NO. 80-286 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1981 

IN RE THE MARRIAGE OF 

ANDREW J. BECK, 

Petitioner and Appellant, 

and 

DORIS BECK, 

Respondent and Respondent. 

Appeal from: District Court of the Third Judicial District, 

In and for the County of Powell. 

Honorable Robert Boyd, Judge presiding. 

Counsel of Record: 

For Appellant: 

Lea2hart Law Firm, Helena, Montana 

For Respondent: 

Daniels and Mizner, Deer Lodge, Montana 

Submitted on briefs: February 17, 1981 

Decided: July 9, 1981 

~iled: JUL 9 - 1988 

%w9 .rb 

Clerk 
Mr. Justice Daniel J. Shea delivered the Opinion of the 

Court. 

Andrew J. Beck appeals from that portion of a judgment 

of the Powell County District Court dividing the parties' 

property as a result of a marital dissolution. He contends 

that the trial court's findings and conclusions are not 

supported by the evidence, that the court failed to consider 

the tax consequences of its property division, and that the 

court should not have considered certain assets which the 

husband brought into the marriage to be marital property 

subject to division. 

Although we rule that the trial court could properly 

consider the assets which the husband had brought into the 

marriage, we nonetheless must vacate the judgment and order 

a new hearing. The findings and conclusions are not supported 

by the evidence. Further, the court should have considered 

the tax consequences of the property division. 

Andrew J. Beck (husband) and Doris Beck (wife) were 

married in 1966 in Elko, Nevada. It was the third marriage 

for each of them. Both had children from previous marriages, 

but no children were born to them during this marriage. 

At the time of their marriage, the husband owned a 

substantial amount of ranch property in Powell County, 

identified as the Gold Creek property, the Red Hills property, 

and the Larabie Ranch. 

During the marriage, the husband granted the wife, by 

joint tenancy deed, an undivided one-half interest in the 

Larabie ranch property. It is approximately 760 acres and 

was appraised at $393,462.80. Most of the land has been 

leased to others. In 1980, they received $14,000 in rental 

from the land, but in 1981, the rental income increased to 

approximately $16,000 per year. 
During the marriage, the husband sold the Gold Hills 

property under two contracts for deed, one to Don Beck, and 

the other to Ronald Cunningham. Payment from both land 

contracts is assigned to the First Security Bank of Deer 

Lodge and the Federal Land Bank of Missoula. In this appeal, 

the husband contends that neither party receives income from 

the contracts. The wife, however, contends that the husband 

will receive a significant amount of cash from these two 

contracts under the property distribution ordered by the 

trial court. Her claim is unsubstantiated. 

The Red Hills property contains about 2,100 acres and 

is subject to a life estate in Andrew A. Beck (the father of 

the petitioner-husband here). The fair market value of this 

property has been appraised at $247,386. 

The husband and wife acquired other property during 

their marriage, in particular, two bars that they later 

resold for profit. These bars were purchased with the 

husband's funds but were improved by the wife's efforts 

before they were resold. 

The only evidence regarding the value of the property 

was introduced by the husband. The trial court adopted the 

wife's proposed findings and conclusions almost in toto. We 

consider here only the major findings covering the division 

of the property. 

The only evidence of the property value was introduced 

by the husband, as previously stated. He also introduced 

the only evidence of the debts of the parties. The undisputed 

evidence was that the Larabie ranch property had a value of 

$393,462.80, and that the Red Hills property had a fair 

market value of $247,386. The total estate was valued at 

$740,573.95. The trial court adopted the wife's proposed 

finding that the total value of the estate is $760,000. 
The husband introduced evidence that the proceeds from 

the contract for sale of the Gold Hills property were unavailable to either the husband or wife because they were 

assigned to a bank. The husband's accountant testified that 

the contract payments from the Don Beck contract were 

"completely assigned to the First Security Bank in Deer 

Lodge and the Federal Land Bank in Missoula." Under crossexamination, the accountant testified that the First Security 

Bank mortgage on the property had been paid off, but that 

the bank was holding the contract proceeds under an assignment 

until the parties' other unspecified indebtednesses to the 

bank were paid off. The accountant also testified that the 

proceeds from the Cunningham contract were also assigned to 

these banks. This testimony was uncontradicted. In fact, 

the only evidence introduced by the wife concerning their 

income was that they received $14,000 per year from rentals 

on the Larabie place. 

The undisputed evidence is that the parties have an 

indebtedness of approximately $92,000. The husband introduced 

into evidence a cash-flow chart showing that the annual 

income of the parties was $23,583, including the income from 

the Larabie property. This evidence was uncontradicted. 

Adopting the wife's proposed findings, the trial court 

awarded the wife the Larabie ranch (valued at $393,000) 

together with the right to receive the rental income (now 

$16,000 per year). 

The court awarded the rest of the property to the 

husband--the Red Hills property (valued at $247,386, but 

d 

subject to a life estate), and the Gold Hills property--being 

sold to Don Beck and Ronald Cunningham under contracts for 

deed. The trial court also ordered the husband to pay all 
debts of the parties, amounting to over $92,000. The trial 

court based this order in part on a finding that the husband 

would have an annual income of $23,583 per year. The court 

found his income to be sufficient to support the husband 

and also for him to pay all income taxes, mortgages, attorney 

fees, and miscellaneous indebtednesses of the parties, 

amounting to over $92,000. The uncontradicted evidence, 

however, is that the husband's annual income is only $9,000 

per year, and from this he must not only support himself but 

pay approximately $92,000 in bills. 

The error lies in the failure of the trial court to 

recognize an error, pointed out in the motion for a new 

trial, that the $23,583 annual income figure for the husband 

was based in part on $14,000 rental income of the Larabie 

ranch property. The court, however, not only awarded this 

ranch to the wife, but also awarded her the rental income, 

thereby cutting the income available to the husband to a 

little over $9,000 per year. The uncontradicted evidence is 

that the lease payments from the Larabie ranch amount to the 

greatest portion of the total income available for distribution 

to the parties. From this $9,000 annual income, the husband 

must meet his own living expenses plus pay off over $92,000 

of the debts. 

Following entry of judgment, the husband moved for a 

new trial on the grounds that the findings and conclusions 

were unsupported by the evidence, and also because in 

entering the decree, the court failed to consider the tax 

consequences of the property division. The motion was 

initially noticed up for hearing, but a later minute entry 

indicates that the hearing was vacated upon stipulation of 

the parties. Both sides presented affidavits in support of 

their position on the motion for a new trial. In her counteraffidavit resisting the husband's motion for a new trial, 
the wife attested that the trial court's property division 

left the husband several sources of income which could 

furnish him with over $25,000 annually. The wife's allegations 

are, however, partially speculative in nature and wholly 

unsupported by the evidence. These alleged amounts of 

income are not set forth in the record. The wife has 

pointed to absolutely no evidence in the record either 

supporting the trial court's findings nor refuting the 

husband's contentions that the property division left him 

with only $9,000 in yearly income. 

The motion for a new trial was not again noticed up for 

hearing, and the trial court took no action on the motion. 

As a result, under Rule 59 (d) , M.R.Civ.P., the motion was 

deemed denied ten days after the wife served her counteraffidavit. A timely notice of appeal was filed, and this 

appeal followed. 

With no support in the record, the wife baldly asserts 

that the husband will have a gross annual income of $37,000, 

and that he will have a net annual income of $21,000. She 

bases this argument in part on an unfounded premise that 

proceeds from the Gold Hill contracts are subject to mortgage 

payments to the Federal Land Bank in the amount of only 

$16,000 annually. The record supports neither the gross 

annual income of $37,000 nor the $16,000 annual mortgage 

payments. 

The only evidence supports a finding that the husband 

would have an annual net income of just over $9,000. ~urther 

the only evidence supports a finding that the value of the 

marital estate is $740,673.95 rather than the figure of 

$760,000 set by the trial court at the suggestion of the 

wife. The trial court could have arrived at these findings 
or conclusions only if it disbelieved portions of the husband's 

evidence, but if the trial court did not believe this evidence, 

it was not free to arbitrarily set figures not supported by 

the evidentiary record. Findings and conclusions may not 

rely solely on a perceived lack of credibility; rather, they 

must be supported by evidence. See, In Re Marriage of Lippert 

(1981) I - Mont. - , 627 P.2d 1206, 38 St.Rep. 625. 

The conflict between the evidence and the findings 

resulted from the trial court's wholesale adoption of the 

wife's proposed findings and conclusions. We recently disapproved 

of such a practice. See, ~omaskie v. ~omaskie (1981), Mont . 

- , 625 P.2d 536, 539, 38 St.Rep. 416, 419, citing Canon 19, 

Canons of Judicial Ethics, 144 Mont. at xxvi--xxvii. See also, 

Louis Dreyfus & C1E.v. Panama Canal Co. (5th Cir. 1962), 298 

F.2d 733, 737; and Roberts v. Ross (3rd Cir. 1965), 344 F.2d 

747, 751-752, which persuasively set forth reasons why the trial 

court should do its own work when drafting final findings and 

conclusions. 

Because the findings are clearly erroneous (see Rule 52 (a), 

M.R.Civ.P.), we must set them aside and vacate the judgment. 

There is another reason, however, to vacate the judgment. AS 

the result of the property division ordered by the court, the 

husband moved for a new trial based in part on his claim that 

some harsh tax consequences would befall him and that the trial 

court had failed to consider these tax consequences. While we 

need not detail the tax consequences here, for we order a new 

hearing in any event, we take this occasion to hold that where 

a property distribution ordered by a court includes a taxable 

event precipitating a concrete and immediate tax liability, 

such tax liability should be considered by the court before 

entering its final judgment. 
In Re Marriage of Gilbert (1981), - Mont. - I 

- P.2d - , 38 St.Rep. 743, we held that a ~istrict 

Court does not abuse its discretion by refusing to 

consider theoretical tax consequences when the court-ordered 

property distribution does not contemplate any taxable 

event which triggers present tax liability. But where a 

present tax liability will be triggered by the court-ordered 

distribution, the court must make allowance for such tax 

impact. Other courts have held that a property distribution 

must make allowance for the tax impact incurred by a husband 

on account of a court-ordered transfer of an interest in 

real property to the wife. See, e.g., Wahl v. Wahl (1968), 

39 Wis.2d 510, 159 N.W.2d 651. See generally, Annot., 

Divorce - or Separation: Consideration of -- Tax Liability or - 

Consequences - in Determining Alimony - or Property Settlement 

Provisions, 51 A.L.R.3d 461. We hold, therefore, that at 

a new hearing, the trial court must consider any concrete 

and immediate adverse tax impact that a division of marital 

property might have on the parties. 

A final issue raised by the husband is that only 

$15,000 acquired by the parties during their marriage through 

the sale of two bars is subject to equitable distribution 

between the parties. He argues that he owned the property 

before the marriage and it should still be his upon the 

dissolution of the marriage. Therefore, he asks this Court 

to rule that the joint tenancy transfer to the wife of an 

undiviced one-half interest in the Larabie ranch must be 

set aside. The only purpose of that transfer, he argues, was 

to benefit the widow if the husband should die, and, because 

they are now divorced, that purpose has been mooted. He 

therefore asks that the one-half interest be set aside and 

the Larabie ranch be restored to him as the donor. 

-8- 
Section 40-4-202, MCA, specifically directs the 

court to equitably apportion between the parties property 

"belonging to either or both, however and whenever acquired 

and whether the title thereto is in the name of the husband 

or wife or both." This statute refutes the husband's 

argument, and we need not say more. An uncontested fact 

is that the trial court found both parties to be in ill 

health and not able to find gainful employment. Dividing 

only the $15,000 profit realized from the sale of the bars 

is not our idea of an equitable property division. 

The judgment is vacated and this cause remanded for 

further proceedings consistent with this opinion. 

n 

#&@&LAdz J t'ce 

We Concur: 

, Justices d u.'