No. 83-333 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1934 

IN RE THE MARRIAGE OF 

RICHARD LAMBERT WAGNER, 

Petitioner and Respondent, 

and 

PEARL F WAGNER, 

Respondent and Appellant. 

APPEAL FROM: District Court of the Seventeenth Judicial District, 

In and for the County of Valley, 

The Honorable Leonard H. Langen, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

David L. Nieisen, Glasgow, Montana 

For Respondent : 

Gallagher, Archambeault & Knierim; Matthew W. Knierim, 

Glasgow, Montana 

Submitted on Briefs: December 8, 1983 

Decided: March 13, 1984 

Filed: 
Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of 

the Court. 

This is an appeal from the final judgment entered in the 

District Court of the Seventeenth Judicial District, Valley 

County on February 18, 1983 distributing marital assets. No 

issue is taken with the granting of the decree of dissolution 

or the awarding custody of the one minor child to the 

petitioner. Appellant challenges only the disposition of the 

marital estate. 

FACTS : 

The parties were married on August 17, 1971. On 

December 17, 1980 the husband filed for dissolution of 

marriage. The trial court entered a temporary order on 

January 23, 1981, which ordered. that the respondent, Pearl 

Wagner, be awarded temporary maintenance of $400 per month 

during the pendency of the action. Dissolution of the 

marriage was granted orally at a hearing on September 21, 

1981 by the trial court sitting without a jury. The final 

decree of dissolution was entered on January 27, 1982. 

Shortly thereafter, husband petitioned the court claiming 

that he was not financially capable of continuing temporary 

maintenance payments to wife. On May 6, 1982, the trial 

court ordered the temporary maintenance terminated based on 

the husband's inability to provide. The final disposition of 

marita.1 assets was entered an February 18, 1983. 

Both husband and wife entered into the marriage with 

substantial personal assets. Prior to the marriage the 

husband owned real estate consisting of a 2280 acre ranch 

owned by the Wagner family for three generations with a 1971. 

appraised value of $236,000. Wife brought no real property 

into the marriage. Just prior to the marriage and shortly 

thereafter, wife sold certain cattle and contributed the 

proceeds of approximately $72,440 to the joint property of 
the parties. During the course of the marriage, the parties 

accumulated considerable personal property and a small amount 

of real estate, which consisted of the "Scott Place," 640 

acres, and "Porcupine" grazing rights. At the time of the 

final distribution of the marital estate the trial court 

found that no equity existed in the "P~rcupine~~ grazing 

rights as the indebtedness equaled the value of the rights 

and furthermore, the grazing rights were forfeited due to 

husband's inability to pay the annual 1982 grazing fees. The 

Scott Place was purchased on a contract for deed in 1979 for 

$64,000. The only equity in real estate acquired after the 

divorce was the sum of two principal payments made in 1979 

and 1980 on the "Scott Place" in the total amount of $25,600. 

During the course of the nine year marriage while the 

parties lived together they were equal partners in the 

ranching operation. Both are and were competent, experienced 

and resourceful ranchers. Undisputed testimony reveals that 

the wife contributed to operating the ranch not only as a 

housewife, but also as an active worker in the fields and 

with the cattle. During the husband's illness in 1980 with 

cancer, the wife was responsible for even more ranch tasks 

previously shared with her husband. 

Early in the marriage the parties began breeding "exotic 

cattle." The Wagners extended a large financial commitment 

to establish themselves in this market. However by 1974 the 

price and demand for "exotic cattle" dropped drastically and 

subsequently the entire cattle market fell. The diminution 

of cattle market values together with rising operating costs 

created personal financial difficulties for the parties. 

The December 1981 separation was acrimonious and the 

husband and wife were unable to reach a mutually acceptable 

agreement on any issue. The trial court directed the parties 

to summarize their contentions regarding the division of 
marital property in a pre-trial memorandum. Contentions of 

the parties varied widely on nearly every asset value. Since 

the husband and wife were unable to agree, the trial court on 

September 9, 1982, ordered a certified public accountant to 

serve as a Special Master of the proceedings, to assist the 

trial judge in defining the parties' contentions concerning 

the property. Originally, the CPA was ordered to prepare his 

Master's Report on the basis of the December 18, 1980, 

separation date. Early in October 1982 the parties agreed 

that the financial statements should reflect financial status 

at or near the time of trial so that the court would be aware 

of any changes in the parties' financial condition during the 

period from the separation, December 18, 1980 to the time of 

the trial. The final Master's Report included financial 

statements showing the net worth of the parties as of October 

31, 1982. 

The Master's Report indicated that the only area of 

agreement was the amount of the parties' liabilities. At the 

time of the marriage, husband had an indebtedness of about 

$5,000 on the family ranch. The wife entered the marriage 

with no debts. During the course of the marriage the parties 

accumulated a total indebtedness as of December 18, 1980 of 

approximately $672,000. The wife did most of the banking for 

the ranch. She was personally obligated on operating loans 

with Treasure State Bank for operating loans. However 

through negotiation and court orders the wife was no longer 

liable for any ranch obligations at the time of final 

disposition of the marital estate. 

Upon the separation of the parties on December 18, 1980 

the financial status of each party took divergent courses. 

The wife established herself in a new ranching operation 

without assistance from the husband other than monies 

previously awarded her by the trial court. At the time of 
the separation, the wife retained her mineral interest which 

she inherited from her mother during the marriage and she 

also retained ownership of certain livestock from the marital 

estate. With this basis and loans from her family, the wife 

purchased several real properties, including the Gartside 

property for $50,000 and the Redd property for $41,000. At 

the time of the final disposition of marital assets the wife 

planned to acquire an additional 140 acres as evidenced by 

her earnest payment of $3,500. According to the trial 

court's findings at final distribution of assets the only 

indebtedness the wife had was the obligations she incurred in 

connection with establishing the new cattle operation. 

The husband's financial status continued to deteriorate 

from separation to final disposition. A line of three 

operating loans held by Treasure State Bank of Glasgow, 

Montana were maintained for expenses to run the ranch. These 

loans accounted for $126,000 of the total $672,000 debt 

service encumbering the Wagner ranch. After numerous 

hearings and agreements negotiated by the parties, a.11 of the 

livestock (except those cattle and horses retained by the 

wife) were sold early in 1981. The total amount received for 

the sale of these cattle was approximately $347,418. The 

husband applied a portion of these proceeds to reduction of 

$126,000 in operating loans. The husband did not raise any 

cattle or farm any crops during 1981 and 1982. While the 

husband was liquidating ranch livestock and ceasing all 

income-generating ranch operations he increased the operating 

1-oans. In January, 1981, the husband borrowed $16,775.27 as 

operating loan; in February of 1981, he borrowed an 

additional $70,756.93; and, in March, 1981, he borrowed 

$21,131.88. During March of 1981, the husband received 

reimbursement from the Agricultural Stabilization 

Conservation Service in an amount of nearly $17,000. These 
funds were not applied against the operating loans held by 

Treasure State Bank. Additionally, the husband received a 

seismograph payment in the sum of $3,000 in the spring of 

1981 which he did not use to reduce the operating loans. 

Sometime late in 1980 or early in 1981 the husband borrowed 

$8,000 against a life insurance policy owned by the husband 

which insured the life of the wife. None of this money was 

applied against the operating loans with Treasure State Bank. 

The husband made 1981 and 1982 annual installment payments on 

the "Scott Place" in the total amount of $25,600. In 1982 

the husband's credit was "frozen" pending final distribution 

of marital property. Husband borrowed the 1982 payment on 

the "Scott Place'' utilizing his brother's co-signature on a 

loan from Treasure State Bank. Husband's liabilities on 

October 31, 1982 were $641,000 making his net worth $171,000 

as compared to his net worth of $313,724 at time of marriage. 

The appellant makes the following challenges to the 

District Court's final disposition of marital assets on 

February 18, 1983: 

1. The trial court erred by using the Master Report 

date of October 31, 1982 instead of the date of separation, 

December 18, 1980 for the date of valuation of assets and 

determination of parties net worth. 

2. The trial court failed to equitably divide the 

marital assets. 

3. The $800 per month in back separate maintenance 

temporarily ordered by the court on January 9, 1981 was 

improperly modified. 

4. The findings of the trial court do not support the 

division of marital property. 

The multiplicity of legal proceedings separated by 

extended periods of time develope an unusual set of facts. 

After consideration of the unique circumstances presented by 
this case we find the challenge to the proper date of asset 

valuation to be dispositive. 

A review of the record indicates that the District Court 

acted conscientiously to protect the marital estate and to 

equita.bly apportion it according to the rights of both 

parties. This was no easy task in the crossfire of divorce 

hostilities. In the findings of fact the trial court stated 

that the husband "is sometimes inclined toward exaggeration 

which results in what might be called unintentiona.1 

misstatements of fact" and the wife "has the same propensity 

toward a.ccuracy and preciseness in her testimony as does the 

petitioner. " (Husband) . 

In this conflict the District Court found the following: 

" (5) That since the disputed issues of material 

facts which are set forth in the Masters Report can 

only be resolved by accepting the testimony of 

either the petitioner or the respondent the court 

finds that it will lead to injustice and error for 

the court to attempt to accurately determine the 

net worth of the parties and the net worth of the 

ma.rita1 estate in dollars and cents and then 

through a process of mathematical computation to 

attempt to determine with preciseness each party's 

share of the marital estate. Therefore the court 

accepts and adopts the Masters Report in its 

present form and will not attempt to resolve all of 

the issues of fact therein presented. 

" (8) The total net worth of petitioner and 

respondent when they entered into the marriage on 

August 17, 1971, was as follows: 

$313,724 - net worth of petitioner 

$118,303 - net worth of respondent 

$432,027 - total joint net worth of parties 

" (18) The court finds that from August 17, 1971, 

the date of the marriage until October 31, 1982, 

the net worth of the petitioner was reduced from 

$313,724 to $171,000 on October 31, 1982. This was 

a reduction of 53.64%. 

"The court finds that the net worth of respondent 

dropped from $118,303 on the date of the marriage 

to $59,600 on October 31, 1982, which was a drop of 

50.37%. 

"The joint net worth of the parties as of the date 

of their marriage was $432,027 and as of October 

31, 1982, was reduced to $230,600, a reduction of 

53.37%. 
" (25) Because of the great variance in the 

contentions of each of the parties and for the 

reasons set forth in Findings of Fact No. 3, 4 and 

5, the court is unable to make any precise Findings 

of Fact with reference to dollar amounts on 

mathematical computations regarding dollar amounts. 

However the court can find with reasonable 

certainty that the parties have already equitably 

divided the marital property and that it is fair 

and equitable that each party shall maintain and 

possess the property presently in his/her 

possession and each party shall be responsible for 

any indebtedness presently owing upon the property 

presently in his/her possession." 

The primary issue regarding the proper date of 

evaluation of marital. assets and net worth of the parties' 

has been specifically addressed by this court: 

"A proper disposition of marital property in a 

dissolution proceeding requires a finding of the 

net worth of the parties at or near the time of the 

dissolution. Hamilton v. Hamilton (1980), 

Mont . , 607 P.2d 102, 37 St.Rep. 247; Vivian v. 

Vivian (1978), Mont . , 583 P.2d 1072, 35 

St.Rep. 1359; Kramer v. Kramer (1978), 177 Mont. 

61, 580 P.2d 439; Downs v. Downs (1976), 170 Mont. 

150, 551 P.2d 1025. The basic reason for the rule 

is obvious; however, it is equally apparent that 

the application of the rule is dependent upon the 

kinds of marital assets under consideration. - The 

-- time for proper valuation cannot --- be tied to any 

single event - in - the dissolution process. The 

filing of a petition, trial of the matter, or even 

the granting of the decree of dissolution do not 

control the proper point of evaluation by the 

District Court. (emphasis added) 

"The exercise of discretion & the District Court 

- is necessary whTn determining the - worth of marital 

assets which fluctuate in value. For example, the 

value of a particular-comrnon stock may change 

drastically during the course of a dissolution 

while the value of the family home or other 

personal property remains stable. Under such 

circumstances selection - of - a single evaluation 

point for determininq net worth -- of the parties 

could create - an inequitable disposition." 

(emphasis added) Lippert v. Lippert (1981) , Mont . , 627 P.2d 1206, 38 St.Rep. 625, 628. 

The instant case epitomizes this court's prior 

observation that: "Under such circumstances selection of a 

single evaluation point for determining net worth of the 

parties could create an inequitable disposition." The trial 

judge adhered to the rationale that "The time for proper 

valuation cannot be tied to any single event in the 
dissolution process" and selected a valuation date of October 

31, 1982, closer to the final. disposition of the marital 

assets on February 18, 1983 than to the date of dissolution. 

Section 40-4-202 (1) provides guidelines for 

apportionment of marital property: 

"Division of property. (1) In a proceeding for 

dissolution of a marriage, legal separation, or 

division of property following a decree of 

dissolution of marriage or legal separation by a 

court which lacked personal jurisdiction over the 

absent spouse or lacked jurisdiction to divide the 

property, the court, without regard to marital 

misconduct, shall, and in a proceeding for legal 

separation may, finally equitably apportion between 

the parties the property and assets belonging to 

either or both, however and whenever acquired and 

whether the title thereto is in the name of the 

husband or wife or both." 

The statute does not mandate a specific time period within 

which marital assets should be accounted for. The logical 

time period is the duration of the marriage. To include in 

the valuation of the marital estate any accumulation of 

financial wealth or, conversely, the increase in financial 

liabilities of either spouse subsequent to the termination of 

the "marital relationship" may effectuate an injustice and 

frustrate the intended purpose of division of martial 

property. Stated differently, to consider for distribution 

those assets acquired by one spouse after the martia.1 

relationship was terminated, might unjustly award a 

"windfall" to the dilatory spouse who did not work to 

accumulate those post-marital assets and penalize the 

diligent spouse for sound business judgment. The present 

case is an excellent example of such an inequitable outcome. 

Using October 31, 1982 as date of valuation of assets the 

District Court found : 

"However the court can find with reasonable 

certainty that the parties have already equitably 

divided the marital property and that it is fair 

and equitable that each party shall maintain and 

possess the property presently in his/her 
possession and each party shall be responsible for 

any indebtedness presently owing upon the property 

presently in his/her possession." 

The District Court erroneously determined that 'I. . . 

the parties have already equitably divided the marital 

property . . ." 

The record is very clear rega.rding what property and 

funds each party received on December 18, 1980 when they 

separated and how each, independent of the other, decided to 

develop those marital assets. The wife left the family 

ranch with: (1) no debts; (2) a certain number of cattle and 

horses; and, (3) a mineral interest which she inherited from 

her mother during the marriage. At the same time, the 

husband retained ownership of the 2280 acre operative cattle 

ranch, complete with livestock, equipment and modern 

machinery. The husband remained responsible for the entire 

debt service on the ranch. Between the separation, December 

3-8, 1980 a.nd the date of dissolution, January 27, 1982 the 

wife, aggressively established herself in a new and 

completely different cattle operation. Admittedly, the wife 

had $400 per month from, the husband in temporary maintenance 

payments, but the record reveals that a major portion of the 

capital necessary to fund her real estate purchases was 

generated on her own initiative through livestock sales, 

mineral lease payments, family and commercial loans. Between 

the separation and dissolution of marriage the husband: (1) 

terminated the ranch operation; (2) liquidated the livestock; 

and, (3) increased the opera.ting loans encumbering the ranch. 

The wife did not participate, even as a decision maker, in 

the husba-nd's increase in financial liabilities and the 

husband's only contribution of the wife's acquisition of real 

estate was the court-ordered tempora.ry maintenance payments. 

Based upon the unique facts of this case, neither the 

husband's increased financial obligation, nor the wife's real 
estate and livestock purchases should legitimately be 

denominated "marital assets" for two reasons: (1) both were 

acquired after the marital relationship was irretrievably 

broken; and, more importantly, (2) the disparity of the 

parties' business acumen resulted in a change of either's 

financial status after the separation so that selection of 

the later date would create an unjust distribution. 

This Court has generally accepted the date of formal 

lega-1 dissolution of the marriage as the date terminating the 

marital relationship. The Court also recognizes that unique 

circumstances of marital relationships can modify this 

generally-accepted date of valuation of assets. The instant 

case presents a factual situation which merits deviating from 

the general rule. During the interim periods while the 

parties argued over their contentions concerning property 

division, the wife accumulated personal wealth and the 

husband increased operating loans against the ranch. When 

the court finally resolved the dispute over two years after 

the parties separated and the marital relationship was 

terminated, the financial status of each party had 

significantly changed. due to their individual initiatives. 

Under the circumstances of this case the date of valuation of 

marital assets should have been the date of separation when, 

in fact, the marriage was irretrievably broken and 

individual business practices had not. yet altered the 

financial status quo of the parties. 

Taking all of the factors into consideration as mandated 

by 40-4-202 (1983), MCA, the trial court should have 

determined what portion of the marital estate was rightfully 

due the wife. It was within the authority of the District 

Court to deny the wife's request to sell the family ranch and 

pay the wife her portion of the marital assets in cash. 

However, in lieu of a sale of the ranch property, the 
District Court may structure an alternative payment to 

achieve the intended equitable distribution of the marital 

estate between the husband and wife. 

In summary, the District Court's selection of October 

31, 1982 as date of valuation of marital assets effected an 

inequitable disposition of the marital estate. By using the 

October 1982 date of valuation, the District Court 

essentially rewarded the husband for encumbering the family 

ranch and penalized the wife for her ambitious effort after 

the broken marriage to negotiate her own independent 

financial security. Therefore, we find the District Court 

abused its discretion in failing to evaluate the marital 

assets as of the date of separation, which under these 

unusual circumstances, was the appropriate date of valuation. 

The appellant's issues regarding inequitable division of 

marital property and the improper termination of temporary 

maintenance payments need not be addressed. The order of the 

District Court is vacated, and this cause remanded for 

further proceedings to determine an appropriate division of 

the marital estate as of the date of separation. 

We concur: 

Chief ~ustice~ - 
Mr. Justice L.C. Gulbrandson dissenting. 

I respectfully dissent. 

This Court recently stated in Holston v. Holston 

(Mont. 1983), 668 P.2d 1048, 1050, 40 St.Rep. 1435, 1436: 

"The standard for reviewing the property 

division in a dissolution decree is well 

settled in Montana. The apportionment 

made by the district court will not be 

disturbed on review unless there has been 

a clear abuse of discretion as manifested 

by a substantially inequitable division 

.......................... 

of marital assets resulting ----- in a 

substantial injustice. (Citations 

omitted.) Abuse of discretion is further 

indicated by a trial court's arbitrary 

action without employment of 

conscientious judgment or in excess of 

the bounds of reason resulting in 

substantial injustice. (Citations 

omitted.)" (Emphasis added.) 

At the pre-tr ial conference, both parties agreed that 

the special master should determine the financial condition 

of each party as of the date of final judgment. Obviously, 

such information was intended for consideration by the judge 

in evaluating the parties' respective abilities to pay or 

need for additional funds. 

The trial judge's findings indicate that he considered 

all financial aspects of the ranching operation, tax 

considerations, the prior distributions of property to the 

wife, her improving financial situation, the health status 

of both parties and the husband's custody obligation of the 

son. 

In my view, the trial judge did not commit a "clear 

abuse of discretion as manifested by a substantially 

inequitable division of marital assets resulting in a 

substantial injustice." 

I would affirm the judgment of the trial court.