No. 80-431
IN THE SUPREME COURT OF THE STATE OF MONTANA
1981
IN RE THE MARRIAGE OF
.
SONYALEA S GILBERT,
Petitioner and Respondent,
VS .
GEORGE RICHARD GILBERT,
Respondent and Appellant.
Appeal from: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone
Honorable Diane G. Barz, Judge presiding.
Counsel of Record:
For Appellant:
Berger, Sinclair and Nelson, Billings, Montana
Arnold Berger argued, Billings, Montana
For Respondent:
Jones Law Firm, Billings, Montana
Blair Jones argued, Billings, Montana
Submitted: March 27, 1981
Decided: May 13, 1981
Filed: MAY 13 1981
I/ n
Y Y
Clerk
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
Richard Gilbert, a party to a marital dissolution,
appeals from the order of the Thirteenth Judicial District
Court, Yellowstone County, equally distributing the Gilbert's
marital estate. We affirm.
Richard raises these issues:
1. Did the District Court err in awarding one-half of
the marital assets to each party without regard to the
present aftertax value thereof?
2. Does the lump sum payment schedule exceed Richard's
ability to pay?
3. Did the Court err in characterizing monthly payments
to Sonyalea, pending appeal, as maintenance rather than as a
credit toward the property division?
4. Did the Court err in failing to distribute to
Richard his insurance policy?
5. Did the Court err in determining the values of
certain personal property?
Richard and Sonyalea Gilbert were married in 1953, when
neither party had significant assets. During the early
years of the marriage, Sonyalea worked while Richard earned
his college degree. Since his graduation Richard has worked
as an executive for Continental Oil Company (Conoco).
Sonyalea has contributed to the marriage financially, and as
a homemaker and mother to the couple's three children, now
adults.
Sonyalea filed for dissolution of the marriage on
January 25, 1979. The District Court granted dissolution on
July 17, 1979, and entered findings of fact, conclusions of
law and order distributing the marital estate on October 3,
1980. Richard's salaries on the above dates were in excess
of $46,000, $54,000 and $62,000, respectively.
The major assets of the marital estate were Richard's
retirement programs with Conoco, consisting mainly of Conoco
stock, with trial date market value of $162,857.90. Of this
amount, approximately $20,000 is Richard's contribution, the
balance being company contributions and earnings. Only the
employee contribution is nontaxable, the balance being
taxable at ordinary rates when distributed. Richard, now 47
years old, can gain access to the bulk of funds only by
quitting his employment outright or by retiring, presumably
18 years hence.
The Court found, using market value of the retirement
fund assets, a net marital estate of $214,900.73. Richard
introduced evidence showing a net estate, after accounting
for tax consequences, relating to an immediate liquidation
of the retirement plans, of $114,467.63. Richard appeals on
the ground that the award of half of the former amount,
$107,450, to Sonyalea leaves him with a settlement portion
of only $7,017 based on his calculated valuation after
taxes.
Our scope of review over the District Court's property
distribution scheme was recently restated as follows:
"A District Court has far-reaching discretion
in resolving property divisions, and its
judgment will not be altered unless a clear abuse
of discretion is shown. (Citations omitted.) The
test for reviewing the District Court's discretion
is: Did the District Court in the exercise of
its discretion act arbitrarily without employment
of conscientious judgment, or exceed the bounds
of reason in view of all circumstances?" (Citations
omitted.) In Re Marriage of Aanenson (1979), -
Mont. , 598 P.2d 1120, 1123, 36 St.Rep. 1525,
1528.
We have ordered the District Court to reconsider its
property division if the court was clearly unadvised of the
current value of the parties' assets or if it ordered a sub-
stantially inequitable division of assets. In Re Marriage
of Brown (1978), - Mont. , 587 P.2d 361, 35 St-Rep.
1733; Kruse v. Kruse (1978), Mont . , 586 P.2d 294,
35 St.Rep. 1502.
Richard Gilbert argues the District Court, in finding
the market value of the retirement plans, ignored the actual
current value of the marital estate, and as a result in-
equitably distributed the assets. He submits the District
Court's failure to consider the income tax consequences
attendant to a present sale of the retirement fund assets
constitutes an abuse of discretion. We find, however, that
the property distribution ordered by the District Court
includes no presently taxable events and triggers no tax
liability. The District Court therefore did not abuse its
discretion by refusing to consider the theoretical income
tax consequences of a present liquidation which is neither
necessary nor probable, but merely conjectural. Weinberg
v. Weinberg (1967), 67 Cal.2d 557, 432 P.2d 709, 63 Cal.Rptr 13.
Undoubtedly the most effective means of eliminating
adverse tax consequences is through settlements amicably
negotiated between the parties. In many instances, property
distributions may be structured to include tax avoidance
provisions whereby the parties mutually benefit from the tax
savings realized as a result thereof. We tacitly approved
such a property settlement format in Washington v. Washington
(1973), 162 Mont. 349, 512 P.2d 1300. Cooperation and
planning can serve to ease the financial onus arising from
tax consequences in these circumstances.
The court ordered a lump sum payment of $74,408.86 to
Sonyalea in satisfaction of her interest in the marital
estate, payable $25,000 immediately down, plus monthly
installments of $1,500, with 10 percent interest on the
unpaid balances. Richard argues the District Court erred in
imposing this payment schedule, which places upon him monthly
obligations in excess of income available to fulfill those
obligations. In Re Marriage of Jorgenson (1979), - Mont.
,
- 590 P.2d 606, 612, 36 St.Rep. 233, 240.
Richard presented evidence establishing his monthly
gross income at $5,166, his net take home pay at $2,736, and
his monthly expenses at $1,309--leaving $1,427 available for
monthly installments. He submits the awarded monthly
installment alone exceeds his ability to pay, with debt
service on the downpayment further aggravating the burden.
Nevertheless, Richard's monthly deductions include large tax
withholdings, a substantial amount of which are refunded
each year, and a $310 monthly contribution to his thrift
plan. Given the availability of these funds, Richard does
have the monthly wherewithal to meet the payment schedule.
The District Court did not abuse its discretion in this
regard.
The District Court granted Richard's application for
stay of execution of judgment, conditioned on a $1,300
monthly maintenance payment to Sonyalea. Richard insists
that because Sonyalea is fully capable of working, maintenance
is not proper here; and that justice and equity demand the
payments be credited against the property settlement.
However, a District Court may grant a stay under such conditions
as it deems proper. Rule 7, M.R.App.Civ.P. Sonyalea is
responsible for all personal expenses, including monthly
condominium payments, yet access to the immediately avail-
able liquid assets provided for by the property distribution
has been delayed due to this appeal. The Court acted within
its discretion in ensuring her livelihood during the interim.
The District Court included a $2,025 life insurance
policy in its calculation of the net marital estate, yet did
not order the policy allocated to either party. Sonyalea's
award includes one-half of the value of this policy. We
presume the policy correspondingly was not awarded to Richard
due purely to oversight. The matter can be corrected by
allowing the District Court to order the policy distributed
to Richard. In Re Marriage of Caprice (1978), Mont .
, 585 P.2d 641, 35 St-Rep. 1460.
Finally, the parties encountered considerable difficulties
in evaluating personal property. Richard eventually submitted
detailed statements itemizing the various items of property,
setting forth appraisals, his valuations, and extending
give-or-take offers at what he considered fair valuations.
The District Court, for the most part, adopted the give-or-
take valuations, differing from Richard's total by only a
nominal amount. Richard submits that, given Sonyalea's
attempts to consistently overvalue assets likely to be
awarded to Richard while undervaluing those likely to be
awarded to her, the District Court should have ruled the
give-or-take proposal a good faith valuation and accepted it
in toto.
--
The District Court obviously recognized and appreciated
the give-or-take proposal as a good faith valuation, as
evidenced by its substantial adoption of the give-or-take
figures. We are reluctant, however, to limit the ~istrict
Court's far-reaching discretion in property disposition
matters by requiring any good faith give-or-take offer to
be substituted for that discretion. The District Court
committed no error in determining the value of personal
property.
- 6-
Affirmed, w i t h i n s t r u c t i o n s t o t h e D i s t r i c t Court t o
o r d e r t h e i n s u r a n c e p o l i c y awarded t o R i c h a r d . Costs t o
t h e wife.
W e concur: