Title: MARRIAGE OF KIS

State: montana

Issuer: Montana Supreme Court

Document:

No. 81-208 IN THE SUPREME COURT OF THE STATE OF MONTANA 1981 IN RE THE MARRIAGE OF LOUIS M . KIS, Petitioner and Appellant, MARGE M . KIS, Respondent and Respondent. Appeal from: District Court of the Eleventh Judicial District, In and for the County of Flathead Honorable James M. Salansky, Judge presiding. Counsel of Record: For Appellant: Hash, Jellison, O'Brien & Bartlett, Kalispell, Montana Kenneth E. O'Brien argued, Kalispell, Montana For Respondent: Keller & Gilmer, Kalispell, Montana Brenda Gilmer argued and Robert Keller argued, Kalispell, Montana Submitted: December 1, 1981 Decided: January 21, 1982 Filed: JAN 21 2982 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. ~ p p e l l a n t , ~ o u i s M. K i s , appeals from t h e Findings of Fact and Conclusions of Law entered on January 8, 1981, and Judgment entered on January 15, 1981, by t h e D i s t r i c t Court of t h e Eleventh J u d i c i a l D i s t r i c t . This judgment d i s t r i b u t e d t h e r e a l and personal property of t h e p a r t i e s t o t h i s d i s s o l u t i o n . Louis and Marge K i s were married June 30, 1960. I t w a s a second marriage f o r both. A t t h e t i m e of t h e marriage, Marge K i s had two c h i l d r e n and Louis K i s had one c h i l d . N o c h i l d r e n were born t o t h e marriage. A l l t h r e e c h i l d r e n w e r e emancipated when t h e d i s s o l u t i o n proceedings were i n s t i t u t e d . A t t h e time of t h e marriage, Louis K i s had been employed a s a warden f o r t h e Montana Fish and Game Department f o r approximately s i x years. Marge K i s worked a s a bookkeeper. From 1960 t o 1965, Louis was t r a n s f e r r e d s e v e r a l t i m e s , f i n a l l y being permanently located i n K a l i s p e l l , Montana. With j o i n t proceeds, t h e p a r t i e s purchased property on Foys Lake and constructed a home. They l a t e r purchased two a d d i t i o n a l l o t s on Foys Lake with j o i n t proceeds. During t h e marriage, both p a r t i e s continued t o work. Louis w a s promoted by t h e Fish and Game Department t o c a p t a i n Warden i n charge of t h e Northwest Montana D i s t r i c t . A t t h e time of t r i a l , h i s s a l a r y was $19,400.00 p e r year. ~ d d i t i o n a l l y , he bought, sold and traded a r t , cameras, guns and photographs, thus earning approximately $3,000.00 per year. Marge K i s w a s self-employed as a bookkeeper. I n a d d i t i o n , she invested and speculated i n t h e purchase of commercial property. A t t h e t i m e of t r i a l , Marge K i s owned and maintained solely,and i n p a r t n e r s h i p with o t h e r i n d i v i d u a l s , s e v e r a l r e n t a l p r o p e r t i e s . H e r annual income p r i o r t o t r i a l had ranged from a low of $6,500.00 t o a high of $13,500.00. On June 4 , 1976, Louis K i s f i l e d a p e t i t i o n f o r d i s - s o l u t i o n of t h e marriage. Hearings i n t h e matter w e r e held, and on October 10, 1978, a p a r t i a l decree w a s e n t e r e d by t h e D i s t r i c t Court d i s s o l v i n g t h e marriage and making a n award of p e r s o n a l p r o p e r t y , pursuant t o an agreement reached by t h e p a r t i e s . This agreement awarded Louis K i s p e r s o n a l property t o t a l i n g $17,917.50 and Marge K i s property t o t a l i n g $10,693.73. Subsequently, on January 8, 1981, t h e D i s t r i c t Court e n t e r e d Findings of F a c t and Conclusions of Law. The D i s t r i c t Court determined t h a t Louis K i s was i n good h e a l t h and h i g h l y employable due t o h i s law enforcement background and o t h e r income earning vocations. The c o u r t a l s o found t h a t Louis K i s had a v e s t e d r i g h t t o h i s G a m e Warden r e t i r e m e n t b e n e f i t s and found t h a t t h e c o s t of a n annuity providing s i m i l a r b e n e f i t s w a s $118,833.00. The D i s t r i c t Court found Marge K i s t o be i n only f a i r h e a l t h a s a r e s u l t of s e v e r a l o p e r a t i o n s and an impairment t o h e r r i g h t arm. The c o u r t found t h a t Marge's h e a l t h a f f e c t e d h e r a b i l i t y t o r e p a i r and maintain h e r r e n t a l p r o p e r t i e s , a s w e l l a s perform bookkeeping f u n c t i o n s . The D i s t r i c t Court made s p e c i f i c f i n d i n g s regarding t h e v a l u e s of t h e r e a l p r o p e r t i e s owned by t h e p a r t i e s and determined t h e l i a b i l i t i e s owed by each. The c o u r t s p e c i f i c a l l y found t h a t each p a r t y ' s business and job i n t e r e s t s w e r e , f o r t h e most p a r t , s e p a r a t e . Each p a r t y had maintained s e p a r a t e bank accounts. The D i s t r i c t Court determined t h a t although Louis K i s had co-signed s e v e r a l bank n o t e s , such a c t i o n was taken a t t h e r e q u e s t of lending i n s t i t u t i o n s . he c o u r t found t h a t a t a l l times Marge K i s was i n p a r t n e r s h i p with o t h e r i n d i v i d u a l s i n her business t r a n s a c t i o n s and Louis K i s was never a p a r t n e r . Based on i t s f i n d i n g s t h e D i s t r i c t Court apportioned t h e m a r i t a l property a s follows: "A. The house and two l o t s on Foys Lake, 70% t o t h e husband and 30% t o t h e wife. "B. The F i s h and Game Pension t o t h e husband. "C. A l l t h e personal property a s hereto- f o r e d i s t r i b u t e d i n t h e Findings of Fact and by s t i p u l a t i o n of t h e p a r t i e s a s there- i n s e t f o r t h . "D. The Whitefish A r m s Appartments t o t h e wife. "E. E a s t s i d e Superette ( p a r c e l K ) t o t h e wife. "F. The Pfrimmer House ( p a r c e l L) t o t h e wife. "G. Western Acres duplex ( p a r c e l G ) t o t h e wife. "H. The K.P.H. partnership t o t h e wife. "I. Proceeds from t h e d e f a u l t duplex i n Whitefish ( p a r c e l C ) l e s s t h e amount paid t o M r . O'Brien f o r Attorney's f e e s , t o t h e wife. "J. Any o t h e r business p r o p e r t i e s t o t h e wife." A judgment i n accordance with t h e above apportionment was entered on January 15, 1981. I s s u e s on appeal a r e : (1) Whether t h e Game Warden retirement b e n e f i t s a r e a m a r i t a l a s s e t ? ( 2 ) Whether t h e D i s t r i c t Court e r r e d i n admitting evidence of t h e c o s t of an annuity t o e s t a b l i s h t h e p r e s e n t value of t h e Game Warden retirement b e n e f i t s ? ( 3 ) Whether t h e 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 m a r i t a l e s t a t e ? ( 4 ) Whether t h e D i s t r i c t C o u r t ' s apportionment of t h e m a r i t a l a s s e t s i s supported by s u b s t a n t i a l evidence? (5) Whether t h e District Court abused i t s d i s c r e t i o n by o r d e r i n g t h e Foys Lake residence and l o t s s o l d u n l e s s an agreement w a s reached between t h e p a r t i e s ? Appellant, Louis K i s , f i r s t contends t h a t h i s r e t i r e m e n t b e n e f i t s , stemming from h i s s e r v i c e with t h e Montana Fish and Game Department, should n o t be considered a s a m a r i t a l a s s e t f o r d i s s o l u t i o n purposes. Louis K i s relies mainly on t h e r e c e n t United S t a t e s Supreme Court d e c i s i o n , McCarty v. McCarty (1981), U.S. , 101 S.Ct. 2728, and a l s o Montana s t a t u t e , s e c t i o n 19-8-804, MCA. I n McCarty, t h e United S t a t e s Supreme Court decided t h a t m i l i t a r y r e t i r e m e n t b e n e f i t s could n o t be considered community property t o be divided e q u a l l y i n divorce proceed- i n g s . This d e c i s i o n was based p r i m a r i l y on t h e determination t h a t C a l i f o r n i a ' s community property laws c o n f l i c t e d with s p e c i f i c f e d e r a l s t a t u t e s regarding m i l i t a r y r e t i r e m e n t b e n e f i t s . Therefore, f e d e r a l law preempted t h e s t a t e s t a t u t e s . A s t h e c a s e before t h i s Court does n o t involve a m i l i t a r y r e t i r e m e n t b e n e f i t , t h e McCarty d e c i s i o n is n o t c o n t r o l l i n g . S e c t i o n 19-8-805, MCA, r e l a t i n g t o Game Warden r e t i r e m e n t b e n e f i t s , provides: "Any money received o r t o be paid a s a member's a n n u i t y , s t a t e annuity, o r r e t u r n of deductions o r t h e r i g h t of any of t h e s e s h a l l be exempt from any s t a t e o r municipal t a x and from l e v y , sale, garnishment, attachment, o r any o t h e r process whatsoever and s h a l l be unassignable except a s s p e c i f i c a l l y provided i n 19-8-806." Louis K i s contends t h a t t h i s s t a t u t e precludes i n c l u s i o n of h i s r e t i r e m e n t b e n e f i t s a s a m a r i t a l a s s e t . M r . K i s a s s e r t s t h a t such i n c l u s i o n would v i o l a t e t h e s t a t u t o r y exemption of r e t i r e m e n t b e n e f i t s from ". . . any o t h e r process whatsoever." W e cannot construe t h i s exemption a s extending t o determinations of m a r i t a l e s t a t e s i n d i s s o l u t i o n proceed- ings. he purpose of t h i s provision i s t o p r o t e c t a person's f u t u r e retirement s e c u r i t y . Inclusion of such b e n e f i t s f o r purposes of e s t a b l i s h i n g a m a r i t a l e s t a t e is mandated by s e c t i o n 40-4-202, MCA, which r e q u i r e s apportionment of a l l t h e property and a s s e t s of p a r t i e s t o a d i s s o l u t i o n . W e hold t h a t t h e D i s t r i c t Court properly included t h e retirement b e n e f i t s of Louis K i s a s a m a r i t a l a s s e t of t h e p a r t i e s . The a p p e l l a n t next contends t h a t even i f t h e retirement b e n e f i t s a r e a m a r i t a l a s s e t , t h e D i s t r i c t Court improperly valued t h e retirement b e n e f i t s by accepting evidence of t h e c o s t of an annuity t o e s t a b l i s h t h e p r e s e n t value of t h e b e n e f i t s . The D i s t r i c t Court accepted evidence e s t a b l i s h i n g t h e c o s t of an annuity, purchased f o r a 51 year o l d male, y i e l d i n g $10,000 p e r year from and a f t e r t h e 55th birthday. The c o s t w a s $118,833.00. Louis K i s a s s e r t e d a t t r i a l t h a t h i s only assured retirement b e n e f i t s were h i s c o n t r i b u t i o n s t o t h e retirement fund. This a s s e r t i o n i s premised upon t h e f a c t t h a t ~ o u i s , a t time of t r i a l , was not y e t 55 years of age and had n o t accumulated 25 years of s e r v i c e ; t h e r e f o r e , h i s f u l l retire- ment b e n e f i t s were n o t assured. Evidence was introduced e s t a b l i s h i n g t h a t Louis K i s had contributed $14,436.00. W e hold t h a t t h e D i s t r i c t Court properly accepted t h e evidence of t h e c o s t of an annuity as e s t a b l i s h i n g t h e p r e s e n t value of t h e F i s h and Game retirement b e n e f i t s . Present value i s t h e proper test. Value might be a f f e c t e d by t h e contingency of t h e retirement b e n e f i t s f a i l i n g t o reach t h e l e v e l s used by t h e court. A t t i m e of t r i a l ~ o u i s is had not reached 55 years of age (retirement age) and had n o t served t h e 25 years necessary f o r a retirement b e n e f i t equal t o t h e sum projected by t h e testimony and adopted by t h e court. The p o s s i b i l i t y t h a t Louis K i s would not reach 55 years of age and t h e p o s s i b i l i t y t h a t he would n o t s e r v e 25 years could properly be considered i n a r r i v i n g a t value. However, no evidence was offered by Louis K i s showing what, i f any, e f f e c t such a contingency would have i n diminishing t h e p r e s e n t value f i g u r e offered by Marge K i s . The evidence o f f e r e d by Marge K i s could properly provide a v a l i d b a s i s f o r t h e c o u r t ' s evaluation. Where s u b s t a n t i a l c r e d i b l e evidence supports a finding of t h e t r i a l c o u r t , then t h a t finding must be upheld. Rule 5 2 ( a ) , M.R.Civ.P. Appellant, Louis K i s , contends t h a t t h e D i s t r i c t Court f a i l e d t o determine t h e t r u e n e t worth of t h e m a r i t a l e s t a t e by f a i l i n g t o make s p e c i f i c f i n d i n g s of value regarding c e r t a i n p r o p e r t i e s . S p e c i f i c a l l y , Louis K i s a s s e r t s t h a t t h e c o u r t f a i l e d t o place a value on t h e Foys Lake residence and l o t s , t h e pension b e n e f i t s , and t h e K.P.H. p a r t n e r s h i p i n t e r e s t of Marge K i s . H e f u r t h e r a s s e r t s t h a t t h e c o u r t f a i l e d t o f i n d t h a t Marge K i s had made a $20,000 loan t o t h e K.P.H. p a r t n e r s h i p and was a l s o e n t i t l e d t o $9,000 a s a r e s u l t of a d e f a u l t on a c o n t r a c t f o r deed. A review of t h e record i n t h i s matter d i s c l o s e s t h a t t h e ~ i s t r i c t Court e i t h e r had s t i p u l a t e d v a l u a t i o n s a t its d i s p o s a l o r made f i n d i n g s on t h e disputed p r o p e r t i e s . c o n f l i c t i n g evidence was presented on t h e existence of a s s e t s a s well a s t h e value of a l l a s s e t s . The ~ i s t r i c t Court resolved t h e s e c o n f l i c t s i n determining t h e value of t h e m a r i t a l e s t a t e and i n making an apportionment. From t h e record we cannot say t h a t t h e c o u r t ' s f i n d i n g s were c l e a r l y e r r o n e o u s , a n d t h e r e f o r e t h e y m u s t be a f f i r m e d . R u l e 5 2 ( a ) , L o u i s K i s c o n t e n d s t h a t t h e District C o u r t ' s apportion- m e n t w a s i n e q u i t a b l e a n d u n s u p p o r t e d b y t h e r e c o r d . T h i s a r g u m e n t rests o n h i s a s s e r t i o n t h a t t h e r e t i r e m e n t benefits w e r e i m p r o p e r l y o v e r v a l u e d a n d t h a t m a r i t a l assets w e r e i g n o r e d b y t h e District C o u r t i n e s t a b l i s h i n g t h e m a r i t a l estate. W e h a v e a l r e a d y disposed of t h e s e a r g u m e n t s a n d n e e d n o t d i s c u s s t h e m a g a i n . U t i l i z i n g t h e s t i p u l a t e d v a l u e s a n d t h e f i n d i n g s made t h e D i s t r i c t C o u r t , t h e f o l l o w i n g a p p o r t i o n m e n t f i g u r e s are e s t a b l i s h e d . Husband N e t A s s e t s : R e t i r e m e n t s e c u r i t y $ 1 1 8 , 8 3 3 . 0 0 70% v a l u e o f f a m i l y home 7 4 , 4 6 3 . 0 0 70% value of F o y s L a k e l o t s 2 1 , 0 0 0 . 0 0 P e r s o n a l p r o p e r t y 1 7 , 9 1 7 . 5 0 L i a b i l i t i e s : VISA I R S ( c o n t i n g e n t ) V a l l e y Bank n o t e TOTAL NET TO HUSBAND W i f e N e t A s s e t s : W e s t e r n A c r e s D u p l e x E a s t s i d e S u p e r e t t e P f r i m m e r h o u s e W h i t e f i s h a p a r t m e n t s 30% v a l u e of f a m i l y home 30% v a l u e of F o y s L a k e l o t s F i r s t F e d e r a l S a v i n g s P e r s o n a l p r o p e r t y KPH p a r t n e r s h i p $ 1 0 , 5 0 0 . 0 0 3,833.00 1 9 , 6 6 4 . 0 0 1 4 2 , 5 5 9 . 0 0 3 1 , 9 0 1 . 0 0 9 , 0 0 0 . 0 0 1 4 , 5 1 1 . 0 0 p l u s a c c r u e d i n t e r e s t 1 4 , 3 6 5 . 7 3 2 6 , 1 5 6 . 1 2 L i a b i l i t i e s : F i r s t National Bank of Whitefish 11,660.72 F i r s t National Bank of Whitefish 10,997.74 F i r s t S t a t e Bank of Whitefish 2,175.00 F i r s t S t a t e Bank of Whitefish 3,200.00 Whitefish C r e d i t Union 10,000.00 Harry P i f e r , S r . 5,000.00 D e l i l a P i f e r 5,000.00 Ross Linsennan 5,600.00 F i r s t Northwestern Bank 4,500.00 Legal f e e s (not involved i n t h i s a c t i o n ) 9 , 7 0 0 . 0 0 VISA 1,359.00 Master Charge 829.00 TOTAL NET TO WIFE I n reviewing d i v i s i o n s of m a r i t a l property, t h i s Court must determine only ". . . whether i n t h e e x e r c i s e of i t s d i s c r e t i o n , t h e c o u r t acted a r b i t r a r i l y , unreasonably, o r without regard t o recognized p r i n c i p l e s r e s u l t i n g i n s u b s t a n t i a l i n j u s t i c e . " Balsam v. Balsam (1979), Mont. , 589 P.2d 652, 654, 36 St.Rep. 79, 82. H e r e t h e husband received an unusually l a r g e percentage of t h e m a r i t a l e s t a t e . However, more than one-half of h i s a s s e t s r e s u l t from t h e annuity valuation. W e have held t h a t t h e annuity v a l u a t i o n was proper. Therefore, t h e D i s t r i c t Court acted within i t s d i s c r e t i o n i n apportioning t h e K i s m a r i t a l e s t a t e . I n f a c t t h e husband's award was generous. Appellant's l a s t i s s u e on appeal concerns t h e following order made by t h e D i s t r i c t Court: "a. That i n t h e event t h a t t h e P e t i t i o n e r (Louis K i s ) make arrangements t o t r a n s f e r 30% of t h e value of t h e house and two l o t s on Foys Lake t o t h e Respondent (Marge K i s ) within s i x t y days of t h i s d a t e , s a t i s f a c t o r i l y t o h e r , then such house and two l o t s s h a l l be sold a t p u b l i c s a l e , within s i x t y days t h e r e a f t e r , and t h e proceeds, a f t e r deduct- ing t h e expenses of s a l e , s h a l l be divided between t h e p a r t i e s i n t h e a f o r e s a i d propor- t i o n ; t h a t i f t h e p a r t i e s can agree on a p r i v a t e s a l e p r i o r t o t h a t t i m e , then it may be done; t h a t e i t h e r p a r t y may be t h e purchaser a t t h e s a l e , whether it be public o r p r i v a t e . " W e have o f t e n s t a t e d t h a t t h e D i s t r i c t Court has broad d i s c r e t i o n i n ". . . devising methods t o accomplish an e q u i t a b l e d i v i s i o n of property." I n r e Marriage of Johnsrud (1977), 175 Mont. 117, 123, 572 P.2d 902, 905. H e r e t h e D i s t r i c t Court foresaw problems a r i s i n g from j o i n t ownership and provided a reasonable a l t e r n a t i v e . W e f i n d no abuse of t h e c o u r t ' s d i s c r e t i o n . The judgment of t h e D i s t r i c t Court i s affirmed. W e Concur: