### No. 80-173 IN THE SUPREME COURT OF THE STATE OF MONTANA

i 

### 1981

IN RE THE MARRIAGE OF KZNNETH LIPPERT, Petitioner and Appellant,
-vsJEAN S. LIPPERT, Respondent and Respondent.

Appeal from: District Court of the Thirteenth Judicial District, In and for the County of Big Horn, The Honorable Diane G. 

### Barz, Judgepresiding.
Counsel of Record: For Appellant: Overfelt Law Firm, Billings,Montana John S. Forsythe, Forsyth, Montana For Respondent: 

### Anderson, Edwards & 

### Molloy, Billings,Montana

Filed: 

## APR

## 30

## 19W Submitted on Briefs: February 19, 1981 Decided: April 30, 

### 1981Mr. Justice Frank B. Morrison, 

### Jr., delivered the Opinion of the Court.

his 

### is an appeal from a finaljudgment entered inthe ~istrict Court of the Thirteenth Judicial District, Big Horn County, March 3, 1980. No issue 

### is taken to the granting of the decree of dissolution or torespondent's custody of the two children. Appellant challenges the disposition of themarital estate. The parties

### weremarried June 7, 1968. Appellant filed hispetition seeking dissolution of the marriage inApril of 1978. Trialwithout jury was had June 12, 1979. Discovery
was reopened upon respondent's motion on July 9, 1979, and closed December 6, 1979. Decree of dissolution was granted
on August 28, 1979. From the beginning of the marriage until 1977, appellant
was employed by LippertBrick Contracting Co., Inc., Belleville, Illinois. The respondent, a registered nurse before the marriage, worked part-time outside the home and was principally responsible for supervision of the household and the children, Jennifer Lynn, age 11, and Nicole Lee, age 9. The major assets acquired during the marriage were the family home, with a net equity of $90,000, and stock options inLippert Brick worth $36,000. The house was partially purchased with $34,000 received by the appellant in 1969 and 1971from a family 

### trust, and $31,000 of the stock options resulted from giftsmade by appellant's parents during the marriage. The parties decided to leave Belleville, Illinois, in 1977. Appellant moved toRosebud County, Montana, in~pril of 1977 while the respondent remained in Illinois toprepare their home for sale and to allow the children to finish theremainder of the school year. The stock options 

### were sold inMay 1977 and the house inDecember 1977. The planned construction business 

### was not started immediately. Initially, appellant was hired by the Northern Cheyenne Tribe to supervise the construction of three buildings. The job lasted one year for which appellantwas paid $30,000. The business venture was started early in 1978. Appellant purchased construction equipment with part of the money received from the sale of the stock options and the house. Following completion of the buildings inApril of 1978, appellantbegan working for Northern Cheyenne Erectors Incorporated (NCE)

## , a private construction firm. Herented
some of his equipment toNCE and loaned money to the struggling corporation. Although he earned $11,747.72 inwages from NCE and received $13,399 inrental income, the rental business and the collateral transactions with NCE proved tobe a financial disaster. Attrial appellant claimed he lostall of themoney invested in the rental business. InNovember 1978, appellant leftNCE. He 

### is now an instructor atDull Knife Memorial College, earning $17,000 per year. Throughout thisperiod the respondent has lived in Belleville, Illinois, where she 

### isnow employed earning approximately $12,000 per year. Appellant has challenged the DistrictCourt's findings regarding the (1)networth of the marital estate, (2) liquidated stock options, (3) family trust distributions, and (4) opportunity for future acquisition of capital assets and income. We find the challenge to the finding of net worth of the parties tobe determinative and, for reasons contained in the remainder of this opinion, fee1

### we need not discuss the other issues raised by the appellant.Appellant contends the District Court failed to determine the networth of the parties ator near the 

### timeof the trial and that failure to do so was reversible error. After consideration of the unique circumstances presented by this case, we agree. The District Court found the following: "XVI. From April of 1977 until trial of thismatter, petitioner took, from the marital estateof the parties to Montana, the following sums of money with the express purpose, aspetitioner advised respondent to invest inhis business: "1. $26,000 was taken by petitioner inapproximately May of 1977; this sum was taken from the proceeds of the consideration to forego his stock option with respect to LippertBrick, thatconsideration being a total of $36,000.00 "2. $10,000.00 inNovember of 1977; this sum was obtained by putting a second mortgage on the family home; "3. $60,000.00 inDecember of 1977, said sum being obtained from the proceeds of the sale of the family home. "XVII. The Court finds thatpetitioner took the sum of $96,000.00 from the marital estate and brought 

### it toMontana for the purpose, ashe advised respondent, of investing inbusiness.

"XX. The following amounts of money were leftwith respondent inIllinois, while petitioner was taking $96,000.00 of the marital estate toMontana to invest inbusiness, ashe told respondent: "1. $10,000.00 inMay of 1977, thatbeing the balance of the $36,000.00 paid by Lippert Brick inconsideration for relinquishing the stock option purchase right inpetitioner with respect toLippert Brick. "2. $10,000.00 inDecember of 1977, said sum being the balance of the proceeds leftafter allexpenses of sale of the family home, to include mortgages and other notes, and petitioner's taking of $60,000.00 of those proceeds toMontana to, ashe told respondent, invest inbusiness.

"XXXV. 3. That respondent shall have, in the form of a judgment against petitioner, the sum of $48,000.00, said sum representing one-half of the $96,000.00 of marital assets thatpetitioner has dissipated in Montana and 

### isunable to account for, inany way, suchlack of ability to account for said $96,000.00 the Court finds tobe incredible and the Court does not believe the petitioner's statement thathe cannot account for saidmoney and the Court 

### isnot impressed or persuaded by pe

### titioner

## 's statement that the said $96,000.00 has simply been poured intobad business ventures, which statementspetitioner 

### isnot able to support by anything that resembles clear or convincing evidence." A proper disposition of marital property in

### a dissolution proceeding requires a finding of the networth of the parties ator near the 

### timeof the dissolution. Hamilton v. Hamilton Mont. (1980) 

### - 

## - 

## , 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), 177Mont. 61, 580 P.2d 439; Downs
v. Downs (1976), 170Mont. 150, 551 P.2d 1025. The basic
reason for the rule 

### isobvious; however, 

### it 

### isequally apparent that application of the rule 

### isdependent upon the kinds of marital assetsunder consideration. The 

### timefor proper valuation cannot be tied to any single event in the dissolution process. The filingof 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. The exercise of discretionby the DistrictCourt 

### is necessary when determining the worth of marital assetswhich fluctuate invalue. For example, the value of a particular
common 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 singleevaluation point for determining net worth of the parties could create an inequitable disposition. Turning to the case atbar, the record before us unequivocallydemonstrates the District Court considered appellant's departure from Illinois inApril 1977 as the time for evaluationof themarital 

### estate. The implicit reasoning used by the ~istrict Court was manifestly based upon a presumption that appellantwas untruthful attrialwhen he claimed the business
was a disaster, and he no longer had the money he brought to Montana. Although no contrary evidence 

### was proffered by the respondent ordiscovered during the six-month period following trial, the DistrictCourt found the $96,000 was in the marital estate and awarded the respondent a judgment against the appellantfor $48,000. This was done despite the fact that the evidence showed the property had been lostinbad investments and simply did not exist. The DistrictCourt abused 

### itsdiscretion for three reasons. First, the DistrictCourt lacked sufficient evidence to support 

### its finding. While the DistrictCourt was inthe bestposition tojudge the candor orhonesty of the appellant's testimony, the findings and conclusions must stillbe supported by evidence and notmerely lack of witness credibility. If appellanthas committed fraud upon the court, the case may be justifiably reopened. Pilati v. Pilati (19791, Mont. 

## , 592 P.2d 1374, 36 St.Rep. 619. 

## - - Second, the DistrictCourt exceeded 

### its authority under section 40-4-202, MCA, by awarding the respondent property inexcess of the proven networth of the estate. The statute mandates 

### "[t]hecourt shall also consider the contribution

11

# . or dissipation of value of the respective estates

# . .

# . , however, the DistrictCourt'

### s power does not extend beyond the existent estate. In other words the DistrictCourt may
never award more than 100percent of the marital estate. Third, the award ignores fundamental legal principles of marital status; spouses possess mutual powers, obligations and interestswhich endure until lawfullymodified orterminated. One of those powers 

### is the power to freely contractwith othersregarding marital property

# . Section 40-2-301, MCA. Appellant may have used poor judgment inhis business transactions regarding the equity of the family home and the stock options; however, he lawfully possessed thatpower. The record does not indicate the respondent attempted tomodify the appellant's right to control and dispose of the property ashe did or that she claimed breach of fiduciary obligation by the appellant. In summary, 

### we find the District Court abused 

### its discretion indetermining the networth of the parties. Further, the issues raised by appellant regarding the stock options and family trustdistributions arehypothetical and thus moot unless new evidence can be produced. The order of the DistrictCourt 

### isvacated, and this cause remanded for further proceedings consistentwith this opinion.

?

We concur:

Justices

### Mr. Justice John C. Sheehy dissenting:
The judgment entered by the District Court should be affirmed. The majority fault the District Court for not filing the net worth of themarital property of the parties
on dissolution of the marriage, but give no effect to the impossibility for such evaluation through the lack of assistance and cooperation of the husband. The court found, as themajority opinion indicates, that the husband took $96,000 of the marital assets of the estate for the purported purpose of investing the same. Some $60,000 of those assets were obtained as late as December 1977. The action for dissolution of marriage was commenced onApril 10, 1978. On July 12, 1978, in the husband's answers to the wife's first interrogatories,while the litigation was in progress, he reported total assets of $118,275, total liabilities of $61,075,for
a net worth at that time of $57,200. On May 30, 1979, the husband filed his "current answers" to the first set of interrogatories inwhich he reported total assets of $9,410, liabilities of $3,475, for a net worth of $5,935. In none of the husband's subsequent answers to interrogatories, testimony or documentation, does he demonstrate with any degree of adequacy what happened to the assets of the marital estatewhich he took with him. He contends that he "invested" the monies, and sustained some "business losses." On that basis, the court found as follows: "XXIII. Petitioner now claims that he has no business, that he has lost all of the $96,000 that he brought to Montana, and claims a net worth of $5,935.

"XXIV. The court finds the testimony of petitioner incredible and finds that he has dissipated the value of the marital estate by the $96,000he brought to Montana and cannot now account for."

### The court then went on to find that the petitioner's opportunity for future acquisition of assetsand

### capital is excellent considering his job skills and experience and on that basis rendered the judgment against the husband in favor of the wife. There isno reason here to depart from the general rule of appellatepractice that in cases tried to the court without a jury, the District Court is in the best position to see the comportmentof thewitnesses, and to judge of their candor and credibility. Knight and Co. v. Manaras

(1979), 

## -Mont

# . , 603 P.2d 675, 36 St.Rep. 2148; Jensen
v. Jensen (1979), Mont

# . , 597 P.2d 733, 36 St.Rep. - 

### 1259;Marcoff v. Buck (1978), Mont. 

## , 587 P.2d 1305, - 

### 35 St.Rep. 1953. Where the findings of the District Court depend upon the credibility of the witnesses, and the weight to be given their testimony, the District Court's determination of thosematters will be given weight in reviewing the sufficiencyof the evidence and we will ordinarily presume that findingsand judgment entered by the District Court are correct. Lumby v. ~oetch(19791, Mont

# . , 600 P.2d

This case should be controlled by Downs v. Downs (19761, 170Mont. 150, 551 P.2d 1025, appeal after remand, 592 P.2d 938 (1979). The situation in Downswas the same as that faced by the District Court in this case. The husband was evasive, he had given incomplete discovery, and the trial court had noway to appraise the value of the marital property. The trial court had been confronted with a problem of evaluating themarital property in the face of the lack of credibility of thewitness. There we ordered a new trial because of the unreliability of the record. When the case returned to us
on remand, it was found that the recalcitranceof the husband

### had continued. The judgmentof the District Court on the second trialwas affirmed without further ado. In the case at bar, it is completely within the power of the husband to demonstratewhat happened to themarital monies. He has not done so. He has been evasive in discovery and evasive in his testimony. This Court now places a burden upon thewife to set about to prove the falsity of her husband's claimed losses; losses for which he claims to have no records. She should not have that burden. The judgment should be affirmed.

Justice