NO. 93-045
IN THE SUPREME COURT OF THE STATE OF MONTANA
1993
IN RE MARRIAGE OF
MARCIA R. KIMM,
Petitioner and Respondent/
Cross-Appellant,
and
CLARENCE J. KIMM, SR.,
Respondent and Appellant.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Thomas A. Olson, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
James J. Screnar; Nash, Guenther,
Zimmer & Screnar, Bozeman, Montana
For Respondent:
James D. McKenna; Lineberger,
Walsh & McKenna, Bozeman, Montana
Submitted on Briefs: June 1, 1993
Decided: October 5, 1993
Filed:
Justice Fred J. Weber delivered the Opinion of the Court.
This is an appeal from a division of marital property in a
marital dissolution proceeding in the Eighteenth Judicial District,
Gallatin County. We affirm.
We consider the following issues on appeal:
1. Did the District Court abuse its discretion in ordering
the sale of the Kimm Farm if necessary and in assessing the
division of marital property?
2. Did the District Court err in distributing to Marcia R.
Kimm any interest in the stocks of Alice Kimm?
3. Did the District Court err in ordering Marcia R. Kimm to
assume responsibility for one-half of the fraud damages assessed
against Clarence J. Kimm, Sr., by his sisters in another action
based upon the financial mishandling of Alice Kimm's estate?
Clarence J. Kimm, Sr. (Clarence) and Marcia R. Kimm (Marcia)
have been married since December of 1963. At the time of their
marriage, the couple resided in Grand Rapids, Michigan where
Clarence worked as a teacher and Marcia as a homemaker. The couple
have four children, all of whom have now reached the age of
majority.
In 1972, the couple bought the "Kimm FanP from Clarence's
mother, Alice Kimm, and subsequently, in 1975, moved to Montana to
operate the farm. Clarence proceeded to farm the land while Marcia
worked part time at the Super Save Drug Store in Bozeman until 1978
after which she worked full time.
Marcia left the Montana farm in 1984 to reside elsewhere. The
2
couple divorced in February of 1987, but remarried four months
later. Following the remarriage, Marcia made numerous trips to the
farm to visit with Clarence and to do his housework and certain
farmwork, but neither she nor the children ever again resided at
the farm.
Marcia eventually obtained a full-time job with Gallatin
County. She currently works full-time at this job and part time
cleaning. Clarence continues to farm the ranch.
Marcia retained the responsibility for raising the four
children, all of whom resided with her until their majority.
Clarence's testimony at trial reveals that he has no relationship
with his children and has not seen them for several years.
Although he paid child support for the four months in which the
couple were divorced, he has not contributed to their support since
his remarriage to Marcia, despite her separate residence.
Marcia filed a petition for legal separation on July 31, 1991.
On October 31, 1991, Clarence answered Marcia's petition by filing
a response which requested the action be construed as one for
dissolution. A trial was held on July 8, 1991, by the trial judge.
On August 14, 1992, the court issued its findings of facts and
conclusions of law. The court determined that the marriage was
irretrievably broken and divided the marital estate $353,447.78 to
Marcia and $33.0,197.78 to Clarence. The court determined that
because Clarence had not contributed to the support of his
children, Marcia should get the larger share of the estate.
The estate mainly consists of the Kimm Farm which has been
3
appraised at a sales price of $673,000.00. The court provided that
either party could buy the other party's share of the farm and keep
the farm from being sold. If neither party tendered money for the
other party's half of the farm, then the court ordered that the
farm be sold. Clarence filed a notice of appeal from the court's
order on October 7, 1992. Marcia filed a cross-appeal on October
28, 1992.
Pertinent to this action, but a separate cause, is a fraud
action brought by Clarence's sisters following the death of
Clarence's mother, Alice. See Flikkema v. Kimm (1992), 255 Mont.
3 4 , 839 P.2d 1293. There, the court ordered Clarence to refund to
his sisters $65,000 of the money he had assumed at the mother's
death, as well as $30,000 in punitive damages and costs and fees
for a total of approximately $104,000.
The record establishes that upon the death of Alice Kimm, his
mother, Clarence assumed control over $100,000 which had been
placed in joint tenancy with him. He commingled that $100,000 with
other funds of his and of MarciaIs.
The District Court here included the amount taken from Alice
Kimm's estate in Clarence and Marcia's marital estate because it
was impossibletotracethe $100,000 taken from Alice Kimm's estate
within the couple's accounts. Because the marital estate had
gained benefit from the inclusion of this~money, the court assessed
half of the judgment refund to Marcia for a total of $32,860.00.
The court assessed the other half of the refund to Clarence plus
the $30,000 punitive damages and the $8,470 in costs. Marcia
4
disputes the court's assessment to her of the $32,860 as she had
nothing to do with the defrauding of Clarence's sisters. Clarence
disputes the distribution to Marcia of certain stock purchased from
funds of his mother's estate.
I.
Did the District Court abuse its discretion in ordering
the sale of the Kimm Farm if necessary and in assessing
the division of marital property?
Clarence contends that the courtls division of the family farm
in approximately equal shares to him and his ex-wife is unfair.
Clarence claims to have worked the farm basically alone and that
everyone involved with the farm agreed that it would not be sold.
Further, Clarence argues that his money and efforts bought and
maintained the farm.
Marcia claims that the lower court's division of the marital
estate is equitable and is fully supported by the weight of
evidence. Marcia contends that the assets at issue were acquired
through the work and frugality of both parties during a 28 year
marriage.
District courts are required to equitably apportion between
the husband and wife all property and assets belonging to either or
both, however and whenever acquired and no matter who holds title
to the particular property. Section 40-4-202(l), MCA. District
courts working in equity, must seek a fair distribution of marital
property using reasonable judgement and relying on common sense.
In Re Marriage of Danelson (1992), 253 Mont. 310, 833 P.2d 215. In
order to accomplish this task, district courts are given great
5
discretion in dividing the marital estate. Danelson, 253 Mont. at
317, 833 P.2d at 220.
While acknowledging this discretion, we review a court~s
findings of fact and decide whether they are clearly erroneous and
whether the court has correctly applied the law. Danelson, 253
Mont. at 317, 833 P.2d at 220.
We note first that the court entered 20 pages of findings and
conclusions. The court's findings and conclusions are specific as
to the guidelines provided in 5 40-4-202, MCA. Of importance here,
is the court's specific notation of the years in which Marcia
contributed to the marital estate by homemaking and raising the
couple's four children. The court also noted that while Clarence
spent time with the children, that time was allegedly destructive.
Further, the court noted that since Marcia left the farm to reside
elsewhere with the children, Clarence has not contributed to the
support of his children for more than the four months in which the
couple was legally divorced in 1987.
Clarence argues that it was his efforts which resulted in the
retention of the farm. However, the record supports the following
conclusion of the District Court:
The petitioner's [Marcia's] contributions during this 28-
year marriage, both in her earnings and her services as
a mother and homemaker were responsible for the family's
ability to keep this farm.
Marcia not only worked at a regular job, but sometimes worked two
jobs, raised the children, did the majority of Clarence's
housekeeping, and worked on the farm as well as contributing
financially to it.
6
The District Court divided the value of the farm between both
parties. Partly, it did this in lieu of ordering support for
Marcia. The court specifically ordered that the parties "shall
have 120 days from the date hereof to acquire sufficient funds to
cash out the other and their interest in the marital estate." The
court specifically vacated the restraining order placed upon sale
of farm assets so that the parties could raise the needed money to
pay for the other's share of the farm. The value of $336,500.00
minus encumbrances on the property, was assessed to each party.
Marcia filed a notice of intent to cash out Clarence's share.
Clarence has filed no similar intent.
Clarence argues that In Re Marriage of Eklund (1989), 236
Mont. 77, 768 P.2d 340, controls the disposition of the farm. We
disagree. In Eklund, the court gave a traceable $60,000 gift to
the husband. The couple had only been married for four years. The
husband's parents had loaned him $60,000 to buy a house. A
promissory note was signed only by the husband. Every year, the
parents forgave $20,000 of the debt.
The situation before us is very different. Here, the marriage
was for 28 years. The farm was in the names of both parties and
both parties contributed to the support and upkeep of the farm. No
amount of money within the marital estate was traceable as a gift
to either party. All assets in the marital estate were commingled.
In addition, the District Court here noted that it distributed half
of the farm instead of assessing maintenance against Clarence.
Such a distribution of property is reasonable under the facts
7
of this case. We have already determined that where a wife's non-
monetary contributions as a homemaker facilitated the maintenance
of the family business (here the farm), it enables the husband to
devote more time and effort toward the business and necessitates
the wife's sharing of the property. In Re Marriage of Taylor
(1993) I 50 St.Rep. 186. In its distribution of property, the
District Court considered the home-making contribution by Marcia:
Marcia's contribution to the maintenance of the property; the
division of the property in lieu of a maintenance award to Marcia;
the duration of the couple's marriage; each parties' health, age,
station in life, occupation, amount and sources of income,
vocational skills, employability, personal liabilities and
potential for future acquisition of capital assets and income.
These are all the elements to be considered under § 40-4-202, MCA.
We conclude that the record establishes that the District
Court's findings in this area were not clearly erroneous. In
addition, the record establishes that the District Court properly
considered the law in distributing the marital estate.
Finally, in an attempt to compensate Marcia for her years of
efforts in the marriage, the court provided for sale of the farm.
The court made provision for Clarence or Marcia to provide funds
within 120 days in order to purchase the other party's share of the
farm. If neither party put forth funds to buy the other's half of
the property, the farm was to sold and the money distributed
according to the court's order. Sale of property so that the court
can equitably distribute the marital estate is not an abuse of
8
discretion. In Re Marriage of Peetz (1992), 252 Mont. 448, 830
P.2d 543.
We hold that the court did not abuse its discretion here in
ordering the sale of the Kimm Farm if necessary and in assessing
the division of marital property.
II.
Did the District Court err in distributing to Marcia R.
Kimm any interest in the stocks of Alice Kimm?
Clarence argues that the stocks devised to him by his mother
should in no way be distributed to Marcia. Clarence contends that
shares of stock in Borden Chemical Company, Frontier Directory
Company, Diamond Shamrock, Ribi Intermountain, Citicorp, and
Sterling Chemical were purchased after the death of his mother
during the period of divorce. He also contends that shares in
First Bank were added during the same period. Clarence contends
Marcia has not contributed to the maintenance of these assets and
is not entitled to any part of them.
Marcia contends that her steady income allowed the parties to
accumulate and preserve these assets as well as other assets of the
marital estate.
Whether inherited property is a marital asset remains a
question to be treated on a case-by-case basis. In Re Marriage of
Isaak (1993), 50 St.Rep. 219, 221. When property is inherited
during the course of a marriage it is a marital asset. Isaak, 50
St.Rep. at 221. Here, Clarence's mother died 4 days after his
divorce was final, but he was remarried four months later.
9
The key point is that the inheritance from Clarence's mother's
estate was commingled with the remainder of the marital estate of
the parties. The District Court stated:
[Clarence's] decision to commingle these funds in such a
way as to make any tracing impossible, combined with the
lack of the introduction of any supporting evidence,
makes it impossible for the court to identify any assets
to which this inheritance may have been transferred.
Clarence did not present any evidence which contradicted the
foregoing conclusion of the District Court.
We hold the District Court did not err in distributing to
Marcia an interest in the stocks acquired through use of the
proceeds of the estate of Alice Kimm.
III.
Did the District Court err in ordering Marcia R. Kimm to
assume responsibility for one-half of the fraud damages
assessed against Clarence J. Kimm, Sr., by his sisters in
another action based upon the financial mishandling of
Alice Kimm’s estate?
Marcia argues on cross appeal that the same stocks and bonds
at issue in the aforementioned question were mishandled by
Clarence, not her. According to Marcia, the fraud of which
Clarence was found guilty had nothing to do with her and she should
not have to repay Clarence's siblings from her half of the marital
estate for Clarence's mishandling of his mother's estate.
The court in assessing Marcia half of the $65,000 judgment to
repay Clarence's siblings, determined that the couple's entire
marital estate had benefitted from the inclusion in it of the funds
from Alice Kimm's estate. The $100,000 which Clarence took from
his mother's estate had been commingled with his own marital estate
10
so that tracing was impossible. Therefore, the court reasoned that
the entire marital estate should be burdened with the judgment,
regardless of whether Marcia was involved in the prior fraud
action.
We conclude that such reasoning is not an abuse of discretion.
While the court assessed Marcia half of the amount to be given to
Clarence's siblings, it did not assess her half of the marital
estate with the court costs from the prior case or the $30,000
punitive damages.
We hold that the District Court did not err in ordering Marcia
Kimm to assume responsibility for one-half of the fraud damages
assessed against Clarence Kimm by his sisters in another action
based upon Clarence's mishandling of Alice Kimm's estate.
Affirmed.
11
Justice Terry N. Trieweiler specially concurring.
I concur with the conclusions in the majority opinion under
Issues I and III.
I specially concur with the result of the majority's
conclusion under Issue II. However, I disagree in part with the
reasons for that conclusion.
The majority cites its opinion in In reMarriage of Isaak (Mont.
1993), 848 P.2d 1014, 1017, 50 St. Rep. 219, 221, for the principle
that property inherited during the course of marriage is a marital
asset. That conclusion ignores the specific statutory requirement
found at § 40-4-202(l), MCA, that pre-acquired property, gifted
property, or inherited property be treated differently than other
property acquired during the marriage. That statute specifically
reguiresthatwhen dividing inherited property or property acquired
in exchange for inherited property, the court must consider the
nonmonetary contributions of a homemaker and the extent to which
those contributions have facilitated the maintenance of this
property. The court must also consider whether the property
division is an alternative to maintenance arrangements. If the
Legislature intended such casual treatment of pre-acquired or
inherited property, as is indicated in the majority opinion, then
the various specific requirements set forth in § 40-4-202(l), MCA,
would have been totally unnecessary.
This Court's decisions have, from time to time, reflected this
statutory mandate, but not with any degree of predictability. See
12
Itt re Marriage ofKeedy (1991), 249 Mont. 47, 813 P.2d 442 (Trieweiler,
J., dissenting): In reMarriage of Johnston (1991), 249 Mont. 298, 815
P.2d 1145 (Trieweiler, J., dissenting); Isaak, 848 P.2d at 1014,
(Trieweiler, J., dissenting). The effect of recent decisions, such
as Isaak, is to simply amend the property distribution statute by
removing the specific criteria provided therein and provide broad
discretion for the distribution of all property. This approach is
more consistent with this Court's result-oriented approach to the
distribution of property owned by any party who is unfortunate
enough to become involved in a dissolution of marriage. However,
it is not a correct application of statutory law.
In spite of these concerns with language in the majority's
opinion, I conclude that in this case the District Court correctly
found that Clarence produced insufficient evidence to allow the
District Court to trace the proceeds of his inheritance. The
District Court found that:
As a result of the death of respondent's mother in
February of 1987, respondent claims to have obtained
funds totalling approximately $105,000, the source of
which were joint tenancy CDs and money market accounts
standing in the name of respondent and his mother.
Respondent apparently commingled those funds by
purchasing stock or mutual funds under the parties' joint
account, adding property to the parties' joint farm and
otherwise. He presented no documentation or evidence
which traced the specific use or location of this
$105,000 alleged inheritance. The court notes that
neither copies of the CDs, money market accounts, or a
will were introduced as evidence. Respondent's decision
to commingle these funds in such a way as to make any
tracing impossible, combined with the lack of the
introduction of any supporting evidence, makes it
impossible for the court to identify any assets to which
this inheritance may have been transferred. Accordingly,
13
no assets will be delineated herein as non-marital
property.
Based on the inadequacy of Clarence's proof, the District
Court was unable to trace his inherited property and was not in a
position to more accurately satisfy the requirements of
5 40-4-202(l), MCA.
For these reasons, I concur with the majority's decision to
affirm the District Court, but not for the reasons stated in the
majority opinion.
14
October 5, 1993
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the following
named:
James J. Screnar
Nash, Guenther, Zimmer & Screnar
P.O. Box 1330
Bozeman, MT 59771.1330
James D. McKenna
Lineberger, Walsh & McKenna
P.O. Box 6400
Bozeman, MT 59771-6400
ED SMITH
CLERK OF THE SUPREME COURT