NO. 88-254
IN THE SUPREME COURT OF THE STATE OF MONTANA
1988
IN RE THE MARRIAGE OF
JANICE JOHNSON COLE ,
Petitioner and Respondent,
and
SHERWIN GARY COLE,
Respondent and Appellant.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Thomas Olson, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Drysdale, McLean, Nellen & Nellen; A. Susanne Nellen,
Bozeman, Montana
For Respondent:
Morrow, Sedivy & Bennett; Edmund P. Sedivy, Jr.,
Bozeman, Montana
C
Submitted on Briefs: Aug. 11, 1988
Decided: October 20, 1988
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Clerk
Mr. Justice William E. Hunt, Sr., delivered the Opinion of
the Court.
The husband in a dissolution action appeals from a
decree of the Eighteenth Judicial District Court, Gallatin
County. We affirm the District Court and remand for a
determination of reasonable attorney's fees incurred by the
wife on this appeal.
The issues raised on appeal are:
1. Whether the District Court properly considered the
factors delineated in the Montana maintenance statilte, $
40-4-203, MCA, when it awarded maintenance to the wife.
2. Whether the maintenance award i.s based on
substantial credible evidence.
The parties were married on July 18, 1975. Shortly
after the marriage, in January, 1976, the husband, his
brother and his father formed a farming partnership. The
husband and his brother each received a 25 percent share in
the business and their father retained the remaining
interest.
Prior to December 29, 1987, the partnership was indebted
to Norwest Bank of Billings in the amount of approximately
$574,000, plus $55,000 interest. On December 29, 1987, one
day before the dissolution hearing that is the subject of
this appeal, the partners restructured their loan with the
bank. The agreement does not increase the amount of the
original debt but gives the partners the authority to borrow
additional funds up to a total approximate debt of $748,000.
The loan agreement allows the partners to take draws of
$5,500 per month, with $2,500 going to the father and the
husband and his brother splitting equally the remaining
$3,000. No other salaries are drawn by the partners and no
bonuses are given. The loan agreement requires that all
profits be applied toward the debt or the purchase of new
equipment.
The District Court found that the husband's share of the
partnership was a minority interest in a closely-held family
business and for that reason was not saleable to an outside
buyer.
The District Court valued the partnership at $1,019,733,
and the husband's 25 percent share at $254,933. The court
then reduced the value of the interest by 30 percent to take
into account the share's nonmerchantability, the
partnership's high debt load and a discount for machinery.
The court concluded that, after the 30 percent reduction, the
husband's interest equaled $178,453. The court found that
his share of the debt was $158,440.
The husband also owns a 50 percent interest in 105 acres
of farmland. He and his brother purchased the land in 1985
with a $130,000 loan. Unfortunately, land values dropped.
The husband' s interest in the land, $50,000, is presently
valued at less than his share of the debt, $64,000. The
partnership farms the land, although it pays no rent for the
acreage.
The wife is 34 years old. She has a degree in home
economics from Montana State University. During the
marriage, she regularly worked outside the home in addition
to her duties as homemaker. She has been employed as a
teacher, travel agent, employment counselor and door-to-door
salesperson. She has also engaged in business ventures,
although with little success. Her earnings have averaged
approximately $4.00 per hour. In 1987, she earned $5,203
selling cable television subscriptions in Colorado and
Nevada.
The wife filed a petition for dissolution of marriage on
October 7, 1986. A one day hearing was held on December 30,
1987. The District Court issued its findings of fact and
conclusions of law on February 24, 1988.
The trial court awarded the parties joint custody of
their one son, Wesley, age 10. The court gave temporary
physical custody of the son to the husband while the wife
moved to another area to look for a new job. Once the wife
is settled, she may apply to the court for physical custody
of the child. The husband has agreed to pay child support of
$250 per month in the event physical custody of the child is
given to the wife. The wife is not required to pay child
support while Wesley resides with the husband.
The court divided the property of the parties, awarding
the wife assets valued at a total of $12,975. The award
included a 1985 Jeep and camper, a 1953 Chevrolet limousine,
and various household furnishings. The wife was also ordered
to pay $9,250 in liabilities, leaving her with a net of
$3,725.
The court granted the husband his entire interest in the
partnership as well as his interest in the 105 acres of land.
In addition, the husband was awarded several household items,
a 1981 BMW, and the family home. The court found that the
home had a value of $48,000 but was mortgaged at $52,231.
The total value of the assets awarded to the husband equaled.
$290,403. The husband was ordered to assume liabilities of
$293,671, including the partnership debt and the mortgages on
the house and the farmland. Subtracting the liabilities from
the assets, the husband received a negative net of $3,268.
The District Court also ordered the husband to pay
maintenance to the wife in the sum of $500 per month for 10
years. The husband contends this award of maintenance was
improper because the District Court failed to consider the
factors set out in § 40-4-203, MCA, and because the award was
not based on substantial credible evidence.
Our standard of review in dissolution cases is limited.
We will not disturb a District Court's judgment that is based
on substantial credible evidence unless a clear abuse of
discretion is shown. In Re the Marriage of Stewart (Mont.
1988), 757 P.2d 765, 767, 45 St.Rep. 850, 852. Although the
District Court in the instant case failed to make findings
specifically tailored to the elements delineated in §
40-4-203, MCA, it did not abuse its discretion in making the
maintenance award. It is evident from the findings that the
lower court considered the proper factors in granting the
wife maintenance and that the award was based on substantial
credible evidence.
An award of maintenance may be granted only if the
spouse seeking maintenance meets the requirements of S
40-4-203 (I), MCA. In Re the Marriage of ~ohnsrud (1977), 175
Mont. 117, 123, 572 P.2d 902, 905. That section provides:
(1) In a proceeding for dissolution of marriage or
legal separation or a proceeding for maintenance
following dissolution of the marriage by a court
which lacked personal jurisdiction over the absent
spouse, the court may grant a maintenance order for
either spouse only if it finds that the spouse
seeking maintenance:
(a) lacks sufficient property to provide for his
reasonable needs; and
(b) is unable to support himself through
appropriate employment or is the custodian of a
child whose condition or circumstances make it
appropriate that the custodian not be required to
seek employment outside the home.
Maintenance payments supplement the property division.
If, after an equitable division of the marital assets, one
party lacks sufficient property to fulfill his or her
reasonable financial needs, maintenance may be appropriate.
In determining whether a spouse has sufficient property, a
court should consider whether the spouse seeking maintenance
has received income producing or income consuming assets. In
Re the Marriage of Goodman (Mont. 1986), 723 P.2d 219, 222,
43 St.Rep. 1410, 1414-15. While income producing property
generates income to provide for a party's financial needs,
income consuming property requires capital for its upkeep.
Therefore, a spouse who receives only income consuming
property is more likely to be in need of maintenance.
In the present case, the District Court failed to
specifically point out the income producing or consuming
nature of the property awarded to the parties. This failure,
however, is not fatal. Although in our opinion, In Re the
Marriage of Tow (Mont. 1987), 748 P.2d 440, 442, 44 St.Rep.
2154, 2157, we stated, "we will require a specific finding
regarding the nature of the properties owned by the
maintenance seeking spouse," such a specific finding is not
required in this case. It is obvious from the findings and
conclusions that the court considered the character of the
property when it granted the maintenance award.
There is substantial credible evidence that the property
awarded to the wife will not fulfill her reasonable economic
needs. The total value of the award, $12,975, was small.
Furthermore, what property she did receive, two motor
vehicles, furniture and appliances, was income consuming
rather than income producing.
Because the wife will be unable to support herself by
relying on income produced by the asets distributed to her in
the property division, she will be required to find
employment in order to provide for her reasonable needs.
There is no question regarding the wife's ability to work.
She is a young, healthy individual who has worked outside of
the home throughout the marriage. The question is whether
she will be able to support herself through "appropriate
employment," a point that must be evaluated in light of the
standard of living established during the marriage. In Re
the Marriage of Madson (1979), 180 Mont. 220, 224-25, 590
P.2d 110, 112; Goodman, 723 P.2d at 222, 43 St.Rep. at 1414;
TOW, 748 P.2d at 442, 44 St. Rep. at 2158.
The District Court made no specific finding regarding
the standard of living established during the marriage. Even
so, we can infer from the findings that the parties enjoyed a
comfortable, though not lavish, lifestyle. They owned their
own home and several motor vehicles. The husband was a
partner in a successful farming operation from which he
received monthly draws ranging from $1,500 to $2,000.
The wife's standard of living fell drastically once she
separated from her husband. Her failure to find work in the
Bozeman area that paid more than minimum wage forced her to
look for employment outside of the state. The employment she
was able to find, selling cable subscriptions door-to-door,
required that she work extremely long hours seven days a
week. Even though she saved on rent by living out of her
camper, she earned only enough money to pay her bills. At the
time of the dissolution hearing she was out of funds and
without a job. She testified that she planned to move to a
metropolitan area where she estimated she could earn $1,200
monthly. Even at that salary, however, she would be unable
to meet her projected living expenses of $1,743 per month.
Both the findings and the record reflect that the wife
will be unable to support herself in a manner that will
approximate the standard of living established during the
marriage without the aid of maintenance payments. Therefore,
the District Court was correct in determining that an award
of maintenance was appropriate.
Once the lower court determines that a grant of
maintenance is warranted, it must look to the factors
enumerated in § 40-4-203(2), MCA, to ascertain the duration
and amount of the award. That section is as follows:
(2) The maintenance order shall be in such amounts
and for such periods of time as the court deems
just, without regard to marital misconduct, and
after considering all relevant facts including:
(a) the financial resources of the party seeking
maintenance, including marital property apportioned
to him, and his ability to meet his needs
independently, including the extent to which a
provision for support of a child living with the
party includes a sum for that party as custodian;
(b) the time necessary to acquire sufficient
education or training to enable the party seeking
maintenance to find appropriate employment;
(c) the standard of living established during the
marriage;
(d) the duration of the marriage;
(e) the age and the physical and emotional
condition of the spouse seeking maintenance; and
(f) the ability of the spouse from whom
maintenance is sought to meet his needs while
meeting those of the spouse seeking maintenance.
Our discussion above shows that the District Court
considered the majority of the elements listed in S
40-4-203(2), MCA, when it evaluated the need for maintenance.
Thus, the only element we need to discuss is that concerning
the ability of the husband to meet his needs while making
maintenance payments. Here, too, the income producing or
income consuming character of the property awarded in the
property distribution is important. In Re the Marriage of
Herron (1980), 186 Mont. 396, 407-08, 608 P.2d 97, 103. A
spouse who receives income producing property is in a better
position to pay a greater amount of maintenance for a longer
period of time.
In the instant case, the husband received all the farm
assets. Even so, he argues that the maintenance grant was
improper, contending that the partnership is income consuming
rather than income producing because it is heavily indebted.
We do not agree. A loan agreement with a bank that requires
that all profits be applied to debt reduction does not change
the character of an asset from income producing to income
consuming. The partnership is an income producing asset.
The husband further contends that the award was improper
because he is unable to pay maintenance and meet his personal
expenses at the same time. He argues that his ability to pay
should be the deciding factor in determining the propriety of
a maintenance award. This is not so. While the husband's
ability to meet his needs is an element that should be given
great weight, it is not always the determining factor. Each
case depends on its own unique set of facts. In Re the
Marriage of Aanenson (1979), 183 Mont. 229, 234, 598 P.2d
1120, 1123.
In the present case, the trial court was forced to
choose between awarding the wife an interest in the
partnership, an arrangement that would have caused continuing
friction between the parties, or maintenance. It chose to
grant maintenance of $500 per month for LO years. Under the
circumstances this was not an abuse of discretion. Although
the trial court did not make specific findings regarding each
element of § 40-4-203, MCA, the findings that were made show
that the court considered the proper factors when making the
award. Further, the findings and the award were based on
substantial credible evidence found in the record.
Ms. Cole requests attorney's fees on this appeal in
accordance with 5 40-4-110, MCA. That statute allows a court
to award costs and attorney's fees to a party who defends a
post-judgment proceeding in a dissolution action. We
therefore remand to the District Court for a determination of
Ms. Cole's reasonable attorney's fees incurred in defending
this appeal.
We affirm the grant of maintenance and remand on the
matter of Ms. Cole's attorney's
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