No. 79-27

VIVIAN INTHE SUPREME COURT OF THE STATE OF MONTANA 1980

COOK, Petitioner and Respondent,

-vsALFRED C. COOK, Respondent and Appellant.

Appeal from: District Court of the Eighteenth Judicial District, In and for the County of Gallatin, The Honorable W. W. Lessley, Judge presiding. Counsel of Record: For Appellant: Ann L. Smoyer, Helena, Montana For Respondent: Keller, Reynolds, Drake, Sternhagen and Johnson, Helena, Montana

Submitted on Briefs: May 27, 1980 

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# 171980 Decided: A

Filed: 

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# q- j\

## 7Mr. Justice John Conway Harrison delivered the Opinion of the Court.

This appeal arises outof 

### a proceeding for a dissolution of marriage and the equitable apportionment of assets of a marital estate filed inthe DistrictCourt of the EighteenthJudicial District, the Honorable W. W. Lessley presiding. Appellant husband appeals from the District Court's apportionment of the marital estate. Appellant husband and respondent wife 

### weremarried in Bozeman, Montana, on December 11, 1955. On October 18, 1977, after twenty-two years of marriage, wife petitioned the court for 

### a dissolution of marriage and the equitable apportionment of assets of theirmarital estate. Atthe time of the filingof the petition, husband was 45 years old and wife was 42 years old. Husband had a college education and worked invarious occupations during the marriage: foreman and ranch hand, insurance agent, teacher, and automobile salesman. Wife had approximately two years of college and worked primarily as a housewife, although she was employed atdifferent 

### times throughout the marriage as a waitress, newspaper reporter, and retail clerk. Five childre.?were born to the parties during their mzrriage. One child, Kevin, isa minor who presently lives with wife inHelena, Montana. Three children have attained the age of majority, and the remaining child died inan accident during the marriage. The assets accumulated by the parties during the marriage include a family home inBozeman, two cars, a motorcycle, several shares of corporate stock, a boat, home furnishings, clothing and other incidental 

### itemsof personal property. In 1965, wife alsoreceived an inheritance fromher grandmother, Ada Smith. The inheritance consisted of a cash bequest, which was used for family expenses, and a remainder interest incertain farm and ranch land near Saco, Montana (hereinafter referred to as the Smith Ranch). The value of the land was stipulated by the parties asbeing between one and two million dollarsbefore taxes. The interest is subject toa lifeestateheld by wife's father, Hugh C. Smith. From this interest, the parties have received approximately $39,554.15 inthe form of mineral royalty payments and lifeestateprincipal and income distribution. These proceeds have alsobeen applied toward family living expenses. During the marriage, husband lefta $5,500 teaching contract inWhite Sulphur Springs in 1958, and the parties moved to the Smith Ranch, where husband worked as foreman and ranch hand. Husband continued inthis capacity for six years ata salaryof $250 per month plus housing. During this 

### timean additional 100 acres of wheat were put into production. In 1964, because of financial reasons, the parties moved from the ranch into the town of Saco, where husband taught vocational agriculture inthe public school system. In 1971, because of wife's desire to leave Saco, the partiesmoved toBozeman. Husband cashed his teacher's retirement fund and some smaller lifeinsurance policies to finance the move. Wife presently works asa clerk in stategovernment in Helena, Montana. Husband 

### ispresently unemployed, having been terminated from hisjob inearly 1977 and working for only four months in 1978. Husband has suffered both emotional and physical problems since the parties' separation and has incurred substantial medical and hospital expenses.The marriage of the parties was dissolved by the DistrictCourt on April 10, 1978. The court apportioned the 

### assets of themarital estateon February 15, 1979. Several of the assets

### were distributed pursuant to a stipulation of the parties. An agreement was made between the parties to equally splitthatportion of the proceeds which represented equity resulting from the 

### sale of their Bozeman residence. That figure amounted toapproximately $11,200. With respect to the other assets, the parties stipulated, with the exception of a few 

### items, who was toreceive each 

### asset, but left the particular valuation of each asset to the court. The property was distributed and valued by the DistrictCourt in the following manner: Wife was awarded 

### a 1967 model car 

### (lessthan $1,000); a wedding ring ($800);home furnishings (unvalued); china closet (unvalued); clothing and other inzidental items of personal property. Husband received a 1977 Buick Riviera automobile ($3,500); a Honda 90 ($150); a boat ($2,700); corporate shares of stock funvalued);home furnishings (unvalued); clothing and other incidental 

### items of personal property inhis possession. It should be mentioned that the DistrictCourt noted in

### its findings that husband paid remaining purchase money mortgages on the 1977

car and the boat out of the proceeds received from the 

### sale of the house. The 

### District Court further found thathusband had not \ contributed to themaintenance of wife's remainder interest and awarded her sole ownership of the interest on the basis of the property distribution and as an alternative tomaintenance. The DistrictCourt ordered husband to assume the remaining debts of the marriage, pay $110 per month for the support of theparties' minor child until he reached the age of majority and pay wife's attorney fees.We consider three issueson appeal: 1. Whether the DistrictCourt erred or abused 

### its discretion inapportioning the assets of the 

### marital estate? 2. Whether the DistrictCourt erred inawarding wife soleownership of the remainder interest 

### as an alternative tomaintenance? 3. Whether the DistrictCourt erred inordering husband topay wife's attorney fees? The firstissueraises the question of whether it is necessary for a District Court ina dissolution proceeding to firstplace a value upon allof the assetswithin a marital estate and determine the networth of the parties before distributing property within thatmarital estate. In this case, the DistrictCourt distributed the marlt~~l estate without determining the net worth of the parties or valuing the following 

### itemsof the marital estate: the china closet, the corporate shares of stock, and the home furnishings received by husband and wife. Husband contends itwas error for the court to apportion the assetswithout undertaking such preliminary matters. Husband relies upon several cases inwhich this Court has stressed the importance of valuing assets and determining the net worth of parties indissolution proceedings before distributingproperty within the marital estate. See Herring v. Herring (19791, Mont. 

## - , 602 P.2d 1006, 36 St.Rep. 2052; 

### InReMarriage of Brown (1978), 

### -Mont

# .

, 587 P.2d 361, 35 St.Rep. 1733; Martinez v. Martinez (1978), 175Mont. 280, 573 P.2d 667, 35 St-Rep. 61. Wife argues that the DistrictCourt did not 

### err in apportioning the assets of the marital estate. She 

### asserts there was no need for the District Court to concern itselfwith the valuation of certain assets orwith the determination of the networth of the parties because there was a stipulation entered intobetween the parties regarding the distribution of assets. Wife contends, because of the stipulation, that this case 

### isdistinguishable from the authority relied upon by husband. Further, on the basis of Penn v. Burlington Northern, Inc. (1980), Mont. I 605 P.2d 600, 

### 37 St.Rep. 93, wife contends thathusband 

### is precluded from raising any issues relating to the stipulation on appeal. InPenn both parties agreed that certain documentary evidence did not need tobe introduced at

### trial if the railroad would admit that 

### it had notice of the dangerous nature of a railroad crossing. The railroad admitted notice, and the plaintiff did not attempt to introduce the documents for other purposes 

### attrial. On appeal, however, the plaintiff argued that the evidence was relevant to the issue of notice and punitive damages. Werefused to consider that issue, however, because of the stipulation. The transcriptvery clearly indicates in this

### case that therewas a stipulation entered intobetween the parties. However, the transcript further indicates, unlike Penn, that the stipulation was limited innature. The parties here agreed only as towhich party would receive particular assets and not to a particular valuation. The valuation of assets wzs leftto the coart. The following colloquy occurred atthe beginning of the trial: "THE COURT: This 

### is the time 

### set by the Court and Counsel of Record in 24041 tohear the 

### matter of property division and gentlemen you may proceed. "MR. KOMMERS: Thank you, your Honor, I represent the petitioner and I have some proposed findingsfor the Court and I realize that some of these 

### willhave tobe changed, but I submit thatnow. The Petitioner and Respondent inthismatter have reached agreements with respect to severalmatters indispute here, and 

### we would stipulate for the record that the following 

### itemsare true and need no proof. With respect to the personal properties acquired by the couple during the 

### termof the marriage, property has been divided and the Petitioner 

### isinpossession of 

### a 1967 automobile, home furnishings, and a wedding ring, and the Respondent 

### isinpossession of a 1977 Buick Riviera automobile, a Honda 90, 

### a certain number of Life and Montana corporate shares, a boat, and certain home furnishings. The evaluation of 

### -- the property could -- notbe agreed to 

### b~ the parties and 

### willbe 

### --- provided - intestimonybefore the Court today. "With respect toreal estate acquired by the par

### ties during the term of themarriage, it 

### is agreed tobe true and requires no further proof that the home consisted of real estate. The family home consisted of real 

### estate acquired by them which was sold for the fairmarket value of $55,400 at which Petitioner and Respondent share equally in the netproceeds inthe amount of approximately $11,458.86. That with respect toother sources of income of the parties and 

### it 

### isatissue today with respect to the future interestof Petitioner, the parties have agreed on 

### a valuation of monies received from the estateof Ada Smith, and that thesemonies 

### were received and used by the couple equally during the 

### termof the marriage 

# . . ." (Emphasisadded.) Here, counsel did not agree to an overbroad stipulation. There was no agreement, for example, that the distribution of assets would remain the same if the value of the 

### estates received by each individual party 

### were inequitable and disproportionate. To the contrary, the stipulation was well-defined and limited. Assuming that the courtwould undertake a division of property thatwas equitable, the parties only agreed astowho would receive particular assets and leftthevaluation of the assets to the court. Under these circumstances, 

### we find thathusband isnot precluded from raising his arguments on appeal. This Court has held ir, many 1)reviouscases that, before

a trial courtmay properly apportion the assets of a marital

### estate, it

### must firstdetermine the net worth of the par

### ties. Herring, supra; Brown, supra; Martinez, supra. We have also stressed the importance of valuing each asset of themarital estate. InHerrinq, where the DistrictCourt made no findings as to the networth of the parties or as to thepresent fairmarket value of the substantial assets of the marital estate, we remanded and stated: "We have held ina number of cases that, before theremay be a proper distribution of marital property, the DistrictCourtmust firstdetermine the networth of the parties. [Citations omitted.] Here, 

### the District Court made no such finding. While the District Court did indicate that the only significant assets

### were the diamond rings and the lotand the home, there was no attempt toplace a present, fairmarket value 

### - upon these items 

### -- ortodetermine the networth 

### -- of the parties 

### atthe time of their divorce." 

### -- 

### ---- Herring, 602 P.2d 

### at 1007, 36 St.Rep. at2054. (Emphasis added.) InMartinez, where 

### itwas argued that

### we should take judicial notice of certainproperty values by looking to stateappraisals because no evidence was introduced regarding property values attrial, 

### we stated: "Whether or not inretrospect these figures provide an accurate indication of fairmarket value of the Billings property, however, begs the issue. Section 48-321, R.C.M. 

### 1947, requires the trial judge to consider the property values. Neither the appraised valuation nor the assessed valuation

### were introduced asevidence at

### trial; nothing inthejudge's findings of factor conclusions of 

### -- 

## --- law shows thathe ever considered the assessed

# or --- appraised value 

### --- of the land prior chis 

### --- property disposition order. "Respondent alsomaintains that theMexican propperty 

### isirrelevant to the property disposition because it 

### isof negligible value and because a Montana DistrictCourt 

### isof no effect inMexico. The record - 

### is silentas 

### tothe value of the Mexican 

### --- -- property. The Mexican property is

### relevant to a property distributionbecause, although Montana Court orders encumbering or transferring title 

### to Mexican property may be of no legal effectin Mexico, thatMexican property still is 

### of value to the owner, is

### part of the owner's estate, 

### will affectthe owner's futureneeds and therefore must be considered under section 48-321." Martinez, 573 P.2d at669-670, 35 St.Rep. 

### at64. (Em

### phasis added.)

### We find in thiscase that the District

### Court erred in notplacing a value upon the aforementioned 

### itemsof the marital estate and innot determining the networth of the parties atthe time

### of their divorce. The valuation of assets and the determination of networth are two important stepswhich must be made by District Courts inthe apportionment process, regardless of whether parties enter into any stipulations concerning their marital estate. From these determinations, a 

### basis is

### provided from which a ~istrict Court may make, oran appellate courtmay decide, that an apportionment isequitable. Without these determinations, the equitable distribution of marital 

### assets amounts only to guesswork. This casemust, therefore, be remanded to the DistrictCourt so that the parties' marital estatemay be distributed on thisbasis. By our decision today, 

### wemean inno way to discourage parties indissolutionproceedings from entering into stipulations such as the case here. To the contrary, stipulations provide an economical and efficientway tohandle such proceedings. We 

### intend only toreemphasize the importance of taking certainpreliminary stepsbefore property is 

### distributed. Where parties cannot agree asto the value of

a particular asset, we further encourage counsel toprovide ample testimony for the District Court regarding values. Despite the statements of counsel, thatwas not done here. The remaining issues inthiscase aredirectly affected by and intertwined with our holding regarding husband's firstissue. The second issue concerns whether the District Court erred inawarding wife sole ownership of the remainder interest on thebasis of the property distribution and 

### as an alternative tomaintenance. The District 

### Court found:"The Court concludes that the respondent has made no contributionswhich have facilitated maintenance or [sic] the property subject to the life estate and petitioner's remainder interest, and therefore, has no claim for any portion of petitioner's remainder interest. Petitioner should retain sole ownership of the remainder interest. This award constitutes a portion of the property disposition and asan alternative tomaintenance arrangements infavor of petitioner which would otherwise be required from the respondent." Husband's primary argument 

### is thathe 

### is entitled to a portion of the remainder interest because of his contributions while working on the Smith Ranch and his sacrifices in surrendering employment opportunities to accommodate his wife's desire tomove. Wedecline to rule upon this issue inview of our holding inthe firstissue and leave husband's arguments to the DistrictCourt for consideration on remand. Whether wife 

### is entitled to sole ownership of the remainder interest, especially asan alternative tomaintenance, depends upon the property distribution. Maintenance 

### is properly awarded only after the property 

### isapportioned between the parties. In ReMarriage of Herron (1980), Mont. 

## , 608 P.2d 97, 102, 37 St-Rep. 387, 394; Vivian

v. Vivian (1978), Mont. 

## , 583 P.2d 1072, 1075, 35 St.Rep. 1359, 1362. The spouse seekingmaintenance must lack sufficientproperty toprovide for his/her reasonable needs and be unable to support himself/herself through appropriate employment or be the custodian of a child whose conditions or circumstances make 

### it appropriate that the custodian not be required to seek employment outside the home. Section 40-4-203(1), MCA. Conceivably, on remand, when the DistrictCourt places a value upon allof the assets of the marital estate and determines the networth of the parties, the findings may reveal that a differentapportionment 

### is appropriate. In

### this connection, if the court finds that the award of the remainder interest to wife is appropriate partly as ac al-ternativeto maintenance, it should make findingspursuant to section 40-4-203(1), MCA. Those findings are not present here.The third issue in this case concernswhether the District Court erred in ordering husband to pay wife's attorney fees. For attorney fees to be awarded in dissolution proceedings, necessitymust be shown. In Re Marriage of Kaasa (1979), Mont. 

## , 591 P.2d 1110, 1114, 36 

### St.Rep. 425, 430. Here again,whether wife is able to demonstratenecessity for an award of attorney fees depends to some extent upon the court's apportionmentof marital assets. In this regard,we also note thatwhile husband was terminated from his job in 1977 and worked for only four months in 1978, wife ispresently employed. We 

### leave this issue to the District Court for consideration on remand. This cause is remanded to the District Court to proceed in accordance with this opinion.

We concur:

Chief Justice

Mr. Justice John C. 

### Sheehy and Mr. Justice Gene B. 

### Daly dissent and will file a written dissent later.DISSENT

No. 79-27



# ............................................................... COOK V. COOK



# ............................................................... Opinion handed down July 17, 1980 and authored 

### by Mr. Justice John C. Harrison--Dissent authored 

### by Mr. Justice John C. Sheehy and Mr. Justice Gene B. Daly



# ...............................................................

DATED : November 

### 7, 1980

- &LED:( OF SUPREMECOUa '\ STATE.OENOO-!aEd6

### Mr. Justice John C. Sheehy and Mr. Justice Gene B. Daly dissenting:

What does Alfred Cook hope to accomplish by this appeal? He hopes to receive a portion of Vivian's inheritance. He recites in his brief: "Thus,Vivian's inheritance,received during the pendency of her marriage to Al, was a marital asset to be apportioned equitably as required by 48-321, R.C.M. 1947--40-4-202, MCA. It should also be noted that this section also requires a valuation of the wife's estate at the time of the divorce, even though a portion of the estatemay be subject to distributionby her death." What inheritance of the wife isAlfred Cook talking about? Under the terms of the probated Will of Ada Smith, the grandmother of Vivian Cook,Ada Smith left her residuary estate to her son, Hugh C. Smith, during his natural life, and upon his death to his five children, including Vivian Smith Cook, the respondent here.We are told that the total estate has a value of between $1 to $2 million and it is obvious that Vivian's share is onefifth of whatever value the estate may eventually have, -

### presupposing thatVivian Cook outlives her father 

### -- Hugh C. Smith. At the time of the dissolution of the marriage, and the order of the court dividing the property, although Vivian Cook was the vested remainderman in a one-fifth interest in the estate, subject to the life estate of her father, she has absolutely no right in the estate until his death and if shepredeceases her father,her sharewill descend to her children by virtue of other provisions in the Will of Ada Smith. By 

### any abilitytJ~c?.t

### we have to judge, the value of her remainder estate at the time of the dissolution of the marriage ----- 

### -- was nil. She had no right to dispose of any of the underlying assets comprising the remainder estate unless she had met someone who had recently purchased the Brooklyn Bridge. -12-

### This is not a casewhich requires the application of section 40-4-202,MCA, regarding the factors to be considered by the court in the determination of a fair division of property. The reason is that in this case, the parties had stipulated between them as to the respective spouses to whom their items of property would go. In Morse v. Morse (1977), Mont

# . , 571 P.2d 1147, 34 St.Rep. 1334, this Court stated that the possibility of receiving futuremonies by a spouse could not be considered by the courtandspecifically the court refused to consider the possibility that the wife would receive an inheritance from her mother sometime in the future. The District Court specifically found in finding of fact

no. 13 that "the respondent has made no contributions which have facilitatedmaintenance of the properties subject to the life estate of Hugh Smith and the remainder interest of the petitioner." The value of the remainder interest therefore, if it had any,

was quite beside the point. The District Court did Alfred Cook a favor when itprovided that the wife should receive no maintenance fromAlfred Cook in view of her possible remainder interest. The remaining unvalued items are a china closet, household furnishings and corporate stock which was awarded to Alfred Cook. His dissatisfaction arises, if we may believe his brief, from the situation that "here thewife's inheritancemay exceed the worth of all other material assets combined and it is certainly

a major asset whether it is considered a marital asset or part of her estate. Thus, 'to deny the husband a share of the wife's inheritancewould stand on the same footing as denying the wife

a share of the large sum in windfall profits from the husband's business or investments acquired just prior to the divorce.'" Alfred Cook's premise is groundless. He may not count a marital asset a future conditional interest not in the possession of his wife at the time of the marital dissolution. Themajority has failed to grasp at this point.-13-

### The futility of remand here is manifest. The District Court on reconsideration will assign a minimum value to the future interest,award that future interest to thewife because ithas no other legal option and provide that such future interests shall be in lieu of maintenance for the husband. We have assigned to the District Court the performance of a useless task. Under Rule 52(a), M.R.Civ.P., the findings of the District Court should not be set aside unless clearly erroneous. We do not see any error in the way this matter was handled by the District Court, in view of the stipulation that the parties adopted respecting the distribution of the property. A factor which makes the decision of the majority seem even worse is thatAlfred Cook made no effort to bring before the District Court a valuation of the future interest, although he now complains that the District Court made no such valuation. This is the trial testimony fromAlfred Cook respecting thatpoint: 

### "Q. Did you obtain an appraisal of the property that is covered by the future interest? A. 

### I did not. 

### "Q. And what was the reason for not obtaining the appraisal? A. Really,when this first started, I saw no need for it, and the provisions and what was promised by me, I 

### didn't see any need for an appraisal. Later, I 

### could see no need for it and probably because of the expense, itwas not deemed unnecessary to have it appraised as that is not what is important." The position of the majority in this case is inexplicable. bfewo'ilLd af firm on all counts. 

# A Justice


# / Justice 

## 1