No. 80-328 IN THE SUPREME COURT OF THE STATE OF MONTANA 1981



### IN RE THEMARRIAGE OF JUDITH MARIE GOMKE, Petitioner and Appellant,

VS

# . DONALD WAYNE GOMKE, Respondent and Respondent.

Appeal from: District Court of the Twelfth Judicial District, In and for the County of Hill. Honorable B. W. Thomas, Judgepresiding. Counsel of Record: For Appellant: Morrison, Ettien and Barron, Havre,Montana For Respondent: Bosch, Kuhr,Dugdale,Warner & Martin, Havre,Montana

Submitted on briefs: December 17, 1980 Decided:April 20, 1981Mr. JusticeDaniel J. Shea delivered the Opinion of the Court.
Petitioner Judith Marie Gomke, wife, appeals an order of the Hill County District Court amending its decree of dissolution of the parties' marriage to allowher ex-husband, respondentDonald Wayne Gomke, to retain the family farm and pay thewife her share of the marital estate in four annual installments. The sole issue on appeal iswhether the District Court thereby abused its discretion. We hold that it did not and affirm. Judith and Donald Gomke were divorced on June 23, 1980. In the decree dissolving their marriage, the court ordered that themajor asset of the marriage, a small farm (including the family home and farmmachinery) be sold and the proceeds divided between the parties, 55 percent to the husband and 45percent to thewife. The courtweighted the apportionment of the marital estate slightly in favor of the husband because 480acres of the 640 acre farm were derived from his family's farm. Inhis findings,Judge Thomas found that the farmlands did not constitute an economic unit. He concluded that to divide the property between the parties in kind and to oblige the husband to compensate thewife under a payment plan for the excess value of any land he receivedwas impractical. The court found that the husband's prospects to pay thewife off on a reasonable basis and to meet all of his other financial obligationswere poor. The husband moved to amend the court's findings, conclusions, and decree on July 3, 1980. After a hearing, the District Court granted themotion on July 24, 1980. The court devised a plan by which the husband could attempt to retain and workthe farmwhile paying the wife her share of the equity on a short-termbasis. The net value of themarital estatewas $207,034.30. Payment of the wife's share of $88,684.00 was to be made in four equal annual installments of $22,171.00 togetherwith interestat the rate of 

### 7percent per year. Thewife urges that the District Court order allowing the husband's retention of the farm rather than requiring its sale and the distribution of the proceeds in accordance with the 

### 45percent to 55 percent formula denied her an equitable apportionment of the marital estate. She contends that, at aqy rate, the husband does not have adequate financial means to make the annual installment payments. Furthermore, she asserts, it is unfair for the husband to be awarded income-producingproperty and for the wife to receive only cash compensation under the District Court's property settlement. We will address her assertions individually. It is thewife's contention that the farm could be sold for significantly more than the court's determination of the property's fairmarket value. She maintains that to deny her the opportunity of sharing in any gain that could be realized over and above the DistrictCourt's valuation of the farm is to deny her an equitable share in the marital estate. The record contains some conflicting evidence on the property's fairmarket value. The courtwas not obliged, however, to accept the appraisals which the wife and her expertwitness presented. See,Dickerson v. Dickerson 37 St.Rep. 1286. (19801, Mont

# . , 614 P.2d 521, 524/ As ithad every right to do, the District Court in its findingsexpressly relied on the expert testimony of other witnesses. See, Dickerson, supra. The value of the net estate is a question of fact that is determined by the District Court in dissolutionproceedings. Thewife has not even attempted to show that the District Court's valuation of the property is "clearly erroneous." Hence,we will not disturb the court's assessment of fairmarket value. See,Rule 52(a), M.R.Civ.P. Thewife contends that the husband cannot generate sufficient income from the farming operation and fromhis outside employment to make the annual installment payment to her, and, at the same time, to pay all other existing indebtedness. Therefore, she urges us to find that the District Court abused its discretionby not requiring the property to be sold.We have espoused the policy that a family farm or a ranch should be kept intact and operated as a unit upon a marriage dissolution whenever there is a reasonable means of providing awife her equitable share of the marital property short of selling the land. InRe Marriage of Jacobson (1979), Mont. 

## , 600 P.2d 1183, 1186-88, 36 St.Rep. 1773, 1777-79. That is a policy tied to the economic realities of a predominantly rural state likeMontana. Family-run farms and ranches constitute an important part of the state's economy and of itsway of life. Many parents wish to pass the family farm or ranch to their children before their deaths and want to insure the continuity of a familyheritage. That understandable desirewould be frustrated if the courts of the state were required to sell family farms and ranches

as a matter of course in order to effect an "equitable" property settlement for the spouse who does notwish to remain on the farm after amarriage dissolution. As the District Court found, the farmland in dispute has been owned by the Gomke family since 1917 and the husband has lived there all of his life. After he was grown, the husband stayed on the farmbecause of his father's poorhealth. After theparties were married, the husband farmed the land on a crop-sharebasis. Both the husband, Donald Gomke, and his mother, Leona Gomke,want the farm to remain in the family. The husband, in turn, desires topass the land on to his own son one day. In 1974, Leona Gomke, the husband's mother, sold 480 acres of the 640acre farmpresently owned by the parties to her

son and his wife at a price belowmarket value. Although the contract for deed according to which she sold the land isnow in default, Leona Gornke has not initiated any proceedings to terminate the contract. The District Court inferred an intentby the mother to make a partial gift to her son individually. In Jacobson, supra,we held that the District Court had not abused its discretion in allowing the husband, upon dissolutionof the parties' marriage, to retain the family ranch and to purchase the wife's 50 percent interest

on an installmentbasis. The marital estate there had a net value of over a million dollars. The District Court gave the husband the option of paying for thewife's interest in

a lump sum or of paying her 20 percent down with the remainder to be paid in 30 equal annual installments, interest to

accrue at 7percent per annum. Unlike the ranch in Jacobson, supra, the Gomke farm is ratherheavily encumbered. In addition, the husband's income from the farm operations and from outside sources is somewhat limited. The District Court found that he earned approximately $655 in monthly net pay from his employment at the Cargil Elevator in Fresno,Montana. Over the past ten years, the annual income received from the farmhas varied greatly, ranging from ca. $250 to ca. $14,000. Under the decree of dissolution, the husband is also obliged to pay$300per month in child support to the wife who has custody of the parties' threeminor children. Nevertheless, themajor part of that indebtedness is owed to the husband's mother. There is every reason to think that she will help her son retain the land. The amount of indebtedness should, therefore, notmaterially hinder the husband's efforts inpaying the installments owed to thewife. Given the husband's relatively lowyearly income, he will quitepossibly have to refinance the property

or arrange forprivate loans in order to make the annual installmentpayments to thewife. The installment scheme of the District Court more than adequately protects thewife's interest in the marital property. The courtappears to have closely modelled its installment plan on the one approved of in Jacobson. The decreeprovides that thewife's interest in themarital property either be paid immediatelyor in no more than three years--with interest at seven percent per year. The outstanding balance owed by the husband to the wife constitutes a lien on the land until fullypaid. If an installment is notpaid on time, the husband's option to purchase terminates, and the property is to be sold as the parties may agree or

as the courtorders, if they cannotagree. If the husband sells the farmor any part of it before the wife is fully paid, thewifewill participate to the extent of 45percent in the gain realized over the valuation placed on the farm by the DistrictCourt. Under the circumstances,we are persuaded that the trial courthas acted in an equitable

manner to protect the interests of both parties. We find no abuse of its discretion. Similarly,we reject the wife's argument that the ~istrict Court's property settlement scheme is inherently unfair toher because it allows the husband to retain income-producing property while she receives only cash. She can reinvest that cash in any income-producing property shewishes. The husband has requested attorney fees and costs on appeal. We decline to award them. Thewife's appeal of the DistrictCourt's installmentplan was not so unreasonable or frivolous as to justify such an award in light of the fact that the farmlandwas heavily encumbered and the husband has only limited resourceswith which to make the yearly payments to thewife. We think shehad a reasonable basis to petition for relief under the rule of the Jacobson case, supra. We remand to the District Court and direct it tomodify its decree to specifically provide that the outstanding installment balance shall constitute a lien on all 640acres of the - parties' farm until the wife is fullypaid her interest in the marital estate. In all other respects, the judgment of the District Court is affirmed. 

# ,9+&&

We Concur:

Chief Justice

f' Justices