NO. 92-116 IN THESUPREME

COURTOFTHESTATEOFMONTANA 1993

IN RETHEMARRIAGEOF: MARILYNANNEOLSEN,

Petitioner andRespondent, and RAYMOND

CHARLESOLSEN, Respondent andAppellant.

APPEALFROM: District Court of the Eleventh Judicial District,

In andfor the County of Flathead, TheHonorable Leif B. Erickson, Judge presiding.

COUNSELOFRECORD:

ForAppellant: Patrick D. Sherlock, Sherlock &Nardi, Kalispell, Montana For Respondent: Katherine R. Curtis, Kaplan &Curtis, Columbia Falls, Montana

Filed: Submitted onBriefs: August 6, 1992 Decided: March 5, 1993Chief 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 bythe District Court for the Eleventh Judicial District, Flathead County. Weaffirm the District Court. Raymondraises five issues for our consideration. Werephrase those issues as: 1. Did the District court require Raymond to Pay unreasonable child support? 2. Wasthe District Court correct in denying Raymond's motion for retroactive modification of atemporary child support, maintenance, andhealth insurance order? 3. Did the District Court err in requiring Raymondto pay medical insurance andpart ofthe uncovered future medical expenses of his children? 4. Was the District Court's award of maintenance unreasonable? 5. Wasthe District Court's apportionment of the parties' assets equitable? RaymondandMarilyn Olsen (Marilyn) were married onJune 27, 1971, in Bigfork, Montana. Twochildren were born to the parties:
adaughter, born July 19, 1973; andason, born July 10, 1975. RaymondandMarilyn separated in February 1990after Raymondwas arrested for sexual assault of their daughter. Raymond plead guilty to onecount of sexual assault andwassentenced to sixteen years in prison with six years suspended. Raymondwasincarcerated in the Montana State Prison onOctober 25, 1990.

2Through 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 3added 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 achild support obligation. Wefirst addressed this issue in Mooney v. Brennan (1993), Mont. -, P.2d -, (Cause No. 92-089, decided March 5, 1993). Moonev involved modification of achild support order which
was based upon pre-incarceration income. In the instant case, we decide asimilar, 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, wedetermine 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 achange in circumstances sosubstantial and continuing
as to make the terms of a child support order based upon pre4incarceration income unconscionable. Mooney, Slip op. at 6. We

held the District Court wasincorrect asamatter of law in ruling that incarceration met the requirements of §40-4-208(2)(b)(i), MCA,andjustified amodification of child support payments because of aresultant 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, 831P.2d 1353, 1355. Ourstandard of review asto 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), 245Mont. 470, 474-75, 803P.2d 601, 603. Raymondcontends 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. Heargues that hadthe District Court doneso, 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" andmerely averages his income over atwo-year period. Whenanorder 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

5by 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 togross incomeanddeductions 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 beannualized 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 wasrecommended that: All income should beannualized and copies of the last two years' tax returns should accompany financial statements aswell ascurrent wagestubs. District Court Rules on Child Support (1987), 227 Mont. 1, 5. Raymondargues that, hadthe District Court donethis, 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 recommendedbythe District Court Rules on Child Support that two years of annualized income be examined is: Without such examination atemporary period of present unemployment or underemployment may indicate an unwarranted low amount of income available for support.

6District 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., andnot the District Court Rules onChild Support. Third, where a parent is voluntarily unemployed or underemployed, the District Court may impute income "based uponthe parent's ability or capacity to earn net income." Section 46.30.1513(1)(b), ARM(1990) (emphasis added). TheDistrict Court found that Raymond's gross incomefor 1989, his last full year of employment, was $40,659. Raymond's gross income for 1990, through October, was$42,951. Raymondwasordered to payatotal of $702per month inchild support through May1992, whenhis daughter completed high school. Thereafter, Raymondwas ordered to payatotal of $452per month in child support through July 1993, whenhis sonturns eighteen. In using the $42,951 figure for imputing income upon which child support wasbased, the District Court reasoned that Raymond's lack of employment wasthe result of avoluntary criminal act. The District Court imputed income to Raymondandcalculated his child support obligation "as though he had continued in his pre7incarceration employment." Raymond contends that while his

criminal conduct wasvoluntary, the resulting unemployment arising from his incarceration wasinvoluntary andunforeseeable under the circumstances. Therefore, Raymond argues, the District Court failed to impute income based upon one year of involuntary unemployment aswell ashis final year of employment before hewas incarcerated. Wedonot agree. In Moonev, weheld that acriminal should not be offered a reprieve from their child support obligations whenwedonot dothe
samefor onewhobecomesvoluntarily unemployed. Mooney, Slip op. at 6-7. Furthermore, weheld it wasthe 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. Onesuch purpose requires parents to provide support for their children. Section 40-4- 101(4), MCA. Wenowextend the reasoning in Mooneyto the case at bar. Wehold under the facts of this case, the District Court's decision to impute incometo Raymondfor purposes of child support based uponhis pre-incarceration income wasnot clearly erroneous nor incorrect asamatter of law. II Wasthe District Court correct indenying Raymond's motion for retroactive modification ofatemporary child support, maintenance, andhealth insurance order? Raymondcontends the District Court erred asamatter of law indenying his motion for retroactive modification of the temporary
aorder entered onOctober 18, 1990. Heargues that under §40-4-

208(2) (b)(i), MCA,retroactive modification waswarranted because his unemployment due to incarceration constitutes a change in "circumstances sosubstantial andcontinuing asto makethe terms [of the temporary order] unconscionable." Section 40-4- 208(2)(b)(i), MCA. Wedonot agree, andhold the District Court
was correct in denying Raymond's motion for retroactive modification of the temporary child support, maintenance, and health insurance order. TheDistrict Court concluded that Raymond's unemployment due to incarceration did not constitute achange in circumstances so substantial andcontinuing asto makethe terms of the temporary order unconscionable. Therefore, a modification under §40-4- 208(2)(b)(i), MCA,wasnot appropriate. Wehold this conclusion is correct asamatter of law, andin line with our holding in Mooney. III Didthe District Court err inrequiring Raymondto paymedical insurance andpart of the uncovered future medical expenses of his children? Raymondnext contends the District Court erred in requiring that hepaythe medical insurance premiums andadisproportionate share of uncovered future medical expenses for the parties' children. As to the medical insurance, the temporary order required Raymondto provide medical coverage for his children. In its final order, the District Court ordered Raymondto continue to provide medical insurance for his children. 9Raymond 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 afinal child support obligation under this title

. . . must include aprovision 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. Whenhebecame incarcerated and unemployed, Raymond lost his medical insurance benefits. After the insurance became unavailable to him, 540-4-204(4)(b), MCA, required that heobtain 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 ameans 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

10they 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. 11IV

Wasthe District Court's award of maintenance unreasonable? Anawardof maintenance may beproper 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, 831P.2d at 1355. In the case at bar, the District Court divided the $156,704 marital estate inthe 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. Wedonot 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) Themaintenance order shall bein such amounts and for suchperiods oftime asthe court deemsjust, without regard to marital misconduct, andafter 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 aprovision for support of achild living with the party includes asumfor that party ascustodian;

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 wasawarded the house, the silver dollar collection, a1984 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 540-4-203(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 13sufficient for Marilyn's reasonable present needs. VanAtta, 829

P.2d at 5-6. Furthermore, although the moneymarket account will
earn interest, Marilyn will haveto deplete the funds at agreater rate than interest accrues to meet the needs of herself and the parties' children. After athorough review of the record, wehold the District Court did not clearly err in finding the property awarded to Marilyn wasnot sufficient property to provide for her reasonable needs. Raymondalso argues Marilyn has appropriate employment from which she can provide for her reasonable needs. During the marriage, Marilyn enjoyed areasonably decent standard of living. After the parties separated, because she had no job skills or education greater than ahigh school diploma, Marilyn took ajob as abartender/cocktail waitress and earned approximately $1000 per month net, with no benefits. The District Court found the reasonable monthly expenses of Marilyn andthe two children to be $1600. Furthermore, the District Court found Marilyn wasbarely able to support herself through her employment much less achieve the standard of living enjoyed during the marriage. "'Appropriate employment' under !j40-4-203(1)(b), MCA, 'must bedetermined with relation to the standard of living achieved by the parties during the marriage."' Van Atta, 829 P.2d at 6 (citation omitted). Wehold the District Court did not err in its finding that Marilyn could not properly support herself in relation

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

requirements of 540-4-203(l), MCA,have been satisfied. Finally, Raymondcontends the District Court erred inawarding increased maintenance payments sothat Marilyn could seek further education after the youngest child turns eighteen. TheDistrict Court found it would take Marilyn two years to acquire sufficient education andtraining in order that she might find appropriate employment. TheDistrict 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 wehave held Marilyn did not have appropriate employment under §40-4-203(l), MCA,wealso hold the District Court did not
err in awarding Marilyn increased maintenance. V Wasthe District Court's apportionment of the parties' assets equitable? In his final assignment of error, Raymondclaims that if the District Court erred in determining his obligation of child support, maintenance, medical insurance, and future medical expenses, those amounts should not bededucted from his share of the property settlement. Aswehave held the District Court did not err in its determination ofthe amountof these obligations, we donot address this issue in detail. In passing, wedonote that
15it 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:

16Justice Karla M. Gray, specially concurring.

I concur in the opinion of the majority on issues 3, 4and 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 myjoining 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 onthe basis that its findings
are not clearly erroneous. Onthe 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 sosubstantial andcontinuing asto make the terms of the temporary order unconscionable.

17March5,1993 CERTIFICATE OFSERVICE IherebycertifythatthefollowingorderwassentbyUnitedStatesmail,prepaid,tothefollowing named:

PATRICK D.SHERLOCK Sherlock&Nardi 30FifthStreetEast Kalispell,MT59901 KatherineR.Curtis KAPLAN &CURTIS P.O.Box329 ColumbiaFalls,MT59912 EDSMITH CLERKOFTHESUPREMECOURT STATE%F MONTANA