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, Judge presiding. 

Counsel of Record: 

For Appellant: 

Overfelt Law Firm, Billings, Montana 

John S. Forsythe, Forsyth, Montana 

For Respondent : 

Anderson, Edwards & Molloy, Billings, Montana 

Filed: APR 3 0 19W 

Submitted on Briefs: February 19, 1981 

Decided: April 30, 1981 
Mr. Justice Frank B. Morrison, Jr., delivered the Opinion of 

the Court. 

 his is an appeal from a final judgment entered in the 

~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 to respondent's custody of 

the two children. Appellant challenges the disposition of 

the marital estate. 

The parties were married June 7, 1968. Appellant filed 

his petition seeking dissolution of the marriage in April of 

1978. Trial without 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 Lippert Brick 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 

in Lippert Brick worth $36,000. The house was partially 

purchased with $34,000 received by the appellant in 1969 and 

1971 from a family trust, and $31,000 of the stock options 

resulted from gifts made by appellant's parents during the 

marriage. 

The parties decided to leave Belleville, Illinois, in 

1977. Appellant moved to Rosebud County, Montana, in ~pril 

of 1977 while the respondent remained in Illinois to prepare 

their home for sale and to allow the children to finish the 
remainder of the school year. The stock options were sold 

in May 1977 and the house in December 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 appellant was 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 in April of 1978, 

appellant began working for Northern Cheyenne Erectors 

Incorporated (NCE) , a private construction firm. He rented 

some of his equipment to NCE and loaned money to the struggling 

corporation. Although he earned $11,747.72 in wages from 

NCE and received $13,399 in rental income, the rental business 

and the collateral transactions with NCE proved to be a 

financial disaster. At trial appellant claimed he lost all 

of the money invested in the rental business. In November 

1978, appellant left NCE. He is now an instructor at Dull 

Knife Memorial College, earning $17,000 per year. 

Throughout this period the respondent has lived in 

Belleville, Illinois, where she is now employed earning 

approximately $12,000 per year. 

Appellant has challenged the District Court's findings 

regarding the (1) net worth 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 to be 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 net worth of the parties at or near the time of 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 this matter, 

petitioner took, from the marital estate of the parties to Montana, the following sums of money with the 

express purpose, as petitioner advised respondent to 

invest in his business: 

"1. $26,000 was taken by petitioner in approximately 

May of 1977; this sum was taken from the proceeds of 

the consideration to forego his stock option with 

respect to Lippert Brick, that consideration being a 

total of $36,000.00 

"2. $10,000.00 in November of 1977; this sum was obtained by putting a second mortgage on the family 

home ; 

"3. $60,000.00 in December of 1977, said sum being 

obtained from the proceeds of the sale of the family 

home. 

"XVII. The Court finds that petitioner took the sum 

of $96,000.00 from the marital estate and brought it 

to Montana for the purpose, as he advised respondent, 

of investing in business. 

"XX. The following amounts of money were left with 

respondent in Illinois, while petitioner was taking 

$96,000.00 of the marital estate to Montana to invest 

in business, as he told respondent: 

"1. $10,000.00 in May of 1977, that being the balance 

of the $36,000.00 paid by Lippert Brick in consideration for relinquishing the stock option purchase right 

in petitioner with respect to Lippert Brick. 

"2. $10,000.00 in December of 1977, said sum being the 

balance of the proceeds left after all expenses of sale 

of the family home, to include mortgages and other notes, 

and petitioner's taking of $60,000.00 of those proceeds 

to Montana to, as he told respondent, invest in business. 

"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 that petitioner has dissipated in 

Montana and is unable to account for, in any way, such 
lack of ability to account for said $96,000.00 the 

Court finds to be incredible and the Court does not 

believe the petitioner's statement that he cannot account for said money and the Court is not impressed or 

persuaded by pe ti tioner ' s statement that the said 

$96,000.00 has simply been poured into bad business 

ventures, which statements petitioner is not 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 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 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. 

The exercise of discretion by the District Court is 

necessary when determining the worth of marital assets which 

fluctuate in value. 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 single evaluation point for determining net 

worth of the parties could create an inequitable disposition. 

Turning to the case at bar, the record before us unequivocally demonstrates the District Court considered appellant's 

departure from Illinois in April 1977 as the time for evaluation 
of the marital estate. The implicit reasoning used by the 

~istrict Court was manifestly based upon a presumption that 

appellant was untruthful at trial when 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 or discovered during the six-month period following 

trial, the District Court found the $96,000 was in the 

marital estate and awarded the respondent a judgment against 

the appellant for $48,000. This was done despite the fact 

that the evidence showed the property had been lost in bad 

investments and simply did not exist. The District Court 

abused its discretion for three reasons. 

First, the District Court lacked sufficient evidence to 

support its finding. While the District Court was in the 

best position to judge the candor or honesty of the appellant's 

testimony, the findings and conclusions must still be supported by evidence and not merely lack of witness credibility. 

If appellant has 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 District Court exceeded its authority under 

section 40-4-202, MCA, by awarding the respondent property 

in excess of the proven net worth of the estate. The statute 

mandates " [t]he court shall also consider the contribution 

11 . or dissipation of value of the respective estates . . . , 

however, the District Court' s power does not extend beyond 

the existent estate. In other words the District Court may 

never award more than 100 percent of the marital estate. 

Third, the award ignores fundamental legal principles 

of marital status; spouses possess mutual powers, obligations 

and interests which endure until lawfully modified or 
terminated. One of those powers is the power to freely 

contract with others regarding marital property . Section 

40-2-301, MCA. Appellant may have used poor judgment in his 

business transactions regarding the equity of the family 

home and the stock options; however, he lawfully possessed 

that power. The record does not indicate the respondent 

attempted to modify the appellant's right to control and 

dispose of the property as he did or that she claimed breach 

of fiduciary obligation by the appellant. 

In summary, we find the District Court abused its 

discretion in determining the net worth of the parties. 

Further, the issues raised by appellant regarding the stock 

options and family trust distributions are hypothetical and 

thus moot unless new evidence can be produced. The order of 

the District Court is vacated, and this cause remanded for 

further proceedings consistent with 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 the marital 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 

the majority 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 on April 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 in which 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 estate which 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 $96,000 he brought to Montana 

and cannot now account for." 
The court then went on to find that the petitioner's 

opportunity for future acquisition of assets and 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 is no reason here to depart from the general rule 

of appellate practice that in cases tried to the court 

without a jury, the District Court is in the best position 

to see the comportment of the witnesses, 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 those matters will be given weight in reviewing the 

sufficiency of the evidence and we will ordinarily presume 

that findings and 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, 

170 Mont. 150, 551 P.2d 1025, appeal after remand, 592 P.2d 

938 (1979). The situation in Downs was 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 no way to appraise the value of the marital property. 

The trial court had been confronted with a problem of evaluating 

the marital property in the face of the lack of credibility 

of the witness. 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 recalcitrance of the husband 
had continued. The judgment of the District Court on the 

second trial was affirmed without further ado. 

In the case at bar, it is completely within the power 

of the husband to demonstrate what happened to the marital 

monies. He has not done so. He has been evasive in discovery 

and evasive in his testimony. This Court now places a 

burden upon the wife 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