### No. 84-59 INTHE SUPREMECOURT OF THE STATEOF MONTANA 1984

IN RE 

### THE lJlARRLAGE OF ALICE BURKART SUMMERFELT, PetitionerandAppellant, and DONALDA. SUMMERFELT, Respondent and Respondent.

APPEAL FROM: District Court of theFirst Judicial ilistrict, Inand for the County of Lewis & 

### Clark, TheHonorableArnold Olsen, Judgepresiding.

COUNSELOF RECORD:

ForAppellant: Skedd, Ashley,McCabe,Weingartner & 

### Graveley; Charles Graveley, Helena, Montana

ForRespondent: Harlen, Thompson & 

### Parish; ShaunR. Thompson, Helena,Montana

SubmittedonBriefs: May 17,1984 Decided: September 18,

### 1984

Filed: 

## $EP1

### 6

## 1904

---- Clerk

### Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court.
This case comes on appeal from a decree of the District Court of the First Judicial District, Lewis and Clark County, distributing the parties' marital assets. We
reverse. The parties to this action were married on May 11, 1963, at Townsend, Montana. At the time of the marriage, the wife owned a ranch near Townsend (hereinafter referred to as the Townsend ranch) consisting of 3,880 acres which the parties have stipulated was worth $185,000. In addition, the wife had purchased 120 acres of additional ranchland, known as the Cooney property, for $8,000. Also, at the time of the marriage, the wife owned approximately 170 head of various livestock, a 1/3 interest in three rental houses in Billings valued at $7,000, household furniture and crops in storage. Prior to the marriage, the husband had worked as 

### a heavy equipment operator and at the time of the marriage he
was employed as a business manager for the International Union of Operating Engineers at Butte. At the time of the marriage, the husband owned a house in Helena valued at $13,500, subject to a debt of $7,791.07, other vehicles and
a trailer collectivelyvalued at $4,900. The District Court found that the husband and wife mutually decided that the husband quit his employment as 

### a business manager for the union and that they would operate the wife's Townsend ranch, although the wife testified that the husband quit his job after the lessee of the ranch surrendered his lease a year early due to adisputewith the husband.The wife asserts thather networth atthe 

### timeof the marriage was $425,618 and the husband's was $12,355.07. Although the husband disagrees with the amount the wife assertswas her networth, the record clearlyindicates the wife brought substantiallymore property into the marriage thandid thehusband. On January 23, 1975, theTownsend ranch was soldunder
a contract for deed to the wife's daughter and son-in-law, the Henleys, for $100,000 with a life estate reserved for the husband and wife. The wife also reserved the right to
run fifty head of cattle on the ranch. The parties also accumulated funds in various bank accounts during the marriage which arenot atissue inthisappeal. In 1977, the parties separated when the wife filed a petition for dissolution which was subsequently dismissed. Thgreafter, the wife, in an effort towards reconciliation, added the husband as a joint tenant owner 

### of the Cooney property. On May 16, 1980, the wife petitioned the District Court for a decree of dissolution. At that time the wife was 68 and the husband 60. On November 18, 1982, the District Court determined that the Townsend ranch was not a marital asset but that the value of the contract for deed and the lifeestatereserved under the contractweremarital assets to be distributed. On July 12, 1983, the District Court granted the decree of dissolution and on November 23, 1983, it entered 

### its findings of fact, conclusions of law and decree regarding distributionof themarital assets. In itsfindings of facttheDistrictCourt stated, in pertinent part: that both partiesworked hard during themarriage and

### made numerous improvements to the ranch; that the value of the contract for deed was theprincipal balance owing in the
sum of $100,000 and the current value of the partiesg life estate was $90,000 for a total of $190,000; the Henleygs contract was a sham and void if they could not be required to pay $100,000 immediately or at a very early date; the current market value of the Cooney property was $38,000; that the total marital assets amounted to $358,490.74; that the wife was currently 72 years of age and receiving $229 per month in Social Security; and that the husband was 64 years of age and had little likelihood of securing significant assets for retirement. In its conclusions of law the District Court distributed the marital assets as follows: the husband received a total of $163,094.24 in assetswhich included 1/3 of the principal balance remaining on the contract for deed ($33,330), the Summerfelt house in Helena ($43,000), the Cooney property ($38,300), twenty-five cows with calves ($13,750) and several other assets that were added to the husband's total award. The wife received a total of $196,406.50 in assets which included the life estate reserved under the contract for deed ($90,000),2/3 of the principal balance remaining on the contract for deed

($66,670), 1/2 of all bank accounts ($16,309.50), and the wife's personal property excluding cattle ($22,017). From the decree of theDistrictCourtdistributing the marital assets thewife appeals,raising four issues: (1) Whether the District Court erred in its determinationof "total marital assets" because it failed to accept present day net values on the contract for sale oftheranch and on the reserved lifeestate. (2)Whether the District Court erred in 

### itswholesale adoption of thehusband's proposed findings and conclusions. (3)Whether the award to the wife was ins-dequate in light of the financial condition of each of the parties at theoutsetof themarriage. (4) Whether the District Court erred in failing to recognize the property inheritedby thewife asher seperate property. Initially, 

### we note that the well-established rule in Montana 

### is:"The apportionment made by the District Court will.not be disturbed on review unless there has been a clear abuse of discretionasmanifested by a substantial inequitable division of the marital assets resulting in substantial injustices." In re the Marriage of Brown (1978), 179Mont. 417, 587 P.2d 361. In the present case, the distribution of the marital assets by the District Court resulted in substantial injusticestothewife. InGlasser v. Glasser (Mont. 1983), 669 P.2d 685, 40 St.Rep. 1518, thisCourt stated: "In 

### - Kis, supra, 

### we statedthat, '[plresent value 

### isthe "proper test" for determination of marital interest.'" Similarly, inPopp
v. Popp (Mont. 1983), 671 P.2d 24, 40 St. Rep. 1747, this Court said:"It

### is also clear from a thorough review of the fileon thismatter thatthecourt valued some assets at their depreciated value aslisted on theparties income tax returns instead of their fair market value. Yet there 

### is no finding stating that the depreciated value is equal to fair market value of certain 

### items of equipment. Without such a finding we hold that the District Court's decision was 'clearlyerroneous.

### ' " Here, theDistrictCourt erred in 

### itsdetermination ofmarital assets to be distributed because it accepted the balance remaining due on the real estate contract for sale of theranch, rather thandiscounting it to

### itspresent fair market value, and it erred in setting the value on the life estate reserved to the wife. The contract for sale of the ranch required the buyers to pay the interest on 

### a yearly basis and allowed them to retire the principal amount as they were able to do so. The ranch contract contained no language allowing the seller to demand full payment of the principal balance owing at anytime she desired. It 

### is elementary that the present day fair market value of a contract for deed, rarely, if ever, equals the principal balance due thereon. Although the husband asserts the parties stipulated to thepresent day value of the contract for deed in a pretrial order, that contention 

### is without merit. The pretrial order indicates the husband and wife only agreed that $100,000 was the principal balance remaining on the contract for deed. In short, theDistrict Courtdidnot properlydetermine the presentmarket valueof the contract for deed. Similarly, the District Court erred in 

### its valuation of the life estate reserved by the wife. At trial, an expert testified the present day market value of the life estatetobe thirtypercent of the stated amount of the life estate. Thirty percent amounted to a $57,493.80 valuation of the life estate. However, the District Court, without explanation, assigned avalueof $90,000 tothe lifeestate. In, In re Marriage of Wolfe (Mont. 1983), 659 P.2d 259, 40 St.Rep. 211, this Court stated: "Where there are widely conflicting valuations between different appraisers, the

### District Court shall give reasons why one value is selected
over others.

### " Moreover, the award to the wife was inadequate in light of the financial condition of each of the parties at the outset of themarriage. Although the District Court did not determine the financial condition of the parties at the outset of the marriage, the record clearly indicates the wife brought substantially more net worth into the marriage thandid the husband. The wife asserts her networth at the time of the marriage was $425,615 and the husband's was, at the most, $12,355.07. We held in In re Marriage of Herron - 

## 396 (1980), 185 Mont. 

### %, 608 P.2d 97, that the source of the property was amajor factor to be considered by the District Court dividing property under section 40-4-202, MCA. See 

## 'Ml4el-5 also, In re Marriage of #& 

### (Mont. 1984), P.2d



## , 41 St.Rep. 990. In this case, the amount the District Court awarded the husband was an abuse of discretion when considered in light of the parties' financial condition at the outset of the marriage. Since the issues discussed above are dispositive of this appeal,we need not consider the other issuesraised by the wife. Reversed and remanded for a new trial on the issue of 4 

### division ofmarital assets.

-. 

### Justice

We concur:Justices

Mr. Justice Frank 

### B. Morrison, Jr., dissents and will file a written dissent later.