NO. 93-614 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1994 

IN RE MARRIAGE OF 

DEANNE M. NEAL, 

Petitioner and Appellant, 

and 

DALE E. NEAL, 

Respondent and Respondent. 

APPEAL FROM: Dist: ct Court of the Eighth Judicial District, 

In and for the County of Cascade, 

The Honorable John M. McCarvel, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Marcia Birkenbuel, Great Falls, Montana 

For Respondent: 

Joan E. Cook, Great Falls, Montana 

Filed: 

Submitted on Briefs: August 11, 1994 

Decided: November 14, 1994 
Justice Fred J. Weber delivered the Opinion of the Court. 

This is an appeal from the findings of fact, conclusions of 

law and final decree of dissolution entered by the Eighth Judicial 

~istrict Court, Cascade County, Montana. We reverse in part and 

affirm in part. 

We consider the following issues on appeal: 

I. Did the District Court err in determining the net 

value of the marital estate? 

11. Did the District Court abuse its discretion by 

refusing to consider newly discovered evidence regarding 

the cash value of the Kentucky Central Life Insurance 

policy? 

111. Did the District Court abuse its discretion by 

amending its order to finally refuse reimbursement to 

Deanne for the children's health insurance premiums? 

Deanne Neal (Deanne) and Dale Neal (Dale) were married in 

1973. During the marriage, the couple lived and worked on the 

family farm in Fairfield, Montana. Dale still works on the farm 

and Deanne is employed part-time. Neither party owned substantial 

property prior to the marriage. During the marriage they 

accumulated a home, land, livestock and various vehicles and 

equipment. 

Five children were born of the marriage, four of whom were 

minors at the time of the trial. Following the dissolution of the 

marriage, the couple agreed to share legal custody of the children, 

with primary residence to be with Dale on the farm. Dale retained 

the sole control over the family farm and Deanne rented a home in 

Fairfield. 

Deanne filed an action for dissolution on July 29, 1992, in 
Cascade County. Trial was held on July 15, 1993, and on September 

16, 1993, the court issued its findings of fact, conclusions of law 

and final decree dissolving the marriage, dividing the property and 

providing for custody of the children. The child custody 

arrangements ordered by the court agreed with those of the parents 

incorporated into their written agreement. Subsequently, Deanne 

filed a motion to alter or amend the judgment or for a new trial. 

Dale filed his opposition and the court denied Deanne's motion. 

The major dispute at trial involved the calculation of the net 

value of the marital estate as it concerned the farm and ranch 

operating note. At the time of trial the balance on the note was 

$84,740.00 but the crops securing the note had not been sold nor 

had the calves sold. 

At trial, Deanne's expert testified that there were several 

accounting alternatives that could be used to set the net value of 

the marital estate when it involves a farming operation. One of 

the alternatives included valuing all the assets bought or produced 

with the operating loan against the full balance owing on the loan; 

another method would be to exclude both the note and the assets 

produced therewith. Another method would be to determine an 

average loan balance and subtract from the average loan balance the 

average annual value of the crops and livestock. 

Evidence at trial showed that Deanne had borrowed a 

significant sum of money from her parents in order to pay her 

monthly living expenses in Fairfield. Deanne moved the court for 

temporary maintenance and at the hearing the court determined that 

Deanne needed an extra $500 a month to live. The court initially 
determined that the monthly sum of $500 should be included in the 

marital debt to be divided by both Deanne and Dale. In the final 

decree, the court found that no evidence existed to show that the 

money borrowed from Deanne's parents had to be repaid. 

Dale received the farm as part of the property settlement and 

Deanne received the Life Insurance policy which was valued at 

$10,000, a cash payment of $13,570 and half of the cooperative 

patronage credits worth $6,250. Deanne was unable to cash the 

insurance because the company was in rehabilitation proceedings. 

By order of May 24, 1993, the court ordered Dale to repay 

Deanne for the extra $156 she paid to her employer each month for 

the children's health insurance premiums. Dale was to make these 

payments to Deanne on the first of each month until the final 

decree in the case was issued. Dale obtained health insurance for 

the children during the next month and did not reimburse Deanne for 

any premiums she paid after he obtained insurance. Deanne did not 

drop the children from her policy at work because of the court 

order. Attempts to get Dale to reimburse her for these payments 

were to no avail. 

Deanne appeals the court's final September 1993 findings, 

conclusions and decree. 

Standards of Review 

Much of the information we are asked to review here involves 

the court's findings of fact as to the valuation of the net marital 

estate. Such findings with regards to the division of marital 

property are reviewed to see if they are clearly erroneous. 

Marriage of Danelson (1992), 253 Mont. 310, 833 P.2d 215. 
Discretionary rulings by the ~istrict Court are reviewed to ensure 

that the District Court did not abuse its discretion. Marriage of 

Scoffield (1993), 258 Mont. 337, 852 P.2d 664. We review a 

district court's legal conclusions to see if the conclusions are 

correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 

470, 803 P.2d 613. 

I. 

Did the District Court err in determining the net value of the 

marital estate? 

A. Value of Crops 

In setting a value for the marital estate, the District Court 

included in the list of marital liabilities, the balance owed on 

the operating note for the farm. However, the court did not take 

into account the value of the crop grown with the help of the money 

borrowed. Appellant argues that this is error. Respondent 

contends that the court was correct in adding the $84,000 owed on 

the operating loan to the list of marital liabilities. 

Previous cases provide guidance for determining the effect of 

an operating loan on a property settlement. In the Marriage of 

Krum (L98O), 188 Mont. 498, 614 P.2d 525, we considered the 

district court's action of offsetting the balance of the operating 

loan with the value of the future proceeds of the farm's crops. 

u, 188 Mont. at 503. We determined that the court was correct 

in subtracting the value of crops from the amount owed on the loan 

and attributing the remainder of the balance owed to the marital 

estate. 

In the Halverson case, we approved the same accounting method 
of considering the crops as "fruit" of the operating loan: 

The husband's 1984 farming operation is easily accounted 

for. The husband had complete control and, fairly, 

should be held responsible for the 1984 results. 

Equitably, it is fair to charge him with the December 

1984, Federal Land Bank payment for the use he made of 

the family farm in 1984. He, then, would also be 

entitled to the fruits of his 1984 crop efforts which he, 

in fact, had. (Emphasis added.) 

~arriage of Halverson, 230 Mont. 226, 230, 749 P.2d 518, 520. 

Because of the timing of the dissolution in Halverson, the husband 

was attributed both the bank debt and the credit for the crops. In 

the present case, the dissolution occurred during the middle of the 

year and the bank debt was attributable to both parties as part of 

the marital estate. However, the court totally neglected to take 

into consideration the "fruits" of the operating loan. 

We find persuasive the testimony presented by Deanne's expert 

witness, Nicholas Bourdeau, a certified public accountant. He 

testified that when valuing a farm operation, the liability of a 

farm operating debt must be set against any value gained as a 

result of using the operating monies. He stated that: "[Y]ou 

either count all the assets this money [the operating loan] bought, 

or you don't count any of the assets and don't count any of the 

note. 

Bourdeau explained to the court that when he valued the 

marital estate, he only had one side of the equation in the figures 

he had been given or could discover. That side of the equation was 

the amount of the operating loan which the Neals obtained each 

year and repaid to the lending institution when the crops were 

sold. The current operating loan amounted to $84,000. What he did 
not have were values for the current year-end crop yield because 

the crop was still in the ground. The money gained from the crop 

would go to repay the operating loan. 

On cross examination, Bourdeau was asked what the $36,947 

figure in his valuation for crops meant. He explained that this 

figure had nothing to do with the crops in the ground or the 

enhanced value of the cattle--both attributable to the contentious 

$84,000 operating loan. The crop value listed on his report was 

the amount of crops on the property from a prior year's harvest. 

Bourdeau went on to state that it is very speculative and 

expensive when attempting to put a price on the value of crops in 

the ground and unharvested. Therefore, when he made his valuation 

of the marital property he had not speculated as to the value of 

the crops for this current year. Because he had no estimate as to 

the value of the crops, he preferred not to add the current 

operating loan figure of $84,000 on the liabilities side of the 

marital property valuation. He therefore excluded the $84,000 from 

the marital debts. 

If courts are going to consider the operating loan debt of a 

farming operation, it is only a fair consideration to offset that 

debt with the value of the crops gained by way of that operating 

loan. This may sometimes mean an expensive projection of future 

value onto a farm's crops. The alternative, and the one called for 

here, was to disallow an operating loan repaid from the current 

crop yield. It should have been an "either-or" situation. Either 

both operating loan and crops should have been considered or 

neither should have. 
We hold the court erred in considering the operating loan 

shown in the court's findings as an $84,000 liability to the 

marital estate. We reverse the District Court's valuation of the 

marital estate and remand for further consideration of the 

operating loan/crop-yield equation. 

B. Money from Deanne's Parents 

The trial court entered a temporary order in November, 1992, 

declaring that the $500 per month which Deanne needed to "borrow 

from her parents for her monthly living expenses shall be 

considered as a marital debt to be divided between the parties at 

the time of the final division of the marital estate." However, 

when the trial court entered its final order, the court found that 

the money borrowed from her parents was not expected to be repaid 

and the trial court did not include the debt in its calculation of 

the marital estate. 

Deanne argues that she is responsible to repay her parents the 

money that she continues to receive from them, in order that she 

can pay her monthly living expenses. In essence, Deanne argues 

that there is an implied contract with her parents that she repay 

the money borrowed. Dale contends that no evidence was presented 

during these proceedings that shows that Deanne had an obligation 

to repay her parents the money she borrowed from them. 

Contrary to Dale's argument, the record contains evidence in 

the form of Deanne's affidavit and testimony, both stating that she 

has only borrowed the money in order to meet her living expenses 

now. The record is devoid of any evidence offered by Dale that the 

money borrowed from Deanne1s parents was a gift. Thus, the record 
does not substantiate the court's final holding on the debt to 

Deanne's parents. We conclude, therefore, that the court correctly 

determined in its temporary order of 1992 that the $500 per month 

was a marital debt. 

We hold that the ~istrict Court erred in excluding Deanne's 

$500 a month payment from her parents as part of the marital 

liabilities. We reverse the court's final decision on this debt 

and instruct the court to enter its original November 1992 ruling. 

11. 

Did the District Court abuse its discretion by refusing to consider 

newly discovered evidence regarding the cash value of the Kentucky 

Central Life Insurance policy? 

The court awarded Deanne the $10,000 Life Insurance policy 

held by her and Dale. However, Deanne has been unable to cash this 

policy because the company is in rehabilitation. Deanne argues 

that the notice was sent to the farm concerning the status of this 

company, but the information was not passed to her. Deanne argues 

that this is newly discovered evidence and that she is due a new 

trial because of it. Dale argues that the notification was sent to 

Deanne and not him and that Deanne had the responsibility to 

research the company at least five months before trial. 

Granting a new trial is within the sound discretion of the 

District Court. Marriage of Keaster (1993) , 259 Mont. 48, 853 P. 2d 

1191. 

Section 25-11-102, MCA, states that the grounds for new trial 

are met if the party making the application for a new trial based 

on newly discovered evidence presents evidence that could not have 
been discovered prior to trial, using reasonable diligence. Newly 

discovered evidence is evidence that came to the moving party after 

trial, that was not undiscovered earlier through lack of diligence, 

that the materiality of the evidence is so great it would probably 

produce different results on retrial and that new evidence is not 

merely cumulative, nor tending only to impeach or discredit 

witnesses in the case. Cowles v. Sheeline (1993), 259 Mont. 1, 855 

P.2d 93. 

Contained within the evidence presented at trial is a document 

clearly indicating that the insurance company had Deanne's name on 

the policy as beneficiary, but the document has the ranch address 

on it. The record is ambiguous as to whether she knew of the 

rehabilitation action before or after trial. Her affidavit claims 

that she only learned of this after trial. In reviewing the facts 

presented here, while we are concerned that the possibility exists 

that Deanne was not informed of rehabilitation, Deanne's knowledge 

that rehabilitation was occurring would not have changed the 

outcome of the court's distribution. Deanne admits that the policy 

is not worthless. 

We conclude that the District Court did not abuse its 

discretion in failing to order a new trial based upon newly 

discovered evidence. 

111. 

Did the District Court abuse its discretion by amending the order 

requiring reimbursement for the children's health insurance 

premiums? 

Deanne claims that she was ordered by the court in its May 24, 
1993 order to maintain health insurance for the children and to 

have Dale reimburse her for this payment. According to Deanne, she 

could not stop providing this service for the children without a 

court order. Dale's attorney sent Deanne notification in June 

informing her that he had provided for the children's health 

insurance. However, Deanne would not stop paying the monthly 

premiums for the children under her own policy until ordered to do 

so by the court. 

A review of the record shows that both parties signed a legal 

stipulation stating word-for-word what later became the court's May 

24, 1993 order concerning the children's health care. The court in 

essence merely gave the parties' stipulation the force of law. A 

stipulation by the parties or judgment by consent is construed as 

a written contract and operates to end all controversy between the 

parties. First Bank (N.A.) Western Montana Missoula v. District 

Court for the Fourth Judicial District (1987), 226 Mont. 515, 737 

P.2d 1132. 

Despite this stipulation, Dale went ahead and obtained 

insurance for the children on his own, notified Deanne in June, and 

subsequently refused to reimburse her for the payments made by her 

following his notification. However, he did not notify the court 

of his unilateral purchase. Nor did Deanne petition the court for 

a change in its May order requiring her to provide insurance. As 

a result, Deanne carried the children on her insurance policy until 

the final decree issued in September of 1993, relieved her of that 

responsibility. That decree made Dale solely responsible for the 

children's health insurance. 
~ollowing the final decree, Deanne attempted to collect 

reimbursement from Dale for the insurance premiums that she had 

paid for the children between his notification in June and the 

court's final decree in September. Dale refused to reimburse her. 

In a November 4, 1993 order, (a response to Deanne's Motion for New 

Trial and Dale's Motion to Quash) the court further denied 

reimbursement to Deanne for the insurance paid for during the 

months between June and September. The court stated that Deanne 

should have suspended her policy on the children when Dale obtained 

health insurance for them. 

The record does not contain either insurance policy in force 

between May and September of 1993, so it is impossible to conclude 

that the duplicative nature of these policies also made them 

redundant. We have no idea what the parameters of each policy 

were. We do know from the record that Deanne's policy contained a 

provision that the company pay for counseling for Deanne and the 

children. We do not know whether Dale's policy had a similar 

provision. Therefore, just because the two policies existed 

simultaneously for six months does not mean that one of them was 

unused or unneeded. 

After a careful review of both law and facts, we conclude that 

the court, pursuant to 5 40-4-208, MCA, has no jurisdiction to 

retroactively modify its own order providing support (health 

insurance) for the children. The court cannot require Deanne to 

act in opposition to its own order of May 24, 1993, despite Dale's 

unilateral action of providing insurance himself before the court 

made its final decree. 
We hold that the court abused its discretion by amending its 

order to finally refuse reimbursement to Deanne for the children's 

health insurance premiums. 

Reversed and remanded for further consideration of the 

operating loan\crop-yield equation and for issuance of a court 

order requiring Dale Neal to reimburse Deanne Neal for the money 

she paid for health insurance premiums for the children between May 

of 1993 and September of 1993. We also reverse the court's final 

decision concerning Deanne's debt to her parents and instruct the 

court on remand to enter its oriainal November 2 1992 rulina. 

We Concur: 

47-1 

Chief Justice / ' 
November 14, 1994 

CERTIFICATE OF SERVICE 

I hereby certlfy that the following certified order was sent by United States mail, prepaid, 

to the following named: 

Marcia Birkenbuel 

Attorney at Law 

613 Strain Building 

Great Falls, MT 59401 

Joan E. Cook 

Attorney at Law 

600 Central Plaza, Suite 300 

Great Falls, MT 59401 

ED SMJTH 

CLERK OF THE SUPREME COURT 

STA'IE OF MONTANA