No. 03-200
IN THE SUPREME COURT OF THE STATE OF MONTANA
2003 MT 292
IN RE THE MARRIAGE OF
KIMBERLY K. GERHART,
Petitioner and Appellant,
and
KEVIN GERHART,
Respondent and Respondent.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin, Cause NO. DR-00-296
The Honorable Mike Salvagni, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
James D. McKenna; Walsh & McKenna, Bozeman, Montana
For Respondent:
Magdalena C. Bowen; Bowen & Parker, Bozeman, Montana
Submitted on Briefs: July 31, 2003
Decided: October 23, 2003
Filed:
__________________________________________
Clerk
Chief Justice Karla M. Gray delivered the Opinion of the Court.
¶1 Kimberly K. Gerhart appeals from the Findings of Fact, Conclusions of Law and
Decree of Dissolution entered by the Eighteenth Judicial District Court, Gallatin County.
We affirm.
¶2 Kimberly raises the following issues on appeal:
¶3 1. Did the District Court abuse its discretion in failing to award her spouse’s bonus
and profit-sharing award to Kimberly when he disclosed them only two business days before
trial?
¶4 2. Did the District Court abuse its discretion in failing to award her spouse’s
interest in an Employee Stock Ownership Plan (ESOP) to Kimberly?
¶5 3. Did the District Court improperly determine the amount and distribution of
Kimberly’s pretrial expenditures of home sale proceeds?
¶6 4. Is the District Court’s distribution of the marital estate inequitable?
BACKGROUND
¶7 Kimberly and Kevin Gerhart married in 1981. Kimberly worked as a retail employee
and a bank teller until the parties decided to have a family. Subsequently, she worked
primarily as a homemaker. The couple had two children, born in 1994 and 1996. Kevin
worked in the dairy industry throughout the marriage.
¶8 The parties separated in April of 1999, and Kimberly petitioned for dissolution in
August of 2000. After the separation, Kevin voluntarily paid Kimberly’s living expenses
and child support until the couple sold the marital home in October of 2000. As agreed by
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the parties, the net proceeds of $118,958.73 were placed into a money market account in
Kimberly’s name. At that time, Kevin stopped paying for Kimberly’s personal living
expenses, but he continued to make monthly child support payments of $1,500. Kimberly
spent some of the sale proceeds in the ensuing months. In September of 2001, when the
account balance had fallen to approximately $83,000, the District Court issued its Findings
of Fact, Conclusions of Law and Temporary Order, which it amended in October of 2001.
In the Temporary Order, the District Court prohibited further withdrawals from the home
sale proceeds account absent a court order. In addition, the District Court ordered Kevin to
pay $1,326 in child support and $1,675in temporary maintenance each month.
¶9 During the interim, Kevin had begun working for a new employer in a management
position in December of 1999. Shortly thereafter, Kevin’s employer instituted an ESOP
program, in which Kevin could participate after completing one year of employment. Under
the ESOP’s vesting schedule, Kevin had no vested interest in the ESOP at the time of trial
on Kimberly’s dissolution proceeding. Kevin testified at trial that he had no vested interest
in the ESOP shares, and Kimberly could have the asset “if it has no value.”
¶10 In 2001, Kevin received a bonus and profit-sharing award totaling $45,532.70. He
deposited the checks into an investment bank account which, at the time of trial in March
of 2002, had declined in value to $28,798.23. Kevin testified that he planned to use the
funds to pay increased taxes resulting from the bonus and award moving him into a higher
tax bracket.
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¶11 Kevin failed to disclose the account in his Final Declaration of Disclosure. After
Kimberly’s counsel requested Kevin’s W-2 forms for the year 2001, Kevin amended his
disclosure to include the account, and the amended disclosure was received two days before
trial. Kevin testified he had inadvertently omitted the bonus and profit-sharing award,
having placed his W-2 tax form in an envelope marked for his 2001 taxes without looking
at it and simply forgetting about the account.
¶12 After trial, the District Court entered its Findings of Fact, Conclusions of Law and
Decree of Dissolution. It valued the marital estate at $444,637, and apportioned $218,694
to Kimberly and $225,943 to Kevin. The court also ordered Kevin to pay child support of
$1,736, as well as $2,000 in maintenance, per month. The trial court observed that Kevin
had “no vested interested [sic] in the ESOP plan” and acknowledged the account containing
the bonus and profit-sharing award, but included neither as a marital asset to be divided.
¶13 The trial court found that Kimberly had spent $43,958 of the marital home proceeds
before Kevin stopped paying her living expenses. It divided the $83,635 home proceeds
account balance equally between the parties, and added the $43,958 Kimberly previously had
spent to her distribution, resulting in a $127,593 valuation of the account.
¶14 Both parties timely filed motions for amendment and/or clarification of the District
Court’s findings, conclusions, and decree. In its Order RE: Motions to Amend Findings of
Fact, Conclusions of Law and Decree of Dissolution and Motion for Clarification of Court
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Orders, the court denied Kimberly’s motion for amendment of the property distribution.
Kimberly appeals.
STANDARD OF REVIEW
¶15 We initially review a district court’s division of marital property to determine whether
the findings of fact upon which the division is based are clearly erroneous. In re Marriage
of Pospisil, 2000 MT 132, ¶ 19, 299 Mont. 527, ¶ 19, 1 P.3d 364, ¶ 19 (citation omitted).
“A finding is clearly erroneous if it is not supported by substantial evidence, if the district
court misapprehended the effect of the evidence, or if our review of the record convinces us
that the district court made a mistake.” In re Marriage of Steinbeisser, 2002 MT 309, ¶ 17,
313 Mont. 74, ¶ 17, 60 P.3d 441, ¶ 17 (citation omitted).
¶16 Pursuant to § 40-4-202, MCA, a district court has broad discretion to distribute a
marital estate equitably according to the circumstances of the case. In re Marriage of Bee,
2002 MT 49, ¶ 34, 309 Mont. 34, ¶ 34, 43 P.3d 903, ¶ 34 (citation omitted). Absent clearly
erroneous findings, we will affirm a trial court’s property distribution unless the court abused
its discretion. Marriage of Pospisil, ¶ 19 (citation omitted).
DISCUSSION
¶17 1. Did the District Court abuse its discretion in failing to award Kevin’s bonus and
profit-sharing award to Kimberly when he disclosed them only two business days before
trial?
¶18 Kimberly argues that the presumption contained in § 40-4-253(4), MCA, required the
District Court to penalize Kevin by awarding his late-disclosed assets to her. Her argument
is without merit.
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¶19 Section 40-4-253(4), MCA, provides, in pertinent part, that a party’s failure to
disclose an asset on his or her final disclosure declaration is presumed to be grounds for the
court to award the undisclosed asset to the other party separate from the equitable division
of the marital estate. Thus, it is undisputed that the statute clearly authorizes a court to
award undisclosed assets to the opposing party.
¶20 The statute only creates a presumption, however. Section 26-1-601, MCA, sets forth
a list of conclusive presumptions, including “any other presumption, which, by statute, is
expressly made conclusive,” while § 26-1-602, MCA, provides that all other presumptions
are disputable and may be controverted by other evidence. Section 40-4-253(4), MCA, on
which Kimberly relies, does not state that the presumption therein is conclusive.
Consequently, the presumption at issue is disputable.
¶21 Kevin testified about why he was late in disclosing the account. Kimberly argues
that Kevin’s explanation of the late disclosure is insufficient to overcome the presumption
in § 40-4-253(4), MCA. As the finder of fact, however, it was within the District Court’s
province to determine Kevin’s credibility. In re Marriage of Nies & Cooper, 2003 MT 100,
¶ 18, 315 Mont. 260, ¶ 18, 68 P.3d 697, ¶ 18 (citation omitted); Albrecht v. Albrecht, 2002
MT 227, ¶ 47, 311 Mont. 412, ¶ 47, 56 P.3d 339, ¶ 47 (citations omitted). The trial court
apparently accepted Kevin’s explanation.
¶22 We conclude the District Court did not abuse its discretion by failing to award the
profit-sharing and bonus account to Kimberly.
¶23 2. Did the District Court abuse its discretion in failing to award Kevin’s interest in
the ESOP to Kimberly?
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¶24 Kimberly asserts that the District Court abused its discretion by failing to award
Kevin’s interest in the ESOP to her because Kevin agreed to allow her to have it. Even
assuming arguendo that Kimberly properly characterizes Kevin’s testimony, Kimberly has
failed to cite any authority to support her position. Rule 23(a)(4), M.R.App.P., requires an
appellant to cite to authorities in support of the arguments raised. Moreover, we have
repeatedly held that absent such authorities, we will not consider the issue. See, e.g., In re
Marriage of Clark, 2003 MT 168, ¶ 25, 316 Mont. 327, ¶ 25, 71 P.3d 1228, ¶ 25 (citation
omitted). Consequently, we decline to address this argument.
¶25 3. Did the District Court improperly determine the amount and distribution of
Kimberly’s pretrial expenditures of home sale proceeds?
¶26 Kimberly sets forth two arguments regarding the trial court’s determinations relating
to the home sale proceeds she spent before the court awarded her temporary maintenance in
September of 2001. First, Kimberly argues that the trial court abused its discretion when it
awarded her “funds that did not exist” because she had spent them on reasonable living
expenses. Second, Kimberly contends that the trial court erred in determining the pretrial
expenditures were $43,958. We address her arguments in reverse order.
¶27 Kimberly claims the trial court erred in its calculation of the amount of home sale
proceeds she spent. She states she spent $35,325.
¶28 At trial, Kevin testified that Kimberly had spent $34,958. Kimberly testified she had
spent approximately $35,000. No other evidence was presented. The trial court found
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Kimberly had spent $43,958, which we observe is the same as Kevin’s figure except that the
first two digits are inverted.
¶29 The first prong of our standard of review of a trial court’s finding is whether it is
clearly supported by substantial evidence. See Marriage of Steinbeisser, ¶ 17. Nothing in
the record supports a finding that Kimberly spent $43,958 of the home sale proceeds.
Consequently, the finding is clearly erroneous.
¶30 Kevin asserts, however, that Kimberly did not raise this matter in the District Court.
Therefore, according to Kevin, it is not properly before us. He relies on Siefke v. Siefke,
2000 MT 281, 302 Mont. 167, 13 P.3d 937.
¶31 This Court generally will not address an issue raised for the first time on appeal
because “[a] district court cannot be placed in error for something which it never had the
opportunity to decide.” Siefke, ¶ 25. The procedural facts in Siefke render it otherwise
readily distinguishable from the present case, however. There, the wife failed to object
during a hearing to the husband’s evidence regarding the calculation of his child support, and
the trial court made clear that it intended to consider the evidence presented. On appeal, the
wife attempted to challenge the evidence and its sufficiency. Siefke, ¶ 24. We refused to
consider the issue raised for the first time on appeal. Siefke, ¶ 25.
¶32 Here, the miscalculation Kimberly raises could not have been objected to in the
District Court because both she and Kevin presented evidence that her expenditures were
around $35,000. Kimberly simply could not have known that the court would miscalculate
or misstate the amount.
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¶33 Kimberly also argues that the District Court should not have included any pretrial
expenditures as part of her share of the marital estate because she used the home sale
proceeds for her reasonable living expenses. She cites to no authority for this argument,
however. As stated above, Rule 23(a)(4), M.R.App.P., requires an appellant to cite to
authorities in support of the arguments raised, and we will not consider an issue briefed
without such citations. See Marriage of Clark, ¶ 25. Consequently, we decline to address
this argument.
¶34 We conclude the District Court clearly erred when it found that Kimberly’s pretrial
expenditures of the home sale proceeds were $43,958. For the reasons discussed below,
however, we hold this does not constitute reversible error.
¶35 4. Is the District Court’s distribution of the marital estate inequitable?
¶36 Kimberly next argues that if this Court decides the previous issue in her favor, her
percentage of the marital estate will be reduced. Therefore, she contends she is entitled to
reconsideration of the overall division of property. We disagree.
¶37 As discussed above, the District Court erroneously overstated Kimberly’s pretrial
expenditures as $43,958. That error also affected the District Court’s valuation of the home
sale account and, ultimately, Kimberly’s share of the marital assets.
¶38 As valued and distributed by the District Court, Kimberly received 49.185% of the
total marital estate and Kevin received 50.815%. Had the District Court attributed $34,958
in pretrial expenditures to Kimberly and made a corresponding reduction in the value of the
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home sale account and the marital estate, Kimberly would have received $209,694, or
48.135% of the marital estate, a decrease of 1.050%.
¶39 Section 40-4-202 requires the district court to make an equitable distribution, but
it does not necessarily require equal distribution. In re Marriage of Smith, 2003 MT 63, ¶
13, 314 Mont. 421, ¶ 13, 67 P.3d 199, ¶ 13 (citations omitted). We recently held that a 1/6
of 1% shortage to one party was insufficient to result in a conclusion that the property
distribution was “unequal,” even in light of the parties’ agreement to an “equal distribution.”
In re Marriage of Hochhalter, 2001 MT 268, ¶¶ 37-38, 307 Mont. 261, ¶¶ 37-38, 37 P.3d
665, ¶¶ 37-38.
¶40 In the present case, and notwithstanding the court’s erroneous finding, we must
conclude that the property distribution remains, in the District Court’s words, “fair and
equitable.” From the latter phraseology, it is clear that the District Court intended an
equitable–not necessarily equal–distribution. The court’s intent is even more clear, however,
regarding distribution of the home sale proceeds account. The District Court stated in that
regard that “the balance of funds from the proceeds of the sale of the home will be equally
divided between the parties.” The court accomplished this equal division of the balance by
awarding $41,817 to Kimberly and $41,818 to Kevin. The District Court then stated that
“[t]he monies that were paid to Kimberly from those proceeds [that is, her expenditures] are
included in the distribution to her.” Thus, whether Kimberly’s expenditures were $34,958
or $43,958, the court intended to increase the value of the account–and the marital assets–in
that amount and distribute it to Kimberly as part of her fair and equitable allocation.
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¶41 On this record, we hold that the property distribution is equitable.
¶42 Affirmed.
/S/ KARLA M. GRAY
We concur:
/S/ JIM REGNIER
/S/ JOHN WARNER
/S/ PATRICIA COTTER
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Justice Jim Rice dissenting.
¶43 I dissent from the Court’s resolution of Issues 3 and 4.
¶44 The Court declines to address the merits of Kimberly’s contention that the District
Court erred by including her pretrial expenditures from home sale proceeds within her share
of the marital estate on the ground that she “cites to no authority for this argument.” ¶ 33.
However, specific authority is not necessarily existent for every issue which may arise during
the course of a district court’s distribution of marital property, which the law requires to be
equitable. Here, Kimberly argues that the District Court abused its discretion in making the
property distribution and cites Marriage of Steinbeisser, 2002 MT 309, 313 Mont. 74, 60
P.3d 441, in support of her argument. I conclude therefrom that Kimberly has offered
sufficient authority and would reach the merits of the issue. Further, I conclude that the
District Court indeed abused its discretion.
¶45 Following their separation, Kevin paid $1,500 per month for Kimberly’s living
expenses until sale of the parties’ home in October 2000, when Kevin stopped paying
maintenance and paid only child support (Finding No.18). About a year later, the court,
based upon Kevin’s annual income of $132,000 and Kimberly’s imputed annual income of
$10,980, required that Kevin pay temporary maintenance in the amount of $1,675 per month.
However, for that intervening year, Kimberly had no choice but to withdraw funds from the
sale proceeds to support herself. Further, the District Court, in its final order, noted that its
earlier orders had failed “to allow for any daycare expenses for the children” during this
time, causing an additional expense to Kimberly of $300 per month (Finding No. 11).
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¶46 Kevin argues that Kimberly’s withdrawals were used for other purposes, citing
Kimberly’s testimony that “some” of these expenditures were for living expenses. However,
Kevin mischaracterizes Kimberly’s testimony. In response to a question about distribution
of the proceeds, Kimberly testified that she had used “some”–in other words, less than the
total sale proceeds–for living expenses. She did not testify that she had used only “some”
of the withdrawals for living expenses. Under additional questioning, this point was
clarified:
[Counsel]: You testified that you used some of those funds for your own
living expenses; is that correct?
[Kimberly]: I did.
[Counsel]: Is that how the balance went from [$118,000] to the current
balance?
[Kimberly]: Yes.
Thus, the accurate conclusion to be drawn from Kimberly’s testimony is that all of the
withdrawals were for living expenses, including the daycare expenses which the court
admittedly failed to consider, during the year that she was not receiving maintenance from
Kevin.
¶47 Although the District Court noted that Kimberly made the withdrawals from the
account, and then included those withdrawals within her share of the property distribution,
it failed to acknowledge that the withdrawals were expended for living expenses necessitated
by Kevin’s failure to pay maintenance and the court’s earlier failure to consider and provide
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for the children’s daycare expenses (Finding No. 25). This failure was an abuse of
discretion.
¶48 This result of this error was to “award” $35,300 to Kimberly which she had
previously expended for her and her children’s living expenses. This error, combined with
the nearly $9,000 error which the Court recognizes in ¶ 34, is equivalent to 10 percent of the
total marital estate, a significant impact. Therefore, I would reverse on issues 3 and 4 and
remand for reconsideration of the estate distribution after correction of these errors.
/S/ JIM RICE
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In Re the Marriage of Gerhart
Court: Montana Supreme Court
Date filed: 2003-10-23
Citations: 2003 MT 292, 318 Mont. 94
Copy CitationsCombined Opinion