Opinion ID: 885206
Heading Depth: 1
Heading Rank: 7

Heading: Whether the District Court failed to equitably apportion the marital assets.

Text: ¶ 39 We review a district court's division of marital property to determine whether the findings on which the court relied are clearly erroneous. In re Marriage of Engen, 1998 MT 153, ¶ 26, 289 Mont. 299, ¶ 26, 961 P.2d 738, ¶ 26 (citing In re Marriage of Stufft (1996), 276 Mont. 454, 459, 916 P.2d 767, 770). If the findings are not clearly erroneous, we will affirm the distribution of property unless the court abused its discretion. Engen, ¶ 26 (citing Stufft, 276 Mont. at 459, 916 P.2d at 770). See also In re Marriage of Hogstad (1996), 275 Mont. 489, 496, 914 P.2d 584, 588; In re Marriage of Smith (1995), 270 Mont. 263, 267-68, 891 P.2d 522, 525. The test for an abuse of discretion in a marital dissolution proceeding is whether the district court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in substantial injustice. Engen, ¶ 26 (citing In re Marriage of Meeks (1996), 276 Mont. 237, 242, 915 P.2d 831, 834). ¶ 40 In addition, we review a district court's interpretation of the law to determine whether the court's interpretation is correct. Hayes v. Hayes (1994), 264 Mont. 350, 352, 871 P.2d 913, 914 (citing Steer Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603). ¶ 41 The District Court determined in this case that the marital estate had accumulated $78,778.49 in assets during the term of the marriage and that Christine had contributed to this increase largely by her contributions as a homemaker. The court further found that the only major asset to which Christine has a significant connection is the marital home in the Bitterroot Valley. The District Court awarded Christine $80,000 from the value of the home, $2,000 for a misplaced necklace, $1,200 for past counseling expenses, $4,000 for future counseling expenses, $3,000 for outstanding credit card debt, the Ford Bronco, a horse, the medical billing business, and various items of personal property. The District Court found that an award of maintenance was inappropriate in this matter in view of the court's allocation of property. ¶ 42 David argues that the Bitterroot Valley home should not have been included in the marital estate as it is undisputed that the home was acquired by David prior to the marriage and solely from his assets. David further argues that even if the residence were included in the marital estate, the District Court's property division was grossly inequitable as the court awarded Christine an amount in excess of what the court determined was the entire appreciated value of the marital estate rather than an equitable share of any appreciated value, which David contends there was none. David claims that the value of the home at the date of the marriage was estimated to be $229,680 and that Christine's expert estimated the value of the residence at the time of dissolution at $223,900, thus there was no increase in value during the term of the marriage. ¶ 43 Christine claims that David's argument fails to consider that the parties' estate was valued at nearly $1,000,000 and that the court awarded Christine only $80,000 from the major asset which Christine and David shared, that being the home. Christine contends that the remainder of the award provides her with a vehicle and a horse, both of which restore property she had previously given up as a result of her relocating to Montana with David. ¶ 44 Christine argues that considering she gave up a significantly better paying position with nine years seniority, retirement and other benefits; she relocated to Montana based on David's promises; and that she has insufficient income or property to sustain herself otherwise, the District Court's distribution is equitable and should be sustained. David argues that Christine is asking to be compensated for her loss of lifestylea lifestyle that existed for her in Arizona, but does not exist for her in Montana where she has elected to reside. ¶ 45 Section 40-4-202, MCA, sets forth the guidelines for distributing preacquired or gifted property as part of a marriage dissolution: In dividing property acquired prior to the marriage; property acquired by gift, bequest, devise, or descent; property acquired in exchange for property acquired before the marriage or in exchange for property acquired by gift, bequest, devise, or descent; the increased value of property acquired prior to marriage; and property acquired by a spouse after a decree of legal separation, 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. ¶ 46 This Court has previously construed this provision to mean that regardless of who holds title, preacquired or gifted property need not be included in the marital estate unless the nonacquiring spouse contributed to its preservation or appreciation. Engen, ¶ 29. In the event the nonacquiring spouse did contribute to the property's preservation or appreciation, we have held that the nonacquiring spouse is entitled to an equitable share of the appreciated or preserved value which is attributable to his or her efforts. Engen, ¶ 29 (citations omitted). Those assets belonging to a spouse prior to a marriage, or acquired by gift, bequest, devise, or descent during the marriage are not part of the marital estate unless the spouse made contributions in the preservation or interest in that property. In re Marriage of Nordberg (1994), 265 Mont. 352, 361, 877 P.2d 987, 992 (citing In re Marriage of Smith (1994), 264 Mont. 306, 312, 871 P.2d 884, 887-88). ¶ 47 Moreover, if gifted or preacquired assets have not appreciated during a marriage, their value at the dissolution of the marriage cannot be considered a contribution from the marital effort. In re Marriage of Goodman (1986), 222 Mont. 446, 449, 723 P.2d 219, 221 (citing In re Marriage of Balsam (1979), 180 Mont. 129, 134, 589 P.2d 652, 654). ¶ 48 In the case sub judice, while Christine did contribute to the home as a homemaker during the 14 months of the parties' marriage, there is no evidence that the home increased in value during that time or as a result of her efforts. Rather, the evidence adduced at trial shows that the property was worth less at the time of dissolution than what David paid for it in 1995. ¶ 49 In addition, Christine offered several documents into evidence to support her testimony that the marital estate had increased in value during the term of the marriage. The District Court used these documents to arrive at its finding in its April 2, 1999 decree that the marital estate had accumulated $78,778.49 in assets consisting mainly of the value of horses, savings and retirement. The court, however, did not make any findings as to any appreciated value of the home. Moreover, those same documents show that while the value of horses, savings and retirement had increased by that amount, other assets had markedly decreased, thus supporting David's contention that the increase in value of the horses, savings and retirement were in part due to a shifting of assets. ¶ 50 Therefore, we hold that the District Court abused its discretion when it included the Bitterroot Valley home in the marital estate and awarded a portion of the value of the home to Christine without a finding that the home had appreciated in value during the term of the marriage and that Christine's contributions facilitated the maintenance of this property or that the property division serve[d] as an alternative to maintenance arrangements. Section 40-4-202, MCA. ¶ 51 David also objects to the District Court's award of $2,000 to Christine for a missing necklace. David argues that the only evidence of the necklace or its value is Christine's uncorroborated testimony. The District Court determined that because the necklace has never been returned to Christine and because David had primary control of the marital residence when the necklace disappeared and has previously demonstrated his ability to use personal property and finances for manipulative purposes, he should be required to reimburse Chris the value of the misplaced necklace. ¶ 52 We have repeatedly held that the trial court sits in the best position to judge the credibility of the testimony proffered by the parties to a dissolution action and that because the trial court has had the opportunity to observe the demeanor of those witnesses, we will defer to its resolution of any conflicting evidence. In re Marriage of Porter (1991), 247 Mont. 395, 398, 807 P.2d 192, 194. See also Engen, ¶ 46. Unless an abuse of discretion can be shown, we will not disturb the district court's findings concerning the valuation of property, even if the evidence conflicts, as long as those findings are based on substantial credible evidence.  Porter, 247 Mont. at 398, 807 P.2d at 194 (emphasis added) (citing In re Marriage of Milesnick (1988), 235 Mont. 88, 95, 765 P.2d 751, 755). ¶ 53 The only evidence regarding the necklace is Christine's testimony: A. And I don't want to forget about the necklace that he stole from me. I want that back. Q. What was the value of that? A. About $2,000.00. We conclude that, in this case, there is not substantial evidence to support the District Court's finding of the value of the necklace or that David is in possession of the necklace. Hence, we reverse the District Court on this issue. ¶ 54 David also objects to the award of the Ford Bronco to Christine. He claims that he purchased the Ford Bronco four years prior to the marriage and that at the time of dissolution it was worth $15,000. He argues that the evidence shows Christine sold the car she owned prior to their marriage for $3,000 and used the proceeds to reduce her personal debts. Hence, David argues that it was error for the court to award the Ford Bronco to Christine because she did not contribute to its preservation or appreciation and, in fact, the car depreciated in value during their marriage. ¶ 55 There was no evidence introduced at trial that Christine made any contribution to the purchase of the Ford Bronco prior to the marriage or to the preservation or appreciation of the Ford Bronco during the marriage. Therefore, we hold that the District Court abused its discretion when it included the Ford Bronco in the marital estate and awarded it to Christine without a finding that it had appreciated in value during the term of the marriage and that Christine's contributions facilitated the maintenance of the Ford Bronco or that the award of the Ford Bronco serve[d] as an alternative to maintenance arrangements. Section 40-4-202, MCA. ¶ 56 Accordingly, we reverse and we remand to the District Court for a determination, consistent with this opinion, of the appreciated value of the marital assets and an equitable distribution of the appreciated value of those assets.