No. 89-103 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1989 

IN RE THE MARRIAGE OF 

LINDA WINSTON McFARLAND, 

Petitioner and Appellant, 

and 

WILLIS LEE McFARLAND, 

Respondent and Respondent. 

APPEAL FROM: ~istrict Court of the ~inth ~udicial ~istrict, 

In and for the County of Pondera, 

The Honorable R. D. ~c~hillips, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Ralph T. Randono, Great Falls, Montana 

For Respondent: 

Richard L. Beatty; Anderson, Beatty & Buyske, Shelby, 

Montana 

submitted on ~riefs: Oct. 13, 1989 

Decided: December 8, 1989 

Filed: 
~ustice William E. Hunt, Sr., delivered the Opinion of the 

Court. 

~inda McFarland, petitioner and appellant, appeals from 

the property division and award of child support mandated in 

the judgment entered by the District Court of the Ninth 

Judicial District, Pondera County. We affirm in part and 

reverse and remand in part for a modification of child 

support and equitable division of stock consistent with this 

Opinion. 

The issues raised on appeal are: 

1. Whether the ~istrict Court properly excluded 

husband's share of McFarland and Sons stock as a marital 

asset. 

2. Whether the District Court properly divided West 

Star stock between the parties. 

3. Whether the District Court properly ruled that 

husband had complied with the full disclosure of his financial situation. 

4. Whether the District Court properly assessed child 

support amounts in accordance with the uniform ~istrict Court 

Guidelines on Child Support. 

Linda and Willis McFarland were married on April 21, 

1979. Two children were born of the marriage, ages six and 

eight. Willis adopted Linda's daughter from a former mar-- 

riage, age seventeen. Prior to the marriage, Linda was working as a registered nurse. Also prior to the marriage, 

Willis was gifted 121 percent of stock on his parents' family 

farm. The farm was incorporated under the name of McFarland 

and Sons with the parents retaining 51 percent of the stock 

ancl gifting 124 percent to each of four sons. Until 1986 

when the corporation was restructured, McFarland and Sons 
provided Willis with a furnished ho.use, food, utilities, 

vehicles, gasoline, insurance, and paid him a salary of $700 

per month. Linda also worked for McFarland and Sons and was 

paid accordingly. 

The parties separated in March of 1986. At about the 

same time, McFarland and Sons restructured the corporation. 

As a consequence of the restructuring, willis formed a 

corporation under the name of West Star Farm, Incorporated. 

Willis owned 100 percent of the stock of West Star and he and 

his accountant comprised the board of directors. West Star 

borrowed in excess of $115,000 to finance the newly organized 

corporation. with the loan, West Star purchased machinery, 

summer fallow, the farm home that he and Linda lived in, and 

approximately twenty acres of land from McFarland and Sons. 

Also, West Star rented a portion of land from McFarland and 

Sons under a cash payment which, at the time of the hearing, 

was in excess of $54,000 per year to be negotiated yearly. 

Since West Star's incorporation, willis is no longer an 

employee of McFarland and Sons. West Star now provides 

willis housing, groceries, utilities, vehicles, gasoline, 

insurance, various other living expenses, and pays him a 

salary of $400 per month. The net effect of willis's salary 

and benefits is approximately $17,280 per year. 

Linda is working as a surgical nurse with an income of 

$21,000 to $22,000 per year. She resides, with the three 

children, in a rented home. 

A dissolution hearing was held on July 5, 1988. The 

District Court entered its findings of fact and conclusions 

of law on September 2, 1988, and its j-udgment on September 

14, 1988. During the hearing, Willis submitted the balance 

sheets of McFarland and Sons which reflected his financial 

situation with the corporation. Linda objected to the 
balance sheets as insufficient and argued a lack of full 

disclosure because financial statements were not produced. 

The ~istrict Court ordered that Willis pay child support in the amount of $400 per month total for the three 

children and that Linda was entitled to claim the children as 

tax deductions. It also found that the McFarland and Sons 

stock vrould not be included in the marital estate since Linda 

did not contribute to the facilitation or maintenance of the 

stock during the marriage. The court ordered that Linda 

receive $2,500 as her share of stockholder equity in West 

Star and that willis retain the West Star stock. Stockholder 

equity in West Star was valued at $31,600, subject to yearly 

fluctuations. 

The first issue raised on appeal is whether the w istrict Court properly excluded husband's share of PYIcFarlanii 

and Sons stock from the marital estate. 

In the mid-701s, Willis acquired 12i percent stock in 

McFarland and Sons, as did his three brothers, by virtue of a 

gift from his parents. while Willis's parents gifted each 

son 12i percent stock, only two sons, including Willis, 

worked the farm and were compensated for their services. 

willis's parents retained controlling stock in the 

corporation. 

During the parties' marriage, Linda worked for 

McFarland and Sons and was duly compensated. Linda brought 

no assets into the marriage. She argues that willis's 

interest in McFarland and Sons should have been included in 

the marital estate and that the ~istrict Court erred in not 

including it. We disagree. 

Under 5 40-4-202 (1) (b) , MCA, the District Court shall 

consider the contributions of the non-acquiring spouse and 

the extent that the contributions facilitated the maintenance 

of the property. Under In re the ~arriage of Herron (1980) , 
186 Mont. 396, 404, 608 P.2d 97, 101, we stated that the 

District Court must consider all property, including that 

received by gift, but that: 

If none of the value of the property is a product 

of contribution from the marital effort, the 

~istrict Court can justifiably find that the 

non-acquiring spouse has no interest in the 

property. 

Here, the District Court specifically found that the 

value of the stock decreased during the last few years of the 

marriage and that ~inda did nothing to contribute to the 

facilitation or maintenance of the stock during the marriage. 

In fact, ~inda was monetarily compensated for any work 

performed for McFarland and Sons. Where a spouse does not 

contribute, the ~istrict Court may exclude the asset from the 

marital estate. See In re the Marriage of ~uisi (~ont. 

1988), 756 P.2d 456, 458, 45 St.Rep. 1023, 1025. The 

District Court exercised proper discretion in excluding the 

stock from the marital estate. 

The second issue raised on appeal is whether the 

District Court properly divided West Star stock between Linda 

and FJillis. 

Here, the District Court awarded ~inda $2,500 as her 

share of stockholder equity in West Star and ordered that 

Willis retain the stock. Stockholder equity was valued at 

approximately $31,600, subject to yearly fluctuations. Linda 

argues that the division is inequitable. We agree. 

The standard of review to be applied in a distribution 

case is that where the District Court based its distribution 

of marital assets on substantial credible evidence, it will 

not be overturned absent a clear abuse of discretion. In re 

the Marriage of Johns (Mont. 1989), 776 P.2d 839, 840, 46 

St.Rep. 1249, 1251. See also In re the ~arriage of Stewart 

(Mont. 1988), 757 P.2d 765, 767, 45 St.Rep. 850, 852; In re 
the ~arriage of Watson (Mont. 1987), 739 P.2d 951, 954, 44 

St.Rep. 1167, 1170. We will reverse the District Co.urt upon 

a showing of abuse of discretion. Johns, 776 P.2d at 840. 

In this case, willis incorporated West Star Farm at 

approximately the same time the parties separated. West Star 

accumulated approximately $31,600 in equity. The court in 

its findings stated that Linda did contribute to West Star 

and that her nonmonetary contributions as a homemaker did 

facilitate the maintenance and operation of the corporation. 

Th-us, Linda was entitled under 5 40-4-202(1) (b), MCA, to a 

share of the corporate equity. In light of the above facts, 

the District Court did abuse its discretion in awarding Linda 

a mere $2,500. We reverse on this issue and remand to the 

District Court for an equitable distribution of the stock as 

valued at the time of the ~istrict Court's decree to be 

consistent with this Opinion. 

The third issue raised on appeal is whether the 

District Court properly ruled that Willis had complied with 

the full disclosure of his financial situation. 

In Fautsch v. Fautsch (1975), 166 Mont. 98, 102-103, 

530 P.2d 1172, 1175, we stated that the parties must 

completely disclose money and assets accumulated during the 

marriage. In the present case, ~inda claims that willis 

failed to disclose financial information regarding McFarland 

and Sons stock beca.use he did not provide her with the books 

of the corporation. The record, however, indicates that 

willis did provide her with the balance sheets of the 

corporation. 

The District Court relied on the balance sheets to 

determine McFarland and Sons stock value. We hold that the 

balance sheets provided sufficient financial information 

regarding McFarland and Sons stock. 
The last issue raised on appeal is whether the District 

Court properly based child support amounts in accordance with 

the Uniform District Court Guidelines on Child Support. 

The court ordered that Willis pay Linda $400 per month 

child support for their three minor children. Linda argues 

that the court abused its discretion in setting the amount 

because the guideline amount she offered established that an 

amount of $263 a month per child or a total of $789 a month. 

Willis did not submit a guideline form. 

An award of child support is governed by S 40-4-204, 

MCA, which presently provides in pertinent part and applies 

to this modification as: 

(b) the financial resources of the custodial - - parent; 

(3) (a) Whenever a court issues or modifies an 

order concerning child support, the court shall 

determine the child support obligation by applyin 

the standards -- in this section -- and the uniform chilz 

support quidelines adopted by the department of 

social and rehabilitation services ~ursuant A. to 

40-5-209, unless the court finds by clear and 

convincing evidence that the application of the 

standards and guidelines is unjust to the child or 

to any of the parties or is inappropriate in that 

particular case. 

(b) -- If the court does not apply these standards .- and guidelines to determine chlld support, it shall 

state its reasons for finding that the application 

of such standards and guidelines is unjust to the 

child or a party or is inappropriate in that 

particular case. (Emphasis added.) 

The ~istrict Court will be reversed on appeal only 

where there has been a "clear abuse of discretion resulting 

in substantial injustice." In re the Marriage of Hoffmaster 

(Mont. 1989), 780 P.2d 177, 46 St.Rep. 1531. See also In re 
the Marriage of Alt (1985), 218 Mont. 327, 333, 708 P.2d 258, 

261. 

As the court stated in its findings, w ill is's living 

arrangement gave him a monthly imputed income of $1,040 plus 

a monthly salary of $400 for a total yearly annualized income 

of $17,280. In the court's conclusions of law it notes, 

 his amount [$400] is reasonable as determined according to 

the Supreme Court child Support ~uidelines." The amount of 

child support awarded, when taking Willis's annualized income 

into consideration, results in substantial injustice. 

~ffirmed in part and reversed and remanded for a 

modification of child support and equitable division of stock 

consistent with this Opinion. 

We Concur: A