No. 88-514 

IN THE STJPREMF COURT OF THE STATE OF MOhTTAMA 

1989 

IN RE THE MARRIAGE OF 

MARTHA HETdEN HOCKADAY, 

Petit-ioner and Respondent, 

and 

HUGE W. HOCKADAY, 

Respondent and Appellant. 

APPEAL FROM: District Court of the Eleventh Judicial District, 

In and for the County of Flathead, 

The Honorable Michael Keedy, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

M. Dean Jel lison, Kal-ispell, Montana 

For Respondent: 

Bruce McEvoy; Warden, Christiansen, Johnson & Rerg, 

KalispelJ , Montana 

Submitted on Briefs: April 6, 1989 

Decided: June 1, 1989 

A iled: ,. . Y 

--._ '<.,: 

.. . ', ,: 
Mr. Justice L. C. Gulbrandson delivered the 0pini.on of the 

Court. 

Hugh Hockaday, the husband, appeals the division of 

property mandated in the final dissolution of marriage decree 

entered by the Eleventh Judicial District Court, Flathead 

County. Martha Hockaday , the wife , filed a cross-appeal 

requesting the correction of numerous factual and 

mathematical errors in the District Court's findings of fact 

and conclusions of law. We affirm the District Court's 

valuation of those marital properties disputed by appellant 

and the method employed by the court to equitably distribute 

the property. We remand the case, however, for a correction 

of various errors, more specifically enumerated herein, and 

for an alteration of the final judgment as deemed necessary 

by the District Court to assure the equitable division of the 

marital estate after correction of these enumerated errors. 

The husband raised the following issues on appeal: 

1. Did the District Court fail to make a reasonable 

valuation of the family home, Lots 32, 33 and Lot 37, and of 

Hockaday Reproductions, Inc.? 

2. Did the District Court err in failing to determine 

the net worth of the marital estate prior to ordering a 

division of the estate property? 

3. Did the District Court err in awarding Lot 37 to 

the wife after erroneously finding that the husband owned the 

property even though his mother held title to the Tlot? 

The wife raised the following issues on cross-appeal: 

1. Did the District Court err by valujnq the husband's 

premarital debt to Montana Forest Products at two different 

amounts in two different Findings of fact? 

2. Did the District Court err in valuing the husband's 

debt to Valley Rank of Kalispell at $15,000 when the evidence 

indicated the debt was approximately $4,000? 
3. Did the District Court err in finding that the 

husband had incurred a premarital alimony debt to a former 

spouse but then failing to include this debt in its 

evaluation of assets and debts existing at the time of the 

parties' marriage? 

4. Did the District Court err by failing to include 

the total $13,834.30 value of improvements to Lots 32 and 33 

in Finding No. 24, a finding detailing the value of the 

marital estate at the time of the hearing? 

5. Did the District Court err, after reimbursins the 

wife for all other inheritance expended for marital purposes, 

in failing to reimburse her for those life insurance policy 

benefits amounting to $1,916 which she inherited hut 

similarly expended during the marriage? 

Hugh and Martha Hockaday were married on March 17, 

1979. On December 12, 1984, the wife filed a petition for 

dissolution of: their marriage and for equitable division of 

the marital estate. The parties made several attempts at. 

reconciliation after 1984, but these attempts failed. 

Thereafter, a hearing on the petition was held on December 14 

and. 1.5, 1987. On July 8, 1988, the District Court issued its 

findings of fact, conclusions of law and final decree 

di-ssolving the marriage and dividing the marital property. 

The court's division of the marital property was made 

after its considerat.ion of the length of the marriage, the 

occupation of each, their respective employment histories and 

the future employment and income opportunities for each in 

light of their age, health and skills. The court noted that 

the husband worked in construction, building first log homes 

and then docks and retaining walls when the market for home 

construction slowed. His good health would allow for his 

continued work within the field of construction. Further, as 
an only child, he stood to inherit property and money when 

his elderly mother died. 

The court noted that the wife, on the other hand, did 

not have this potential future expectancy of inheritance 

income as both her parents had already died. Moreover, the 

court recoanized that the wife had a limited potential for 

future job advancement and salary increases in her present 

occupation as a legal secretary. She had been employed as a 

special education administrator in Hardin, Montana and had 

been working toward her doctorate in the field prior to her 

marriage. She had a promising chance for job advancement 

within that field. After she married and moved to the 

Flathead Valley area, however, she was unable to find 

employment within this field of expertise. She then worked 

as a homemaker, helping raise her husband's two children from 

a prior marriage, and at various odd jobs. She had often 

helped her hu-sband in his construction business. The court 

noted that the wife would be unable to return to her prior 

profession within the field of education, after her nine-year 

absence from the field, without further schooling and a 

recertification. 

The court also based its division of the marital estate 

upon a consideration of the amount of property each party 

brought to the marriage and of the value of the marital. 

estate at the time of dissolution. Rased on the evidence 

elicited. at the dissolution hearing, the court determined the 

assets and debts of each party at the time of their marriage 

and t.he value of the marital estate at the time of the 

hearing, excluding the amount of inherited or gifted property 

received by each party during the marriage. These 

evaluations detailed in Findings Nos. 33, 34, and 35 are 

summari-yed as f0ll0~7~: 
Marital Inheritance 

Premarital Estate During 

- Assets/ -- (Debts) Value -- - - - - - - - Marriage 

HUSBAND 

Lot 39/residence 

Koonce Contract Income 

Lots 32/33 

Toot 37 

1975 Chevy truck 

Tractors 

Sawrnill/Tools 

Artwork-Bronzes 

Quarter horses 

Household/Furnishings 

Mortgage on home 

17alley Bank 

Montana Forest Prod. 

A1 imony 

TOTATJS : 

WIFE 

Arlee Acreage 

North Fork Acreage 

1974 Ford Truck 

Library 

Stock 

Money Life Ins. 

Cash Value 

Teacher's Retirement 

Household/Furnishings 

Life Ins. Benefits/ 

from Father 

1,oans /from Mother 

Kal ispell Lot 

Lot ?AA Note 

Mobile Home 

Jeep 

First Natll/ 

Whitefish, MT 

I,it+le Horn State Rank (2,631) 

TOTALIS : $21,221 

$153,617 

18, OOC 
MUTUAL ACQUISITIONS 

JJots 32/33-Improvements 

5ot 37-Improvements 

Two Trucks 

1978 Cadillac 

Hockaday Reproductions 

Stock/So. Cal. Electric 

Jewelry 

Note Receivahle/Fis Son 

Danny on Prints 

TOTALS : 

Total Marital Estate: $208,742 

(excluding inheritance 1 

Total Premarital Estate: 

(Husband = 104,300) 

(Wife = 21,231) 

Increased value of 

Marital Estate: 

Reimbursement to Wife 

for Expended inheritance: 

Remaining Increase in Marital Estate: $54,167.70 

(Divided Equatly) 

As is apparent from the foregoing chart, a substantial 

amount of the wife's inherited monies and premarital assets 

had been sold and/or spent during the course of the marriage. 

The court thus awarded $29,053.30 of the increased value of 

the marital estate to the wife to reimburse her For the 

$15,219 loaned by her mother to meet marital expenses, and 

later subtracted from the wife's inheritance amount, and for 

the additional $13,834.30 in improvements to Lots 32/33 which 

the court generally traced to the wife's inheritance and 

liquidated premarital assets. This reimbursement effectively 

insured that the wife received a return of all her 

inheritance, except the $1,916 in life insurance benefits 

from her father's estate. The court then divided the ~ra!.ue 
of the remaining increase in the marital estate equally 

between the two. 

Each party was awarded the total value of their 

respective premarital assets and the increased value of the 

marital estate as apportioned by the court. Because of the 

husband's greater future income potential, the court 

determined that equity demanded also awarding the wife the 

value of the majority of her inheritance. Because many of 

the wife's premarital assets had been sold during the 

marriage, the court determined that Lots 32, 33 and 37, which 

constituted the sum of the husband's advance inheritance, 

would have to be given to the wife to comprise her total. 

The award of Lots 32 and 33 also served to guarantee the 

wife's continued right to reside on these lots in her mobile 

home, a residence she established after her husband obtained 

a court order expelling her from the family home. The 

husband retained Lot 39 and the family home. 

The husband appealed from the court's valuation and 

division of the marital estate. 

I. CHALLENGES TO THE COURT'S VALUATIONS 

Appellant challenges the District Court's valuation of 

several pieces of property. We will review these alleged 

valuation errors and reverse the District Court's valuatior! 

and subsequent property division only upon a showing that the 

court acted arbitrarily or clearly abused its discretion so 

as to create a substantial injustice. In re Marriage of Hall 

(Mont. 1987), 740 P.2d 684, 686, 44 St.Rep. 1321, 1323. This 

standard of proof for reversal is necessarily high because a 

district court has broad discretion when valuing and 

distributing property in a dissolution action. In re 

Marriage of Stewart (Mont. 1988), 757 P.2d 765, 767, 45 

St.Rep. 850, 852. The court's valuation need only be 

r~asonabl-e in light of competent evidence submitted. In re 
Marriage of Milesnick (Mont. ?988), 765 P.2d 751, 755, 45 

St.Rep. 2182, 2187. 

Appellant's first challenge is to the valuation of Lot 

39 at $153,617 at the time of dissolution. He contends this 

valuation is unreasonable and amounts to an abuse of 

discretion by the District Court. This value reflects an 

increase of $68,637 from the $85,000 value assigned by the 

court to the T,ot at the time of marriage. The husband 

asserts that this increase is erroneous as Lot 39 was worth 

$125,000 at the time of the marriage and it did not 

appreciate in value during the marriage. 

The District Court based its valuation of Lot 39 on the 

wife's testj-mony, which the court concluded generally was 

more credible than the husband's. Her testimony regarding 

the value of the Lot was supported by the Flathead County 

Treasurer's valuation of the property. The husband, on the 

other hand, offered no concrete evidence in support of his 

valuation. 

The extensive improvements made during the marriage to 

the family home, located on Lot 39, provide a further 

illustration of the increased value of the property. These 

improvements included a remodeled kitchen and bathroom, new 

carpeting and linoleum upstairs, construction of an outside 

deck and driveway, and the installation of a large garden and 

landscaped yard. The parties also converted the unfinished 

basement of the home into a bathroom, den, bedroom, study 

area, family room with rock fireplace, and a fruit room, 

thereby doubling the living area of the home. Evidence of 

these extensive improvements and the valuation by the county 

and by the wiF~ indicate that the District Court's valuation 

was reasonable. We therefore conclude that the court's 

valuation of Lot 39 was not arbitrary nor the product of an 

abuse of dS scretlon. 
Appellant's second challenge is to the court's 

valuation of Lots 32 and 33 at $18,760, a value which 

included $17,789.30 in improvements made during the marriage. 

Appellant asserts this valuation unreasonably placed the 

value of Lots 32 and 33 at the time of marriage at $971. 

The District Court's findings of fact, when viewed as a 

whole, indicate that the court valued Lots 32 and 33 at the 

time of dissolution not at a total $18,760, but rather at 

$18,760 plus the value of improvements, or $36,549.30. 

Finding No. 25 placed the base value of the Lot at the time 

it was gifted to the husband at $18,760. Finding No. 24 

recognized $3,955 in improvements attributable to the joint 

efforts of both parties. Finding No. 27 recognized an 

additional $13,834.30 in improvements to the Lots arising 

from the investment of monies directly traceable to the 

wife's inheritance or liquidated premarital assets. The sum 

of these findings, $36,549.30, is consistent with the 

testimony of both the husband and the wife, the county's 

valuation of the property, and the bills submitted for 

improvements made to the Lots. F7e therefore hold that the 

court did not act arbitrarily or abuse its discretion when it 

valued Lots 32 and 33. 

The District Court admittedly utilized an oftentimes 

confusing methodology for valuing the various properties and 

for attributing the value to the entitled party. Moreover, 

the District Court failed to apply this methodology in a 

consistent manner; the court failed to include that portion 

of the $13,834.30 attributable to the wife's inheritance 

monies in its Finding No. 25, which detailed the wife's 

inherited property, or on the other hand, to include that 

portion attributable to her premarital assets in Finding No. 

?4, which detari l.ed the value of those items benefiting the 
marital estate, excluding inheritance monies. We direct the 

court to correct this omission upon remand. 

Appellant's third challenge is to the District Court's 

valuation of Lot 37 at $16,540, a value which appellant 

contends included $1.0,000 worth of improvements made during 

the marriage. Again, we hold that the value of the Lot 

stated in Finding No. 25, listing inheritance values, did not 

include the value of improvements made during the marriage. 

The court valued the lot at the time of dissolution at the 

- sum of the $16,540 value at the time it was gifted and the 

$l0,000 in improvements made during the marriage. 

Appellant failed to show that either of these two 

values were arbitrary. The wife's testimony and the Flathead 

County Treasurer ' s valuation of the property support the 

court's $1.6,540 valuation of the unimproved lot. The court 

cited to the wife' s testimony and to the turn-around in 

profits from the orchard as support for its valuation of the 

improvements made to Tlot 37 at $10,000. The orchard went 

from a non-profitab1.e orchard with a loss of approximately 

54,500 in 1980, at the beginning of their marriage, to a 

productive orchard capable of producing a net profit of 

$3,000-$4,000. This improvement can be attributed to the 

increased care of the orchard and to the addition of a 

combination of 125 new cherry, peach and apricot trees on 

Lots 37 and 38, as well as favorable weather conditions. 'In 

light of this evidence, we hold that the court's valuation of 

the property and improvements on it did not amount to a clear 

abuse of discretion. 

Appellant lastly challenges the court's valuation of 

Hockaday Reproductions, Tnc., a business venture commenced to 

market and sell a limited number of art prints of paintings 

done by the husband's father, a well-known local artist. The 

court valued the parties' 50% share of the corporation at 
$20,000. Yet, appellant contends that those remaining unsold 

prints would not sell without a great expenditure of time and 

money, and thus they were worth only the value of the paper 

on which they were printed. 

We hold that the court's valuation of the parties' 

share of Hockaday Reproductions was not arbitrary. Both 

parties testified that 250 sets of prints were created by an 

initial $3,000 investment. Enough prints were sold, roughly 

twenty sets of prints at the retail price of $175 for a set 

of five prints (or at $40 for each individual print), to 

recover the initial investment by a11 parties to the venture. 

The potential income available from the remaining 

approximately 230 sets at this retail price could total 

$40,240. Although the husband asserted that a substantialamount of time and money would be necessary to market and 

sell the remaining prints, he failed to provide any evidence 

or estimates of this monetary amount. In light of all the 

evidence the court's estimated valuation of the parties' 50% 

share in Hockaday Reproductions at $20,000 appears 

reasonable, and we hold that the court did not abuse its 

discretion in so valuing the corporation's worth. 

11. NET WORTH OF THE MARITAL ESTATE 

Appellant contends that the District Court erroneously 

failed to determine the net worth of the marital estate. 

This determination is required prior to a division of the 

property, and appellant contends the court abused its 

discretion when it failed to make such a determination. 

Indeed, this Court has previously held that a district 

court must determine the net worth of a marital estate prior 

to division of the estate. Schultz v. Schultz (1980), 188 

Mont. 363, 365, 613 P.2d 1022, 1024. This determination of 

net worth is necessary before a court may equitably apportion 

all the property and assets belonging to the parties as is 
required hy 5 40-4-202, MCA. The court need not, however, 

precisely detail the parties' net worth in one finding. 

Rather, the findings as a whole must be sufficient to allow 

for the determination of the parties' net worth. In re 

Marriage of I,eProwse 11982), 198 Mont. 357, 362, 646 P.2d 

526, 529. 

We ho1.d that the findings as a whole generally were 

sufficiently detailed and exhaustive. The findings, however, 

contain several errors which prevent an accurate 

cletermj-nation of the parties' net worth. We order these 

errors corrected upon remand. Specifically, the District 

Court erroneously awarded the entire value of Lot 37 to the 

wife despite the fact the husband's mother holds title to the 

property. The husband had only a limited equity, by virtue 

of a few payments credited to him under a contract for deed, 

in the property at the time of dissolution. The District 

Court only may award that equity acquired by the husband in 

the property. We therefore direct the court to make further 

findings as to the exact amount of equity acquired by the 

husband in the Lot at the time of the dissolution and to make 

all necessary corrections to the relevant findings, notably 

to Findings Nos. 15(b), 25 and 36, and to the di-stribution of 

the marital estate as deemed necessary in light of these 

corrections. 

We also direct the court to address the followjnq 

errors raised by cross-appellant. We note the crossappellant filed! a notice to amend the findings to allow the 

District Court to correct these errors, but the court was 

unable to address these errors before the notice of appeal 

was filed. First, the findings erroneously listed the 

husband's debt to Montana Forest Products at two differing 

values: Ftnding No. 7(j) listed the debt at $700, while 

Find5no WO. 33 1i.sted the same debt at 5900. Second, 
Findings Nos. 24 and 30 list the debt owed to Valley Rank at 

$15,000 (while Finding No. 23 mentions a $5,000 debt), even 

though both parties concede, and the testimony at the 

dissolution hearings indicates, that the debt owed was only 

$4,000. Third, the court considered and listed the 

premarital debts of both parties in Finding No. 33, yet it 

failed to list the amount of the recognized alimony debt owe$L 

by the husband. Fourth, as previously mentioned in Section T 

above, the court failecl to include the $13,834.30 in 

improvements made to Lots 32 and 33 either in Finding No. 24 

or 25. The fifth allegation of error by cross-appell-ant, 

that the court erred in failing to reimburse the wife for the 

expended $1,916 in inheritance monies, is without merit. The 

court need not assure the return of all the wife's 

inheritance, it need only equitably divide the property. The 

final property division, after correction of the 

above-mentioned errors, would appear to be equitable. 

We affirm the District Court's valuations, but remand 

this case for correction of the above-mentioned errors and 

for redistribution of the marital estate as deemed necessary 

by the District Court, in light of these corrections, to 

assure an equitable propert!- division. 

We concur: