No. 81-428
I N THE SUPREME COURT O F THE S T A T E O F MONTANA
1982
I N RE THE MARRIAGE O F
BEVERLY J . LARSON,
P e t i t i o n e r and A p p e l l a n t ,
-vs-
FRED J . LARSON,
R e s p o n d e n t and R e s p o n d e n t .
Appeal from: D i s t r i c t C o u r t of t h e E i g h t h J u d i c i a l D i s t r i c t ,
I n and f o r t h e C o u n t y of C a s c a d e , T h e H o n o r a b l e
H. W i l l i a m C o d e r , J u d g e p r e s i d i n g .
C o u n s e l of R e c o r d :
For A p p e l l a n t :
S m i t h , B a i l l i e & Walsh, Geeat Falls, Montana
For Respondent:
Alexander & Baucus, G r e a t Falls, Montana
S u b m i t t e d on B r i e f s : June 1 0 , 1 9 8 2
Decided: September 2 , 1 9 8 2
S L ..~2 1982
Filed:
Mr. Justice Frank B. Morrison, Jr., delivered the Opinion
of the Court.
On ~ p r i l17, 1981, the Eighth Judicial District Court
entered a decree which dissolved the marriage of petitioner
and respondent, established child custodv, support and
visitation, divided the real and personal property comprising
the marital estate, and ordered each party to pay his or her
attorney's fees. This decree was amended June 10, 1981, and
from that amended order, Beverly Larson appeals.
Petitioner raises the following issues on appeal:
1) Whether the District Court's valuation and division
of the marital estate was adequate and equitable?
2) Whether the District Court should have awarded
maintainence to Beverly Larson?
3) Whether the District Court should have required
Fred Larson to pay Beverly Larson's costs and attorney's
fees?
On the basis of the first issue we reverse the District
Court's decision and remand this matter for reconsideration
of the factors enumerated in section 40-4-202, MCA, as
elaborated in this opinion. Maintainence and attorney's
fees need to be reviewed after the District Court has adequately
determined the value of the net marital estate and apportioned
the estate in an equitable fashion.
FACTUAL BACKGROUND
Beverly and Fred Larson were married October 15, 1965.
Both had been previously married and had children from those
marriages. These children have attained majority. The
issue of the Larson marriage are as yet minors, Valerie, age
14, and Andy, age 9.
At the time of the marriage Fred Larson was in the
process of purchasing a piece of property known as the Thorn
Place on a contract for deed. The purchase price was $61000.001
with $1,500.00 down and the remaining $4,500.00 payable at
t h e r a t e of $100.00 p e r month b e g i n n i n g August 30, 1963. A
b a l a n c e of a p p r o x i m a t e l y $2,000.00 remained when t h e p a r t i e s
were m a r r i e d . The p a r t i e s used j o i n t l y - a c q u i r e d f u n d s and
t h e p r o c e e d s from t h e s a l e of a house F r e d owned i n F a i r f i e l d
t o pay t h e b a l a n c e . T i t l e t o t h e Thorn P l a c e was i n F r e d
L a r s o n ' s name.
The L a r s o n s l i v e d on and o p e r a t e d t h e Thorn Place u n t i l
November, 1976, when t h e p r o p e r t y was s o l d on a c o n t r a c t f o r
deed a t a p r i c e of $39,650.00. The p a r t i e s r e c e i v e d $11,500.00
a s a downpayment and a s o f t h e h e a r i n g d a t e , t h e b a l a n c e on
t h e Thorn c o n t r a c t was $26,893.04.
I n 1970, t h e p a r t i e s a c q u i r e d a s j o i n t t e n a n t s a 160-
a c r e p i e c e of property r e f e r r e d t o a s t h e B a r t l e t t Property.
I n 1976, t h e p a r t i e s remodeled t h e house on t h e B a r t l e t t
P r o p e r t y u s i n g t h e downpayment t h e y r e c e i v e d on t h e Thorn
Place. They moved i n t o t h e B a r t l e t t house i n November of
t h a t year. The B a r t l e t t P r o p e r t y was s u b s e q u e n t l y r e f i n a n c e d
t h r o u g h t h e F e d e r a l Land Bank of Spokane, and a s o f t h e
h e a r i n g d a t e , t h e amount r e m a i n i n g on t h a t l o a n was $28,900.00.
The p r e s e n t f a i r m a r k e t v a l u e of t h e B a r t l e t t P r o p e r t y i s
$80,000.00.
The t h i r d p a r c e l of p r o p e r t y i n v o l v e d i n t h i s m a t t e r i s
t h e Davis P l a c e . T h i s 160-acre t r a c t was p u r c h a s e d under
a c o n t r a c t f o r deed i n 1973. The p u r c h a s e p r i c e w a s $32,000.00;
t h e t e r m s were $9.000.00 down w i t h t e n a n n u a l payments of
$3,162.09. The t i t l e t o t h e Davis P l a c e was a c q u i r e d i n t h e
names o f F r e d L a r s o n , and h i s s o n , M a r t i n L a r s o n , t h e n 2 0
y e a r s of age. A l o a n was o b t a i n e d from t h e F i r s t N a t i o n a l
Bank of F a i r f i e l d t o make t h e downpayment. F r e d Larson was
t h e named o b l i g o r on t h e l o a n and s e c u r i t y i n c l u d e d c a t t l e
and machinery on t h e B a r t l e t t P r o p e r t y . art in owned an
u n s p e c i f i e d number o f c a t t l e l o c a t e d on t h e B a r t l e t t P r o p e r t y .
As of the hearing date, the balance due on the Davis Place
contract was $18,987.00. The appraised value was $43,700.00.
Throughout the marriage and during the pendency of
these proceedings, Fred Larson, with assistance from his son
Martin, operated the various parcels of property as one
economic unit, accounting for income and expenses on a
common basis. The proceeds from the unified ranching opera-
tion, supplemented by Fred's wages from his employment by
Greenfield Irrigation District as a ditchrider, were used to
meet living and operating expenses and annual loan obligations.
Beverly Larson cared for the children, numbering as many as
five during some years of the marriage, and the home. She
also tended the yard and chickens and occasionally helped
out with small ranch chores and errands.
Beverly Larson filed a petition for dissolution of the
marriage on December 21, 1977. Some forty months later the
final dissolution decree was entered.
The District Court originally found the net worth of
the marital estate to be $36,098.00 and awarded Beverly
Larson the following property: a 1972 Chevrolet valued at
$675.00, an oil and gas lease valued at $320.00, household
furniture and appliances worth $1,875.00, and twenty-five
thousand dollars ($25,000.00) in cash, ten thousand ($10,000.00)
of which was payable within 60 days, the remainder of which
was payable in sixty monthly installments of $304.15. No
mention was made of the remaining marital property in the
ordering paragraph. By implication, the court awarded Fred
Larson the Bartlett Property and the Davis Place valued at
$80,000.00 and $43,700.00, respectively, automobiles and a
trailer worth $6,275.00, cattle at a value of $5,000.00,
$14,725.00 worth of farm machinery, the balance of the Thorn
contract attributable to the marital estate valued at $2,527.95,
and $9,892.00 in an unvested PERS retirement fund. The
order expressly reposed in Fred Larson sole responsiblity
for the parties' accumulated debt, then totalling $99,333.54.
Included were First National Bank of Fairfield loans amount-
ing to $44,040.00, a Federal Land Bank loan equalling $28,900.00,
and the remainder due on the Davis Place contract, which was
$18,987.00. Additionally, the court made no findings regarding
petitioner's request for maintainence. It did find that
both parties were capable of being responsible for their own
attorney's fees. Fred Larson was ordered to pay Beverly
Larson $200.00 per month per child for child support. The
parties' stipulation regarding child custody and visitation
was incorporated by reference.
Petitioner then filed a timely motion for new trial or
amendment of the findings of fact and order. Many of the
issues raised on appeal were addressed in this motion. The
court's amendments were limited to the following particulars:
1) the fair market value of the cattle was changed from
$5,000.00 to $45,000.00; 2) the net value of the marital
estate was increased to $92,399.91; 3) Fred Larson was held
responsible for the minor childrens' reasonable medical,
dental and optical expenses; and 4) Beverly Larson's cash
award was increased to $31.000.00, of which $21,000.00 would
be payble in eighty-four monthly installments of $327.32.
NET WORTH AND DIVISION OF MARITAL ESTATE
Petitioner contends that the District Court abused its
discretion first by omitting certain marital assets proven
at trial, and second, in its determination of the value of
the assets included by the court. The total of the omitted
and undervalued assets is $55,622.06, according to petitioner.
When that amount is added to the net estate found by the
court, petitioner argues, an award of only $33,870.00 in
cash and personalty to petitioner is inequitable.
Petitioner maintains that respondent's checking account
balance, certain shares of stock in the Federal Land Bank of
Spokane, and a 1977 leased winter wheat crop in seed at the
time of hearing, should have been valued and included in the
marital estate. Respondent counters that it was reasonable
for the District Court to omit those items because the
checking account balance fluctuated greatly, depending on
current working expenses or payment obligations, the shares
had no marketable value because they were an integral part
of the Federal Land Bank loan, and the crop lease may have
existed at the time of hearing, but there was no evidence of
its existence at time of distribution.
As a general rule, if contested evidence is presented
to the trial court regarding the existence or valuation of a
marital asset and no findings are made regarding that asset
or no explanation is provided as to why the District Court
accepted one party's valuations over that of the other, the
District Court has abused its discretion. Peterson v.
Peterson (1981), Mont. , 636 P.2d 821, 38 St.Rep.
1723. Item-by-item findings are not required in property
division cases, but findings nevertheless must be sufficently
adequate to ensure that this Court need not succumb to
speculation while assessing the conscientiousness or reason-
ableness of the District Court's judgment. In re the ~arriage
of Caprice (1978), 178 Mont. 455, 585 P.2d 641.
Here the District Court makes no finding regarding
either the bank stock or the leased crop. The finding which
pertains to the checking account fails to disclose why the
~istrictCourt chose to disregard the balance in its calculation
of the net marital estate. This Court cannot uphold the
District Court's judgment as within the realm of its broad
discretion if we have no inkling of its thought processes.
Petitioner's second contention is that the District
Court erred in including less than ten percent of the balance
remaining on the Thorn contract in the marital estate.
Citing section 40-4-202, MCA, petitioner argues that there
is no legal basis for limiting appreciation in land values
over the course of the marriage by a fraction reflecting the
ratio of prenuptial to post-nuptial payments made toward the
original purchase price. Petitioner believes that such a
valuation unduly minimizes her contribution as homemaker and
ranch wife and disregards the statutory mandates of section
40-4-202, MCA. We agree.
The District Court reasoned that petitioner was only
entitled to 4.7 percent of the value of the Thorn Place as a
result of the parties' marriage because only $562.68 of the
$2,000.00 balance remaining at the time of marriage was
paid with jointly-acquired funds, the rest being paid with
the proceeds from the sale of property Fred acquired before
the marriage. Five hundred sixty-two dollars and sixty-
eight cents represents approximately 9.4 percent of the
original purchase price; therefore, only 9.4 percent of the
balance remaining on the sale of the Thorn Place, one-half
of which could be attributed to Beverly Larson's contributions
during the marriage, should be included in the marital
estate. The consequence of the court's reasoning was
exclusion of $25,629.06 from the net value of the marital
estate.
Respondent maintains that the District Court's reasoning
is in keeping with the language of section 40-2-202, MCA,
and the broad discretion afforded a District Court under
section 40-4-202, MCA.
The Court is not impressed with respondent's defense of
the District Court's order. Section 40-2-202, MCA, refers
to a married person's property rights during a marriage.
The days when section 40-2-202, !