In Re the Marriage of Debuff

No. 01-233

IN THE SUPREME COURT OF THE STATE OF MONTANA

2002 MT 159

IN RE THE MARRIAGE OF,

LAURIE M. DeBUFF,

Petitioner and Appellant,

and

HAROLD DeBUFF,

Respondent and Cross-Appellant.

APPEAL FROM: District Court of the Tenth Judicial District,
In and for the County of Fergus,
The Honorable David Cybulski, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Gary S. Deschenes, Deschenes Law Office, Great Falls, Montana

For Respondent:

Jock B. West, West, Patten, Bekkedahl & Green, Billings, Montana

Submitted on Briefs: January 31, 2002

Decided: July 16, 2002

Filed:

__________________________________________
Clerk
Justice Terry N. Trieweiler delivered the Opinion of the Court.

¶1 The Petitioner, Laurie M. DeBuff, appeals from an Order issued by the District Court

for the Tenth Judicial District in Fergus County which redistributed the marital estate

between her and the Respondent, Harold DeBuff, following this Court's opinion in DeBuff v.

DeBuff, 1999 MT 278N. Harold cross-appeals the District Court's failure to consider his tax

consequences as a result of the District Court's Order. We affirm in part, reverse in part, and

remand for proceedings consistent with this Opinion.

¶2 The following issues are presented on appeal:

¶3 1. Did the District Court err when it redetermined and

redistributed the DeBuff marital estate?

¶4 2. Did the District Court correctly determine the prejudgment

and postjudgment interest to which Laurie was entitled?

¶5 3. Did the District Court err by not considering the tax

consequences to Harold which would result from the redistribution

of the marital estate?

FACTUAL AND PROCEDURAL BACKGROUND

¶6 This is the second appeal from the District Court in this

case. Because the primary issue, the distribution of the marital

estate, remains the same, it is helpful to summarize the relevant

facts from our prior opinion, DeBuff v. DeBuff, 1999 MT 278N

(DeBuff I) (a noncitable opinion).

¶7 Laurie and Harold DeBuff were married on February 4, 1978.

Shortly thereafter, they acquired twenty-eight acres of property

with a home in Fergus County, Montana. In 1982, they acquired a

farm, consisting of 2360 acres, in Wheatland County, Montana. The

2
couple operated the farm throughout their marriage. Of the 2360

acres, 1400 is planted, 340 is in a Conservation Reserve Program

and the balance is native grasses.

¶8 During the marriage, Laurie was primarily a homemaker. On

occasion, Laurie worked various part-time jobs. In May 1997,

Laurie went to work as a grocery clerk for the IGA in Lewistown,

Montana, earning $6.00 per hour. Harold worked part-time as a road

construction equipment operator, earning $17.45 per hour, and

operated the farm.
¶9 The couple separated on September 30, 1997. On November 6,

1997, Laurie filed a Petition for Dissolution. A dissolution

hearing was held on March 30 and 31, 1998. Laurie asked for

assets "suitable for liquidation" in order to purchase a home. On

May 13, 1998, the District Court issued its Findings of Fact,

Conclusions of Law and Order, along with the Final Decree of

Dissolution of Marriage. The District Court awarded Harold the

properties in Wheatland County and Fergus County, miscellaneous

personal property and the accounts receivable. Harold's total

distribution was valued at $334,439. Laurie was awarded farm

machinery and equipment, grain, vehicles, and miscellaneous

personal property. Laurie's total distribution was valued at

$346,513. In addition, the District Court gave Laurie three weeks

to remove her share of the distributed items from the farm.

¶10 In DeBuff I, this Court affirmed in part and reversed in part.

We reversed the District Court's division of the marital estate

insofar as it failed to consider the liabilities associated with

3
the property distribution and failed to discuss any of the

statutory criteria for the division of marital property found at §

40-4-202, MCA. We remanded for a redetermination and

redistribution of the marital estate.

¶11 The District Court held an evidentiary hearing on March 22,

2000. On November 28, 2000, the District Court issued an Order in

which it redetermined and redistributed the marital estate. To

address the tax liability and liquidation costs associated with the

sale of the grain, equipment and machinery, the District Court

awarded Laurie an additional $66,728, "with said sum to bear

interest at the rate of 7% from April 15, 2000. . . . On January

31, 2001, the interest rate is to increase to the legal rate on

Judgments." The District Court also redistributed the marital

estate based on the statutory criteria in § 40-4-202, MCA.
¶12 Following the filing of the Notice of Entry of Judgment,

Harold filed a Motion for a New Hearing on Tax Liability, or in the

alternative, sought to amend the order pursuant to Rules 52(b) and

59, M.R.Civ.P. A hearing was held on March 14, 2001, and the

District Court denied Harold's motion, stating "[i]t is clear there

was no newly discovered evidence, and thus no basis for a new

trial."

¶13 Laurie filed a Notice of Appeal on April 3, 2001, challenging

the District Court's redetermination and redistribution of the

marital estate. On May 3, 2001, Harold filed a Notice of Cross-

Appeal based on the District Court's failure to take into account

4
the tax liability he would incur based upon the redistribution of

the marital estate.

STANDARD OF REVIEW

¶14 We review a district court's division of marital property to

determine whether the findings on which it relied are clearly

erroneous. In re Marriage of Engen, 1998 MT 153, ¶ 26, 289 Mont.

299, ¶ 26, 961 P.2d 738, ¶ 26. If the findings are not clearly

erroneous, we will affirm the distribution of property unless the

district court abused its discretion. Engen, ¶ 26.
¶15 A district court's award of prejudgment interest is a question

of law, and therefore, we examine whether the district court was

correct in its application of the law. Semenza v. Bowman (1994),

268 Mont. 118, 127, 885 P.2d 451, 456. Whether a party is entitled

to postjudgment interest is a conclusion of law which we review de

novo. Tipp v. Skjelset, 1998 MT 263, ¶ 11, 291 Mont. 288, ¶ 11,

967 P.2d 787, ¶ 11.

DISCUSSION

ISSUE 1

¶16 Did the District Court err when it redetermined and

redistributed the DeBuff marital estate?

¶17 In DeBuff I, we held that the District Court erred in its

distribution of the marital estate because it failed to consider

the tax consequences and liquidation costs associated with the

property distribution and failed to consider the mandatory

statutory criteria for the division of marital property. ¶ 49.

Therefore, we remanded to the District Court for a redetermination

5
of the marital estate and redistribution of that estate in

accordance with § 40-4-202, MCA.

¶18 Laurie contends that the District Court erred when it

redetermined and redistributed the marital estate for two reasons.

First, Laurie asserts that the District Court failed to include

$120,000 of unaccounted-for cash in its redetermination of the

marital estate, and that the District Court's finding that the

monies existence was "speculative" was clearly erroneous. Second,

Laurie contends that although the District Court correctly included

the tax consequences and liquidation costs associated with the

property distributed to her, the District Court inequitably divided

the estate.
¶19 In its November 28, 2000, Order, the District Court first

considered the liabilities which had been excluded in the original

determination of the marital estate:

The issue before the Court is the tax liability and
liquidation costs associated with the grain, equipment
and machinery awarded to wife. The testimony presented
shows the liquidation costs at $38,214 and a tax
liability of $117,316, leaving wife with a deficiency as
to her share of the marital estate. Although wife's
accountant's testimony seems to the court to have
overstated the tax and liquidation costs, the evidence
otherwise available does not adequately support any
different amount.

The District Court then subtracted those liabilities from what it

had previously determined was the total marital estate:

Previously, wife received $346,513 and husband
received $334,439, with a total marital estate of
$680,952. When this estate is reduced by the liquidation
and sale costs of $155,530, this leaves a revised marital
estate of $525,422, with an equal division of that amount
being $267,711. To equalize the estates, recognizing
that the property had been previously divided, the

6
 husband will have to pay to wife the sum of $66,728.
This sum represents the reimbursement required to
equalize the marital estate after wife paid the income
tax consequences and sale expenses.

After review of Laurie's accountant's testimony, it appears the

District Court inadvertently misstated the appropriate amount of

tax liability by $180, which resulted in a figure of $117,316. The

appropriate amount was $117,136, rather than $117,316. After

correcting the District Court's error, the appropriate amount of

liabilities (tax liability and liquidation costs) is $155,350, not

$155,530. Therefore, the correct value of the revised marital

estate is $525,602, not $525,422.
¶20 Laurie contends that the District Court erred when it refused

to include in the marital estate approximately $120,000 of

"missing money." According to Laurie, handwritten notes prepared

by Harold for his accountant in 1997 show that income in that year

exceeded expenses by approximately $120,000. Furthermore, Laurie

contends that that amount has never been accounted for, nor denied

by Harold, and, therefore, should be included in the marital

estate. Although evidence relating to the "missing money" was

presented to the District Court in the original trial, the District

Court did not make any findings on the matter and refused to

include the amount in its original determination of the marital

estate.

¶21 However, in the November 28, 2000, Order, the District Court

specifically addressed Laurie's claim, and stated:

Wife's counsel introduced evidence attempting to
show that husband had not accounted for some large sums
of cash, with the basis in the testimony being the

7
 parties taxable income for two years. The evidence is
purely speculative, in that other than the tax returns
showing income in one year and a loss in another, there
was no evidence to show the cash related to that income
ever was or still is in existence.

Laurie contends that the District Court's finding is clearly
erroneous.

¶22 Findings of fact are clearly erroneous if they are not

supported by substantial evidence, the court misapprehended the

effect of the evidence, or this Court's review of the record

persuades it that a mistake has been made. In re T.B., 1999 MT

174, ¶ 12, 295 Mont. 234, ¶ 12, 983 P.2d 929, ¶ 12. Laurie asserts

that the District Court misapprehended the effect of the evidence,

and erroneously based its finding on the DeBuffs' 1996 and 1997 tax

returns instead of on the disparity between income and expenses

reflected in Harold's handwritten notes.
¶23 The record reflects that the District Court was quite confused

about the basis for Laurie's claim and about how the $120,000

amount was arrived at. However, the District Court was equally

intent on understanding the basis for Laurie's claim. While

Laurie's accountant testified, the District Court listened to all

the evidence relating to the claim, reviewed the relevant trial

testimony from the original trial, reviewed Harold's handwritten

notes, and asked clarifying questions of Laurie's counsel when

confused. Following those efforts, the District Court found that

Laurie's claim was "purely speculative" based on a lack of evidence

to substantiate the claim. After review of the record, we conclude

that the District Court's finding was not clearly erroneous.

Although Harold's handwritten notes do reflect that income exceeded

8
expenses by approximately $120,000 in 1997, the notes neither

directly correspond to the DeBuffs' gross income reflected on their

1997 tax return, nor are they corroborated with any other type of

record, i.e., bank records. The District Court's finding that the

existence of the alleged $120,000 had not been proven was a

reasonable interpretation of the evidence.

¶24 Therefore, the correct amount of the marital estate in this

case is $525,602. Following remand, the District Court was next

instructed to equitably divide the marital estate in accordance

with the statutory criteria set forth in § 40-4-202, MCA. In the

original distribution of the marital estate, the District Court

awarded Laurie $346,513 (approximately 51%) and Harold $334,439

(approximately 49%). Laurie contends that the District Court, at a

minimum, should have awarded her the same 51% apportionment she

received in the original distribution. However, after it

redetermined the marital estate, the District Court also

reapportioned the estate, and opted to divide it equally.
¶25 In its Order, the District Court erroneously calculated an

equal division of the marital estate when it stated "this leaves a

revised marital estate of $525,422, with an equal division of that

amount being $267,711." One half of $525,422 is $262,711, not

$267,711. However, as stated above, the District Court also

incorrectly stated the tax liability. After substituting the

correct amount, we conclude that the revised marital estate is

$525,602, and an equal division of that amount is $262,801.

¶26 The District Court then went on to state:

9
 To equalize the estates, recognizing that the property
had been previously divided, the husband will have to pay
to wife the sum of $66,728. This sum represents the
reimbursement required to equalize the estate after wife
paid the income tax consequences and sale expenses.

The District Court's Order does not explain exactly how it arrived

at the $66,728 figure. However, if Laurie received an original

award of $346,513, and paid $155,350 for tax liability and

liquidation costs, then Laurie has actually received only $191,163

to date. Using the District Court's figures, the difference

between what Laurie received and one-half the revised marital

estate would have been $76,548. Employing the revised figures,

Laurie is entitled to an award of $71,638 (the difference between

the amount Laurie has received, $191,163, and her share of the

marital estate, $262,801). If the District Court's calculation was

based on other considerations, they were not identified in its

Order. Therefore, we conclude that the District Court's

redetermination and redistribution of the marital estate, based on

math alone, is clearly erroneous.
¶27 To accomplish an equal division of the marital estate, Laurie

is entitled to an additional payment of $71,638. However, Laurie

claims that the District Court's division of the marital estate was

inequitable for two additional reasons. First, Laurie asserts that

there was no basis for the District Court to reduce her

apportionment of the marital estate from 51% to 50%, which resulted

in a $12,000 reduction in her share of the estate. Second, Laurie

contends that the District Court failed to properly weigh all

10
factors listed in § 40-4-202, MCA, which resulted in an inequitable

distribution.

¶28 As to the reduction in Laurie's apportionment of the estate,

the District Court provided a basis for its decision:

Previously this court entered a disproportionate division
of property to reflect an estimate at disposition and tax
costs, but those costs have been determined and reflected
in the property division. . . . No reason exists to award
either party a disproportionate property division or an
award of maintenance.

When the District Court determined the fixed amount of liabilities,

it reapportioned the estate and divided it equally. Laurie

contends that the District Court's rationale for reducing her

portion of the marital estate contradicts an earlier order of the

Court issued orally on March 31, 1998, and that the reduction was

simply punishment for her appeal of the case. At the March 31,

1998, hearing, the District Court stated:
Since I have awarded the wife more than half of the
property I think in my mind that kind of covers a chunk
of the attorney's fees, and that's part of the reason for
the inequitable settlement. I didn't come up with an
exact number, come up with a number of cash from one of
you to the other, so I am going to just direct each party
to pay their own attorney's fees.

Another reason behind that is I have watched
interaction between the parties here. Neither party has
bent over backwards to try to get along with the other
one. The attorneys have some, but neither party really
has, so you guys fought your own fight. You get to pay
for your own fight. [Emphasis added.]

While attorney fees may have been part of the reason for the

inequitable distribution, it was not the only reason, and we

conclude that the District Court's rationale in its November 28,

2000, Order was a reasonable exercise of its discretion. Once the

11
liabilities were determined, the District Court had the discretion

to reduce the apportionment of the estate to effect an equitable

distribution in accordance with § 40-4-202, MCA. We have found

nothing in the record to show that the District Court abused its

discretion. Therefore, the District Court did not err.

¶29 Finally, Laurie contends that the District Court failed to

properly consider certain criteria enumerated in § 40-4-202, MCA,

most notably the parties' respective abilities to generate future

income and the fact she was not awarded maintenance. Laurie

contends that she should have received sixty percent of the marital

estate as her equitable share.
¶30 Section 40-4-202(1), MCA, provides in pertinent part:

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;

custodial provisions; 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. The court shall also consider the

contribution or dissipation of value of the respective

estates and the contribution of a spouse as a homemaker

or to the family unit.

¶31 On remand, we instructed the District Court to justify its

findings based on the statutory criteria in § 40-4-202, MCA. The

12
District Court complied with our instruction. In the November 28,

2000, Order, it stated:

The Supreme Court wanted the statutory criteria for
division of marital property in Section 40-4-202
addressed. The parties were married just shy of 20
years, all of their adult lives. Both enjoy reasonably
good health. Husband has job skills in the farming and
construction industry, and wife has some vo-tech
education, substitute experience at schools, some sawmill
laborer experience, and grocery clerk experience.
Husband's construction skills earned him about $14,000
per year, wife's skills earned her about $12,000 per
year. Neither party has extraordinary needs. Husband is
primary custodian of the parties minor children. The
parties had no substantial pre-marital property, or gifts
or bequests during the marriage. The parties acquired
substantially all of their property during the marriage.
When wife was a homemaker she facilitated the
maintenance of the parties property. . . . Although the
values for the property division are equal, the husband
has received as his property the majority of the debt
carrying property, including the home with a substantial
debt, and the land debt. He has the farmland, but no
operating capital, no machinery, and now a debt to wife
for his share of the liquidation and tax costs. Wife has
received property suitable for liquidation, less the
costs of liquidation, and therefore will be in a position
to invest the proceeds of the liquidation to supplement
her income. No reason exists to award either party a
disproportionate property division or an award of
maintenance.
¶32 As we stated in DeBuff I, a district court need not articulate

each factor set forth at § 40-4-202, MCA, separately, so long as

the findings are sufficient to allow nonspeculative review by this

Court. Citing In re Marriage of Gerhart (1990), 245 Mont. 279,

282, 800 P.2d 698, 700-01. The test for the adequacy of the

findings of fact is "whether they are sufficiently comprehensive

and pertinent to the issues to provide a basis for decision, and

whether they are supported by the evidence presented." Gerhart,

13
245 Mont. at 282, 800 P.2d at 701 (citing In re Marriage of Jensen

(1981), 193 Mont. 247, 253, 631 P.2d 700, 703).

¶33 Here, we conclude that the District Court's distribution of

the marital estate was supported by the record. The District Court

provided findings of fact which specifically included the statutory

criteria enumerated in § 40-4-202, MCA. The District Court

considered the status of the parties, their job skills, their

relative positions based on the division of the marital estate, and

found that an equal distribution of the estate was in this case

equitable. After review of both the District Court's reasoning as

well as the evidence in the record, we conclude the District Court

did not err.
¶34 Accordingly, based on the tax liability and liquidation costs

excluded in the original marital estate, Laurie is entitled to an

additional $71,638, plus interest as discussed below.

ISSUE 2

¶35 Did the District Court correctly determine the prejudgment and

postjudgment interest to which Laurie was entitled?

¶36 Laurie contends that the District Court erred when it

determined the amount of interest to which she was entitled.

Specifically, Laurie contends that pursuant to our decision in In

re Marriage of Pospisil, 2000 MT 132, 299 Mont. 527, 1 P.3d 364,

she is entitled to interest at the rate of 10% from the time

judgment was entered and that the 10% interest rate should run from

the time the District Court issued its verbal order on March 31,

1998. In Pospisil, we held:

14
 Judgment interest is not "awarded." Rather, judgment
interest is a statutory right. Under § 25-9-205, MCA,
interest is payable on all judgments recovered at the
annual rate of ten percent. Under Rule 54(a),
M.R.Civ.P., a "judgment" expressly includes a decree and
any order from which an appeal lies. Once a person is
liable for a money judgment resulting from a property
settlement and payment is not made, the person entitled
to the settlement is further entitled to the statutory
rate of interest. [Citations omitted.] Further, under
Rule 31, M.R.App.P., "[i]f a judgment is modified or
reversed with a direction that a judgment for money be
entered in the district court, the mandate shall contain
instructions with respect to allowance of interest."

Pospisil, ¶ 49.
¶37 Harold, on the other hand, contends that Laurie is not

entitled to postjudgment interest from the date of the original

decree based on this Court's decision in Marriage of Pfeifer, 2000

MT 100, 299 Mont. 268, 999 P.2d 340. In Pfeifer, we held that a

spouse is not entitled to interest on an original award where that

award on appeal has not been affirmed. ¶ 18.

¶38 However, Pfeifer is factually distinguishable and neither

party has accurately characterized what the District Court actually

did. The District Court, in its November 28, 2000, Order stated:

This sum [$66,728] represents the reimbursement required
to equalize the marital estate after wife paid the income
tax consequences and sale expenses. The sale expenses
had no fixed date, the income tax liability would have
become concrete on April 15, 1999. Therefore wife should
receive interest on that sum from April 15, 2000. A
reasonable amount of interest, given this courts
familiarity with current lower interest rates, would be
7%.

At the conclusion of the Order, the District Court stated:

WHEREFORE, IT IS HEREBY ORDERED that Husband pay to
Wife the sum of $66,728, with such sum to bear interest
at the rate of 7% from April 15, 2000. Husband is given
until January 30, 2001, to make this payment. On January

15
 31, 2001, the interest rate is to increase to the legal
rate on Judgments.

There was not a money judgment for which statutory interest was

owed as a result of the 1998 decree. The first money judgment

resulted from the District Court's Order dated November 28, 2000,

and the monetary amount was not due by the terms of that Order

until January 30, 2001. Therefore, the District Court correctly

concluded that statutory interest on the judgment was due from

January 31, 2001, forward. Section 25-9-205, MCA, provides:
Amount of interest. (1) Except as provided in
subsection (2), interest is payable on judgments
recovered in the courts of this state at the rate of 10%
per annum and no greater rate. Such interest must not be
compounded in any manner or form.
(2) Interest on a judgment recovered in the courts
of this state involving a contractual obligation that
specifies an interest rate must be paid at the rate
specified in the contractual obligation.

Therefore, from January 31, 2001, Laurie was owed postjudgment

interest from Harold on the amount owed her at the rate of 10% per

annum.

¶39 Although not referred to as such, by either party or the

District Court, the interest awarded to Laurie at the rate of 7%

was, in reality, prejudgment interest, presumably awarded pursuant

to § 27-1-211, MCA. That statute provides:

Right to interest. Every person who is entitled to
recover damages certain or capable of being made certain
by calculation and the right to recover which is vested
in him upon a particular day is entitled also to recover
interest thereon from that day except during such time as
the debtor is prevented by law or by the act of the
creditor from paying the debt.

¶40 Although the rate of postjudgment interest is provided by

statute, there is no comparable provision for the rate of

16
prejudgment interest. Therefore, the District Court understandably

used its discretion to arrive at a reasonable rate. However,

failure to provide guidance to district courts for future awards of

prejudgment interest will lead to inconsistent and unpredictable

results. That would not be in the best interest of parties trying

to anticipate their rights or obligations in an effort to avoid

litigation. Therefore, in this case and in the future, we conclude

that the appropriate rate for prejudgment interest when it is

awarded should be the same as that rate awarded for postjudgment

interest.
¶41 Neither party has provided guidance to this Court regarding

the appropriate rate for prejudgment interest. However, the public

policy established by the Legislature is apparent through the only

two statutes which establish interest rates and which have been

applied in the context of litigation. Section 25-9-205, MCA,

already discussed, establishes the postjudgment interest rate at

10% per annum unless there is a contractual obligation which states

otherwise. Section 31-1-106, MCA (found in Title 31, Credit

Transactions and Relationships), also provides for a 10% rate of

interest where a rate is not otherwise provided by contract on

written instruments, accounts stated, and money lent or detained.

We have in the past relied on § 31-1-106, MCA, in the context of

prejudgment interest. See Frank L. Pirtz Constr. v. Hardin Town

Pump, Inc. (1984), 214 Mont. 131, 142, 692 P.2d 460, 466; Ehly v.

Cady (1984), 212 Mont. 82, 98-99, 687 P.2d 687, 696. However,

those cases involved contract actions which are specifically

17
provided for by the terms of the statute. This case does not

involve any of the circumstances specifically referred to in § 31-

1-106, MCA.

¶42 Where the legislature has provided for interest but failed to

provide the rate, the general rule is stated at 45 Am. Jur.2d,

Interest and Usury § 48 (1999), which states:

Many states have statutes regulating the rate of
interest receivable for the use of money, and, assuming
their validity, such provisions are controlling.
Subject to such statutory provisions, the parties
may, by contract, fix the rate of interest to be charged.
In the absence of a governing statute, a court of equity
may exercise discretion as to the allowance of interest,
depending on the circumstances of the case, but equity
generally follows the rules of law governing the
allowance of interest, and if the subject is regulated by
statute, the court must follow the statute and may not
exercise discretion as to the rate to be allowed.
[Emphasis added.]
¶43 At our effort to implement the intent of the Legislature by

permitting prejudgment interest when the statutory criteria is

satisfied and provide interest at a rate which the Legislature

would consider reasonable, we conclude that the most appropriate

rate for prejudgment interest pursuant to § 27-1-211, MCA, is the

same rate provided for postjudgment interest pursuant to § 25-9-

205, MCA.

¶44 The question here is when was prejudgment interest due.

Laurie contends that the costs of liquidation were incurred in 1998

and the tax liability by April 15, 1999. The District Court found

no date had been established for liquidation costs, that the tax

liability accrued on April 15, 1999, and awarded prejudgment

interest from April 15, 2000. After reviewing the record, we

18
conclude that the District Court correctly found that no date had

been established for liquidation costs. However, if the tax

liability was incurred by April 15, 1999, the property was

liquidated sometime prior to that date and subsequent to May 13,

1998. We are unable to establish a more precise date because of a

failure of the parties to do so. Therefore, we conclude that

prejudgment interest, pursuant to § 27-1-211, MCA, was due from

April 15, 1999. The District Court's Order regarding interest is

otherwise affirmed.
ISSUE 3

¶45 Did the District Court err by not considering the tax

consequences to Harold which would result from the redistribution

of the marital estate?

¶46 The District Court's redistribution of the marital estate

resulted in a monetary obligation from Harold to Laurie in lieu of

the tax liability and liquidation costs she incurred. Harold

contends that the District Court failed to take into account the

resulting tax liability he would incur in order to pay that amount

to Laurie. According to Harold, because he was left with only

debt-burdened assets, he will be forced to liquidate property and,

in turn, will incur a similar tax liability. Therefore, Harold

maintains that the District Court erred when it failed to take into

account his tax consequences.

¶47 We have previously held that a district court abuses its

discretion when it fails to address tax consequences associated

with the distribution of a marital estate. In re Marriage of Lee

19
(1991), 249 Mont. 516, 519-20, 816 P.2d 1076, 1078. We have stated

"where a property distribution ordered by a court includes a

taxable event precipitating a concrete and immediate tax liability,

such tax liability should be considered by the court before

entering its final judgment." Lee, 249 Mont. at 519, 816 P.2d at

1078 (quoting In re Marriage of Beck (1981), 193 Mont. 166, 171,

631 P.2d 282, 285).

¶48 Therefore, we must determine whether the District Court

ordered Harold to engage in a taxable event precipitating a

concrete and immediate tax liability. We conclude that it did not.

The District Court did not order Harold to sell any of his

property in order to pay Laurie the cash settlement now owed.

Harold's situation is different than Laurie's following the

original distribution. In DeBuff I, we held that because Laurie

had already moved off the farm, was employed as a grocery store

clerk, and was given only three weeks to remove her property from

the farm, it was reasonable to conclude that Laurie did not intend

to either use or rent the equipment and, therefore, would have to

sell it. ¶ 24. For that reason, we concluded that an immediate

and concrete tax liability would result.
¶49 Here, Harold simply raises the possibility that if he

liquidates any of his holdings, he will incur a tax liability as a

result. However, the District Court did not order Harold to

liquidate any of his property. While the sale of land is one

possible option, Harold agreed that he has a variety of other

options available to him to satisfy his obligation to Laurie.

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Several of those options, such as a payment plan over time or

taking out a personal loan, would not result in any tax liability.

Because the District Court did not order Harold to do something

which will result in a concrete and immediate tax liability, we

conclude the District Court did not err.

¶50 Accordingly, we affirm in part and reverse in part the

judgment of the District Court. We affirm the District Court's

inclusion of the tax liability and liquidation costs incurred by

Laurie in the marital estate. However, we adjust the amount of her

award based on corrected calculations. Furthermore, we affirm the

District Court's division of the estate based on the statutory

criteria in § 40-4-202, MCA. However, we reverse the District

Court's award of prejudgment interest. Laurie is entitled to

prejudgment interest at the rate of 10% per annum from April 15,

1999. Finally, we conclude that the District Court did not err by

declining to adjust the marital estate to account for Harold's

alleged tax consequences and we remand to the District Court for

entry of judgment consistent with this Opinion.

/S/ TERRY N. TRIEWEILER

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We Concur:

/S/ KARLA M. GRAY
/S/ JIM REGNIER
/S/ JAMES C. NELSON
/S/ W. WILLIAM LEAPHART

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