MARRIAGE OF STEINBEISSER

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No. 01-394 IN THE SUPREME COURT OF THE STATE O F MOR'TANA 2002 %IT 309 I?; RE THE LIARRIAGE OF JAMES STEINBEISSER, Petitioner and Appellant, i-I" 5 7 iurr. I and JACICIE STEINBEISSER, Respondent, Respondent and Cross-Appellant. APPEAL FROM: District Court of the Seventh Judicial District, In and tor the County of Richland, The llonorable David Cyl?ulski, Judge presiding COUNSEL OF RECORD: For Appellant: W. Corbin Wo\v.ard, Attorney at Law: Billings. Montana Phillip N.Carter, Attorney at L.aw, Sidney, Montana For Respondent: Christoffersel? & Knierim, P.C., Culbertson, Montana Laura Christoffeusel~, Submitted on Briefs: Marc11 14, 20W2 Decided: Decelnber 12. 2002 Filed. justice Terry Y. lricweiier delivered the Opinion ofthe Cciurt. The Petitioner, James Stcinheisscr (Jirnj, fiicd a pctirion lor dissolution of his marriage to Respondentl Jackie Steinbcisscr, in the District Court for the Seventh Judicial District in Richland County. Following trial, the District Court entered its Findings of Fact, Conclusions of Law. aud Decree of Dissolution. Jim appeals the District Court's distribution of property and award of attorney fees to Jackie. Jackie cross-appeals thc District Co~irt's consideration of certain family dcbt in the computation of Jim's net worth. We reverse the judgment of the District Court. 72 1 We address the following issues on appeal: 73 i . Did the District Court err in its valuation of thc prcrnarital and nrarital assets? 'i4 2. Did the District Court err when it valued Jackie's financial contribution to the marital estate? 715 3. Did the District Court err when it required Jim to reimburse Jackie for the cntirc amount of her inheritance? qh :i 3. Did the District Court err when it found that Jackie gave up her teaching career for the marriage? , ? 5. Did the District Court e n when it awarded Jackie two-thirds of t l ~ c appreciated \-aluc of Jinr's pre-acyuired property'! *:8 I 0. Did the District Court err when it awardcd attorney fces to Jackie'? r:O 7. Did the District Court en- when it reduced the divisible marital estate on account , of premarital debt that Jim purporledlj fa~led dlsclose prior to trlal'? to 2 FACTEAL AND PROCEDURAL. BACMGROI:hD :if 0 On i:eltt.ua~y1 1; 19904. Jim and Jackie were married in Sidney; Moirtana. Jirn was 34 years of age and Jackie was 52 years of age when the parties married. Aside from a two-year stint in Williston, North Dakota, to attend junior college, Jim has farmed and ranched iti Richland County. Montana, throughout his lifetime. Initially, Jim worked for Steinbeisser ~~ and Sorts, Inc., 011 his family's farm and ranch. In the mid 1 9 8 0 Jini, his two brothers, and two of his cousins borrowed money from their family to purchase their own farming and ranching operation. They formed a partnership, 5 S Partnership, which owned the land and established a corporatiori, VS, Inc., to operate the film1 and ranch. In 1990, Jim purchased an apartment complcx for S41,000, which he intended to utilize as rental property. Jim entered the marriage with the rental property, a 1i5 uridivided interest in 5 S Partnership and VS, Inc., and some other property discussed in greater detail below. 41 1 Prior to the marriage to Jim, Jackie worked as a substitute teacher in the Sidney, Montana, school system while she renewed her teaching certificate. 'Thereafter, Jackie taught full time at a rural school during the 1992-03 school year. Jackie entered into the marriage with SI7,615.73 in an investment account, $1 100 in an 1R:k a vehicle worth S5000, and a tliineral interest a ~ i d personal property worth nominal sums. Further, Jackie received or~c thousand dollars a tnonth in maintenance from a previous maniage during thc lirsr twentytwo months of her marriage to Jim. 712 During the marriage, the parties lvorked in various capacities on the Cam and ranch owned by thc 5 S Partnership. Jackie did riot return to teaching following the 1002-93 school 3 year and her teaching certification h s since expired. %eitherpary rnaintaincd cmpioyji~ent a off ofthe Farm and ranch. Flowe\-er, both Jim and Jackie remained activeiy involved with thc Montana Farm Bureau throughout the marriage in volunteer capacities. Further, Jackic assumed responsibility for the management of Jim's apartment complex. 7113 Each of the parties inherited property during the marriage. Jackie inherited a house from her aunt wltich she sold for S5 1,261.73. With Jackie's inheritance money, the parties paid off a portion of the apartment complex's mortgage, purchased stock, and placed the remainder in a joint savings account. In 1099, Jim inherited a minority interest in Steinbeisser & Sons, Inc., from his grandmother, valued at approxintately 552,000. The parties did accumulate joint property during the course of tl-te iwarriage which will be discussed in greater detail below as necessary. '114 0 1 1 November 12, 1999, Jim filed a petition for dissolution with the District Court. 'Phc matter proceeded to trial on January 4,2001. Because no children were bor~i during the tnal-riage, the dispute at trial primarily in\-olved the valuation and distribution of the parties' premarital and n~arital assets. Jim relied on expert testimony from two appraisers to establisli the premarital and date ofsepitration values for the apartment complex and his interest in the farming and ranching operation, Jackie did not offer expert testimony to rebut Jim's valuations. Instead, Jrzckie primarily relied on Jim's financial statements and her opinion to value the inarital estate. Following presentation of the testimony and evidence, the District Court cntcred its Findings of Fact, Conclusions of Law, and I>ecree of Dissiilution, "5 : 'The tlistrict Court adopted Jackie's valuations for virinaily evcry asset i\%hin ihc premarital and n~arirai estate. In caicuiaring the estates, the i>isrrici Corrrt reduced Jim's ncr worth by approximately $1483000because of debts he owed to his fainily. Jackie objected, although unsuccessfully, to the inclusion of the family debt because Jim allegedly failed to disclose the infolmation prior to trial. Although its decision is not completely clear, the District Court purported ro award assets to Jim wovtli $582,501.86. The District Court awarded Jackie assets worth S230,581.13. Jackie's award consists prirnarily of cash payments in the amount of S157,964.41 (213 of the increase in Jim's net worth from the time of marriage to separation) and S5 1,261.73 (the value of the inl~eritance from Jackie's aunt). Further, the District Court awarded Jackie her reasonable attorney fees incumcd in the dissolution proceedings. 9 16 Jim appeals the Ilistrict Conrt's property distribution and attorney fee award. Jackie cross-appeals the District Court's consideration of the premarital debt in computing Jim's net worth. STANDARD OF REVIEW 71 7 We review a district court's findings of fact regarding t l ~ e division of marital propcrty to determine whether they are clearly erroneous. lrz r-e 12.1urr-iug-c qfOrtiz (1907), 282 Mont. 500, 503. 938 P.2d 1308; 1310. .Z finding is clearly erroneous if it is not supported by substantial cvidcnce, if the district court ~nisapprehendeci effect of the evidence, or if our the review of the record convinces us that the district court made a mistake. Kovril-ik v. Kovnr-ik, 1'498 %IT33,1/ 20,287 Clont. 350, qi 20,954 P.2d 1147,120. If the findings are not clearly 5 exoneous; 'XC will affirm the distribution of property unicss the district coun abused i t s discrction. 122 re itfarriizge qfStz!fi ji39hj7 271, ilont. 454,459, 9 lir P.2d 767>770. li18 Further, we will not overturn a district court's award of attorney k e s absent an abuse of discretion. Harper v. Harper, 1999 MT 32 1, gj 47,297 'Vtont. 290,B 47,994 P.2d 1.9 47. Tllc test for an abuse of discretion is whether the trial judge acted arbitrarily without employment of conscientious judgment or has exceeded the bounds of reason resulting in substantial injustice. Schinieding v. Scl~titiedirzg, 2000 MT 237,.1 22, 301 Mont. 336,Yi 22, 9 P.3d 52, '1 22. DISCUSSION ISSUE I 711 9 Did the [>istrier Court err in its valuation of thc premarital and marital assets? 9 0 in its Findings of Fact. Conclusions of Law, and Decree of Dissolution, the District Court found "that the value of [Jim's] assets at the time of marriage was $266,885.73 and at the timc of separation it was $555,052.21. . . . ."' The District Court ordered Jim to pa); Jackie $5 1,26 1.73-the value of an inheritstnee she reccived during the marriage. Therefore, the District Court reduced Jim's date of separation value for his premarital assets by this amount and calculated the increase in Jim's net worth during the marriage at $236,934.78 :0 1 1 appeal, Jim notes an appai-cnt inconsistency in the value o f tlie estate he is to receive pursuant to the District Court's property distribution. Xfier repeated efforts wc cannot reconcile the variations in the District Court's Findings of Fact 1 1 and 12 as to Jim's purporied "net cslate." ilowever, it is not critical that wc square the ineonsiste:lcy oil appeal and \?ill therefore leave this task to the District Court on ren~and. (55i!3,790,5 1 - 5265,855.73)."'The District Court then awarded appruxin~ateiyiwo-ihirds f o this increase to Jackie i n the form oEa $1 57,964.41 cash award. 321 Jim contends that the District Court erroneously valued Jim's interest in the 5 S Partnership, the apartmcnt complex, and the parties' !997 Subaru Outback. Jim claims that these incorrect valuations skewed each respective parties' allocation of the marital estate and, ultimately, altered the calculation of Jackie's cash award to his detriment. '122 At trial, Jim ofkred expert testimony from Roger Cymbaluk, a licensed realtor and appraiser with extensive real estate experience in eastern Montana, to establish the necessary real property- values. Using coii~parable sales information; Cymbaluk estimated the date of separation value for Jim's interest i n the 5 S Partncrship at S101,572.80 and the apartment co~nplex $72,500. Jackie did not offer expert testimony regarding the valuation of the real at property at issue. Instead, Jackie submitted an "Agricultural Financial Statement" which Jim filled out and submitted to the farming and ranching operation's bank (First Bank). On this annual financial statement, Jirn itemized his assets and liabilities and approximated the value of each. In the 1999 financial statement, J i n ~ estimated that the date of separation values for his interest in the 5 S Partnership and the apartment complex were $284,128 and $70,000 I-espectively. The financial statement estimated the value of the Subam Outback at S15,OOO. ' LVc have been unable to determine why the t>istrieiCourl subtracted 5266,855.73fro111 Jim's date of separation estate as opposed to the $266,885.73 figure quoted earlier in the same findings of fact. ii . Jackie relied exclusively on the lYIi"inancia1 statenlent h r the 5 S Partnership date of sepamiiorr value. However; Jackie disagreed with ihe apartment complex estirnatc contained in the financial statement and C~jnibaluk's appraisal. Instead, Jackie testified that, in her opinion, the apartment was worth between $103,000 and 51 10,000 at the date of separation, Finally, Jackie disagreed with Jim's valuation of the Subar~t Outback atid offered several lower assessments during her testimony, including an S1 1,000 estimate. 124 The District Court awarded the interest in the 5 S Partnership and the apartment con~plex Jim and arguably awardcdpossession of the parties' Subam Outback to both Jim to and Jackie. For purposes of computing the net worth of the distributions, the District C'ourt found "that the bank financial statements provide the most reliable source of valuation of the assets of the parties." Therefore, the District C'ourt valued the 5 S Partnership interest at 5284,128, However, the District Court strayed from the financial statement when it valued tile apartment complex and Subaru Outback and essentially adopted Jackie's values for the two assets (except that the court placed two different values on the Subaru). The District Court valued the apartment complex at $1 10,000 and the Subaru Outback at $1 1,000. The District Court also awarded "blachinery, vehicles, and equipment" to Jim, valucd at $42,100. pursuant to the financial statement. I-lowever,this award consisted of a Ford pickup (valued at $25,irOO), a Honda Prelude (valued at 56001, and the Subaru Outback ( ~ a l u e d $15:W00). ar 'l'herefore, the District Court's distribution accounted for the Subaru Outback tsvicc. at different values. q25 When asked at trial about the financial statement, Jim testified as follows: 8 Q: Oltay. kolv, \*hen you issued this bank statement on December 15'" of 1090. did you do a detailed inspection or calculation, if you will, of what aii of ithe 5 S Partner-ship was worth'? A: No. Q: And when you prepared this financial statement, did you do a detailed calculation of what the VS, Inc., property was worth and debts? Q: In connection uith 5 S, before you prepared this financ~al statement did 4ou ha\e the property appraised by Mr. Cynbaluk or anybody else before you statement'? signed that linane~al A: No. Q:Whj not'? A: This is just a general year-to-year thing we do. The bank asks for them because we have loans with them, and it wasn't a very detailed ihing. It was just kind of general. During trial, the District Court expressed resenations about the rehab~lttyof financ~aJ statements filled out by borro\\ers, contrary to its ult~mate reliance on the statement. The District Court and First Bank's President engaged in the following colloquy: Court: And aren't borrouers supposed to lie about hon much stuff 1s worth to then- banker anyuay to make it look better? Isn't that kind of the standard? President: 'That has happened. Court I'hat has happened President: That has happened many times Fufih~r. First Bank President testified as follows: thc Q: Do you rely on your debtors to be accurate when they turn in the finaneiaI statements to you'? A: it's a practice of our bank to have the loan officer analyze the financial statement. And as the judge and L were just talking. yes, there's many times that we don't feel the machiner) is worth what they say it's worth or the land what they say it's worth. . . . Xe~ertheless, Distrmct Court adopted the kalue found In the finane~al the statement for the 5 S Partnership interest in contra\:ention of the only expert testimony on the issue. 126 As to the apartment comnplex, Jackie admitted that she did not "know anything abotlt real estate." t-lowever, upon questioning from her attorney, Jackie estimated the value of the apartment complex at between $1 03,000 and Sl10.000. Jackie justified this estimate based on the apartment co~nplex'sunique characteristics whicli distinguished it from the other properties in Sidney. Jackie offered no comparable sales infornlation or any other evidence; in addition to her opinion, to justify her estimate. Yet, despite Jackie's admission that she knew nothing about real estate and the District Court's ftnding that the financial statement provided"the most reliable source of valuation of the assets ofthe parties," the District Court disregarded the expert appraisal and the financial statement estimation in favor of Jackie's valuation for the apartment complex. 727 Finally, the District C'ou1.t appears to have awarded the Subaru Outback io both parties at different values. The District Court awarded the Subaru Outback to Jackie and valued it at 31 1;000; presumably based on the following testimony from Jackie: Q: &'hat do you ihitlk the value of the 1997 Subaru was in December of 1999? 10 A: ! -- 1 really don't kno\v. 1 would say maybe between S13,O(iO anci S14,OOii. Maybe 5 11,000. 1 --- I don't know. I - i have no idea. t-lowever, in thc same finding of fact, the District Court awarded Jim .'Machinerq, vt.hic1c.s. artd ccluiptncnt." as indicated in tlzc financial statement, which includcd the Subaru Outback at a value of $15,900. On appeal, Jackie concedes that the District Court erroneously accounted for the Subaru Outback twice. 728 In sum, the District Court expressed concern for the values contained in the financial statement at trial but then concluded after the trial that the "financial statements provide the most reliable source of valuation of the assets of the parties." Consistent with this conclusion, the District Court valued the 5 S Partnership in accordaiice with the financial lower appraisal offered by Cymbaluk. Howcvev, the statement despite the sig~iificantly District Court disregarded Cymbaluk's appraisal and the financial statement when it valued the apartment complex based 01 1 Jackie's admittedly unsupported estimation. Finally, in awarding the value of the Subaru O ~ ~ t b a c k both parties at different valtles, the District to Court impliedly found the financial statement crediblc and unreliable at the same time. Based on the foregoing, \ve conclude that the District Court's valuations set forth above are not supportecl by substantial evidence. ISSUE 2 1729 estatc? Did the District Court em when it valued Jackie's financial contribtltion to the marital 930 'The District Court made the f o l l o ~ i n gfinding regarding Jackic's financial contribtttion ro the nlaritai csrare: Shortly after the marriagc, [Jackie! reeei\-ed 551,261.73 in the ihrm of an inhe!-itance from her aunt. . . . At the time of the marriage, [Jackie] held S12,015,73 with Edward Jones, owned her IRA in the amount of $l,lOO.OO1 had a vehicle worth S5,000,00, and received monthly maintenance in the amount ofS1,000.00 per month. She continued to receive the maintenance for 22 months during her second marriagc to [Jim] totaling S22,000.00. [Jackie's] monetary contributions toward the nian-iage were approximately $91,977.00. This $91,977 marital contribution figure is significant because the Distrtct Court considered Jackie's percentage of contribution to the manta1 estate uhen it detern~ined what percentage of tllti marital estate to a ~ a r to Jackie d 131 J ~ ncontends that the maintenance auard from Jackie's prior marriage was not an asset i but should simply be treated as income. Jim contends that the D~strxct Court did not cred~t him for post-separation maintenance he paid to Jack~e incorne he earned during the or mamagc. The~efore, niatnta~ns the Distrtct Court should not h a ~ considered the Jim that e maintenance %hen it computed Jackie's financial contribution to the manta1 estate '32 In 111t-e;llurnilge ofEkI~~tzd(l980). Mont. 77.79.768 P.2d 3 4 ~342, we held that 236 , a portion of the marital estate may be set aside if it is traceable to one party or the other. Whether ~tis traceable depends on the adequac) ofthe c . ~ ~ d e npresented $11 the case. I-ieie. ce the evidence at trial indicated that the parties treated the maintcnancc as joint income and, in fact, reportcd it as s~ich the parties' joint income tax retrlrns for 1994 and 1995. on Further? when asked what she did with the maintena~ice income during her marriage to Jim, 12 Jackie testrfied that ""went rntujustjornt accounts " The record ~nciudcs e l rdence v\ hich no indicates that Jackie intended to segregate the S22,OOO from the marital cstate 733 '4s Jackie made no effort to separate this income from the marital estate and, instcad. cotnrningled the money with the joint funds, as was done with Jim's income, we conclude that the District Court erred when it characterized the S22,OOO as a premarital asset contributed to the marital estate. The evidence in the record indicates that Jackie's premarital estrtte was worth approx~niately 18,715.73. The D~strtet S Court's iind~ng the contrar) n a s to not supported by substantial evidcncc and is clearly erroneous. ISSUE 3 Ti34 Did the District Court err when it required Jim to reimburse Jackie for the entire atnount of her inheritance? 735 'The District Court made the following finding regarding Jackie's inheritance: Shortly after the marriage, [Jackie] received $5 1,26 1.73 in the fom? of an inheritance from her aunt. This money was wired to First Bank in Sidney, Montana. The money was first used to pay off [Jim's] debt against the apartment building, then partly to purchase bank stock in First Bank and finally, was [sic] the remainder was placed into the joint savings ofthe parties, which was removed by [Jim] at the time of separation. Each party should receive their own inherited property. 'Thus, the court should award to [Jim] his stock in Steinbcisser & Sons, Inc. Further, the court should award to [Jackie] the sum of S 5 1,261.73, representing her inheritance from her aunt. . . [plus1 interest on her inheritanerr since [Jim] has had d?e use of the money since September, 1093 . . . . Pursuant to these findings, the District Court ordered Jim to pay Jackie Sji,261.5? as compensation for the dissipated inhcricance. 730 Jinl contends that the District Court erred when it awarded Jackie the entire aniouilt of her inheritance. J i n ~ maintains that Jackie is cntitled to some of the inheritance, but only that portion which she can trace to ascertainable assets. On appeal, Jim cortcedes that Jackie applied S12,749.82 of her inheritance to the mortgage on the apartment complex. Further, Jivn's proposed findings of fact and conclusions of law ackno\vledged that Jackie used $16,250.00 of her inheritance to purchase stock in First Bank. However, Jim insists that Jackie deposited the remainder of her inheritance, approximately $22,000.00, in thc parties' joint savings account. Tlierefore, as to her inheritance, Jim conterrds that Jackie is entitled to S28,999.82, not the cntire $51,261.73. 737 Tltose assets belongiilg to a spouse prior to a marriage, or acquired by giftl bequest, devise, or descent during the marriage are not part of the marital estate unless the spouse made contributions in the preservation or appreciatioii of that property. In re blarrii~ge qf' Rolf; 2200 MT 361. 46, 303 Mont. 349,7 46, 16 P.3d 345, '146. Where an inheritance is not traceable and both parties contribute to the increased value, it is illequitable to award the value of the asset solely to the acquiring spouse upon dissolution. See 11z re Llilrriuge qf .4ncle1-.sotr(1%86j, 220 k.loiit. 477, 481, 71 7 P.2d 1 1, 15; lir re ,2lut-r-iuge oJHerrorr (1980), I86 Mont. 305,404, 6 0 8 P.2d 07, 101. 4138 Afier a discussior~ about rhc application of the inheritance nrimej- to tire apartmenr cornpiex's mortgage. Jim rcsrificd to the foiiotving under cross examination b? Jackie's attorney: Q Okay. And what was done with the balance of the 51,000 then? A. We had - We opened a CD, and then in the course of time we closed that CD. That CD included her inheritance money plus some other money, I believe. Maybe not. Maybe it was just hers. I don't ren~ember sure, but for we closed that then and we combined ---- we took the remainder - - - \fTeput some money in a savings account, a special high-interest savings account, with some other money that 1 had prior, and then some went to buy the stock, the additional bank stock. Q. And at the time of your separation in December of 199") other than the money that was used on the bank's stock, was the balance of Jackie's inheritance, did it remain in those First Bank accouilts? A. 117 a sa~irtgs account, yes Q. And \%,asthat the money that you mithdrew at the time of separation'' A. It was in that account. There was additional money in that account A. Yes. At trial, Jackie agreed that the balance was depositcd in the parties' joint savings account. As its name implies, the account was opened in both parties' names and both partles tnaintained access to it. The el-idencc indicates that both parties contributed to the account rtnd utilized the account for joint expenditures. 9 As the balance of Jackic's ilrhcritancc \\:as comrninglcd with other marital funds in thejoint savings account, it is therefore not traceable. Since the $22,000 inheritance balance 15 is not traceable and Jinl contributed to the savings account, we hold that the District Court el-rcd when it awarded Jackic the cr~tirc amount of her inheritance. ISSUE 4 740 Did the District Court e n when it found that Jackie gave up her teaching career for the marriage'? '1 1 4 Jtm contends that Jackterece~\ a disproportionate share ofthemantal estate, tn part. ed because the District Court co~leludedthat Jackie abandoned her teaching career for the marriage. Jim submits that Jackie never maintained a teaching "career." Further, Jim insists that the inarrtagc n o e r prohibtted any prospectitc teaching pursutts Jackte may have entertained dtlring or- after the marriage. 142 The District Court found that Jackie's "marriage restilted in her not continuing teaching, and thus giving up its related retirement benefits." .4side from this one reference, the District Court made no mention of what impact the marriage had on Jackie" marital or future employment as a teacher. Further, the District Court did not elaborate on how this finding affected its property distribution. $43 At trial, Jackie testified that: she received a Bachelor of Science degree in education in 19665; however. she did not pursue work in cdncation follotving graduation from college and. therefore, her teaching certification expired; following her first divorce in the mid IOSOs, she substitute taught kvhile she worked toward recertification: shc taught full time during tltc 1992-93 school year; the frill time teaching experience was "extrertlely difficult;" she has not tat~ght sincc 1993 antil therefore, her certification has since expired; and she has 16 no intention ofreturning to reaching. We concludc that the evidencc simply cioes not support a firidtrig that Jack~e abdrtdoneci a teachlng career for the marrlaya: T'ncreforc. on remand the Dlst~ttt Court's dlstnbutron of the marital estate should not bc based on that f i i ~ d ~ n g ISSUE 5 '13.1 Did the District Court err vc-hen it awarded Jackie two-thirds of the appreciated value of Jinx's pre-acquired property? 'i35 The District Coun entered the following findings in regard to the distribution ofJim's premarital property: During the inarriage both parties contributed to the maintenance of the assets of the marriage. [Jackie] worked on the farm and was active in agricultural issues, with the encouragement of [Jim], through the Montana Farm Bureau. [Jackie] was also active on the farm, performing the usual farm nlfe tasks of cooking, cleanrng. ma~ntenanceof the yard, assistance with calving and in feeding bum calves, assistance in ridtng horses or herding cattle, assistance in fencing and other duties as needed and required. During the marriage, [Jackie] was primarily responsible for management of the apartment complex owned by the parties, including inten;iewing tenants, collecting rents, paying bills, arranging for maintenance to be done, ete. . . . [Jackie] further contributed financially to the marital estate through use of her inheritance to purchase bank stock, to pay off debts, and to contribute to savings. Further, her maintenance income received from her first husband was deposited to the joint accounts of the parties. [Tllxe court finds that the value of [Jim's] assets at the time of marriage was $266,885.73 and at the time ofseparation it was S555;052.24, exclusive of his inherited Steinbeisser and Son's stock. Reducing the net worth of [Jim] by . . . [Jackie's inheritanccj leaves [Jim] with a net worth of S503,790.51 . . . . The increase in his net worth during the marriage aittev reducing tire marital estatc by said award is (S503,790.5 1 - S266,855.73) $236,934.78. Said amount should be divided 1 3 ro [Jim] and 2:3 to [Jackie] requiring an a n x d ofS1579064.4i to [Jackie] in addition to restoration of her inherited property. ti46 Ji~n not dispute Jackie's entitletnent lo a share of the marital estate. i-lo\\ever: does Jim does challenge tlte District Court's award to Jackie of two-thirds of the value of the appreciation in his premarital assets. J i ~ n contends that this cash amard bears no relationship to Jackie's actual contributions to the presercation or appreciation of those assets 747 Sect~on40-4-202, MCA, controls the div~sion of pre-acquired property In a proceeding for dissolution, and provides in pertinenr part: (1) [Tlhe court. . . shall . . . finally equitably apportion between the parties the property and assets belonging to either or both, however and whenever acquired and whether the title thereto is in the name of tile husband or wife or both. . . . In dividing property acquired prior to the marriage; . . . the increased value of prooertli acauired prior to the marriage: . . . the court shall consider those contribt~tions the other spouse to the m a ~ ~ i a gmcludrng of e. [a) the nonmonetarv contribution of a homemaker; jb) the extent to w h ~ e hsuch contr~but~onsa w fae~litated the h maintenance of this property: and fc) nhether or not the propert, di'vis~on serves as an alternative to nialntenance arrangements. [Emphas~s added.) 'This section pro\idcs for equitable distribution of pre-acquired property. taking into consideration the contributions of the non-acquiring spouse to its presenation or 1 18. : The non-acquiring spouse is entitled to an equitable share of only the appreciated or I preserved valuc which is attributable to his or her effoi-ts. Rolf; j' 46. :court cannot 18 distribute to the oon-acquiring spouse property acquired prior to the marriage when iherc is no evidence tiisrr the spousc made any cont1ibutiol-r to ['nose assets in any form. In i-c ittfitrviirge (of'St7iith ( 1 994), 204 Mont. 306, 3 12, 871 P.2d 885, 888. Xbscnr a showing of contribution, being the family liomemaker does not alone entitle one to the appreciation in property. .Tfonemtrt~, 20. Finally, a non-acquiring spouse is not entitled to a sharc of the 1' increase in premarital property when the property's appreciation is due simply to market factors. IIZ r+e Murriuge of Hogstud (l99bj, 275 Mont. 489, 499, 914 P.2d 584, 590 sl~pe/-.reded oflzergrounnk izs stilted in /n re Mar-riizge ofkfur-tillicJ~-NzLIII, on 2002 MT 224, 31 1 blont. 375, 56 P.3d 317. 1/48 We havc had a difficult time detern~ining how the District Court compiitcd Jim's net \v<)r-tIiat S503,790.5 1 in finding of fact number 1 I, given the fact that the District Court itemized Jim's assets in finding of fact number 12 and calculated an entirely different net worth for Jim. Nevet-theless, the b~ilkof Jim's premarital assets appear to include two accounts with Edward Jones, an IRA, a Certificate of Deposit, a life insurance policy, seventy shares of First Bank stock, three horses, the apartment complex, and Jim's interest in the 5 S Partnership and VS. Ine. 149 At trial; Jim testified that Jackie had no involvcmellt with his Edxvard Jones accounts followitlg their marriage. Jackie conceded that the parties nrade no financial co~ltributions to those accounts dunng the marriage. J I testified that 11e dld onn an I R A prior to the ~ marriage and that the parties invested mo~ieyin that account during the marriage. Jitn puvcfiased his (-'ertificate of Deposit i n 1989, prior to the marriage, and tcstificd that tltc 19 partics did not add to its value during the marriagc. Prior to the n-rctrr-iagc,Jilt? purcitascd a life ins~irartccpolicy through thc \Vestern Farm Burcau Lifc Insurance Company. Jim testified that the parties used marital income to pay the policy's premiums throughout the seventy shares of First Bank stock. Although marriagc. Prior to thc marriage, Jim purcl~ascd Jim anlended thc stock certificate to add Jackie's name, Jim testified that Jackie did nothing to contribute to the stock's apprcciation. Jim owned three horses prior to the marriage and there is evidence i n the record that Jackie helped care for the horses during the marriage. 150 Jim testified that Jackie performed the majority ofthe work necessary to operate the apartment complex. I-lo\vever, the parties offered conflicting testimony regarding Jackie's contribution to the farming and ranching operation. Jackie rnaintaiired that she performed all of the duties required of a homemaker and helped with tlle tasks outlined in the LXstrict Court's findings of fact which arc set forth above. Further, Jackie contends that she contributed financial support to the operation in the form of 11er maintenance checks from the prior marriage and her inheritance. 75 1 Jim acknolvledged that Jackie contributed to the farm's operation during the initial years of their marriage. However: Jim testified that "[t]owards the end of the marriage, the last two, three years, her involvement decreased substantially, and the last couple years she was gone a lot and was not \zry in~olved."In his proposed findings of facr and conciusions of law. Jim agreed that Jackie's efforts did contribute to the increase in vi-llucof Jim's interest in 1 s Inc. tlowcver, Jim insists that Jackie's efforts did nothing to cc~ntrihuteto the ': appreciation in his interest in the 5 S Partnership, which owned the firm and rmcb real estate. 752 The District Court did not value Jim's premarital interest in the 5 S Partnership. However, Cymbaluk valued this asset at $1 19,091.50 at the time the parties manied. If ~ v e use Cymbaluk's 1994 value and the District Court's 1999 value for Jim's interest in the 5 S Partnership, it appears that this asset had appreciated by the approximate amount of $1 65,000 after only five years and ten mo~lths marriage. We understand that as the finder of fact it of was certainly ~vithinthe District Court's discretion to weigh the conflicting testimony; ascertain the credibility of the witnesses, and resolve factual conflicts. However, the District Court awarded Jackie two-thirds of this appreciation without any consideration for or recognition of the Fact that it was largely based on appreciating property values and other similar market factors. 753 We note that the District Court justified its cash award to Jackie, in part, as an alternative to maintenance. However, the District Court also concluded that ollly "11;6 of the . . . [property di\-ision] would be in lieu of maintenance." Consequently, we presume the other 516 ofJackie's award reflects her contributions to the assets, As indicated above, the evidence at trial established that Jackie made no contribution to some of Jim's premarital asscts and minimal to substantial contribution, nlonctarily and otherwise, to others. Yet, the District Court simply comp~tted value of Jim's premarital property before tlle marriage the and at the separation and, in sumnla1-y fashion, awarded Jackie two-thirds of the appreciation. :i51 Jackie may in fact bc entitled to son~e this appreciation based on her contriburions of to the assets. Ho\vcvcr, the District Court Innst evaluate Jsrckie's coniribution to cach ofthe premarital assets and allocate her award accordingly The D~strictCourt cannot s~mplg tabulate thc appreciation in Jim's premarital assets and award Jackie two-thirds of its value without regard to her respective contribution to each and. therefore, we conclude that the District Court erred when it did so. ISSUE 6 '55 Did the District Court CIT when it awarded attorney fees to Jackre? '56 The District Court awarded Jackie her reasonable attorney fees based on the following: [Jackie] has incurred substantial attorneys fees due to delay in discovery, filing of motions to compel discovery and in motions for contempt due to late payments of maintenance and due to [Jim's] char~giulg of beneficiaries on his life insurance in violation of the restraining order issued herein, it was clear at the trial of this niatter that [Jackie] had not been afforded complete discovery. The court has allowed introduction of the evidence not provided to [Jackie], but finds that [Jackie] is entitled to attorneys fees as the claims of lack of compliance with discovery were merited. All documents offered by [Jackie] (although objected to by [Jim] due to alleged failure to produce) were documents which remained at all times during these proceedings in the control of [Jim] and available to him and his counsel. The court will set a post-trial hearing, if necessary, for a determination of tlie aniount of attosneys fees due by [Jiun] to [Jackie]. The District Court cited no authority as justification for its attorney fee award, 757 Prior to trial, Jackie served Jim with interrogatories and requests for production pursuant to the klontana Rules of Civil Procedure. At trial, Jackie exprcssed dissatisfaction u ith Jim's responses to her drscovery requests. On appeal. Jackre states, "'The Distrrct Court was aware of this abuse of the discovery process and thus, had the right to find as it did thar [Jiin] significantly increased t h costs of litigation incurrcd by [Jackie! and titcrcfi)re. jkackiej u as entitled to an auard of attorney fees." Thc 1)istrict Court's findings of fact and Jackle's allegations appear to be based on rules related to discolery Houekcr, the Ilistrict Court's find~ngs fact and conclus~ons law do not tdentlfy the procedural or statutory baas for of of its auard. On appeal, Jaekse contends that the attorney fee award was wai~anted pursuant to SS; 40-4-1 10 and -255, MCA. Therefore, we will not examine the attorney fee award within the context of the discolery rules. Instead we analyfe it pursuant to Q$; 40-4-1 10 and -255, MCA 7158 Section 30-4- 110, MC.4, pro\ ides in r e l e ~ part: ant ( 1 ) The court from time to time, after considering the financial resources of both parties, may order a party to pay a reasonable amount for the cost to the other party of maintaining or defending any proceeding under chapters 1 and 4 and for professional fees, including sums for legal and professional services rendered and costs incurred prior to the commencement of the proceedislg or after entry of judgment. An award of attorney fees pursuant to $; 40-4-1 10, MCA, is appropriate if it 1s: (1) based on necessity; (2) reasonable; and (3) based on colnpetent evidence. LSc:c.htriier/ing,'; h finding 25. of iiecesstty must be s u p p o ~ ~ by factual findings. Iyefer v I'jelfer ( 1 9977),282 Mont. 46 1, cd 366,938 P.2d 684.085. Facts that me hale traditionally considered i n detcrn~ining nccess~ty are: 11) the rcquesting party's ~nability pay her o\tn attorney fees: (2) the other partl's to abllity to pay attorney fces; and (3) the relatibe finane~al posstions of rhe parties. Schtrlied~ng, 150 I'he District Court entered findings regarding the rciativc financial positions of the partics and the prospect of fururc earnings. I-iowever, to justify an attorney fee award pursuant to 40-4-1 10. MCA, Jackie first had to demonstrate an inability to pay her own attorney fees. When it d i ~ ~ i dthe premarital and marital property, the District Court ordered ed that Jimpay Jackie S209,226.14. The District Court's findings do not addrcss Jackie's ability to pay her oun attorney fees and Jack~e not cited any ebidence to that effect on appeal. has Furthermore, wc are not able to make that determinat~on appeal because we habe reversed on the District Churt's valuation and distribution of the marital estate. A determination of Jackie's entitlement to an award of attorney fees pursuant to 3 40-4-1 10, MCA, will necessarily have to be determined based on the criteria set forth above following remand to the Distria Court. 760 Section 40-4-255, MCA, provides in pertinent part: ( 3 )Ifa party fails to comply with any provision of40-4-25 1 through 404-258, the court shall, in addition to any other remedy provided by law, order the noncomplying party to pay to the complying party any reasonable attorney fees or costs incurred, or both, unless the court tinds that the noncomplying party acted with substantial justification or that other circumstances make the i~nposition the sanction unjust. of Jackie claims the award ofattorney fees was justi fied pursuant to 3 40-4-255, MCtl, because Jiin failed "to comply with the declarations of disclosure requ~red statute." Jackie does by not expand on which declaration of disclosure provision Jim failed to comply with. 761 As indicated above; 3 40-4-255, ?ilCil, authorizes a court to award attorney fees when part? falls to comply wrih any prox~sioncontamed in ; I 55 40-4-251 through -258. 'LICrl. Tile record slrows that Jim executed a preliminary cieciaration oftiiscinsuse~ pursuant to 5 40- 4-252, '11CA, and served juckic with the same. Nciiher parry filed a final cicciaratio~~ of ciiselosurc pursuant to 4 40-4-253, PlC-2, and, therefore. Jackie docs not appear to be a "complying" party who nlay seek an award pursuant to this section. 762 For these reasons: the attorney fee award to Jackie is set aside subjcet to reconsideratio11by the District Court following revaluation and distribution of the marital estate. ISSUE 7 163 Did the Dxstrict Court err when st reduced the dikis~ble inarital estate on account of premarital debt that Jirti purported11 failed to disclose prior to trial? 164 ;it tr~al. submsttcd ecrdence which documented large sums of money that tie owed Jim to his fanilly atid the District Court subsequently found that the marrtal estate "should be reduced by 'family' debts. . . ." Jackie contends that Jiin did not disclose tltese liabilities in his preliminary declaration of disclosure, in responses to Jackie's discovery requests, or in a final declaration of disclosure. Jackie claims that if she had this information prior to trial she could ha\ e: 1 ) undertaken further investigation to determine the authenticity of the obligations. 2) could have deposed the various providers of the funds. 3 j could have demonstrated the obligations were not expected to be repaid and 3) could have more adecluately assessed her position prior to trial and perhaps resolved the matter without trial. Since she could not "prepare zl defeitnse to thosc liabilities," Jackie maintains that she was precluded from recotenng tno-thirds ofthe value of the reduction in the marrtal estate 25 vj5 Jirn agrees with Jackie that the ilistrict Court '"erred in its Findings regarding tl~csc Fancily G~iigations,"however. for a difiretlt reason. Jim contends thar the value adopted bgthc District Court for his premarital assets was reduced to account fc~r premarital debt. his I-lou:ever, Jim asserts that the date of separation value adopted by the District Conrt did not account for the premarital debt. l l ~ e r c f o r Jim maintains that the District Court substandally e~ diseountcd the value of Jitn's premarital estate and inflated the value of his assets as of the date of scparation and, therefore, erroneously calculated the appreciation. 1166 Clearly, Jim's preliminary declaration of disclosure did not reference the family debt. Further, Jirn did not supplement his preliminary disclosure despite his "duty to update and augment material clianges to ihat disclosure [lo preclude] the need of formal discovery," pursuant to the preamble to the disclosure laws found at $ 5 30-4-251 through -258, MCA. Finally, Jim admits that he did not file a final declaration of disclosure, pursuant to $ 40-4253, MCA. Flowever, neither did Jackie tile a final declaration of disclosure. Therefore, as previously noted, she cannot rely on $40-4-255, MCA, for exclusion of Jim's non-disclosed debts. ?i67 Jackie did s e n e Jim \vitll formal discovery requests, pursuant to the Montana Rules of Civil Procedure, which requested an itemixed lisl of all of Jim's liabilities. Jim contends thar hc supplied this inforiliation to Jacltie and Jacliie disputes ever receiving it. Based on rhe record before us, sve cannot substantiate what docun~ents corresp~nding and information were iivallable to Jackie prior to trial, Furthermore, Jackic did not object to the adrnissioii of this cvidencc u hen offered at triai. Therefore. wc conciudc that thc District i.-oul? did not err ivhen it considered the c\ idence ofprcniariial debt. " 7 8 1.-lowever, J i m contends that the District Court's inconsistent treatment of the 1~ premarital debt warrants reconsideration on remand. Frankly, we cannot discern the cause of the discrepancy in Jim's net worth between findings of fact numbered 1 1 and 12. Perhaps the evplanatioll for the inconsistency lies somewhere in the District Court's treatment of the premarital debt as Jim suggests. However, the District Court's findings offer no insight to credit or discredit Jim's speculation regarding the contradictory values. Based on our conclusions to the previous issues, the District Court is going to have to revalue the parties' premarital and marital estates and redistribute the marital estate. ['remarital debt is one factor to consider in that revaluation and Jackie should not be precluded from the discovery she deems necessary to challenge the amount of Jim's family debt. 6 9 Based on the foregoing, we reverse and remand this ease to the District Court ibr revaluation and distribution of the parties' premarital and marital assets in accordance with this Opinion We Concur:

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