No. 01-717
IN THE SUPREME COURT OF THE STATE OF MONTANA
2002 MT 147N
IN RE THE MARRIAGE OF
KIMBERLY ANN KINS DIXON,
Petitioner and Respondent,
and
MICHAEL ARTHUR DIXON,
Respondent and Appellant.
APPEAL FROM: District Court of the Second Judicial District,
In and For the County of Silver Bow,
Honorable Kurt Krueger, Judge Presiding
COUNSEL OF RECORD:
For Appellant:
Patrick D. McGee and Francis P. McGee, Attorneys at Law, Butte, Montana
For Respondent:
Mollie A. Maffei, Maffei Law Firm, PLLC, Butte, Montana
David L. Vicevich, Attorney at Law, Butte, Montana
Submitted on Briefs: March 14, 2002
Decided: June 27, 2002
Filed:
__________________________________________
Clerk
Justice W. William Leaphart delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph (3) Montana Supreme Court
1996 Internal Operating Rules, the following decision shall not be
cited as precedent but shall be filed as a public document with the
Clerk of the Supreme Court and shall be reported by case title,
Supreme Court cause number and result to the State Reporter
Publishing Company and to West Group in the quarterly table of
noncitable cases issued by this Court.
¶2 Michael A. Dixon (Michael) appeals from the Second Judicial
District Court’s findings of fact, conclusions of law and order.
At issue are the District Court’s valuation and distribution of
the marital estate, designation of Kimberly Ann Kins Dixon (Kim) as
residential custodian and child support order. We affirm.
¶3 We re-state the issues on appeal as follows:
¶4 (1) Did the District Court err in conducting dissolution
proceedings and entering a final decree after Michael failed to
file a responsive pleading?
¶5 (2) Did the District Court err in valuing and distributing the
marital estate?
¶6 (3) Did the District Court err in designating Kim as
residential custodian of Junior?
¶7 (4) Did the District Court err in its determination of child
support?
FACTUAL AND PROCEDURAL BACKGROUND
Comment [COMMENT1]: Dc fof
¶8 Michael and Kim were married on May 25, 1985. They have two 1
Comment [COMMENT2]: Dc fof
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minor children, Kayla and Michael (Junior).
2
Comment [COMMENT3]: Tr 5
¶9 Michael and Kim separated in August 1995. In 1997, Michael Comment [COMMENT4]: Tr 8
Comment [COMMENT5]: Tr 8
petitioned for dissolution and the parties, Kim without the benefit
Comment [COMMENT6]: Tr 68
of counsel, signed a property settlement agreement. According to
this agreement, if Michael agreed to co-sign a home equity loan in
the amount of $32,000 for Kim, she would agree to forgo any
proceeds from Michael’s Thrift Savings retirement account.
However, the agreement was never filed with the District Court, and
the petition for dissolution was ultimately dismissed. Kim filed a
Comment [COMMENT7]: Tr 7
petition for dissolution three years later on December 7, 2000.
¶10 The parties acquired both assets and debts during their
marriage and five-year separation. During the marriage, the
parties purchased a home with a fair market value of $73,500 as
assessed by Silver Bow County for property taxes. The home had an
outstanding mortgage of $36,000 while the parties were married.
Michael, a United States postal employee, contributed to a Thrift
Savings retirement account valued at approximately $86,047, and a
second pension plan totaling $3,900, as valued at the time of the
parties’ dissolution. Kim, a high school teacher, contributed to a
teachers retirement account valued a $11,160 at the time of
dissolution. She also had a Prudential Life Account valued at
$7,000. Michael purchased a Kawasaki 4-wheeler for $5000. Kim
purchased twelve condom vending machines for between $5000 and
$10,000. Kim incurred a credit card debt of approximately $30,000
in a failed attempt to establish a business.
¶11 During the parties’ separation, Michael purchased a 2001 Ford
F-250 truck worth approximately $32,000, with an equity value of
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approximately $26,000 at the time of dissolution. Kim leased a
Ford Ranger truck for $310 per month. She cashed out her
Prudential Life account, and Michael was paid $4,500. Kim obtained
a home equity loan in the amount of $32,000 with which she paid off
several of her credit card debts. Michael co-signed the loan.
Subsequently, Kim accumulated over $40,000 in credit card debt,
more than half of which constituted late fees and accumulated
interest. The parties filed married joint tax returns throughout
this time.
¶12 During the separation, the two minor children primarily
resided with Kim in the family home and Michael maintained a
flexible parenting schedule with few overnight visits. In lieu of
child support, Michael paid the house payment of approximately $490
per month.
¶13 After Kim filed a petition for dissolution, Michael filed a
motion to dismiss. The District Court denied the motion and
ordered Michael to respond to the petition within twenty days.
Michael did not file a responsive pleading. However, he otherwise
participated in the dissolution proceedings.
¶14 Following trial, the court issued its findings of fact,
conclusions of law and order. The Court valued the parties’
marital estate at the time of the dissolution. It awarded Kim all
equity in the family home totaling $11,742; the leased truck; the
teachers retirement plan; $4,500 from the distribution of her
Prudential Life Account; and $30,000 from Michael’s Thrift Savings
retirement account to be used to pay her outstanding credit card
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debt. The court ordered Kim responsible for both home mortgages.
It also ordered her to “do whatever possible” to remove Michael’s
name from the home mortgages and credit cards.
¶15 Regarding the children, the court found both parents fit. It
designated Kim as the residential custodial parent and issued a
parenting plan giving Michael liberal parenting time. The parenting
plan, with a few exceptions, mirrored the arrangement the parties
followed during their separation. The court ordered Michael to pay
$340 per month child support beginning in June 2001, and it ordered
him to pay back support in the amount of $500 per month for March
through May 2001.
¶16 Michael appeals the District Court’s valuation and
distribution of the marital estate, designation of Kim as
residential custodian of Junior and calculation of child support.
DISCUSSION
¶17 (1) Did the District Court err in conducting dissolution
proceedings and entering a final decree after Michael failed to
file a responsive pleading?
¶18 Michael argues that because he failed to file a responsive
pleading to Kim’s petition for dissolution, the Court should treat
this case as if the pleading had been filed or declare the trial a
nullity and remand for a responsive pleading. He notes that Kim
did not file a motion for default judgment upon his failure to
respond to her petition and admits otherwise participating in the
dissolution proceedings, including a settlement conference and
trial.
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¶19 Michael and Kim agree that under Rule 55(a), M.R.Civ.P.,
governing entry of default judgments, Michael “otherwise defended”
his position in this case. Kim also argues that Michael did not
move the District Court to reconsider or move for a new trial on
the grounds that he did not file a responsive pleading, and, as
such, the court did not exceed its jurisdiction in hearing the
matter.
¶20 We conclude that the District Court properly conducted
dissolution proceedings and entered a final decree despite
Michael’s failure to file a responsive pleading. In so concluding,
we note that Michael did not raise this issue in the District
Court. We also note that Kim did not file a motion for entry of
default judgment under Rule 55(a), M.R.Civ.P., and, even if she
had, the motion would have been meritless in light of Michael’s
active participation in the dissolution proceedings. See Klock v.
Town of Cascade (1997), 284 Mont. 167, 172-73, 943 P.2d 1262, 1265-
66 (motion for default judgment properly denied when defendants
failed to file an answer to a complaint but filed a motion to
dismiss and a motion for summary judgment). At this point,
Michael’s personal attempt to sanction himself is both untimely and
unnecessary.
¶21 (2) Did the District Court err in valuing and distributing
the marital estate?
¶22 We review the division of marital property by a district court
to determine whether the findings upon which the district court
relied are clearly erroneous. If the findings are not clearly
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erroneous, we will affirm the distribution of property unless the
district court abused its discretion. The test for abuse of
discretion in a dissolution proceeding is “whether the district
court acted arbitrarily without employment of conscientious
judgment” or whether the district court “exceeded the bounds of
reason resulting in substantial injustice.” In re Marriage of
Gochanour, 2000 MT 156, ¶ 15, 300 Mont. 155, ¶ 15, 4 P.3d 643, ¶ 15
(citing In re Marriage of Engen, 1998 MT 153, ¶ 26, 289 Mont. 299,
¶ 26, 961 P.2d 738, ¶ 26).
¶23 We review a district court’s conclusions of law to determine
whether the conclusions are correct. Gochanour, ¶ 16 (citation
omitted).
¶24 Michael raises the following challenges to the District
Court’s valuation and distribution of marital property. With
regard to each of them, we hold that the District Court employed
conscientious judgment, acted reasonably and correctly interpreted
applicable law.
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1997 Property Settlement Agreement
¶25 Michael first contends that the District Court erred when
refusing to consider the parties’ 1997 property settlement
agreement. At trial, Michael attempted to testify that, pursuant
to this agreement, Kim agreed to “give” Michael his entire Thrift
Savings retirement account if he co-signed on a home equity loan.
Kim objected on relevancy grounds, and the District Court sustained
the objection since the action which gave rise to the settlement
agreement had been dismissed.
¶26 Michael argues that a district court is required to abide by
the terms of a written settlement agreement unless it is
unconscionable under § 40-4-201, MCA. Kim emphasizes that the
District Court allowed testimony regarding the parties’ previous
settlement agreement but appropriately deemed it irrelevant.
¶27 We hold that the District Court did not err in declining to
consider a property settlement agreement which Kim executed without
the benefit of counsel in an action which was ultimately dismissed.
A District Court is bound by parties’ settlement agreements
“attendant upon their separation or the dissolution of their
marriage.” Section 40-4-201(1), MCA. Michael’s and Kim’s 1997
settlement agreement was not “attendant” upon the action at hand.
It did not have a tendency to make the existence of any fact of
consequence to the present dissolution action more or less
probable. See Rule 401, M.R.Civ.P. The District Court did not err
in concluding that the agreement was irrelevant and it was not
bound by it under § 40-4-201, MCA.
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Valuation of Marital Estate
¶28 Michael also argues that the District Court erred in valuing
the entire marital estate at the time of the parties’ dissolution
rather than valuing certain assets at the time of the parties’
separation in 1995. Citing In re Marriage of Wagner (1984), 208
Mont. 369, 679 P.2d 753, and its progeny holding that in unique
circumstances a marital estate should be valued at the time of
separation to avoid injustice, Michael claims the court’s inclusion
of Kim’s substantial post-separation credit card debt in the
marital estate was clear error. He also insists that Kim’s and his
trucks and contributions to their retirement accounts during their
separation should not have been included in the marital estate.
¶29 Kim disputes the applicability of Wagner in this case. She
maintains that it is more important to achieve an equitable
apportionment of property than to designate the moment at which a
court should value property. Kim argues that while she was
primarily responsible for the needs of the parties’ children during
the separation, Michael lived at his parents’ home and was able to
contribute more to his retirement plan.
¶30 The well-settled rule in Montana is that absent unique
circumstances, a marital estate should be valued at or near the
time of dissolution. In re Marriage of Lopez (1992), 255 Mont.
238, 244, 841 P.2d 1122, 1125. Yet, the appropriate time for
valuing the marital estate cannot always be tied to a specific time
or event in the dissolution process and the District Court is
required to exercise discretion in determining the appropriate time
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for valuation. Lopez, 255 Mont. at 244, 841 P.2d at 1125 (citing
Wagner, 208 Mont. at 377, 679 P.2d at 757). At times, valuation at
or near the time of the dissolution may cause an injustice due to
the nature of the assets or the course of conduct of the parties.
Lopez, 255 Mont. at 244, 841 P.2d at 1125-26 (citing In re Marriage
of Gebhardt (1989), 240 Mont. 165, 783 P.2d 400).
¶31 We hold that the unique circumstances found in Wagner and
Gebhardt are not present in this case. In Wagner, the wife,
through impressive business acumen, substantially increased her
ranch assets during the parties’ separation while the husband,
through mismanagement, decreased his assets. In Gebhardt, the
husband made personal investment decisions encumbering farm
property during separation. Here, Kim did not make poor investment
decisions. Rather, she testified that she used her credit card to
buy necessaries such as school clothes and groceries as well as to
pay household bills and make ends meet on a limited budget.
¶32 Moreover, it is well established in this state and other
states that retirement benefits are part of the marital estate. In
re Marriage of Rolfe (1985), 216 Mont. 39, 46, 699 P.2d 79, 83.
The Court was not required to deprive Kim of an equitable share of
Michael’s retirement because she acquired debt in obtaining
household necessaries after the parties’ separation. This is
especially true since during the same period of time, Michael
testified that he lived with his parents at reduced rent, purchased
a $32,000 truck, nearly doubled his retirement account, and enjoyed
the tax advantage of filing joint returns.
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¶33 Given the facts of this case, we hold that the District Court
did not err in valuing the marital estate at or near the time of
the parties’ dissolution.
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Failure to Include Marital Asset
¶34 Michael next argues that the District Court erred by failing
to include Kim’s condom vending machines as an asset in the marital
estate. Generally, if contested evidence is presented to the trial
court regarding the existence or valuation of a marital asset and
no findings are made regarding the asset, the district court has
abused its discretion. In re Marriage of Larson (1982), 200 Mont.
134, 139, 649 P.2d 1351, 1354. Here, the District Court was
presented with speculative evidence regarding the purchase value of
the condom machines, and, as Michael admits, no evidence regarding
the current value of the machines or the amount of income or loss
they produce. Accordingly, we hold that the District Court did not
err by failing to include the condom vending machines as a marital
asset.
Value of Family Home
¶35 Finally, Michael challenges the District Court’s valuation of
the family home. He argues that a loan appraisal valued the home
at $88,500 while the court valued it at $73,500 pursuant to a
property tax assessment.
¶36 The District Court “has broad discretion in determining the
value of property in a dissolution. . . . As long as the valuation
of property in a dissolution is reasonable in light of the evidence
submitted, we will not disturb the finding on appeal.” In re
Marriage of Hanni, 2000 MT 59, ¶ 22, 299 Mont. 20, ¶ 22, 997 P.2d
760, ¶ 22 (citing In re Marriage of Robinson (1994), 269 Mont. 293,
296, 888 P.2d 895, 897). Here, we conclude that the District
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Court’s valuation of the home was reasonable and supported by the
evidence.
¶37 (3) Did the District Court err in designating Kim as
residential custodian of Junior?
¶38 The District Court concluded that both Michael and Kim were
fit and proper persons to have custody of their children. It then
concluded that it was in the best interest of the children that Kim
be the residential custodial parent and that Michael have parenting
time with the children as set forth in the court’s parenting plan.
¶39 Michael does not contest the parenting plan. However, he does
contest the District Court’s designation of Kim as the residential
custodial parent for Junior. Michael claims that there was no
evidence of Junior’s wishes in the record in violation of § 40-4-
212(1)(b), MCA. Michael also faults the court for failing to state
a basis for its parenting decision. Kim points out that both
Michael and Kim testified as to Junior’s wishes during the trial
and that the court issued sufficient findings to support its
parenting determinations.
¶40 We review a custody determination to determine whether the
findings of fact upon which the district court relied are clearly
erroneous. Where the findings are supported by substantial
credible evidence, this Court will affirm the custody decision
unless it is shown that the court committed a clear abuse of
discretion. In re Marriage of McKenna, 2000 MT 58, ¶ 14, 299 Mont.
13, ¶ 14, 996 P.2d 386, ¶ 14.
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¶41 In a marriage dissolution proceeding, the district court must
determine child custody matters in accordance with the best
interest of the child. See § 40-4-212, MCA. Although the court
must consider several statutory factors in determining the child’s
best interest pursuant to § 40-4-212, MCA, it need not make
specific findings pertaining to each factor. McKenna, ¶ 15
(citations omitted).
¶42 Here, both parents testified regarding Junior’s wishes. Kim
stated that Junior said he wanted time with both Michael and her.
Michael testified that Junior wanted to live with him and would
like to spend one more night per week with Kim. Additionally, the
court heard testimony that Kim was the primary custodial parent
during the parties’ separation and that Junior was more comfortable
at Kim’s house because he had “more to do and that’s where his
friends are.” Upon review of the record in this case, we hold that
Michael has failed to show that the District Court clearly abused
its discretion in designating Kim as the residential custodian of
Junior.
¶43 (4) Did the District Court err in its determination of child
support?
¶44 The District Court found that child support should be
calculated in compliance with the Montana Child Support Guidelines
and concluded that Michael was required to pay $340 per month
beginning June 2001. Michael claims that the court ordered an
improper amount of child support because the guidelines mandate a
payment of $118 per month.
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¶45 In response, Kim submits an affidavit of Christine Mandiloff,
the Settlement Facilitator in this case, which states that after
the trial, the District Court requested that Mandiloff calculate
child support in accordance with the Montana Child Support
Guidelines based upon the parenting plan to be established by the
court. Mandiloff avers that the calculation resulted in a $340 per
month obligation. Kim states that the $118 figure Michael relies
upon was one of two hypothetical calculations set forth prior to
trial and that it is inaccurate with respect to the court’s actual
parenting plan.
¶46 Pursuant to § 40-4-204(3)(a), MCA, a district court must
determine child support by applying the standards in this section
and the uniform child support guidelines unless the application of
the standards and guidelines is unjust or inappropriate. An award
based on the guidelines is presumed reasonable and adequate. In re
Marriage of Schnell (1995), 273 Mont. 466, 469, 905 P.2d 144, 146.
We review a district court’s child support award to determine
whether the court abused its discretion. Schnell, 273 Mont. at
469, 905 P.2d at 146 (citations omitted).
¶47 We conclude that the District Court did not abuse its
discretion in awarding child support in this case. The record
indicates that the court complied with § 40-4-204, MCA, and, in the
absence of any convincing evidence to the contrary, we presume that
the court’s child support award is reasonable and adequate.
¶48 We affirm.
/S/ W. WILLIAM LEAPHART
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We concur:
/S/ KARLA M. GRAY
/S/ JAMES C. NELSON
/S/ PATRICIA COTTER
/S/ TERRY N. TRIEWEILER
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