No. 81-208
IN THE SUPREME COURT OF THE STATE OF MONTANA
1981
IN RE THE MARRIAGE OF
LOUIS M. KIS,
Petitioner and Appellant,
MARGE M. KIS,
Respondent and Respondent.
Appeal from: District Court of the Eleventh Judicial District,
In and for the County of Flathead
Honorable James M. Salansky, Judge presiding.
Counsel of Record:
For Appellant:
Hash, Jellison, O'Brien & Bartlett, Kalispell, Montana
Kenneth E. O'Brien argued, Kalispell, Montana
For Respondent:
Keller & Gilmer, Kalispell, Montana
Brenda Gilmer argued and Robert Keller argued,
Kalispell, Montana
Submitted: December 1, 1981
Decided: January 21, 1982
Filed: JAN 21 2982
Mr. J u s t i c e Frank B. Morrison, J r . , d e l i v e r e d t h e Opinion of
t h e Court.
~ p p e l l a n t ,~ o u i s
M. Kis, a p p e a l s from t h e F i n d i n g s o f
F a c t and C o n c l u s i o n s of Law e n t e r e d on J a n u a r y 8 , 1981, and
Judgment e n t e r e d on J a n u a r y 1 5 , 1981, by t h e D i s t r i c t C o u r t
of t h e E l e v e n t h J u d i c i a l D i s t r i c t . T h i s judgment d i s t r i b u t e d
t h e r e a l and p e r s o n a l p r o p e r t y of t h e p a r t i e s t o t h i s
dissolution.
L o u i s and Marge K i s were m a r r i e d J u n e 30, 1960. It was
a second m a r r i a g e f o r b o t h . A t t h e t i m e of the marriage,
Marge K i s had two c h i l d r e n and L o u i s K i s had one c h i l d . No
c h i l d r e n were b o r n t o t h e m a r r i a g e . A l l three children w e r e
emancipated when t h e d i s s o l u t i o n p r o c e e d i n g s were i n s t i t u t e d .
A t t h e t i m e of t h e m a r r i a g e , L o u i s K i s had been employed
a s a warden f o r t h e Montana F i s h and Game Department f o r
approximately s i x years. Marge K i s worked a s a bookkeeper.
From 1960 t o 1965, L o u i s was t r a n s f e r r e d s e v e r a l t i m e s ,
f i n a l l y b e i n g permanently l o c a t e d i n K a l i s p e l l , Montana.
With j o i n t p r o c e e d s , t h e p a r t i e s p u r c h a s e d p r o p e r t y on Foys
Lake and c o n s t r u c t e d a home. They l a t e r p u r c h a s e d two
a d d i t i o n a l l o t s on Foys Lake w i t h j o i n t p r o c e e d s .
During t h e m a r r i a g e , b o t h p a r t i e s c o n t i n u e d t o work.
L o u i s w a s promoted by t h e F i s h and Game Department t o c a p t a i n
Warden i n c h a r g e of t h e Northwest Montana D i s t r i c t . A t the
t i m e of t r i a l , h i s s a l a r y was $19,400.00 p e r y e a r . ~dditionally,
h e b o u g h t , s o l d and t r a d e d a r t , cameras, guns and p h o t o g r a p h s ,
t h u s e a r n i n g a p p r o x i m a t e l y $3,000.00 p e r y e a r .
Marge K i s w a s self-employed as a bookkeeper. I n addition,
s h e i n v e s t e d and s p e c u l a t e d i n t h e p u r c h a s e of commercial
property. A t t h e t i m e of t r i a l , Marge K i s owned and m a i n t a i n e d
solely,and i n partnership with other individuals, s e v e r a l
rental properties. H e r a n n u a l income p r i o r t o t r i a l had
r a n g e d from a low of $6,500.00 t o a h i g h of $13,500.00.
On June 4 , 1976, L o u i s K i s f i l e d a p e t i t i o n f o r d i s -
s o l u t i o n of t h e marriage. H e a r i n g s i n t h e matter w e r e h e l d ,
and on O c t o b e r 1 0 , 1978, a p a r t i a l d e c r e e w a s e n t e r e d by t h e
D i s t r i c t C o u r t d i s s o l v i n g t h e m a r r i a g e and making a n award
o f p e r s o n a l p r o p e r t y , p u r s u a n t t o a n a g r e e m e n t r e a c h e d by
the parties. T h i s a g r e e m e n t awarded L o u i s K i s p e r s o n a l
p r o p e r t y t o t a l i n g $17,917.50 and Marge K i s p r o p e r t y t o t a l i n g
$10,693.73.
S u b s e q u e n t l y , on J a n u a r y 8 , 1981, t h e D i s t r i c t C o u r t
e n t e r e d F i n d i n g s o f F a c t and C o n c l u s i o n s o f Law.
The D i s t r i c t C o u r t d e t e r m i n e d t h a t L o u i s K i s was i n
good h e a l t h and h i g h l y employable d u e t o h i s law e n f o r c e m e n t
background and o t h e r income e a r n i n g v o c a t i o n s . The c o u r t
a l s o f o u n d t h a t L o u i s K i s had a v e s t e d r i g h t t o h i s G a m e
Warden r e t i r e m e n t b e n e f i t s and f o u n d t h a t t h e c o s t o f a n
a n n u i t y p r o v i d i n g s i m i l a r b e n e f i t s w a s $118,833.00.
The D i s t r i c t C o u r t found Marge K i s t o b e i n o n l y f a i r
h e a l t h a s a r e s u l t o f s e v e r a l o p e r a t i o n s and a n i m p a i r m e n t
t o h e r r i g h t arm. The c o u r t found t h a t M a r g e ' s h e a l t h
a f f e c t e d h e r a b i l i t y t o r e p a i r and m a i n t a i n h e r r e n t a l
p r o p e r t i e s , a s w e l l a s p e r f o r m bookkeeping f u n c t i o n s .
The D i s t r i c t C o u r t made s p e c i f i c f i n d i n g s r e g a r d i n g t h e
v a l u e s o f t h e r e a l p r o p e r t i e s owned by t h e p a r t i e s and
d e t e r m i n e d t h e l i a b i l i t i e s owed by e a c h . The c o u r t s p e c i f i c a l l y
f o u n d t h a t e a c h p a r t y ' s b u s i n e s s and j o b i n t e r e s t s w e r e , f o r
t h e most p a r t , s e p a r a t e . Each p a r t y had m a i n t a i n e d s e p a r a t e
bank a c c o u n t s . The D i s t r i c t C o u r t d e t e r m i n e d t h a t a l t h o u g h
L o u i s K i s had c o - s i g n e d s e v e r a l bank n o t e s , s u c h a c t i o n was
t a k e n a t t h e r e q u e s t of lending i n s t i t u t i o n s . he c o u r t
found t h a t a t a l l t i m e s Marge K i s was i n p a r t n e r s h i p w i t h
o t h e r i n d i v i d u a l s i n h e r b u s i n e s s t r a n s a c t i o n s and L o u i s K i s
was n e v e r a p a r t n e r .
Based on i t s f i n d i n g s t h e D i s t r i c t Court apportioned
t h e m a r i t a l property a s follows:
"A. The house and two l o t s on Foys Lake,
7 0 % t o t h e husband and 30% t o t h e w i f e .
"B. The F i s h and Game P e n s i o n t o t h e
husband.
"C. A l l t h e p e r s o n a l p r o p e r t y a s h e r e t o -
f o r e d i s t r i b u t e d i n t h e F i n d i n g s of F a c t
and by s t i p u l a t i o n of t h e p a r t i e s a s t h e r e -
i n s e t forth.
"D. The W h i t e f i s h A r m s Appartments t o t h e
wife.
"E. E a s t s i d e S u p e r e t t e ( p a r c e l K ) t o t h e
wife.
"F. The Pfrimmer House ( p a r c e l L ) t o t h e
wife.
"G. Western Acres d u p l e x ( p a r c e l G ) t o t h e
wife.
"H. The K . P . H . partnership t o t h e wife.
" I . P r o c e e d s from t h e d e f a u l t d u p l e x i n
W h i t e f i s h ( p a r c e l C ) l e s s t h e amount p a i d
t o M r . O'Brien f o r A t t o r n e y ' s f e e s , t o t h e
wife.
" J . Any o t h e r b u s i n e s s p r o p e r t i e s t o t h e
wife."
A judgment i n a c c o r d a n c e w i t h t h e above a p p o r t i o n m e n t
was e n t e r e d on J a n u a r y 1 5 , 1981.
I s s u e s on a p p e a l a r e :
(1) Whether t h e Game Warden r e t i r e m e n t b e n e f i t s a r e a
marital asset?
(2) Whether t h e D i s t r i c t C o u r t e r r e d i n a d m i t t i n g
e v i d e n c e of t h e c o s t of a n a n n u i t y t o e s t a b l i s h t h e p r e s e n t
v a l u e of t h e Game Warden r e t i r e m e n t b e n e f i t s ?
(3) Whether t h e D i s t r i c t C o u r t f a i l e d t o d e t e r m i n e t h e
n e t worth of t h e m a r i t a l e s t a t e ?
(4) Whether t h e D i s t r i c t C o u r t ' s a p p o r t i o n m e n t o f t h e
m a r i t a l a s s e t s i s s u p p o r t e d by s u b s t a n t i a l e v i d e n c e ?
(5) Whether 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
by o r d e r i n g t h e Foys Lake r e s i d e n c e and l o t s s o l d u n l e s s a n
a g r e e m e n t w a s r e a c h e d between t h e p a r t i e s ?
Appellant, Louis K i s , f i r s t contends t h a t h i s r e t i r e m e n t
b e n e f i t s , stemming from h i s s e r v i c e w i t h t h e Montana F i s h
and Game Department, s h o u l d n o t b e c o n s i d e r e d a s a m a r i t a l
a s s e t f o r d i s s o l u t i o n purposes. L o u i s K i s r e l i e s m a i n l y on
t h e r e c e n t U n i t e d S t a t e s Supreme C o u r t d e c i s i o n , McCarty v .
McCarty ( 1 9 8 1 ) , U.S. , 101 S.Ct. 2728, and a l s o
Montana s t a t u t e , s e c t i o n 19-8-804, MCA.
I n McCarty, t h e U n i t e d S t a t e s Supreme C o u r t d e c i d e d
t h a t m i l i t a r y r e t i r e m e n t b e n e f i t s could n o t be considered
community p r o p e r t y t o b e d i v i d e d e q u a l l y i n d i v o r c e p r o c e e d -
ings. T h i s d e c i s i o n was b a s e d p r i m a r i l y on t h e d e t e r m i n a t i o n
t h a t C a l i f o r n i a ' s community p r o p e r t y laws c o n f l i c t e d w i t h
s p e c i f i c f e d e r a l s t a t u t e s regarding m i l i t a r y retirement
benefits. T h e r e f o r e , f e d e r a l law preempted t h e s t a t e s t a t u t e s .
A s t h e c a s e b e f o r e t h i s Court does n o t i n v o l v e a m i l i t a r y
r e t i r e m e n t b e n e f i t , t h e McCarty d e c i s i o n i s n o t c o n t r o l l i n g .
S e c t i o n 19-8-805, MCA, r e l a t i n g t o Game Warden r e t i r e m e n t
b e n e f i t s , provides:
"Any money r e c e i v e d o r t o be p a i d a s a member's
a n n u i t y , s t a t e annuity, o r r e t u r n of deductions
o r t h e r i g h t of any of t h e s e s h a l l be exempt
from any s t a t e o r m u n i c i p a l t a x and from l e v y ,
s a l e , g a r n i s h m e n t , a t t a c h m e n t , o r any o t h e r
p r o c e s s w h a t s o e v e r and s h a l l b e u n a s s i g n a b l e
e x c e p t a s s p e c i f i c a l l y p r o v i d e d i n 19-8-806."
Louis K i s contends t h a t t h i s s t a t u t e precludes i n c l u s i o n
of h i s retirement b e n e f i t s a s a m a r i t a l a s s e t . Mr. Kis
a s s e r t s t h a t such i n c l u s i o n would v i o l a t e t h e s t a t u t o r y
exemption of r e t i r e m e n t b e n e f i t s from ". . . any o t h e r
process whatsoever."
W c a n n o t c o n s t r u e t h i s exemption a s e x t e n d i n g t o
e
d e t e r m i n a t i o n s of m a r i t a l e s t a t e s i n d i s s o l u t i o n proceed-
ings. he p u r p o s e of t h i s p r o v i s i o n i s t o p r o t e c t a p e r s o n ' s
future retirement security. I n c l u s i o n of s u c h b e n e f i t s f o r
p u r p o s e s of e s t a b l i s h i n g a m a r i t a l e s t a t e i s mandated by
s e c t i o n 40-4-202, MCA, which r e q u i r e s a p p o r t i o n m e n t of a l l
t h e p r o p e r t y and a s s e t s of p a r t i e s t o a d i s s o l u t i o n .
W e hold t h a t t h e D i s t r i c t Court properly included t h e
r e t i r e m e n t b e n e f i t s of L o u i s K i s a s a m a r i t a l a s s e t of t h e
parties.
The a p p e l l a n t n e x t c o n t e n d s t h a t even i f t h e r e t i r e m e n t
b e n e f i t s a r e a m a r i t a l a s s e t , t h e D i s t r i c t Court improperly
v a l u e d t h e r e t i r e m e n t b e n e f i t s by a c c e p t i n g e v i d e n c e of t h e
c o s t of a n a n n u i t y t o e s t a b l i s h t h e p r e s e n t v a l u e of t h e
benefits. The D i s t r i c t C o u r t a c c e p t e d e v i d e n c e e s t a b l i s h i n g
t h e c o s t of a n a n n u i t y , p u r c h a s e d f o r a 51 y e a r o l d male,
y i e l d i n g $10,000 p e r y e a r from and a f t e r t h e 55th b i r t h d a y .
The c o s t w a s $118,833.00.
Louis K i s a s s e r t e d a t t r i a l t h a t h i s o n l y a s s u r e d
r e t i r e m e n t b e n e f i t s were h i s c o n t r i b u t i o n s t o t h e r e t i r e m e n t
fund. T h i s a s s e r t i o n i s premised upon t h e f a c t t h a t ~ o u i s ,
a t t i m e of t r i a l , was n o t y e t 55 y e a r s of a g e and had n o t
accumulated 25 y e a r s of s e r v i c e ; t h e r e f o r e , h i s f u l l r e t i r e -
ment b e n e f i t s were n o t a s s u r e d . Evidence was i n t r o d u c e d
e s t a b l i s h i n g t h a t L o u i s K i s had c o n t r i b u t e d $14,436.00.
W hold t h a t t h e D i s t r i c t Court properly accepted t h e
e
e v i d e n c e of t h e c o s t of a n a n n u i t y as e s t a b l i s h i n g t h e
p r e s e n t v a l u e of t h e F i s h and Game r e t i r e m e n t b e n e f i t s .
Present value i s t h e proper test. Value m i g h t be a f f e c t e d
by t h e c o n t i n g e n c y of t h e r e t i r e m e n t b e n e f i t s f a i l i n g t o
r e a c h t h e l e v e l s used by t h e c o u r t . A t t i m e of trial ~ o u i s
is had n o t r e a c h e d 55 y e a r s of a g e ( r e t i r e m e n t a g e ) and had
n o t s e r v e d t h e 25 y e a r s n e c e s s a r y f o r a r e t i r e m e n t b e n e f i t
e q u a l t o t h e sum p r o j e c t e d by t h e t e s t i m o n y and a d o p t e d by
the court. The p o s s i b i l i t y t h a t L o u i s K i s would n o t r e a c h
55 y e a r s of a g e and t h e p o s s i b i l i t y t h a t he would n o t s e r v e
25 y e a r s c o u l d p r o p e r l y be c o n s i d e r e d i n a r r i v i n g a t v a l u e .
However, no e v i d e n c e was o f f e r e d by L o u i s K i s showing what,
i f a n y , e f f e c t such a c o n t i n g e n c y would have i n d i m i n i s h i n g
t h e p r e s e n t v a l u e f i g u r e o f f e r e d by Marge K i s . The e v i d e n c e
o f f e r e d by Marge K i s c o u l d p r o p e r l y p r o v i d e a v a l i d b a s i s
f o r the c o u r t ' s evaluation. Where s u b s t a n t i a l c r e d i b l e
e v i d e n c e s u p p o r t s a f i n d i n g of t h e t r i a l c o u r t , t h e n t h a t
f i n d i n g must be u p h e l d . Rule 5 2 ( a ) , M.R.Civ.P.
Appellant, Louis K i s , contends t h a t t h e D i s t r i c t Court
f a i l e d t o d e t e r m i n e t h e t r u e n e t worth of t h e m a r i t a l e s t a t e
by f a i l i n g t o make s p e c i f i c f i n d i n g s of v a l u e r e g a r d i n g
certain properties. S p e c i f i c a l l y , Louis K i s a s s e r t s t h a t
t h e c o u r t f a i l e d t o p l a c e a v a l u e on t h e Foys Lake r e s i d e n c e
and l o t s , t h e p e n s i o n b e n e f i t s , and t h e K . P . H . partnership
i n t e r e s t o f Marge K i s . H e further asserts that the court
f a i l e d t o f i n d t h a t Marge K i s had made a $20,000 l o a n t o t h e
K.P.H. p a r t n e r s h i p and was a l s o e n t i t l e d t o $9,000 a s a
r e s u l t of a d e f a u l t on a c o n t r a c t f o r deed.
A r e v i e w of t h e r e c o r d i n t h i s m a t t e r d i s c l o s e s t h a t
t h e ~ i s t r i c C o u r t e i t h e r had s t i p u l a t e d v a l u a t i o n s a t i t s
t
d i s p o s a l o r made f i n d i n g s on t h e d i s p u t e d p r o p e r t i e s .
c o n f l i c t i n g e v i d e n c e was p r e s e n t e d on t h e e x i s t e n c e of
a s s e t s a s w e l l a s t h e v a l u e of a l l a s s e t s . The ~ i s t r i c t
C o u r t r e s o l v e d t h e s e c o n f l i c t s i n d e t e r m i n i n g t h e v a l u e of
t h e m a r i t a l e s t a t e and i n making a n a p p o r t i o n m e n t . From t h e
r e c o r d we c a n n o t s a y t h a t t h e c o u r t ' s f i n d i n g s were c l e a r l y
e r r o n e o u s , a n d t h e r e f o r e t h e y m u s t be a f f i r m e d . Rule 52(a),
L o u i s K i s c o n t e n d s t h a t t h e D i s t r i c t C o u r t ' s apportion-
ment was i n e q u i t a b l e and unsupported by t h e record. This
a r g u m e n t rests o n h i s a s s e r t i o n t h a t t h e r e t i r e m e n t b e n e f i t s
w e r e i m p r o p e r l y o v e r v a l u e d a n d t h a t m a r i t a l assets w e r e
ignored by t h e District C o u r t i n e s t a b l i s h i n g t h e m a r i t a l
estate. W e h a v e a l r e a d y d i s p o s e d of t h e s e a r g u m e n t s a n d
need n o t d i s c u s s them a g a i n .
U t i l i z i n g t h e s t i p u l a t e d v a l u e s a n d t h e f i n d i n g s made
t h e District Court, t h e following apportionment f i g u r e s
are e s t a b l i s h e d .
Husband
N e t Assets:
Retirement security $118,833.00
7 0 % v a l u e o f f a m i l y home 74,463.00
7 0 % v a l u e of F o y s L a k e l o t s 21,000.00
Personal property 17,917.50
Liabilities:
VISA
IRS (contingent)
V a l l e y Bank n o t e
TOTAL NET TO HUSBAND
W i f e
N e t Assets:
Western A c r e s Duplex $ 10,500.00
Eastside Superette 3,833.00
Pfrimmer house 19,664.00
Whitefish apartments 142,559.00
3 0 % v a l u e of f a m i l y home 31,901.00
3 0 % v a l u e of F o y s L a k e l o t s 9,000.00
F i r s t Federal Savings 14,511.00 p l u s a c c r u e d
interest
Personal property 14,365.73
KPH p a r t n e r s h i p 26,156.12
Liabilities:
F i r s t N a t i o n a l Bank of W h i t e f i s h 11,660.72
F i r s t N a t i o n a l Bank o f W h i t e f i s h 10,997.74
F i r s t S t a t e Bank of W h i t e f i s h 2,175.00
F i r s t S t a t e Bank of W h i t e f i s h 3,200.00
W h i t e f i s h C r e d i t Union 10,000.00
Harry P i f e r , S r . 5,000.00
Delila Pifer 5,000.00
Ross Linsennan 5,600.00
F i r s t Northwestern Bank 4,500.00
Legal f e e s ( n o t involved i n t h i s
action) 9,700.00
VISA 1,359.00
Master Charge 829.00
TOTAL NET TO WIFE
I n r e v i e w i n g d i v i s i o n s of m a r i t a l p r o p e r t y , t h i s C o u r t
must d e t e r m i n e o n l y ". . . whether i n t h e e x e r c i s e of i t s
d i s c r e t i o n , t h e c o u r t acted a r b i t r a r i l y , unreasonably, o r
without regard t o recognized p r i n c i p l e s r e s u l t i n g i n s u b s t a n t i a l
injustice." Balsam v . Balsam ( 1 9 7 9 ) , Mont. , 589
P.2d 652, 654, 36 St.Rep. 79, 82. H e r e t h e husband r e c e i v e d
a n u n u s u a l l y l a r g e p e r c e n t a g e of t h e m a r i t a l e s t a t e . However,
more t h a n one-half of h i s a s s e t s r e s u l t from t h e a n n u i t y
valuation. W have h e l d t h a t t h e a n n u i t y v a l u a t i o n was
e
proper. Therefore, t h e D i s t r i c t Court a c t e d w i t h i n i t s
d i s c r e t i o n i n apportioning the K i s marital e s t a t e . In fact
t h e h u s b a n d ' s award was g e n e r o u s .
A p p e l l a n t ' s l a s t i s s u e on a p p e a l c o n c e r n s t h e f o l l o w i n g
o r d e r made by t h e D i s t r i c t Court:
"a. That i n t h e event t h a t t h e P e t i t i o n e r
( L o u i s K i s ) make a r r a n g e m e n t s t o t r a n s f e r
30% of t h e v a l u e of t h e house and two l o t s
on Foys Lake t o t h e Respondent (Marge K i s )
w i t h i n s i x t y d a y s of t h i s d a t e , s a t i s f a c t o r i l y
t o h e r , t h e n such house and two l o t s s h a l l
be s o l d a t p u b l i c s a l e , w i t h i n s i x t y days
t h e r e a f t e r , and t h e p r o c e e d s , a f t e r d e d u c t -
i n g t h e e x p e n s e s of s a l e , s h a l l be d i v i d e d
between t h e p a r t i e s i n t h e a f o r e s a i d propor-
t i o n ; t h a t i f t h e p a r t i e s c a n a g r e e on a
p r i v a t e s a l e p r i o r t o t h a t t i m e , t h e n it
may be done; t h a t e i t h e r p a r t y may be t h e
p u r c h a s e r a t t h e s a l e , whether it be p u b l i c
or private. "
W e have o f t e n s t a t e d t h a t t h e D i s t r i c t C o u r t h a s broad
discretion i n ". . . d e v i s i n g methods t o accomplish a n
e q u i t a b l e d i v i s i o n of property." I n r e M a r r i a g e of J o h n s r u d
( 1 9 7 7 ) , 175 Mont. 117, 123, 572 P.2d 902, 9 0 5 . H e r e the
D i s t r i c t C o u r t f o r e s a w problems a r i s i n g from j o i n t ownership
and p r o v i d e d a r e a s o n a b l e a l t e r n a t i v e . W f i n d no a b u s e of
e
the court's discretion.
The judgment of t h e D i s t r i c t C o u r t i s a f f i r m e d .
W e Concur: