NO. 95-151
IN THE SUPREMECOURT OF THE STATE OF MONTANA
1995
IN RE THE MARRIAGE OF
SHARONGAYLE WAITE,
f/k/a Sharon Gayle Greenlee,
Petitioner and Appellant,
SEP 08 19%
and
ROGERWAYNEGREENLEE,
Respondent and Respondent.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable Russell K. Fillner, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Kevin T. Sweeney, Sweeney & Healow,
Billings, Montana
For Respondent:
Robert J. Wailer, Wailer & Womack,
Billings, Montana
Submitted on Briefs: July 13, 1995
Decided: September 8, 1995
Filed:
Justice Terry N. Trieweiler delivered the opinion of the Court.
The appellant, Sharon Gayle Waite, filed a renewed motion for
modification of decree of dissolution, a motion to determine dollar
value of judgment, and a motion to determine judgment, in the
District Court for the Thirteenth Judicial District in Yellowstone
County in which she asked the District Court to change residential
custody of the parties' minor son, modify the child support
language found in the dissolution decree, and determine the amount
the respondent, Roger Greenlee, owed her pursuant to the
dissolution decree. The District Court granted Waite's motion for
change of residential custody, established the child support
Greenlee owed Waite, and denied Waite's motion for payment of
income from Greenlee's partnership. Waite appeals the District
Court's child support and partnership decisions. We affirm the
order of the District Court.
Waite raises the following issues:
1. Did the District Court err when, for purposes of
calculating child support, it did not consider Greenlee's passive
income?
2. Did the District Court err when it failed to award Waite
a share of Greenlee's passive partnership income?
FACTUAL BACKGROUND
Sharon Gayle Waite and Roger Wayne Greenlee are in what
appears to be the final round of a twelve-round boxing match. By
all accounts, Waite and Greenlee have still not removed their
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gloves, tattered as they may be, and instead, continue throwing
powerful head and body shots in an obvious attempt to reduce one
another to vegetable matter. What follows is our attempt to
referee the final round. See In re Marriage of Greenlee ( 19 9 1) , 2 4 9 Mont .
521, 816 P.2d 1073.
Greenlee is a dentist, and during the marriage entered into
the Rose Park Professional Center Partnership with four other
dentists. As a result, he became a one-fifth owner of the Rose
Park Professional Center. The sole purpose of the Partnership is
to "own, manage and maintain the Center, the building in which the
partners maintain their offices." The partnership generates income
by charging the partners and two non-partner tenants monthly rent,
although it appears from the record that the two non-partner
tenants pay an insubstantial amount of rent as compared to the
partners. The partnership uses the monthly rent to make its
regular mortgage payments and pay necessary expenses. At some
point, the partners agreed that they would use all but $1,000 of
each of the partner's yearly partnership distributions to make an
additional payment on the mortgage in an effort to retire the debt
owed for the Center at an early date.
On October 16, 1990, the District Court dissolved this
couple's marriage, ordered joint custody, and designated Greenlee
as the primary residential custodian of the two minor children,
Jene ' and Ryan.
Eventually, Waite moved the District Court to designate her
the primary residential custodian of Ryan, and it did so. However,
Waite and Greenlee were unable to agree on the amount of child
support for which Greenlee was responsible. Therefore, the
District Court held a hearing, following which it found that
Greenlee had a net income in 1993 of $38,412, that he had interest
income in 1993 of $733, and that he had a total distribution from
the partnership in 1993 of $7,692, only $1,000 of which he actually
received. The remaining $6,692 was classified by the partnership
accountant as "passive income," on which Greenlee was taxed.
The District Court found that the funds distributed to
Greenlee by the partnership represent a return of Greenlee's own
contribution to the partnership made during the course of the year.
In other words, Greenlee, through payment of rent, insured that at
the end of each year, he would receive a distribution from the
partnership, all but $1,000 of which the partnership would retain
in order to more quickly pay off the mortgage on the Center. The
District Court found that "it is not fair or reasonable to include
the passive income portion of this distribution as income for child
support purposes because it is not money over which Roger has any
control." Therefore, the court found that Greenlee's gross income
for child support purposes was $55,687, while his net income for
child support purposes was $40,145.
The District Court found that the dissolution decree
distributed Greenlee's interest in the partnership by awarding
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50 percent to Greenlee and 50 percent to Waite. However, for the
following reasons, the District Court found that Waite was not
currently entitled to a share of the partnership distributions:
(1) the dissolution decree provided for Waite to
receive her interest only upon sale of the Rose Park
Professional Center;
(2) Waite benefits from the partnership retaining
all but $1,000 of partnership distributions in order to
reduce the debt owed on the Rose Park Professional
Center;
(3) the distribution represented a return of
Greenlee's own contribution to the partnership, rather
than income from an independent source, and;
(4) the dissolution decree made it clear that
Waite's interest in the partnership represents 50% of the
expenses Greenlee paid to maintain his interest in the
partnership.
The District Court concluded that Greenlee should pay $400 per
month in child support from December 1993 through June 1994, and
$473 per month until Ryan reached the age of 19 or graduated from
high school, whichever occurred first. The court also concluded
that Waite was not entitled to any part of the distributions
Greenlee had received from the partnership since dissolution of the
parties' marriage in October 1990
ISSUE 1
Did the District Court err when, for purposes of calculating
child support, it did not consider Greenlee's passive income?
We have previously held that when reviewing modification of
child custody we will review the district court's findings of fact
to determine whether they are clearly erroneous. We will review
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the district court's decision based on those findings of fact to
determine whether the district court abused its discretion. In re
Marriage ofElser (Mont. 1995) , 895 P.2d 619, 622, 52 St. Rep. 434, 436.
We conclude that the same standard of review is appropriate when
considering a district court's award of child support.
Waite contends that the District Court incorrectly applied the
Uniform Child Support Guidelines or, in the alternative,
misapprehended the effect of the evidence concerning Greenlee's
income from the partnership, and therefore, awarded insufficient
child support. She claims that the correct application of the
guidelines in this case required that the District Court designate
any rent paid by Greenlee over the amount necessary to cover
necessary partnership expenses as income. Instead, the District
Court designated only $1,000 of the money annually returned to
Greenlee as income for purposes of determining child support.
Waite points to the definition of "gross income" in the
guidelines:
"[Glross income" for those who are self-employed, or who
receive profits from a business enterprise such as . .
a partnership . . . includes gross receipts minus
ordinary and necessary expenses for . business
operation.
Rule 46.30.1508(c), ARM. Waite asserts that this definition, along
with 5 40-4-204(l) and (2), MCA, requires that we reverse the
District Court's child support order.
Waite contends that because Greenlee elected, as a member of
the partnership, to apply partnership profits to payment of the
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mortgage on the Center, he cannot now claim that this income is
unavailable to him to pay child support. She analogizes Greenlee's
partnership decision to apply part of his income toward payment of
the partnership mortgage to a "choice" to otherwise voluntarily
invest his money. However, the analogy is not valid. The
partnership's decision to apply its profits toward payment of the
mortgage on the Center limited the extent to which Greenlee can
"choose" to "invest" his portion of the partnership profits.
Specifically, Greenlee can choose to invest only $1,000 of the
partnership profits or, in other words, that portion that he
actually receives.
Greenlee realizes only $1,000 of the rental income returned to
the partners, which the court correctly identified as income for
child support purposes. Moreover, Greenlee pays taxes on the full
$7,692, even though he receives only $1,000.
Greenlee correctly asserts that the cases upon which Waite
relies do not apply here because they all relate to parents who
have chosen to earn less than they were capable of earning, while
there is no indication in the record that Greenlee has a choice in
this matter.
Based on our review of the record we agree and conclude that
the District Court's findings are not clearly erroneous, and when
it applied those findings to its calculation of child support, the
District Court did not abuse its discretion. We affirm the
District Court's child support award.
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ISSUE 2
Did the District Court err when it failed to award Waite a
share of Greenlee's passive partnership income?
We review the District Court's conclusions of law in relation
to the division of marital property to determine whether the
district court correctly interpreted the law. In re Marriage of Rock
(1993), 257 Mont. 476, 480, 850 P.2d 296, 298 (citing Schaubv. VitaRich
Dairy (1989), 236 Mont. 389, 391, 770 P.2d 522, 523).
Waite contends that the District Court's failure to award her
a share of Greenlee's partnership distribution "stood on its head"
the language in the prior decree which apportioned and distributed
the partnership interest.
In the decree of dissolution, the District Court divided the
interest in the Center "50/50 between the parties." The court
found that it could not give a specific market value for the
Center, so instead, "equitably" divided it '150/50" between Waite
and Greenlee. The court stated that Waite and Greenlee "will
assume the risks involved with this investment, will receive the
benefit of any tax consequences, any income or equity upon sale ofthis
property in thefuture T’
Waite emphasizes that the decree of dissolution states
specifically that both she and Greenlee are to receive the benefit
of "any income" from the partnership.
Waite contends that the District Court's ruling that she will
not receive income from Greenlee's share of the partnership until
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sale of the partnership is "utterly not true and not supported in
the record." She initially asserts that the decree of dissolution
specifically states that she will receive half of any income
Greenlee generates from the partnership, and that the District
Court's failure to award her 50 percent of this income alters the
dissolution decree. Furthermore, Waite asserts that it defies
"both rules of grammar and logic" to hold to the contrary.
Greenlee responds that the dissolution decree states plainly
that income will not be shared until the time of sale of the
partnership interest. We agree with this interpretation of the
District Court's decree.
The District Court's dissolution clearly provided that Waite
and Greenlee "will receive the benefit of . . any income .
upon sale of" the Center "in the future." The partnership has not
sold the Center, and Greenlee has not sold his interest in the
partnership. We conclude that the District Court was correct when
it held that Waite was not entitled to a share of Greenlee's annual
partnership distribution until sale of his partnership interest.
For these reasons, we affirm the order of the District Court.
Pursuant to Section I, Paragraph 3 (cl, Montana Supreme Court
1995 Internal Operating Rules, this decision shall not be cited as
precedent and shall be published by its filing as a public document
with the Clerk of the Supreme Court and by a report of its result
to Montana Law Week, State Reporter and West Publishing Company.
We concur:
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