NO. 90-053 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1990 

IN RE THE MARRIAGE OF RODNEY GLENN BUTLER, 

Petitioner and Respondent, 

and 

ALBERTA ESTHER BUTLER, 

Respondent and Respondent, FIY :9-li.d FD %,.A 

and 

DALE BUTLER, 

Intervenor and Appellant, 

Cd 5kitL 

CLERMOFSUPREI'JJECOURT 

STATE OF MONTANA GINA KAY COLWELL, 

APPEAL FROM: District Court of the Eleventh Judicial District, 

In and for the County of Flathead, 

The Honorable Michael H. Keedy, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Katharine S. Donnelley and Leo Berry; Browning, 

Kaleczyc, Berry & Hoven; Helena, Montana 

For Respondent: 

Donald E. Hedman; Hedman, Hileman & LaCosta; 

Whitefish, Montana 

Jeffrey D. Ellingson; Ellingson Law Offices, 

Kalispell, Montana (Estate of R.G. Butler) 

Patrick D. Sherlock; Sherlock & Nardi; Kalispell, 

Montana (Colwell) 

Amicus Attorneys: 

Lewis K. Smith; Teachers1 Retirement Board; Helena, 

Montana 

submitted on Briefs: June 14, 1990 

Filed: 

Decided: July 13, 1990 
Justice R. C. McDonough delivered the Opinion of the Court. 

This appeal involves the distribution of teacher retirement 

benefits as part of a marital estate. The intervenor appellant, 

Dale Butler, appeals the order of the Eleventh Judicial District 

Court, Flathead County, awarding one-half of the teacher's 

retirement benefits of his deceased brother, Rodney Glenn Butler, 

to Rodney's former spouse, Alberta Esther Butler, and the other 

half to Rodney's estate. The court's order is the result of a 

remand from an earlier appeal, prior to which order the retirement 

benefits were being paid to Dale Butler. We affirm the District 

Court's award of one-half the retirement benefits to Alberta as 

part of the marital estate and decline, in this divorce action, to 

determine title to the remaining benefits, as that issue is not 

properly before us and involves a question outside of this 

dissolution. 

The issue on appeal is as follows: Did the District Court 

err in holding that the deceased husband's teacher's retirement 

benefits, which were being paid to the named beneficiary after 

entry of the initial decree, should be redistributed as part of the 

martial estate upon appeal and remand from the initial decree of 

dissolution? 

Rodney and Alberta were married in 1963. Two children born 

of the marriage have now reached the age of majority. Rodney was 

a teacher in Chester, Montana, where the Butlers owned a home in 

joint tenancy with right of survivorship. 

In August of 1982, the Butlers purchased the Cedar Lodge, a 
motel in Columbia Falls, Montana, for $245,000.00. The parties 

managed the motel together, with Rodney commuting to Chester to 

teach, until March of 1984 when the parties separated. Rodney then 

returned to Chester and Alberta continued management of the motel 

alone as her sole source of income. 

Rodney filed for divorce in January of 1985; he was diagnosed 

with terminal cancer in September 1986. The District Court 

dissolved the marriage in December 1986, and entered an order 

dividing the marital estate in February 1987. The court awarded 

Rodney his teacher's retirement and the home in Chester and awarded 

Alberta the motel. In April of 1987 the District Court set a 

hearing for July 1987 on Alberta's motion to alter or amend the 

property distribution. Rodney married a second wife, Tammy, 

shortly before his death. He died on June 17, 1987, prior to the 

hearing. At this time Rodney's brother Dale, as the named 

beneficiary of the teacher's retirement account, began receiving 

monthly survivorship benefits of $ 1,048.02 per month. 

In December of 1987, the District Court denied Alberta's 

motion to alter or amend and the first appeal ensued. See In re 

Marriage of Butler (1988), 232 Mont. 418, 756 P.2d 1159. In our 

first opinion we found that the District Court abused its 

discretion by utilizing an outdated appraisal of the Cedar Lodge 

Motel. We remanded the case for determination of the partiest 

interest in the motel, stating that Itit may be necessary . . . to 

reconsider the allocation of any or all of the marital estate to 

reach an equitable distribution." Butler, 756 P.2d at 1162. 
A hearing was held upon remand on July 12, 1989, and the court 

entered its memorandum and order on October 6, 1989, redistributing 

the property. The court essentially revalued the motel at zero net 

value due to existing encumbrances. The District Court did not 

disturb its prior award of the Chester home, where Tammy now 

resides, to Rodney. The court ordered Dale to account for and 

return to the marital estate all retirement benefits received, and 

awarded one-half of such benefits to Alberta Ester Butler in lieu 

of the first award of the defunct Cedar Lodge Motel. The Court 

awarded the other half to the Estate of Rodney Butler. 

On February 6, 1989, appellant Dale Butler intervened alleging 

that he had a vested property right to the retirement benefits 

precluding the District Court from redistributing such benefits as 

marital property. On April 18, 1989, Gina Kay Colwell, one of the 

adult children of Rodney and Alberta, also intervened. She alleged 

that pursuant to Rodney's last will and testament and his 

correspondence with the Teachers1 Retirement System, a trust was 

created by Rodney out of his teacher's retirement account naming 

Dale as trustee and Gina and her sister Cynthia Rae Buck as 

beneficiaries. She alleges that Dale has breached the fiduciary 

duty he has as trustee and has also breached the covenant of good 

faith and fair dealing. Thus, all the parties claim an interest 

in the teachers1 retirement benefits. 

It is well-settled that a district court has far-reaching 

discretion in resolving property divisions. In re Marriage of 

Luisi (1988), 232 Mont. 243, 247, 756 P.2d 456, 459. Its judgment 
will not be altered or overturned absent a clear abuse of 

discretion nor will its findings of fact be set aside unless they 

are clearly erroneous. Butler, 756 P.2d at 1161; Marriage of Watson 

(1987), 227 Mont. 383, 387, 739 P.2d 951, 954. By statute the 

district court has the power 

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. 

Section 40-4-202, MCA. Montana law is well-settled that teachers' 

retirement benefits are properly considered to be a marital asset 

at the time of dissolution. In re Marriage of Sirucek (1985), 

219 Mont. 334, 339, 712 P.2d 769, 772; In re Marriage of Rolfe 

(1985), 216 Mont. 39, 46, 699 P.2d 79, 83; Sowell v. Teacher's 

~etirement System (1984), 214 Mont. 200, 207, 693 P.2d 1222, 1226. 

Dale contends that the District Court cannot retrieve benefit 

payments and the right to receive them and place them back in the 

marital estate because his right to receive them vested upon 

Rodney's death. He relies heavily on the following language from 

the Sowell case: 

Even though Montana recognizes that the pension fund of 

one spouse must be included in the marital estate at the 

time of a divorce action, we have not adopted the 

community property concept in this state. Property can 

be owned and separately controlled by one spouse without 

the permission of the other. We hold that, consistent 

with this separate ownership concept, a spouse has the 

right to nominate the beneficiary of retirement account 

proceeds without consultation or permission from the 

other spouse and can designate a beneficiary other than 

the spouse. Althoush the retirement account proceeds 

must be included as a marital asset at the time of 

divorce, at the time of death those proceeds can be 

excluded from the decedent's estate and from anv claim 

by the survivor. 
Sowell, 693 P.2d at 1226. (~mphasis by appellant.) 

Sowell is distinguishable from the case at bar. There, the 

decedent husband, who died sometime after the divorce was in full 

force and effect, failed to change the beneficiary designation of 

his teachers1 retirement benefits from a former wife to his widow. 

The widow claimed an interest in those benefits. This Court held 

that the widow did not have an interest in those benefits, which 

were vested with the former spouse and designated beneficiary, 

absent an affirmative act by the husband changing the beneficiary. 

Here, at the time the beneficiary designation was made and when 

Dale began receiving benefits, the dissolution was still wending 

and therefore was subject to subsequent appeal of the property 

distribution, and our instructions on remand to consider all 

property for reallocation. Where property interests are involved, 

an appeal in a divorce case does not abate upon the death of a 

party pending its determination. In re Marriage of Lawrence 

(1984), 212 Mont. 327, 330, 687 P.2d 1026, 1028; Deich v. Deich 

(1958), 136 Mont. 566, 577-578, 323 P.2d 35, 42; Judson v. Anderson 

(1945), 118 Mont. 106, 125, 165 P.2d 198, 207. 

Dale and amicus curiae, the Teachers1 Retirement Board, also 

contend that by statute, teacherst retirement benefits are not 

subject to legal process, and that the Board has in rem 

jurisdiction over such funds prior to payment to a member or 

designated beneficiary. See 66 19-4-706 and 19-4-1001, MCA. The 

Board further contends that once vested in a beneficiary the 

District Court must obtain in personam jurisdiction over a 
beneficiary before it can redirect payments. 

These arguments beg the question. As long as a dissolution 

is still pending, the district court need not I1obtaintt jurisdiction 

over retirement benefits because it already has continuing 

jurisdiction over such benefits as part of the marital estate until 

the dissolution is final. Sowell, 693 P.2d at 1226; Lawrence, 687 

P.2d at 1028. Here the District Court was faced with a difficult 

situation upon remand as to how to reallocate the marital estate. 

In light of this and the District Court's equitable powers 

regarding property disposition, we find no clear abuse of 

discretion in the award of one-half of the teacher's retirement 

benefits to the former spouse Alberta. 

However, Appellant Dale is correct in asserting that any 

claims of the other intervenor Gina Kay Colwell or Rodney's estate 

are not properly before this Court. Title to the remaining onehalf interest in the retirement accounts is to be determined in a 

separate matter. The order of the District Court is affirmed 

with respect to the award of one-half of the teacher's retirement 

account to Alberta Esther Butler, and the awarding of the other 

half of the retirement award is vacated. 

AFFIRMED IN PART. 

Justice /