April 28 2009
DA 08-0333
IN THE SUPREME COURT OF THE STATE OF MONTANA
2009 MT 144
VERNON A. ANDERSON,
Plaintiff and Appellant,
v.
NANCY LEE WOODWARD,
Defendant and Appellee.
APPEAL FROM: District Court of the Seventeenth Judicial District,
In and For the County of Valley, Cause No. DV-07-74
Honorable John C. McKeon, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Peter L. Helland, Attorney at Law, Glasgow, Montana
For Appellee:
Nancy Lee Woodward, self-represented litigant, Visalia, California
Submitted on Briefs: February 25, 2009
Decided: April 28, 2009
Filed:
__________________________________________
Clerk
Justice Brian Morris delivered the Opinion of the Court.
¶1 Vernon A. Anderson (Anderson) appeals from a partition order of the Seventeenth
Judicial District Court, Valley County, that settled interests in real property between
Anderson and Nancy Lee Woodward (Woodward). The order determined that Anderson had
gifted certain real property to Woodward. We affirm.
¶2 We review the following issue on appeal:
¶3 Did the District Court correctly determine that Anderson had gifted to Woodward
real property located at 636 Mahon?
FACTUAL AND PROCEDURAL BACKGROUND
¶4 Anderson filed suit against Woodward seeking partition of two separate real
properties that the parties’ had purchased during their eight-year relationship. The
relationship began in January of 1999 and ended in February of 2007. The couple never
married.
¶5 Anderson and Woodward owned and lived in separate residences in Ridgecrest,
California when their relationship began. Anderson moved into Woodward’s California
residence approximately six months after the relationship began. Anderson inherited his
parents’ home located at 511 Francis in Glasgow, Montana, when his father died in August
of 2000. Anderson and Woodward began living half of the year at Anderson’s Montana
home and the other half of the year at Woodward’s California home.
¶6 Anderson and Woodward acquired as joint tenants a property adjacent to 511 Francis
in August of 2004. Anderson and Woodward paid for 513 Francis with $10,000 borrowed
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from Anderson’s home equity line of credit on the 511 Francis property. Anderson and
Woodward agreed at the time of the purchase of 513 Francis that Woodward would clean up
the property and pay for improvements to make it more attractive as a rental. Woodward
also would pay $50 per month towards Anderson’s loan until they were able to find tenants
for the property. Anderson and Woodward planned to use the rental proceeds to pay off
Anderson’s loan. Woodward agreed to pay the real estate taxes. The agreement did not
include payment for Woodward’s labor in making improvements to the property.
¶7 Anderson and Woodward also acquired a property located at 636 Mahon in Glasgow
in June of 2005. The deed listed the couple as joint tenants. Anderson paid $6,500 in cash
for the property. The property is located within a block of the Francis Street properties and
includes a house, shed, and garage. The house is uninhabitable. The property’s current
value is $5,300. The parties referred to the property as “the barn.”
¶8 Anderson and Woodward separated in February of 2007. Anderson filed an action for
partition in October of 2007. Anderson sought partition of both 513 Francis and 636 Mahon.
The District Court conducted a bench trial on May 29, 2008. Anderson and Woodward each
presented witnesses and other evidence. Both parties testified. The District Court
considered detailed evidence of the relative contributions that Anderson and Woodward had
made to 513 Francis, including acquisition costs, tax payments, and rental proceeds. The
District Court distributed the 513 Francis property to Anderson and ordered him to pay
Woodward $5,400 in recognition of Woodward’s contributions to that property.
¶9 The District Court also considered detailed evidence regarding 636 Mahon.
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Woodward testified that Anderson had bought the property as a gift for her. She testified
that she had performed virtually all of the work on the property. Anderson attempted to
rebut Woodward’s testimony by cross-examining Woodward on her earlier statement at the
pretrial conference that she “assumed [636 Mahon] was a gift.” Woodward responded that
she had meant that she assumed that Anderson had told the truth when he told her that he
bought the property for her as a gift.
¶10 Anderson testified that he had bought the property for Woodward “to keep her busy.”
Anderson denied buying 636 Mahon as a gift for Woodward, although he admitted that he
likely would have given Woodward the property as a gift if the couple had remained
together. Anderson conceded that Woodward had paid property taxes for 636 Mahon until
the couple separated. Anderson also conceded that Woodward had requested the tax bills for
the property even after the couple’s relationship had ended.
¶11 The District Court admitted into evidence a series of e-mail correspondence between
Anderson and Woodward from May of 2007. The e-mails included Anderson’s statements
that “I bought the barn for you,” and “I thought I was being nice by letting you have the
barn.” The District Court determined that Woodward was the sole owner of 636 Mahon
based on the fact that Anderson had gifted the property to her. The District Court ordered
Anderson either to distribute the 636 Mahon property to Woodward as her sole property or
pay Woodward $5,300 for the property within 30 days. Anderson appeals the District
Court’s partition of 636 Mahon.
STANDARD OF REVIEW
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¶12 We review a district court’s findings of fact in an equitable action, including a
partition action, to determine whether the findings are clearly erroneous. Flood v.
Kalinyaprak, 2004 MT 15, ¶ 14, 319 Mont. 280, 84 P.3d 27; In re Estate of Bradshaw, 2001
MT 92, ¶ 11, 305 Mont. 178, 24 P.3d 211; M. R. Civ. P. 52(a). A finding is clearly
erroneous if it is not supported by substantial credible evidence, if the trial court
misapprehended the effect of the evidence, or if our review of the record convinces us that a
mistake has been committed. Talon v. State Dept. of Labor & Industry, 2008 MT 376, ¶ 20,
346 Mont. 499, 198 P.3d 213. We view the evidence in the light most favorable to the
prevailing party. In re Bradshaw, ¶ 11. The trial court determines the credibility of
witnesses and the weight assigned to their respective testimony. In re Bradshaw, ¶ 11.
¶13 We review a district court’s conclusions of law to determine whether those
conclusions are correct. Harding v. Savoy, 2004 MT 280, ¶ 20, 323 Mont. 261, 100 P.3d
976. We review a district court’s evidentiary rulings for an abuse of discretion. State v.
Stearns, 2008 MT 356, ¶ 13, 346 Mont. 348, 195 P.3d 794. A district court abuses its
discretion when it acts arbitrarily without conscientious judgment or exceeds the bounds of
reason. Stearns, ¶ 13.
DISCUSSION
¶14 Did the District Court correctly determine that Anderson had gifted to Woodward
real property located at 636 Mahon?
¶15 Anderson argues that the evidence does not support the District Court’s determination
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that Anderson gifted 636 Mahon to Woodward. Anderson alleges that the trial record
contains no evidence of a written transfer of 636 Mahon from Anderson to Woodward.
Anderson points to § 70-20-101, MCA, to support his contention that Montana law requires
evidence of a written transfer for any transfer of real property by gift or otherwise. Anderson
also argues that the District Court’s findings and conclusions contradict Montana’s general
law on gifts because the trial record is devoid of any evidence that Anderson had delivered
636 Mahon to Woodward as a gift.
¶16 The District Court correctly stated that partition actions sound in equity. See Flood,
¶¶ 17, 21; § 70-29-209(2), MCA. The district court has “great flexibility” in a partition
action in fashioning appropriate relief for the parties. Flood, ¶ 17. The district court has the
power to make compensatory adjustments between the respective parties according to the
ordinary principles of equity. Flood, ¶ 21 (citing § 70-29-209(2), MCA). Partition actions
should be fashioned to cause the least degree of harm to the cotenants and to confer no unfair
advantage on any one cotenant. Flood, ¶ 21.
¶17 A rebuttable presumption exists that joint tenants own equal shares of the property.
See Flood, ¶ 28; Rausch v. Hogan, 2001 MT 123, ¶ 24, 305 Mont. 382, 28 P.3d 460; Matter
of Estate of Dern Family Trust, 279 Mont. 138, 151-52, 928 P.2d 123, 131 (1997). When a
party presents evidence of unequal contribution to an asset, however, the presumption shifts.
Evidence of unequal contribution leads to the presumption that the cotenants own the asset
in proportion to their contribution. Flood, ¶¶ 23, 28; Dern Family Trust, 279 Mont. at 152-
53, 928 P.2d at 132-33. The presumption where one contributes unequally to the purchase
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price does not necessarily apply “where the relationship between the parties indicates that
one might have intended to make a gift to the other.” Flood, ¶ 23 (quoting Dern Family
Trust, 279 Mont. at 152, 928 P.2d at 132).
¶18 The party who seeks to establish that the parties intended a division disproportionate
to their contributions has the burden to demonstrate this intent. Flood, ¶¶ 23, 28; Dern
Family Trust, 279 Mont. at 151-53, 928 P.2d at 131-33. “[A]ll relevant evidence of the
parties’ intent is admissible to sustain or rebut the presumptions.” Flood, ¶ 23. The party
may establish proof of a gift by parol evidence, such as conduct over the course of time, the
relationship between the two parties, the sharing of expenses, labor, or any other admissible
means. Flood, ¶¶ 23-28; Dern Family Trust, 279 Mont. at 151-53, 928 P.2d at 131-33.
¶19 The District Court allowed each party to introduce extensive evidence of the parties’
intent as to 636 Mahon. The District Court concluded that Anderson was the sole owner of
636 Mahon. The District Court determined that Anderson had “overcome the presumption
of joint ownership by proving a gift of this property.” The District Court determined that
Anderson’s testimony regarding 636 Mahon was not credible “in light of his
acknowledgment in Exhibit 16 that he bought [636 Mahon] for [Woodward].”
¶20 Exhibit 16 consisted of a series of e-mail correspondences between Anderson and
Woodward from May of 2007. The e-mails included discussions and arguments between the
parties about how they should divide the various properties. The e-mails also contained
personal accusations and recriminations. In the exchange emphasized by the District Court,
Anderson stated to Woodward that he had bought the 513 Francis property and that he had
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put Woodward’s name on the title because he thought that they would be together forever
and that she should have the house “if he went first.” Anderson then declared “I bought the
barn for you.”
¶21 Anderson argues that he sought to admit Exhibit 16 into evidence only to provide a
more complete picture of the e-mail exchange after the District Court had admitted
Woodward’s Exhibit A over Anderson’s objection. Exhibit A included selected e-mails
from the May 2007 e-mail correspondence. Woodward testified that she sought to admit the
e-mails contained in Exhibit A in order to prove that Anderson had gifted 636 Mahon to her.
She testified that she had included only a portion of the e-mails because of the ugly personal
nature of the rest of the e-mails.
¶22 Exhibit A included Anderson’s statements that “I bought the barn for you,” and “I
thought I was being nice by letting you have the barn.” Anderson argued that the e-mails
were inadmissible as they constituted evidence of compromise made in anticipation of trial.
Anderson contended that his statement that “I bought 636 Mahon for you” was “not the kind
of statement that should be binding the parties.”
¶23 Anderson does not mention that he testified about the statement he now disputes
before Woodward sought to admit the statement into evidence. In Anderson’s direct
testimony, his counsel noted that “there’s been some correspondence during the negotiation
between you and Miss Woodward, and I believe some of that correspondence may state the
words that you bought [636 Mahon] for her.” Anderson’s counsel then asked, “[b]ut you
didn’t buy it for her to be a gift to her?” Anderson responded that he had not bought the
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property as a gift for Woodward, but “I did buy [636 Mahon] for her to keep her busy.”
¶24 A district court possesses “broad discretion” in its determination of what evidence is
relevant and admissible. State v. White, 2009 MT 26, ¶ 7, 349 Mont. 109, 201 P.3d 808.
The District Court in this partition action further possessed “great flexibility” in fashioning
equitable relief for the parties. Flood, ¶ 17. The e-mails between Anderson and Woodward
constituted “relevant evidence” admissible to sustain or rebut the presumptions of ownership
of joint tenants of property. Flood, ¶ 23. The e-mails were evidence that the District Court
properly could consider in determining whether the relationship between the parties
indicated that Anderson “might have intended to make a gift” to Woodward. Flood, ¶ 23
(quoting Dern Family Trust, 279 Mont. at 152, 928 P.2d at 132). We will not fault the
District Court for using its “broad discretion” and “great flexibility” to admit into evidence
statements by Anderson to which Anderson himself earlier had testified. White, ¶ 7; Flood, ¶
23.
¶25 The District Court considered extensive evidence and testimony from Woodward and
Anderson regarding the parties’ relationship, their conduct over the years, their labor toward
improving the various properties, payment of taxes, sharing of expenses, and the parties’
e-mail correspondence after the separation and before Anderson filed the partition action.
See Flood, ¶¶ 23-28; Dern Family Trust, 279 Mont. at 151-53, 928 P.2d at 131-33. The
District Court determined Woodward’s version of events to be more credible than
Anderson’s version. The court further determined that Anderson had intended to gift the
property to Woodward and that delivery of the property was complete before the parties’
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separation when Woodward accepted responsibility for the property and commenced
payment of taxes on the property. The court thus concluded that Woodward had met her
burden of rebutting the presumption that the couple held the property equally as joint tenants.
¶26 The District Court properly considered “all relevant evidence” in considering whether
Anderson had gifted 636 Mahon to Woodward. Flood, ¶ 23. We review this evidence in the
light most favorable to Woodward. In re Bradshaw, ¶ 11. We will not disturb the District
Court’s determination that Anderson’s testimony lacked credibility. In re Bradshaw, ¶ 11.
We are convinced, viewing the evidence in this light, that substantial credible evidence
supports the District Court’s partition of 636 Mahon. Talon, ¶ 20. We do not believe that
the District Court misapprehended the effect of the evidence. Talon, ¶ 20. The District
Court properly exercised its power to fashion appropriate relief for Anderson and Woodward
according to the ordinary principles of equity. Flood, ¶ 21; § 70-29-209(2), MCA.
¶27 Affirmed.
/S/ BRIAN MORRIS
We Concur:
/S/ MIKE McGRATH
/S/ PATRICIA COTTER
/S/ JOHN WARNER
/S/ JIM RICE
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