No. 89-149 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1989 

IN RE THE MARRIAGE OF 

ROBERT MARTIN MILLER, 

Petitioner and Respondent, 

and 

ELIZABETH ANN MILLER, 

Respondent and Appellant. 

APPEAL FROM: District Court of the Eleventh Judicial District, 

In and for the County of Flathead, 

The Honorable Michael Keedy, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Sherlock & Nardi; Patrick D. Sherlock, Kalispell, 

Montana 

For Respondent: 

Randall S. Ogle; Murray, Kaufman, Vidal, Gordon, 

and Ogle, Kalispell, Montana 

Filed:. r -i 

Submitted on Briefs: July 20, 1989 

Decided: August 25, 1989 

I 

- I - ; 

1. ..: Clerk 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

The parties' marriage was dissolved by decree dated 

October 28, 1988 in the District Court for the Eleventh 

Judicial District, Flathead County. Wife appeals various 

aspects of the decree and the findings of fact and conclusions of law contained therein. We reverse and remand for 

further proceedings consistent with this opinion. 

We rephrase the issues as follows: 

1. Whether the District Court erred in its valuation 

and distribution of the marital property? We conclude that 

there was sufficient error to require remand and 

consideration. 

2. Is it appropriate that a different Judge of the 

District Court consider this case on remand? We conclude 

that it is. 

Elizabeth Ann Miller (wife) and Robert Martin Miller 

(husband) married on January 31, 1959. Four children were 

born during the marriage, all of whom were adults at the time 

of trial. The parties separated in November of 1986, with 

the wife remaining in possession of the family home in 

Kalispell. Since the date of separation, husband has paid 

the monthly mortgage payment of $415 on the first mortgage on 

the residence. In addition, he paid $200 per month temporary 

maintenance from November 1986 to February 1988. By court 

order dated February 22, 1988, the maintenance was increased 

to $400 per month. 

Husband is employed as an electrician for the Bonneville 

Power Administration earning approximately $43,000 per year 

with a regular monthly net income of $2,218.46. At the time 

of trial, husband had acquired retirement benefits valued at 

$34,401. The District Court found that husband occasionally 
worked overtime but that those hours were sporadic and that 

his overtime compensation was not regular income. 

In addition to raising the parties' four children and 

serving as homemaker, the District Court found that the wife 

worked as a cake baker, cake decorator, and a professional 

monogrammer. At the time of trial, she was an enrolled 

student at Flathead Valley Community College pursuing a 

degree in education. 

In 1982, the parties mutually acquired the business 

presently known as Miller Monogramming for $13,000. The 

business was operated as the joint business of husband and 

wife through November of 1986, after which time the wife was 

the sole operator. The business has been operated out of the 

family residence since its acquisition. In conjunction with 

the business purchase, the parties received a list of business clients and a three-year covenant not to compete from 

the seller. Since 1982, the parties have invested in Miller 

Monogramming the additional sum of $21,682 which was secured 

by a second mortgage on the family residence. The District 

Court found the outstanding second mortgage obligation to be 

$15,654.38. 

The District Court valued Miller Monogramming at $22,800 

based on the testimony of Thomas Wynne, C.P.A., who evaluated 

the tax returns and business schedules for 1983 through 

August 1988. The court awarded the business to the wife and 

ordered her to assume the second mortgage debt of $15,654.38. 

The court also ordered the family home to be sold with 

the proceeds to be divided equally after payment of the first 

mortgage, which was $6,928.11 at the time of trial. The 

District Court did not value the family residence, but found 

that two appraisals were offered a% trial, one of $118,442 

and one of $90,000. The court ordered that the residence be 

appraised by a mutually agreeable appraiser and that the 
parties accept any offer to purchase within ten percent of 

the appraised value. The court ordered the second mortgage 

to be paid by the wife no later than the time of sale of 

Miller Monogramming or at the time of sale of the residence, 

whichever occurred first. Husband was awarded his $34,401 of 

retirement benefits, and the parties' personal property was 

divided in accordance with a list prepared by the husband. 

The District Court concluded that wife lacks sufficient 

property to provide for her reasonable needs and is unable to 

totally support herself through appropriate employment in the 

immediate future. The court ordered the husband to continue 

paying temporary maintenance of $400 per month directly to 

wife. In addition, the court required husband to pay the 

first mortgage payments of $415 until the residence was sold, 

at which time a hearing regarding further maintenance would 

be held. It is not clear from the court's order whether 

maintenance payments of $400 per month shall continue after 

sale of the house. 

On appeal, wife challenges the court's valuation and 

distribution of the marital property. In particular, she 

challenges the valuation of the parties' business, Miller 

Monogramming, and the court's decision to award her the 

business in light of the court's duty to equitably apportion 

the marital property. She also argues that the District 

Court Judge should have recused himself because of editorial 

comments made during the divorce proceedings which she contends may have affected his impartiality. 

I. 

Whether the District Court erred in its valuation and 

distribution of the marital property? 

The District Court awarded property valued at 

$49,443.50, or 52% of the marital estate to the husband, and 

property valued at $45,041, or 488 of the marital. estate to 
the wife. Wife contends that while this property division is 

approximately equal on its face, it is in no way an equitable 

apportionment of the marital property if the evidence presented is reconsidered by this Court. 

The District Court has broad discretion in dividing the 

marital estate. In re Marriage of Luisi (Mont. 1988), 756 

P.2d 456, 459, 45 St.Rep. 1023, 1025. In doing so, it is the 

duty of the District Court to equitably apportion the property under S40-4-202, MCA. In reviewing the lower court's 

division of property, this Court will look to see if the 

judgment is based upon substantial credible evidence, and if 

so, this Court will not disturb the judgment unless a clear 

abuse of discretion is shown. In re Marriage of Stewart 

(Mont. 1988), 757 P.2d 765, 767, 45 St.Rep. 850, 852. In this 

case, wife contends that the District Court's findings of 

fact and conclusions of law are not consistent with the 

evidence presented, thereby constituting an abuse of the 

lower court's discretion. Wife is particularly critical of 

the valuation of Miller Monogramming and of the earning 

capacity of that business as well as the distribution of the 

business to her. 

The District Court found that, "Wife has the ability to 

earn in excess of $1,000 per month from Miller Monogramming." 

This finding is apparently based on other findings relating 

to gross income and gross profits which are as follows: 

26. The gross income of Miller Monogramming in 1985 was 

approximately $16,240.00, or an average of $1,353.33 per 

month. 

27. The cost of goods sold from Miller Monogramming in 1985 

was $3,175.00. 

28. The gross profit (i.e., gross income less cost of goods 

sold) of Miller Monogramming in 1985 was the sum of 

$13,064.71 or an average of $1,088.72 per month. 
29. The gross income of Miller Monogramming in 1986 was 

approximately $14,486.00, or an average of $1,207.00 per 

month. 

30. The cost of goods sold from Miller Monogramming in 1986 

was $2,007.16. 

31. The gross profit (i.e., gross income less cost of goods 

sold) of Miller Monogramming in 1986 was the sum of 

$12,478.84, or an average of $1,039.90 per month. 

32. The gross income of Miller Monogramming in 1987 was 

approximately $11,578.00. 

33. The cost of goods sold from Miller Monogramming in 1987 

was $1,689.00. 

34. The gross profit (i.e., gross income less cost of goods 

sold) of Miller Monogramming in 1987 was the sum of 

$9,889.00, or $824.08 per month. 

Despite these extensive findings on gross income and 

gross profit, the court made no findings which reflect the 

net earnings of that business for the years in question. The 

same tax returns which the lower court used to determine 

gross income also reflect the net income of the business, 

however, no explanation is given for the absence of these 

figures in the court's decree. We have reviewed the tax 

returns received in evidence which set forth the following 

net earnings figures for the years 1983 to 1987: 

The findings and conclusions do not address the contradiction 

between the net earnings as disclosed by the tax returns and 
the specific findings on gross income as contained in the 

court's order. As a result, we conclude that there is no 

substantial credible evidence to support the findings of the 

District Court that the wife has the ability to earn in 

excess of $1,000 per month from Miller Monogramming. 

At trial, wife requested that Miller Monogramming be 

sold and the proceeds, if any, be divided equally between the 

parties. She expressed her lack of interest in operating the 

business and her intent to pursue a degree in education. 

Instead, the District Court gave the business and the corresponding debt to the wife, which she now contends she neither 

wants nor can afford. The lower court did not state why it 

chose to award the business to the wife as opposed to honoring her request to have the business sold. The value of 

Miller Monogramming adopted by the lower court was the value 

offered by husband's expert, who examined the parties' tax 

returns for the years 1983 through August 1988. The expert 

admitted that his appraisal did not reflect the fair market 

value for selling purposes, nor did he consider the business' 

goodwill or equipment, or the impact of similar businesses in 

the area upon the marketability of Miller Monogramming. In 

contrast, the testimony of the real estate broker testifying 

for the wife showed that it would be very difficult to sell 

Miller Monogramming because of the local competition in the 

area. As a result, we are unable to find substantial evidence to support the valuation of the business itself. 

In addition, the findings and conclusions of the District Court do not address the request on the part of the 

wife to have the business sold and to allow her to continue 

to pursue her college education. It appears that the award 

of retirement benefits having a value of $34,000 to the 

husband was basically offset against the award of the business to the wife. We conclude that the record does not 
contain substantial evidence to support the evaluation of the 

Miller Monogramming business itself and its distribution to 

the wife. We therefore conclude that the valuation and 

distribution of the marital property should be set aside and 

returned to the District Court for redetermination. 

Because the matter is being returned to the District 

Court for redetermination, we also direct the court to consider the question of maintenance of the wife. 

Is it appropriate that a different Judge of the District 

Court consider this case on remand? 

Wife contends that the District Court Judge should have 

disqualified himself prior to the October, 1988 hearing on 

the merits due to a series of publications which appeared in 

the Kalispell Daily Interlake in October of 1987. Wife did 

not formally move to disqualify the Judge as set forth in 

S3-1-805, MCA. However, she did express her concern as to 

the Judge's possible prejudice at the October, 1988 hearing 

in a Motion for Rehearing dated November 11, 1988. 

Included in her Motion for Rehearing was an affidavit 

which established that on October 1, 1987, a news article 

appeared in the Kalispell Daily Interlake which was critical 

of the District Judge who tried this cause. The article 

contained a reference to the wife's pending divorce case in 

its news analysis of the Judge which stated in part: 

A couple files for divorce. A hearing on temporary 

support is held in May. No ruling is forthcoming. 

The husband, who makes $43,000 a year, voluntarily 

gives the wife $200 a month. The wife takes in 

sewing to make ends meet. 

A local attorney offers this example to back 

up his complaint that the 11th District Court - and 

in particular, the department presided over by 

Judge Michael Keedy - takes too long to resolve 

cases. 
In response to this article, the District Court Judge 

wrote a letter to the editor which appeared in the October 7, 

1987 edition of the newpaper, which stated in part: 

. . . on the very day the hearing was conducted 

four months ago I ordered the husband to pay his 

estranged wife $615 per month pending further 

notice from the court. (She had been a self-employed seamstress for more than a year before the 

hearing). 

On October 11, 1987, the wife's own letter to the editor 

appeared in the newspaper, which stated in part: 

I am the wife that is mentioned in both the 

article and letter. . . . My husband and I have 

been married for over 28 years. He left in October 

1986 and filed for divorce a week later. He have 

(sic) four grown children and three grandchildren. 

In May my lawyer finally got a "show cause" hearing 

for more financial support. He was satisfied that 

Judge Keedy would be handling the case and assured 

me that he was a fair and just person and we would 

have a ruling shortly. 

A ruling was never made though! The $615 

mentioned in the article was already being paid 

when we went to court. The $200 was to me for 

maintenance and the $415 was for the payment on the 

house that my husband and I own jointly. . . . I do not envy a judge having to make a decision in a divorce case. But courts are suppose 

(sic) to show mercy. If I had committed a felony, 

my case would have already gone to trial, a decision made and my fate decided. But my only crime 

was agreeing to a divorce. Now I wait. 

In her Motion for Rehearing, wife alleged that she was 

denied a fair hearing of her case due to the publications and 

that the Judge's prejudice was reflected by the manner in 

which the hearing was conducted and also in the Judge's final 

order. No ruling was issued on wife's motion within 45 days, 

so it was deemed denied pursuant to Rule 59 (g), M.R.Civ.P. 
We do not find it necessary for this Court to make a 

ruling on the issue of disqualification raised by the wife. 

We do note that a judge's official conduct is to be free from 

even the appearance of impropriety and that his personal 

behavior should be beyond reproach as set forth in Canon IV, 

Canons of Judicial Ethics. In order to eliminate any question of impropriety or impartiality, we direct that on remand, this proceeding shall be assigned for consideration and 

redetermination by a District Judge other than the one who 

previously made the determination. 

Reversed and remanded.