No. 80-328
IN THE SUPREME COURT OF THE STATE OF MONTANA
1981
IN RE THE MARRIAGE OF JUDITH
MARIE GOMKE,
Petitioner and Appellant,
VS .
DONALD WAYNE GOMKE,
Respondent and Respondent.
Appeal from: District Court of the Twelfth Judicial District,
In and for the County of Hill.
Honorable B. W. Thomas, Judge presiding.
Counsel of Record:
For Appellant:
Morrison, Ettien and Barron, Havre, Montana
For Respondent:
Bosch, Kuhr, Dugdale, Warner & Martin, Havre, Montana
Submitted on briefs: December 17, 1980
Decided: April 20, 1981
Mr. Justice Daniel J. Shea delivered the Opinion of the
Court.
Petitioner Judith Marie Gomke, wife, appeals an order
of the Hill County District Court amending its decree of
dissolution of the parties' marriage to allow her ex-husband,
respondent Donald Wayne Gomke, to retain the family farm and
pay the wife her share of the marital estate in four annual
installments. The sole issue on appeal is whether the District
Court thereby abused its discretion. We hold that it did
not and affirm.
Judith and Donald Gomke were divorced on June 23, 1980.
In the decree dissolving their marriage, the court ordered
that the major asset of the marriage, a small farm (including
the family home and farm machinery) be sold and the proceeds
divided between the parties, 55 percent to the husband and
45 percent to the wife. The court weighted the apportionment
of the marital estate slightly in favor of the husband
because 480 acres of the 640 acre farm were derived from
his family's farm.
In his findings, Judge Thomas found that the farmlands
did not constitute an economic unit. He concluded that to
divide the property between the parties in kind and to
oblige the husband to compensate the wife under a payment
plan for the excess value of any land he received was impractical.
The court found that the husband's prospects to pay the wife
off on a reasonable basis and to meet all of his other
financial obligations were poor.
The husband moved to amend the court's findings, conclusions,
and decree on July 3, 1980. After a hearing, the District Court
granted the motion on July 24, 1980. The court devised a
plan by which the husband could attempt to retain and work
the farm while paying the wife her share of the equity on a
short-term basis.
The net value of the marital estate was $207,034.30.
Payment of the wife's share of $88,684.00 was to be made in
four equal annual installments of $22,171.00 together with
interest at the rate of 7 percent per year.
The wife urges that the District Court order allowing
the husband's retention of the farm rather than requiring
its sale and the distribution of the proceeds in accordance
with the 45 percent to 55 percent formula denied her an
equitable apportionment of the marital estate. She contends
that, at aqy rate, the husband does not have adequate
financial means to make the annual installment payments.
Furthermore, she asserts, it is unfair for the husband to be
awarded income-producing property and for the wife to receive
only cash compensation under the District Court's property
settlement. We will address her assertions individually.
It is the wife's contention that the farm could be sold
for significantly more than the court's determination of the
property's fair market value. She maintains that to deny
her the opportunity of sharing in any gain that could be
realized over and above the District Court's valuation of
the farm is to deny her an equitable share in the marital
estate. The record contains some conflicting evidence on
the property's fair market value. The court was not obliged,
however, to accept the appraisals which the wife and her
expert witness presented. See, Dickerson v. Dickerson
3 7 St.Rep. 1 2 8 6 .
(19801, Mont . , 614 P.2d 521, 524/ As it had every
right to do, the District Court in its findings expressly
relied on the expert testimony of other witnesses. See,
Dickerson, supra. The value of the net estate is a question
of fact that is determined by the District Court in dissolution
proceedings. The wife has not even attempted to show that
the District Court's valuation of the property is "clearly
erroneous." Hence, we will not disturb the court's assessment
of fair market value. See, Rule 52(a), M.R.Civ.P.
The wife contends that the husband cannot generate
sufficient income from the farming operation and from his
outside employment to make the annual installment payment to
her, and, at the same time, to pay all other existing indebted-
ness. Therefore, she urges us to find that the District Court
abused its discretion by not requiring the property to be
sold.
We have espoused the policy that a family farm or a
ranch should be kept intact and operated as a unit upon a
marriage dissolution whenever there is a reasonable means of
providing a wife her equitable share of the marital property
short of selling the land. In Re Marriage of Jacobson (1979),
Mont. , 6 0 0 P.2d 1183, 1186-88, 36 St.Rep. 1773, 1777-79.
That is a policy tied to the economic realities of a
predominantly rural state like Montana. Family-run farms
and ranches constitute an important part of the state's
economy and of its way of life. Many parents wish to pass
the family farm or ranch to their children before their
deaths and want to insure the continuity of a family heritage.
That understandable desire would be frustrated if the courts
of the state were required to sell family farms and ranches
as a matter of course in order to effect an "equitable"
property settlement for the spouse who does not wish to
remain on the farm after a marriage dissolution.
As the District Court found, the farmland in dispute
has been owned by the Gomke family since 1917 and the husband
has lived there all of his life. After he was grown, the
husband stayed on the farm because of his father's poor
health. After the parties were married, the husband farmed
the land on a crop-share basis.
Both the husband, Donald Gomke, and his mother, Leona
Gomke, want the farm to remain in the family. The husband,
in turn, desires to pass the land on to his own son one day.
In 1974, Leona Gomke, the husband's mother, sold 480 acres
of the 640 acre farm presently owned by the parties to her
son and his wife at a price below market value. Although
the contract for deed according to which she sold the land
is now in default, Leona Gornke has not initiated any proceedings
to terminate the contract. The District Court inferred an
intent by the mother to make a partial gift to her son
individually.
In Jacobson, supra, we held that the District Court
had not abused its discretion in allowing the husband,
upon dissolution of the parties' marriage, to retain the
family ranch and to purchase the wife's 50 percent interest
on an installment basis. The marital estate there had a net
value of over a million dollars. The District Court gave
the husband the option of paying for the wife's interest in
a lump sum or of paying her 20 percent down with the remainder
to be paid in 30 equal annual installments, interest to
accrue at 7 percent per annum.
Unlike the ranch in Jacobson, supra, the Gomke farm
is rather heavily encumbered. In addition, the husband's
income from the farm operations and from outside sources is
somewhat limited. The District Court found that he earned
approximately $655 in monthly net pay from his employment at
the Cargil Elevator in Fresno, Montana. Over the past ten
years, the annual income received from the farm has varied
greatly, ranging from ca. $250 to ca. $14,000. Under the
decree of dissolution, the husband is also obliged to pay
$300 per month in child support to the wife who has custody
of the parties' three minor children.
Nevertheless, the major part of that indebtedness is
owed to the husband's mother. There is every reason to
think that she will help her son retain the land. The
amount of indebtedness should, therefore, not materially
hinder the husband's efforts in paying the installments owed
to the wife. Given the husband's relatively low yearly
income, he will quite possibly have to refinance the property
or arrange for private loans in order to make the annual
installment payments to the wife.
The installment scheme of the District Court more than
adequately protects the wife's interest in the marital
property. The court appears to have closely modelled its
installment plan on the one approved of in Jacobson. The
decree provides that the wife's interest in the marital
property either be paid immediately or in no more than three
years--with interest at seven percent per year. The out-
standing balance owed by the husband to the wife constitutes
a lien on the land until fully paid. If an installment is
not paid on time, the husband's option to purchase terminates,
and the property is to be sold as the parties may agree or
as the court orders, if they cannot agree. If the husband
sells the farm or any part of it before the wife is fully
paid, the wife will participate to the extent of 45 percent
in the gain realized over the valuation placed on the farm
by the District Court. Under the circumstances, we are
persuaded that the trial court has acted in an equitable
manner to protect the interests of both parties. We find no
abuse of its discretion.
Similarly, we reject the wife's argument that the ~istrict
Court's property settlement scheme is inherently unfair to
her because it allows the husband to retain income-producing
property while she receives only cash. She can reinvest that
cash in any income-producing property she wishes.
The husband has requested attorney fees and costs on
appeal. We decline to award them. The wife's appeal of the
District Court's installment plan was not so unreasonable or
frivolous as to justify such an award in light of the fact
that the farmland was heavily encumbered and the husband has
only limited resources with which to make the yearly payments
to the wife. We think she had a reasonable basis to petition
for relief under the rule of the Jacobson case, supra.
We remand to the District Court and direct it to modify
its decree to specifically provide that the outstanding install-
ment balance shall constitute a lien on - 640 acres of the
all
parties' farm until the wife is fully paid her interest in the
marital estate. In all other respects, the judgment of the
District Court is affirmed.
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We Concur:
Chief Justice
f' Justices