NO. 92-128 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1992 

BONNIE L. MISCHKE, 

Plaintiff and Appellant, 

-vCALVIN L. MISCHKE, 

Defendant and Respondent. 

APPEAL FROM: District Court of the Twentieth Judicial District, 

In and for the County of Lake, 

The Honorable C. B. McNeil, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

James C. Bartlett, Hash, O'Brien & Bartlett, 

Kalispell, Montana 

For Respondent: 

R. M. Kehew, Kalispell, Montana 

Filed: 

Submitted on Briefs: October 29, 1992 

Decided: February 2, 1993 

'Clerk 
Justice Fred 3. Weber delivered the Opinion of the Court. 

This is an appeal by the Petitioner, Bonnie L. Mischke, from 

an order distributing marital assets by the District Court of the 

Twentieth Judicial District, Lake County, Montana. We affirm. 

We have restated the issues for our review as follows: 

1. Whether the District Court erred by including Mrs. 

Mischke's "inheritance" in the marital estate. 

2. Whether the District Court erred in determining that gifts 

from Albert Hoffman were made to both Mr. and Mrs. Mischke. 

3. Whether the District Court correctly determined the net 

assets of the marital estate. 

4. Whether the District Court abused its discretion by 

awarding 52% of the marital estate to Mr. Mischke and 48% to Mrs. 

Mischke. 

Bonnie and Calvin Mischke (the Mischkes) were married on March 

27, 1971 in Wolf Point, Montana. At the time, Mr. Mischke worked 

for the Wolf Point Fanners' Union Elevator and Mrs. Mischke worked 

for her father, Albert Hoffman, doing general farm labor. Shortly 

after the marriage, Mr. Mischke lost his job at the elevator and 

began working on Mr. Hoffman's farm. The relationship between Mr. 

Mischke and Mr. Hoffman was strained throughout the Mischkes' 

marriage. Nonetheless, the record establishes that Mr. Hoffman 

made substantial gifts to the Mischkes throughout the marriage 

until his death in June of 1990. 

Shortly after they were married, Mr. Hoffman bought a house in 

Wolf Point for the Mischkes to live in. They lived there rent-free 

2 
for eight years. After their three children were born, Mr. Hoffman 

built a larger home for the Mischkes. This new home was built in 

1979 on property where an older home was also located. The 

Mischkes received the rents from this home to apply as payments to 

Mr. Hoffman on the new home. 

Albert later deeded the entire property to the Mischkes. They 

were to repay Mr. Hoffman for the materials for this new home but 

not his labor. Mr. Hoffman later forgave a large part of this 

debt. In September 1986, the Mischkes moved to the Flathead area 

and rented a home on the East Shore of Flathead Lake. The Mischkes 

continued to receive rents from both Wolf Point homes. 

In 1987, Mr. Hoffman helped the Mischkes purchase the home 

they had been renting for the previous year. The purchase price 

was $46,500. Mr. Hoffman and his wife owned an undivided one-half 

interest and the Mischkes owned the other one-half interest. The 

Mischkes agreed to pay Mr. and Mrs. Hoffman one-half the purchase 

price plus $10,000 for debts Albert had paid for them--a total of 

$33,250. They subsequently defaulted on the loan to the Hoffmans. 

Periodically, the Hoffmans forgave some of the payments and allowed 

double credit for others. Approximately one month before Mr. 

Hoffman's death in 1990, the Hoffmans conveyed their one-half 

interest in the home to the Mischkes. 

In February of 1990, the Mischkes sold the Wolf Point rental 

homes for $60,000. Some of this money was used for home 

improvements to their Flathead home. Mrs. Mischke customarily 

handled all the financial affairs for the parties. She testified 

3 
that the $59,555 cash received from the sale was all spent by 

September 1990 for home improvements, living expenses and debts. 

She further testified that she transferred some of this to a 

Capital Preservation Fund and later to her separate savings account 

at Whitefish Credit Union. 

Following Mr. Hoffman's death in June of 1990, Mrs. Mischke 

received a death benefit which testimony established was to be her 

inheritance from Mr. Hoffman. This money was deposited in the 

joint checking account. Mrs. Mischke testified that she used some 

of her inheritance to pay marital debts. Mrs. Mischke testified 

extensively about her reasons for switching funds among various 

bank accounts in an attempt to explain how her inheritance could be 

traced from the date it was received until after the date of 

separation and to show that the inherited funds were kept separate. 

She also presented much evidence in an attempt to prove that Mr. 

Hoffman's gifts were intended for her alone and not as joint gifts. 

Testimony established that the Mischkes enjoyed a standard of 

living far beyond what they could have afforded without Mr. 

Hoffman's generosity. In addition to the gifts and loans described 

above relating to the homes, Mr. Hoffman made numerous other gifts 

of cash and other items to the Mischkes. Mr. Hoffman's farm 

corporation paid for health and life insurance, telephone service 

and $150 in food each month for the Mischkes. 

The sole issues for trial were calculation and distribution of 

marital property and child support. The District Court determined 

that the value of the marital estate, including the home and cash 

4 
in Mrs. Mischke's account, was $175,402. Mr. Mischke received 

assets valued at $91,683 and Mrs. Mischke received assets valued at 

$83,719. Mrs. Mischke sold other marital assets after the parties 

separated through Gardner Auction Service in Missoula. The award 

to Mr. Mischke includes a lump sum child support award as he has 

the minor children living with him. Mrs. Mischke was unemployed at 

the time of trial except for part-time piano instruction. 

I. 

Whether the District Court erred by including Mrs. Mischke's 

"inheritance" in the marital estate. 

Mrs. Mischke contends that her inheritance should be separate 

property. Mrs. Mischke testified that she transferred cash from 

one account to another in order to keep the inheritance separate 

from money received from the sale of the Wolf Point homes. 

The record establishes, however, that prior to the parties' 

separation in January of 1991, inherited funds were commingled with 

other marital income, and although Mrs. Mischke controlled marital 

finances, she made little effort to separate her inheritance. 

Consequently, we are unable to determine that the total amount of 

the inheritance was still intact at the time of trial. 

Nonetheless, the record establishes that the District Court 

considered the nature of the asset and awarded a substantial sum of 

cash to Mrs. Mischke. 

Our standard of review for questions of law is whether they 

correctly apply the law. In re the Marriage of Hamilton (Mont. 

1992), 835 P.2d 702, 704, 49 St.Rep. 604, 606. An inheritance 

5 
received during the marriage may be a marital asset. Section 40-4- 

202(1), MCA. We conclude that under the facts of this case the 

marital estate could properly include Mrs. Mischke's "inheritance." 

We hold that the District Court did not err by including the 

amount of Mrs. Mischke's inheritance in the marital estate. 

II. 

Whether the District Court erred in determining that gifts 

from Albert Hoffman were made to both Mr. and Mrs. Mischke. 

Mrs. Mischke disputes the District Court's finding that the 

gifts were not made to her individually, particularly the Flathead 

area home. She contends that ownership of the family home resulted 

from gifts made to her alone from her father and that Mr. Mischke 

should not be awarded 100% of property gifted to her. She 

presented testimony to establish that both the Flathead home and 

her inheritance could be traced as gifts from Mr. Hoffman intended 

for her alone, even though the Hoffmans transferred title to the 

home to both Mr. and Mrs. Mischke as joint tenants with the right 

of survivorship. 

However, cash sums received from the sale of the Wolf Point 

homes and later from Mrs. Mischke's inheritance were not kept 

separate. They were deposited in joint accounts. Mrs. Mischke 

testified that although cash was commingled in joint marital 

accounts, the $59,555 from the sale of the Wolf Point homes was 

exhausted prior to the parties' separation to pay marital debts, 

living expenses and home improvements and that all the inheritance 

was kept intact. The record does not support her contention that 

6 
her inheritance can be accounted for separately. 

Our standard of review for a district court's factual findings 

relating to the division of marital property is whether they are 

clearly erroneous. Hamilton, 835 P.Zd at 704. A finding is not 

clearly erroneous if it is supported by substantial evidence. 

Interstate Prod. Credit Ass'n v. DeSaye (1991), 250 Mont. 320, 322- 

23, 820 P.2d 1285, 1287. Substantial evidence is evidence that a 

reasonable mind might accept as adequate to support a conclusion: 

it consists of more than a scintilla of evidence and may be 

somewhat less than a preponderance. Barrett v. Asarco, Inc. 

(1990) I 245 Mont. 196, 200, 799 P.2d 1078, 1080. 

Letters from Albert discussing his gifts were written to both 

Mr. and Mrs. Mischke. All real property was conveyed to them both 

as joint tenants with rights of survivorship. The record 

establishes that ownership of the Flathead home resulted partly 

from Mr. Hoffman's gifts and partly from the Mischke's payments. 

Despite Mrs. Mischke's testimony that Mr. Mischke did little 

to maintain or enhance the value of this property, the District 

Court found that the gifts from Mr. Hoffman were intended as gifts 

to both Mr. and Mrs. Mischke. Property gifted during marriage may 

be excluded from the marital estate, however, where the objecting 

spouse can claim no contribution to the property's value. In re 

the Marriage of Dailey (1988), 232 Mont. 235, 242, 756 P.2d 1131, 

1135. Such is not the case here. While Mr. Mischke's 

contributions may not have been great, the record establishes that 

he helped to construct the Wolf Point home, helped to construct 

7 
improvements to the Flathead home, contributed to the maintenance 

of both homes and that his earnings also contributed to payments to 

Mr. Hoffman from the parties' combined income during the marriage. 

We conclude there is substantial evidence in the record to support 

the District Court's finding that Mrs. Mischke failed to prove an 

individual gift. 

We hold that the District Court did not err in determining 

that gifts from Mr. Hoffman were made to both Mr. and Mrs. Mischke. 

III. 

Whether the District Court correctly determined the net assets 

of the marital estate. 

Mrs. Mischke's argument focuses upon the net amount of the 

marital estate. She claims that the total "cash in bank," found by 

the District Court to be $47,999.00, is incorrect. If her 

inheritance must be included in the marital estate, she contends 

that the correct amount is $34,995.43. This figure represents the 

amount of her inheritance ($46,988.41 gross: $43,319.54 actually 

received net of taxes) less the amount of pre-separation debts and 

attorney's fees she claims to have paid. 

To support this contention, Mrs. Mischke introduced into 

evidence a copy of a savings account record from Whitefish Credit 

Union, showing a balance of $45,667.02 as of April 23, 1991. Mrs. 

Mischke did not provide any bank statements or other information to 

demonstrate the amount of cash in the account as of the date of 

trial, which was December 2, 1991. 

Although the District Court did not specifically state a 

8 
factual finding relating to how it determined the total "cash in 

bank," the amount determined ($47,999.00) is only $2,332.00 more 

than the amount shown as of April 23, 1991. A trial judge is free 

to accept any valuation of property he wishes so long as there is 

substantial evidence to support the value selected. In re the 

Marriage of Hammill (1987), 225 Mont. 263, 732 P.2d 403. The 

District Court could have reasonably determined that this amount 

represented earned interest from the date of deposit until the date 

of the decree or that it represented an amount Mrs. Mischke 

received from sales of marital property that she sold through 

Gardner Auction Service in Missoula. 

Mrs. Mischke also contends that Mr. Mischke should be ordered 

to pay her for 50% of the total pre-separation debts that she paid 

from her inheritance, represented by the $13,003.57 figure. She 

testified that she borrowed $13,000 after the parties separated, 

some of which she used to pay $8,444.31 in pre-separation marital 

debts instead of using her inheritance money to pay them. She 

subtracted $13,000.00 (the amount of the loan) to arrive at her 

calculation for "cash in bank." 

Mrs. Mischke failed to produce adequate financial records to 

support her contention that the money was used in this manner. The 

District Court noted that "the evidence introduced by the parties 

with respect to marital debt is confusing, conflicting and 

incomplete." 

The decree provides that any indebtedness incurred after the 

date of separation is not part of the marital estate. This 

9 
includes the $13,000.00 borrowed by Mrs. Mischke. It also provides 

that both parties remain jointly responsible for unpaid marital 

debts. Mrs. Mischke testified but produced inadequate proof to 

substantiate that two marital debts totalling slightly over 

$Z,OOO.OO remained unpaid at the time of trial. 

A district court is not required to determine and assign 

marital debts based on one party's testimony where copies of 

statements from creditors or other evidence to support claims has 

not been introduced. In re the Marriage of Purdy (1988), 234 Mont. 

502, 764 P.2d 857. The record establishes that Mrs. Mischke 

handled all financial matters for the parties and that she did not 

provide copies of accounts as requested during discovery. Similar 

to Purdv, the evidence Mrs. Mischke introduced at trial to 

establish marital debt was sketchy; she testified as to the 

amounts, but did not provide copies of statements or other credible 

evidence to support her claims. Her evidence consisted of her 

handwritten summaries and oral testimony. We affirm the District 

Court's refusal to allocate part of the $13,000.00 debt to the 

husband. 

We hold that the District Court did not err in determining the 

net assets of the marital estate. 

IV. 

Whether the District Court abused its discretion by awarding 

52% of the marital estate to Mr. Mischke and 48% to Mrs. Mischke. 

The District Court awarded 52% of the marital estate to Mr. 

Mischke, including the home, stating that: 

10 
. . . The Court has taken all factors into consideration and 

awards a larger share of the marital estate, including the 

Woods Bay family home, to the Respondent as a one time cash 

settlement in lieu of support, and Petitioner shall have no 

further child support obligation for the minor children of the 

parties. 

In dividing marital property, courts must fashion a 

distribution which is equitable to each party under the 

circumstances. Hamilton, 835 P.2d at 704. Obtaining an equitable 

distribution at times requires the court to engage in discretionary 

action which cannot be accurately categorized as a finding of fact 

or a conclusion of law. Such discretionary findings will not be 

disturbed absent an abuse of discretion. In re the Marriage of 

Danelson (Mont. 1992), 833 P.2d 215, 49 St.Rep. 597. Abuse of 

discretion in apportioning the marital estate is manifested by a 

substantially inequitable division of the marital estate. In re 

the Marriage of Holston (1983), 205 Mont. 470, 668 P.2d 1048. 

Under Montana law, gifts and inheritances are treated 

similarly in a dissolution of marriage proceeding. Section 40-4- 

202 (1) I MCA, provides 

. . . the court. . . shall . . . finally equitably apportion 

between the parties the property and assets belonging to 

either or both, however and whenever acquired and whether 

title thereto is in the name of the husband or wife or both . 

. . In dividing property acquired . . . by gift, bequest, 

devise or descent; property acquired in exchange for property 

acquired . . . by gift, bequest, devise, or descent . . . the 

court shall consider those contributions of the other spouse 

to the marriage, including: 

(a) the nonmonetary contribution of a homemaker; 

(b) the extent to which such contributions have 

facilitated the maintenance of this property; and 

(c) whether or not the property division serves as an 

alternative to maintenance arrangements. 

Section 40-4-202(l), MCA, is a flexible statute vesting 

11 
district courts with wide discretion for distributing marital 

property. In re the Marriage of Stewart, 232 Mont. 40, 757 P.2d 

765. There is no set rule concerning how an inherited asset is to 

be divided. Stewart, 757 P.2d at 768. 

In addition to the broad discretion given to District Courts 

concerning property division, they also have broad discretion in 

providing for support for children. In dividing marital property, 

the court may take into account child support considerations and 

may protect and promote the best interests of the children by 

setting aside a portion of jointly and separately held property for 

support of their children. In re Marriage of King (1985), 216 

Mont. 92, 700 P.2d 591. 

Mrs. Mischke testified that she was unemployed except for 

part-time piano instruction and could not afford to pay any child 

support for the two minor children. She further testified that she 

intended to provide for their support from the proceeds of the sale 

of the family home. Instead of ordering a sale of the home, the 

District Court awarded a larger share of the marital estate to Mr. 

Mischke, which was to be considered a lump sum settlement in lieu 

of child support from Mrs. Mischke and which relieved her of all 

future support obligations for the children. 

Considering the facts of this case, we conclude that the 

District Court did not abuse its discretion by awarding 52% of the 

marital estate to Mr. Mischke and 48% to Mrs. Mischke. We further 

conclude that the District Court did not abuse its discretion in 

awarding a larger share of the marital estate to Mr. Mischke in 

12 
lieu of monthly child support payments. 

We hold that the District Court did not err in distributing 

52% of the marital estate to Mr. Mischke and 48% to Mrs. Mischke. 

Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 

1988 Internal Operating Rules, this decision shall not be cited as 

precedent and shall be published by its filing as a public document 

with the Clerk of this Court and by a report of its result to the 

West Publishing Company. 

Affirmed. 

We Concur: 

Chief Justice 

13 
February 2, 1993 

CERTIFICATE OF SERVICE 

I hereby certify that the following order was sent by United States mail, prepaid, to the following 

named: 

James C. Bartlett 

HASH, O’BRIEN & BARTLETT 

P.O. Box 1178 

Kalispell, MT 59903 

R.M. KEHEW 

Attorney at Law 

P.O. Box 5427 

Kalispell, MT 59903-5427 

ED SMITH 

CLERK OF THE SUPREME COURT 

STATE OF MONTANA