No. 81-395
I N THE SUPREME COURT O THE STATE O MONTANA
F F
1982
I N RE THE MARRIAGE OF
MARTHA H. BURLEIGH,
P e t i t i o n e r and Respondent,
-vs-
C. WARD BURLEIGH,
Respondent and A p p e l l a n t .
Appeal from: D i s t r i c t Court of t h e Tenth 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 County o f F e r g u s , The Honorable
N a t A l l e n , Judge p r e s i d i n g .
Counsel o f Record:
For A p p e l l a n t :
Robert L. Johnson, Lewistown, Montana
For Respondent :
Anderson, Edwards & blolloy, B i l l i n g s , Montana
Amicus C u r i a e :
J a r d i n e , S t e p h e n s o n , B l e w e t t & Weaver, G r e a t F a l l s ,
Montana
S u b m i t t e d on B r i e f s : July 9, 1982
Decided: Adgust 1 9 , 1982
Mr. Chief Justice Frank I. Haswell delivered the Opinion of
the Court.
Husband appeals from a judgment entered by the
District Court of the Tenth Judicial District, Fergus
County, which awarded the wife child support and custody of
the children and required the husband to make a lump sum
payment plus twenty annual payments of $11,116 to the wife.
We aff irm.
Husband and wife were married on January 8, 1966, in
Fort Collins, Colorado. Husband was completing his studies
for a Doctor of Veterinary Medicine degree, and wife was in
her senior year of undergraduate school studying history.
The couple then made several moves for the husband's employ-
ment, first to Utah where the husband was employed at a
private veterinary clinic and the wife worked part-time as a
receptionist. The parties then moved to Lewistown and,
during the first months of 1967, lived with the husband's
parents on Burleigh Angus Ranch and shared ranch and house-
hold duties.
In March 1967 they moved to Miles City, where husband
was employed as a deputy state veterinarian and wife
attended school, received her bachelor's degree and did some
substitute teaching. In September of 1968, husband accepted
employment with a private veterinarian in Sidney, and wife
taught school from October to the end of the school year.
In the summer of 1969 the parties moved back to
Lewistown where husband was employed by a private veter ina-
rian and wife taught school. Both parties helped on the
ranch part-time. In 1970 and 1971, wife experienced child-
bearing problems requiring out-of-state chemotherapy which
prevented her from contributing to the home and marriage as
much as she previously had. In 1972 the husband gave up his
veterinary practice, and the parties moved into the main
ranch house on Burleigh Angus Ranch. Part of the wife's
duties included keeping records on the Angus cattle and
operating a public dumpyard acquired by the ranch.
In September 1973, the parties adopted a three-month-
old son, Theran. Husband's parents gifted thirty shares of
stock to the husband during this year. On February 10,
1975, all shareholders entered a buy and sell agreement
which contained provisions which disallowed any encumbering
or disposing of the stock without the consent of the remain-
ing shareholders and statements to the effect that a stock-
holder may not dispose of any shares without first offering
them to the corporation. This agreement has been twice
amended. In July 1975 the parties had a child of their own,
Sarah. During 1975 husband's parents gave him twenty more
shares of stock in the corporation and gave wife twenty
shares also.
On April 1, 1978, husband contracted to buy 274
treasury shares of the corporation and also contracted to
buy 230 shares from his parents. He had been gifted forty-
six shares prior to marriage. After the parties moved to
Lewistown, the wife was active in working with horses, in
raising and selling dogs and in continuing to take educa-
tional courses.
In September 1979 the parties separated, and on
October 29, 1979, wife filed a complaint seeking dissolution
of the marriage. On January 10, 1980, on oral stipulation
of the parties, the District Court dissolved the marriage,
awarding temporary custody of the children to the wife.
Both p a r t i e s s u b s e q u e n t l y r e m a r r i e d .
On August 4, 1981, t h e District C o u r t awarded p e r -
manent c u s t o d y t o t h e w i f e w i t h r i g h t s of v i s i t a t i o n t o t h e
h u s b a n d and g a v e t h e w i f e $400 p e r month i n c h i l d s u p p o r t .
The D i s t r i c t C o u r t a l s o f o u n d t h a t t h e w i f e ' s s h a r e o f t h e
marital estate was $247,320.26, with $25,000 to be paid
w i t h i n s i x t y d a y s o f t h e d a t e of judgment and t h e b a l a n c e t o
be paid in twenty annual installments of approximately
$11,116 each. The c o u r t g r a n t e d t h e w i f e a s e c u r i t y i n t e r -
e s t i n t h e husband's s t o c k u n t i l f u l l p a y m e n t was made a t
w h i c h t i m e t h e w i f e would c o n v e y h e r twenty s h a r e s t o t h e
husband. Husband a p p e a l s a n d p r e s e n t s s e v e r a l i s s u e s w h i c h
c a n b e s t a t e d as f o l l o w s :
1. Did t h e D i s t r i c t C o u r t e r r i n a w a r d i n g c u s t o d y o f
the children t o the wife?
2. Did t h e D i s t r i c t C o u r t e r r i n making i t s a w a r d o f
child support?
3. Did t h e D i s t r i c t C o u r t e r r in distributing the
marital estate?
Both parties cite Corbett v. Corbett (1981), -
Mont. -, 635 P.2d 1 3 1 9 , 38 S t . R e p . 1 8 5 2 , as s e t t i n g o u r
standard of review on the first issue. In Corbett we
stated:
" T h i s C o u r t h a s s a i d many times r e g a r d i n g t h e
d i s c r e t i o n of t h e D i s t r i c t Court i n c h i l d
c u s t o d y cases t h a t :
" ' I n r e v i e w i n g o r d e r s which a f f e c t t h e cus-
t o d y of t h e c h i l d , t h i s C o u r t i s m i n d f u l t h a t
t h e primary d u t y of d e c i d i n g t h e proper cus-
t o d y of c h i l d r e n is a t a s k o f t h e D i s t r i c t
Court. T h u s , a l l r e a s o n a b l e p r e s u m p t i o n s as
t o c o r r e c t n e s s of t h a t d e t e r m i n a t i o n w i l l be
made. No r u l i n g w i l l b e d i s t u r b e d a b s e n t a
c l e a r showing t h a t t h e D i s t r i c t C o u r t ' s d i s -
c r e t i o n was a b u s e d . F o s s v. L e i f e r ( 1 9 7 6 ) ,
1 7 0 Mont. 9 7 , 550 P.2d 1 3 0 9 , 1 3 1 1 . " 6 3 5 P.2d
S e c t i o n 40-4-212, MCA, i s t h e c o n t r o l l i n g s t a t u t e h e r e and
s t a t e s a s follows:
"Best i n t e r e s t of c h i l d . The c o u r t s h a l l
determine custody i n accordance with t h e b e s t
i n t e r e s t of t h e c h i l d . The c o u r t s h a l l con-
sider a l l relevant factors including:
" ( 1 ) t h e w i s h e s of t h e c h i l d ' s parent or
parents a s t o h i s custody;
" ( 2 ) the wishes of the child as to his
custodian;
" ( 3 ) t h e i n t e r a c t i o n and i n t e r r e l a t i o n s h i p o f
the child with h i s parent or parents, h i s
s i b l i n g s , and a n y o t h e r p e r s o n who may s i g n i -
ficantly affect the child's best interest;
" ( 4 ) the c h i l d ' s adjustment to his home,
s c h o o l a n d community; and
" ( 5 ) t h e m e n t a l and p h y s i c a l h e a l t h of all
i n d i v i d u a l s i n v o l v e d . I'
The D i s t r i c t C o u r t ' s finding i n t h i s regard stated
thus:
"The C o u r t f i n d s t h a t b o t h p a r t i e s a r e f i t
and p r o p e r p a r e n t s , and f u r t h e r f i n d s t h a t
t h e b e s t i n t e r e s t s of t h e minor c h i l d r e n
r e q u i r e t h a t t h e y be p l a c e d i n t h e c a r e ,
c u s t o d y and c o n t r o l o f t h e i r m o t h e r . The
Court considers the following relevant i n
making t h i s d e t e r m i n a t i o n :
" 1 ) That n e i t h e r c h i l d h a s reached an age
where h i s w i s h e s a r e r e l e v a n t i n t h i s d e t e r -
mination, f u r t h e r , both p a r e n t s expressed a
s t r o n g d e s i r e t o a c q u i r e custody; accord-
i n g l y , t h e d e s i r e s of t h e p a r t i e s and t h e
c h i l d r e n do n o t e n t e r i n t o t h i s d e c i s i o n ;
" 2 ) The t e s t i m o n y e s t a b l i s h e d t h a t t h e m o t h e r
is, and h a s been, t h e p r i m a r y p e r s o n i n v o l v e d
i n t h e c a r e , e d u c a t i o n and r e a r i n g of t h e
children since their birth. The m o t h e r I s
p r e s e n t l i v i n g s i t u a t i o n is s u c h t h a t i t
f a c i l i t a t e s t h e k i n d of c a r e and a t t e n t i o n
r e q u i r e d by c h i l d r e n o f t h i s a g e . The e v i -
dence e s t a b l i s h e d t h a t t h e c h i l d r e n a r e w e l l
s e t t l e d t o t h e c u r r e n t l i v i n g s i t u a t i o n and
t h e i r progress i n school is s a t i s f a c t o r y ;
" 3 ) The m e n t a l a n d p h y s i c a l health of all
i n d i v i d u a l s is s a t i s f a c t o r y ;
" 4 ) I n summary, t h e C o u r t f i n d s no e v i d e n c e
of p o s i t i v e v a l u e s t o be g a i n e d by c h a n g i n g
t h e i r c u s t o d y from t h e c u r r e n t s t a t u s ,
wherein t h e i r p r i m a r y c u s t o d y and c a r e r e s t s
w i t h t h e i r mother. To t h e c o n t r a r y , t h e
C o u r t f i n d s t h a t t h e b e s t i n t e r e s t s of t h e
c h i l d r e n r e q u i r e t h e c o n t i n u a t i o n of t h e
c u r r e n t custody s t a t u s w i t h t h e mother."
Appellant charges t h a t t h e c o u r t ' s findings do not
properly address the children's interaction with other
people in the mother's home including respondent's new
husband. A p p e l l a n t a l s o c o n t e n d s t h a t t h e husband s h o u l d
have been awarded custody because he fulfilled all the
criteria of section 40-4-212, MCA, based largely on his
testimony and that of a social worker who visited the
h u s b a n d ' s home.
We disagree. Montana l a w s t a t e s t h a t t h e f i n d i n g s d o
n o t n e e d t o be i n a n y p a r t i c u l a r f o r m i f t h e r e i s 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 t o s u p p o r t t h e t r i a l j u d g e ' s judgment
on t h e m e r i t s . I n Re M a r r i a g e o f B a r r o n ( 1 9 7 8 ) , 1 7 7 Mont.
161, 580 P.2d 936. T h e r e is s u b s t a n t i a l evidence in the
record t o support t h e c o u r t ' s conclusion here.
The two c h i l d r e n h a d l i v e d w i t h t h e m o t h e r s i n c e t h e
s e p a r a t i o n i n September 1979, and t h e husband t e s t i f i e d t h a t
t h e w i f e was a s a t i s f a c t o r y m o t n e r . Furthermore, t h e s o c i a l
worker had only visited the husband's home, and not the
wife's, s o c o u l d n o t t e s t i f y t h a t t h e w i f e ' s home was n o t a
s u i t a b l e home for the children. W h i l e w e may s y m p a t h i z e
w i t h t h e h u s b a n d ' s w i s h e s t o h a v e a more d i r e c t i n f l u e n c e o n
the r e a r i n g of h i s children, w e do n o t f i n d any abuse o f
d i s c r e t i o n w h i c h would w a r r a n t a r e v e r s a l . Corbett, supra.
With regard to the second issue, appellant argues
that there is no finding to suggest that the court
considered the statutory criteria set forth in section
40-4-204, MCA, in awarding the wife child support payments
of $200 a month per child. Husband further argues that the
requirements of the District Court's judgment obligate him
to pay out far more each year than he has ever received in
income.
Section 40-4-204, MCA, provides:
"Child support. In a proceeding for dissolu-
tion of marriage, legal separation, mainten-
ance, or child support, the court may order
either or both parents owing a duty of sup-
port to a child to pay an amount reasonable
or necessary for his support, without regard
to marital misconduct, after considering all
relevant factors including:
"(1) the financial resources of the child;
"(2) the financial resources of the custodial
parent;
"(3) the standard of living the child would
have enjoyed had the marriage not been dis-
solved ;
" (4) the physical and emotional condition of
the child and his educational needs; and
"(5) the financial resources and needs of the
noncustodial parent."
Here the District Court judge had before him the
wife's testimony regarding the financial needs of her
children, which included housing, groceries and transporta-
tion. The wife testified that she needed $600 per month for
two children, and, in our view, an award of $400 per month
is not excessive in any way.
Nor are we persuaded that the District Court's judg-
ment will so strap the husband that he cannot make the pay-
ments. Both the husband and the ranch accountant testified
that the corporation pays and provides nearly all the hus-
band's living expenses, including his house, food, utilities
and transportation. The corporate salaries are adjusted
a c c o r d i n g t o t h e income r e c e i v e d e a c h y e a r . The h u s b a n d ' s
s a l a r y i n 1 9 7 8 was $ 2 2 , 8 5 0 a n d i n 1 9 7 9 was $ 2 7 , 8 6 6 . There
i s a m p l e e v i d e n c e t o s u p p o r t a n a w a r d o f $400 p e r month i n
c h i l d support.
Appellant's third issue relates to the District
Court's distribution of the marital estate. Appellant
argues t h a t t h e f i n d i n g s should n o t have included in the
marital e s t a t e t h e 120 s h a r e s g i f t e d t o t h e husband a f t e r
the marriage. Appellant also contends that the husband
should have been credited for the nearly $25,000 t h a t he
paid t o t h e wife a f t e r their s e p a r a t i o n and p r i o r t o her
remarriage.
Both appellant's brief and the amicus brief
(representing the other shareholders) argue t h a t t h e c o u r t ' s
v a l u a t i o n o f t h e s h a r e s was i m p r o p e r a n d t h a t t h e g r a n t i n g
of a s e c u r i t y i n t e r e s t was c o n t r a r y t o t h e v a r i o u s a g r e e -
ments of t h e s h a r e h o l d e r s .
I n Montana w e p a y a g r e a t a m o u n t o f d e f e r e n c e t o t h e
judgment of t h e D i s t r i c t C o u r t r e g a r d i n g p r o p e r t y d i v i s i o n s ,
i.e. , our s t a n d a r d of r e v i e w is w h e t h e r t h e D i s t r i c t C o u r t
a c t e d a r b i t r a r i l y w i t h o u t employment o f c o n s c i e n t i o u s j u d g -
ment, o r exceeded t h e bounds of r e a s o n i n view of all the
circumstances. Zell v . Z e l l ( 1 9 7 7 ) , 1 7 4 Mont. 2 1 6 , 570 P.2d
33.
I n I n R e M a r r i a g e o f J o r g e n s e n ( 1 9 7 9 ) , 1 8 0 Mont. 294,
590 P.2d 606, t h i s Court considered t h e v a l u a t i o n of s t o c k
of a c l o s e l y h e l d c o r p o r a t i o n where t h e s h a r e s c o u l d o n l y be
s o l d t o o t h e r s h a r e h o l d e r s o r t o t h e company. A shareholder
agreement set t h e p r i c e o f e a c h s h a r e a t $750, and we found
that the District Court did not abuse its d i s c r e t i o n in
v a l u i n g t h e s h a r e s a t $750. Here, under t h e p r o v i s i o n s of
t h e buy a n d s e l l a g r e e m e n t a n d amendments t h e r e t o , t h e p r i c e
o f e a c h s h a r e s h a l l b e book v a l u e ( a s shown by t h e b a l a n c e
s h e e t a t t h e c l o s e of t h e p r e c e d i n g t a x y e a r ) o r a d i f f e r e n t
v a l u a t i o n c a n b e e s t a b l i s h e d by a n i n d e p e n d e n t a p p r a i s e r .
Under t h e book v a l u e m e t h o d , each s h a r e of B u r l e i g h
Angus Ranch would b e w o r t h $158.37 which, i n view of the
evidence, is u n r e a l i s t i c a l l y low. Husband e s t i m a t e d t h a t
e a c h s h a r e was w o r t h a b o u t $500. The D i s t r i c t C o u r t v a l u e d
each a t $1,009.72, a f i g u r e r e a c h e d by d i v i d i n g t h e v a l u e o f
t o t a l a s s e t s l e s s l i a b i l i t i e s by t h e number o f o u t s t a n d i n g
and i s s u e d s h a r e s . W e cannot say t h a t t h e District Court
a c t e d a r b i t r a r i l y o r t h a t t h e method e m p l o y e d e x c e e d e d t h e
bounds of r e a s o n i n view of t h e c i r c u m s t a n c e s , Z e l l , s u p r a ,
and w e uphold it h e r e .
W can s i m i l a r l y dispose of t h e husband's contention
e
t h a t t h e D i s t r i c t C o u r t s h o u l d h a v e made a d i s t r i b u t i o n o f
the stock i n kind, i.e., that the wife should have been
g i v e n some o f the shares instead of the right t o annual
payments. S i m p l y b e c a u s e t h i s o p t i o n was o p e n t o t h e c o u r t
is no reason that the district judge had to select it.
Under t h e circumscribed standard of review e s t a b l i s h e d by
Zell a n d numerous o t h e r cases, t h e r e was no e r r o r in the
D i s t r i c t Court's f a i l u r e t o d i s t r i b u t e t h e property i n kind.
Furthermore, w n o t e t h a t t h e D i s t r i c t C o u r t d i d n o t award
e
t h e w i f e 50 p e r c e n t o f t h e n e t m a r i t a l e s t a t e , b u t o n l y 3 8
p e r c e n t because of t h e g i f t s t h e husband had r e c e i v e d b e f o r e
and d u r i n g t h e m a r r i a g e .
Nor do we p r e d i c a t e error on the District Court's
g r a n t i n g t h e w i f e a s e c u r i t y i n t e r e s t i n t h e 720 s h a r e s o f
t h e husband's stock. She n e e d s some p r o t e c t i o n t o i n s u r e
t h a t t h e a n n u a l p a y m e n t s w i l l b e made, and t h e p r o s p e c t o f
foreclosure on those shares should provide a sufficient
i n c e n t i v e f o r t h e h u s b a n d t o make t h e i n s t a l l m e n t p a y m e n t s .
We have previously approved the granting of a security
interest for the wife's protection in other cases, In Re
M a r r i a g e o f Brown ( 1 9 7 8 ) , 1 7 9 Mont. 417, 587 P.2d 361. We
also note that, under the terms of the District Court
decree, t h e wife cannot unreasonably withhold consent t o t h e
husband's encumbering h i s s t o c k o r s e l l i n g c o r p o r a t e l a n d .
The p a r t i e s h e r e d i s a g r e e on w h e t h e r t h e h u s b a n d h a s
the voting rights to a majority of the stock in the
corporation. T h e r e a r e 1 , 4 7 9 o u t s t a n d i n g s h a r e s , a n d i t is
u n c o n t e s t e d h e h a s v o t i n g r i g h t s t o 510 s h a r e s . The bone o f
c o n t e n t i o n h e r e is whether t h e husband h a s t h e v o t i n g r i g h t s
t o t h e 230 s h a r e s b e i n g s o l d t o him by h i s p a r e n t s , w h i c h
would make him a m a j o r i t y s h a r e h o l d e r . A p p e l l a n t and t h e
amicus b r i e f a r g u e t h a t s i n c e t h e c e r t i f i c a t e s a r e s t i l l i n
t h e p a r e n t s ' names, t h e y r e t a i n t h e v o t i n g r i g h t s . Based on
the record before us, we cannot agree. The c r u c i a l l a n g u a g e
i n t h e c o n t r a c t w h e r e i n t h e husband is buying t h e s t o c k from
h i s p a r e n t s is a s f o l l o w s :
". . . Purchaser s h a l l have t h e r i g h t t o
enjoy a l l r i g h t s and i n c i d e n t s o f o w n e r s h i p
o f t h e 230 s h a r e s o f s t o c k , s u b j e c t o n l y t o
s u c h r e s t r i c t i o n s a s h a v e b e e n p l a c e d upon
t h e P u r c h a s e r by t h e S e l l e r s u n d e r t h e terms
of t h i s agreement." (Emphasis added.)
Nowhere i n t h e c o n t r a c t d o w e f i n d a n y r e s e r v a t i o n o f v o t i n g
r i g h t s by t h e p a r e n t s , and w e t h u s c o n c l u d e t h a t t h e h u s b a n d
h a s t h e r i g h t t o v o t e a m a j o r i t y of t h e s t o c k of t h e corpor-
ation. The s e c u r i t y i n t e r e s t g r a n t e d t o t h e w i f e w i l l h e l p
e n s u r e t h a t t h e husband d o e s n o t u s e h i s c o r p o r a t e c o n t r o l
t o jeopardize her interest.
Finally, husband argues he should have been given
credit for the a p p r o x i m a t e l y $25,000 t h a t he paid to the
wife after t h e i r s e p a r a t i o n and b e f o r e h e r remarriage. We
disagree. W have p r e v i o u s l y h e l d t h a t l i v i n g expenses of
e
t h e w i f e need n o t be c r e d i t e d t o t h e husband i n t h e d i s t r i -
b u t i o n and computation of t h e marital estate, I n R e M a r r i a g e
o f C a p r i c e ( 1 9 7 8 ) , 1 7 8 Mont. 455, 5 8 5 P.2d 641, and w e s o
f i n d here.
Affirmed.
@ . uxag
&,
Chief J u s t i c e