Case Title: MARRIAGE OF LIPPERT

Citation: 

Docket Number: 80-173

State: montana

Court: Montana Supreme Court

Date: 1981-04-30T00:00:00Z

Document:
No. 80-173 IN THE SUPREME COURT OF THE STATE OF MONTANA i 1981 IN RE THE MARRIAGE OF KZNNETH LIPPERT, Petitioner and Appellant, -vs- JEAN S. LIPPERT, Respondent and Respondent. Appeal from: District Court of the Thirteenth Judicial District, In and for the County of Big Horn, The Honorable Diane G. Barz, Judge presiding. Counsel of Record: For Appellant: Overfelt Law Firm, Billings, Montana John S. Forsythe, Forsyth, Montana For Respondent : Anderson, Edwards & Molloy, Billings, Montana Filed: APR 3 0 19W Submitted on Briefs: February 19, 1981 Decided: April 30, 1981 M r . J u s t i c e Frank B. Morrison, Jr., d e l i v e r e d t h e Opinion of t h e Court. his i s an appeal from a f i n a l judgment entered i n t h e ~ i s t r i c t Court of t h e Thirteenth J u d i c i a l D i s t r i c t , Big Horn County, March 3, 1980. N o i s s u e i s taken t o t h e granting of t h e decree of d i s s o l u t i o n o r t o respondent's custody of t h e two children. Appellant challenges t h e d i s p o s i t i o n of t h e m a r i t a l e s t a t e . The p a r t i e s w e r e married June 7, 1968. Appellant f i l e d h i s p e t i t i o n seeking d i s s o l u t i o n of t h e marriage i n A p r i l of 1978. T r i a l without jury was had June 1 2 , 1979. Discovery was reopened upon respondent's motion on J u l y 9, 1979, and closed December 6, 1979. Decree of d i s s o l u t i o n was granted on August 28, 1979. From t h e beginning of the marriage u n t i l 1977, a p p e l l a n t was employed by L i p p e r t Brick Contracting Co., Inc., B e l l e v i l l e , I l l i n o i s . The respondent, a r e g i s t e r e d nurse before t h e marriage, worked part-time o u t s i d e t h e home and was p r i n c i p a l l y responsible f o r supervision of t h e household and t h e c h i l d r e n , J e n n i f e r Lynn, age 11, and Nicole Lee, age 9. The major a s s e t s acquired during t h e marriage were t h e family home, with a n e t e q u i t y of $90,000, and stock options i n Lippert Brick worth $36,000. The house was p a r t i a l l y purchased with $34,000 received by t h e a p p e l l a n t i n 1969 and 1971 from a family t r u s t , and $31,000 of t h e stock options r e s u l t e d from g i f t s made by a p p e l l a n t ' s p a r e n t s during t h e marriage. The p a r t i e s decided t o leave B e l l e v i l l e , I l l i n o i s , i n 1977. Appellant moved t o Rosebud County, Montana, i n ~ p r i l of 1977 while t h e respondent remained i n I l l i n o i s t o prepare t h e i r home f o r s a l e and t o allow t h e c h i l d r e n t o f i n i s h t h e remainder of t h e school year. The stock options w e r e sold i n May 1977 and t h e house i n December 1977. The planned construction business w a s n o t s t a r t e d immediately. I n i t i a l l y , a p p e l l a n t was h i r e d by the Northern Cheyenne Tribe t o supervise t h e construction of t h r e e buildings. The job l a s t e d one year f o r which a p p e l l a n t was paid $30,000. The business venture was s t a r t e d e a r l y i n 1978. Appellant purchased construction equipment with p a r t of the money received from t h e s a l e of t h e stock options and t h e house. Following completion of t h e buildings i n April of 1978, a p p e l l a n t began working f o r Northern Cheyenne Erectors Incorporated (NCE) , a p r i v a t e construction firm. H e rented some of h i s equipment t o NCE and loaned money t o the s t r u g g l i n g corporation. Although he earned $11,747.72 i n wages from NCE and received $13,399 i n r e n t a l income, the r e n t a l business and t h e c o l l a t e r a l t r a n s a c t i o n s with NCE proved t o be a f i n a n c i a l d i s a s t e r . A t t r i a l a p p e l l a n t claimed he l o s t a l l of t h e money invested i n t h e r e n t a l business. I n November 1978, a p p e l l a n t l e f t NCE. H e i s now an i n s t r u c t o r a t Dull Knife Memorial College, earning $17,000 per year. Throughout t h i s period the respondent has l i v e d i n B e l l e v i l l e , I l l i n o i s , where she i s now employed earning approximately $12,000 per year. Appellant has challenged the D i s t r i c t Court's f i n d i n g s regarding t h e (1) n e t worth of t h e m a r i t a l e s t a t e , ( 2 ) l i q u i d a t e d stock options, (3) family t r u s t d i s t r i b u t i o n s , and ( 4 ) opportunity 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 assets and income. W e f i n d the challenge t o the f i n d i n g of n e t worth of t h e p a r t i e s t o be determinative and, f o r reasons contained i n t h e remainder of t h i s opinion, f e e 1 w e need not d i s c u s s t h e o t h e r i s s u e s r a i s e d by the a p p e l l a n t . Appellant contends the D i s t r i c t Court f a i l e d t o determine t h e n e t worth of t h e p a r t i e s a t o r near t h e t i m e of t h e t r i a l and t h a t f a i l u r e t o do so was r e v e r s i b l e e r r o r . After consideration of t h e unique circumstances presented by t h i s case, we agree. The D i s t r i c t Court found the following: "XVI. From April of 1977 u n t i l t r i a l of t h i s m a t t e r , p e t i t i o n e r took, from t h e m a r i t a l e s t a t e of t h e par- t i e s t o Montana, t h e following sums of money with t h e express purpose, a s p e t i t i o n e r advised respondent t o i n v e s t i n h i s business: "1. $26,000 was taken by p e t i t i o n e r i n approximately May of 1977; t h i s sum was taken from t h e proceeds of t h e consideration t o forego h i s stock option with r e s p e c t t o L i p p e r t Brick, t h a t consideration being a t o t a l of $36,000.00 "2. $10,000.00 i n November of 1977; t h i s sum was ob- tained by p u t t i n g a second mortgage on the family home ; "3. $60,000.00 i n December of 1977, s a i d sum being obtained from the proceeds of the s a l e of the family home. " X V I I . The Court f i n d s t h a t p e t i t i o n e r took t h e sum of $96,000.00 from t h e m a r i t a l e s t a t e and brought it t o Montana f o r t h e purpose, a s he advised respondent, of i n v e s t i n g i n business. "XX. The following amounts of money were l e f t with respondent i n I l l i n o i s , while p e t i t i o n e r was taking $96,000.00 of t h e m a r i t a l e s t a t e t o Montana t o i n v e s t i n business, a s he t o l d respondent: "1. $10,000.00 i n May of 1977, t h a t being t h e balance of t h e $36,000.00 paid by Lippert Brick i n consider- a t i o n f o r r e l i n q u i s h i n g t h e stock option purchase r i g h t i n p e t i t i o n e r with r e s p e c t t o Lippert Brick. "2. $10,000.00 i n December of 1977, s a i d sum being t h e balance of t h e proceeds l e f t a f t e r a l l expenses of s a l e of t h e family home, t o include mortgages and o t h e r notes, and p e t i t i o n e r ' s taking of $60,000.00 of those proceeds t o Montana t o , a s he t o l d respondent, i n v e s t i n business. "XXXV. 3. That respondent s h a l l have, i n the form of a judgment a g a i n s t p e t i t i o n e r , t h e sum of $48,000.00, s a i d sum representing one-half of t h e $96,000.00 of m a r i t a l a s s e t s t h a t p e t i t i o n e r has d i s s i p a t e d i n Montana and i s unable t o account f o r , i n any way, such lack of a b i l i t y t o account f o r s a i d $96,000.00 the Court f i n d s t o be i n c r e d i b l e and t h e Court does n o t b e l i e v e t h e p e t i t i o n e r ' s statement t h a t he cannot ac- count f o r s a i d money and the Court i s n o t impressed o r persuaded by pe ti t i o n e r ' s statement t h a t the s a i d $96,000.00 has simply been poured i n t o bad business ventures, which statements p e t i t i o n e r i s not a b l e t o support by anything t h a t resembles c l e a r or convincing evidence." A proper d i s p o s i t i o n of m a r i t a l property i n a d i s s o l u t i o n proceeding r e q u i r e s a finding of t h e n e t worth of the p a r t i e s a t o r near t h e t i m e of the d i s s o l u t i o n . Hamilton v. Hamilton Mont. (1980) - - , 607 P.2d 1 0 2 , 37 St.Rep. 247; Vivian v. Vivian (1978), - Mont. - , 583 P.2d 1072, 35 St.Rep. 1359; Kramer v. Kramer (1978), 177 Mont. 61, 580 P.2d 439; Downs v. Downs (1976), 170 Mont. 150, 551 P.2d 1025. The b a s i c reason f o r t h e r u l e i s obvious; however, it i s equally apparent t h a t a p p l i c a t i o n of the r u l e i s dependent upon t h e kinds of m a r i t a l a s s e t s under consideration. The t i m e f o r proper valuation cannot be t i e d t o any s i n g l e event i n t h e d i s s o l u t i o n process. The f i l i n g of a p e t i t i o n , t r i a l of t h e matter, o r even t h e granting of t h e decree of d i s s o l u t i o n do n o t c o n t r o l the proper p o i n t of evaluation by the D i s t r i c t Court. The e x e r c i s e of d i s c r e t i o n by t h e D i s t r i c t Court i s necessary when determining the worth of m a r i t a l a s s e t s which f l u c t u a t e i n value. For example, the value of a p a r t i c u l a r common stock may change d r a s t i c a l l y during t h e course of a d i s s o l u t i o n while t h e value of the family home o r other personal property remains s t a b l e . Under such circumstances s e l e c t i o n of a s i n g l e evaluation p o i n t f o r determining n e t worth of t h e p a r t i e s could c r e a t e an i n e q u i t a b l e d i s p o s i t i o n . Turning t o t h e case a t bar, t h e record before us unequiv- o c a l l y demonstrates t h e D i s t r i c t Court considered a p p e l l a n t ' s departure from I l l i n o i s i n April 1977 a s t h e time f o r evaluation of t h e m a r i t a l estate. The i m p l i c i t reasoning used by t h e ~ i s t r i c t Court was manifestly based upon a presumption t h a t a p p e l l a n t was u n t r u t h f u l a t t r i a l when he claimed t h e business was a d i s a s t e r , and he no longer had t h e money he brought t o Montana. Although no contrary evidence w a s proffered by t h e respondent o r discovered during the six-month period following t r i a l , t h e D i s t r i c t Court found t h e $96,000 was i n the m a r i t a l e s t a t e and awarded t h e respondent a judgment a g a i n s t t h e a p p e l l a n t f o r $48,000. This was done d e s p i t e t h e f a c t t h a t t h e evidence showed the property had been l o s t i n bad investments and simply d i d n o t e x i s t . The D i s t r i c t Court abused i t s d i s c r e t i o n f o r t h r e e reasons. F i r s t , the D i s t r i c t Court lacked s u f f i c i e n t evidence t o support i t s finding. While the D i s t r i c t Court was i n t h e b e s t p o s i t i o n t o judge t h e candor o r honesty of the a p p e l l a n t ' s testimony, the f i n d i n g s and conclusions must s t i l l be sup- ported by evidence and n o t merely lack of witness c r e d i b i l i t y . I f a p p e l l a n t has committed fraud upon t h e c o u r t , t h e case may be j u s t i f i a b l y reopened. P i l a t i v. P i l a t i (19791, Mont. , 592 P.2d 1374, 36 St.Rep. 619. - - Second, the D i s t r i c t Court exceeded i t s a u t h o r i t y under s e c t i o n 40-4-202, MCA, by awarding t h e respondent property i n excess of the proven n e t worth of t h e e s t a t e . The s t a t u t e mandates " [ t ] h e c o u r t s h a l l a l s o consider t h e c o n t r i b u t i o n 11 . o r d i s s i p a t i o n of value of t h e r e s p e c t i v e e s t a t e s . . . , however, t h e D i s t r i c t Court' s power does n o t extend beyond t h e e x i s t e n t e s t a t e . I n o t h e r words t h e D i s t r i c t Court may never award more than 100 percent of t h e m a r i t a l e s t a t e . Third, the award ignores fundamental l e g a l p r i n c i p l e s of m a r i t a l s t a t u s ; spouses possess mutual powers, o b l i g a t i o n s and i n t e r e s t s which endure u n t i l lawfully modified o r terminated. One of those powers i s the power t o f r e e l y c o n t r a c t with o t h e r s regarding m a r i t a l property . Section 40-2-301, MCA. Appellant may have used poor judgment i n h i s business t r a n s a c t i o n s regarding the e q u i t y of the family home and t h e stock options; however, he lawfully possessed t h a t power. The record does not i n d i c a t e t h e respondent attempted t o modify t h e a p p e l l a n t ' s r i g h t t o c o n t r o l and dispose of the property a s he d i d o r t h a t she claimed breach of f i d u c i a r y o b l i g a t i o n by the a p p e l l a n t . I n summary, w e f i n d t h e D i s t r i c t Court abused i t s d i s c r e t i o n i n determining t h e n e t worth of t h e p a r t i e s . Further, t h e i s s u e s r a i s e d by a p p e l l a n t regarding t h e stock options and family t r u s t d i s t r i b u t i o n s a r e hypothetical and thus moot unless new evidence can be produced. The order of t h e D i s t r i c t Court i s vacated, and t h i s cause remanded f o r f u r t h e r proceedings c o n s i s t e n t with t h i s opinion. ? W e concur: J u s t i c e s Mr. Justice John C. Sheehy dissenting: The judgment entered by the District Court should be affirmed. The majority fault the District Court for not filing the net worth of the marital property of the parties on dissolution of the marriage, but give no effect to the impossibility for such evaluation through the lack of assist- ance and cooperation of the husband. The court found, as the majority opinion indicates, that the husband took $96,000 of the marital assets of the estate for the purported purpose of investing the same. Some $60,000 of those assets were obtained as late as December 1977. The action for dissolution of marriage was commenced on April 10, 1978. On July 12, 1978, in the husband's answers to the wife's first interroga- tories, while the litigation was in progress, he reported total assets of $118,275, total liabilities of $61,075, for a net worth at that time of $57,200. On May 30, 1979, the husband filed his "current answers" to the first set of interrogatories in which he reported total assets of $9,410, liabilities of $3,475, for a net worth of $5,935. In none of the husband's subsequent answers to inter- rogatories, testimony or documentation, does he demonstrate with any degree of adequacy what happened to the assets of the marital estate which he took with him. He contends that he "invested" the monies, and sustained some "business losses." On that basis, the court found as follows: "XXIII. Petitioner now claims that he has no business, that he has lost all of the $96,000 that he brought to Montana, and claims a net worth of $5,935. "XXIV. The court finds the testimony of petitioner incredible and finds that he has dissipated the value of the marital estate by the $96,000 he brought to Montana and cannot now account for." The court then went on to find that the petitioner's opportunity for future acquisition of assets and capital is excellent considering his job skills and experience and on that basis rendered the judgment against the husband in favor of the wife. There is no reason here to depart from the general rule of appellate practice that in cases tried to the court without a jury, the District Court is in the best position to see the comportment of the witnesses, and to judge of their candor and credibility. Knight and Co. v . Manaras (1979), - Mont . , 603 P.2d 675, 36 St.Rep. 2148; Jensen v. Jensen (1979), Mont . , 597 P.2d 733, 36 St.Rep. - 1259; Marcoff v . Buck (1978), Mont. , 587 P.2d 1305, - 35 St.Rep. 1953. Where the findings of the District Court depend upon the credibility of the witnesses, and the weight to be given their testimony, the District Court's determination of those matters will be given weight in reviewing the sufficiency of the evidence and we will ordinarily presume that findings and judgment entered by the District Court are correct. Lumby v. ~oetch (19791, Mont . , 600 P.2d This case should be controlled by Downs v. Downs (19761, 170 Mont. 150, 551 P.2d 1025, appeal after remand, 592 P.2d 938 (1979). The situation in Downs was the same as that faced by the District Court in this case. The husband was evasive, he had given incomplete discovery, and the trial court had no way to appraise the value of the marital property. The trial court had been confronted with a problem of evaluating the marital property in the face of the lack of credibility of the witness. There we ordered a new trial because of the unreliability of the record. When the case returned to us on remand, it was found that the recalcitrance of the husband had continued. The judgment of the District Court on the second trial was affirmed without further ado. In the case at bar, it is completely within the power of the husband to demonstrate what happened to the marital monies. He has not done so. He has been evasive in discovery and evasive in his testimony. This Court now places a burden upon the wife to set about to prove the falsity of her husband's claimed losses; losses for which he claims to have no records. She should not have that burden. The judgment should be affirmed. Justice