MARRIAGE OF PETERSON

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I N THE SUPREME COURT OF THE STATE OF MONTANA No. 81-50 I N RE THE MARRIAGE OF: KAY J O Y PETERSON, P e t i t i o n e r and A p p e l l a n t , VS. RAYMOND P. PETERSON, R e s p o n d e n t and R e s p o n d e n t . O R D E R PER CURIAM: I T I S HEREBY ORDERED t h a t t h e o p i n i o n o f t h i s C o u r t d a t e d October 22, 1981, be c o r r e c t e d i n t h e f o l l o w i n g manner. The f o u r t h p a r a g r a p h o n p a g e 2 w h i c h b e g i n s " B o t h r a n c h e s were s u b s t a n t i a l l y encumbered. . ." s h o u l d read as f o l l o w s : " B o t h r a n c h e s were s u b s t a n t i a l l y e n c u m b e r e d . The D i s t r i c t C o u r t f o u n d t h e home r a n c h to h a v e a n e g a t i v e v a l u e of $74,625 a f t e r d e d u c t i n g a l l l i a b i l i t i e s from its f a i r market v a l u e of $402,500. The c o u r t f o u n d t h e f a i r m a r k e t v a l u e o f t h e A l b e e Ranch t o be $ 2 , 0 0 3 , 0 0 0 a n d t o t a l l i a b i l i t i e s to be $ 1 , 3 2 4 , 7 6 1 . 3 0 . The c o u r t awarded t h e a p p e l l a n t t h e s t o c k sale p r o c e e d s , f u r n i t u r e from t h e home r a n c h , a h o r s e , h o r s e t r a i l e r , j e w e l r y and o n e - h a l f o f $ 9 0 0 0 i n l e a s e f e e s owed t o t h e P e t e r s o n s f o r g r a z i n g r i g h t s o n t h e home r a n c h . The r e s p o n d e n t was a w a r d e d t h e home r a n c h , c a t t l e v a l u e d a t $ 5 2 , 9 2 4 , t h r e e h o r s e s , farm machinery, p e r s o n a l p r o p e r t y , $ 4 5 0 0 i n lease f e e s and $ 9 0 0 0 f r o m t h e sale o f a c a t e r p i l l a r tractor." DATED t h i s p d a y o f November, 1 9 8 1 . Justices No. 81-50 I N THE SUPREME C U T O THE STATE O M N A A O R F F OTN 1981 I N RE THE MARRIAGE O F KAY J O Y PETERSON, P e t i t i o n e r and A p p e l l a n t , and RAYMOND P. PETERSON, Respondent and Respondent. Appeal from: D i s t r i c t Court of t h e F i f t h 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 c o u n t y o f Beaverhead. Honorable Frank B l a i r , Judge p r e s i d i n g . Counsel o f Record: For A p p e l l a n t : D a t s o p o u l o s , ~ M a c D o n a l d & L i n d , M i s s o u l a , Montana F o r Respondent: C o r e t t e , Smith, Pohlman & A l l e n , B u t t e , Montana Submitted on b r i e f s : Decided: Filed: J u l y 30, 1981 at Mr. Justice Frank B. Morrison, Jr., delivered the Opinion of the Court. Kay Peterson appeals from a judgment of the Fifth Judicial District, Beaverhead County, apportioning marital assets, denying child support and maintenance, and awarding custody of one child to the respondent. Kay and Raymond Peterson were married September 23, 1960. They have three children: two sons, Guy, age 18, and Jade, age 17, and one daughter, Andrea, age 15. The appellant and respondent accumulated substantial property during their marriage. They owned a 1400-acre cattle ranch where they resided, livestock, farm machinery and other appellant personal property. and represented Prior respondent each owned fifty percent of an to September ninety incorporated 1980, shares which 12,000-acre ranch near Wisdom, Montana, called the Albee Ranch. The remaining fifty percent was owned by Mr. and Mrs. Tom Ford. The appellant sold her $230,000 before trial. ninety shares to the Fords for The respondent was not involved in the sale and retained his ninety shares at the time of trial . Both ranches were substantially encumbered. The District Court found the home ranch to have a negative value of $74,625 after deducting all liabilities from its fair market value of $402,500. value of The court found the fair market the Albee Ranch to be liabilities to be $1,324,761.30. $2,003,000 and total The court equally divided the stock sale proceeds between the parties and ordered the shares owned by the respondent sold and the proceeds equally divided within thirty days or individually reissued in equal amounts to the parties. The home ranch, three horses and farm machinery were awarded to the respondent. Petitioner was awarded furniture, jewelry, a horse and a horse trailer. The remainder of the marital estate, which included cattle valued at $52,924, was equally apportioned. The appellant raises the following issues in this appeal: 1. Whether the District Court accurately determined the net worth of the marital estate. 2. Whether the District Court abused its discretion in apportioning the marital estate. 3. Whether the District Court erred in denying child support and maintenance. Whether the District Court erred in granting the 4. respondent custody of the minor daughter. We have carefully reviewed the record before us and find the judgment must be reversed and the case remanded for complete findings regarding the true net worth marital estate and the awarding of child custody. of the Further, it is obvious that the District Court failed to adequately follow the applicable statutory mandates and case law in apportioning the marital estate and in denying child support and maintenance. Net Worth of the Marital Estate The appellant contends the District Court abused its discretion first by omitting marital assets proven at trial and second in its determination of the value of assets included by the court. The first omission complained of arises from the sale by respondent of 160 cattle to one Andrew Leep in December 1979. The r e s p o n d e n t t e s t i f i e d t h e t o t a l s a l e s p r i c e was $ 7 6 , 0 0 0 which was a p p l i e d t o a p r o m i s s o r y n o t e t o S t a t e Bank and Trust Company of Dillon, Montana, the holder of the security interest in the cattle. The a p p e l l a n t c o n t e n d s t h e s a l e s p r i c e was a c t u a l l y $ 9 6 , 0 0 0 p a i d t o t h e r e s p o n d e n t i n two c h e c k s ; a downpayment o f $ 2 0 , 0 0 0 made p a y a b l e t o t h e r e s p o n d e n t i n d i v i d u a l l y a n d a second check of and the $ 7 6 , 0 0 0 made j o i n t l y p a y a b l e t o r e s p o n d e n t bank. In support of her allegation appellant o f f e r e d t e s t i m o n y of a Department of L i v e s t o c k i n v e s t i g a t o r , the canceled $20,000 check, copies of the bank's deposit r e c o r d s and l o a n n o t a t i o n s , and t h e o f f i c i a l f i n d i n g s o f t h e Montana Board of L i v e s t o c k i n v e s t i g a t i o n r e l a t i n g t o L e e p ' s livestock d e a l e r ' s admit the Board license. of The D i s t r i c t C o u r t r e f u s e d t o Livestock findings. Rule 803(8), Mont . R . E v i d . The D i s t r i c t C o u r t d i d n o t make a f i n d i n g r e g a r d i n g this matter. Appellant presented evidence i n support of received $96,000 conceal the for $20,000 her substantial contention the cattle payment. that the credible respondent and may h a v e a t t e m p t e d t o Respondent first testified t h a t he c o u l d n o t remember t h e t o t a l s a l e s p r i c e b u t l a t e r testified if he had received t h e second check f o r t h a t he d e p o s i t e d t h a t check w i t h t h e bank. not present contention. any documentary in Respondent d i d support of his Upon t h e e v i d e n c e f o u n d i n t h i s r e c o r d , we h o l d t h e D i s t r i c t Court abused contested evidence $20,000 issue in i t s d i s c r e t i o n by its findings. On remand ignoring this the District C o u r t m u s t make a f i n d i n g r e g a r d i n g t h i s c l a i m . Appellant n e x t c o n t e n d s t h e D i s t r i c t C o u r t e r r e d by failing to estate. include prepaid grazing fees in the marital The respondent paid a Washington landowner $18,000 in anticipation of pasturing one hundred cattle; however, only forty-six cattle were actually pastured. The testimony of respondent supports the appellant's contention regarding the unused prepaid fees. Respondent testified the lessor would rebate approximately $9,000 on demand. evidence appears in the record. No contrary The District Court did not include this asset in its findings and conclusions. was error. On remand the District Court must This add the prepaid fees to the valuation of the estate. The final omissions claimed as error are a $6,000 payment received by respondent for gravel taken from the home rancn and a $1,400 mineral lease payment. these payments was admitted by the respondent. Receipt of However, the record does not contain the time they were received. The respondent testified he applied all the proceeds to expenses of the ranch. Appellant contends she is entitled to a full accounting. In Lippert v. Lippert (1981), P.2d 1206, 1209, 38 St.Rep. - Mont. , 627 625, 629, we held, "spouses possess mutual powers, obligations and interests which endure until lawfully modified or terminated. One of those powers is the power to freely contract with others regarding marital property. Section 40-2-301, MCA." Absent modification either spouse is free to act with marital property. contract was In this case the marital power to freely lawfully modified. On March 25, 1980, a temporary order was granted by the District Court prohibiting the respondent from "transferring, encumbering, con- cealing or otherwise of any real or personal [ s i c ] any i n t e r e s t t h e r e i n d u r i n g t h e p e n d e n c y p r o p e r t y of of t h i s proceeding." statutes. disposing T h i s r e l i e f was i n a c c o r d a n c e w i t h o u r Section 40-4-106(2)(a), A subsequent order MCA. m o d i f y i n g t h e t e m p o r a r y o r d e r was e n t e r e d J u n e 2 , 1 9 8 0 . The modification the removed the total prohibition against respondent but required t h e respondent t o "account f o r a l l monies the from this date to t h e d a t e of P e t i t i o n for Dissolution." d i s c l o s e when he r e c e i v e d were received after On remand hearing the on respondent t h e d i s p u t e d payments. March 25, 1980, or the must they If remained in the m a r i t a l e s t a t e a f t e r t h a t d a t e , t h e r e s p o n d e n t must a c c o u n t t o the appellant f o r t h e i r disbursement. In addition to omissions, the appellant claims the D i s t r i c t C o u r t e r r e d i n i t s v a l u a t i o n o f t h e home r a n c h , t h e A l b e e Ranch, farm machinery, and t h e number o f h o r s e s owned by t h e p a r t i e s . trial At regarding the the p a r t i e s presented t h e v a l u e of testimony certified and appraiser c o n f l i c t i n g evidence t h e home r a n c h . appraisal who report concluded Appellant offered of the a value r a n c h t o be $ 7 5 0 , 0 0 0 a s o f S e p t e m b e r 1 9 8 0 . offered buyer. Court, The the testimony He valued without District the stated Court of a local ranch at rancher and $402,500. the home real estate The accepted the free follow one to of The r e s p o n d e n t reasons, is professional District lower figure. appraisal and r e j e c t another. However, h e r e t h e r e i s a w i d e d i s p a r i t y i n valuation, we discretion and in the are unable absence of to review f i n d i n g s by supporting the valuation selected. for the abuse trial of court Respondent cites Biegalke v. Biegalke (1977), 172 Mont. 3 1 1 , 564 P.2d 9 8 7 , f o r t h e r u l e t h a t " t h e t r i e r o f t h e f a c t s h a s t h e d i s c r e t i o n t o g i v e whatever w e i g h t he s e e s f i t t o t h e t e s t i m o n y of t h e e x p e r t from 0 t o l o o % . " the is d i s t i n g u i s h a b l e . W think Bieqalke e 990. parties appraiser, accepted agreed to the court In Biegalke, appointment of stipulated t o his qualifications, his appraisal without 564 P.2d a t objection. a single and g e n e r a l l y On appeal, we held the court properly exercised its discretion i n determining v a l u a t i o n . different appraisers, valuations. District In the instant case the p a r t i e s secured who presented Upon r e v i e w of Court properly the record, conflicting we c a n n o t s a y t h e its exercised it did without selecting the value widely discretion in some i n d i c a t i o n o f its reasons f o r doing s o . Appellant next contends t h e D i s t r i c t Court e r r e d its valuation testified of t h e Albee that a rejected Ranch. offer of Appellant's $2,600,000 s p e c t i v e b u y e r was a r e a s o n a b l e v a l u a t i o n . appraiser testified the Ranch was $ 2 , 0 0 5 , 5 5 0 . total market in appraiser from a pro- The r e s p o n d e n t ' s value of the Albee The D i s t r i c t C o u r t f o u n d " t h e m a r k e t v a l u e o f t h a t r a n c h f r o m t h e t e s t i m o n y o f J a c k H i r s c h y t o be i n t h e sum o f $2,003,000." h a s made a c l e r i c a l error It appears t h e D i s t r i c t Court which s h o u l d be corrected. In a d d i t i o n , t h e c o u r t should s t a t e its reasons f o r determining valuation. A rejected offer of $2,600,000 might well i n d i c a t e t h e t r i a l c o u r t abused i t s d i s c r e t i o n i n a s s i g n i n g a value proper of only e x e r c i s e of $2,003,000. However, we uphold a d i s c r e t i o n by t h e t r i a l c o u r t and i f a will r e a s o n a b l e e x p l a n a t i o n e x i s t s f o r a d o p t i n g t h e lower v a l u e , i t s h o u l d be s t a t e d . With r e g a r d t o a p p e l l a n t ' s f i n d i n g s of v a l u a t i o n of horses, once we again challenge t o the c o u r t ' s farm machinery find and t h e number substantial disparity in of the e v i d e n c e p r e s e n t e d by t h e p a r t i e s b u t no r e a s o n i n g g i v e n by t h e c o u r t f o r i t s a d o p t i o n of t h e lower v a l u e s . On remand t n e c o u r t s h o u l d e x p l a i n t h e r e a s o n s employed. A p p o r t i o n m e n t , M a i n t e n a n c e and C h i l d S u p p o r t True net worth of the marital estate must be a c c u r a t e l y d e t e r m i n e d b e f o r e t h e i s s u e s of e q u i t a b l e apportionment, maintenance and child support can be resolved; however, w e have i n c l u d e d a p p e l l a n t ' s c l a i m s r e g a r d i n g t h e s e issues t o provide guidance t o the D i s t r i c t Court. Appellant contends the D i s t r i c t Court f a i l e d t o apply t h e m a n d a t e s of s e c t i o n 40-4-202, MCA, W agree. e the marital property. i n t h e d i v i s i o n of The d e t e r m i n a t i o n s made m u s t be m e a s u r e d a g a i n s t t h e s t a t u t e . I n apportioning the m a r i t a l e s t a t e t h e D i s t r i c t C o u r t must f o l l o w t h e r e q u i r e m e n t s of s e c t i o n 40-4-202(1), v . Smith ( 1 9 8 1 ) , 146; T e f f t v. 38 S t . K e p . , - Mont. Tefft 837. MCA, (1981), and o u r c a s e l a w . 622 P.2d - Mont . Smith 1 0 2 2 , 38 S t . R e p . , 628 P.2d 1094, I n deciding t h e i s s u e of maintenance, the c o u r t m u s t f o l l o w t h e g u i d e l i n e s f o u n d i n s e c t i o n 40-4-203, , Mont. - P.2d Bowman v . MCA. Bowman (1981), 38 S t . R e p . 1515. F i n a l l y , t h e i s s u e of c h i l d s u p p o r t m u s t be d e t e r m i n e d i n a c c o r d a n c e w i t h s e c t i o n 40-4-204, The District apply the Court must, enumerated at the statutory e x e r c i s e of i t s d i s c r e t i o n . very factors least, which MCA. consider and control the T h i s was n o t d o n e i n t h i s c a s e . Child Custody The final issue we can properly review at this time is the challenge to the custody award. In accordance with an agreement of the parties, the District Court interviewed the minor children to determine their custodial preferences. In awarding custody the District Court made no specific findings. Appellant contends the award should be reversed because of such failure, citing section 40-4-212, MCA; In Re Marriage of Kaasa (1979), - Mont . , 591 P.2d 1110, 36 St.Rep. 425; and In Re Marriage of Kramer (1978), 177 Mont. 61, 580 P.2d 439. We agree and hold the custody award was deficient for failure to make proper findings. In summary we hold the District Court did not find the true net worth of the marital estate and inadequately considered the statutes controlling apportionment, main- tenance, child support and child custody awards. This cause is reversed and remanded for further proceedings consistent We concur: d h i e f Justice

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