No. 87-548 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1988 

IN RE THE MARRIAGE OF 

CAROL C. DALLEY, 

Petitioner and Appellant, 

and 

MARK F. DALLEY, 

Respondent and Respondent. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable G. Todd Baugh, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Davidson & Poppler; Doris M. Poppler, Billings, 

Montana 

For Respondent: 

Sandall, Cavan, Smith & Grubbs; John J. Cavan, 

Billings, Montana 

Filed: gua y 

Submitted on Briefs: March 31, 1988 

Decided: June 7, 1.989 

Clerk 
Mr. Justice R. C. McDonough delivered the Opinion of the 

Court. 

This appeal from the Thirteenth Judicial District 

involves the division of a marital estate in a dissolution 

proceeding. Appellant Carol C. Dalley (Carol) contends that 

the District Court erred in arriving at her share of the 

estate, and respondent and cross-appellant, Mark F. Dalley 

(Mark) makes the same claim in regard to his share on 

cross-appeal. We affirm the division made by the District 

Court. 

The issues presented for review on appeal are as 

follows: 

(1) Whether the Court abused its discretion in 

apportioning the parties' marital assets? 

(2) Whether the Court erred in failing to award Carol 

assets traceable as gifts from her relatives. 

(3) Whether the Court erred in failing to date the 

value of the parties' assets in 1976? 

The issue presented on cross-appeal is: 

Whether the Court abused its discretion in arriving at 

Mark's share of the marital assets? 

The relevant facts are briefly as follows: The parties 

married on June 28, 1946, and the lower court dissolved the 

marriage by interlocutory order on April 10, 1987. The 

property division went to trial on April 23, 27, 28, and 30, 

1987. After the trial on November 10, 1987, the District 

Court's decree divided the parties' assets. Under the decree 

Carol received property valued at $766,988.60, and Mark 

received property valued at $379,001.40. 
The lower court made extensive findings on the 

contributions of the parties toward acquiring and maintaining 

the assets in the marital estate. In summary, the lower 

court found that: in the early years of the marriage both 

parties worked and contributed their income to the expenses 

of the marriage; that later Carol cared for the parties' 

children and Mark worked to support the family; that gifts of 

money, stock, and financial assistance to Carol from her 

father, aunt, and uncle before the marriage, and other gifts 

from her father during the marriage, were used during the 

marriage to suppl-ement the parties' income; that the parties' 

bought and sold a Billings tavern during the marriage; that 

Carol started her own business during the marriage; that the 

parties own their own home; that Carol holds investment 

assets which produce income from interest and dividends; that 

Carol acquired other investment assets with investment 

earnings; that Mark was gifted stock from Carol's father 

during the marriage and used the stock and his share of sale 

proceeds from the tavern to borrow money for a business 

venture which has lost money; that since 1975 the parties 

contributed separately to a joint account used to cover 

household expenses; that in 1976 the parties began to file 

individual income tax returns; that from 1975 to 1986, Carol 

contributed $112,076.93 to family living expenses while Mark 

contributed $53,550; and that in the near future Carol would 

receive an inheritance from her deceased father's estate. 

The lower court listed the parties' assets as follows: 

ASSETS 

1. 6,672 shares Arnoco $497,064 

2. 667 shares Cypress Minerals 14,174 

3. 1,185 shares Lehman Brothers 19,849 

4. 160 shares Mont. Power Co. Preferred 4,280 
Tax exempt bonds-face value $155,000 183,966 

Money Market Account 13,808 

IRA (wife) 15,455 

CD 60,000 

1978 Oldsmobile 3,000 

Manpower, Inc . 15,000 

CD 100,000 

IRA (husband) 7,500 

Mont. Power Co. (Husband-savings) 4,328 

Cash value life insurance 5,066 

Contract-sale of poker & keno machines 42,000 

1981 Chrysler 3,000 

Country Club membership 5,000 

Money Market CD 87,000 

Family home and contents per Ex. C 70,000 

TOTAL ASSETS . . . . $1,1501490 

The lower court did not list Carol's expected inheritance as 

an asset in the marital estate. 

From the total asset figure the lower court subtracted 

Mark's liabilities of $180,252, to arrive at a net value of 

the parties' assets of $970,238. The District Court then 

made the division as follows: 

Asset items 1 and 2 shall be wife's because 

these are stocks gifted to her by her family and 

the proceeds of stock splits and spinoffs from 

those gifts. 

Asset items 3 through 10 shall be wife's but 

the values of asset items 3 through 10 shall be 

divided 70% to wife and 30% to husband because she 

has been substantially more instrumental in the 

acquisition, preservation, management and 

accumulation of these assets and because gifts from 

her family were also important to her ability to 

put together these assets; 30% to husband fairly 

reflects his contribution to preservation of these 

assets. 

Asset items 11 through 18 are set over to 

husband because these items have been managed by 

him and it is necessary that he have these items to 

achieve an equitable apportionment. 

Asset item 19 is set over to wife but the 

value thereof shall be equally split for this is an 
equitable apportionment of the family home and its 

contents. 

The liabilities, items 20 and 21 are set over 

to husband because he is responsible for their 

creation and continued existence and he has the 

assets which are pledged as security for their 

payment. 

Issue I. 

Carol contends that the lower court abused its 

discretion in dividing the parties' assets. First, she 

argues that the division is unfair because the majority of 

her share is traceable to gifts from her relatives. Carol 

also contends under this issue that the lower court failed to 

consider her father's contribution to the construction of the 

family home, and failed to consider her right to half the 

proceeds from the sale of the tavern in Billings. 

In reviewing a district court's division of marital 

property this Court will reverse a district court: 

only upon a showing that the district court has 

acted arbitrarily or has committed a clear abuse of 

discretion, resulting in either instance in 

substantial injustice. 

In re the Marriage of Hall (Mont. 1987), 740 P.2d 684, 686, 

44 St.Rep. 1321, 1323. 

We reject Carol's contentions on this issue because S 

40-4-202, MCA, gives the lower court the discretion to 

consider factors in addition to the source of the property. 

In re the Marriage of Vance (1983), 204 Mont. 267, 275, 664 

P.2d 907, 912. Here, the lower court found that: 

Wife's investments have been substantially 

more successful than husband's and the generosity 

of her family has played a substantial part in the 

accumulation of the assets the parties own. But 

husband worked and earned a good income during the 

entire marriage. That income and wife's income 
have been used by the parties to rear the children, 

support the family, and to some extent, have aided 

wife in accumulating, saving, maintaining and 

increasing those assets managed by her. 

In addition to this finding, the lower court also found that 

Carol would be more likely to acquire greater capital assets 

than Mark, that Carol would shortly receive a substantial 

inheritance, and that Mark had contributed to the acquisition 

and maintenance of the family home and the tavern. These 

findings are supported by substantial evidence, they weigh in 

favor of distributing a portion of assets contested by Carol 

on appeal to Mark, and they demonstrate that the 

contributions of Carol's relatives were considered. Thus, 

there is no clear abuse of discretion here, and we affirm on 

this issue. 

Issue 11. 

Carol maintains that inasmuch as spouses may conduct 

financial transactions independently, (see §§ 40-2-301 to302, MCA; § 40-2-202, MCA; § 40-2-106, MCA), and inasmuch as 

Mark's contribution to acquiring and maintaining her 

investment assets was minimal, we should conclude that the 

District Court abused its discretion by not awarding more of 

the investment assets to Carol. Carol fails to specify which 

assets should have been awarded to her under this theory, but 

we must assume from the facts of this case that the assets 

she complains of are the items numbered 3-10 in the lower 

court's asset list. Carol received 70% of these assets, and 

Mark received 30%. 

First, in regard to the statutes cited, the "application 

of these statutes to married couples is undeniable, but there 

is no intimation that they are at all controlling upon 

dissolution of the marriage by di.vorce." Cook v. Cook 
(1972), 159 Mont. 98, 102, 495 P.2d 591, 593. We hold here 

that they do not control over the more particular provisions 

of 5 40-4-202, MCA. Thus, we are not persuaded to reverse by 

their citation. 

Second, Carol contends that we should follow the 

rationale employed by the Oklahoma Supreme Court in 

Mothershed v. Mothershed (Okla. 1985), 701 ~.2d 405, a 

dissolution property dispute where the Court stated: 

The gift of property to a spouse during marriage is 

considered separate property of such spouse and 

upon divorce it cannot be considered as having been 

acquired by the joint industry, or efforts of the 

parties to the subject marriage. . . . I' I f one 

spouse brings separate property to the marriage, 

increased or enhanced value of the property will 

not constitute jointly acquired property during 

coveture unless the enhancement value was the 

result of joint efforts, skill or funds of both 

spouses. I' 

Mothershead, 701 P.2d at 408 (quoting Templeton v. Templeton 

(Okla. 1982), 656 P.2d 250, 252). We have held similarly 

that where none of the value of gifted property is a product 

of contribution from the marital effort, the District Court 

can justifiably find that the non-acquiring spouse has no 

interest in the property. In re the Marriage of Herron 

(1980), 186 Mont. 396, 404, 608 P.2d 97, 101. However, we 

also stated in Herron that 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, 608 P.2d at 100. 

As stated in regard to the first issue, the lower court 

awarded some of Carol's investment assets to Mark because of; 
Carol's superior ability to acquire capital assets and her 

recent inheritance, Mark's current indebtedness, and Mark's 

contributions of income during the marriage which to some 

extent aided Carol's investment ventures. The consideration 

of these facts as affecting the distribution of gifted 

property is proper under S 40-4-202, MCA, and the facts 

themselves distinguish this case from Herron. Thus, there is 

no clear abuse of discretion on this issue and we affirm. 

Issue 111. 

Carol contends that the District Court abused its 

discretion by failing to value the marital assets in 1976. 

She maintains that in 1976 the parties terminated their 

marital relationship and began to change their financial 

status due to individual initiative. Thus, according to 

Carol, In re the Marriage of Wagner (Mont. 1984), 679 P.2d 

753, 41 St.Rep. 409, mandates valuation of the assets in 

1976. Mark responds that the marriage relationship was not 

terminated in 1976, and that Wagner may be distinguished from 

the case at hand. 

First, in Wagner, this Court held that the parties' 

unique financial circumstances mandated a valuation of 

marital assets two years before the date of formal legal 

dissolution because: (1) the assets were acquired after the 

marital relationship was irretrievably broken, (2) the 

disparity of the parties' business acumen resulted in a 

change of the parties' financial status after the separation 

so that selection of the later date would create an unjust 

distribution. Wagner, 679 P.2d at 758. In this dispute, 

unlike in Wagner, the evidence preponderates against a 

finding that the marriage was irretrievably broken in 1976. 

The parties here lived together and shared expenses until 

June of 1986 when Carol filed her petition for dissolution. 
Thus, there is no separation of the parties and their assets 

as in Wagner, and the rule from Wagner does not apply. 

Furthermore, the award of some of the appreciation of Carol's 

investment holdings is supported by the findings we have 

referred to in the first two issues. Thus, we affirm on all 

issues presented on Carol's appeal. 

On cross-appeal Mark contends that the District Court 

failed to properly value his contribution to the parties' 

asset accumulation. Specifically, Mark contends that as the 

chief breadwinner of the family, his contributions of income 

entitle him to a larger portion of the marital assets. We 

reject this contention. The record shows that Carol 

contributed her labor as homemaker during much of the period 

that Mark claims credit for as the "chief breadwinner", and 

the record also reveals that gifts to Carol - and Mark of stock 

from Carol's relatives furthered the establishment and 

accumulation of marital assets. Section 40-4-202, MCA, 

mandates consideration of Carol's contribution and the 

contribution of her relatives. Thus, the District Court did 

not abuse its discretion by undervaluing Mark's contribution. 

Mark also argues that the District Court should have 

included the value of Carol's expected inheritance in the 

marital estate. A district court may commit error by failing 

to consider an expected inheritance in distributing the 

marital estate. In re the Marriage of Alt (Mont. 1985), 708 

P.2d 258, 260, 42 St.Rep. 1621, 1626. However, property 

gifted during the marriage may be excl-uded from the marital 

estate where an objecting spouse can claim no contribution to 

the property's value. Becker v. Becker (Mont. 1985), 707 

P.2d 526, 528, 42 St.Rep. 1541, 1544. It follows from Becker 

that an expectation of property where an objecting spouse can 

claim no contribution may be properly excluded from the 
marital estate. That is the case here, and the District 

Court properly excluded Carol's expected inheritance. All 

issues are affirmed. 

Justice 4