Title: ZELL v ZELL

State: montana

Issuer: Montana Supreme Court

Document:

NO. 80-66 I N T H E SUPREME C O U R T O F T H E STATE O F M O N T A N A 1980 RAYMOND W. ZELL, P l a i n t i f f and Respondent, -vs- VICTORIA M. ZELL, Defendant and Appellant. Appeal from: The D i s t r i c t Court of t h e Ninth 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 County o f Toole, The Honorable Robert M. H o l t e r , Judge p r e s i d i n g . Counsel of Record: For Appellant: Conner, Baiz & Olsen, Great F a l l s , Montana For Respondent : Aronow, Anderson, Beatty & Lee, Shelby, 3lontana Submitted on B r i e f s : May 1 4 , 1980 Decided : JUL 2 - 1 9 8 D M r . J u s t i c e Gene B. Daly delivered t h e Opinion of t h e Court. his case presents a r e g r e t t a b l e s t a t e of a f f a i r s wherein t h e p a r t i e s t o a divorce are s t i l l disputing t h e d i s t r i b u t i o n of m a r i t a l property ordered by t h e D i s t r i c t Court i n i t s 1975 decree of d i s s o l u t i o n and affirmed by t h i s Court. Z e l l v. Z e l l (1977), 1 7 4 Mont. 216, 570 P.2d 3 3 . The f a c t s of t h i s case a r e adequately set o u t i n our p r i o r opinion. B r i e f l y , t h e marriage of Raymond Z e l l and V i c t o r i a M. Zell was dissolved i n an October 20, 1975 decree which d i s t r i b u t e d equally t h e m a r i t a l property of t h e p a r t i e s . For purposes of t h i s appeal, it i s necessary only t o p o i n t o u t t h a t t h e wife, a p p e l l a n t here, was t o r e c e i v e t h e family residence, and t h e husband was t o r e c e i v e a r e n t a l property and a l l farm machinery. The farmland owned by t h e p a r t i e s w a s ordered t o be p a r t i t i o n e d equally between them, and c e r t a i n l e a s e s w e r e a l s o divided. The proceeds from t h e 1975 crops w e r e t o be divided equally between the p a r t i e s a f t e r t h e husband was reimbursed f o r t h e c o s t s of production and a f t e r a l l e x i s t i n g encumbrances a g a i n s t t h e farm machin- e r y and t h e family residence were discharged. The afore- mentioned d i s t r i b u t i o n of m a r i t a l property was challenged by t h e wife on appeal and was affirmed by t h i s Court i n our p r i o r opinion. The controversy now before t h i s Court a r i s e s o u t of t h e p a r t i e s ' r e f u s a l t o c a r r y o u t the property d i v i s i o n ordered by t h e D i s t r i c t Court. The wife neglected t o convey her i n t e r e s t i n t h e r e n t a l property t o t h e husband, as ordered i n t h e D i s t r i c t Court decree, and she continued t o c o l l e c t r e n t s on t h a t property u n t i l January 1979. The husband f a i l e d t o apply t h e n e t proceeds from t h e 1975 crops t o discharge a l l encumbrances a g a i n s t t h e family residence, which was awarded t o t h e wife. Both p a r t i e s f a i l e d t o e f f e c t an equal p a r t i t i o n of t h e farmland u n t i l November 1978, and t h e husband, who continued t o farm t h e property a f t e r t h e October 20, 1975 divorce, made no accounting t o t h e wife of h i s income derived from t h e property u n t i l 1979, although he delivered a share of t h e crop t o her each year. O n motion of t h e wife, a hearing r e l a t i n g t o t h e per- formance of t h e t e r m s of t h e October 20, 1975 decree w a s held on February 22, 1979, before t h e same d i s t r i c t judge who had presided a t t h e o r i g i n a l d i s s o l u t i o n proceedings. A f t e r t h e hearing t h e judge d i r e c t e d each p a r t y t o f i l e an accounting of income and expenses f o r t h e years 1975 through 1978 t o assist i n implementing t h e o r i g i n a l decree. Following a second hearing on May 30, 1979, t h e judge appointed an accountant a s a s p e c i a l master t o make a com- p l e t e r e p o r t of t h e income and expenses of both husband and wife f o r t h e years i n question. A f t e r t h e s p e c i a l master f i l e d h i s r e p o r t with t h e D i s t r i c t Court on August 2 1 , 1979, t h e p a r t i e s made exceptions and o b j e c t i o n s t o t h e s p e c i a l master's r e p o r t . A hearing w a s held on September 27, 1979, during which both p a r t i e s examined t h e s p e c i a l master and submitted f u r t h e r evidence and arguments. O n November 15, 1979, t h e D i s t r i c t Court entered i t s supplemental f i n d i n g s of f a c t , conclusions of law, and judgment, ordering husband t o pay wife t h e sum of $11,912.69 with i n t e r e s t a t t h e rate of 6 percent per annum from J u l y 1, 1976. The D i s t r i c t Court entered a f u r t h e r order re- linquishing j u r i s d i c t i o n . Wife f i l e d a motion requesting a new presiding judge and a motion f o r a new t r i a l and t o amend and a l t e r t h e supplemental f i n d i n g s of f a c t , conclu- s i o n s of law and judgment r e l a t i n g t o property matters, which motion was denied by t h e new presiding judge following a hearing. She now brings t h i s appeal. The ~ i s t r i c t Court s t a t e d i n i t s supplemental f i n d i n g s of f a c t : "2. The p r i n c i p a l d i s p u t e between t h e p a r t i e s r e l a t e s t o t h e income from t h e farm lands owned by t h e p a r t i e s and from leased lands during t h e period s t a r t i n g with t h e year 1975 and ending with t h e year 1978. The October 20, 1975, judg- ment provided t h a t t h e 1975 crops grown on t h e s e lands w e r e t o be sold and t h e proceeds used, f i r s t , t o pay c o s t s of production; second, t o discharge l i e n s and encumbrances e x i s t i n g a g a i n s t t h e r e a l and personal property, and, t h i r d , any balance t o be divided equally between t h e par- t i e s . From t h e t i m e of t h e divorce through t h e year 1978, p l a i n t i f f continued t o farm a l l of t h e deeded and leased land. H e d e l i v e r e d over t o defendant a share of the crop each year, b u t made no accounting t o her of income and expenses u n t i l 1979. The 1975 income w a s n o t applied when received i n accordance with t h e d i r e c t i v e s of t h e judgment. During t h e period from October 20, 1975, t o September 2 1 , 1977, when t h e Supreme Court d e c i s i o n was handed down, it appears t h a t no a c t i o n was taken by e i t h e r p a r t y t o c a r r y o u t t h e t e r m s of t h e decree. Thereafter, much of t h e delay i n having an accounting and a r r i v i n g a t a settlement was due t o defendant's change of a t t o r n e y s and her i n a b i l i t y t o understand o r agree t o t h e t e r m s of t h e judgment. "6. Defendant's exception No. 6 t o Master's re- p o r t asks t h a t p l a i n t i f f be responsible f o r t h e i n t e r e s t t h a t has accumulated on t h e encumbrance e x i s t i n g a g a i n s t t h e property a t 800 F i r s t S t r e e t South s i n c e he f a i l e d t o make a timely f u l l ac- counting and t h a t he be ordered t o discharge t h i s encumbrance as provided by t h e October 20, 1975, judgment. The judgment provided t h a t t h e encumbrance e x i s t i n g as of May 19, 1975, be d i s - charged from proceeds of 1975 crop income before any p a r t of t h e income was divided between t?ie p a r t i e s . The r e p o r t shows t h a t t h e property i n question was encumbered t o t h e amount of $16,065.10 on May 1 9 , 1975. The r e p o r t f u r t h e r shows t h a t t h e n e t 1975 income from t h e farm lands, a f t e r r e i m - bursing p l a i n t i f f f o r c o s t s of production, was $64,910.48. Encumbrances t o be deducted t o t a l e d $21,355.68, which included t h e $16,065.10 and $5,290.58 owing on farm machinery. This l e f t $43,554.80 t o be divided between t h e p a r t i e s a t $21,777.40 each. I t appears f u r t h e r from t h e r e - p o r t t h a t p l a i n t i f f d i d not apply t h e r e c e i p t s from t h e 1975 crop i n t h a t fashion. H e d i d n o t pay off the encumbrance on the property a t 800 F i r s t S t r e e t South. Instead, he delivered t o defendant 1975 g r a i n of a value of $17,858.19, a sum s u f f i c i e n t t o pay o f f t h e encumbrance. De- fendant d i d n o t use the proceeds of t h e 1975 g r a i n sale f o r t h a t purpose, nor has she applied any of the payments received from p l a i n t i f f i n subsequent years f o r t h a t purpose, so t h i s en- cumbrance still has n o t been s a t i s f i e d . Plain- t i f f d i d n o t d e l i v e r t o defendant any a d d i t i o n a l p a r t of the 1975 crop. I n e f f e c t , whatever balance i s found by t h e Court i n t h i s proceeding t o be owing t o defendant is accountable t o the f a i l u r e of p l a i n t i f f t o apply t h e 1975 s a l e s proceeds a s required by the judgment. P l a i n t i f f should be chargeable f o r i n t e r e s t on t h a t balance a t the r a t e of 6% per annwn from J u l y 1, 1976, t h e approximate d a t e on which t h e f i n a l s a l e of 1975 g r a i n should have been made." These findings are n o t seriously i n dispute. Instead, wife presents arguments amounting t o a claim t h a 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 . She contends (1) t h a t husband should be responsible f o r t h e accrued i n t e r e s t on t h e residence awarded t o wife; ( 2 ) t h a 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 by allowing husband t o charge depre- c i a t i o n of farm machinery a g a i n s t h i s n e t income; and ( 3 ) t h a t she was n o t given adequate access t o husband's income and expense records, which were submitted t o the s p e c i a l master and t o the D i s t r i c t Court. W e f i n d these arguments t o be without m e r i t . Wife argues t h a t because husband f a i l e d t o discharge a l l encumbrances a g a i n s t t h e residence awarded t o her as he was required t o do under t h e October 20, 1975 decree, he should have been held responsible f o r a l l accrued i n t e r e s t r a t h e r than merely 6 percent per annum on t h e balance found owing t o t h e wife. This argument might have some force i f t h e wife had come t o t h e c o u r t with clean hands, b u t she d i d not. The D i s t r i c t Court found t h a t much of the delay i n carrying o u t its o r i g i n a l decree was due t o t h e w i f e ' s a c t i o n s o r inactions. While the husband was a t f a u l t f o r h i s f a i l u r e t o discharge t h e encumbrances a g a i n s t the w i f e ' s residence o u t of t h e proceeds of t h e 1975 crops, t h e wife a l s o disregarded t h e decree by f a i l i n g t o convey t h e r e n t a l property t o husband as allocated by t h e decree and by col- l e c t i n g r e n t s from t h e premises. Thus, we are s a t i s f i e d t h a t the D i s t r i c t Court d i d not abuse i t s d i s c r e t i o n i n reaching an equitable solution. W e s t a t e d i n our previous opinion: " I t i s well s e t t l e d i n Montana t h a t a d i s t r i c t c o u r t has f a r reaching d i s c r e t i o n i n resolving property d i v i s i o n s and i t s judgment w i l l not be a l t e r e d unless a c l e a r abuse of t h a t d i s c r e t i o n i s shown . . . The c r i t e r i a f o r reviewing the d i s t r i c t c o u r t ' s d i s c r e t i o n is: Did the dis- trict c o u r t i n the exercise of i t s d i s c r e t i o n a c t a r b i t r a r i l y without employment of conscien- t i o u s judgment, o r exceed t h e bounds of reason i n view of a l l the circumstances." Zell v. Zell, supra, 570 P.2d a t 35. Rather than having acted a r b i t r a r i l y , t h e District Court must be commended f o r employing n o t only its conscien- t i o u s judgment b u t a l s o t h e patience of Job i n attempting t o p r o t e c t the r i g h t s of t h e p a r t i e s , notwithstanding t h e f a c t t h a t both p a r t i e s must share r e s p o n s i b i l i t y f o r refusing t o c a r r y o u t t h e terms of t h e o r i g i n a l decree issued nearly f i v e years e a r l i e r . The D i s t r i c t Court granted wife several hearings and appointed an accountant as a s p e c i a l master t o determine each p a r t y ' s income and expenses f o r the years i n question, an appointment which would have been unnecessary b u t f o r the intransigence of both p a r t i e s i n complying with t h e o r i g i n a l decree. The D i s t r i c t Court f e l t , and we agree, t h a t t h e r e has been an u n j u s t i f i a b l e delay i n complying with i t s decree. Should t h e r e be any f u r t h e r delay, the D i s t r i c t Court is, of course, empowered t o u t i l i z e i t s contempt powers. There being no abuse of discretion, the judgment is a£ firmed. We concur: %&a*&& Chief Justice