No. 86-041
IN THE SUPREME COURT OF THE STATE OF MONTANA
1986
IN RE THE MARRIAGE OF
MARGARET E. HURLEY,
DENNIS P. HURLEY,
APPEAL FROM: District Court of the Thirteenth
Judicial District of the State of
Montana in and for the County of
Yellowstone,
The Honorable Diane G. Barz, Judge presiding.
COUNSEL OF RECORD:
For ~etitioner/Respondent:
Wright, Tolliver and Guthals;
Kenneth D. Tolliver,
Billings, Montana
For Respondent/Appellant:
Radovich Law Firm; Eric K. Hendricks
Billings, Montana
Submitted on Briefs: April 4, 1986
Decided: July 17, 1986
Jlii 1 790g
',
Filed:
Clerk
Mr. Justice John C. Sheehy delivered the Opinion of the Court.
Appellant, Dennis P. Hurley, appeals from the judgment
of the District Court, Thirteenth Judicial District, County
of Yellowstone, dissolving the parties' marriage and
apportioning the property and assets of their marital estate.
Margaret and Dennis Hurley were formerly married in
1962. In 1968, the parties adopted a child, Kevin Hurley,
who was 17 years old and a senior at Billings Central
Catholic High School at the time of the dissolution
proceedings in the District Court. In 1970, the parties were
legally divorced in the State of Minnesota. In the two years
following their divorce, the parties occasionally resided
together on an irregular basis, until early 1973, when Dennis
asked Margaret to move to Corning, Iowa where he had secured
employment the previous year. Margaret testified that she
agreed to move to Iowa on the condition that they resume
their marital relationship. Accordingly Margaret quit her
job and sold her home in Minnesota to facilitate the move.
After moving to Iowa, Margaret resumed wearing her
wedding rings and the couple held themselves out as husband
and wife. In November, 1973, Dennis and Margaret purchased a
home in Corning, Iowa. Margaret testified she contributed
$12,500.00 toward the downpayment, that being the proceeds
from the sale of her Minnesota home. Dennis produced two
cancelled checks indicating that he contributed the sum of
$2,500.00. The parties gave conflicting testimony regarding
the total purchase price of the home, Margaret recalling the
amount to be $42,500.00 and Dennis $40,500.00. The balance
of the purchase price was financed by a mortgage in the sum
of $28,000.00. The parties executed the mortgage as "Dennis
P. Hurley and Margaret E. Hurley, Husband and Wife."
For the years 1978-1981, Dennis prepared the family
income taxes which he filed as "married-filing joint return,"
naming Margaret as his wife with her occupation shown as
"housewife." Dennis denied that a common law marriage
existed despite the fact that they held themselves out as
married and despite the fact that he agreed he received
"services that would be comparable or equivalent" to a wife.
Based on the above evidence, the District Court concluded
that the parties entered a common law marriage in April,
1973.
In 1981, the parties purchased a duplex in Eureka
Springs, Arkansas, as an investment. The duplex was
purchased under a contract for deed for the sum of
$50,000.00, less a $20,000.00 downpayment. The record
indicates the downpayment consisted of $14,000.00 in funds
inherited by Dennis and $6,000.00 from the parties' joint
savings account.
In 1982, Dennis obtained employment in Billings,
Montana. The parties and their son resided in Billings until
April, 1984, when they separated. The record discloses, as
the District Court found, that the parties held themselves
out as husband and wife and maintained joint checking and
savings accounts while in Billings.
During 1983, Dennis was employed by I.R.I. Research in
Georgetown, Guyana. While employed by I.R.I. Research, in
March of 1983, Dennis completed a form designating Margaret
as his beneficiary for insurance purposes, indicating her
relationship as "wife."
In April 1984, Dennis disappeared from the Billings
area. He later phoned Margaret from Las Vegas, Nevada,
advising her that he had left a note with instructions in a
post office box. The note instructed Margaret to take the
funds from their joint checking and savings accounts to use
to support herself and their son, and further advised that he
would be living in Las Vegas.
At that time, Margaret withdrew $31,000.00 from the
savings account leaving a balance of $13,994.00. She did not
remove any funds from the joint checking account, in which
there was a balance of $22,605.00. At this time, Margaret
also had access to a savings account in her own name, with a
balance of $15,000.00 which sum was the accumulation of gifts
received from her family, her childhood savings, and a small
inheritance from her father's estate.
Dennis returned to Billings a few days after he had
phoned Margaret from Las Vegas and withdrew the sums
remaining in the joint checking and savings accounts,
totalling approximately $36,000.00.
In May, 1984, Dennis moved to Eureka Springs, Arkansas,
and moved into one unit of the parties' duplex, where he
presently resides. Dennis is a college graduate with a
degree in accounting, and is presently employed for the firm
of George S. May as a management consultant. The record
indicates that Dennis' present earnings are approximately
$1,700.00 per month. The record, however, also indicates
that he has had an earning capacity of up to $4,000.00 per
month.
In 1983 and 1984, Margaret attempted to establish a
career in real estate in Billings, but earned only $2,300.00
in commissions. Thereafter, Margaret worked briefly as a
receptionist from December, 1984, through February 1985, but
has been unemployed since that time. Margaret, however,
testified that she intends to attend a four-month paralegal
training course in Denver, Colorado, to obtain marketable
employment skills if she does not obtain suitable employment
soon.
The District Court found that during the period of April
1973, up to the time of separation, the parties accumulated
the following assets:
Assets at time of separation
Joint checking account
Joint saving account
Wife's separate savings account
1981 Mercury Lynx
1974 Chrysler
IRA
Furniture
Arkansas Duplex
Stocks
3 shares Financial Corp. of America 120.00
6 shares Pfazier 120.00
162 shares Amfac 4,050.00
3 shares N.W. National 40.00
TOTAL $148,719.59
The District Court also found that the parties had
accumulated the following liabilities at the time of trial:
Liabilities at time of trial
Mortgage of Arkansas Duplex $ 18,000.00
Mortgage of Billings House 40,000.00
TOTAL $ 62,000.00
Subsequent to the parties separation, Margaret purchased a
home in Billings for $60,000.00. The "mortgage of Billings
House" listed above represents the amount still owing on the
$60,000 purchase price.
At the time the parties separated in April, 1984,
Margaret had custody of the following assets:
Funds from joint savings account $ 31,000.00
Personal savings account 15,000.00
1981 Mercury Lynx 3,500.00
Furniture 1,835.00
TOTAL $ 51,335.00
Of the $31,000.00 from the parties' joint savings
account, Margaret used $16,500.00 of the savings as a
downpayment on the Billings house. Further, Margaret
testified that she had also expended a portion of the savings
for living expenses for herself and the parties' minor child,
leaving a balance of $15,208.00 in savings and $1,424.66 in
checking account funds.
The District Court also found that Dennis had custody of
the following assets:
Funds from joint savings account $ 13,994.00
Funds from joint checking account 22,605.59
1974 Chrysler 500.00
IRA 10,000.00
Stocks-totaling 4,330.00
Arkansas duplex 50,000.00
TOTAL $101,429.59
Accordingly, the District Court allocated the assets and
liabilities in the marital estate as follows:
Assets Value Wife Husband
Wife's cash account balance
Savings drawn by husband
Checking drawn by husband
1981 Mercury Lynx
1974 Chrysler
IRA
Furniture
Arkansas Duplex
Stocks
Billings house
TOTAL ASSETS $181,972.59 $90,543.00 $91,429.59
Liabilities
Billings home mortgage
Arkansas duplex
TOTAL LIABILITIES
Net Worth and Allocation $119,972.59 $46,543.00 $73,429.59
In addition, the District Court awarded Margaret $31,439.18
to be paid in installments of $5,000.00, the first payment
due 30 days after entry of the decree and the balance in five
equal annual installments commencing July 1, 1986, together
with interest at 10% per annum from the date of trial. In
awarding Margaret the cash sum, the District Court reasoned
that: "In light of the husband's superior earning capacity,
the wife's need for retraining in order to obtain suitable
employment and the expense she will incur in educating the
parties' son, the Court finds it equitable to award her
approximately 65% of the net marital estate."
The District Court also noted that Dennis failed to
account accurately for the marital assets he controlled since
the separation, and that he testified to purchasing assets
not shown on his Rule 32 affidavit. Specifically, Dennis
failed to report income of $325.00 per month he receives for
rental of one-half of the duplex in Arkansas.
The record also indicates that Dennis expended a large
portion of the cash assets of the marriage. Of the
$36,599.59 which he took from the parties joint checking and
savings accounts, he retained only $15,350.00 at the time of
trial. Dennis' only explanation at trial for the dissipation
of funds was the expense of transporting a woman whom he
purportedly married, and her three children from Guyana,
South America to the United States.
Dennis raises five issues for our review:
1. Whether the District Court erred in determining that
a common law marriage had been established commencing April
1, 1973;
2. Whether the District Court's adoption of Margaret's
Proposed Findings of Fact and Conclusions of Law was error;
3. Whether the District Court erred in failing to
indicate the basis for the determination of the values of the
marital estate when conflicitng evidence of values was
presented;
4. Whether the District Court erred in selecting the
time valuation of the marital estate; and
5. Whether the District Court erred, in exercise of its
discretion, by acting arbitarily and without employment of
conscientious judgment and by exceeding the bounds of reason
in view of the circumstances.
Dennis first contends that the District Court erred in
failing to explain whether its finding of a common law
marriage was based on Montana or Iowa law because the parties
were Iowa residents when the common law marriage was entered.
Dennis further contends that the evidence does not support
the conclusions that the parties entered a common law
marriage under Iowa law. Margaret, however, contends that
there was a valid common law marriage under the laws of both
Montana and Iowa.
In Montana, in order for a common-law marriage to exist,
the parties must be capable of consenting to the marriage;
there must be a mutual and public assumption of the marriage
relationship, cohabitation, and the marriage must take place
immediately. In Re Sartain (Mont. 1984), 686 P.2d 909, 912,
41 St.Rep. 1691, 1694; In Re McClelland (1975), 168 Mont.
160, 164, 541 P.2d 780, 783. In Iowa the elements necessary
to establish a common law marriage are: 1. an intent and
agreement praesenti to be married by both parties,
2. continuous cohabitation by the parties, and 3. a public
declaration that the parties are husband and wife. In Re
Marriage of Winegard (Iowa 1979), 278 N.W.2d 505, 510.
Clearly, the elements required to establish a common law
marriage in Iowa and Montana are substantatively indentical.
We, therefore, hold as to Dennis1 first contention, that it
was immaterial that the District Court did not state in its
findings whether it found the existence of a common law
marriage based on Montana or Iowa law. Because the parties
were residents of Iowa, in April, 1973, however, when the
alleged common law marriage was entered, we will look
specifically to Iowa law to determine whether there was
sufficient evidence in the record to support the District
Court's conclusion that the parties entered a common law
marriage.
Specifically, Dennis argues that there is a lack of
evidence of an agreement to be married in praesenti as
required by Iowa law. In a separate opinion in In Re
Marriage of Winegard (Iowa 1977), 257 N.W.2d 609, where the
husband expressly denied the existence of an agreement to
marry, the Supreme Court of Iowa stated:
It is sufficent if the parties cohabitating intend
present marriage, and it is immaterial how the
intention is evidenced. The woman, indeed, may be
entitled to marital rights if she intends present
marriage, and the man does not, provided they
cohabit and provided his conduct is such as to
justify her in believing that he intends present
marriage. 257 N.W.2d at 616.
In upholding the finding in Winegard of a common law
marriage, the Iowa Supreme Court permitted both direct and
circumstantial proof of an agreement to be married in
praesenti. Here, the evidence of the agreement to be married
in praesenti is more than adequate and Dennis1 denial thereof
is not controlling. Margaret testified on cross-examination
as follows:
Q. You stated earlier that there was an agreement
to live as man and wife. Can you explain when that
agreement was made? A. The agreement to live as
man and wife, I was represented and introduced as
his wife as soon as we started living together.
But when I agreed to move to Corning, we moved as
representing, I was again introduced as his wife.
We purchased our home as husband and wife.
Q. Can you point to an exact moment where this
agreement was made? At some point, there was a
decision to become man and wife. Can you tell me
what that moment was? A. At the moment when I
agreed to move to Corning.
There being an abundance of evidence in the record
establishing the other elements of an Iowa common law
marriage, we hold the District Court did not err in finding
the parties entered a common law marriage in April, 1973.
Dennis next contends that the District Court's adoption
of Margaret's Proposed Findings of Fact and Conclusions of
Law was error. It is well settled that the District Court
should not rely too heavily on findings and conclusions
submitted by the winning party, and reliance is too heavy
when the findings are used to the exclusion of a
consideration of the facts and the exercise of the Judge's
own judgment. In Re Marriage of Hunter (1982), 196 Mont.
235, 245-46, 639 P.2d 489, 495. Our ultimate test for
adequacy of findings of fact is whether they are sufficiently
comprehensive and pertinent to the issues to provide a basis
for decision, and whether they are supported by the evidence
presented. In Re Marriage of Wolfe (1983), 202 Mont. 454,
457-58, 659 P.2d 259, 261; In Re Marriage of Jensen (Mont.
1981), 631 P.2d 700, 703, 38 St.Rep. 1109, 1113. The
findings in this case, which were adopted almost verbatim
from Margaret's proposed findings, do meet the above tests.
The District Court's findings of fact and conclusions of law
are comprehensive and pertinent to the issues presented.
Further, they are all supported by sufficient evidence in the
record.
Dennis' third contention is that the District Court
erred by failing to indicate the basis for the determination
of the values of the marital estate when conflicting evidence
of values was presented. Specifically, Dennis contends that
the District Court erred in valuing the parties' personal
property. At trial, Margaret testified that the parties'
personal property should be valued at $1,835.00. Margaret
arrived at this amount by attaching a value to each item of
personal property an amount equal to one-fourth of its
purchase price. Dennis, however, testified that the proper
valuation method should be the replacement cost of each item.
In Montana, in distributing marital property pursuant to
a dissolution and adopting proposed values or setting its own
values, the District Court is free in its discretion to adopt
the recommendation of a party or a layman. In Re Marriage of
Garst (Mont. 1983), 669 P.2d 1063, 1066-67, 40 St.Rep. 1526,
1529; In Re Marriage of Goodmundson (1982), 201 Mont. 535,
539, 655 P.2d 509, 511. But it is also true that when faced
with widely conflicting valuations, the District Court is
required to give reasons for selecting one value over the
others. Wolfe, 202 Mont. at 459, 659 P.2d at 262. Clearly,
the District Court should have stated its reasons for
adopting Margaret's valuation over Dennis'. We, however,
hold that the error was harmless, the method employed by the
District Court being more sound than the method suggested by
Dennis.
Dennis next contends that the District Court erred in
selecting the time valuation of the marital estate. In the
instant case, the District Court valued Dennis' estate as of
the date of separation and Margaret's estate as of the date
of dissolution. Dennis maintains that the same valuation
date should be applied to both parties and that it should be
the date of separation. Margaret, however, contends that the
valuation dates adopted allowed for an equitable analysis and
allocation of the parties assets.
The standard for reviewing the property division in a
dissolution decree is well settled in Montana. The
apportionment made by the District Court will not be
disturbed on review unless there has been a clear abuse of
discretion as manifested by a substantially inequitable
division of the marital assets resulting in substantial
injustice. In Re Marriage of Holston (Mont. 1983), 668 P.2d
1048, 1050, 40 St.Rep. 1435, 1436-37; In Re Marriage of
Schultz (1982), 199 Mont. 332, 338, 649 P. 2d 1268, 1271; In
Re Marriage of Brown (1978), 179 Mont. 417, 422, 587 P.2d
361, 364. Abuse of discretion is further indicated by a
District Court's arbitrary action without employment of
conscientious judgment or in excess of the bounds of reason
resulting in substantial injustice. In Re Marriage of
Martens (Mont. 1981), 637 P.2d 523, 525, 38 St.Rep. 2135,
2137; In Re Marriage of Creon (1981), 195 Mont. 254, 275, 635
P.2d 1308, 1309.
It is well settled that a proper disposition of marital
property in a dissolution proceeding requires a finding of
the net worth of the parties. In Re Marrige of Hamilton
(1980), 186 Mont. 282, 285, 607 P.2d 102, 103; In Re Marriage
of Vivian (1978), 178 Mont. 341, 344, 583 P.2d 1072, 1074; In
Re Marriage of Kramer (1979), 177 Mont. 61, 67, 580 P.2d 439,
443. This Court has further recognized that selection of a
single valuation date for determining the net worth of the
parties can create an inequitable disposition. In Re
Marriage of Wagner (Mont. 1984), 679 P.2d 753, 757, 41
St.Rep. 409, 414.
In the instant case the parties effected a partial and
informal division of a portion of the marital estate at or
about the time of separation. Specifically, they each took a
substantial portion of cash and placed it in their separate
accounts. Margaret applied her cash toward maintaining
herself and the partiesv minor son for whom Dennis provided
no support or financial assistance during the separation.
With regard to Dennis, however, it is sufficient to say that
the record is clear that he dissipated his cash in ways which
did not further the legitimate objectives of the marriage.
The District Court relied on Dennis' dissipation of
funds in reaching its conclusion that to equitably apportion
the parties' marital estate separate valuation dates were
necessary. Section 40-4-202(l), MCA, permits the District
Court to consider "dissipation of value of the respective
estates" by one or both of the parties in its apportionment
of the marital estate. Here, the District Court considered
Dennis' dissipation of assets in its determination of the
parties net worth. It made no substantive difference whether
the District Court considered Dennis' dissipation of funds in
its determination of the net worth of the parties or in its
actual apportionment of the marital estate because a finding
of net worth is simply the first step in the apportionment
process. We, therefore, hold that the District Court did not
abuse its discretion by selecting separate valuation dates
for the estates of the respective parties.
With regard to the apportionment of assets to the
respective parties, Dennis contends it was error for the
District Court to award Margaret additional assets to cover
the expenses she intends to incur in sending the parties' son
to college. In this regard, the District Court made the
following findings of fact:
37. The evidence further shows that the parties'
son is a senior in high school and an honor student
at Billings Central Catholic High School, and Boys
State delegate and that he desires a college
education. His last year at Central will cost
$1,048.00 in tuition.
39.. .. In light of the husband's superior
earning capacity, the wife's need for retraining in
order to obtain suitable employment and the expense
- - incur esuitable to award parties' - the
she will
Court finds it
in educating the son,
her approximately
--
65% of the net- marital estate.. .. (~m~hasis
added. )
Section 40-4-202(2), MCA states:
In a proceeding, the court may protect and promote
the best interests of the children by setting aside
a portion of the jointly and separately held
sestates of the parties in a separate fund or trust
for the support, maintenance, education, and
general welfare of any minor, dependent, or
incompetent children of the parties. (Emphasis
added.
Thus, in the instant case, the District Court erred in two
respects. First, it was error to award a portion of the
marital estate directly to Margaret for the education of the
parties' son. Such an apportionment should have been placed
in a "separate fund or trust" as provided by S 40-4-202(2),
MCA .
Second, § 40-4-202(2), MCA,permits the District Court to
set aside a portion of the marital estate only for the
education of a "minor" child. Here, the District Court
apparently awarded Margaret a greater portion of the marital
estate using as one of the factors in its decision the
college education of the parties' son. In Montana, a parents
obligation for support ends at the age of majority, unless
there has been some voluntary agreement that support by one
or both parents will continue beyond majority. In Re
Marriage of Bordner (Mont. 1986), 715 P.2d 436, 438, 43
St.Rep. 417, 419-20; In Re Marriage of Herrig (1982), 199
Mont. 174, 187, 648 P.2d 758, 765. The District Court's
consideration of Margaret's educational expenses effectively
placed an improper obligation on Dennis to support their son
beyond majority. This cannot be done. Thus, we remand this
case for the District Court to apportion the parties' assets
without regard to the expenses Margaret will incur in sending
the parties' son to college. The District Court, however,
may consider Margaret's expenses in raising and educating the
parties' son from the time of separation until he reached
majority as a significant contribution to the marital estate.
In Re Marriage of Popp (Mont. 1983), 671 P.2d 24, 28, 40
St.Rep. 1747, 1751. The District Court may, of course, grant
Margaret a larger share of the marital property upon the need
for her retraining and his superior earning capacity.
Dennis' final contention is that the District Court
erred in awarding Margaret the parties' Individual Retirement
Account for failure to consider the tax consequences.
Dennis, however, failed to present this issue to the District
Court and advances it here with no citation of authority to
establish an immediate tax liability. In Re Marriage of Beck
(Mont. 1981), 631 P.2d 282, 285, 38 St.Rep. 1054, 1058. We,
therefore, will not discuss the issue further.
We remand to the District Court for further proceedings
consistent with this opinion.
W Concur:
e
d d 7 -
Chief J u s t i c e