NO. 92-116 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1993 

IN RE THE MARRIAGE OF: 

MARILYN ANNE OLSEN, 

Petitioner and Respondent, 

and 

RAYMOND CHARLES OLSEN, 

Respondent and Appellant. 

APPEAL FROM: District Court of the Eleventh Judicial District, 

In and for the County of Flathead, 

The Honorable Leif B. Erickson, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Patrick D. Sherlock, Sherlock & Nardi, Kalispell, 

Montana 

For Respondent: 

Katherine R. Curtis, Kaplan & Curtis, Columbia 

Falls, Montana 

Filed: 

Submitted on Briefs: August 6, 1992 

Decided: March 5, 1993 
Chief Justice J. A. Turnage delivered the Opinion of the Court. 

Raymond Olsen (Raymond) appeals the findings of fact, 

conclusions of law, and order entered in this dissolution of 

marriage by the District Court for the Eleventh Judicial District, 

Flathead County. We affirm the District Court. 

Raymond raises five issues for our consideration. We rephrase 

those issues as: 

1. Did the District court require Raymond to Pay 

unreasonable child support? 

2. Was the District Court correct in denying Raymond's 

motion for retroactive modification of a temporary child support, 

maintenance, and health insurance order? 

3. Did the District Court err in requiring Raymond to pay 

medical insurance and part of the uncovered future medical expenses 

of his children? 

4. Was the District Court's award of maintenance 

unreasonable? 

5. Was the District Court's apportionment of the parties' 

assets equitable? 

Raymond and Marilyn Olsen (Marilyn) were married on June 27, 

1971, in Bigfork, Montana. Two children were born to the parties: 

a daughter, born July 19, 1973; and a son, born July 10, 1975. 

Raymond and Marilyn separated in February 1990 after Raymond was 

arrested for sexual assault of their daughter. Raymond plead 

guilty to one count of sexual assault and was sentenced to sixteen 

years in prison with six years suspended. Raymond was incarcerated 

in the Montana State Prison on October 25, 1990. 

2 
Through Raymond's employment as a truck driver for the 

Columbia Falls Aluminum Company, and Marilyn's efforts as a 

homemaker, the parties enjoyed a decent standard of living during 

their marriage. Their home in Columbia Falls had a market value of 

$63,500 with no encumbrances. They had accumulated $43,882.33 in 

a joint money market account at the time of separation. 

Additionally, they had various items of personal property and 

liquid assets for a marital estate totaling $156,704. Raymond's 

employment also provided medical insurance for the family. 

After their separation, Marilyn moved the District Court for 

temporary child support and maintenance. Following a hearing, the 

District Court ordered Raymond to pay child support of $401.50 per 

month per child. Raymond was also ordered to pay maintenance in 

the amount of $200 per month. The order allowed Marilyn to make up 

any deficiencies in the support and maintenance payments from 

Raymond's share of the money market account. In addition, 

approximately one year after their separation, Marilyn obtained 

employment as a bartender/cocktail waitress. Her net earnings from 

this job were approximately $1000 per month. 

In December 1991, after a bench trial, the District Court 

entered its findings of fact, conclusions of law and decree of 

dissolution of marriage. The District Court divided the total 

marital estate, valued at $156,704, equally between the parties. 

However, Marilyn actually received $124,341 of the marital estate. 

The District Court deducted from Raymond's half of the estate, and 

3 
added to Marilyn's share, Raymond's obligation for child support, 

maintenance, medical insurance, uncovered future medical expenses 

and incurred liabilities, for a total addition of $43,289. The 

District Court ordered the deductions in lieu of cash payments 

because Raymond would be earning no income while incarcerated. 

Raymond appeals the decision of the District Court. 

I 

Did the District Court require Raymond to pay unreasonable 

child support? 

In this appeal, we again address what effect loss of income 

due to incarceration should have upon a child support obligation. 

We first addressed this issue in Mooney v. Brennan (1993), 

Mont. -, P.2d -, (Cause No. 92-089, decided March 5, 

1993). Moonev involved modification of a child support order which 

was based upon pre-incarceration income. In the instant case, we 

decide a similar, although not exactly parallel, issue. Here, we 

address what effect incarceration should have upon an original 

child support order arising from a dissolution of marriage. In 

addition, we determine what effect an inability to earn income due 

to incarceration for a voluntary criminal act should have upon 

maintenance and other family support obligations arising from a 

dissolution of marriage. 

In Mooney, this Court determined that incarceration does not 

constitute a change in circumstances so substantial and continuing 

as to make the terms of a child support order based upon pre4 
incarceration income unconscionable. Mooney, Slip op. at 6. We 

held the District Court was incorrect as a matter of law in ruling 

that incarceration met the requirements of § 40-4-208(2)(b)(i), 

MCA, and justified a modification of child support payments because 

of a resultant loss of income. Mooney, Slip op. at 8. 

In reviewing the District Court's findings of fact, the 

standard of review to be applied is whether the findings are 

clearly erroneous. In re the Marriage of Eschenbacher (1992), 253 

Mont. 139, 142, 831 P.2d 1353, 1355. Our standard of review as to 

the District Court's conclusions of law is "whether the tribunal's 

interpretation of the law is correct." Steer, Inc. v. Department 

of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603. 

Raymond contends the District Court erred in its determination 

of child support because it failed to "annualize" his income for 

the immediate two-year period preceding the dissolution of 

marriage, the last of which he was incarcerated and earned no 

income. He argues that had the District Court done so, his income 

over this time frame would have been $18,828, and, therefore, his 

child support obligation would have been lower. However, Raymond 

misinterprets the term "annualized income" and merely averages his 

income over a two-year period. 

When an order concerning child support is issued, part of the 

criteria used in determining the child support obligation requires 

the district court to determine the support obligation 

5 
by applying . . . the uniform child support guidelines 

adopted by the department of social and rehabilitation 

services pursuant to 40-5-209 . . . . 

Section 40-4-204(3)(a), MCA. In referring to annualized income, 

the Child Support Guidelines state: 

"Annualized income" refers to gross income and deductions 

from gross income used to derive a figure for net 

resources available for child support . . . . 

Section 46.30.1513(1)(e), ARM (1990). Income should be annualized 

to accurately reflect a parent's income oroducincr abilities. 

Section 46.30.1513(1)(e), ARM (1990). 

Raymond supports his argument that his income for the two 

years immediately preceding his dissolution should have been 

"annualized" by relying upon the District Court Rules on Child 

support. Under these rules it was recommended that: 

All income should be annualized and copies of the last 

two years' tax returns should accompany financial 

statements as well as current wage stubs. 

District Court Rules on Child Support (1987), 227 Mont. 1, 5. 

Raymond argues that, had the District Court done this, his child 

support obligation would have been based upon a net income of 

$18,828. This argument fails for three reasons. 

First, the very reason it is recommended by the District Court 

Rules on Child Support that two years of annualized income be 

examined is: 

Without such examination a temporary period of present 

unemployment or underemployment may indicate an 

unwarranted low amount of income available for support. 

6 
District Court Rules on Child Support (1987), 227 Mont. 1, 5 

(emphasis added). 

Second, under § 40-4-204(3)(a), MCA, which was in effect at 

the time of this dissolution of marriage, the District Court is 

required to determine the child support obligation by, inter alia, 

applying the standards in the Uniform Child Support Guidelines 

promulgated by the Department of Social and Rehabilitation 

Services, § 46.30.1501, ARM (1990), et.seq., and not the District 

Court Rules on Child Support. 

Third, where a parent is voluntarily unemployed or 

underemployed, the District Court may impute income "based upon the 

parent's ability or capacity to earn net income." Section 

46.30.1513(1)(b), ARM (1990) (emphasis added). 

The District Court found that Raymond's gross income for 1989, 

his last full year of employment, was $40,659. Raymond's gross 

income for 1990, through October, was $42,951. Raymond was ordered 

to pay a total of $702 per month in child support through May 1992, 

when his daughter completed high school. Thereafter, Raymond was 

ordered to pay a total of $452 per month in child support through 

July 1993, when his son turns eighteen. 

In using the $42,951 figure for imputing income upon which 

child support was based, the District Court reasoned that Raymond's 

lack of employment was the result of a voluntary criminal act. The 

District Court imputed income to Raymond and calculated his child 

support obligation "as though he had continued in his pre7 
incarceration employment." Raymond contends that while his 

criminal conduct was voluntary, the resulting unemployment arising 

from his incarceration was involuntary and unforeseeable under the 

circumstances. Therefore, Raymond argues, the District Court 

failed to impute income based upon one year of involuntary 

unemployment as well as his final year of employment before he was 

incarcerated. We do not agree. 

In Moonev, we held that a criminal should not be offered a 

reprieve from their child support obligations when we do not do the 

same for one who becomes voluntarily unemployed. Mooney, Slip op. 

at 6-7. Furthermore, we held it was the public policy of this 

state that the "provisions of Title 40, Chapter 4 are to be 

liberally construed to promote the underlying purposes of the 

chapter." Mooney, Slip op. at a. One such purpose requires 

parents to provide support for their children. Section 40-4- 

101(4), MCA. We now extend the reasoning in Mooney to the case at 

bar. We hold under the facts of this case, the District Court's 

decision to impute income to Raymond for purposes of child support 

based upon his pre-incarceration income was not clearly erroneous 

nor incorrect as a matter of law. 

II 

Was the District Court correct in denying Raymond's motion for 

retroactive modification of a temporary child support, maintenance, 

and health insurance order? 

Raymond contends the District Court erred as a matter of law 

in denying his motion for retroactive modification of the temporary 

a 
order entered on October 18, 1990. He argues that under § 40-4- 

208(2) (b) (i), MCA, retroactive modification was warranted because 

his unemployment due to incarceration constitutes a change in 

"circumstances so substantial and continuing as to make the terms 

[of the temporary order] unconscionable." Section 40-4- 

208(2)(b)(i), MCA. We do not agree, and hold the District Court 

was correct in denying Raymond's motion for retroactive 

modification of the temporary child support, maintenance, and 

health insurance order. 

The District Court concluded that Raymond's unemployment due 

to incarceration did not constitute a change in circumstances so 

substantial and continuing as to make the terms of the temporary 

order unconscionable. Therefore, a modification under §40-4- 

208(2)(b)(i), MCA, was not appropriate. We hold this conclusion is 

correct as a matter of law, and in line with our holding in Mooney. 

III 

Did the District Court err in requiring Raymond to pay medical 

insurance and part of the uncovered future medical expenses of his 

children? 

Raymond next contends the District Court erred in requiring 

that he pay the medical insurance premiums and a disproportionate 

share of uncovered future medical expenses for the parties' 

children. As to the medical insurance, the temporary order 

required Raymond to provide medical coverage for his children. In 

its final order, the District Court ordered Raymond to continue to 

provide medical insurance for his children. 

9 
Raymond contends health insurance is not mandatory and he 

should not be required to bear the full brunt of medical insurance 

because he is no longer employed. In addition, he argues that 

Marilyn is working and has funds with which to purchase medical 

insurance. 

Under § 40-4-204(4)(b), MCA: 

(4) Each district court judgment, decree, or order 

establishing a final child support obligation under this 

title . . . must include a provision addressing health 

insurance coverage in the following cases: 

. . . 

(b) In the event that health insurance required in a 

child support judqement, decree, or order becomes 

unavailable to the party who is to provide it, through 

loss or change of employment or otherwise, that party 

must ~, in the absence of an agreement to the contrary, 

obtain comparable insurance or request that the court 

modify the requirement. [Emphasis added.] 

At the time the temporary order was entered, Raymond was still 

employed and had insurance coverage for his children through his 

employer. When he became incarcerated and unemployed, Raymond lost 

his medical insurance benefits. After the insurance became 

unavailable to him, 5 40-4-204(4)(b), MCA, required that he obtain 

comparable insurance. Raymond was incarcerated and had no 

employment with which to replace the insurance. However, he did 

have assets in the marital estate as a means to obtain comparable 

insurance. 

The District Court found that $2,775 would be required to 

cover the cost of medical insurance for the parties' children until 

10 
they were emancipated. Because Raymond could not purchase 

insurance, the District Court ordered $2,775 to be deducted from 

Raymond's share of the marital estate. The District Court reasoned 

that deducting the insurance obligation was the only reasonable 

means to insure that Raymond fulfilled his obligation to provide 

medical insurance. We hold the District Court did not err in 

requiring Raymond to provide medical insurance. 

Raymond also contends the District Court erred in requiring 

him to pay a disproportionate share of expected uncovered future 

medical expenses of the parties' children. He argues the future 

medical expenses are speculative and the parties should split any 

expenses fifty/fifty rather than seventy-five/twenty-five. 

The District Court found that the children had significant 

medical problems which would necessitate attention and treatment in 

the future. The District Court also found the expected cost of 

such expenses, not covered by insurance, to be $1700. The District 

Court deducted $1350, or 75 percent, of the expected cost from 

Raymond's share of the marital estate. The District Court derived 

the 75 percent figure by comparing Raymond's net available 

resources to the parties' net available resources as a whole. As 

we have held the District Court did not err in determining the 

amount of income available for child support, we too hold it was 

not clearly erroneous for the District Court to find that Raymond 

was responsible for 75 percent of expected medical expenses not 

covered by health insurance. 

11 
IV 

Was the District Court's award of maintenance unreasonable? 

An award of maintenance may be proper after the District Court 

has equitably divided the marital estate pursuant to § 40-4-202, 

MCA, and has properly applied the criteria of § 40-4-203, MCA. 

Eschenbacher, 831 P.2d at 1355. In the case at bar, the District 

Court divided the $156,704 marital estate in the amount of $78,352 

to each party. Raymond does not contend this division was 

inequitable. Rather, he contends the District Court should not 

have awarded Marilyn more than $100 per month in maintenance 

because she has sufficient employment or assets with which to 

support herself. We do not agree with this contention. 

Under § 40-4-203, MCA, the District Court may grant a 

maintenance order only if it finds the spouse seeking maintenance: 

(a) lacks sufficient property to provide for his 

reasonable needs; and 

(b) is unable to support himself through appropriate 

employment . . . . 

Section 40-4-203(1)(a) and (b), MCA. In addition, 

(2) The maintenance order shall be in such amounts and 

for such periods of time as the court deems just, without 

regard to marital misconduct, and after considering all 

relevant facts including: 

(a) the financial resources of the party seeking 

maintenance, including marital property apportioned to 

him, and his ability to meet his needs independently, 

including the extent to which a provision for support of 

a child living with the party includes a sum for that 

party as custodian; 

12 
(b) the time necessary to acquire sufficient education 

or training to enable the party seeking maintenance to 

find appropriate employment; 

(c) the standard of living established during the 

marriage: 

Cd) the duration of the marriage; 

(e) the age and the physical and emotional condition of 

the spouse seeking maintenance; and 

(f) the ability of the spouse from whom maintenance is 

sought to meet his needs while meeting those of the 

spouse seeking maintenance. 

Section 40-4-203(2)(a) through (f), MCA. 

The District Court ordered Raymond to pay $200 per month in 

maintenance through July 1993, when the youngest child turns 

eighteen. Thereafter, the District Court ordered Raymond to pay 

$500 per month in maintenance through August 1995. The total 

maintenance obligation was $16,500. 

Raymond argues that because Marilyn was awarded the house, the 

silver dollar collection, a 1984 automobile, and the parties' money 

market account, she had sufficient property to provide for her 

reasonable needs. However, for property to be "sufficient 

property" under 5 40-4-203(1)(a), MCA, the property must be incomeproducing rather than income-consuming. In re the Marriage of Van 

Atta (1992), 252 Mont. 310, 313, 829 P.2d 3, 5. Although it is 

arguable that the house and the silver dollar collection will 

produce income due to appreciation in value, they would have to be 

sold to realize any income production. These items cannot be 

considered sufficient property because they will not provide income 

13 
sufficient for Marilyn's reasonable present needs. Van Atta, 829 

P.2d at 5-6. Furthermore, although the money market account will 

earn interest, Marilyn will have to deplete the funds at a greater 

rate than interest accrues to meet the needs of herself and the 

parties' children. After a thorough review of the record, we hold 

the District Court did not clearly err in finding the property 

awarded to Marilyn was not sufficient property to provide for her 

reasonable needs. 

Raymond also argues Marilyn has appropriate employment from 

which she can provide for her reasonable needs. During the 

marriage, Marilyn enjoyed a reasonably decent standard of living. 

After the parties separated, because she had no job skills or 

education greater than a high school diploma, Marilyn took a job as 

a bartender/cocktail waitress and earned approximately $1000 per 

month net, with no benefits. The District Court found the 

reasonable monthly expenses of Marilyn and the two children to be 

$1600. Furthermore, the District Court found Marilyn was barely 

able to support herself through her employment much less achieve 

the standard of living enjoyed during the marriage. 

"'Appropriate employment' under !j 40-4-203(1)(b), MCA, 'must 

be determined with relation to the standard of living achieved by 

the parties during the marriage."' Van Atta, 829 P.2d at 6 

(citation omitted). We hold the District Court did not err in its 

finding that Marilyn could not properly support herself in relation 

14 
to the standard of living achieved during the marriage. The 

requirements of 5 40-4-203(l), MCA, have been satisfied. 

Finally, Raymond contends the District Court erred in awarding 

increased maintenance payments so that Marilyn could seek further 

education after the youngest child turns eighteen. The District 

Court found it would take Marilyn two years to acquire sufficient 

education and training in order that she might find appropriate 

employment. The District Court also found that Marilyn would not 

be able to maintain full-time employment while pursuing this 

education. Therefore, Raymond was ordered to pay increased 

maintenance in the amount of $500 per month beginning in August 

1993. The increased payments were to continue for two years. 

Because we have held Marilyn did not have appropriate employment 

under § 40-4-203(l), MCA, we also hold the District Court did not 

err in awarding Marilyn increased maintenance. 

V 

Was the District Court's apportionment of the parties' assets 

equitable? 

In his final assignment of error, Raymond claims that if the 

District Court erred in determining his obligation of child 

support, maintenance, medical insurance, and future medical 

expenses, those amounts should not be deducted from his share of 

the property settlement. As we have held the District Court did 

not err in its determination of the amount of these obligations, we 

do not address this issue in detail. In passing, we do note that 

15 
it was within the province of the District Court to deduct these 

amounts from Raymond's half of the marital estate after finding 

that this was the only means with which the obligations would be 

met. See e.g.: In re the Marriage of Crabtree (1982), 200 Mont. 

178, 651 P.2d 29; In re the Marriage of Karr (1981), 192 Mont. 388, 

628 P.2d 267. 

The judgment of the District Court is affirmed/ 

We concur: 

16 
Justice Karla M. Gray, specially concurring. 

I concur in the opinion of the majority on issues 3, 4 and 5. 

I specially concur in that opinion on issues 1 and 2, notwithstanding my disagreement with the majority's approach and 

rationale. 

As indicated by my joining of Justice Trieweiler's dissent in 

Mooney, it is my view that black and white rules of law with 

regarding to child support and maintenance owed by an incarcerated 

former spouse are neither necessary nor wise. Nor does the case 

before us fall within the facts of Mooney. Because respondent in 

this case has sufficient assets to meet appropriate child support 

and maintenance obligations, I would distinguish this case from 

Mooney and affirm the District Court on the basis that its findings 

are not clearly erroneous. On the record before us, I cannot say 

that the District Court erred in determining that respondent's 

unemployment due to incarceration did not constitute a change in 

circumstances so substantial and continuing as to make the terms of 

the temporary order unconscionable. 

17 
March 5, 1993 

CERTIFICATE OF SERVICE 

I hereby certify that the following order was sent by United States mail, prepaid, to the following 

named: 

PATRICK D. SHERLOCK 

Sherlock & Nardi 

30 Fifth Street East 

Kalispell, MT 59901 

Katherine R. Curtis 

KAPLAN & CURTIS 

P.O. Box 329 

Columbia Falls, MT 59912 

ED SMITH 

CLERK OF THE SUPREME COURT 

STATE%F MONTANA