NO. 85-403 INTHE SUPREME COURT OF THE STATE OF MONTANA 1986

IN RE THE MARRIAGE OF MABLE RINGLING ANDERSON, Petitioner and Appellant, and RUSSELL ALVIN ANDERSON

## , Respondent and Respondent.

APPEAL FROM: District Court of theFifthJudicia.1District, In and for theCounty of Madison, The Honorable Frank Davis, Judge presiding.

COUNSEL OF RECORD:

For Appellant: Lineberger & Harris; Peter S. Lineberger, Bozeman, Montana KellyM. Hogan, Bozeman, Montana

For Respondent: Jardine, McCarthy & Gra.uman; John Jardine, Whitehall, Montana Berg, Coil, Stokes & Tollefson; Ben Berg, Bozeman, Montana

Submitted on Briefs: Dec. 19, 1985 Decided: 

## APR3 19%

Filed: 

### &+%4Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court.

The wife appeals from a judgment and order of the Madison County District Court dividing the marital estate between the parties. She claims that the District Court abused its discretionby miscalculating thevalue of certain marital assets and inequitably dividing the marital estate, and that the District Court's decision was not based on substantial credibleevidence. We affirm inpart and reverse and remand for additional findings. Mabel Ringling and Russell Anderson were married on November 12, 1949. Before their separation in May 1981 and. their divorce in April 1985, they jointly acquired and operated ranch properties. The downpayment on the Harrison Ranch, the first property acquired, was made possible by financial assistance from the wife's family. The wife's family later partially financed some additionalproperty and farm equipment for the ranch. Theparties repaid loans from the family during the courseof theirmarriage. In 1968,the parties acquired additiona.1properties using jointly held assets. Thepartiesnegotiated a saleof theseproperties in 1976, reserving 191 acres of the Harrison Ranch for their home. The proceeds from the saleswere initially deposited into joint accounts and securities. Later, after their separation, the parties agreed to divide the payments equally. The wife has occupied the Harrison Ranch since their separation. In December 1978, the parties purchased a one-half interest in the "Bruce-Ridder contract." The husband testified that,when he and the wife separated, they agreed she would have the Harrison Ranch, he would have theBruce-Ridder contract and that these were about equal in value. The wife disputes both the agreement and the valuation of this contract. The husband, in partnership with others, entered into twobusinessventures,the "CameronGroup" investmentand the "Blue Anchor Bar and Cafe" in 1980 and 1981. The District Court found that he invested $21,000 ofmarital funds; that these investments, made only in the husband's name, have proved unprofitable; and that the husband currently discharges these obligations through monthlypayments. Prior to their separation, the partiesmade a number of other investmentsusing jointlyheld funds. Some lostmoney. Some were profitable. Generally, the parties shared the lossesandprofits equally. The District Court excluded the cash value of one-half of the investments in the Cameron Group and Blue Anchor Bar and Cafe, in addition to the wife's share of her family trust, from the net value of the marital estate. The wife received her family trust sharesand the cash value of these investments. The District Court then divided the remaining amount equally, awarded the Harrison Ranch to the wife and awarded the Bruce-Ridder contract to the husband. They shared the income from the ranch sales equally. The husband also received his interest in the Cameron Group and Blue Anchor Bar and Cafe investments,some securities, his current home inButte,one-half interest inhisbusiness partnership, and his personal property. The wife also received securities,herArabian horse breeding business, her personal property, and some miscellaneous assets. In order to effect equal distribution, the District Court ordered the wife to pay the husband $82,912.24 orassign to him the equivalent of that sum from the ranch sale contracts. We address two issues on appeal:

(1) Did the DistrictCourt correctly value the marital assets and the totalmarital estate? (2) Did the DistrictCourt equitablydivid-ethemarital estate? Theparties agree on the standard of review.



# . . . In dividing property in a marriage dissolution the District Court has far-reaching discretion and its judgment will not be altered without a showing of clear abuse of discretion. The test of abuse of discretion is whether the trial courtacted arbitrarily without employmentof conscientious judgment or exceeded the bounds of reason resulting in substantial injustice 

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[Citations omitted.] In re Marriage of Perry (Mont. 1985), 704 P.2d 41, 43, 42

The wife argues in the first issue that the District Court clearly abused its discretion by accepting the husband's valuations of assets and the total estate. The evidence showsno substantial difference between theparties' valuationofassets claimedby and assigned to thewife. The parties disagree only on the value of the Bruce-Ridd.er contract, the Cameron Group, the Blue Anchor Bar and Cafe, and the husband's shareof the R & JAmusementsbusiness, all claimed by and assigned to the husband. The District Court expressly valued the Eruce-Ridder contract using a 25% discount of the net value, with the husband's interest then valued. at $100,766.63. The wife argues that a discount in the value is unrealisticwhen the balance of the contractwas due within one year of the trial date,as in this case. Thehusband testified that applying a discount of 25% is a normal procedure in the purchase and sale of contracts in the secondarymarket. He also testifiedthat theupcoming balloon payment would probably notbe made. As 

### we stated inMarriage of Summerfelt (Mont. 1984)

### , 688P.2d 8, 11, 41 St.Rep. 1775, 1778, the fair market value of a contract rarely, if ever, equals the balance due. Under these circumstances, the District Court did not abuse its discretion when he adopted the husband's valuation of the Bruce-Riddercontract. The District Court found that the parties had orally agreed the wife would receive the Harrison Ranch and the husband would receive the interest in the Bruce-Ridder contract and found that these properties were substantially equal in value. Thewife contends theDistrict Court abused its discretion in finding the parties reached an agreementon this division of property. The wife's past financial statements listed the ranch as her property and thehusband's financial statements listed the Bruce-Ridder contract as his property. The wife lived at the ranch and testified that, up to the time of trial, this division had been carried out. During the husband's testimony on the agreement, sheobjected only that the testimony was inadmissible as evidence of compromise negotiations. Even ignoring his testimony, the District Court had sufficient evidence with the wife's testimony and the parties' financial statements to award the Harrison Ranch to the wife and the Bruce-Ridder contract to the husband. We find no abuse of discretion on this point. The District Court's finding that the properties were approximatel-yequal in value is harmless error. Erroneous findings of fact that are not necessary to support the District Court's decision are not grounds for reversal. Eaton v. Morse (Mont. 1984), 687 P.2d 1004, 1010, 41 St.Rep. 1708, 1715. Prior to their separation, the parties together owned the Harrison Ranch, valued at about $253,000 andone-half of the Bruce-Ridder contract, with a face value of about $135,000. Clearly these are not equal in value. However, thevalue of these assetsdid not affect which party received them and the lack of equivalent value had.no effect

on the overall equitable division of property. Thus, this finding, although erroneous, is unnecessary to support the District Court's decision and is harmless. Therefore, we decline to reverse the decisionon thisbasis. The financial statements submitted by the parties reflect contradicting values of the Cameron Group and the Blue Anchor Bar and Cafe. The wife asks for a return of one-half of the joint funds invested in theseventures. She questions the District Court's apparent acceptance of the husband's valuation of the net value of the properties and its finding that $15,000 and $6,000, respectively, of joint fundswere invested initially. She concurs with theDistrict Court's reduction of the marital estate by one-half of the amountof joint funds invested. This Court will not disturb a district court's findings unless there is a clear preponderance of evidence against such findings, Cameronv. Cameron (1978),179Mont. 219, 227, 587 P.2d 939,944. In this case,the record shows no support for valuing the joint funds invested in Cameron Group at $15,000. The husband's financial statement suggests an investment of $23,000 and the wife's evidence, part of the husband's tax return, shows a contribution of $20,000. The evidence on the amount of joint funds invested in the Blue Anchor Bar and Cafe is unclear as well. Since the evidence doesnot support the finding thata total of $21,000of joint funds were invested in these ventures, we remand to the District Court fornew findings on the amount of joint funds invested.The difference in the partiesi estimates of the total net value of the marital estate, excluding the Bruce-Ridder contract, result from the difference in their estimates of the netvalues of the Cameron Group, the Blue Anchor Bar and Cafe, and R & J Amusements. The District Court made no specific findings on the value of each of these investments and valued the total marital estate at $1,776,024.49. This finding must be reversed for lack of supporting evidence. Using the husband's valuation of their networth,which did not include $10,000 worth of the wife's personal property, the totalcomes to $1,716,024.49. Using thewife's statements of value, the total net worth comes to $1,832,165.83. Neither figure reflects that used by the DistrictCourt,althoughamathematical errormay explain the difference between the District Court's and the husband's figures. This Court cannot determine the networth from the findings. Given the wide disparity between the parties' valuations and an apparent mathematical error on the part of the District Court,we reverse and remand for findings which reflect thebasis of thenetworth. The wife questions the District Court's equal division of marital assets in the second issue. She asserts that without her family's funds and borrowing power, the parties would not have acquired their marital estate and wants a substantially larger shareof the estate on thisbasis. ThisCourt will not disturb an apportionment made by the District Court "unless there has been a clear abuse of discretion as manifested by a substantially inequitable division of the marital assets resulting in substantial injustice." In re Marriage of Brown (1978), 179 Mont. 417, 422, 587 P.2d 361, 364. Section 40-4-202,MCA, requires a district court to consider property received by gift orbequest when apportioning marital assets. In re Marriage of Herron (1980), 186 Mont. 396, 401, 608 P.2d 97, 99-100. It goes on to require a District Court to consider the contributions of the non-acquiring spouse when dividing the property. 

### "In determining the exact distribution of this type of marital asset, no set formula can be established as to how the assets should be equitably distributed. Each case has to be decided on its own merits." Herron, supra. In this case, funds borrowed from the wife's family during the early years of the marriage were mostly repaid from the parties' joint funds. Money inherited from thewife's family

was invested in jointly-heldproperty. The record shows the substantial marital estate resulted from the joint efforts of both parties in contributing to the maintenance and appreciation of their property throughout their thirty-five years of marriage. Where a gift or inheritance is not traceable and both parties contribute to the increasing value, "it is inequitable to award the non-acquiring spouse only a fraction of the value of the asset on dissolution." Herron, 186Mont. at 404, 608P.2d at 101. We hold that the DistrictCourt's division ofproperty is an equitableone and shows no abuse ofdiscretion. We reverse and remand for additional findigg~"consistent

,/ with the above opinion.

We Concur:

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