Title: MORSE v MORSE
Citation: N/A
Docket Number: 13364
State: Montana
Issuer: Montana Supreme Court
Date: November 16, 1977

No. 13364 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 WILLIAM R. MORSE, Plaintiff and Appellant, -vs- BETTY J. MORSE, Defendant and Respondent. Appeal from: District Court of the Thirteenth Judicial District, Honorable M. James Sorte, Jud-qe presiding. Counsel of Record. : For Appellant: Anderson, Symmes, Forbes, Peete and Brown, Billings, Montana Weymouth D. Symmes argued, Billings, Montana For Respondent: Hon. Michael Greely, Attorney General, Helena, Montana Allen B . Chronister, Assistant Attorney General, appeared, Helena, Montana Berger, Anderson, Sinclair and Murphy, Billings, Montana Arnold A. Berger argued, Billings, Montana Submitted: January 25, 1977 Decided : Z\dQV 1 6 1377' NQV I E 1 g n Filed: M r . Justice Daniel J. Shea delivered the Opinion of the Court: The husband appeals from a judgment of the District Court, Stillwater County, awarding certain property t o the wife i n a property distribution decree following dissolution of marriage. The husband raises several issues relating t o the Uniform Marriage and Divorce A c t and further claims the court failed t o consider several factors i n making its award of the marital pro- perty. One of the issues under the Uniform Marriage and Divorce A c t i s h i s claim that the court did not consider the wife's inheritance a s a marital asset. Because the District Court was not specific i n its disposition of the inheritance, w e are compelled t o reverse and remarid for a hearing on the disposi- tion of the inheritance. A s t o h i s remaining contentions, we find no error. F i r s t , w e w i l l discuss the various other issues raised by the husband, and discuss l a s t the issue of the wife's $200,000 inheritance. Both the husband and wife were granted a divorce by the court on October 23, 1974. A t r i a l on property disposition was held December 9 and 10, 1975. The court issued findings of f a c t , conclusions of law and order apportioning the marital property on January 19, 1976. The husband contends the correct law under which the court divided the property was that which existed a t the time the t r i a l was held on that matter, and hence prior t o the effective date of the Uniform Marriage and Divorce Act i n Montana, January 1, 1976. However, section 48-341, R.C.M.1947, of that Act, states: "(2) This act applies t o a l l pending actions and proceedings commenced prior t o its effective date with respect t o issues on which a judgment has not been entered * * * "(4) I n any action o r proceeding i n which an appeal was pending o r a new t r i a l was ordered prior t o the effective date of t h i s a c t , the law i n effect a t the time o f , t h e order sustaining the appeal or the new t r i a l governs the appeal, the new t r i a l , and any subsequent t r i a l or appeal." Here, the t r i a l court did not enter judgment on the property division u n t i l January 19, 1976, eighteen days a f t e r the effective date of the Uniform Marriage and Divorce Act. Section 48-341(4) of that Act specifies the exclusive circumstances under which an action would f a l l under pre-existing law--cases i n which a judgment has already been entered o r a new t r i a l ordered. Sub- section (4) plainly does not apply t o t h i s case as a judgment had not been entered when the Uniform Marriage and Divorce A c t went into effect. W e might add, however, that i n the area of property division, the Uniform Marriage and Divorce Act provisions a r e similar t o case law predating that Act. Biegalke v. Biegalke, Mont . , 564 P.2d 987, 34 St.Rep. 401, 405 (1977). Therefore the husband l o s t no substantial rights by coming under the Uniform Marriage and Di.vorce Act. The basis for dividing property upon dissolution of marriage is set out i n section 48-321, R.C.M. 1947. It provides i n relevant part that the court: "* * * without regard t o marital misconduct, s h a l l * * * finally equitably apportion between the parties the property and assets belonging t o either o r both however and whenever acquired, and whether the t i t l e thereto is i n the name of the husband o r wife o r both. * * *'' (Emphasis supplied.) The statute also sets out factors which the court must consider i n the apportionment of the property, including: "* * * amount and sources of income * * * needs of each of the parties [and] whether the apportion- ment is i n l i e u of o r i n addition t o maintenance * * * * I t Concerning property acquired by either spouse before marriage o r by g i f t , bequest, devise o r descent, the s t a t u t e provides the court shall: 'I* * * consider thos3contributions of the other spouse t o the marriage * * * the extent t o which such contributions have facilitated the maintenance of t h i s property and whether o r not the property disposition serves as an alternative t o maintenance arrangements. I I The husband asks t h i s Court t o disregard the specific language of the statute prohibiting consideration of marital misconduct i n distributing marital property, The s t a t u t e ex- pressly forbids a consideration of marital misconduct i n appor- tioning the marital estate. Since the intent is clear we take the s t a t u t e a s we find it. I n the Matter of West Great Falls Flood Control and Drainage District, 159 Mont. 277, 287, 496 P.2d 1143 (1972). It is equally clear that the husband would fare no better under the law pre-existing the Uniform Marriage and Divorce Act. Before that Act, "fault" was considered only i n the context of a party's right t o alimony and could not be the basis for depriving either party of property interests upon divorce. Johnson v. Johnson, 137 Mont, 11, 17, 349 P.2d 310 (1960). The husband also contends that the wife quitclaimed certain property to him before the dissolution of the marriage and accordingly, the court should not consider that property a s part of the marital estate. H e claims it was the intent of the wife to deliver the property t o him and t h i s was manifested by the execution, delivery, and filing of the deeds. However, section 48-321 provides that a district court may equitably divide pro- perty "however and whenever acquired" and therefore the question of title is not controlling. This was also the law before the enactment of the Uniform Marriage and Divorce Act. LaPlant v . LaPlant, Mont . , 551 P.2d 1014, 33 St.Rep. 580 (1976); Downs v. Downs, Mont . , 551 P.2d 1025, 33 St.Rep. 576 (1976); Cook v . Cook, 159 Mont. 98, 102,103, 495 P.2d 591 ( 1 9 7 2 ) . The husband contends the prospective assets and liabilities of the parties should be considered in a property division. While it is true that section 48-321 requires the court, among other things, to consider "the opportunity of each for future acquisi- tion of capital assets and income", here there was no sufficient foundation established for the reasonable likelihood of acquiring future assets. As to future debts or liabilities of the parties, such evidence is normally too speculative, and in this case there was no reliable evidence by which the court could determine future liabilities. For the same reason, we cannot consider the possibility the wife will receive an inheritance from her mother sometime in the future. Because of the ambiguity of the District Court's findings on .the wife's inheritance of $200,000 before the dissolution of the marriage, we are compelled to remand the cause for a hearing and specific findings. I t is clear under section 48-321, "property and assets belonging to either or both however and whenever acquiredl',that the $200,000 inheritance was properly an asset of the marital estate at the time of dissolution. The husband contends gnce the wife was awarded the entire $200,000 inheritance, that he should have received a corresponding benefit from the remainder of the marital property. I n h i s findings the t r i a l judge noted that the wife did have an inheritance of $200,000. However, the judge failed t o dispose of that inheritance i n any way which would clearly show h i s intent. The order of distribution l i s t e d certain property awarded t o the wife, and the remainder t o the husband. Since the wife was not specifically awarded the $200,000, it could be argued the husband was t o receive the $200,000 inheritance of the wife. But there is no evidence the husband asked for a l l o r any portion of the wife's inheritance. Neither i s there any indication from the evidence, findings and conclusions that the court intended t o award a l l o r any portion of the wife's inheritance t o the husband. Moreover, on appeal t o t h i s Court both parties t r e a t the inheritance a s having been awarded t o the wife. The confusion indicated by the record and the position of the parties can only be resolved by a rehearing on the issue of the inheritance. W e s t r e s s here that, as i n a l l decrees of property distribution, there is no definite formula that must be followed and each case must be treated on an individual basis. Biegalke v. Biegalke , supra. The wife contends the decree should be modified so that property awarded to her can be taken from the husband's indirect control. This is a matter for the D i s t r i c t Court t o consider upon remand of t h i s case, and it need not be discussed here. The wife also contends the judgment should be s e t aside because the record did not disclose the true net worth of the husband. She did not cross-appeal on t h i s issue, but raised it for the f i r s t time i n her brief on appeal. Accordingly, she is precluded from raising t h i s issue on appeal. Johnstone v. Svejkovsky, Mont , - - 9 554 P.2d 1329, 33 St.Rep. 954 (1976); Spencer v. Robertson, 151Mont. 507, 511, 455 P.2d 48 (1968). W e vacate the judgment of the district court and remand it for further proceedings consistent with this Opinion. W e Concur: Justices. M r . Justice John Conway Harrison concurring i n part and dissenting in part: This Court i n Bdegalke v. Biegalke, - Mont. , 564 P. 2d 987, 34 St.Rep. 401 (1977), established i n Montana that i n cases, such as the instant one, the provisions of Chapter 3, T i t l e 48, sections 48-301 through 48-341, R.C.M. 1947, Montana's Uniform Marriage and Divorce Act, apply. However, i n apportioning the property of the parties here, under the provisions of section 48-321, I disagree with the majority. Here, under the facts u n t i l 1964, when the wife moved t o England, away from the marital domicile, such a division would, i n m y opinion, have been j u s t , for up t o that time both equally contributed t o the acquisition of the property. A s I view the evidence, it was the defendant wife who wanted the English exper- ience, and it was the plaintiff husband who reluctantly went along with her demands. It was plaintiff husband who had t o purchase the home i n England and maintain h i s family there. From 1964 t o 1972, with the exception of quarterly v i s i t s , and because of the wife's insistence on living i n England, p l a i n t i f f ' s children grew up without h i s close supervision and guidance and he was denied the joy and satisfaction of seeing t h e i r daily development for some eight years. Under these facts one would assume the children would be i n support of their mother, but here, because of her conduct, she has l o s t the support of a l l five children. They have returned from England t o the family home i n Absarokee and support their father's position i n these proceedings. H e has become both father and mother t o them and it i s t o him they have looked t o for f i s c a l and emotional support these l a s t s i x years. Even under the findings of the t r i a l court, it was found that a f t e r moving t o England the wife contributed l i t t l e or nothing t o plaintiff father's earning capacity. During the marriage the parties accumulated the following property : 1. Family dwelling in Absarokee, with garage (average appraised value) 2. Law off ice building 3. Morse apartments 4. Rumaino acreage 5. Airplane and hanger 6. Contract proceeds (total) 7. Morse-Edmonds-Henrickson contract 8. Pickup and vehicles (agreed value) 9. Home furniture (plaintiff' s estimate) 10. Notes and mortgages receivable 11. Value due on lumber 12. Accounts receivable (excluding those with doubtful collection possibilities) 13. Insurance (cash surrender value) 14. Savings Account - Livingston, Montana 15. Checking Account 16. Bank account - Red Lodge 17. Morse Apartments Account 18. Bonds (including $2,500 belonging t o wife a t time of marriage) 19. Library and equipment - law office 20. Morse Apartments - furniture, fixtures 21. P l a i n t i f f ' s apartment furniture 22. Wife's inheritance from father, L.B. Kratz The l i a b i l i t i e s of the parties consist primarily of outstanding mortgages: 1. Federal Land Bank Mortgage $25,207 2. U.S. Bank, Red Lodge 37,195 3. Estimated back tax l i a b i l i t y - IRS (1971-1975) 54,000. In June 1972, defendant returned t o Montana and took up residence with her parents. The divorce proceedings commenced shortly thereafter. Within two years, but prior to the divorce, her father died leaving her approximately $200,000 and in addition she received $9,740 as executrix of the estate. She occupies the family home and has f u l l use of two family automobiles. While speculative i n amount, she w i l l inherit a substantial estate from her mother who is 82 years old. I n spite of the above facts, the t r i a l court made t h i s distribution of property: "A. TO THE D E F E N D A N T : (1) Family dwelling .... together with the attached shed o r .garage . . . (2) A l l furniture and personal property located i n the family home other than that, claimed by the third party intervenor, and p l a i n t i f f ' s business records. (3) The Morse Apartments ... (4) The furniture and fixtures i n the Morse Apartments. (5) A l l of the money's payable and a l l right, t i t l e and interest of the plaintiff i n and t o the property described as the Morse-Edmonds-Hendrickson Contract, the sum being $15,360.83, o r , i n the alternative, a cash payment of $15,360.83. (6) One half of the United States Savings Bonds ( i f and when found). "B. TO THE PLAINTIFF: (1) A l l of the property of the parties not awarded t o defendant as evidenced from the exhibits and the testimony and brought out during the course of the t r i a l . (2) The Plaintiff s h a l l pay a l l outstanding indebtedness on the mortgages that secure a loan on any property that was awarded t o the defendant herein." Considering the facts of the instant case, such a distribu- tion of property i s , i n m y opinion, an inequitable distribution t o the wife. N o mention i s made by the t r i a l court of the $200,000 plus inheritance i n the court' s disposition formula contained i n i t s conclusion of law. Totaling the values of the properties taken by the respective parties i n such case, would yield t h i s result: TO THE HUSBAND $173,482 ( t o t a l value) less 62,400 (Outstanding mortgage l i a b i l i t i e s ) 111,082 l e s s 24;000 (conservative estimate of predivorce tax l i a b i l i t y ) $ 87,082. The husband received no house o r living arrangements other than the a b i l i t y t o rent an apartment owned by the wife by virtue of the decree. H e is, as is apparent, responsible for a l l of the l i a b i l i t i e s of the marriage, a factor t o be considered under the express language of section 48-321. TO THE WIFE $81,621 plus 200,000 (inheritance funds) plus 9,700 (executrix fee) $291,321 In addition, the wife received the family home, which she now rents t o others, despite the court having found as a f a c t that she i s entitled t o the use and occupancy of the Kratz home. Section 48-321 i s a s t a t u t e of broad applicability. It speaks of consideration of " a l l property however and whenever acquired" and expressly refers t o inheritances. Other factors t o be balanced, which would find applicability i n t h i s case are: amount and sources of income, needs of the parties, and oppor- tunities for future acquisitions of capital. Other courts have held that, due t o a . s h o r t term marriage or other l i k e circumstances, a spouse seeking apportionment of a large sum either brought into the marriage o r acquired early i n the marriage by the other spouse, whether by inheritance o r otherwise, does not have the same "interest1' i n the sum a s i n cases where the marriage is of long duration. Here, the marriage lasted approximately 29 years. To deny the husband a share of the wife's inheritance would stand on the same footing a s denying the wife a share of a large sum i n windfall profits from the husband's business or investments acquired just prior t o the divorce. - I1 - To consider inheritances per se as being beyond the language o r intent of section 48-321, would be, in a sense, t o cause Montana t o become a de f a c t o community property s t a t e i n t h i s regard. In m y opinion, t h i s i s not the intent of section 48-321. Here, while the husband has a better future earning poten- t i a l than the wife for obvious reasons a fact which must be weighed i n the balance, the wife does have a strong potential for future acquisition of capital. Both are factors which relate t o the future needs of the parties. The t r i a l judge i n h i s findings of f a c t recognized the wife stands t o receive large sums from her mother upon her death. The mother is presently 82 and i n very poor health. The facts indicate a strong likelihood of such inheritance, due t o the fact M r . and Mrs. Kratz maintained a joint w i l l . I find the holding i n Smyth v. Smyth, (Okla.1947), 179 P.2d 923, persuasive here. There the court said: "'Next t o the fortune of which he i s already possessed, consideration should be given t o * * * future prospects and probable acquisition of wealth from any source whatever.* * * ' I ' See also: Smith v.'Smith, (Okla.1957), 311 P.2d 229; Kessinger v. Kessinger, 360 Mich. 528, 104 N.W.2d 192 (1960). I n addition, I find the t r i a l court's decision t o saddle p l a i n t i f f husband with the obligation of a l l the pre-existing tax l i a b i l i t i e s t o be inequitable. Both owe the obligation, both have the a b i l i t y t o pay the obligation, and both should share i n payment. Considering the e n t i r e record here, I would reverse due t o what, but ion. i n m y opinion, an unconscionable property d i s t r i - e " - t Justice . L I