No. 92-054 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

IN RE THE MARRIAGE OF 

RICHARD DALE ISAAK, 

Petitioner and Appellant, 

-vJUDY L. FUNK SMITH, Personal ~epresentative 

of the Estate of LYNN M. ISAAK, 

Respondent and Respondent. 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis & Clark, 

The Honorable Jeffrey Sherlock, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

John L. Hollow, Attorney at Law, Helena, Montana 

For Respondent: 

Robert T. Cummins and James P. Greenan, Attorneys at 

Law, Helena, Montana 

Filed: 

Submitted on Briefs: August 20, 1992 

Decided: March 4, 1993 
Justice Fred J. Weber delivered the Opinion of the Court. 

Petitioner, Richard Dale Isaak (Dale), appeals the Findings of 

Fact, Conclusions of Law and Order of the First Judicial District 

Court, Lewis and Clark County, Montana, which distributed Dale's 

inherited real property to Lynn M. Isaak (Lynn), required Dale to 

provide health insurance coverage forthe minor child although Dale 

is unemployed, and ordered Dale to pay Lynn's attorney fees. 

Respondent, Judy L. Funk Smith, personal representative for the 

estate of Lynn M. Isaak, cross-appeals claiming that the District 

Court incorrectly calculated the net assets of the marital estate. 

We reverse in part and affirm in part. 

The restated issues are as follows: 

1. Did the District Court correctly calculate the net assets 

of the marital estate? 

2. May the trial court require a person to provide health 

insurance coverage for a child when the coverage is not available 

through an employer, and partially or entirely paid by the 

employer? 

3. Did the District Court err procedurally by allowing Lynn 

to collect attorney fees from Dale? 

Dale and Lynn were married on October 21, 1979 in Helena, 

Montana. One child was born during their marriage. Dale also 

adopted two children born to Lynn prior to their marriage. At the 

time of the trial, Dale was 38 years of age and Lynn was 35 years 

of age. During their marriage, Dale and Lynn lived rent-free in 

houses provided by Dale's father, Reinhold Isaak. In 1987, 

2 
Reinhold Isaak built a new home on a 21-acre parcel at 5920 Highway 

12 West for Lynn and Dale. The District Court found that Reinhold 

Isaak intended to provide a home for Lynn and Dale and included 

this property, valued at $115,500.00, in the marital estate, and 

subsequently distributed it to Lynn. Other than this real 

property, the marital estate consists of personal property valued 

at $7,060.00. Dale received personal property valued at $2,310.00; 

Lynn received personal property worth $4,750.00. 

Dale is the only child of Reinhold and Josephine Isaak. 

Josephine Isaak predeceased Reinhold Isaak, who died in January of 

1990, devising all of his real and personal property to Dale by a 

will dated January 4, 1986. The 21-acre parcel of real property 

with the new home built for Dale and Lynn (distributed to Lynn as 

marital property) was still in ~einhold Isaak's name at the time of 

his death. This property is part of the Reinhold Isaak estate 

which is valued at $578,000.00. This estate includes other real 

and personal property, including income-producing real estate 

contracts. Despite the fact that Reinhold Isaak died while Dale 

and Lynn were married, the District Court did not include the bulk 

of Dale's inheritance in the marital estate, finding that: 

Except as herein modified, this Court is of the view that 

the marital estate does not include the estate that Dale has 

inherited from Reinhold Isaak. Not only did the inheritance 

occur after the parties had separated, but the parties had 

clearly done nothing to improve, maintain, or build that 

estate. 

In addition to the 21-acre parcel of real property and the 

personal property valued at $4,750.00, the District Court's order 

provided Lynn with $500.00 per month maintenance and $285.00 per 

3 
month child support for Kristian, the parties' minor child. It 

also required Dale to provide medical insurance for Kristian. The 

District Court found that Dale, although unemployed, is capable of 

earning at least $1,000.00 per month. Dale also can receive over 

$1,200.00 per month from his father's estate. Many of Dale's 

monthly expenses are paid by the estate. Although the probate has 

not been closed, the attorney for the estate testified that there 

is no reason not to do so. When this is done, Dale may be able to 

eliminate some estate-related monthly expenses such as the attorney 

and accountant, thereby increasing his monthly income. The gross 

monthly income from real estate contracts is approximately 

$3,000.00. 

The District Court further found that Lynn was unable to work. 

Lynn suffered from breast cancer which had metastasized. At the 

trial (May 15 and June 4, 1991), Lynn testified that she had no 

more than three years to live. Lynn died one year later on June 9, 

1992. Her interest is represented in this appeal by the personal 

representative of her estate, Judy L. Funk Smith, who has crossappealed, claiming that the entire Reinhold Isaak estate should 

have been included in the marital estate. 

I. 

Did the District Court correctly calculate the net assets of 

the marital estate? 

The District Court found that it was not appropriate to 

include in the marital estate property devised to Dale by his 

father's will. His father died after the parties had separated, 
although it appears from the record that Dale and Lynn made 

attempts to reconcile up to and after the date of Reinhold Isaak's 

death. The testimony indicates that Reinhold Isaak built a home 

for Dale and Lynn in 1987. The District Court found that he 

intended to provide this as a home for Dale and Lynn. The home is 

located on a 21-acre parcel of land which was still in Reinhold 

Isaak's name at the time of his death in January 1990. 

Dale contends that a mere intention to make a future gift of 

real property does not meet the requirements for an inter vivos 

gift of real property. He argues that there was no completed gift 

because title had not passed to either of the parties. Dale, 

therefore, contends that the District Court incorrectly included 

this property in the marital estate because to do so requires a 

finding of a gift of real property 

We review a lower court's conclusion of law by determining 

whether it correctly or incorrectly applied the law. In re the 

Marriage of Hamilton (Mont. 1992), P. 2d , 49 St.Rep. 604, 

60G. Section 70-20-101, MCA, governs transfers of real property. 

It provides: 

Transfer to be in writing--statute of frauds. No estate or 

interest in real property, other than an estate at will or for 

a term not exceeding 1 year can be created, granted, assigned, 

surrendered, or declared otherwise than by operation of law or 

a conveyance or other instrument in writing, subscribed by the 

party creating, granting, assigning, surrendering, or 

declaring it or by his lawful agent thereunto authorized by 

writing. 

Section 70-20-101, MCA. 

Reinhold Isaak executed no written document to effect a 

transfer of the property to Dale and Lynn. The general rule is 
that a par01 gift of land is invalid and does not pass title to the 

donee, even where the gift is accompanied by a transfer of 

possession, unless the donee, after taking possession, makes 

permanent and valuable improvements or other factors exist that 

would make it a fraud upon the donee not to enforce the transfer. 

38 C.J.S. Gifts 5 57 (1943). Section 70-20-102, MCA, provides 

exceptions to this statute: 

Exceptions to statute of frauds. Section 70-20-101 must not 

be construed to: 

(1) affect the power of a testator in the disposition of 

his real property by a last will and testament; 

(2) prevent any trust from arising or being extinguished 

by implication or operation of law; or 

(3) abridge the power of any court to compel the specific 

performance of an agreement, in case of part performance 

thereof. 

There are no circumstances present here which would constitute 

an exception to the statute of frauds under § 70-20-102, MCA. 

Without a writing signed by Reinhold Isaak to effect an inter vivos 

transfer to Dale and Lynn, the property must pass under the 1986 

will executed by Reinhold Isaak. 

Although we have concluded that this real property could not 

be part of the marital estate based on an inter vivos transfer from 

Reinhold Isaak, the District Court did not err by including it in 

the marital estate. Montana law provides: 

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

marriage, . . .the court, without regard to marital 

misconduct, shall . . . 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. . . . In dividing property acquired prior to the marriage; property 

acquired by gift, bequest, devise, or descent; . . . the court 

shall consider those contributions of the other spouse to the 

marriage, including: 
the nonmonetary contribution of a homemaker; 

the extent to which such contributions have 

ted the maintenance of this property; and 

whether or not the property division serves as an 

ive to maintenance arrangements. 

Section 40-4-202, MCA. 

The District Court found that the marital assets included 

$7,060.00 in personal property and the 21-acre parcel of real 

property with the new home built upon it. It did not include the 

other assets inherited by Dale. Clearly, under § 40-4-202, MCA, 

Dale's inheritance can be part of the marital estate. 

Reinhold Isaak died in January of 1990. The record indicates 

that, although Dale and Lynn had separated in 1989, they attempted 

to reconcile in late 1989 and early 1990, with Dale moving back 

into the home and the parties seeking some marital counseling. It 

was not until after Reinhold Isaakfs death that they separated 

permanently. 

Dale's interest in all of his father's property vested at the 

time of Reinhold Isaakls death, Section 72-3-101 (2) , MCA, 

provides: "Upon the death of a person, his real and personal 

property devolves to the persons to whom it is devised by his last 

will . . . . I I Section 72-3-606, MCA, allows the personal 

representative to take real or personal property if necessary for 

purposes of estate administration. We conclude that the real and 

personal property of Reinhold Isaak became vested in Dale upon 

~einhold Isaakls death in January 1990, subject only to the 

personal representative's power to appropriate the assets, if 

necessary, for purposes of administration. The record does not 
contain any indication that this was or will be necessary. 

Dale's petition to dissolve the marriage is dated August 30, 

1990, over seven months after his father died. Dale inherited 

property valued at $578,000.00 from Reinhold Isaak before the 

petition was filed. An inheritance received during the marriage is 

a marital asset. Vivian v. Vivian (1978),178 Mont. 341, 344, 583 

P.2d 1072, 1074. From the facts of this case, this inheritance 

should properly be considered for inclusion in the marital estate 

according to 5 40-4-202, MCA. Section 40-4-202, MCA, is a flexible 

statute vesting wide discretion in the district court. In re the 

Marriage of Stewart (1988), 232 Mont. 40, 757 P.2d 765. An 

inherited asset is to be treated on a case by case basis when 

marital property is distributed. Stewart, 757 P.2d at 768. See 

also In re the Marriage of Dirnberger (1989), 237 Mont. 398, 402, 

773 P.2d 330 (no definite rule can be established for considering 

inherited assets; each case must be decided on its own facts). We 

conclude that the District Court should have included Dale's 

inheritance in the marital estate. 

The dissent emphasizes the finding of the District Court that 

there is no evidence that either party contributed to or maintained 

any of the inherited estate. Based on that finding and a number of 

Montana cases, the dissent concludes that the marital estate should 

not include the inherited estate or property because the 

inheritance occurred after the separation of the parties, and 

because the parties had done nothing to improve, maintain, or build 

that estate. We do not believe that conclusion is appropriate 
under the facts of this case. 

For the assistance of the District Court on remand, we 

emphasize it must be guided by the provisions of 5 40-4-202, MCA. 

The requirement of the court is that it ''finally, equitably 

apportionI1 the marital estate, and this extends to inherited 

property as well as other property. The statute requires the court 

to consider such items as duration of marriage, health, occupation, 

amount of income, and needs of the parties. The general provisions 

of subparagraph (1) also require that the court consider the 

relationship of apportionment to maintenance and the opportunity of 

each for future acquisitions of capital assets and income. As 

above quoted, the statute also provides that in dividing property 

acquired by devise or descent, the court shall consider the 

contributions of the other spouse to the marriage including: 

(a) the nonmonetary contributions of a homemaker; 

(b) the extent to which such contributions have 

facilitated the maintenance of the property; and 

(c) whether or not the property division serves as 

an alternative to maintenance arrangements. 

Section 40-4-202(1), MCA. We emphasize that the District Court 

should consider all appropriate provisions of 5 40-4-202, MCA. 

On remand, the District Court may also be assisted by In re 

the Marriage of Alt (l985), 218 Mont. 327, 708 P.2d 258, a case 

similar to this one in terms of the inheritance vesting after the 

parties separated, in which this Court approved the district 

court's treatment of inherited property included in the marital 

estate. In <, the court awarded the husband's inherited real 

property to him, with the proviso that if the property was sold 
before the child's majority, one-third of the sale proceeds were to 

be put in trust for the education and general welfare of the minor 

child. The trust was to include conditions for distribution of the 

remainder of the trust to the child upo:n attaining majority. m, 

We hold the District Court did n4ot correctly calculate the 

marital estate. We vacate the property distribution and remand to 

the District Court for recalculation of the marital estate in a 

manner consistent with 5 40-4-202, MCA,, and this opinion. 

May the trial court require a parent to provide health 

insurance coverage for a child when the coverage is not available 

through the parent's employer, and partially or entirely paid by 

the employer? 

Dale contends that, because he is unemployed, the District 

Court had no authority to order that Dale provide health insurance 

coverage for Kristian. In support of this argument, Dale cites 5 

40-4-204(4)(a), MCA, which provides: 

(4) Each district court judgment, decree, or order 

establishing a final child support obligation under this title 

and each modification of a final order for child support must 

include a provision addressing health insurance coverage in 

the following cases: 

(a) If either party has avail.able through an employer or 

other organization health insuranc:e coverage for the child or 

children for which the premium is partially or entirely paid 

by the employer or organization, the judgment, decree, or 

order may contain a provision requiring that coverage for the 

child or children be continued or obtained. 

Dale's reliance on 5 40-4-204(4)(a), MCA, is misguided. That 

section is inapplicable in a situation such as the present one 
where there is no medical insurance plan provided by an employer. 

It merely requires the district court to include a provision 

relating to health insurance when there is such a plan. However, 

5 5 40-4-204 (1) and (2) , MCA, require the district court to order 

either or both parents owing a duty of support to a child to pay an 

amount reasonable or necessary for the child's support and to 

consider all relevant factors. Among other things, the district 

court must consider the "physical and emotional condition of the 

child and his educational and medical needs.'' 5 40-4-204(2) (d), 

MCA. The District Court complied with Montana's child support 

statute and required Dale to provide medical insurance as part of 

his support obligation. 

We hold that the District Court can require a parent to 

provide health insurance coverage for a child, although such 

coverage is not available or paid for partially or totally by the 

employer. 

111. 

Did the District Court err procedurally by allowing Lynn to 

collect attorney fees from Dale? 

Dale contends that Lynn did not file a motion to amend the 

judgment under Rule 59 (g) , M.R.Civ.P., and that her Affidavit in 

Support of Attorney Fees filed on January 16, 1992 was neither 

timely nor in proper form. Dale relies on Cook v. Harrington 

(1983), 203 Mont. 479, 661 P.2d 1287, to support his contention 

that the correct procedure requires a Rule 59(g) motion to amend 

the judgment when a Notice of Entry of Judgment has been filed, as 
happened here. Ms. Smith, the personal representative for Lynn's 

estate, contends that Rule 59(g) is not applicable in this 

situation. We agree with Ms. Smith. 

Section 40-4-110, MCA, gives district courts the authority to 

order one party in a dissolution proceeding to pay a reasonable 

amount for costs and attorney's fees to maintain or defend the 

action and for costs and fees incurred before the commencement of 

the proceedings or after entry of judgment. The District Court 

could properly order that Lynn's costs and attorney's fees be paid 

by Dale as part of the decree. 

Rule 59(g), M.R.Civ.P., applies to petitions for costs and 

attorney fees filed after entry of judgment. In re the Marriage of 

McDonald (l979), 183 Mont. 312, 314, 599 P.2d 356, 358, citing 

Stacy v. Williams (1970), 50 F.R.D. 52 (construing Rule 59(e), 

Fed.R.Civ.P., which is identical in content to Rule 59(g), 

M.R.Civ.P.): Lichtenstein v. Lichtenstein (1972), 55 F.R.D. 535 

(construing Rule 59(e), Fed.R.Civ.P.); see also M & R Construction 

v. Shea (1979), 180 Mont. 77, 589 P.2d 138 (this Court applied Rule 

59(g) to a motion to strike judgment for attorney fees). A Rule 

59(g) motion to amend the judgment must be timely filed when the 

judgment does not contain a provision addressing attorney fees. 

McDonald, 599 P.2d at 358. && involved a case where attorney 

fees were sought after judgment was entered. It is not relevant to 

the circumstances of this case. 

We hold that the District Court did not err procedurally when 

it allowed Lynn to collect attorney's fees from Dale. 
We reverse in part and affirm in part, vacating the property 

distribution ordered by the District Court with instructions for 

the District Court on remand to redetermine the marital estate and 

equitably distribute it in a manner consistent with this opinion. 

We Concur: 

Justices 
Justice Terry N. Trieweiler concurring in part and dissenting in 

part. 

I concur with the majority's disposition of Issue I1 

concerning health insurance, and Issue I11 concerning attorney 

fees . 

I dissent from the majority's opinion regarding Issue I. I 

would reverse the District Court's judgment which awarded real 

property owned by the estate of Reinhold Isaak to Lynn and conclude 

that there was no basis for awarding any real estate to Lynn under 

the facts of this case. 

The majority concludes that although there was no inter vivos 

transfer of the property which was awarded to Lynn, Dale inherited 

the property at the time of his father's death, even though the 

property was still part of his father's estate at the time the 

dissolution judgment was entered. Assuming that part of the 

majority opinion was correct, there was still no basis for awarding 

to Lynn any real property inherited by Dale. 

Section 40-4-202(1), MCA, sets forth the factors which must be 

considered by the District Court before inherited property can be 

distributed to the noninheriting spouse. That section provides in 

relevant part that: 

In dividing property . . . acquired by gift, 

bequest, devise, or descent . . . the court shall 

consider those contributions of the other spouse to the 

marriage, including: 

(a) the nonmonetary contribution of a homemaker; 

(b) the extent to which such contributions have 

facilitated the maintenance of this property; and 
(c) whether or not the property division serves as 

an alternative to maintenance arrangements. 

In the case of In re Mam'age ofHerron (1980), 186 Mont. 396, 608 

P.2d 97, the district court divided marital property on a 

fifty-fifty basis, even though the majority of the property had 

either been given or devised to Mrs. Herron by her father. 

However, this Court found that gifted or devised property was 

governed by the section previously quoted, and based upon that 

statute, concluded: 

If none of the value of the property is a product of 

contribution from the marital effort, the district court 

can justifiably find that the non-acquiring spouse has no 

interest in the property. 

. . . Both parties here should share equally in the 

portion of the value of the gift property attributable to 

contribution from the marriage and appreciation during 

marriage. The Herrons should not, however, share equally 

in the total value of the property since the marital 

assets came to the marriage principally as gifts for Mrs. 

Herron's benefit. 

Herron, 608 P.2d at 101-02. 

In accord are In re Mam'age of Bantard (lggO), 241 Mont. 147, 785 

P.2d 1387; In re Marriage of McFarland (l989), 240 Mont. 209, 783 P.2d 

409; InreMam'ageofFitzmonis (1987), 229 Mont. 96, 745 P.2d 353; Inre 

Mam'age of Becker (1985), 218 Mont. 229, 707 P.2d 526 

In this case, the parties separated in November 1989, several 

months before Reinhold Isaak died. Whether or not they made 

occasional efforts to reconcile following Reinhold's death, but 

before the dissolution decree was entered, there is no evidence 
that during that time any substantial contribution was made by the 

parties to the value or maintenance of the property. In fact, 

although not discussed by the majority, the District Court 

specifically found the following facts to be true: 

There is no evidence in the record that would 

indicate to this court that either party in any way 

contributed to or maintained any of the inherited estate. 

Except as herein modified, this court is of the view 

that the marital estate does not include the estate that 

Dale has inherited from Reinhold Isaak. Not only did the 

inheritance occur after the parties had separated, but 

the parties had clearly done nothing to improve, 

maintain, or build that estate. 

Neither can distribution of this property be considered an 

alternative to maintenance arrangements since Dale was already 

ordered to pay $500 a month to Lynn for her maintenance. 

Since Dale had not inherited the property during the time that 

the parties lived together, there could have been no contributions 

to the value or maintenance of the property during the parties' 

marriage. Therefore, there was no basis, pursuant to our previous 

decisions interpreting § 40-4-202(l), MCA, for distributing any 

part of the real estate inheritance to Lynn. 

For these reasons, I dissent from the opinion of the majority. 

I would reverse that part of the District Court judgment which 

awarded property from Reinhold Isaak's estate to Lynn, and 

otherwise, affirm the District Court. 
March 4, 1993 

CERTIFICATE OF SERVICE 

I hereby certify that the following order was sent by United States mail, prepaid, to the 

following named: 

ROBERT T. CUMMINS 

Attorney at Law 

One North Last Chance Gulch 

Helena. MT 59601 

John L. Hollow 

Attorney at Law 

44 West Sixth Avenue 

IIelena, MT 59601 

ED SMITH 

CLERK OF THE SUPREME COURT