SCHULTZ v SCHULTZ

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No. 79-31 IN THE SUPREMI3 COURT OF THE STATE OF MONTANA 1980 RICHARD SCHULTZ, Petitioner and Appellant, VS. CARLA JEAN SCHULTZ, Respondent and Respondent. Appeal from: District Court of the Eleventh Judicial District, Honorable Robert C. Sykes, Judge presiding. Counsel of Record: For Appellant: Regnier and Lewis, Great Falls, Montana For Respondent: Hash, Jellison, O'Brien and Bartlett, Kalispell, Montana Submitted on briefs: April 3, 1980 Decided: Filed: JUN 2 0 1980 JUb! 2 0 1-%@ J u s t i c e John Conway ~ a r r i s o n e l i v e r e d t h e Opinion of d t h e Court. Mr. T h i s i s t h e second a p p e a l t a k e n from a p e t i t i o n f o r a d i s s o l u t i o n of m a r r i a g e and t h e e q u i t a b l e a p p o r t i o n m e n t of a s s e t s of a m a r i t a l e s t a t e . The p e t i t i o n was o r i g i n a l l y f i l e d i n t h e District Court of t h e Eleventh 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 of F l a t h e a d , t h e Honorable R o b e r t Sykes p r e s i d i n g . The f a c t s of t h e c a s e a r e f u l l y d e v e l o p e d i n t h e f i r s t a p p e a l , I n r e M a r r i a g e of S c h u l t z ( 1 9 7 9 ) , 597 P.2d 1174, 36 St.Rep. discussed here. - Mont. , 1330, and need o n l y be b r i e f l y A p p e l l a n t husband and r e s p o n d e n t w i f e w e r e f i r s t m a r r i e d i n J u n e 1967, d i v o r c e d a y e a r and a h a l f l a t e r , and r e m a r r i e d i n December 1969. A petition for the d i s s o l u t i o n of t h e second m a r r i a g e w a s f i l e d on J u l y 28, 1977. A t t h a t t i m e husband w a s 46 y e a r s o l d and employed a s a r a i l r o a d brakeman-conductor w i t h n e t e a r n i n g s of a p p r o x i m a t e l y $1,350 p e r month. Wife was 37 y e a r s o l d and unem- p l o y e d , b u t had worked d u r i n g t h e m a r r i a g e a s a b a r t e n d e r and waitress. twenty-acre The p r i m a r y a s s e t of t h e m a r i t a l e s t a t e was a t r a c t o f l a n d , known a s t h e H a s k i l l Creek p r o p e r t y , l o c a t e d e a s t of W h i t e f i s h , Montana, i n F l a t h e a d County. A s m a l l l o g house w a s l o c a t e d on t h e p r o p e r t y which s e r v e d as t h e m a r i t a l home of t h e p a r t i e s d u r i n g t h e m a r r i a g e s . Husband o r i g i n a l l y p u r c h a s e d t h e l a n d f o r $11,000 p r i o r t o h i s m a r r i a g e s t o w i f e , and a p p r o x i m a t e l y $5,000 of t h e p u r c h a s e p r i c e was p a i d by husband d u r i n g t h e m a r r i a g e s . On March 23, 1978, t h e D i s t r i c t C o u r t d i s t r i b u t e d t h e marital e s t a t e . The p e r s o n a l p r o p e r t y was d i v i d e d e q u a l l y between t h e p a r t i e s , and husband r e c e i v e d t h e H a s k i l l Creek p r o p e r t y b u t was o r d e r e d t o pay w i f e $6,000 a s h e r i n t e r e s t therein. Husband w a s a l s o o r d e r e d t o assume a l l m a r i t a l o b l i g a t i o n s and w a s g i v e n c r e d i t f o r h i s c o n t r i b u t i o n s toward t h e s u p p o r t of w i f e ' s c h i l d r e n . The f o l l o w i n g c h a r t i n d i c a t e s t h e c o u r t ' s apportionment: DESCRIPTION VALUE TO - HUSBAND -TO WIFE (1) Real E s t a t e $40,000 $34,000 $ 6,000 ( 2 ) Less Contract Balance & Equity (6,000) (6,000) (3) Personal Property 7,170 3,585 ( 4 ) L e s s Debts (4,280) (4,280) (20,000) (20,000) ( 5 ) L e s s C h i l d Supp o r t Contributions NET Wife c o n t e s t e d t h e above a p p o r t i o n m e n t i n t h e f i r s t a p p e a l on t h e b a s i s of i s s u e s u n r e l a t e d t o t h o s e r a i s e d here. W e remanded t h e c a s e t o t h e D i s t r i c t C o u r t t o e n t e r c e r t a i n f i n d i n g s w i t h r e s p e c t t o t h e p e r s o n a l p r o p e r t y of t h e p a r t i e s and t o d i s t r i b u t e t h e m a r i t a l e s t a t e w i t h o u t c o n s i d e r i n g h u s b a n d ' s c o n t r i b u t i o n s toward t h e s u p p o r t of wife's children. Following o u r i n s t r u c t i o n s , t h e D i s t r i c t Court re-apportioned t h e m a r i t a l estate, t h i s t i m e d i v i d i n g t h e e s t a t e e q u a l l y between t h e p a r t i e s w i t h r e s p e c t t o b o t h Husband a g a i n w a s o r d e r e d t o r e a l and p e r s o n a l p r o p e r t y . assume a l l m a r i t a l o b l i g a t i o n s , and t h e p r o p e r t y w a s d i v i d e d i n t h e f o l l o w i n g manner: DESCRIPTION VALUE TO H S A D - UB N TO WIFE -- (1) Real E s t c t e $40,000 $25,190 $14,810 ( 2 ) L e s s Contract Balance & Equity (6,000) (6,000) (3) Personal Property 7,170 3,585 ( 4 ) L e s s Debts (4,280) (4,280) NET $18,495 3 , 585 $18,395 An o b j e c t i o n t o t h i s second a p p o r t i o n m e n t i s now r a i s e d by husband i n t h e form of a second a p p e a l . Husband a r g u e s t h a t t h e D i s t r i c t C o u r t committed r e v e r s i b l e e r r o r and abused i t s d i s c r e t i o n by d i v i d i n g t h e m a r i t a l e s t a t e e q u a l l y between t h e p a r t i e s w i t h o u t c o n s i d e r i n g t h e r e l a t i v e c o n t r i b u t i o n s of t h e p a r t i e s . I n p a r t i c u l a r , husband o b j e c t s t o t h e D i s t r i c t C o u r t ' s award t o w i f e of a g r e a t e r i n t e r e s t i n t h e H a s k i l l Creek p r o p e r t y s i m p l y by r e a s o n of h e r l i v i n g on t h e property during t h e marriage. I n c o n s i d e r i n g h u s b a n d ' s arguments, w e n o t e , f i r s t o f a l l , t h a t a D i s t r i c t Court has far-reaching d i s c r e t i o n i n r e s o l v i n g p r o p e r t y d i v i s i o n d i s p u t e s i n d i s s o l u t i o n proceedi n g s and t h a t t h e D i s t r i c t C o u r t ' s judgment w i l l n o t be d i s t u r b e d u n l e s s a clear abuse of d i s c r e t i o n i s demonstrated. Z e l l v . Zell ( 1 9 7 7 ) , 174 Mont. 216, 570 P.2d M a r r i a g e of Aanenson ( 1 9 7 9 ) , 1123, 36 St.Rep. - Mont. , - 598 P.2d 1120, , 1525, 1528; Cook v. Cook ( 1 9 7 2 ) , 159 Mont. 98, 103, 495 P.2d 591, 593-594; - Mont. 33, 35; I n r e Schwartz v. Schwartz ( 1 9 7 9 ) , 6 0 2 P.2d 1 7 5 , 176; 36 St.Rep. 1980, 1981. To p r e v a i l i n t h i s case, husband must show, t h e r e f o r e , t h a t t h e D i s t r i c t C o u r t c l e a r l y abused i t s d i s c r e t i o n . The p r i m a r y f o c u s o f h u s b a n d ' s arguments c o n c e r n s t h e D i s t r i c t C o u r t ' s a p p o r t i o n m e n t of t h e H a s k i l l Creek p r o p e r t y , which w a s a c q u i r e d by husband p r i o r t o h i s m a r r i a g e s t o wife. That property c o n s i s t e d of a twenty-acre tract of p a r t i a l l y c l e a r e d and p a r t i a l l y u n c l e a r e d l a n d . A t the t i m e of p u r c h a s e , a s m a l l l o g house w a s l o c a t e d upon t h e p r o p e r t y , and t h e r e was second growth t i m b e r of o n l y m a r g i n a l merchantable quality. Husband and h i s f r i e n d s made s e v e r a l s u b s t a n - t i a l improvements t o t h e house w h i l e t h e p a r t i e s l i v e d t h e r e during t h e marriages. I n disposing of property acquired p r i o r t o a marriage, a D i s t r i c t C o u r t i s r e q u i r e d by s t a t u t e t o c o n s i d e r : ". . . t h o s e c o n t r i b u t i o n s of t h e o t h e r s p o u s e t o t h e m a r r i a g e , i n c l u d i n g : ( a ) t h e nonmonetary cont r i b u t i o n of a homemaker; ( b ) t h e e x t e n t t o which s u c h c o n t r i b u t i o n s have f a c i l i t a t e d t h e maintenance of t h i s p r o p e r t y , and ( c ) whether o r n o t t h e prope r t y d i s p o s i t i o n s e r v e s as a n a l t e r n a t i v e t o maint e n a n c e a r r a n g e m e n t s . " S e c t i o n 40-4-202, MCA. Husband h e r e r e f e r s t o c e r t a i n c o n c l u s i o n s made by t h e D i s t r i c t C o u r t f o r h i s argument t h a t w i f e w a s n o t e n t i t l e d t o a g r e a t e r i n t e r e s t i n t h e p r o p e r t y b e c a u s e of h e r l a c k of contributions. The D i s t r i c t C o u r t concluded i n i t s c o n c l u - s i o n s o f l a w t h a t w i f e made no s u b s t a n t i a l improvements t o t h e H a s k i l l Creek p r o p e r t y and t h a t s h e d i s s i p a t e d t h e marital estate. The c o u r t found, however, t h a t by r e a s o n o f w i f e ' s i i v i n g on t h e p r o p e r t y d u r i n g t h e m a r r i a g e and t h e p e r i o d i n which improvements w e r e made, s h e was e n t i t l e d t o equal i n t e r e s t i n the property. I n u n d e r s t a n d i n g t h e c o n c l u s i o n s and t h e d i s c r e t i o n of t h e District Court, it i s important t o consider t h e f i n d i n g s o f f a c t e n t e r e d by t h e c o u r t . These f i n d i n g s p r o v i d e , i n p a r t , a b a s i s f o r t h e c o u r t ' s conclusions. Husband would have u s b e l i e v e , from a r a t h e r s e l e c t i v e e x a m i n a t i o n o f t h e c o u r t ' s c o n c l u s i o n s , t h a t w i f e made no c o n t r i b u t i o n s t o t h e H a s k i l l Creek p r o p e r t y b u t s i m p l y l i v e d on i t , and f u r t h e r t h a t w i f e was t h e s o l e c a u s e and r e a s o n f o r t h e d i s s i p a t i o n of t h e m a r i t a l estate. wise. The f i n d i n g s of f a c t i n d i c a t e o t l i e r - The c o u r t found f a c t u a l l y t h a t b o t h p a r t i e s were r e s p o n s i b l e t o some e x t e n t f o r t h e d i s s i p a t i o n of t h e m a r i t a l e s t a t e and t h a t w i f e made c o n s i d e r a b l e s a c r i f i c e s w h i l e l i v i n g upon t h e p r o p e r t y . F i n d i n g of F a c t No. 1 9 s t a t e d : " C o n s i d e r a b l e s t r i f e , t u r m o i l and c o n t r o v e r s y o c c u r r e d t h r o u g h o u t t h e two m a r r i a g e s of t h e on t p a r t i e s . D r i n k i n g - h e p a r t of b o t h p a r t i e s t o th h a s c o n t r i b u t e d - -e problem. The r e s p o n d e n t [ w i f e ] l e f t t h e f a m i l y home on s e v e r a l o c c a s i o n s ; and t h e s e p a r a t i o n o f t h e p a r t i e s d i s s i p a t e d t h e a s s e t s and monies accumulated d u r i n g t h e c o u r s e o f t h e m a r r i a g e on t h e p a r t o f b o t h p a r t i e s . " (Emphasis added.) F i n d i n g of F a c t No. 21 s t a t e d : " S u b s t a n t i a l improvements w e r e made on t h e house during the marriages. The r e s u l t i n g l i v i n g cond i t i o n s were a problem i n a t t e m p t i n g t o m a i n t a i n r e a s o n a b l e c o n d i t i o n s . The r e s p o n d e n t [ w i f e ] c o n t r i b u t e d l i t t l e p h y s i c a l e f f o r t i n improving t h e house; b u t b o t h p a r t i e s n e i t h e r e x p e c t e d n o r r e q u i r e d s u c h e f f o r t on h e r p a r t . The p a r t i e s l i v i n g on s a i d p r o p e r t y , where s u b s t a n t i a l i m provements w e r e b e i n g made, r e q u i r e d c o n s i d e r a b l e s a c r i f i c e of p e r s o n a l c o m f o r t . " W f i n d s u b s t a n t i a l evidence i n t h e record t o support e such f i n d i n g s . Testimony w a s g i v e n a t t h e a p p o r t i o n m e n t h e a r i n g r e g a r d i n g t h e p a r t i e s ' s e v e r a l c o n f l i c t s and t h e i r d r i n k i n g problems. I t i s i m p o s s i b l e t o c o n c l u d e from s u c h t e s t i m o n y t h a t t h e s e p a r a t i o n of t h e p a r t i e s and t h e s u b s e q u e n t d i s s i p a t i o n of t h e m a r i t a l e s t a t e was c a u s e d e n t i r e l y by t h e a c t i o n s o f one p a r t y . The t r a n s c r i p t a l s o i n d i c a t e s t h a t , w h i l e husband and h i s f r i e n d s engaged i n most of t h e p h y s i c a l work w i t h r e g a r d t o t h e improvements made upon t h e p r o p e r t y , w i f e n e v e r t h e l e s s d i d s u c h t h i n g s a s buy bedroom l i g h t s , bathroom l i g h t s and a h o t w a t e r t a n k f o r t h e h o u s e , s t a i n d o o r s and c a s i n g s , c l e a n up messes d u r i n g t h e c o n s t r u c t i o n , make t r i p s i n t o W h i t e f i s h f o r m a t e r i a l s , r i d e t h e C a t e r p i l l a r w i t h husband i n working t h e p r o p e r t y and d r i v e t h e t r u c k d u r i n g haying o p e r a t i o n s . With r e s p e c t t o t h e l i v i n g c o n d i t i o n s t h a t b o t h p a r t i e s l i v e d with during t h e construction, t h e r e i s testimony t o t h e e f f e c t t h a t t h e r e were c o n s i d e r a b l e s a c r i f i c e s made. An e n t i r e bedroom and bathroom w e r e added, and t h e r e w e r e no k i t c h e n cupboards o r c a r p e t i n g i n t h e house. One f r i e n d of h u s b a n d ' s , who p r o v i d e d c o n s i d e r a b l e h e l p d u r i n g t h e con- s t r u c t i o n , t e s t i f i e d t h a t t h e c o n d i t i o n of t h e p r o p e r t y b e f o r e t h e s t a r t of t h e work was " p r e t t y b a d w - - " t h e r e w a s n ' t any w a t e r , sewer, no l i v e a b l e c o n d i t i o n s - - i t r e a l l y rough." was Because of t h e s e c o n t r i b u t i o n s and s a c r i - f i c e s , we f i n d 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 e r r o r a b u s e i t s d i s c r e t i o n i n awarding w i f e a g r e a t e r i n t e r e s t on t h e second a p p o r t i o n m e n t . I n a f f i r m i n g t h e d i s c r e t i o n and d e c i s i o n of t h e D i s - t r i c t C o u r t , w e wish t o r e i t e r a t e t h a t , i n d i s s o l u t i o n p r o c e e d i n g s , ea::h J a s e must b e c o n s i d e r e d by D i s t r i c t C o u r t s i n d i v i d u a l l y w i t h a n e y e t o i t s unique c i r c u m s t a n c e s . v. Cook, 159 Mont. a t 104, 495 P.2d a t 59. Cook There i s no f i x e d formula o r r a t i o n a l e t o be a p p l i e d i n e a c h c a s e , e x c e p t t h a t t h e c o u r t ' s e x e r c i s e of d i s c r e t i o n must be r e a s o n a b l e under t h e p a r t i c u l a r c i r c u m s t a n c e s . Biegalke v. B i e g a l k e ( 1 9 7 7 ) , 172 Mont. 311, 315, 564 P.2d 987, 989. Here, b o t h p a r t i e s c o n t r i b u t e d t o t h e maintenance of t h e H a s k i l l Creek p r o p e r t y , and b o t h w e r e r e s p o n s i b l e f o r t h e s e p a r a t i o n , which c a u s e d a d i s s i p a t i o n of t h e m a r i t a l estate. T h e r e f o r e , w e f i n d no a b u s e of d i s c r e t i o n , and t h e judgment of t h e D i s t r i c t C o u r t i s a f f i r m e d . u W e concur: Q q 4 / P"P 7=3%%'& Xhief Justice

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