Marriage of Lippert v. Lippert

No. 80-173
IN THE SUPREME COURT OF THE STATE OF MONTANA
i

1981

IN RE THE MARRIAGE OF
KZNNETH LIPPERT,
Petitioner and Appellant,
-vs-
JEAN S. LIPPERT,

Respondent and Respondent.

Appeal from: District Court of the Thirteenth Judicial District,
In and for the County of Big Horn, The Honorable
Diane G. Barz, Judge presiding.

Counsel of Record:
For Appellant:
Overfelt Law Firm, Billings, Montana
John S. Forsythe, Forsyth, Montana

For Respondent :
Anderson, Edwards & Molloy, Billings, Montana

Submitted on Briefs: February 19, 1981
Decided: April 3 0 , 1981

Filed: APR 3 0 19W
M r . J u s t i c e Frank B. M o r r i s o n , J r . , d e l i v e r e d t h e Opinion o f
t h e Court.

his i s an a p p e a l from a f i n a l judgment e n t e r e d i n t h e

~ i s t r i c C o u r t of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , Big Horn
t

County, March 3, 1980. N i s s u e i s t a k e n t o t h e g r a n t i n g of
o

t h e d e c r e e of d i s s o l u t i o n o r t o r e s p o n d e n t ' s c u s t o d y of

t h e two c h i l d r e n . A p p e l l a n t c h a l l e n g e s t h e d i s p o s i t i o n of

the marital estate.

The p a r t i e s w e r e m a r r i e d J u n e 7, 1968. Appellant f i l e d

h i s p e t i t i o n s e e k i n g d i s s o l u t i o n of t h e m a r r i a g e i n A p r i l of

1978. T r i a l w i t h o u t j u r y was had J u n e 1 2 , 1979. Discovery

was reopened upon r e s p o n d e n t ' s motion on J u l y 9, 1979, and

c l o s e d December 6 , 1979. Decree of d i s s o l u t i o n was g r a n t e d

on August 28, 1979.

From t h e b e g i n n i n g of t h e m a r r i a g e u n t i l 1977, a p p e l l a n t

was employed by L i p p e r t B r i c k C o n t r a c t i n g Co., Inc., Belleville,

Illinois. The r e s p o n d e n t , a r e g i s t e r e d n u r s e b e f o r e t h e

m a r r i a g e , worked p a r t - t i m e o u t s i d e t h e home and was p r i n c i p a l l y

r e s p o n s i b l e f o r s u p e r v i s i o n of t h e household and t h e c h i l d r e n ,

J e n n i f e r Lynn, a g e 11, and N i c o l e Lee, a g e 9.

The major a s s e t s a c q u i r e d d u r i n g t h e m a r r i a g e were t h e

f a m i l y home, w i t h a n e t e q u i t y of $90,000, and s t o c k o p t i o n s

i n L i p p e r t B r i c k worth $36,000. The house was p a r t i a l l y

p u r c h a s e d w i t h $34,000 r e c e i v e d by t h e a p p e l l a n t i n 1969 and

1971 from a f a m i l y t r u s t , and $31,000 of t h e s t o c k o p t i o n s

r e s u l t e d from g i f t s made by a p p e l l a n t ' s p a r e n t s d u r i n g t h e

marriage.

The p a r t i e s d e c i d e d t o l e a v e B e l l e v i l l e , I l l i n o i s , i n

1977. A p p e l l a n t moved t o Rosebud County, Montana, i n ~ p r i l

of 1977 w h i l e t h e r e s p o n d e n t remained i n I l l i n o i s t o p r e p a r e

t h e i r home f o r s a l e and t o a l l o w t h e c h i l d r e n t o f i n i s h t h e
remainder of t h e s c h o o l y e a r . The s t o c k o p t i o n s w e r e s o l d

i n May 1977 and t h e house i n December 1977.

The p l a n n e d c o n s t r u c t i o n b u s i n e s s w a s n o t s t a r t e d

immediately. I n i t i a l l y , a p p e l l a n t was h i r e d by t h e N o r t h e r n

Cheyenne T r i b e t o s u p e r v i s e t h e c o n s t r u c t i o n of t h r e e b u i l d i n g s .

The job l a s t e d one y e a r f o r which a p p e l l a n t was p a i d $30,000.

The b u s i n e s s v e n t u r e was s t a r t e d e a r l y i n 1978. Appellant

p u r c h a s e d c o n s t r u c t i o n equipment w i t h p a r t of t h e money

r e c e i v e d from t h e s a l e of t h e s t o c k o p t i o n s and t h e house.

F o l l o w i n g c o m p l e t i o n of t h e b u i l d i n g s i n A p r i l of 1978,

a p p e l l a n t began working f o r N o r t h e r n Cheyenne E r e c t o r s

I n c o r p o r a t e d (NCE) , a private construction firm. H e rented

some of h i s equipment t o NCE and l o a n e d money t o t h e s t r u g g l i n g

corporation. Although he e a r n e d $11,747.72 i n wages from

NCE and r e c e i v e d $13,399 i n r e n t a l income, the r e n t a l business

and t h e c o l l a t e r a l t r a n s a c t i o n s w i t h NCE proved t o be a

financial disaster. A t t r i a l a p p e l l a n t c l a i m e d he l o s t a l l

o f t h e money i n v e s t e d i n t h e r e n t a l b u s i n e s s . I n November

1978, a p p e l l a n t l e f t NCE. H e i s now a n i n s t r u c t o r a t D u l l

K n i f e Memorial C o l l e g e , e a r n i n g $17,000 p e r y e a r .

Throughout t h i s p e r i o d t h e r e s p o n d e n t h a s l i v e d i n

B e l l e v i l l e , I l l i n o i s , where s h e i s now employed e a r n i n g

a p p r o x i m a t e l y $12,000 p e r y e a r .

Appellant has challenged the D i s t r i c t Court's f i n d i n g s

r e g a r d i n g t h e (1) n e t worth of t h e m a r i t a l e s t a t e , (2)

l i q u i d a t e d stock options, (3) family t r u s t d i s t r i b u t i o n s ,

and ( 4 ) o p p o r t u n i t y f o r f u t u r e a c q u i s i t i o n of c a p i t a l a s s e t s

and income.

W f i n d t h e c h a l l e n g e t o t h e f i n d i n g o f n e t worth of
e

t h e p a r t i e s t o be determinative and, f o r reasons contained

i n t h e remainder of t h i s o p i n i o n , f e e 1 w e need n o t d i s c u s s

t h e o t h e r i s s u e s r a i s e d by t h e a p p e l l a n t .
 Appellant contends the D i s t r i c t Court f a i l e d t o determine

t h e n e t worth of t h e p a r t i e s a t o r n e a r t h e t i m e of t h e

t r i a l and t h a t f a i l u r e t o do s o was r e v e r s i b l e e r r o r . After

c o n s i d e r a t i o n of t h e unique c i r c u m s t a n c e s p r e s e n t e d by t h i s

c a s e , we a g r e e .

The D i s t r i c t C o u r t found t h e f o l l o w i n g :

"XVI. From A p r i l of 1977 u n t i l t r i a l of t h i s m a t t e r ,
p e t i t i o n e r t o o k , from t h e m a r i t a l e s t a t e of t h e p a r -
t i e s t o Montana, t h e f o l l o w i n g sums of money w i t h t h e
express purpose, a s p e t i t i o n e r advised respondent t o
i n v e s t i n h i s business:

"1. $26,000 was t a k e n by p e t i t i o n e r i n a p p r o x i m a t e l y
May of 1977; t h i s sum was t a k e n from t h e p r o c e e d s of
t h e consideration t o forego h i s stock option with
r e s p e c t t o L i p p e r t Brick, t h a t consideration being a
t o t a l of $36,000.00

" 2 . $10,000.00 i n November of 1977; t h i s sum was ob-
t a i n e d by p u t t i n g a second mortgage on t h e f a m i l y
home ;

" 3 . $60,000.00 i n December of 1977, s a i d sum b e i n g
o b t a i n e d from t h e p r o c e e d s of t h e s a l e of t h e f a m i l y
home.

" X V I I . The C o u r t f i n d s t h a t p e t i t i o n e r took t h e sum
of $96,000.00 from t h e m a r i t a l e s t a t e and b r o u g h t i t
t o Montana f o r t h e p u r p o s e , a s he a d v i s e d r e s p o n d e n t ,
of i n v e s t i n g i n b u s i n e s s .

"XX. The f o l l o w i n g amounts of money were l e f t w i t h
r e s p o n d e n t i n I l l i n o i s , w h i l e p e t i t i o n e r was t a k i n g
$96,000.00 of t h e m a r i t a l e s t a t e t o Montana t o i n v e s t
i n b u s i n e s s , a s he t o l d r e s p o n d e n t :

"1. $10,000.00 i n May of 1977, t h a t b e i n g t h e b a l a n c e
of t h e $36,000.00 p a i d by L i p p e r t B r i c k i n c o n s i d e r -
a t i o n f o r r e l i n q u i s h i n g t h e stock o p t i o n purchase r i g h t
i n p e t i t i o n e r with r e s p e c t t o Lippert Brick.

" 2 . $10,000.00 i n December of 1977, s a i d sum b e i n g t h e
b a l a n c e of t h e p r o c e e d s l e f t a f t e r a l l e x p e n s e s of s a l e
of t h e f a m i l y home, t o i n c l u d e mortgages and o t h e r n o t e s ,
and p e t i t i o n e r ' s t a k i n g of $60,000.00 of t h o s e p r o c e e d s
t o Montana t o , a s he t o l d r e s p o n d e n t , i n v e s t i n b u s i n e s s .

"XXXV. 3. T h a t r e s p o n d e n t s h a l l have, i n t h e form of
a judgment a g a i n s t p e t i t i o n e r , t h e sum of $48,000.00,
s a i d sum r e p r e s e n t i n g one-half of t h e $96,000.00 of
m a r i t a l a s s e t s t h a t p e t i t i o n e r has d i s s i p a t e d i n
Montana and i s u n a b l e t o a c c o u n t f o r , i n any way, s u c h
 l a c k of a b i l i t y t o a c c o u n t f o r s a i d $96,000.00 t h e
C o u r t f i n d s t o be i n c r e d i b l e and t h e C o u r t d o e s n o t
b e l i e v e t h e p e t i t i o n e r ' s s t a t e m e n t t h a t he c a n n o t a c -
c o u n t f o r s a i d money and t h e C o u r t i s n o t i m p r e s s e d o r
p e r s u a d e d by pe ti t i o n e r ' s s t a t e m e n t t h a t t h e s a i d
$96,000.00 h a s s i m p l y been poured i n t o bad b u s i n e s s
v e n t u r e s , which s t a t e m e n t s p e t i t i o n e r i s n o t a b l e t o
s u p p o r t by a n y t h i n g t h a t r e s e m b l e s c l e a r o r c o n v i n c i n g
evidence."

A p r o p e r d i s p o s i t i o n of m a r i t a l p r o p e r t y i n a d i s s o l u t i o n

p r o c e e d i n g r e q u i r e s a f i n d i n g of t h e n e t w o r t h of t h e p a r t i e s

a t o r n e a r t h e t i m e of t h e d i s s o l u t i o n . Hamilton v. Hamilton

(1980) - ,
Mont. - 607 P.2d 1 0 2 , 37 St.Rep. 247; V i v i a n v .

Vivian (1978), - ,
Mont. - 583 P.2d 1072, 35 St.Rep. 1359;

Kramer v . Kramer ( 1 9 7 8 ) , 177 Mont. 61, 580 P.2d 439; Downs

v . Downs ( 1 9 7 6 ) , 170 Mont. 150, 551 P.2d 1025. The b a s i c

r e a s o n f o r t h e r u l e i s o b v i o u s ; however, i t i s e q u a l l y

a p p a r e n t t h a t a p p l i c a t i o n of t h e r u l e i s d e p e n d e n t upon t h e

k i n d s of m a r i t a l a s s e t s under c o n s i d e r a t i o n . The t i m e f o r

p r o p e r v a l u a t i o n c a n n o t be t i e d t o any s i n g l e e v e n t i n t h e

d i s s o l u t i o n process. The f i l i n g of a p e t i t i o n , t r i a l of t h e

m a t t e r , o r even t h e g r a n t i n g of t h e d e c r e e of d i s s o l u t i o n do

n o t c o n t r o l t h e p r o p e r p o i n t of e v a l u a t i o n by t h e D i s t r i c t

Court.

The e x e r c i s e of d i s c r e t i o n by t h e D i s t r i c t C o u r t i s

n e c e s s a r y when d e t e r m i n i n g t h e worth of m a r i t a l a s s e t s which

f l u c t u a t e i n value. For example, t h e v a l u e of a p a r t i c u l a r

common s t o c k may change d r a s t i c a l l y d u r i n g t h e c o u r s e of a

d i s s o l u t i o n w h i l e t h e v a l u e of t h e f a m i l y home o r o t h e r

p e r s o n a l p r o p e r t y remains s t a b l e . Under s u c h c i r c u m s t a n c e s

s e l e c t i o n of a s i n g l e e v a l u a t i o n p o i n t f o r d e t e r m i n i n g n e t

worth of t h e p a r t i e s could c r e a t e an i n e q u i t a b l e d i s p o s i t i o n .

Turning t o t h e c a s e a t b a r , t h e r e c o r d b e f o r e u s unequiv-

o c a l l y demonstrates t h e D i s t r i c t Court considered a p p e l l a n t ' s

d e p a r t u r e from I l l i n o i s i n A p r i l 1977 a s t h e time f o r e v a l u a t i o n
of t h e m a r i t a l e s t a t e . The i m p l i c i t r e a s o n i n g used by t h e

~ i s t r i c C o u r t was m a n i f e s t l y based upon a presumption t h a t
t
a p p e l l a n t was u n t r u t h f u l a t t r i a l when he c l a i m e d t h e b u s i n e s s

was a d i s a s t e r , and he no l o n g e r had t h e money h e b r o u g h t t o

Montana. Although no c o n t r a r y e v i d e n c e w a s p r o f f e r e d by t h e

r e s p o n d e n t o r d i s c o v e r e d d u r i n g t h e six-month p e r i o d f o l l o w i n g

t r i a l , t h e D i s t r i c t C o u r t found t h e $96,000 was i n t h e

m a r i t a l e s t a t e and awarded t h e r e s p o n d e n t a judgment a g a i n s t

t h e a p p e l l a n t f o r $48,000. T h i s was done d e s p i t e t h e f a c t

t h a t t h e e v i d e n c e showed t h e p r o p e r t y had been l o s t i n bad

i n v e s t m e n t s and s i m p l y d i d n o t e x i s t . The D i s t r i c t C o u r t

abused i t s d i s c r e t i o n f o r t h r e e r e a s o n s .

F i r s t , the D i s t r i c t Court lacked s u f f i c i e n t evidence t o

support i t s finding. While t h e D i s t r i c t C o u r t was i n t h e

b e s t p o s i t i o n t o judge t h e candor o r h o n e s t y of t h e a p p e l l a n t ' s

t e s t i m o n y , t h e f i n d i n g s and c o n c l u s i o n s must s t i l l b e sup-

p o r t e d by e v i d e n c e and n o t merely l a c k of w i t n e s s c r e d i b i l i t y .

I f a p p e l l a n t h a s committed f r a u d upon t h e c o u r t , t h e c a s e

may be j u s t i f i a b l y reopened. P i l a t i v. P i l a t i (19791,

-Mont. -, 592 P.2d 1374, 36 St.Rep. 619.

Second, t h e D i s t r i c t C o u r t exceeded i t s a u t h o r i t y under

s e c t i o n 40-4-202, MCA, by awarding t h e r e s p o n d e n t p r o p e r t y

i n e x c e s s of t h e proven n e t worth of t h e e s t a t e . The s t a t u t e

mandates " [ t ] h e c o u r t s h a l l a l s o consider the contribution
o r d i s s i p a t i o n of v a l u e of t h e r e s p e c t i v e e s t a t e s .
..., 11

however, t h e D i s t r i c t C o u r t ' s power d o e s n o t e x t e n d beyond

the existent estate. I n o t h e r words t h e D i s t r i c t C o u r t may

never award more t h a n 100 p e r c e n t of t h e m a r i t a l e s t a t e .

T h i r d , t h e award i g n o r e s fundamental l e g a l p r i n c i p l e s

o f m a r i t a l s t a t u s ; s p o u s e s p o s s e s s mutual powers, o b l i g a t i o n s

and i n t e r e s t s which e n d u r e u n t i l l a w f u l l y m o d i f i e d o r
terminated. One of t h o s e powers i s t h e power t o f r e e l y

c o n t r a c t with o t h e r s regarding m a r i t a l property . Section

40-2-301, MCA. A p p e l l a n t may have used poor judgment i n h i s

b u s i n e s s t r a n s a c t i o n s r e g a r d i n g t h e e q u i t y of t h e f a m i l y

home and t h e s t o c k o p t i o n s ; however, h e l a w f u l l y p o s s e s s e d

t h a t power. The r e c o r d d o e s n o t i n d i c a t e t h e r e s p o n d e n t

a t t e m p t e d t o modify t h e a p p e l l a n t ' s r i g h t t o c o n t r o l and

d i s p o s e of t h e p r o p e r t y a s h e d i d o r t h a t s h e claimed b r e a c h

of f i d u c i a r y o b l i g a t i o n by t h e a p p e l l a n t .

I n summary, w e f i n d t h e D i s t r i c t C o u r t abused i t s

d i s c r e t i o n i n d e t e r m i n i n g t h e n e t worth of t h e p a r t i e s .

F u r t h e r , t h e i s s u e s r a i s e d by a p p e l l a n t r e g a r d i n g t h e s t o c k

o p t i o n s and f a m i l y t r u s t d i s t r i b u t i o n s a r e h y p o t h e t i c a l and

t h u s moot u n l e s s new e v i d e n c e c a n be produced. The o r d e r of

t h e D i s t r i c t C o u r t i s v a c a t e d , and t h i s c a u s e remanded f o r

f u r t h e r proceedings c o n s i s t e n t with t h i s opinion.
?

W concur:
e

Justices
Mr. Justice John C. Sheehy dissenting:

The judgment entered by the District Court should be
affirmed. The majority fault the District Court for not
filing the net worth of the marital property of the parties
on dissolution of the marriage, but give no effect to the
impossibility for such evaluation through the lack of assist-
ance and cooperation of the husband. The court found, as
the majority opinion indicates, that the husband took $96,000
of the marital assets of the estate for the purported purpose
of investing the same. Some $60,000 of those assets were
obtained as late as December 1977. The action for dissolution
of marriage was commenced on April 10, 1978. On July 12,
1978, in the husband's answers to the wife's first interroga-
tories, while the litigation was in progress, he reported
total assets of $118,275, total liabilities of $61,075, for
a net worth at that time of $57,200. On May 30, 1979, the
husband filed his "current answers" to the first set of
interrogatories in which he reported total assets of $9,410,
liabilities of $3,475, for a net worth of $5,935.
In none of the husband's subsequent answers to inter-
rogatories, testimony or documentation, does he demonstrate
with any degree of adequacy what happened to the assets of
the marital estate which he took with him. He contends that
he "invested" the monies, and sustained some "business
losses." On that basis, the court found as follows:
"XXIII. Petitioner now claims that he has no
business, that he has lost all of the $96,000
that he brought to Montana, and claims a net
worth of $5,935.
"XXIV. The court finds the testimony of
petitioner incredible and finds that he
has dissipated the value of the marital
estate by the $96,000 he brought to Montana
and cannot now account for."
 The court then went on to find that the petitioner's
opportunity for future acquisition of assets and capital is
excellent considering his job skills and experience and on
that basis rendered the judgment against the husband in
favor of the wife.
There is no reason here to depart from the general rule
of appellate practice that in cases tried to the court
without a jury, the District Court is in the best position
to see the comportment of the witnesses, and to judge of
their candor and credibility. Knight and Co. v. Manaras

(1979), - Mont . , 603 P.2d 675, 36 St.Rep. 2148; Jensen
v. Jensen (1979), Mont . -, 597 P.2d 733, 36 St.Rep.
1259; Marcoff v. Buck (1978), - Mont. , 587 P.2d 1305,
35 St.Rep. 1953. Where the findings of the District Court
depend upon the credibility of the witnesses, and the weight
to be given their testimony, the District Court's determination
of those matters will be given weight in reviewing the
sufficiency of the evidence and we will ordinarily presume
that findings and judgment entered by the District Court are
correct. Lumby v. ~oetch (19791, Mont . , 600 P.2d

This case should be controlled by Downs v. Downs (19761,
170 Mont. 150, 551 P.2d 1025, appeal after remand, 592 P.2d
938 (1979). The situation in Downs was the same as that
faced by the District Court in this case. The husband was

evasive, he had given incomplete discovery, and the trial
court had no way to appraise the value of the marital property.
The trial court had been confronted with a problem of evaluating
the marital property in the face of the lack of credibility
of the witness. There we ordered a new trial because of the
unreliability of the record. When the case returned to us

on remand, it was found that the recalcitrance of the husband
had continued. The judgment of the District Court on the
second trial was affirmed without further ado.
In the case at bar, it is completely within the power
of the husband to demonstrate what happened to the marital
monies. He has not done so. He has been evasive in discovery
and evasive in his testimony. This Court now places a
burden upon the wife to set about to prove the falsity of
her husband's claimed losses; losses for which he claims to
have no records. She should not have that burden. The
judgment should be affirmed.

Justice