NO. 96-218 IN THE SUPREME COURT OF THE STATE OF MONTANA

IN RE MARRIAGE OF REBECCA LYNN HOFFMAN, Petitioner and Respondent, and WILLIAM ALLEN HOFFMAN, Respondent and Appellant.

APPEAL FROM: District Court of the Fifth Judicial District, In and for the County of Beaverhead, The Honorable Frank M. Davis, Judge presiding.

COUNSEL OF RECORD: For Appellant: Jack H.Morris; Jardine,Morris & Hoffman; Whitehall,Montana For Respondent: John Warren; Davis,Warren & Hritsco; Dillon,Montana

Filed: Submitted on Briefs: August 29, 1996 ~~~id~d: December 10, 1996Justice Terry N. Trieweiler delivered the opinion of the Court. Pursuant to Section I,Paragraph 3(c),Montana Supreme Court 1995 Internal operatingRules, the following decision shall not be cited as precedent and shallbe published by its filingas apublic document with the Clerk of the Supreme Court andby a report of its result to State Reporter Publishing Company and West Publishing Company. The respondent, Rebecca Lynn Hoffman ("Becky") 

### , filed a petition fordissolution of her marriage to the appellant,William Allen Hoffman ("Bill"),in the District Court for the Fifth Judicial District in Beaverhead County. After a hearing, the District Court entered its decree of dissolution, and concluded that the following were marital assets subject to an equitable division between the parties: (1) the log house in which the parties resided during their marriage ("theHof£man Home"); and

(2)Bill's expectation for future acquisition of the one acre of real property on which the Hoffman Home is located ("theHoffman Home Site"). On that basis, the District Court divided the agreed-uponvalue of the realproperty equally,and ordered Bill to pay Becky in the amount of $47,750forher interest. Bill appeals the judgment of the District Court. We reverse the District Court'sjudgmentas it relates topropertydivision,and remand for entry of judgment consistent with this opinion. The issue on appeal is whether the District Court was correct when it concluded that the Hoffman Home and Bill'sexpectation thathe will, in the future,acquire the Hoffman Home Site were marital assets subject to equitable division between the parties. FACTUAL BACKGROUND Frances Forgy is the record owner of 

### a seventeen-acreparcel of land in Madison County. In 1977 she gave Bill, her nephew, permission to construct a log house on one acre of her property. At that time, Bill began construction of the foundation, and continued to build the house during the next sixyears. However, the seventeen-acreparcel has never been subdivided and nopart has been transferred to Bill. In 1983, Forgy and Bill agreed that the real property taxes for the land would continue to be assessed to Forgy, and that the improvement taxes for the log house would be assessed to Bill. Bill and Becky were married in 1984, and moved into the log house in the fall of 1986. During the course of their marriage, they completed construction of the house, and made a number of improvements to it. They also paid insurance premiums and improvement taxes for the house; however, they did not pay rent to Forgy, and there has never been awritten agreement with regard to their possession of the house. There is a considerable amount of evidence that Forgy plans to devise her property to Bill; nonetheless, she has not yet transferred title to her property. In 1995, Becky filed a petition for dissolution of her marriage to Bill. In its decree of dissolution,the District Court concluded that Bill's expectation that he would be devised the HoffmanHomesite and the Hoffman Home were marital assets subjectto equitable division between the parties. On that basis, the District Court concluded that equitable division of the parties' marital estate would require that Bill pay Becky $47,750 for her interest in the estate, plus her share of the personal property included in the estate. DISCUSSION Was the District Court correct when it concluded that the Hoffman Home and Bill'sexpectation that he will, in the future, acquire the Hoffman Home Site were marital assets subject to equitable division between the parties? When we review a district court's conclusions of law, the standard of review is whether those conclusions are correct. Inre MarriageofHamilton (1992),254 Mont. 31, 35, 835 P.2d 702, 704 On appeal, Bill contends that the Hoffman Home and his expectation that he will inherit the Hoffman Home Site are not marital assets. Specifically,Bill asserts that,because Forgy is the legal owner of both the Hoffman Home Site and the Hoffman Home, the District Court incorrectly included their respective values when it calculated and equitably divided the parties' marital estate. Section 40-4-202,MCA, governs the equitable division of marital property and states, in relevant part, that: (1)In a proceeding for dissolution of a marriage



### . . . the court 

### . . . shall


### . . . finally equitably apportion between the parties the property and assetsbelonqinq to eitherorboth,however and whenever acquired andwhether the title thereto is in the name of the husband or wife or both


### . . 

## . .(Emphasis added.) Thus, 5 40-4-202(I),MCA, clearly limits the marital estate subject to equitable division to the property and assets belonging to either spouse or both, and titled in at least

one of their names. It does not confer any authority upon a district court to include in the marital estate property or assets owned by a third party. THE HOFFMAN HOME SITE It is undisputed that Forgy is, and has been at all times pertinent to this litigation,the recordowner of the real property upon which the HoffmanHome is located. Shehas never conveyedher real property to Bill or Becky, and they do not have a legitimate claim that they own the property. When the District Court equitablydividedtheHoffmans'marital estate,itwas, for reasons that follow in this opinion, required to consider the possibility that,upon Forgy'sdeath,Billmight inherit theHoffmanHome Site. However, we conclude that when the District Court evaluated and equitably divided the Hoffmans' marital estate, it erred when it included property that is owned by Forgy, a third party. THE HOFFMAN HOME The Hoffman Home cannot be separated from the land upon which it is located, and we conclude that, pursuant to 5 70-15-101, -102, and -103, MCA, it is a fixture attached to Forgy's real property. When we determine whether aparticular object is a fixture,we examine: (1) the character of the structure; (2)the manner inwhich it is annexed to the realty; and, of the most significance, (3)the intent of the parties. Grindev.Tindall (1977),172 Mont. 199, 201-02, 562 P.2d 818, 820. While the first two factors indicate that the Hoffman Home is a fixture, the intent of the parties is the controlling factor in our analysis. In this case,neither Bill

nor Becky has claimed that they own the log house. In fact,Bill's testimony with regard to his intent establishes that Forgy is the owner of the property and the log house: Q: Now, back in 1977,when you started construction on



## . . . the Hoffman home


### . . . what arrangements did you make for constructing the home on the site you did? A: Idiscussed it withmy aunt,and basically she had no desire to sell the ground. But she told me I could proceed with it [building the log house1 if I would pay the taxes on the improvements in lieu of rent. Q: 

### . . . [Ylou'vegot a $71,500home on the land. A: Or [Forgyl does. I have never felt I owned either the home or the land that it sets on. Q: If that was your feeling,why would you put all that money into the land? 

### A: Because I have a place to live rent free as long as I want it. Furthermore, with regard to fixtures, 5 70-18-101,MCA, provides: When a person affixes his property to the land of another, without an agreement permitting him to remove it, the thing affixed



### . . . belongs to the owner of the land unless he chooses to require the former to remove it. The record containsno evidence of any agreementwhich would allow Bill or Becky to remove the Hoffman Home from Forgy's real property.We conclude that the Hoffman Home and Bill'sexpectation that he will, in the future, acquire the Hoffman Home Site were not marital assets subject to equitable division. We hold, therefore, that the District Court erred when it included property owned by Forgywhen it evaluated and equitably divided the Hoffmans'marital estate. However, the District Court found, based on substantial evidence, that Forgy intends to devise the property to Bill. We have previously held that: Under section 40-4-202,MCA, the District Court must consider future acquisition of assets. The husband's expectation of a sizeable inheritance is therefore a valid consideration in the equitable distribution of the marital property. MarriageofGoodmundson (l982),201 Mont. 535, 540, 655 P.2d 509, 512. Accordingly,when theDistrict CourtdistributestheHoffmans' marital estate, it is required to consider Bill's substantiated expectation of a sizeable inheritance, which includes the Hoffman Home Site and Hoffman Home. It may also make a disproportionate distribution of the net marital estate based on that expectation. However, the distribution cannot exceed the net value of the marital estate which, in this case, after excluding the marital home and homesite, 

### is $19,775. The judgment of the District Court is reversed,and the case is remanded for entry of judgment consistent with this opinion.We concur:

JusticesJustice James C.Nelson specially concurs.



### I agree with our statement of the law applicable 

### to 

### the homesite and to the home given the undisputed evidence that Forgy is the record owner of the real property on which the home was constructed and that the homewas constructed in the absence of any severance agreement. The law cited in the opinion pertaining to fixtures makes the home part of the real property owned by Forgy and, clearly, the court may not distribute to either Becky or Bill property owned by a third person who is not a party to the dissolutionproceedings. See § 40-4-202(1) 

### , MCA; InreMarriage of Martin (1994),265Mont. 95,102, 874 P.2d 1219,1224 (citingIn re Marriage of Reich (1986),222 Mont. 192, 720 P.2d 286; ~uxbaum v. Buxbaum (1984),214 Mont. 1, 692 P.2d 411). I do, however, feel constrained to make the following observations. On appeal, citing various case and statutory authorities,Bill argues that the trial court committed reversible

error by including in the marital estate and awarding to Becky a portion 

### of the value of property not belonging to either she or Bill--i.e.the homesite 

### and the home. Bill argues the language 

### of 5 40-4-202(1),MCA; failure to comply with the statute 

### of frauds, § 70-20-101,MCA;and failureto prove adversepossessionby reason of permissive occupation and failure to comply with § 70-19-404, MCA and § 70-19-411,MCA. Bill also. argues on appeal that the court committed clear error by including fixtures attached to Forgyis real property in the marital estate, citing §S 70-15-101 and 103,MCA, and various case authorities. 9At trial each party submitted proposed findings of fact and conclusions of law to the court. No briefs were filed by either party. I note that there is not one citation in Bill'sproposed findingsand conclusions (orinBecky1 s,forthatmatter) to any of the cases or to any of the statuteshe now relies on. In fact,the entire District Court record is devoid of any case or statutory authority either in favor of or in opposition to what the court did.



### . Moreover, except in a reference so oblique as to defy denominating it as "legal analysis,

### " Bill didnot articulateany of the arguments he now makes to this Court. His entire "legal argument" is set forth in his proposed conclusionof lawnumber 32 In its entirety, that conclusion of law states: 32. The Court concludesthat the loghouse attached to Francis Forgyls property that was built by Bill prior to the marriage cannot be properly be [sic] considered part of the marital estate. Even though Bill testified that he had hoped that someday he would acquire the property from Forgy either through inheritance or conveyance neither event has transpired. There was no evidence presented to the Court other then the parties' own testimonyas towhat Francis Forgy'sintentionswere, if any, in regard to her ever transferring the property to either party. Becky has confused occupation with ownership. Even though the parties were allowed to live in the log house attached to Forgy'sproperty for over eleven years rent free the parties have no right to the loghouse and realpropertybeyond those conveyed bymere occupancy. Given the applicable law of real property the Court can do nothing else. However,basedupontherepresentationsmade byBill toBecky concerning his hope of oneday acquiring the log house from Forgyand based uponBecky'srelianceon those representationsthe Court feelsthat it wouldbe fairand equitable for Bill to pay to Becky half of $17,500that represents the parties' contribution toward improvement of the log house during the course of the marriage. Therefore,the Court concludes that Becky is entitled to receive from Bill half the value of that contribution. Furthermore,inmoving to amend the trial court'sfindingsandconclusions with regard to the home, Bill'sentire legal argument consisted of the following: " [Plursuant to Section 40-4-202(1), MCA, the Court can only apportion between the parties assets or property belonging to or titled in name [sic] of the husband or wife or both." No brief was filed; no other argument was made; there was no citation to case authority. Inmy view, the legal arguments and theoriesBill now advances

on appeal were not raised with sufficient particularity in the trial court to give either the court or opposing counsel fair notice of what Bill's contentions were. This sort of practice places this Court in the position of having to find the trial court in error on matters of law when that court was not presented with the law that the party, on appeal, contends is dispositive. Secondly, Bill has changed his position on appeal from that which he took at trial. While he now contends that Becky has no ownership interest in the home, that was not in line with his testimonybefore the trial court. Inpoint of fact,at trial Bill testified that Becky did have an interest in the marital home and that he would be willing to split with her "the value of the improvements contributed jointly during the marriage." Bill's proposed conclusion of law referenced above follows his testimony at trial. Again,Billhas blind-sidednot only the trial courtbut opposing counsel as well. Although we are constrained to apply the correct law in this case, 'having now done so, I take no comfort in our decision given the record that was presented to the trial court. Accordingly, 

### I

### specially concur.

JusticeKarla M. Gray

### concurs i