MORSE v MORSE
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No. 13364 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 WILLIAM R. MORSE, Plaintiff and Appellant, -vsBETTY J. MORSE, Defendant and Respondent. Appeal from: District Court of the Thirteenth Judicial District, Honorable M. James Sorte, Jud-qe presiding. : Counsel of Record. For Appellant: Anderson, Symmes, Forbes, Peete and Brown, Billings, Montana Weymouth D. Symmes argued, Billings, Montana For Respondent: Hon. Michael Greely, Attorney General, Helena, Montana Allen B. Chronister, Assistant Attorney General, appeared, Helena, Montana Berger, Anderson, Sinclair and Murphy, Billings, Montana Arnold A. Berger argued, Billings, Montana Submitted: Filed: NQV I E 1n g Decided : January 25, 1977 Z\dQV 1 6 1377' M r . J u s t i c e Daniel J . Shea d e l i v e r e d t h e Opinion of t h e Court: The husband appeals from a judgment of t h e D i s t r i c t Court, S t i l l w a t e r County, awarding c e r t a i n property t o the wife i n a property d i s t r i b u t i o n decree following d i s s o l u t i o n of marriage. The husband r a i s e s s e v e r a l i s s u e s r e l a t i n g t o t h e Uniform Marriage and Divorce A c t and f u r t h e r claims t h e c o u r t f a i l e d t o consider s e v e r a l f a c t o r s i n making i t s award of t h e m a r i t a l property. One of t h e i s s u e s under t h e Uniform Marriage and Divorce A c t i s h i s claim t h a t t h e c o u r t d i d n o t consider t h e w i f e ' s inheritance a s a marital asset. Because t h e D i s t r i c t Court was n o t s p e c i f i c i n i t s d i s p o s i t i o n of t h e i n h e r i t a n c e , we a r e compelled t o reverse and remarid f o r a hearing on t h e d i s p o s i t i o n of t h e i n h e r i t a n c e . A s t o h i s remaining c o n t e n t i o n s , we f i n d no e r r o r . F i r s t , w e w i l l d i s c u s s t h e various o t h e r i s s u e s r a i s e d by t h e husband, and d i s c u s s l a s t t h e i s s u e of t h e w i f e ' s $200,000 inheritance. Both t h e husband and wife were granted a divorce by t h e c o u r t on October 23, 1974. A t r i a l on property d i s p o s i t i o n was h e l d December 9 and 10, 1975. The c o u r t issued f i n d i n g s of f a c t , conclusions of law and order apportioning t h e m a r i t a l property on January 19, 1976. The husband contends t h e c o r r e c t law under which t h e c o u r t divided t h e property was t h a t which e x i s t e d a t t h e time t h e t r i a l was held on t h a t m a t t e r , and hence p r i o r t o t h e e f f e c t i v e d a t e of t h e Uniform Marriage and Divorce Act i n Montana, January 1, 1976. However, s e c t i o n 48-341, R.C.M.1947, of t h a t Act, s t a t e s : "(2) This a c t a p p l i e s t o a l l pending a c t i o n s and proceedings commenced p r i o r t o i t s e f f e c t i v e d a t e with r e s p e c t t o i s s u e s on which a judgment has n o t been entered *** "(4) I n any a c t i o n o r proceeding i n which an appeal was pending o r a new t r i a l was ordered p r i o r t o t h e e f f e c t i v e d a t e of t h i s a c t , t h e law i n e f f e c t a t t h e time o f , t h e order s u s t a i n i n g t h e appeal o r t h e new t r i a l governs t h e appeal, t h e new t r i a l , and any subsequent t r i a l o r appeal." Here, t h e t r i a l c o u r t d i d n o t e n t e r judgment on t h e property d i v i s i o n u n t i l January 19, 1976, eighteen days a f t e r t h e e f f e c t i v e d a t e of t h e Uniform Marriage and Divorce Act. Section 48-341(4) of t h a t Act s p e c i f i e s t h e exclusive circumstances under which an a c t i o n would f a l l under p r e - e x i s t i n g law--cases i n which a judgment has a l r e a d y been entered o r a new t r i a l ordered. Sub- s e c t i o n (4) p l a i n l y does not apply t o t h i s case a s a judgment had n o t been entered when t h e Uniform Marriage and Divorce A c t went i n t o e f f e c t . W might add, however, t h a t i n t h e a r e a of e property d i v i s i o n , t h e Uniform Marriage and Divorce Act provisions a r e s i m i l a r t o case law predating t h a t Act. Mont . , 564 Biegalke v. Biegalke, P.2d 987, 34 St.Rep. 401, 405 (1977). Therefore t h e husband l o s t no s u b s t a n t i a l r i g h t s by coming under t h e Uniform Marriage and Di.vorce Act. The b a s i s f o r d i v i d i n g property upon d i s s o l u t i o n of marriage i s set o u t i n s e c t i o n 48-321, R.C.M. 1947. I t provides i n relevant p a r t t h a t the court: "* * * without regard t o m a r i t a l misconduct, s h a l l * * * f i n a l l y e q u i t a b l y apportion between t h e p a r t i e s t h e property and a s s e t s belonging t o e i t h e r o r both however and whenever acquired, and whether t h e t i t l e t h e r e t o i s i n t h e name of t h e husband o r *'' (Emphasis supplied.) wife o r both. ** The s t a t u t e a l s o sets o u t f a c t o r s which t h e c o u r t must consider i n t h e apportionment of t h e property, including: "* ** ** *** **It amount and sources of income needs of each of t h e p a r t i e s [and] whether t h e apportionment i s i n l i e u of o r i n a d d i t i o n t o maintenance Concerning property acquired by e i t h e r spouse before marriage o r by g i f t , bequest, devise o r descent, t h e s t a t u t e provides the court s h a l l : * * consider thos3contributions of t h e o t h e r spouse t o t h e marriage t h e e x t e n t t o which such 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 property and whether o r n o t t h e property d i s p o s i t i o n s e r v e s a s an a l t e r n a t i v e t o maintenance arrangements. I I 'I* *** The husband asks t h i s Court t o d i s r e g a r d t h e s p e c i f i c language of t h e s t a t u t e p r o h i b i t i n g c o n s i d e r a t i o n of m a r i t a l misconduct i n d i s t r i b u t i n g m a r i t a l property, The s t a t u t e ex- p r e s s l y f o r b i d s a c o n s i d e r a t i o n of m a r i t a l misconduct i n apportioning the marital estate. t h e s t a t u t e a s we f i n d i t . Since t h e i n t e n t i s c l e a r we take I n the Matter of West Great F a l l s Flood Control and Drainage D i s t r i c t , 159 Mont. 277, 287, 496 P.2d 1143 (1972). I t i s e q u a l l y c l e a r t h a t t h e husband would f a r e no b e t t e r under t h e law p r e - e x i s t i n g t h e Uniform Marriage and Divorce Act. Before t h a t Act, " f a u l t " was considered only i n the context of a p a r t y ' s r i g h t t o alimony and could n o t be t h e b a s i s f o r depriving e i t h e r p a r t y of property i n t e r e s t s upon divorce. Johnson v. Johnson, 137 Mont, 11, 1 7 , 349 P.2d 310 (1960). The husband a l s o contends t h a t t h e wife quitclaimed c e r t a i n property t o him before t h e d i s s o l u t i o n of t h e marriage and accordingly, t h e c o u r t should n o t consider t h a t property a s p a r t of t h e m a r i t a l e s t a t e . He claims i t was t h e i n t e n t of t h e wife t o d e l i v e r t h e property t o him and t h i s was manifested by t h e execution, delivery, and filing of the deeds. However, section 48-321 provides that a district court may equitably divide property "however and whenever acquired" and therefore the question of title is not controlling. This was also the law before the enactment of the Uniform Marriage and Divorce Act. LaPlant, Mont Downs v. Downs, . LaPlant v. , 551 P.2d 1014, 33 St.Rep. 580 (1976); Mont . , 551 P.2d 1025, 33 St.Rep. 576 (1976); Cook v. Cook, 159 Mont. 98, 102,103, 495 P.2d 591 (1972). The husband contends the prospective assets and liabilities of the parties should be considered in a property division. While it is true that section 48-321 requires the court, among other things, to consider "the opportunity of each for future acquisition of capital assets and income", here there was no sufficient foundation established for the reasonable likelihood of acquiring future assets. As to future debts or liabilities of the parties, such evidence is normally too speculative, and in this case there was no reliable evidence by which the court could determine future liabilities. For the same reason, we cannot consider the possibility the wife will receive an inheritance from her mother sometime in the future. Because of the ambiguity of the District Court's findings on .thewife's inheritance of $200,000 before the dissolution of the marriage, we are compelled to remand the cause for a hearing and specific findings. It is clear under section 48-321, "property and assets belonging to either or both however and whenever acquiredl',that the $200,000 inheritance was properly an asset of the marital estate at the time of dissolution. The husband contends gnce the wife was awarded the entire $200,000 inheritance, that he should have received a corresponding benefit from the remainder of the marital property. I n h i s findings t h e t r i a l judge noted t h a t t h e wife d i d have an i n h e r i t a n c e of $200,000. However, t h e judge f a i l e d t o dispose of t h a t i n h e r i t a n c e i n any way which would c l e a r l y show h i s i n t e n t . The order of d i s t r i b u t i o n l i s t e d c e r t a i n property awarded t o t h e wife, and t h e remainder t o t h e husband. Since t h e wife was n o t s p e c i f i c a l l y awarded t h e $200,000, i t could be argued t h e husband But t h e r e i s was t o r e c e i v e t h e $200,000 i n h e r i t a n c e of t h e wife. no evidence t h e husband asked f o r a l l o r any p o r t i o n of t h e w i f e ' s inheritance. Neither i s t h e r e any i n d i c a t i o n from t h e evidence, findings and conclusions t h a t t h e c o u r t intended t o award a l l o r any p o r t i o n of t h e w i f e ' s i n h e r i t a n c e t o t h e husband. Moreover, on appeal t o t h i s Court both p a r t i e s t r e a t t h e i n h e r i t a n c e a s having been awarded t o t h e wife. The confusion i n d i c a t e d by t h e record and t h e p o s i t i o n of t h e p a r t i e s can only be resolved by a rehearing on t h e i s s u e of t h e inheritance. W s t r e s s here t h a t , a s i n a l l decrees of property e d i s t r i b u t i o n , t h e r e i s no d e f i n i t e formula t h a t must be followed and each c a s e must be t r e a t e d on an i n d i v i d u a l b a s i s . Biegalke v. Biegalke , supra. The wife contends t h e decree should be modified so t h a t property awarded t o h e r can be taken from t h e husband's i n d i r e c t control. This i s a matter f o r t h e D i s t r i c t Court t o consider upon remand of t h i s c a s e , and i t need not be discussed here. The wife a l s o contends t h e judgment should be s e t a s i d e because t h e record d i d n o t d i s c l o s e t h e t r u e n e t worth of t h e husband. She d i d n o t cross-appeal on t h i s i s s u e , b u t r a i s e d i t f o r t h e f i r s t time i n h e r b r i e f on appeal. Accordingly, she i s precluded from r a i s i n g t h i s i s s u e on appeal. Johnstone v. Svejkovsky, Mont - , -9 554 P.2d 1329, 33 St.Rep. 954 (1976); Spencer v. Robertson, 151Mont. 507, 511, 455 P.2d 48 (1968). W vacate the judgment of the d i s t r i c t court and remand e it for further proceedings consistent with t h i s Opinion. W Concur: e Justices. M r . J u s t i c e John Conway Harrison concurring i n p a r t and d i s s e n t i n g in part: This Court i n Bdegalke v. Biegalke, Mont. , 564 P. 2d 987, 34 St.Rep. 401 (1977), e s t a b l i s h e d i n Montana t h a t i n c a s e s , such a s t h e i n s t a n t one, t h e provisions of Chapter 3, T i t l e 48, s e c t i o n s 48-301 through 48-341, R.C.M. 1947, Montana's Uniform Marriage and Divorce Act, apply. However, i n apportioning t h e property of t h e p a r t i e s h e r e , under t h e provisions of s e c t i o n 48-321, I d i s a g r e e with t h e majority. Here, under t h e f a c t s u n t i l 1964, when t h e wife moved t o England, away from t h e m a r i t a l domicile, such a d i v i s i o n would, i n m opinion, have been j u s t , f o r up t o t h a t time both e q u a l l y y c o n t r i b u t e d t o t h e a c q u i s i t i o n of t h e property. A s I view t h e evidence, i t was t h e defendant wife who wanted t h e English experi e n c e , and i t was t h e p l a i n t i f f husband who r e l u c t a n t l y went along with h e r demands. I t was p l a i n t i f f husband who had t o purchase t h e home i n England and maintain h i s family t h e r e . From 1964 t o 1972, with t h e exception of q u a r t e r l y v i s i t s , and because of t h e w i f e ' s i n s i s t e n c e on l i v i n g i n England, p l a i n t i f f ' s c h i l d r e n grew up without h i s c l o s e supervision and guidance and he was denied t h e joy and s a t i s f a c t i o n of seeing t h e i r d a i l y development f o r some e i g h t y e a r s . Under t h e s e f a c t s one would assume t h e c h i l d r e n would be i n support of t h e i r mother, b u t h e r e , because of h e r conduct, she has l o s t t h e support of a l l f i v e children. They have returned from England t o t h e family home i n Absarokee and support t h e i r f a t h e r ' s p o s i t i o n i n t h e s e proceedings. He has become both f a t h e r and mother t o them and i t i s t o him they have looked t o f o r f i s c a l and emotional support t h e s e l a s t s i x years. Even under t h e f i n d i n g s of t h e t r i a l c o u r t , it was found t h a t a f t e r moving t o England t h e wife contributed l i t t l e o r nothing t o p l a i n t i f f f a t h e r ' s earning capacity. During t h e marriage t h e p a r t i e s accumulated t h e following property : 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. Family dwelling i n Absarokee, with garage (average appraised value) Law o f f i c e b u i l d i n g Morse apartments Rumaino acreage Airplane and hanger Contract proceeds ( t o t a l ) Morse-Edmonds-Henrickson c o n t r a c t Pickup and v e h i c l e s (agreed value) Home f u r n i t u r e ( p l a i n t i f f ' s e s t i m a t e ) Notes and mortgages receivable Value due on lumber Accounts receivable (excluding those with doubtful c o l l e c t i o n p o s s i b i l i t i e s ) Insurance (cash surrender value) Livingston, Montana Savings Account Checking Account Bank account Red Lodge Morse Apartments Account Bonds (including $2,500 belonging t o wife a t time of marriage) Library and equipment law o f f i c e furniture, fixtures Morse Apartments P l a i n t i f f ' s apartment f u r n i t u r e Wife's i n h e r i t a n c e from f a t h e r , L.B. Kratz - - - - The l i a b i l i t i e s of t h e p a r t i e s c o n s i s t primarily of outstanding mortgages: 1. 2. 3. Federal Land Bank Mortgage U.S. Bank, Red Lodge Estimated back t a x l i a b i l i t y - IRS (1971-1975) $25,207 37,195 54,000. I n June 1972, defendant returned t o Montana and took up residence with h e r parents. shortly thereafter. The divorce proceedings commenced Within two y e a r s , b u t p r i o r t o t h e divorce, her f a t h e r died leaving h e r approximately $200,000 and i n a d d i t i o n she received $9,740 a s e x e c u t r i x of t h e e s t a t e . She occupies t h e family home and has f u l l use of two family automobiles. While s p e c u l a t i v e i n amount, she w i l l i n h e r i t a s u b s t a n t i a l e s t a t e from her mother who i s 82 years o l d . I n s p i t e of t h e above f a c t s , t h e t r i a l c o u r t made t h i s d i s t r i b u t i o n of property: "A. TO THE DEFENDANT: (1) Family dwelling shed o r .garage .... together with ... the attached (2) A l l f u r n i t u r e and personal property located i n t h e family home o t h e r than t h a t , claimed by t h e t h i r d p a r t y i n t e r v e n o r , and p l a i n t i f f ' s business records. (3) The Morse Apartments ... (4) (5) A l l of t h e money's payable and a l l r i g h t , t i t l e and i n t e r e s t of t h e p l a i n t i f f i n and t o the property described a s t h e Morse-Edmonds-Hendrickson Contract, t h e sum being $15,360.83, o r , i n the a l t e r n a t i v e , a cash payment of $15,360.83. (6) "B. The f u r n i t u r e and f i x t u r e s i n t h e Morse Apartments. One h a l f of t h e United S t a t e s Savings Bonds ( i f and when found). TO THE PLAINTIFF: (1) A l l of t h e property of t h e p a r t i e s not awarded t o defendant a s evidenced from t h e e x h i b i t s and t h e testimony and brought o u t during t h e course of t h e trial. (2) The P l a i n t i f f s h a l l pay a l l outstanding indebtedness on t h e mortgages t h a t secure a loan on any property t h a t was awarded t o t h e defendant herein." Considering t h e f a c t s of t h e i n s t a n t c a s e , such a d i s t r i b u y t i o n of property i s , i n m opinion, an i n e q u i t a b l e d i s t r i b u t i o n t o t h e wife. N mention i s made by t h e t r i a l c o u r t of t h e $200,000 o plus i n h e r i t a n c e i n t h e c o u r t ' s d i s p o s i t i o n formula contained i n i t s conclusion of law. T o t a l i n g t h e values of t h e p r o p e r t i e s taken by t h e r e s p e c t i v e p a r t i e s i n such c a s e , would y i e l d t h i s r e s u l t : TO THE HUSBAND less less $173,482 ( t o t a l value) 62,400 (Outstanding mortgage l i a b i l i t i e s ) 111,082 24;000 (conservative estimate of predivorce t a x l i a b i l i t y ) $ 87,082. The husband received no house o r l i v i n g arrangements o t h e r than t h e a b i l i t y t o r e n t an apartment owned by t h e wife by v i r t u e of t h e decree. He i s , a s i s apparent, responsible f o r a l l of t h e l i a b i l i t i e s of t h e marriage, a f a c t o r t o be considered under t h e express language of s e c t i o n 48-321. TO THE WIFE $81,621 p l u s 200,000 ( i n h e r i t a n c e funds) plus 9,700 ( e x e c u t r i x f e e ) $291,321 I n a d d i t i o n , t h e wife received t h e family home, which she now r e n t s t o o t h e r s , d e s p i t e t h e c o u r t having found a s a f a c t t h a t she i s e n t i t l e d t o t h e use and occupancy of t h e Kratz home. Section 48-321 i s a s t a t u t e of broad a p p l i c a b i l i t y . It speaks of c o n s i d e r a t i o n of " a l l property however and whenever acquired" and expressly r e f e r s t o i n h e r i t a n c e s . Other f a c t o r s t o be balanced, which would f i n d a p p l i c a b i l i t y i n t h i s c a s e a r e : amount and sources of income, needs of t h e p a r t i e s , and opport u n i t i e s f o r f u t u r e a c q u i s i t i o n s of c a p i t a l . Other c o u r t s have held t h a t , due t o a . s h o r t term marriage o r o t h e r l i k e circumstances, a spouse seeking apportionment of a l a r g e sum e i t h e r brought i n t o t h e marriage o r acquired e a r l y i n t h e marriage by t h e o t h e r spouse, whether by i n h e r i t a n c e o r otherwise, does n o t have the same " i n t e r e s t 1 ' i n t h e sum a s i n cases where t h e marriage i s of long d u r a t i o n . l a s t e d approximately 29 years. Here, t h e marriage To deny t h e husband a s h a r e of t h e w i f e ' s i n h e r i t a n c e would stand on t h e same footing a s denying t h e wife a share of a l a r g e sum i n w i n d f a l l p r o f i t s from t h e husband's business o r investments acquired j u s t p r i o r t o t h e divorce. - I1 - To consider i n h e r i t a n c e s per s e a s being beyond t h e language o r i n t e n t of s e c t i o n 48-321, would b e , i n a sense, t o cause Montana t o become a de f a c t o community property s t a t e i n t h i s regard. I n m opinion, t h i s i s n o t t h e i n t e n t of s e c t i o n y 48-321. Here, while t h e husband has a b e t t e r f u t u r e earning potent i a l than t h e wife f o r obvious reasons a f a c t which must be weighed i n t h e balance, t h e wife does have a s t r o n g p o t e n t i a l f o r f u t u r e a c q u i s i t i o n of c a p i t a l . Both a r e f a c t o r s which r e l a t e t o t h e f u t u r e needs of t h e p a r t i e s . The t r i a l judge i n h i s f i n d i n g s of f a c t recognized t h e wife stands t o receive l a r g e sums from h e r mother upon h e r death. The mother i s p r e s e n t l y 82 and i n very poor h e a l t h . The f a c t s i n d i c a t e a s t r o n g l i k e l i h o o d of such i n h e r i t a n c e , due t o t h e f a c t M r . and Mrs. Kratz maintained a j o i n t w i l l . I f i n d t h e holding i n Smyth v. Smyth, (Okla.1947), 179 P.2d 923, persuasive here. There t h e c o u r t s a i d : "'Next t o t h e f o r t u n e of which he i s already possessed, c o n s i d e r a t i o n should be given t o f u t u r e prospects and probable a c q u i s i t i o n of wealth *'I' from any source whatever.* *** * See a l s o : Smith v.'Smith, (Okla.1957), 311 P.2d 229; Kessinger v. Kessinger, 360 Mich. 528, 104 N.W.2d 192 (1960). I n a d d i t i o n , I f i n d t h e t r i a l c o u r t ' s d e c i s i o n t o saddle p l a i n t i f f husband with t h e o b l i g a t i o n of a l l t h e p r e - e x i s t i n g t a x l i a b i l i t i e s t o be i n e q u i t a b l e . Both owe t h e o b l i g a t i o n , both have t h e a b i l i t y t o pay t h e o b l i g a t i o n , and both should share i n payment. Considering t h e e n t i r e record h e r e , I would reverse due y t o what, i n m opinion, an unconscionable property d i s t r i e " - b u t ion. t Justice . L I
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