NO. 92-247 IN THE SUPREME COURT OF THE STATE OF MONTANA 1992

IN RE THE MARRIAGE OF BIRGIT I. GRAY, Petitioner and Respondent,

GARY E. GRAY, Respondent and Appellant.

APPEAL FROM: District Court of the Second Judicial District, In and for the County of Silver Bow, The Honorable Mark P. Sullivan,Judge presiding.

COUNSEL OF RECORD: For Appellant: Daniel R. Sweeney,Attorney at Law, Butte, Montana For Respondent: Kevin E. Vainio, Attorney at Law, Butte, Montana



### 22 Submitted on Briefs: October 22, 1992 Decided: December 22, 1992 Filed: 

## idsmith CLERKOFSUPREMECOURi STATEOFMONTANAJustice John Conway Harrison delivered the Opinion of the Court. Birgit Graypetitioned for dissolution of marriage on January 9, 1991, afternineyears of marriage. A decree was entered onMay 14, 1992, in the Second Judicial District, Silver Bow County. The husband, Gary, appeals the property division ordered by District Court Judge Mark P. Sullivan. The parties were married on August 23, 1981, having lived together for the preceding year in Gary's mobile home at 210 Lyndale Lane in Butte. No children were born of this marriage. Gary's youngest child lived with the couple at 210 Lyndale Lane until 1985, and Birgit's only child, John, lived with them throughout theirmarriage. Birgitlsname was added to the deed on the mobile home after she and Gary were married. She also owned a small house at 2500 Nettie Street in Butte, appraised in 1991 at $5,000. Birgit purchased this house in her own name in 1985 and used it as a rental property. At the time Birgit filed the petition, she was 37 years old and had been working as a customer service clerk at Montana Power Company for about eighteen months. Her net salary was $880 per month, in addition to which she received $125 per month as child supportand approximately $75permonth fromrentalproperty. Gary was 48 and had worked nearly twelve years as a telecommunications foreman at Montana Power Company. His net salary was $2,166 per month. Gary and Birgit were unable to agree on thevalue of the real 2property or on a division of their furniture and household goods. After a hearing in November 1991, the District Court entered an Order Distributing Marital Property on January 24, 1992. This order included household furnishings and other personal property. Three items in particular had been disputed at the November 1991 hearing and are stilldisputed on appeal: a "six-piecebedroom setw and a Honda motorcycle,both awarded toBirgit, and a l'mattressbox spring setwawarded to Gary. Inhis Findingsof Fact, Conclusions of Law, and Order,dated April 8, 1992, Judge Sullivan assigned the following items to the marital estate:



# ... 210 Lyndale Lane (increase in value) $ 30,000 2500 Nettie St. 

# ......... 5,000 Husband's retirement benefit 

# . 18,616 Wife's retirement benefit (not vested) 

# . . 0 Husband's deferred savings 

# . 40,787



# .......... 1983Dodgevan 3,500 1985Honda 

# ........... 2,900 1992 Honda Accord 

# ......... 18,160 Paintings and art supplies 

# ...... 750 Home furnishings 

# ......... 4,725



# ........ Total Marital Estate $124,438 Liabilities againstthemarital estate included theentire value of the 1992 Honda, a $3,500 balance owed on the Dodge van, and $1,550 in debts related to the house at 210 Lyndale Lane. Judge ~ullivan divided the parties1assets and liabilitiesas follows: Assets Gary Increase in value of 210 Lyndale Lane $ 15,000 2500 Nettie 0 Husband's retirement 9,308 Husband's savings 20,3941983 Dodge van 0 1985 Honda 2,900 1992 Honda 18,160 Paintings and art supplies 0 Home furnishing 2,362 TOTAL $ 68,124 $ 56,314 Liabilities Mortgage Masonry debt Home remodeling 1992 Honda Dodge van NET TOTAL $ 48,414 $ 52,814 Gary was ordered to pay Birgit her share of the increased value of the house within ninety days, less the $2,200 due from Birgit to equalize the division of the marital estate. Gary was also ordered topay Birgit $500 "forthepurchase of amattress and box springs," and $750 for attorney's fees. Gary presents the following issues for review: 1. Whether the District Court arbitrarily assigned a value, unsupported by any evidence, to the familyhome for the purpose of establishing a net increase in its value. 2. Whether the District Court arbitrarily assignedavalue, unsupported by any evidence, to the box springs and mattress that it had ordered Gary to giveBirgit inMarch 1992. 3. Whether the District Court should have included a Honda motorcycle in its January 1992Order Distributing Marital Property. 4. Whether the District Court properly awarded Birgit attorney's fees.

The primary issue at the November 1991 hearing and in this appeal is the appreciation in value of the house at 210 LyndaleLane. TheDistrict Courtdetermined that thehousehad appreciated in value during the marriage by $30,000. Both parties challenge this figure on the grounds that the court arbitrarily assigned a 1981 value to theproperty. Gary argues that the 1981 value should be higher, thus reducing the increase in value assigned to the marital estate,while Birgit argues that the 1981value should be lower. Neither party disputes the District Court's conclusion that the fair market value of the house in 1991 was $52,009. Birgitts appraiservalued thehouse at $64,500,based on salesof comparable single-familyhomes,while Gary's appraiser valued it at $47,600, based on sales of comparablemobile homes. We hold that the court actedwithin its discretion in selectinga figure within the range of figures submitted in evidence. In re Marriage of Gerhart

(1990), 245 Mont. 279, 800 P.2d 698. The issue is whether the court abused itsdiscretion inassigninga 1981value to thehouse. Gary and his first wife (Karen Gray) bought the house as a mobile home in 1974. They had already purchased and paid for the lot. Between 1974 and 1976 they borrowed money to put in a basement and to install a double garage. Gary testified at the November 1991 hearing that when he married Birgit in 1981 he had invested the following amounts: Lotpurchasedin1971 

# . . . . . . . . .$1,975 Home improvement loans, 1974-1976 

# . . . . . 6,980 Payments formobilehome, 1974-81 

# . 

# . . . . 16,020' 

# ' Ninety payments at $178. Garypresentedbank statementsat the hearing showing that 90 payments had been made before August 23, 1981, when he married Birgit.TOTAL 

# . . . . . . . . . . 

# . . . 

# . $24,9752 When Gary and Karen Gray were divorced in 1978, they agreed that the house at 210 Lyndale Lane was to be Gary's sole and separate property, subject to thebalance payable on the purchase price, and that their equity in thehouse was $9,256. This figure is equal to the sum of the fifty-two payments that had been made before Gary and KarenGray signed theirproperty agreement in 1978. Gary agreed topay Karen half that amount, or $4,628,when he sold thehouse. At theNovember 1991hearing, Birgit presented the 1978 property agreement as evidence ofGary's equity in thehouse at the time of theirmarriage. Gary disputed the implication that $9,256 represented the value of thehouse in 1978 and stated that Karen Gray had proposed

''afigure that she feltwould be fairand equitable. Inhisview, as expressed at the hearing,thevalue of thehouse in 1981was the amount he had actually invested. No evidence on the fair market value of the house in 1981was presented at the hearing. Birgit testified that the house was in very poor shape when she moved in, in 1980: the roof leaked, the basement was unfinished, the kitchen cabinets were falling apart, the only bathroom needed repairs, and the lot had not been landscaped. After she and Gary were married, they replaced the roof and built

Gary provides a different figure in his brief, asserting that he spent $32,378, including 87 payments on the mobile home, before hemarried Birgit. He did not itemize this figure. Itmay include interest on the home improvement loans, which the court specificallydisallowed when 

### Gary presented evidence 

### of the loans at the hearing.a deck; covered the entire house with brick; finished the basement and installed a new bathroom; replaced all the kitchen cabinets; replaced all the interior doors and panelling; rewired the entire house; and landscaped the yard. Birgit said that she had done at least half thework on these improvementsand had used part of her salary to pay for building materials. In estimating the 1981 value for the purpose of determining the increase invalue during the parties' marriage,Judge Sullivan relied on the I1equitynin the 1978 property settlement. In his Findings of Fact, Conclusions of Law, and Order he calculated the 1981value as follows: Equity in 1978 

# . $ 9,256 Firstwife's lien 

# ...... 4,678 Balance due on August 24, 1981 

# . 8,075 TOTAL

# ..........$22,009 The $8,075balance due was provided by Gary's lawyer, Daniel R. Sweeney, on February 24, 1992, in a letter responding to the judge's post-hearing request. Judge Sullivan also asked Mr. Sweeney to obtain an opinion as to the value of the property from appraiser James Burgess. Mr. Sweeney sent a copy of Burgess' letter,dated February 14, 1992,to Judge Sullivanon February 24. Another copy was submitted to this Court as an appendix to Gary's brief. It expresses the view that the value of a double wide mobile home situated on a one acre lot would remainnearly constant from 1978 to the present. Gary points out inhisbrief that Burgessvopinion referred to the entire 1978-92 period, not merely 

### to the 1978-81 period,implying that during this fourteen-year period the house depreciated to an extent that balanced the value of the post-1981 improvements. Therefore, he argues, the net increase in thevalue of the home was zero. Birgit contends inher brief that the District Courtproperly assumed,based onBurgess' opinion, that the housedid not increase invaluebetween 1978and 1981,and that the courtproperly allowed for an increase invalue after 1981 because theparties "converted the home to something resembling a conventional home." If the court erred at all, Birgit says, it was to overvalue the house by adding the amount of Karen Gray's lien to Gary's 1978 equity, thereby counting the same value ($4,678) twice. Instead, she argues, the court should have added to Gary's 1978 equity ($9,256) the sum of the thirty-seven payments he made after his first divorce and before their marriage, or $6,586,3 for a premarital value of $15,842 and a postmarital appreciation of $36,167. A district court has broad discretionary power to determine the value of property in a dissolution action. In re Marriage of Milesnick (1988), 235Mont. 88, 94,765 P.2d 751, 755. The court's valuation need only be reasonable in light of competent evidence submitted. In re Marriage of Hockaday (1989), 237 Mont. 413, 418, 773 P.2d 1217, 1221. We will review allegedvaluation errors only

on a showing that the court acted arbitrarily or clearly abused its discretion so as to create a substantial injustice. Hockadav, 773
Gary actuallymade thirty-eight payments between his first divorce and his marriage to Birgit, adding $6,764 

### to his total investment.P.2d at 1221;seealso InreMarriage of Danelson (Mont. 1992)

## , 833 P.2d 215, 49 St.Rep. 597 (discretionary judgments by the trial court are presumed to be correct and will not be disturbed absent

an abuse of discretion). We hold that in the present case the District Court did not abuse itsdiscretion in assigning a premaritalvalue of $22,009 to the house at 210 Lyndale Lane, and that its action did not create a substantial injustice. Although Judge Sullivan offered no rationale for adopting the "equitywfigure inGaryts1978property settlement or for adding to that figure the lien held by Gary's firstwife, thetotal sumhe adopted for the 1981value isunlikely to be substantially different from the truevalue. In the absence of competent evidence fromeither party,he arrivedata reasonable estimate. I1 Did the District Court arbitrarily assign a value of $500 to thebox springsandmattress Garywas ordered in March 1992togive Birgit? This question arose from the division of personal property Judge Sullivan ordered onJanuary 24, 1992. TheOrder consisted of

a list of items to be distributed to eachparty. This list closely resembledbutwasnot identical toa list submittedby Gary shortly after the November 1991 hearing. Gary's list designated a "sixpiece master bedroom setw as Birgit's personal property and a Itmattressbox spring setM as Garytspersonal property. Judge Sullivan assigned the six-piece bedroom set to Birgit 

### and themattress box spring set to Gary. In February, 1992, Birgit filed a motion to hold Gary in contempt because he had not given her the items assigned to her in the court's January 24 Order. She amended her motion in March to reflect the fact that some items had been turned over to her, but inpoor or unusable condition. Gary responded thathe had in fact turned over all items except for those Birgit had refused to take. The District Court heard this matter on March 24, 1992. At theMarch hearing it became clear that Birgit and Gary did not agree as to the components of the "six-piece bedroom set." Gary presented a receipt showing that furniture comprising a sixpiece bedroom set had been purchased by the couple without a mattress or box springs. Birgit testified that she understood the bedroom set to includethe queen size mattress and box springs that she and Gary had used with the bedroom furniture at 210 Lyndale Lane. Gary testified that Birgit had taken two twin size box spring-and-mattresssetswith herwhen she and her sonmoved out of the house, and that he understood that the queen size set in the bedroom was the set awarded to him in the January 24 Order. Birgit testified that one of the twin box spring sets was broken and unusable and that she was sleeping on the floor in a sleeping bag. Judge Sullivan said to Gary: I want you to see that she has at least something to sleep onby tomorrow night atnine o'clock. You give her that queen sized mattress and box springs that was originallywithyour six-piecebedroom set or another set of mattress and box spring by nine o'clock tomorrow night,delivered to her house. These instructionsapparentlywere without effect, and the court'sfinal order, entered April 8, 1992, included a $500 payment to Birgit for thepurchase of a mattress and box springs. Gary argues that the truevalue of the disputed mattress and box spring set was $250. At the hearing in November 1991 he offered a list of various household furnishings that had been appraised by a Butte furniture store. Included on this listwas a "Serta queen size bed1'valued at $250. No other evidence was presented to establish the value of the mattress and box springs. Birgit argues that the court properly awarded $500 because that sum ltcloser approachesthereplacementvalue of amattress and box springs, and that thecourt couldhave fined Gary for contempt after he refused to deliver them. Wehold that theDistrict Courthad discretiontodeterminean appropriate value for an item it had repeatedly ordered Gary to deliver to Birgit, and that it did not abuse that discretion in determining that $500was anappropriatevalue. SeeMilesnick, 765 P.2d at 755,and InreMarriage ofGallinger (1986), 221Mont. 463, 719 P.2d 777 (upholding a district courtts division of property on the grounds that the court had employed conscientious judgment in arriving at a substantially just result). I11 Should the District Court have included the Honda motorcycle in its January 1992 Order? A Honda motorcycle was awarded to Birgit in the District Court's January 1992 Order. At the hearing in November 1991, Birgit testified that she and Gary had given themotorcycle tohersonJohn,afterbuying it fromGary's sister,and that its current value was $75. Later, Gary testified that he and Birgit had not bought the motorcycle and that his sister still had title to it. In the following exchange, the court ordered Gary to buy the motorcycle and give it to Birgittsson, John: THE COURT: We're talking about a bike valued at $75, right? THE WITNESS [Gary]: Yes. THE COURT: Is that worth spending this time talking about it? THE WITNESS: Not to me, Your Honor. THE COURT: Well, buy thebike. Give it toher. John is using the bike, you dontthave kids that are using the bike, right? THE WITNESS: Right. THE COURT: Okay. That's going to John, Mr. Sweeney. Gary argues that the motorcycle belonged to his sister and therefore could not be included in the marital estate. Birgit argues that because the sister had left the motorcycle with Gary for several years, she had no real interest in it, and that Gary could in fact comply with the court's order. It is the duty of the trial court to resolve conflicts in the evidencepresented, and we will not disturb its findings when they are based on substantial though conflicting evidence. In re Marriage of Obergfell (1985), 218 Mont. 83, 708 P.2d 561. We find that substantial credible evidence supports Judge Sullivan's decision to award the motorcycle to Birgit.IV The final issue is whether the District Court should have awarded Birgit $750 in attorney's fees. The District Court found that Birgit was without financial

resources to pay her attorney's fees and awarded her $750 for that purpose. Gary argues that the court erroneously found that Birgit had no incomebeyond her $880 net monthly salary, and that in fact Birgit received $150 per month in rental income from her house at 2500 Nettie We find no error on the part of the District Court. In its Findings of Fact, Conclusions of Law, and Order it reported that Birgit's monthly income included child support and rental income, for a total of $1,080, or approximatelyhalf thenet monthly income reported for Gary. Because the record indicates that the District Courtwas awareof eachparty's financial resourcesand obligations

we find no abuse of discretion 

### in the award of attorney's fees. See In reMarriage of Sullivan (1990), 243Mont. 292, 794 P.2d 687; In re Marriage of Carr (1983), 205 Mont. 269, 667 P.2d 425. Birgit requests attorney's fees for this appeal. Section 25- 20-104, MCA, provides that the successfulparty shall recover the costs of appeal from the other party, but attorney's fees are not included as costs. Allen v. Allen (1978), 175 Mont. 527, 575 P.2d 74. Therefore we deny this request. Testimony at the November 1991 hearing indicated that officially the rent for 2500 ~ettie St. was $150 per month but that the tenants did not always pay it. Inhis Findings of Fact, Conclusions of 

### Law, and Order, Judge Sullivan assumed that Birgit actually received $75 per month as rent for 2500 Nettie St.AFFIRMED. Pursuant to Section I, Paragraph 3(c),Montana Supreme Court 1988 Internal Operating Rules, this decision shallnot be cited as precedent and shallbe published by its filing as apublic document with the Clerk of the Supreme Court and by a report of its result to Montana Law Week, State Reporter, and West Publishing Company.

We concur: I