### 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

# 212982Mr. Justice Frank B. Morrison, Jr., delivered the Opinion of the Court. ~ppellant, ~ouis M. Kis, appeals from the Findings of Fact and Conclusions of Law entered on January 8, 1981, and Judgment entered on January 15, 1981, by the District Court of the Eleventh Judicial District. This judgment distributed the real and personal property of the parties to this dissolution. Louis and Marge Kiswere married June 30, 1960. It

### was

a second marriage for both. Atthe 

### timeof the marriage, Marge Kishad two children and Louis Kishad one child. No children were born to the marriage. Allthree children 

### were emancipated when the dissolution proceedings were instituted. Atthe time of the marriage, Louis Kishad been employed

as a warden for the Montana Fish and Game Department for approximately sixyears. Marge Kisworked as a bookkeeper. From 1960 to 1965, Louis was transferred several 

### times, finally being permanently located inKalispell, Montana. With joint proceeds, the parties purchased property on Foys Lake and constructed a home. They laterpurchased two additional lots on Foys Lake with joint proceeds. During the marriage, both parties continued towork. Louis 

### was promoted by the Fish and Game Department tocaptain Warden in charge of the Northwest Montana District. Atthe time of trial, his salary was $19,400.00 per year. ~dditionally, he bought, sold and traded art, cameras, guns and photographs, thus earning approximately $3,000.00 per year. Marge Kis

### was self-employed 

### as a bookkeeper. In addition, she invested and speculated in the purchase of commercial property. Atthe 

### timeof trial, Marge Kisowned and maintained solely,and inpartnership with other individuals, severalrental properties. Her annual income prior t o t r i a lhad ranged from a low of $6,500.00 toa high of $13,500.00. On June 4, 1976, Louis Kisfiled a petition for dissolution of themarriage. Hearings inthe

### matter were held, and on October 10, 1978, a partial decree 

### was entered by the DistrictCourt dissolving themarriage and making an award of personal property, pursuant to an agreement reached by the parties. This agreement awarded Louis Kispersonal property totaling $17,917.50 and Marge Kisproperty totaling $10,693.73. Subsequently, on January 8, 1981, the DistrictCourt entered Findings of Fact and Conclusions of Law. The DistrictCourt determined thatLouis Kiswas in good health and highly employable due tohis law enforcement background and other income earning vocations. The court also found thatLouis Kishad a vested right tohis Game Warden retirement benefits and found that the cost of an annuity providing similar benefits 

### was $118,833.00. The DistrictCourt found Marge Kistobe inonly fair health as a result of several operations and an impairment toher right arm. The court found thatMarge's health affected her ability torepair and maintain her rental properties,as

### well asperform bookkeeping functions. The DistrictCourtmade specific findings regarding the values of the real properties owned by the parties and determined the liabilities owed by each. The court specifically found that each party's business and job interests 

### were, for themost part, separate. Each party had maintained separate bank accounts. The DistrictCourt determined that although Louis Kishad co-signed several bank notes, such actionwas taken atthe request of lending institutions. he courtfound that atalltimes Marge Kiswas inpartnership with other individuals inher business transactions and Louis Kis

was never 

### a partner. Based on 

### its findings the DistrictCourt apportioned themarital property as follows: "A. The house and two lots on Foys Lake, 70%tothe husband and 30%to the wife. "B. The Fish and Game Pension to the husband. "C. Allthe personal property as heretoforedistributed inthe Findings of Fact and by stipulationof the parties as therein setforth. "D. The Whitefish Arms Appartments tothe wife. "E. Eastside Superette (parcelK) to the wife. "F. The Pfrimmer House (parcelL) to the wife. "G. Western Acres duplex (parcel G) to the wife. "H. The K.P.H. partnership to the wife. "I. Proceeds from the default duplex in Whitefish (parcel C) less the amount paid toMr. O'Brien for Attorney's fees, to the wife. "J. Any other business properties to the wife." A judgment inaccordance with the above apportionment

was entered on January 15, 1981. Issues on appeal are: (1) Whether the Game Warden retirement benefits area marital asset? (2) Whether the District Court erred in admitting evidence of the cost of an annuity to establish the present value of the Game Warden retirement benefits? (3) Whether the District Court failed todetermine the net worth of the marital estate?(4) Whether the DistrictCourt's apportionment of the marital assets 

### is supported by substantial evidence? (5) Whether the District Court abused its discretion by ordering the Foys Lake residence and lots sold unless an agreement 

### was reached between the parties? Appellant, Louis Kis, firstcontends thathis retirement benefits, stemming from his servicewith the Montana Fish and Game Department, should not be considered as a marital asset for dissolutionpurposes. Louis Kis

### relies mainly on the recent United States Supreme Court decision, McCarty v. McCarty (1981), U.S. 

## , 101S.Ct. 2728, and also Montana statute, section 19-8-804, MCA. InMcCarty, the United States Supreme Court decided thatmilitary retirement benefits could not be considered community property tobe divided equally indivorce proceedings. This decision was based primarily on the determination that California's community property laws conflicted with specific federal statutes regarding military retirement benefits. Therefore, federal law preempted the state statutes. As the case before thisCourt does not involve a military retirement benefit, the McCarty decision 

### is not controlling. Section 19-8-805, MCA, relating toGame Warden retirement benefits, provides: "Any money received or to be paid asa member's annuity, state annuity, or return of deductions or the right of any of these shallbe exempt from any s t a t e o rmunicipal tax and from levy, sale, garnishment, attachment, or any other process whatsoever and shallbe unassignable except as specifically provided in 19-8-806." Louis Kis contends that this statuteprecludes inclusion of his retirement benefits as a marital asset. Mr. Kis asserts that such inclusion would violate the statutory exemption of retirement benefits from 

# ".

. . any other process whatsoever."We cannot construe this exemption as extending to determinations of marital estates indissolution proceedings. he purpose of thisprovision is toprotect a person's future retirement security. Inclusion of such benefits for purposes of establishing a marital estate 

### ismandated by section 40-4-202, MCA, which requires apportionment of all the property and assets of parties to a dissolution. Wehold that the District Court properly included the retirement benefits of Louis Kisas a marital asset of the parties. The appellant next contends that even if the retirement benefits are a marital asset, the District Court improperly valued the retirement benefits by accepting evidence of the cost of an annuity toestablish the present value of the benefits. The District Court accepted evidence establishing the cost of an annuity, purchased for a 51 year oldmale, yielding $10,000 per year from and after the 55th birthday. The cost

### was $118,833.00. Louis Kisasserted attrial that his only assured retirement benefits were his contributions tothe retirement fund. This assertion ispremised upon the fact that ~ouis, attime of 

### trial, was not yet 55 years of age and had not accumulated 25 years of service; therefore, his full

### retirement benefits were not assured. Evidence was introduced establishing that Louis Kishad contributed $14,436.00. We hold that the District Court properly accepted the evidence of the cost of an annuity 

### as establishing the present value of the Fish and Game retirement benefits. Present value is the proper 

### test. Value might be affected by the contingency of the retirement benefits failing to reach the levels used by the court. At

### time of trial ~ouisis had not reached 55 years of age (retirement age) and had not served the 25 years necessary for a retirement benefit equal tothe sum projected by the testimony and adopted by the court. The possibility that Louis Kiswould not reach 55 years of age and the possibility that he would not serve 25 years could properly be considered in arriving atvalue. However, no evidence was offered by Louis Kis showing what, if any, effect such a contingency would have in diminishing the present value figure offered by Marge Kis. The evidence offered by Marge Kiscould properly provide a valid basis for the court's evaluation. Where substantial credible evidence supports a finding of the trial court, then that finding must be upheld. Rule 52(a),M.R.Civ.P. Appellant, Louis Kis, contends that the DistrictCourt failed to determine the true net worth of the marital estate by failing tomake specific findings of value regarding certainproperties. Specifically, Louis Kisasserts that the court failed toplace a value on the Foys Lake residence and lots, the pension benefits, and the K.P.H. partnership interest of Marge Kis. He further asserts that the court failed to find thatMarge Kishad made a $20,000 loan to the K.P.H. partnership and was also entitled to $9,000 as a result of a default on a contract for deed. A review of the record inthismatter discloses that the ~istrict Court either had stipulated valuations at

### its disposal ormade findings on the disputed properties. conflicting evidence was presented on the existence of assets aswell as the value of allassets. The ~istrict Court resolved these conflicts indetermining the value of the marital estate and inmaking an apportionment. From the record we cannot say that the court's findings were clearlyerroneous, and therefore theymust be affirmed. Rule 52(a),

Louis Kis contends thatthe District Court's apportionment was inequitableand unsupported by therecord. This argument 

### rests onhisassertion thattheretirement 

### benefits

were improperly overvalued and thatmarital 

### assets were ignored by theDistrict Court 

### in establishing themarital estate. Wehave already disposed of these arguments and need 

### not discuss them again. Utilizing the stipulatedvalues and the findingsmade the

### District Court

## , the following apportionment figures

are established. Husband NetAssets: Retirement security $118,833.00 70%value of family home 74,463.00 70%

### value of Foys Lake 

### lots 21,000.00 Personal property 17,917.50

Liabilities: VISA IRS (contingent) Valley Bank note

TOTAL NET TO HUSBAND

WifeNetAssets: Western Acres Duplex Eastside Superette Pfrimmer house Whitefish apartments 30%value of family home 30%value of Foys Lake lots FirstFederal Savings Personal property KPH partnership $ 10,500.00 3,833.00 19,664.00 142,559.00

31,901.00

9,000.00 14,511.00 plus accrued interest 14,365.73 26,156.12Liabilities: FirstNational Bank of Whitefish 11,660.72 FirstNational Bank of Whitefish 10,997.74 First StateBank of Whitefish 2,175.00 First StateBank of Whitefish 3,200.00 Whitefish Credit Union 10,000.00 Harry Pifer, Sr. 5,000.00 Delila Pifer 5,000.00 Ross Linsennan 5,600.00 FirstNorthwestern Bank 4,500.00 Legal fees (not involved in this action) 9,700.00 VISA 1,359.00 Master Charge 829.00

TOTAL NET TO WIFE

In reviewing divisions of marital property, this Court must determine only 

# ".

. . whether in the exercise of its discretion, the court acted arbitrarily, unreasonably, or without regard torecognized principles resulting in substantial injustice." Balsam v. Balsam (1979), Mont. 

## , 589 P.2d 652, 654, 36 St.Rep. 79, 82. Here the husband received

an unusually largepercentage of the marital estate. However,

more than one-half of his assets result from the annuity valuation. We have held that the annuity valuation was proper. Therefore, the District Court acted within 

### its discretion in apportioning the Kismarital estate. In fact the husband's award was generous. Appellant's last issue on appeal concerns the following order made by the District Court: "a. That in the event that the Petitioner (Louis Kis) make arrangements to transfer 30%of the value of the house and two lots on Foys Lake to the Respondent (Marge Kis) within sixty days of this date, satisfactorily to her, then such house and two lots shall be sold atpublic sale, within sixty days thereafter, and the proceeds, after deducting the expenses of sale, shall be divided between the parties in the aforesaid proportion; that if the parties can agree on a private saleprior to that 

### time, then 

### it may be done; that either party may be the purchaser atthe sale, whether 

### it be public or private.

### "Wehave often stated that the DistrictCourt has broad discretion in

# ".



# . . devisingmethods to accomplish an equitable division of property." In reMarriage of Johnsrud (1977), 175Mont. 117, 123, 572 P.2d 902, 905. Herethe District Court foresaw problems arising from joint ownership and provided a reasonable alternative. We find no abuse of the court's discretion. The judgment of the District Court is affirmed.

WeConcur: