No. 14595 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1979 

IN RE THE MARRIAGE OF 

STANLEY M. KNUDSON, 

Petitioner and Appellant, 

VS. 

FRANCES ANNE KNUDSON, 

Respondent-Counter-Petitioner. 

Appeal from: District Court of the Twelfth Judicial District, 

Honorable B. W. Thomas, Judge presiding. 

Counsel of Record: 

For Appellant: 

Berger, Anderson,Sinclair and Murphy, Billings, Montana 

For Respondent: 

Marra, Wenz, Iwen & Johnson, Great Falls, Montana 

Submitted on briefs: July 14, 1979 

Decided: JAN 30 1980 

Filed: &!B 3') aa 
Mr. Justice Daniel J. Shea delivered the Opinion of the Court. 

Stanley V. Knudson (herein designated as the husband) 

appeals from that portion of a dissolution of marriage 

decree entered by the Hill County District Court which 

awarded Frances Anne Knudson (herein designated as the wife) 

an interest in his retirement benefits to which he is entitled 

under the Railroad Retirement Act. The wife cross-appeals 

from the same judgment, contending that it was error for the 

trial court to award her only 40 percent of the marital 

estate. She also contends she is entitled to maintenance, 

attorney fees, and costs. 

We discuss first the issue of whether the wife can 

claim an interest in the husband's benefits to which he is 

entitled under the Railroad ~etirement Act. Since the 

appeal was filed in this case, the United States Supreme 

Court has ruled in Hisquierdo v. Hisquierdo (1979), 439 U.S. 

572, 99 S.Ct. 802, 59 L.Ed.2d 1, that such benefits are not 

part of the marital estate, and cannot be considered directly 

or indirectly in a divorce decree which distributes the 

assets of the marriage. For purposes of discussing the 

remainder of the property distribution award, it is useful 

to set forth how the railroad retirement benefits were 

handled by the trial court. 

In responding to the husband's petition for divorce and 

an equitable distribution of the assets of the marriage, 

the wife contended that his railroad retirement benefits were 

an asset of the marriage, and therefore she claimed an 

interest in them. The court found that the husband through 

1976 had accumulated 275 months of employment with the 

railroad which would have entitled him to an annuity of $560 

per month if he were eligible to retire at the end of 1976. 

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In the initial decree the trial court awarded the husband 

approximately 60 percent of the marital assets, and 

the remaining 43 percent was of course, awarded to the 

wife. But for some reason the original decree is silent 

as to disposition of the railroad retirement benefits. 

After entry of the original decree, both parties moved to 

amend the findings and conclusions in several particulars. 

The wife at that time requested that the decree be amended 

to award her a portion of the husband's interest in his 

railroad retirement pension. The Court then arrived at a calculation of the husband's retirement benefits and distributed 

40 percent of the benefits to the wife and 60 percent of the 

benefits to the husband. This was the same formula used by the 

trial court in dividing the other marital assets. At the time 

the court awarded railroad retirement benefits to the wife as a 

property interest, it had before it several state cases, includin*~ 

the California case of In Re Marriage of Hisquierdo (1977), 139 

Cal.Rptr. 590, 19 Cal.3d 613, 566 P.2d 224, which case was then 

being reviewed by the United States Supreme Court. 

Because of the way in which the railroad retirement benefits 

were treated by the trial court, it is clear to us that the 

trial court would not have distributed the marital estate in 

any different manner if the Court had known from the outset 

that Railroad Retirement Act benefits were not part of, and 

could not be considered for any purpose, as part of the 

marital estate and therefore subject to distribution. 

As we have noted, the United States Supreme Court in 

Hisquierdo, supra, specifically ruled that retirement benefits 

receivable under the Railroad Retirement Act, 45 U.S.C.A. 

231, et seq. may not be included as part of a property distribution. 

The Court determined that distribution of a share of one 

spouse's expection in retirement benefits under the Act would 

frustrate the purpose of the Act which is to encourage an 
early retirement by employees by providing them with 

adequate support in their old age. The Court further 

noted that the antigarnishment section of the Act, section 

231(m), protects not only a direct distribution of a share of 

a pension, but also an indirect distribution by an offsetting 

award, that is, an award to compensate the nonemployee spouse 

for retirement benefits not directly received. The Court 

concluded that an offset as well as a direct interest in the 

pension wbuld frustrate the purpose of the Act. We note, 

however, that the Court was careful to add that pension 

benefits under the Act could still be reached for maintenance 

or for child support. Hisquierdo, supra. 

Here, the trial court clearly awarded the wife as part 

of the property settlement a share in the husband's pension 

rights under the Railroad Retirement Act. Accordingly, that 

portion of the decree must be vacated. The question of 

whether the wife should have been awarded maintenance in 

lieu of a share of the railroad pension is discussed later 

in this opinion. 

We reach now the wife's cross-appeal whereby she contends 

that the trial court should have awarded her 50 percent 

of the marital assets. She asserts two grounds. First, she 

contends that she asked for a 50 percent distribution in 

her counterpetition, that the husband did not respond to the 

counterpetition, and therefore he is deemed under pleading 

rules to have admitted she was entitled to 50 percent of 

the marital estate. Second, she argues that if her pleading 

argument should not prevail, that the distribution scheme 

is unfair to her. 

The wife relies on Rule 7(a), and Rule 8(d) of Mont. 

R.Civ.P. in contending that the husband had a duty to respond 

to her counterpetition, and in failing to do so admitted that 

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the wife was entitled to 56 percent of the marital 

assets. She argues that because of these rules, the hands 

of the trial court was tied, and he was bound by law to 

award her 50 percent of the marital estate. To accept 

her argument however, would be to exalt form over substance. 

The essential pleadings required under the Uniform 

Marriage and Divorce Act are set forth in section 40-4- 

103(3), MCA. The first pleading is a petition, and the 

responsive pleading is denominated a response. If there are 

other pleadings under the Act, they are specifically governed 

by the Montana Rules of Civil Procedure. In his petition 

the husband asked the trial court to equitably apportion the 

marital estate. In her response the wife went another step 

and asked that she be awarded SO percent of the marital 

estate. She contends that the husband was duly bound by the 

rules of civil procedure to respond to her demand for fifty 

percent of the assets, and that his failure to do so resulted 

in an admission that she was so entitled. But the husband was 

under no duty to answer the wife's "counter-petition." 

The entire marital estate was brought before the trial 

court by the husband's petition asking the court to equitably 

apportion this estate. The husband did not take a position 

in this petition as to precisely how he felt the estate 

should be divided, but the wife in her counterpetition alleged 

that she was entitled to half of the parties assets. A reply 

to this counterpetition, might have indicated to the court how 

close or how far away the parties were from arriving at a 

percentage figure for distributing the marital estate, but he 

had no duty to reply. The entire marital estate was before the 

trial court for equitable distribution. We note, furthermore, 

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that at the end of the trial counsel for the husband moved 

under Rule 15 that the pleadings be amended to conform to 

the proof and that the trial court granted this motion. 

Nor does the Uniform Marriage and Divorce Act (section 

40-4-105, MCA) require that a petition for marriage dissolution 

set forth how the petitioner believes the marital estate should 

be divided. The purpose of the petition is simply to inform the 

trial court that the parties' acquired property during the course 

of the marriage and that the court should equitably divide it in 

the event the parties' cannot reach an agreement in this regard. 

Here both sides conducted extensive discovery and there was a 

prolonged trial where the positions of the parties were set 

forth in great detail. The issue of an equitable division was 

clearly raised by the pleadings, and that is all that is required. 

We next discuss the wife's contention that she should 

have been awarded 5C percent of the marital assets and 

a large share of the income-producing property. 

The parties owned a 1,320 acre farm which they used for 

farming and ranching, and a 10 acre tract of land upon which 

barns, graineries, sheds, and a farmhouse were located. Other 

major assets of the parties included personal property 

necessary to run the farm, livestock, prospective income 

from grain contracts, and grain on hand. The court set the 

value of the farmland at $400,000, the 10 acres and associated 

buildings at $87,000, and the farm-related assets described 

above at $154,487. 

At trial, the husband requested the court to keep the 

farm intact and to permit him to compensate the wife for her 

interest in the farm. The wife on the other hand, wanted a 
50 percent share of the marital assets, and had no objection 

to the sale of the farm if it was required in order to reach 

her 50 percent objective. 

The trial court set the net value of the marital estate 

at $551,000 and fixed the wife's interest at $220,000. The 

decree awarded to the husband the farmland, the livestock, 

personal property necessary to run the farm, the income to 

be received from grain sale contracts, and the grain on 

hand. The husband was ordered to assume responsibility for 

the parties' debts which were estimated at $90,586. 

The wife was to receive her $220,000 by receiving the 

10 acre tract with its associated buildings valued at $87,000, 

and payment of $133,000 from the husband. The amended 

decree ordered the husband to pay the wife $13,000 by November 

1, 1978 and the balance of $120,000 in yearly installments 

of $6,000 each. The decree also provided that either party 

could seek modification of the payment schedule in the event 

the property was sold, and that the balance due the wife 

would be a lien upon the farmland. 

The wife contends the trial court's property division 

was inequitable because she received less than 50 percent of 

the net marital estate, and because the husband received 

most of the income-producing assets. 

The evidence presented by both parties at trial established 

that the husband spent practically the whole of his waking 

hours working either for the railroad or on the family farm. 

Uncontroverted testimony established that the husband as a 

general practice worked about 16 hours a day and spent 

anywhere from 5 to 8 hours on farm work. The forced sale of 

the family farm would have ended the husband's lifetime 

dream of developing the family farm. The parties' son has 

begun farming a portion of the land and he shares his father's 

lifetime goal. 

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The wife, on the other hand, does not care for farming, 

and has opposed the investment of the family's income in 

farm machinery and other farm materials. Although the wife 

helped in clearing the land of rocks and performed other 

farm chores, she has not displayed the single-minded devotion 

to the farm that the husband possesses. The bulk of the 

parties' assets consist of the farm and farm-related materials, 

and these assets have been maintained primarily through the 

enormous contributions of the husband. We see no abuse of 

discretion here in awarding the wife 40 percent of the value 

of the marital assets rather than her claimed 50 percent. 

The thrust of the wife's next contention is that the 

court erred in awarding the husband all the income-producing 

property and awarding her all the incoming-consuming property. 

The court sought to preserve ownership of the farm in the family 

and awarded it to the husband primarily because he was most likely 

to continue its operation. The wife expressed no interest whatsoever in continuing the farming operations. Her complaint is 

that the property awarded her will not produce income equal to 

that of the farm and that the property awarded her is primarily 

income consuming. This same argument was presented by the wife 

when her counsel moved the court to amend its findings and conclusions. 

In response to this argument, the trial court found that the 10 

acre tract with its barn sheds, graineries and farmhouse gave 

the wife property which could generate income by either its sale 

or rental. Testimony of the wife's expert at trial confirms 

this determination. 

At trial, a real estate broker testifying for the wife 

estimated the value of the farm buildings and the land upon which 

they sit to be $87,000. He described the property as a unique 

piece of land on which some people might place a value even higher 

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than his estimate. He stated that the property's location 

next to the highway would probably make it a quick sale. 

This testimony suggests that the wife by selling the property 

could in fact produce a sizeable amount of income for her 

savings or reinvestment. The trial court also determined 

that the property had rental value. We find no abuse of 

discretion in these determinations. 

The next issue raised by the wife is that the court 

erred in denying her maintenance. She argues that her 

present income is such that she cannot earn enough to provide 

herself a decent standard of living and that the trial 

court's distribution of property has cut off her opportunities 

for additional income. We determine, however, that the 

trial court did not abuse its discretion in not awarding 

maintenance to the wife. 

The wife left the farm and lived apart from the husband 

for two years prior to their divorce. She testified at 

trial that she had not received any money from the husband 

during this period and that she is able to support herself. 

Since the parties' separation, she has rented an apartment 

for approximately $140 per month. The trial court distributed 

the family home to the wife. By living in the home she can 

reduce her expenses by $140 per month, or as discussed 

above, the wife could produce a significant amount of income 

by selling or renting the property. Moreover, in addition to 

the initial $13,000 to be paid the wife, the husband must 

pay the balance of the $120,000 in cash in annual installments 

of $6,000 each. We cannot conclude, therefore, that the 

trial court abused its discretion in not awarding maintenance 

to the wife. 

We emphasize that in reaching our decision here, we have 

considered the impact of Hisquierdo, supra, in that the wife will 

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no longer be getting 40 percent of the husband's railroad 

retirement benefits when they mature. In the wife's proposed 

findings of fact, she requested the trial court to award 

maintenance to her in lieu of her claimed share in the husband's 

railroad pension. Instead, the trial court's amended decree 

awarded her a 40 percent share of the husband's pension as a 

property interest, but no maintenance. 

By concluding that the wife is foreclosed from receiving 

any portion of her husband's railroad retirement benefits as 

an interest in property, her monthly income will be reduced by 

$220 per month from the date she would first have been entitled 

to receive a share of the pension. But the trial court's order 

denying maintenance to the wife should still be affirmed. She 

has supported herself without aid from the husband for over two 

years, and with the annual payments to be made to her by the 

husband, together with the property she has received (which she 

can either sell or rent for additional income), she has adequate 

means to support herself. We note in this regard that although 

the husband's income is larger than that of the wife, it is 

significantly reduced by a mortgage on the farmland, by debts 

connected with the farm machinery, and by payments to the wife 

required by the decree. 

Ultimately, without regard to the railroad pension which 

must be considered the separate property of the husband under 

Hisquierdo, supra, the trial court awarded 40 percent of the 

marital assets to the wife and 60 percent to the husband. It 

found that she was not entitled to maintenance because she was 

employed and had been supporting herself for at least two years 

prior to the divorce, and because the cash awarded to the wife 

by the way of annual installment payments together with other 

income-producing property awarded to the wife, eliminated the need 

for maintenance. The trial court did not abuse its discretion. 

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The wife's final contention is that she is entitled to 

attorney fees for the divorce proceeding and this appeal. 

A party requesting an award of attorney fees must make a showing 

of necessity. See, Brown v. Brown (1978) , Mont . , 587 

P.2d 361, 35 St.Rep. 1733; Whitman v. Whitman (1974), 164 Mont. 

124, 519 P.2d 966. The trial court's award or denial of attorney 

fees will not be reversed when there is substantial evidence to 

support its findings. Allen v. Allen (19781, Mont . I 

575 P.2d 74, 35 St.Rep. 246. Here the wife was employed and 

testified that she had sufficient income to support herself. 

The wife did not demonstrate a necessity as required before she 

is entitled to attorney fees. Upon these facts, we find no 

abuse of discretion. The wife is clearly able to pay her own 

attorney fees. 

The decree of the District Court is affirmed except insofar 

as it awards the wife a share of the husband's railroad retirement 

pension. This cause is remanded to the District Court for amendment of judgment in accordance with this opinion. 

Justice 

We Concur: 

Ch-ief Justice 

.? f 

/ / Justices V