No. 92-277 IN THE SUPREME COURT OF THE STATE OF MONTANA 1993

IN RE THE MARRIAGE OF STEPHENW. TAYLOR, Petitioner and Appellant, and JUDITHA. TAYLOR, Respondent and Respondent.

APPEAL FROM: District Court of the Tenth Judicial District, In and for the County of Judith Basin, The Honorable Peter L. Rapkoch, Judgepresiding.

COUNSEL OF RECORD: For Appellant: Ward 

### N. Ernst, Attorney at Law, Stanford,Montana For Respondent: Marcia Birkenbuel, Attorney at Law, Great Falls, Montana

Filed: Submitted on Briefs: September 4, 1992 Decided: February 25, 1993Justice William 

### E. Hunt, Sr., delivered the opinion of the Court. Appellant StephenTaylor appeals froma decree of dissolution fromtheTenth Judicial District, JudithBasinCounty,dividingthe marital property of the parties. We affirm. We present the issues on appeal in the following order: 1. Was the District Court's division of the stock clearly erroneous? 2. Was theDistrict Court's valuation of Stephen's sharesof stock clearly erroneous? 3. Did the District Court err by ordering a cash settlement in lieu of distributing Taylor Honey, Inc., shares of stock to Judith? 4. Did the District Court errby awarding attorney feeswhen they were not pled and no evidence was submitted to determine if attorney fees were required? The parties were married on May 13, 1974, in Reno, Nevada. Neither party brought assets to the marriage. Two children were born into the marriage. On February 22, 1991, Stephen filed 

### a petition for dissolution. Theparties' onlydisputes inthis case concern the value of Stephen's stock in thehoney business and the award of attorney fees to Judith. 

### At the time of the dissolution, Stephenwas 40 years old and had a high school education. Judithwas 36 years old, had a high school education, and had attended a vo-tech school for one year. 2Throughout their marriage, Judith was primarily responsible for raising the children and maintaining the home. She worked part-time as a waitress and worked in the family honey business. For the past three years, she was employed by the United States Forest Service, earning approximately $13,750 a year. In 1982, Stephen's parents formedTaylor Honey, Inc., for the purpose of producing honey. Stephen worked in the business throughout the marriage. It is undisputed that over the years Stephen's parents gifted stock in the business to Stephen and his brother for estateplanningpurposes. Stephenreceived a total of 8969 shares,or 25.9 percent of the corporate stock. Stephennever received any dividends from the stock and earns a yearly salary of approximately $27,000. Only Stephen,his parents, and his brother

are shareholders inthebusiness. Stephenandhis brother actually

run the day-to-day affairs of thebusiness, while theparents work

as advisors. At the time of trial, Stephen was president of the corporation. At trial, Stephen testified that the stock he received was worthless. Stephen's father testified with some uncertainty that the value of the corporation ranged from $250,000 to $800,000. Both Stephen and his father testified as to their future business concerns regarding government regulations,and troubles withmites and African bees which could affect theviability of the business. On the other hand, Stephen's expert testified that the net value of the business was between $458,878 and $646,878. He 3discounted Stephen's share of the stock by 20 percent because it

was a minority share, and valued the stock from $95,000 to $134,033. Judith's expert witness valued the business between $900,000 to $950,000 and valued the stock between $230,000 to $245,000. Financial statements entered into evidence valued the business over the last five years between $1,000,000 and $1,400,000. In its decree, the District Court valued the corporation at approximately $917,000. The court concluded that as a result, Stephen's 25.9 percent share of stock amounted to $237,500. The court determined that the stock was marital property and awarded Judith a $109,483 cash settlement for her share of the marital estate. The court allowed Stephen the option of paying Judith's share of the marital estate in a cash settlement of four annual installmentsof $25,000 each,with 10percent interestand $25,000 down. The court allowed Judith to encumber Stephen's stock if the need arises. The court allowed Stephen to offset his payments on the parties' home mortgage against the $109,483. The court also ordered Stephentopay Judith's attorney fees. Stephen appealsthe decree. I. Was the District Court's division of the stock clearly erroneous? Our standard of review regarding the division of the marital estate has recently changed to the following: 4In the past, this Court has employed an abuse of discretion standard in reviewing a lower court's determinationof the appropriate division of themarital estate. This Court has recently clarified that our standard of review in regard to the factual findings of the district court relating to the division of martial property is whether the district court's findings are clearly erroneous. InreMarriage of Danelson (Mont. 1992), 833 P.2d 215, 219, 49 St. Rep. 597, 599. Section 40-4-202(1)(a) 

## -(b)

### , MCA, requires the court to consider the nonmonetary contributions of a spouse when dividing the marital estate and whether such contributions facilitated the maintenance of the property. The statute also mandates that the court examinewhether the divisionof themarital estate serves as an alternative to maintenance. Section 40-4-202(1)(c), MCA. Stephen contends that he did not make monetary contributions to the stock,nor did he facilitate the maintenance of the stock. He contends that, as a result, it would have been impossible for Judith to contribute to the value of the stock, and the stock should not be included as part of the marital property. We disagree. There is substantial evidence to support the court's finding that both Stephenand Judith contributed to themaintenance of the honey business stock. Stephen is a minority shareholder in the company with only four employees. He works 16 hour days, seven days a week, in making the business a going concern. Stephen also takes the bees to ~aliforniain the fall of each year for

### approximately twomonths to pollinate certaincrops. In addition, he is the president of the company. Judith's contributions were of equal importance. She maintained the household and took care of the children for 17% years. The record reflects that on occasion she also worked for the company. Judith's nonmonetary contributions as a homemaker facilitated themaintenance of the honey business because Stephen would not havebeen able todevote theconsiderabletimeand effort the business required were it not for Judith's caring for the children and the home. The court did not grant Judith a maintenance award and the division of the marital property served

as an alternative to maintenance. We hold that the District Court's divisionof themarital propertywasnot clearlyerroneous. 11. Was the District Court's valuation of Stephen's shares of stock clearly erroneous? Stephen attacks the District Court valuation of the honey business stock at $237,500. In our review of 

### a district court's valuation of marital property, we have established several principles which guide us. When there is a dispute over property in amarriage dissolution, the district courtmay assign any value that iswithin the range of valuespresented into evidence. In re Marriage of Kramer (1987), 229 Mont. 476, 747 P.2d 865. However, if thevalues arewidely conflicting, then the district courtmuststate its reasons for determining a certainvalue. In reMarriage of Glass (1985), 215 Mont. 248, 697 P.2d 96. In this instance, the evidence of the value of Taylor Honey, Inc., ranged from practically zero to $1,400,000. The evidence indicated the value of Stephen's shares ranged from zero to $245,000. The court valued Stephen's shares at $237,500. Apparently, the District Court averaged the high and low figures offeredby Judith's expert to arrive at $237,500. Thisvalue falls within the rangespresented at trial. In addition, the court gave its reasons for its valuation, stating that it believed the family's fear of African bees and mites was merely speculation and did not pose a current threat which would reduce the value of the business. In addition, the court stated that it also considered the company's financial statements,which presented a higher valuation of the corporation than those presented by the parties' expert witnesses. Stephen also maintains that the District Court did not take into account all of the company's liabilities. Specifically, he charges that the court failed to take into account tax liabilities that he would incur because he would be forced to sell his shares of stock in order tomake thenecessary cash payments forJudith's share of the marital estate. We held in In re Marriage of Lee (1991), 249 Mont. 516, 519, 816 P.2d 1076, 1078, that the court must take into account tax liabilities for a court ordered distribution which results in a taxable event that precipitates a 7"concrete and immediate tax liability." Unlike 

### Lee, no evidence

was introduced at trial relating to a concrete and immediate tax liabilitythat Stephenmight incur if hewere to sellhis sharesof stock. Inaddition,therewas no evidence introducedat trial that Stephenwould have to sellhis stock in order topay any cashaward to Judith,nor was he ordered to do so by the court. Stephen also contends thattheDistrictCourt didnotproperly discount the value of his stock because he is a minority share holder. Stephen's expert witness discounted Stephen's shares of stock 20 percent because he was a minority shareholder. On the otherhand, Judith'sexpert did not apply anydiscount to thevalue of the stock. The expert explained that he did not apply a discount to Stephen's shares because he was basing his values on the corporation'sunderlying assets and not on the market value of the stock. We have stated that it would be inappropriate to discount stockwhen the value of the corporationwas arrived at by determining the market value of the underlving assets. In re Marriage of Buxbaum (1984),214 Mont. 1, 8, 692 P.2d 411, 414. Finally, Stephen argues that the court failed to take into account the debentures issuedto Stephen's parents asa formaldebt of the corporation. The record indicatesthat the debentures were not consistently reported in financial statements, nor did the corporationpay these debts on a regular basis. Therefore, they did not constitutea formal debt of the corporation. We hold thatthe District Court's valuation of Stephen's shares of stock in Taylor Honey, Inc., was not clearly erroneous. 111. Did the District Court err by ordering a cash settlement in lieu of distributing Stephen's shares of stock to Judith? Stephen assails the District Court's order requiring a cash settlement. He contends that after paying child support, he is left with only $14,796 to meet the rest of his obligations under the order, aswell ashis own living expenses. The record reveals that Taylor Honey, Inc., is a closely held family corporation. Only Stephen, his brother, and their parents have shares in the corporation. Stephen and his brother control the day-to-day operation of the business, plus they also determine when to pay dividends to stockholders. The corporation has not paid dividends since its inception, nor is it expected to pay dividends in the future. If Judith were to receive an in-kind distribution of stock, she would not likely receive any benefits. In In re Marriage of Johnson (1986), 223 Mont. 383, 726 P.2d 322,we were facedwith a similar factual situation. Inthat case,we held that itwasproper for the District Court to award a cash settlement in lieu of an in-kind distributionof stock where the spouse was part of a closely held family corporation. Johnson, 726 P.2d at 324. We hold that the District Court did not err by ordering a cash settlement in lieu of distributing shares of stock.IV. Did theDistrict Court errby awarding attorney fees when they were not pled and no evidence was submitted to determine if attorney feeswere required? Stephenmaintains that the court's award of attorney feeswas in error because Judith did not request attorney fees in the pleadings andno evidencewaspresented todetermine if an award of attorney feeswas necessary. Section 40-4-110, MCA, grants the district court the discretion to award reasonable attorney fees after considering the financial resources of both parties. Absent an abuse of discretion, this Court will not overturn the district court's decision denying attorney fees. In re Marriage of Manus (1987), 225 Mont. 457, 733 P.2d 1275. We have stated that although the statute does not specifically require that attorney fees be pled, it would be good practice to so. In re Marriage of Johnsrud (1977), 175Mont. 117, 572 P.2d 902. Judith did not request attorney fees in her pleading. However, at the end of her complaint she did request "for such further relief as the Court deems just and proper." In a recent case, we held that such language allowed the District Court to grant a largermaintenance award than thatpled by thewife. In re Marriage of Eide (1991), 250 Mont. 490, 821 P.2d 1036. We concluded that Rule 54(c), M.R.Civ.P., provided:

### Except as to a party against

### whom a judgment is entered by 

### default, every final judgment shall grant the relief to which the party in whose favor it 

### is rendered is entitled,

### even if the party

### has not demanded such relief in his pleadings. Eide 821 

### P.2d at 1039. 

### Rule 54(c), M.R.Civ.P., grants the t 

### district court discretion which 

### must be 

### viewed according to the circumstances of the 

### case. Eide, 821 P.2d 

### at 1039. 

### In its findings,the court considered the financial resources of the parties and concluded that 

### Stephen should pay Judith's reasonable

### attorney fees. 

### We hold that the District Court did not

err in awarding reasonable attorney fees 

### to Judith. We 

### affirm.

We 

### concur:Justice Terry N. Trieweiler concurring in part and dissenting in part.I concur with the majority's conclusions that it was reasonable to include Stephen's stock in the marital estate and divide it between the parties; the District Court's valuation of the stockwasnot clearly erroneous;and theDistrict Courtdid not

err by awarding attorney fees, even though they were not specifically sought by the pleadings. I dissent from thepart of the majority opinion which affirms the District Court's judgment ordering that a cash settlement be paid to Judith in lieu of her share of the marital estate's stock in Taylor Honey, Inc. 

### I conclude that the only reasonable way to distribute the value 

### of the stock is an in-kind distribution. If the stockhas a marketable value, then Judith can sell it as well as Stephen. If the stock is notmarketable, then Stephen cannot convert it to cash any more than Judith, and there was no evidence that he had any other assets, nor sufficient income with which to pay Judith $109,000 in cash at the rate of $25,000per year. Excluding the shares in Taylor Honey, Inc., Stephen was awarded property from themarital estate with anet value of $2876. There was no evidence that he had any other property. His net yearly income, after payment of federal and state taxes, is $21,538. However, fromthat incomehe has ayearly child support obligation of $6742, leavinghim approximately $14,000per year with which to pay all of his living expenses. 12The family residence was awarded to Judith, so presumably Stephen will have to pay for other living arrangements out of the remaining disposable income that he has. Only four witnesses testified regarding the value or transferability of the stock in the family business. Both Stephen and his father testified that there was nomarket for the stock. Stephen's expert witness, Dan ~uckovich,testified that he doubted the stock was marketable. Even ~udith's expert,~icholas Bourdeau,denied that he had come to any conclusion that the stock could be sold. The predicament in which Stephen is left by the ~istrict Court's judgment is compounded by the fact that the District Court accepted theappraisal fromJudithf sexpert, which wasbased on the value of the business assets. The only way for Stephen to obtain the cashwithwhich to satisfytheDistrict Court's decreewould be to sell thebusiness assets, or someportion of them. Therewasno evidence that the business could continue to generate the kind of income which is necessary 

### for Stephen to pay child support and his

own living expenses if he is forced to sell off some of the assets which are necessary 

### to generate business income. Maybe the majority and the District Court are aware of some

means by which Stephen can raise $25,000 

### a year to satisfy the District Court decree and still meet his child support obligation and 

### pay his own living 

### expenses. 

### However, I have 

### been 

### unable 

### to make that determination from anything that is found in the record

on appeal.Therefore, I conclude that there was no substantial evidence to support the District Court's judgment that $109,000 in cash should be paid to Judith in lieu of her interest in the stock in Taylor Honey, Inc., that was included in the marital estate. I would reverse that part of the District Court judgment and remand forpurposes of amending the decree to awardJudiththe appropriate number of shares in the family corporation.February25, 1993 CERTIFICATEOFSERVICE Ihereby certifythat thefollowingorderwassentby United Statesmail,prepaid, tothe followingnamed:

WardN.Ernst AttorneyatLaw 

### P.O. Box

### 559 Stanford,MT 59479 Marcia Birkenbuel AttorneyatLaw 613StrainBldg. GreatFalls,MT 59401 EDSMITH CLERKOFTHESUPREME COURT STATEOFMONTANA BY: ~eput~( 

# -