NO. 95-362
IN THE SUPREME COURT OF THE STATE OF MONTANA
1996
IN RE MARRIAGE OF t
APPEAL FROM: District Court of the Sixth Judicial District,
In and for the County of Park,
The Honorable Richard G. Phillips, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Brenda R. Cole, Swandal, Douglass,
Frazier & Cole, Livingston, Montana
For Respondent:
Rienne McElyea, Berg, Lilly, Andriolo
& Tollefsen, Bozeman, Montana
Submitted on Briefs: February 8, 1996
Decided: April 5, 1996
Filed:
Justice Charles E. Erdmann delivered the opinion of the Court.
Dennis Hogstad and Martha Hogstad were divorced in October
1994. Dennis appeals from the findings of fact, conclusions of
law, and decree of dissolution entered by the Sixth Judicial
District Court, Park County. We affirm in part, reverse in part,
and remand for further proceedings consistent with this opinion.
We restate the issues on appeal as follows:
1. Did the District Court err in designating Martha the
primary custodial parent for Matthew, the parties' minor child?
2. Did the District Court err in dividing the marital
property?
3. Did the District Court err in determining child support?
4. Did the District Court err in establishing a visitation
schedule for Matthew?
FACTS
Dennis and Martha were married on May 31, 1986, in Livingston.
Matthew Hogstad, who is currently eight years old, is the only
child born of the marriage. Martha has a thirteen-year-old
daughter, Laura, from a previous marriage.
The parties resided in Livingston during the course of their
marriage. Martha was employed as the office manager for Brand-S
Corporation until the plant closed its Livingston operation in May
1994. Dennis worked as a carpenter for the National Park Service
in Yellowstone National Park from approximately April to October of
each year. During the winter months Dennis worked locally for a
Livingston contractor.
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Martha and Dennis separated in September 1993 and on
September 17, 1993, Martha filed a petition for dissolution. When
Martha's employment in Livingston ceased she disclosed her intent
to relocate to Oregon with Matthew. Martha sought physical custody
of Matthew for the school year with Dennis having summer
visitation. Dennis sought just the opposite--he requested custody
of Matthew for the school year with Martha receiving summer
visitation.
The parties agreed that a custodial evaluation for Matthew
should be performed and they stipulated that Dr. Chuck Kelly and
Suzy Saltiel would jointly perform the evaluation. The evaluators
determined that Martha had been Matthew's primary caretaker. They
were aware of Martha's intent to move to Oregon with Matthew, but
nonetheless concluded that Martha should remain the primary
custodial parent. The evaluators recommended that Martha have
physical custody of Matthew during the school year with Dennis
having visitation during summer months and on alternating holidays.
In addition to the issues of Matthew's custody, support, and
visitation, the parties each claimed certain premarital property
interests. Martha owned the couple's residence prior to the
marriage and she and Dennis both agreed that she should receive her
premarital equity in the home as part of the distribution of
marital assets.
Prior to the marriage, Dennis and a friend jointly owned
property and a cabin in the Crazy Mountains. The original purchase
price was $16,000 and Dennis's contribution was $8,000. During the
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marriage, Dennis and his friend divided the property. Dennis
received approximately half the property and $6,000 in lieu of his
friend keeping the cabin. Dennis deposited $5,200 from that
transaction into the parties' Franklin Money Market account and
when the property was divided Dennis and Martha filed a joint
tenancy deed to the property. The parties agreed that the value of
the property at the time of the divorce was $21,500. They also
agreed that at the time of the marriage Dennis had approximately
$7,700 in separate credit union accounts.
On September 26 and 27, 1994, a final hearing on the matter
was conducted, and on October 31, 1994, the District Court entered
its findings of fact, conclusions of law, and decree of
dissolution. The District Court awarded the parties joint custody
of Matthew and determined that Matthew's primary residence should
be with Martha, subject to liberal visitation for Dennis. The
District Court ordered Dennis to pay $275 per month in child
support and set a visitation schedule for Dennis and Matthew.
The District Court concluded that the value of Martha's home
at the time of the marriage was $15,000, noting that a $27,000 home
improvement loan the parties received was not determinative as such
loans typically include the value of the remodeling efforts. The
District Court found that if the house were to be sold for fair
market value the first $15,000 of value after payment of
outstanding debt should go to Martha with the balance of the sale
proceeds shared equally between the parties.
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The District Court determined that with respect to Dennis's
mountain property, the increase in value from the date of marriage
to the date of divorce ($8,000 to $21,500) should be equally
divided between the parties. While the District Court did not
specifically address the separate funds Dennis brought into the
marriage, it ordered the parties to equally divide the Franklin
Money Market account.
On December 2, 1994, Dennis filed a notice of appeal and a
motion for stay of judgment pending appeal. On December 6, 1994,
Martha and Matthew left Montana for Oregon. On December 21, 1994,
the District Court denied the motion for stay of judgment and this
appeal followed.
ISSUE 1
Did the District Court err in designating Martha the primary
custodial parent for Matthew?
The standard of review in a child custody case is whether the
district court's findings are clearly erroneous. In re Marriage of
Dreesbach (1994), 265 Mont. 216, 220-21, 875 P.2d 1018, 1021. The
findings of fact must be based on substantial credible evidence and
the court's decision will be upheld unless a clear abuse of
discretion is shown. Dreesbach, 875 P.2d at 1021; In re Marriage
of Hunt (1994), 264 Mont. 159, 164, 870 P.Zd 720, 723.
Dennis argues that he has a very close relationship with his
son and that it was not in Matthew's best interest for the District
Court to designate Martha the primary custodial parent and allow
her to move to Oregon with Matthew. He contends that the District
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Court should have given greater consideration to the fact that
Matthew was well integrated into the Livingston community and his
school and day care environments.
Martha argues that the District Court is in the best position
to resolve custody disputes and that the District Court's
determination that she should have physical custody of Matthew was
supported by the evidence. Martha relies on the custodial
evaluation performed by Dr. Kelly and Ms. Saltiel which indicates
that Martha has been Matthew's primary caretaker and that it is in
Matthew's best interest to have that arrangement continue. She
notes that Dennis and the evaluators were aware of her intent to
move to Oregon with Matthew and that the District Court addressed
Matthew's ability to adjust to a new community in its custody
determination.
In custody disputes involving both parents of a minor child,
district courts shall award custody according to the best interest
of the child as set out in 5 40-4-212, MCA. Section 40-4-223, MCA
(1993). In making its custody determination, the District Court
gave "significant weight" to the results of the custody evaluation
performed by Dr. Kelly and Ms. Saltiel. Both evaluators
recommended that Martha be designated the primary custodial parent
for Matthew. In its findings of fact the District Court stated
"[iIn making this determination the Court has considered the
provisions of Section 40-4-212 MCA." Due to Matthew's age and his
desire to please both parents the court did not consider his wishes
in making its determination.
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The District Court found that Martha had been the primary care
giver for Matthew for most of the time during the marriage, as
Dennis's employment required that he be gone from the home for four
to five days at a time. The court also found that Dennis had shown
little interest in Matthew's school activities, having only
attended one activity since Matthew had been in school, and that
Martha would be better able to provide for him during the school
year. The record reflects that the District Court considered the
factors set forth in 5 40-4-212, MCA (1993), in making its custody
determination and that the court's findings are supported by
substantial evidence.
We conclude that the District Court's findings relating to
custody are not clearly erroneous and we hold that the District
Court did not abuse its discretion in awarding the parties joint
custody of Matthew and designating Martha as the primary
residential custodian. We affirm the District Court on this issue.
ISSUE 2
Did the District Court err in dividing the marital property?
The standard of review of a district court's division of
marital property is whether the court's findings of fact are
clearly erroneous. If substantial credible evidence supports the
court's findings and judgment, this Court will not change the
district court's decision unless the court abused its discretion.
In re Marriage of Smith (1995), 270 Mont. 263, 267-68, 891 P.2d
522, 525. See also In re Marriage of Maedje (1994), 263 Mont. 262,
- -
265-66, 868 P.2d 580, 583.
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Martha's Home
The District Court found the value of Martha's home at the
time of the marriage to be $15,000. It was undisputed that the
house was encumbered by a $10,000 mortgage at the time of the
marriage but the District Court failed to match that premarital
debt to Martha's premarital equity in the home. Instead, the court
found that upon the sale of the home the first $15,000 of value
after payment of debt against the house should go to Martha.
Dennis argues that in awarding Martha $15,000 as her premarital
equity interest in the home the District Court erred by failing to
take into account the $10,000 mortgage which encumbered the
property at the time.
Martha counters that she requested over $19,000 as her
premarital interest in the home, and therefore, the District Court
did not err in awarding her $15,000. She claims that the "home
improvement" loan in the amount of $27,000 was actually a "home
equity" loan based on the appraisal ordered by the bank. Martha
contends that the result reached by the District Court was sound,
even if its reasoning was flawed by not taking into account the
mortgage lien against the home.
We are not persuaded by Martha's arguments. In valuing the
home at $15,000 the District Court concluded that Dennis's opinion
and expertise as an experienced carpenter carried more weight than
Martha's opinion that the home was worth $30,000. Furthermore, in
reaching the $19,000 figure as her premarital interest in the home
Martha herself subtracted the $10,000 mortgage from her $30,000
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estimate. The District Court should have done the same when it
calculated Martha's equity interest in the home.
We therefore determine Martha's premarital equity interest in
the home to be $5,000 ($15,000 estimated value minus $10,000
mortgage). The District Court's finding that the first $15,000 of
value after payment of debt against the home should go to Martha is
not supported by substantial evidence and is therefore clearly
erroneous. We conclude that the District Court abused its
discretion in failing to account for the outstanding mortgage when
it determined Martha's interest in the home. We reverse the
District Court on this issue and remand for further proceedings in
this regard.
Dennis's Seoarate Funds
The parties agreed that Dennis brought $7,705 in separate
funds into the marriage. Dennis argues that the District Court
erred in not awarding him that amount as part of the property
distribution. Even though the District Court ordered that the
parties should equally divide the Franklin Money Market account, it
did not specifically address the separate funds Dennis brought into
the marriage.
Martha claims that the money was placed into a joint money
market account which they used as a general savings account.
Dennis does not contest this allegation. Martha and Dennis placed
the money received from the home equity loan into the account and
paid for various housing projects out of the account. Martha
placed money she received from her previous employer's profit
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sharing plan into the account and she and Dennis paid various bills
out of the account, including income taxes, property taxes, and
credit card debts. Martha contends that the funds Dennis brought
into the marriage were commingled with her profit sharing funds and
the home equity loan proceeds. She claims that the account was
marital property and that the District Court correctly determined
that it should be divided evenly between the parties.
We have stated that under § 40-4-202, MCA, the district court
is vested with broad discretion to distribute the marital estate in
a manner which is equitable to each party according to the
circumstances of the case. Smith
-I 891 P.2d at 525. Section
40-4-202, MCA, provides that in dividing marital property a court
may equitably apportion the parties' property and assets "belonging
to either or both, however and whenever acquired."
In distributing premarital property the court must consider
the contributions of the other spouse, including:
(a) the nonmonetary contribution of a homemaker;
(b) the extent to which such contributions have
facilitated the maintenance of this property; and
Cc) whether or not the property division serves as
an alternative to maintenance arrangements.
Section 40-4-202, MCA (1993).
In determining that the money market fund should be evenly
divided between the parties, the District Court found that "each
of the parties hereto has contributed to the fund." In addition to
Martha's monetary contributions to the account, Martha testified
that she did ninety-five percent of the cooking, cleaning, and
laundry in the household, and was responsible for paying all of the
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bills during the marriage. Her contributions as a homemaker
facilitated the maintenance of the account since the household
services she provided would have otherwise been expenses of the
marriage.
We have held that N [ilncluding the premarital assets in the
marital estate is not an abuse of discretion, nor does it result in
substantial injustice." In re Marriage of Peterson (1989), 238
Mont. 470, 475, 778 P.2d 402, 405. We have also recently held that
the district court did not abuse its discretion by including in the
marital estate property which the husband had brought into the
marriage. In re Marriage of Binsfield (1995), 269 Mont. 336,
343-44, 888 P.2d 889, 893.
We conclude that the District Court's finding that the parties
had each contributed over the years to the money market fund is
supported by substantial evidence and is not otherwise clearly
erroneous. Each party made monetary contributions to the account
and Martha made nonmonetary contributions as a homemaker. The
District Court did not abuse its discretion in determining that the
funds from the account should be evenly split between the parties
and we affirm the District Court on this issue.
Dennis's Mountain Property
Prior to the marriage Dennis contributed $8,000 toward the
purchase of mountain property in the Crazy Mountains. He purchased
the property in 1981 with a friend for $16,000 and owned the land
free and clear before he and Martha were married. In 1992 Dennis
and his friend divided the property and Dennis received $6,000 and
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half of the acreage. At the time of the dissolution hearing the
property was valued at $21,500.
The District Court made the following finding concerning the
mountain property:
While [Dennis] argues that [Martha] did nothing to
increase the value of this property, it appears that
[Dennis] did nothing either and that the increase is due
simply to market factors. [Dennis] should be entitled to
receive the first thousand dollars of equity in this
property, and the difference between the market value of
$21,500 and such $8,000 should be shared equally between
the parties.
Dennis argues that the entire value of the property should be
retained by him as a separate premarital asset. He maintains that
the District Court was correct in finding that the increase in
value to the property was due simply to market factors and that
Martha did nothing to contribute to the increase in the value of
the land. Dennis further claims that he should receive credit for
the $5,200 he deposited in the money market fund from the $6,000 he
received when he and his friend divided the property. He argues
that these are proceeds traceable to his premarital asset.
Martha counters that the mountain property was part of the
marital estate as she was listed as a joint owner on the deed to
the land and notes that the property taxes for the land were paid
out of the parties' joint money market account. In urging us to
affirm the District Court Martha relies on Maedie to argue that her
contributions as a homemaker should be considered, thus allowing
her to receive a portion of the mountain property as part of the
marital estate.
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We conclude that the District Court's finding that the
increase in value to the property was due simply to market factors
is supported by substantial evidence and is otherwise not clearly
erroneous. Martha's contributions as a homemaker in the marriage
did not contribute to the maintenance and appreciation of the
mountain property. We distinguish our holding in Maedie by noting
that in that case the district court specifically found that the
spouse had "contributed in some fashion to the maintenance and
appreciation of [the] properties." Maedie, 868 P.2d at 584. The
District Court should have awarded Dennis the entire value of the
mountain property.
However, we do not agree with Dennis that he should receive
all of the $5,200 he deposited into the money market account when
the property was divided in 1992. We earlier addressed the
District Court's distribution of the money market fund and
concluded that the District Court did not abuse its discretion in
dividing the account evenly between the parties.
We conclude that the District Court abused its discretion in
dividing the difference between the present market value of the
mountain property and its original purchase price ($21,500 minus
$8,000) evenly between the parties. Dennis should receive credit
for $21,500, representing the full value of the mountain property.
We reverse the District Court on this issue and remand for further
proceedings in this regard.
ISSUE 3
Did the District Court err in determining child support?
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The standard of review of a district court's award of child
support is whether the district court abused its discretion. In re
Marriage of Craib (1994), 266 Mont. 483, 490, 880 P.2d 1379, 1384.
A presumption exists in favor of the trial court's determination
and we will not overturn its findings unless the court has abused
its discretion. In re Marriage of Brown (1994), 263 Mont. 184,
187, 867 P.2d 381, 382. This Court has stated that "a district
court must apply its discretion in a realistic manner, taking into
account the actual situation of the parties." In re Marriage of
Noel (1994), 265 Mont. 249, 252, 875 P.2d 358, 359. See also In re
- -
Marriage of D.F.D. and D.G.D. (19931, 261 Mont. 186, 203, 862 P.2d
368, 378-79; In re Marriage of Anderson (1993), 260 Mont. 246,
255-56, 859 P.2d 451, 457.
After reviewing the child support guideline work sheets
submitted by the parties, the District Court determined that
Martha's calculation of $310 per month was correct. However, the
District Court granted Dennis a variance in the amount of $35 per
month for long-distance visitation costs for which it determined
Dennis would be responsible. The amount of child support was
therefore set at $275 per month. The District Court also ordered
Dennis to maintain health insurance coverage for Matthew. Dennis
argues on appeal that the District Court erred in not crediting his
child support amount to account for the health insurance premium
payments.
Dennis's argument on this issue is not persuasive. At the
time of the dissolution hearing, Dennis had not secured health
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insurance coverage for Matthew. Martha had enrolled Matthew in the
COBRA extension plan offered by her previous employer and was
paying the premium associated with the coverage. Dennis cannot now
argue that he should have received credit on his child support for
insurance coverage he was not providing at the time of the hearing.
We conclude that the District Court did not abuse its
discretion in setting the amount of child support at $275 per
month. The amount is realistic and takes into account the actual
situation of the parties. We affirm the District Court on this
issue.
ISSUE 4
Did the District Court err in establishing a visitation
schedule for Matthew?
Our standard of review for visitation is whether substantial
credible evidence supports the district court's findings
Dreesbach, 875 P.2d at 1022 (citing In re Marriage of Nash (1992),
254 Mont. 231, 234, 836 P.2d 598, 600). We will overturn a court's
visitation decision only when the court's findings and conclusions
clearly demonstrate an abuse of discretion. Dressbach, 875 P.2d at
1022 (citing In re Marriage of Anderson (1993), 260 Mont. 246,
254-55, 859 P.2d 451, 454).
The District Court determined that Dennis should exercise his
visitation with Matthew during the entire summer vacation,
commencing on the Tuesday after school ends in the spring and
terminating ten days before school begins in the fall. In
addition, Dennis received visitation on an alternating basis during
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the Christmas and Thanksgiving holidays and during the spring break
vacation. The District Court stated that this plan "recognizes the
fact that [Martha] is living in Oregon and [Dennis] will remain in
Livingston." As noted above, the court also determined that Dennis
should be responsible for transportation costs associated with the
long-distance visitation.
Dennis contends that Martha should have to pay at least
one-half of the transportation costs and also argues that the
District Court erred in establishing a visitation schedule that
departs from the one recommended by Dr. Kelly and Ms. Saltiel. The
custody evaluators recommended that Dennis have visitation for the
summer vacation, every spring break, on alternating Thanksgiving
holidays and for one week every Christmas--the difference being
that the District Court's plan alternated the spring break vacation
and the Christmas holiday.
The District Court recognized the fact that Martha lives in
Oregon and Dennis resides in Livingston. We conclude that the
District Court did not abuse its discretion in adjusting the
visitation schedule based on the physical distance between the
parties. Furthermore, since Dennis receives credit against his
child support for long-distance visitation, we conclude that the
District Court did not abuse its discretion in determining that
Dennis should be responsible for transportation costs. We affirm
the District Court on this issue.
We affirm in part, reverse in part and remand to the District
Court for reconsideration of its equitable distribution of the
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marital estate, based on our holdings on Issue 2 and the record
before it, and for the entry of an amended final decree relating to
the distribution of the marital estate which is consistent with
this opinion.
We concur:
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