MARRIAGE OF SUMMERFELT
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No. 84-59 IN THE SUPREME COURT OF THE STATE OF MONTANA 1984 IN RE THE lJlARRLAGE OF ALICE BURKART SUMMERFELT, Petitioner and Appellant, and DONALD A. SUMMERFELT, Respondent and Respondent. APPEAL FROM: District Court of the First Judicial ilistrict, In and for the County of Lewis & Clark, The Honorable Arnold Olsen, Judge presiding. COUNSEL OF RECORD: For Appellant: Skedd, Ashley, McCabe, Weingartner Charles Graveley, Helena, Montana & Graveley; For Respondent: Harlen, Thompson Helena, Montana & Parish; Shaun R. Thompson, Submitted on Briefs: May 17, 1984 Decided: September 18, 1984 Filed: $EP 16 1904 Clerk ---- Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. This case comes on appeal from a decree of the District Court of the First Judicial District, Lewis and Clark County, distributing the parties' marital assets. We reverse. The parties to this action were married 1963, at Townsend, Montana. on May 11, At the time of the marriage, the wife owned a ranch near Townsend (hereinafter referred to as the Townsend ranch) consisting of 3,880 acres which the parties have stipulated was addition, the wife had purchased worth $185,000. In 120 acres of additional ranchland, known as the Cooney property, for $8,000. Also, at the time of the marriage, the wife owned approximately 170 head of various rental houses livestock, a 1/3 in Billings valued interest in three at $7,000, household furniture and crops in storage. Prior to the marriage, the husband had worked as a heavy equipment operator and at the time of the marriage he was employed as a business manager for the International Union of Operating Engineers at Butte. marriage, the husband owned a house At the time of the in Helena valued at $13,500, subject to a debt of $7,791.07, other vehicles and a trailer collectively valued at $4,900. The District Court found that the husband and wife mutually decided that the husband quit his employment as a business manager for the union and that they would operate the wife's Townsend ranch, although the wife testified that the husband quit his job after the lessee of the ranch surrendered his lease a year early due to a dispute with the husband. The w i f e a s s e r t s t h a t h e r n e t w o r t h a t t h e t i m e o f t h e marriage was $425,618 Although the husband and the disagrees a s s e r t s was h e r n e t w o r t h , husband's was with amount the $12,355.07. the wife the record c l e a r l y indicates t h e w i f e b r o u g h t s u b s t a n t i a l l y more p r o p e r t y i n t o t h e marriage t h a n d i d t h e husband. On J a n u a r y 2 3 , 1 9 7 5 , t h e Townsend r a n c h was s o l d u n d e r a c o n t r a c t f o r d e e d t o t h e w i f e ' s d a u g h t e r and s o n - i n - l a w , t h e Henleys, for $100,000 t h e husband and w i f e . run f i f t y head accumulated of with a l i f e e s t a t e reserved The w i f e a l s o r e s e r v e d t h e r i g h t t o c a t t l e on t h e r a n c h . funds for in various bank The p a r t i e s accounts during also the m a r r i a g e which a r e n o t a t i s s u e i n t h i s a p p e a l . I n 1 9 7 7 , t h e p a r t i e s s e p a r a t e d when petition f o r d i s s o l u t i o n which was s u b s e q u e n t l y d i s m i s s e d . Thgreafter, added the wife f i l e d a the the wife, husband as i n an e f f o r t t o w a r d s r e c o n c i l i a t i o n , a joint tenant owner of the Cooney property. On Court was May 16, 1980, f o r a d e c r e e of 68 and the the wife petitioned dissolution. husband 60. On At the District t h a t time t h e w i f e November 18, 1982, the D i s t r i c t C o u r t d e t e r m i n e d t h a t t h e Townsend r a n c h was n o t a m a r i t a l a s s e t b u t t h a t t h e value of t h e c o n t r a c t f o r deed and t h e l i f e e s t a t e r e s e r v e d u n d e r t h e c o n t r a c t w e r e m a r i t a l a s s e t s t o be d i s t r i b u t e d . On J u l y 1 2 , 1983, the District C o u r t g r a n t e d t h e d e c r e e of d i s s o l u t i o n and on November 2 3 , it e n t e r e d its f i n d i n g s of c o n c l u s i o n s of law and d e c r e e r e g a r d i n g d i s t r i b u t i o n o f t h e m a r i t a l a s s e t s . In 1983, fact, i t s f i n d i n g s of f a c t t h e D i s t r i c t C o u r t s t a t e d , i n p e r t i n e n t part: t h a t b o t h p a r t i e s worked h a r d d u r i n g t h e m a r r i a g e and made numerous improvements to the ranch; that the value of the contract for deed was the principal balance owing in the sum of $100,000 and the current value of the partiesg life estate was $90,000 for a total of $190,000; the Henleygs contract was a sham and void if they could not be required to pay $100,000 immediately or at a very early date; the current market value of the Cooney property was $38,000; that the total marital assets amounted to $358,490.74; that the wife was currently 72 years of age and receiving $229 per month in Social Security; and that the husband was 6 4 years of age and had little likelihood of securing significant assets for retirement. In its distributed conclusions the marital of law assets as the District follows: the Court husband received a total of $163,094.24 in assets which included 1/3 of the principal balance remaining on the contract for deed ($33,330), the Summerfelt house Cooney property ($38,300), in Helena twenty-five ($43,000), the cows with calves ($13,750) and several other assets that were added to the husband's total $196,406.50 award. The in assets which wife received included the a total life of estate reserved under the contract for deed ($90,000), 2/3 of the principal balance remaining o n the contract for deed ($66,670), 1/2 of all bank accounts ($16,309.50), and the wife's personal property excluding cattle ($22,017). From the decree of the District Court distributing the marital assets the wife appeals, raising four issues: (1) Whether the District Court erred in its determination of "total marital assets" because it failed to accept present day net values on the contract for sale of t h e r a n c h and on t h e r e s e r v e d l i f e e s t a t e . t h e D i s t r i c t Court e r r e d i n its wholesale ( 2 ) Whether a d o p t i o n o f t h e h u s b a n d ' s p r o p o s e d f i n d i n g s and c o n c l u s i o n s . ( 3 ) Whether l i g h t of t h e award t o t h e w i f e was t h e f i n a n c i a l c o n d i t i o n of each of ins-dequate in the parties a t t h e o u t s e t of t h e m a r r i a g e . ( 4 ) Whether the District Court erred in failing to r e c o g n i z e t h e p r o p e r t y i n h e r i t e d by t h e w i f e a s h e r s e p e r a t e property. Initially, we note t h a t the well-established rule in Montana is: "The a p p o r t i o n m e n t made by t h e D i s t r i c t C o u r t w i l l . n o t b e d i s t u r b e d on r e v i e w u n l e s s t h e r e h a s been a c l e a r abuse o f d i s c r e t i o n a s m a n i f e s t e d by a s u b s t a n t i a l i n e q u i t a b l e d i v i s i o n of t h e m a r i t a l assets resulting in substantial i n j u s t i c e s . " I n r e t h e M a r r i a g e o f Brown ( 1 9 7 8 ) , 1 7 9 Mont. 417, 587 P.2d 361. In the present case, assets by the District i n j u s t i c e s t o t h e wife. 669 P.2d 685, Court resulted Popp (Mont. substantial 1518, t h i s Court s t a t e d : "In Kis, ' [ p l r e s e n t value is t h e "proper t e s t " f o r d e t e r m i n a t i o n of m a r i t a l i n t e r e s t . ' " v. in the marital I n G l a s s e r v . G l a s s e r (Mont. 1 9 8 3 ) , 40 S t . R e p . supra, we s t a t e d that, t h e d i s t r i b u t i o n of 1 9 8 3 ) , 6 7 1 P.2d 24, S i m i l a r l y , i n Popp 40 S t . Rep. 1747, this Court s a i d : " I t i s a l s o c l e a r from a t h o r o u g h r e v i e w of t h e f i l e on t h i s m a t t e r t h a t t h e c o u r t v a l u e d some a s s e t s a t t h e i r d e p r e c i a t e d v a l u e a s l i s t e d on t h e p a r t i e s income t a x r e t u r n s i n s t e a d of t h e i r f a i r market value. Y e t t h e r e i s no f i n d i n g s t a t i n g t h a t t h e d e p r e c i a t e d v a l u e is e q u a l t o f a i r m a r k e t v a l u e o f c e r t a i n items o f equipment. W i t h o u t s u c h a f i n d i n g we hold t h a t t h e D i s t r i c t C o u r t ' s d e c i s i o n was ' c l e a r l y e r r o n e o u s . ' " Here, t h e D i s t r i c t C o u r t e r r e d i n i t s d e t e r m i n a t i o n o f marital assets to be distributed because accepted it the b a l a n c e r e m a i n i n g d u e on t h e r e a l e s t a t e c o n t r a c t f o r s a l e of t h e ranch, r a t h e r than d i s c o u n t i n g it t o i t s p r e s e n t f a i r market value, and i t e r r e d i n s e t t i n g t h e v a l u e on t h e l i f e e s t a t e reserved t o the wife. ranch required basis and the buyers allowed t h e y were a b l e them The c o n t r a c t f o r s a l e of i n t e r e s t on a y e a r l y t o pay the retire the to t o do s o . principal balance elementary that contract for balance due owing the deed, at anytime present day rarely, thereon. amount as The r a n c h c o n t r a c t c o n t a i n e d no l a n g u a g e a l l o w i n g t h e s e l l e r t o demand principal the if f u l l payment o f she fair ever, Although desired. market equals the It value the husband of the is a principal asserts the p a r t i e s s t i p u l a t e d t o t h e p r e s e n t d a y v a l u e of t h e c o n t r a c t for deed merit. only in a pretrial order, The p r e t r i a l o r d e r agreed that that contention indicates $100,000 was t h e husband and w i f e principal balance the r e m a i n i n g on t h e c o n t r a c t f o r d e e d . is without In short, the D i s t r i c t C o u r t d i d n o t p r o p e r l y d e t e r m i n e t h e p r e s e n t market v a l u e of t h e c o n t r a c t f o r deed. Similarly, of the expert life estate testified i n its valuation t h e D i s t r i c t Court e r r e d reserved by the wife. trial, At t h e p r e s e n t day market value of an the l i f e e s t a t e t o be t h i r t y p e r c e n t o f t h e s t a t e d amount o f t h e l i f e estate. of the T h i r t y p e r c e n t amounted t o a $ 5 7 , 4 9 3 . 8 0 l i f e estate. However, valuation the D i s t r i c t Court, without e x p l a n a t i o n , a s s i g n e d a v a l u e of $90,000 t o t h e l i f e e s t a t e . In, I n St.Rep. r e M a r r i a g e of Wolfe 211, conflicting this Court valuations (Mont. stated: between 1 9 8 3 ) , 659 P.2d "Where different there are 259, 40 widely appraisers, the District Court shall give reasons why one value is selected over others. " Moreover, the award to the wife was inadequate in light of the financial condition of each of the parties at the outset of the marriage. Although the District Court did not determine the financial condition of the parties at the outset of the marriage, the record clearly indicates the wife brought substantially more net worth into the marriage than did the husband. The wife asserts her net worth at the time of the marriage was $425,615 and the husband's was, at the most, $12,355.07. We held in In re Marriage of Herron - 396 (1980), 185 Mont. %, 608 P.2d 97, that the source of the property was a major factor to be considered by the District Court dividing property under section 40-4-202, MCA. also, In re Marriage of , 41 St.Rep. 990. 'Ml4el-5 (Mont. 1984), # & See P.2d In this case, the amount the District Court awarded the husband was an abuse of discretion when considered in light of the parties' financial condition at the outset of the marriage. Since the issues discussed above are dispositive of this appeal, we need not consider the other issues raised by the wife. Reversed and remanded for a new trial on the issue of 4 division of marital assets. - . Justice We concur: Justices Mr. Justice Frank B. Morrison, Jr., dissents and will file a written dissent later.
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