No. 83-103 

IN THE SUPREME COURT OF TIIE STATE OF MONTAFJA 

1984 

IN RE THE MARRIAGE OF 

JOHN WAYNE KEATING, 

Petitioner and Respondent, 

and 

TERRI S. KEATING, 

Respondent and Appellant. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The I-Ionorable Diane G. Barz, Judge presiding. 

CCUNSEL OF RECORD: 

For Appellant: 

Stephens & Cole; Robert L. Stephens, Billings, 

Montana 

For Respondent: 

Berger Law Firm; Chris J. Nelson, Billings, Montana 

Olsen, Christensen & Gannett; Damon L. Gannett, 

Guardian Ad Litem, Billings, Montana 

Submitted on Briefs: July 10, 1984 

Decided: October 11, 1984 

QU;I ilk :Y84 

Filed: 

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

Terri S. Keating (wife) appeals from the order of the 

District Court of Yellowstone County, awarding custody of the 

two minor children to John Wayne Keating (husband) and 

dividing the parties' marital estate. We affirm in part and 

reverse in part the order of the District Court. 

The following issues are presented on appeal: 

1. Whether the District Court abused its discretion in 

its division of debts and distribution of marital assets? 

2. Whether the District Court abused its discretion in 

awarding the custody of the minor children to the husband? 

John and Terri Keating were married August 7, 1972 and 

separated in July, 1981. Two children were born of the 

marriage. The District Court appointed a guardian ad litem 

to represent the children and conducted four hearings between 

August, 1981 and December, 1982. The children resided 

primarily with the mother during this time. Extensive 

evidence was submitted, including reports, evaluations and 

recommendations by Dr. Marian Martin, a clinical psychologist 

who examined John, Terri, the two children and Michael 

Miller, Terri's present husband. Numerous other witnesses, 

including the children's teachers, also testified. The 

District Court entered 64 separate findings of fact in 

support of its conclusions of law. 

I 

Did the District Court abuse its discretion in dividing 

the marital debts and distributing the marital assets? 

The primary argument on the part of the wife is that the 

District Court failed to include an evaluation of the Keating 

Ranch in the marital assets. The husband owned a 30% 

interest in a family partnership known as the Keating Ranch. 
In its findings of fact, the District Court included a 

substantial history of the farm operations, a review of 

machinery values and the basis for appraisal, and a 

determination that the purchase price value of the ranch at 

the time of the hearing was $800,000. 

The District Court further found that in November, 1981 

the current assets of the partnership amounted to 

$942,322.80, while the liabilities amounted to $976,613.45. 

The District Court also found that in December, 1982 the 

assets of the corporation totaled $872,997.80 and the 

liabilities totaled $887,365.85. As a result, the court 

concluded that the Keating Ranch was a negative asset and was 

not to be included in the marital estate. 

The wife argues that the court should have considered 

the possibility for an increase in future value of the ranch 

assets and that, in failing to do so, the court abused its 

discretion. 

This Court's standard of review of a disposition of 

marital property was defined in In re the Marriage of Krum v. 

Krum (Mont. 1980), 614 P.2d 525, 527, 37 St.Rep. 1291, 1295: 

"The disposition of a marital estate is governed by 

section 40-4-202, MCA, and is largely within the 

discretion of the District Court. This Court will 

not disturb the decision of the trial court absent 

a clear abuse of discretion. . . . The test for 

abuse of discretion is whether the trial court 

acted arbitrarily without the employment of 

conscious judgment or exceeded the bounds of 

reason. " 

The wife has failed to show that the court's evaluation 

of the ranch as a negative asset was arbitrary, without 

conscious judgment or beyond the bounds of reason. In 

arguing that the court abused its discretion by failing to 

include the husband's ranch interest in the marital estate, 

the wife has disregarded the state of the record. If in fact 

a percentage of the partnership interest were awarded to the 
wife, it logically would subject her to an assumption of 

Liabilities. Instead of a benefit to the wife, such an award 

would appear to be a detriment. 

We find substantial evidence to support the District 

Court's findings that the liabilities of the ranch exceeded 

the assets in both 1981 and 1982; that the wife made no 

contribution toward the acquisition or preservation of the 

ranch; and that the wife should be held harmless from any 

ranch liabilities. We find no abuse of discretion in the 

District Court's conclusion that the husband's partnership 

interest in the Keating Ranch was a negative asset to be set 

aside to him alone. 

We affirm the division of debts and distribution of 

marital assets by the District Court. 

Did the District Court abuse its discretion in awarding 

custody of the two minor children to the husband? 

An award of custody shall be determined in accordance 

with the best interest of the child. In determining custody 

in accordance with the best interest of the child, the 

District Court is statutorily required to consider all 

relevant factors including: 

" (1) the wishes of the child's parent or parents 

as to his custody; 

(2) the wishes of the child as to his custodian; 

(3) the interaction and interrelationship of the 

child with his parent or parents, his 

siblings, and any other person who may 

significantly affect the child's best 

interest; 

(4) the child's adjustment to his home, school, 

and community; and 

(5) the mental and physical health of all 

individuals involved." Section 40-4-212, 

MCA . 

The wife argues that the District Court failed to make 

specific findings regarding the interaction and 

interrela.tionship of the two minor children with the parents, 
and their younger stepsister, as required by section 

40-4-212 (3), MCA. In addition, the wife contends that the 

District Court should not have found that joint custody was 

inappropriate because of the parties' difficulty in 

communicating with each other. She argues that the court's 

decision to award custody of the children to their father is 

contradicted by evidence of the parties' willingness to 

participate in counseling and the father's testimony that 

joint custody was a viable alternative. 

The five factors which the court is required to consider 

in determining custody are set forth in section 40-4-212, 

MCA. Without detailing each of the District Court's 34 

findings of fact pertaining to custody here, we note that 

there are no findings regarding the wishes of the children as 

to their custody (40-4-212(2), MCA) , the wishes of the 

parents (40-4-212 (1) , MCA) , or the interaction and 

interrelationship of the children with each parent, their <a 

siblings, and their stepfather (40-4-212 ()Qo , MCA) . We 

commend the court for its thorough findings regarding the 

parents' educational background, work history and present 

employment status, as well as the stepfather's employment and 

child support history, use of alcohol, and physical 

confrontation in the home. There are also numerous findings 

paraphrasing the observations and evaluations of two clinical 

psychologists, both of whom concluded that the children were 

experiencing varied degrees of behavioral difficulties and 

that the younger child had significant learning disabilities. 

Finding of fact 62 provides that the interests of the 

children would be best served by placing them in the care, 

custody and control of their father, subject to the mother's 

reasonable visitation. Finding of fact 61 specifically 

states that "conditions in existence in the living situation 
of [the father] John Wayne Keating appear to provide the 

minor children with a desirable amount of consistency and 

stability. " 

Regarding the statutory requirement that certain factors 

be considered in all child custody determinations, this Court 

recently stated: 

"The District Court need not make specific findings 

on each of the elements. Speer v. Speer (Mont. 

1982), 654 P.2d 1001, 1003, 39 St.Rep. 2204, 2206. 

However, the 'essential and determining facts upon 

which the District Court rested its conclusion' 

must be expressed. Cameron v. Cameron (1982), 197 

Mont. 226, 231, 641 P.2d 1057, 1060." Hardy v. 

Hans (Mont. 1984), 685 P.2d 372, 374, 41 St.Rep. 

1566, 1569. 

In Hardy, the trial court failed to make specific findings of 

fact, but recited, in a court memorandum, statements the 

child had made to the court regarding his interaction with 

family and friends and his adjustment in both communities and 

schools. This Court concluded that the parents' wishes were 

obvious and that the child's statements, contained in the 

court's memorandum, were sufficient to satisfy the statutory 

requirement that the trail court consider the child's wishes, 

his adjustment in the community and in school, and his 

interaction with family and others who may significantly 

affect his best interest. 

Hardy is distinguishable from this case in that here 

there are no findings or other indications by the court that 

it considered each of the factors set forth in section 

40-4-212, MCA. Absent an indication that the trial court 

considered all of the statutorily mandated factors, the award 

of custody cannot be upheld. 

The extensive record in this case contains substantial 

evidence on each of the five factors of which consideration 

was required. We remand the cause to the District Court for 

appropriate findings, a determination pursuant to section 
40-4-212, MCA, and such other proceedings, if any, that the 

court may deem necessary. 

We concur: