts from the proceeds of the
bakery business which was allegedly jointly owned by the couple?
Jim and Donna were married on July 7, 1977, in Houston, Texas.
Two children were born of their marriage, Casey, now age 9, and
Kevin, now age 6. At the time of this appeal Jim was 48. He was
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employed as a commercial fisherman in Alaska. Donna was 41. She
operated a bakery in Houston, Texas, from her office in Superior,
Montana.
The couple separated in 1989 when Jim left the family home to
travel to Seattle to become a commercial fisherman. During the
marriage the couple acquired certain property and debts which are
the focus of this appeal.
On October 1, 1979, the couple purchased a bakery in Houston,
Texas. Initially, they intended to operate the bakery as a "mom
and pop" operation. However, after a few months of continuous
disagreement, Donna assumed the day-to-day management of the
bakery.
The couple always treated the bakery as Donna's bakery. In
fact, she personally borrowed money to purchase equipment for the
bakery; negotiated employee wages and salaries; had the business
licenses solely in her name; and made all the decisions regarding
the operation of the bakery. Donna has operated the bakery alone
for almost twelve years and continues to do so today. Conversely,
Jim has had nothing to do with the bakery for the last five years.
Although Jim contributed between $2,000 and $2,500 for the
down payment on the bakery, Donna has essentially paid the entire
purchase price, $25,000, from a loan and the earnings of the
bakery. Currently, the bakery is Donna's sole source of income.
In 1991, Donna's bakery netted approximately $22,000. Jim's wages
that year as a commercial fisherman were between $45,000 and
$46,000.
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In 1981, the couple moved from Texas to St. Reqis, Montana.
They purchased 21.24 acres of land from Lincoln's Silver Dollar Bar
& Gift Shop, Inc., on a contract for deed. The land payments on
the contract for deed were approximately $363 per month. In 1984,
the couple constructed a log home on the land with the help of a
friend.
The couple separated in 1989. After the separation, Donna
used the bakery's profits to support herself, the family home, the
marital assets and the two children. In fact, Donna has
continuously negotiated with the couple's creditors (including the
Internal Revenue Service, a law firm in Missoula, Visa and Master
Card); paid the marital debts; supported and raised the children;
made improvements to the family home; redeemed the family home and
acreage from a tax sale; and logged the property to pay thirteen
delinquent land payments with the logging proceeds. The District
Court found that she was financially responsible for the
preservation of the marital estate.
On the other hand, the District Court found that Jim was
financially irresponsible to the marital estate and to his family.
Specifically, after the separation in 1989, he did not contribute
his earnings to the marital estate or the children until the
District Court ordered him to pay the land payments in lieu of
child support and twice ordered him to pay the children's health
insurance.
On June 1, 1990, Donna filed a petition for dissolution.
Subsequently, she filed an amended petition for dissolution on
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September 14, 1990. Jim filed a response on October 29, 1990.
The matter came to trial on September 11, 1992. The parties
stipulated to reserve issues of custody, visitation and child
support and the court accepted the stipulation and reserved the
issues. On October 5, 1992, the District Court issued its findings
of fact, conclusions of law and decree of dissolution.
On October 8, 1992, Donna's attorney served a notice of entry
of decree of dissolution on Jim's attorney. Subsequently, however,
Jim's attorney moved the District Court to alter or amend its
judgmentpursuantto Rule 59(g), M.R.Civ.P., or in the alternative,
for relief of a judgment order under Rule 60(b), M.R.Civ.P. The
court failed to rule on the motions within forty-five days. Thus,
the motions were deemed denied. On December 29, 1992, Jim filed a
notice of appeal with this Court.
We have previously declared that in reviewing factual findings
which divide marital property "[o]ur standard of review . . . is
whether the district court's findings are clearly erroneous." In
re Marriage of Danelson (1992), 253 Mont. 310, 317, 833 P.2d 215,
219 (citations omitted). Additionally, we scrutinize the district
court's legal conclusions de nova and examine whether the court
interpreted the law correctly. Danelson, 833 P.2d at 219-220.
We grant the district court broad discretion to equitably
apportion the marital estate. In re Marriage of Sirucek (1986),
219 Mont. 334, 342, 712 P.2d 769, 774. Accordingly, where, as
here, a party challenges the distribution of the marital estate,
our review is limited to determining whether the district court
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abused its discretion.
I
The District Court apportioned numerous items of property and
debts between the parties. Jim challenges the following
distributions: the bakery, the home along with its personal and
real property and the debts.
The court awarded Donna the bakery as her sole property.
Further, the court ordered the parties to continue to jointly own
the land and family home (property) until the last child reached
age eighteen or graduated from high school, whichever occurred
later. Donna and .the children are allowed to continue to reside at
the residence until the property is sold. On the other hand, Jim
must pay the remaining land payments and taxes. When the property
is sold, the parties must equally split the proceeds. The District
Court also allowed the parties, if they agreed, to sell the
property to a third party or to the other party before the last
child reached eighteen or graduated from high school.
First, Jim argues, generally, that the District Court failed
to consider the factors under 5 40-4-202(l), MCA. We conclude,
however, that the court considered the factors of § 40-4-202(l),
MCA, the court's extensive findings of fact negate JimIs argument.
Those findings include: the parties were 47 and 40 years old; were
married for twelve years before they separated; were both in good
health; Jim was a commercial fisherman and Donna operated a bakery;
Jim earned almost $50,000 a year with numerous benefits, while
Donna earned $22,000 a year without benefits: Jim completed the
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ninth grade, while Donna completed high school: over the years, Jim
was employed as a longshoreman and worked at odd jobs and Donna
worked as a bank .teller, and in an insurance department at a bank:
Jim was capable of earning excellent wages and sustaining full-time
employment under strenuous circumstances: Donna solely managed the
bakery for almost twelve years: Donna's sole source of income was
the bakery; aside from the bakery, Donna was out of the labor
market for approximately ten years; managing the bakery was a full-
time job: the bakery provided the main financial support of the
family: Donna was unilaterally responsible for keeping the marital
estate intact; Donna single-handedly worked hard to support the
family; Donna maintained the family home; Donna negotiated with and
paid the couple's creditors; the award of the bakery to Donna was
in lieu of maintenance; Jim neglected to pay the couple's creditors
until the court ordered him to pay the land payments in lieu of
child support: and Jim has not contributed any money to the
preservation of the marital estate, except the court ordered land
payments. Clearly, this excerpted barrage of facts confirms that
the District Court covered the gambit of 5 40-4-202(l), MCA.
Additionally, the court detailed the property and debts of the
marriage. The record conclusively establishes that the court
considered the factors of 5 40-4-202(l), MCA, when it divided the
marital property. We hold that the District Court properly
followed 5 40-4-202(l), MCA.
II
Next, Jim challenges the court's distribution of the marital
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assets and debts. He argues that the court, on four occasions,
acted inequitably or abused its discretion when it divided the
couple's assets.
Jim maintains that the District Court abused its discretion by
failing to consider his contribution as the homemaker, which
allowed Donna to operate the bakery. This argument lacks merit.
Jim testified that, while Donna operated the bakery, he built
the family home, cared for the children, hauled water, mended
fences, drove Donna to and from work, and maintained the family
home. On the other hand, Donna testified that Jim only contributed
a small portion of the down payment, and only participated in the
management of the bakery for the first few months.
The District Court specifically found that Donna was primarily
responsible for the maintenance and operation of the bakery. The
court refused to acknowledge Jim's contribution as the homemaker.
Effectively, it found Donna's testimony more credible than Jim's
testimony. We refuse to disturb the District Court's determination
of the credibility of witnesses. See In re Marriage of Porter
(1991) I 247 Mont. 395, 398, 807 P.2d 192, 194.
We hold that the District Court did not abuse its discretion
when it did not rely on Jim's testimony to establish his
contribution to the bakery as the homemaker. The District Courtfs
determination that Donna was primarily responsible for the
maintenance and continuing operation of the bakery is supported by
the record.
a
III
Further, Jim argues that the District Court abused its
discretion by finding that if Donna was not awarded the bakery,
then the District Court would probably award Donna maintenance
payments. He is mistaken.
Jim misinterprets §§ 40-4-202 and -203, MCA. These statutes
were enacted "to encourage the court to provide for the financial
needs of the spouses by property disposition rather than by an
award of maintenance." Commission Comments MCA Annotations, Title
40, (1992), Vol. 7, p. 170; In re Marriage of Scott (1990), 246
Mont. 10, 24, 803 P.2d 620, 629. Moreover, 5 40-4-202(l), MCA,
specifically requires the court to consider "whether the
apportionment [of property] is in lieu of . . . maintenance . . .
." Accordingly, we conclude that 55 40-4-202 and -203, MCA, when
read together, compel the district court, when proper, to order a
division of marital property, as opposed to an award of
maintenance, to satisfy the financial needs of the parties.
Here, the District Court determined that Donna should be
awarded the bakery because she was primarily responsible for its
maintenance and operation. Further, the court found that the
bakery was her only realistic source of income. The court also
noted that if it decided to divide the bakery, as Jim proposed,
then Jim would probably have to pay maintenance to Donna.
We conclude that the District Court properly followed the
statutory mandates of 55 40-4-202(l) and -203, MCA, not only by
considering the factors and specifically considering that the
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division was in lieu of maintenance, but also by electing to
distribute property, instead of awarding maintenance. We hold that
the District Court did not abuse its discretion when it awarded
Donna the bakery.
IV
Jim contends the District Court abused its discretion by
awarding Donna one-half of the proceeds of the family home. Jim
argues that since he is paying the remaining land payments, in
effect, he is paying both his one-half and Donna's one-half of the
equity in the property and, therefore, he should retain the entire
proceeds of the property when it is sold. We disagree.
Jim forgets that while the parties were separated, Donna paid
the monthly payments on the loan which financed the construction of
the home. Further, he ignores the fact that Donna paid the land
payments before the court ordered him to pay the land payments.
The District Court recognized that Donna paid the home loan,
the land payments, and numerous marital debts during the couple's
separation. The court also noted that if Donna had not expended
her efforts to preserve the marital estate, there would be no
marital estate to divide.
The District Court acted equitably. The court found that the
contributions of the parties were not equal. Donna contributed her
portion of the equity in the property. Jim, however, failed to
contribute his portion. Thus, the court ordered Jim to pay the
remaining land payments. The District Court's order equalizes
Jim's contribution with Donna's contribution.
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Further, by ordering the future sale of the property and a
split of the proceeds, the District Court has guaranteed that each
party will retain his or her equity in the property. We hold that
the District Court was not clearly erroneous.
V
Finally, Jim challenges the District Court's determination of
the parties' net worth. This convoluted argument is not supported
by the record.
The District Court meticulously organized both the marital
property and marital debts in its findings and conclusions. The
court also made a conscientious effort to equitably divide the
property and debts between the parties.
Jim, however, ridicules the District Court's thorough process.
First, he assumes that he owns half of the bakery. He then builds
on that assumption by suggesting Donna paid marital debts from the
bakery proceeds. He concludes that he should be credited with one-
half of the marital debts which Donna paid from the bakery
proceeds. This argument is absurd and is not supported by the
record or by Montana law.
When dividing marital property, the district court should not
be concerned with the ownership status of property acquired during
the marriage. In fact, if property is acquired during the
marriage, it is part of the marital estate regardless of who owns
the property. Section 40-4-202(l), MCA. The court's only
obligation is to consider the factors of 5 40-4-202(l), MCA, and
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equitably apportion the marital estate. In re Marriage of Scott
(1992), 254 Mont. 81, 87, 835 P.2d 710, 714.
Here, the bakery is a marital asset. However, that fact, by
itself, does not entitle Jim to claim credit for one-half of the
debts paid from the bakery's proceeds. The District Court found
that Donna exclusively operated the bakery and exclusively paid the
debts from the bakery proceeds. Thus, the court credited her for
paying the debts.
Moreover, the record reveals that Jim did not pay these debts.
He did not work at the bakery when the debts were paid, nor did he
have any part in managing the bakery. He also failed to send money
from Alaska to ptiy these debts. Thus, he is not entitled to claim
that he paid the debts.
The court correctly refused to grant Jim a windfall. We
conclude that the District Court acted equitably and within its
discretion when it refused to credit Jim for the payment of debts
which he did not pay.
After a review of the record, we conclude that the District
Court properly followed the factors of 5 40-4-202(l), MCA, when it
conscientiously considered the facts and achieved an equitable
division of the marital estate. We hold that the District Court
did not abuse its discretion when it divided the marital estate.
Affirmed.
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We concur: //M
f Justice/
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