Opinion ID: 890239
Heading Depth: 2
Heading Rank: 2

Heading: Artwork attributed to Bill

Text: ¶29 Bill argues the court erred by attributing $71,900 in artwork to him without substantial credible evidence. Laurie contends that the District Court did not err. ¶30 Bill offered a trial exhibit, admitted by the court, which listed the parties’ “Artwork/Antiques” at $100,000, a figure about which he also testified. When asked about this amount, Bill testified: “Well, again I just picked a number. I didn’t really have any idea because I didn’t have an inventory, but I do also feel that this is incomplete, but I don’t believe it’s going to approach the hundred thousand dollar level.” The parties stipulated that an art appraisal was conducted on the artwork in Laurie’s possession, which was valued at $28,100. In her proposed findings, Laurie stated that “Bill should retain the remaining artwork valued at $71,900.” Asked why she attributed a majority of the artwork to Bill, Laurie testified that “in the information we got from Bill, he said that there was a hundred thousand dollars worth of art that we had and . . . I asked -- Tim Gordon is an appraiser, and I asked him to come to my house and appraise the art that I have at the house, and he put a $28,000 value on it . . . . I don’t know where the difference between the hundred that Bill is saying that we have and what Tim appraised.” She also testified as to the artwork: “So I’m basically hitting that tennis ball back into his court.” However, Laurie further testified that Bill “has probably four or five Monte Dolack lithographs,” “one larger piece of original art that we purchased together by Kathryn Kress that’s up at the red cabin,” and “he has things hanging all over his house on 3rd Street, and he has artwork up at the lake in the blue cabin, and he has 16 artwork in the red cabin.” Bill testified that he did not have the balance of the value of the remaining artwork, offering that he had “two or three original paintings,” and did not know the value of any of those pieces of art. ¶31 “[P]arties to a dissolution proceeding have a duty to assist the trial court in acquiring information needed to determine an appropriate distribution of marital property. Where a party fails to introduce credible evidence of the value of a piece of marital property, a court is free to utilize credible evidence of value submitted by the other party.” Foreman, ¶ 37 (citations omitted). In light of minimal evidence in the record, we will not second-guess the District Court’s determination to attribute the $71,900 in artwork to Bill. C. Bill’s Premarital Contribution Credit for Certain Property ¶32 Bill’s next cross-appeal issue is that the District Court did not give him proper premarital contribution credit for certain properties. Laurie responds that “Bill was given more credit for his contribution than he deserved.” (Emphasis omitted.) ¶33 We pause here to note that “marital” versus “nonmarital” property is unfortunate nomenclature which this Court recently discarded in In re Marriage of Funk, 2012 MT 14, ___ Mont. ___, ___ P.3d ___. While premarital property and property acquired by gift, bequest, devise and descent is given special consideration under § 40-4-202, MCA, all property is included within the marital estate and subject to equitable distribution. Funk, ¶ 19. “In other words, everything owned jointly or by either party must be equitably apportioned by the district court in a dissolution proceeding regardless of when 17 or how it was acquired.” Funk, ¶ 13. “[T]he court has the ultimate authority to distribute all property of both spouses; it is not required to subtract premarital assets or inheritances from the marital estate before dividing it, nor is it limited in its authority to determine how such assets are to be divided.” Funk, ¶ 16. As we will further note herein, our decision in this case is not inconsistent with Funk, due to the evidence of record, the parties’ trial actions, the particular determinations reached by the District Court—despite its occasional use of incorrect nomenclature—and our ultimate conclusions. ¶34 Bill argues that he should have received more premarital credit on 2210 Hilda. He asserts that the District Court incorrectly found only $55,000 in premarital contribution for the down payment on the property, instead of the $80,000 that he actually paid. Both Laurie and Bill testified to the $80,000 down payment amount, and Bill listed that amount in his proposed and supplemental findings. It appears the District Court mistakenly attributed only $55,000 of the down payment as Bill’s premarital contribution, shorting Bill’s contribution by $25,000, due to the incorrect amount being listed in Laurie’s supplemental findings. 5 Further, Bill argues that he was not given credit for the $52,000 second mortgage on the Hilda property. The District Court noted the first mortgage of $315,000, but failed to account for the second mortgage, about which both parties testified. It thus appears that the $52,000 second mortgage was also mistakenly omitted from the District Court’s Decree. We discuss these errors further herein. 5 Laurie’s supplemental findings were used by the District Court as a template for the final Decree. 18 ¶35 We disagree with Bill’s remaining arguments about the designation of other properties as gifted or premarital, or, in other words, as lacking any contribution from Laurie. Bill argues that Caras Nursery, valued at $2,117,000 and the largest asset, should not have been deemed a marital asset. He asserts that “Laurie was asking for an award . . . never having worked at Caras Nursery . . . and her only contribution having been ‘homemaker’ services.” While the District Court recognized that Bill acquired the business before his marriage to Laurie, and awarded the Nursery and the associated acreage to Bill, it found that the Nursery was a marital asset due to Laurie’s contributions as a homemaker. ¶36 Section 40-4-202(1), MCA, provides that, “[i]n dividing property acquired prior to the marriage . . . 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. Consistent with our decision in Funk, we have previously explained that this statute “embraces the theory that all property is to be distributed equitably, considering all of the circumstances of a particular marriage. The theory of equitable distribution recognizes, and attempts to compensate for, each party’s contribution to the marriage.” Bartsch, ¶ 20. Here, the District Court considered the factors of § 40-4-202(1)(a)-(c), MCA. Regarding Caras Nursery, the District Court found that, although Laurie did not directly 19 contribute to the Nursery, her work as a homemaker “helped maintain and enhance the value of the business. . . . In effect, Laurie’s contribution permitted Bill to develop and expand his business.” Laurie testified that she helped increase the value of the Nursery in that it was her “job to be home with the kids . . . and primarily that allowed -- it allowed Bill primarily to be at work . . . as much as he needed to be.” She also testified that her homemaker services enhanced the value of the Caras Nursery acreage by “the fact that I was able to be home with the four kids and that Bill was available to leave whenever he needed to leave in the mornings and come back whenever he needed to come back at night allowed the business to grow financially which allowed the business to pay for the bare acreage during the course of our marriage.” Although the District Court concluded that Caras Nursery was a “marital asset,” an unnecessary holding under Funk, nonetheless the outcome is still appropriate: Laurie was entitled to share in Caras Nursery (or its value), a premarital asset, because of contributions she made to the marriage under § 40-4-202(1)(a)-(c), MCA. See Bartsch, ¶ 27 (citation omitted) (“Without her contributions in caring for the children and the home, [the husband] would not have been able to devote the considerable time and effort the business required in order to preserve its value.”); In re Marriage of Taylor, 257 Mont. 122, 126, 848 P.2d 478, 480 (1993) (“[The wife]’s nonmonetary contributions as a homemaker facilitated the maintenance of the honey business because [the husband] would not have been able to devote the considerable time and effort the business required were it not for [the wife]’s caring for the children and the home.”). 20 ¶37 Bill also argues that any appreciation in the Nursery real estate or extra acreage would be due to market factors since “[o]nly modest improvements had been made to the operation.” However, in Funk, we overturned past cases which held that a non-acquiring spouse is limited to an equitable share of the appreciated value of such property attributable to that spouse’s efforts. See Funk, ¶ 26. But, further, Bill’s testimony militates against his argument, as he testified that he had made improvements to an existing greenhouse, added more greenhouses, and equipment. On the extra acreage, Bill testified that they built a small greenhouse for approximately $30,000 to $60,000, and cleaned up the property. Laurie testified, “They’ve improved. They’re cleaned up. They’re -- they’re well cared for. They -- they were a mess for years and that’s been -- part of the improvements have gone on . . . .” Thus, we disagree that the increased value of the Caras Nursery real estate and the extra acreage was due only to market factors. ¶38 Bill argues that the 2717 S. Third West property should not have been deemed a “marital asset” by the District Court since it was gifted to him by his parents. Bill was given this property in the distribution, but to the extent its designation as premarital would still be relevant, the District Court found that the parties began living in this residence in 1992, Bill’s parents gifted the property to him in 1999, and that the property was used as the marital residence until August 2003. The court found that “[t]he parties worked together to remodel the property. Laurie actively participated in the redesign of the property and Bill testified that they had fun working together, that they ‘tag teamed’ the project, and that they came up with some ‘pretty cool stuff’ together.” Laurie also 21 testified that while Bill’s premarital funds were used for the initial remodel on the property, marital funds were used for subsequent remodeling including a new roof, paint, wallpaper, new furnace, new yard landscaping, and a new patio. The District Court did not err in concluding that both parties had contributed to the property. ¶39 Bill also contests the District Court’s valuation of the property at $350,000. Bill testified the property was valued at $280,000, while Laurie testified to the $350,000 amount as based on “the representation of value made by Bill . . . at his deposition.” Bill testified that he reduced the property’s value because “I’m not sure that we had an expert do it. I think that was pretty much my -- kind of my opinion.” He also testified that it was his best estimate at the time of trial. The District Court, as noted in its Decree, chose April 29, 2010, as the proper date of valuation of assets in the dissolution proceeding because it was the date of Bill’s deposition, “when Bill testified to the value of assets which Laurie then adopted and relied upon . . . .” We conclude that the District Court did not err. See Foreman, ¶ 34 (citation omitted) (A district court has “ample discretion” to determine property values in a dissolution proceeding); In re Marriage of Crilly, 2005 MT 311, ¶ 19, 329 Mont. 479, 124 P.3d 1151 (citation omitted) (“A district court’s valuation of marital property may be premised on expert testimony, lay testimony, documentary evidence or any combination thereof, as long as the valuation is reasonable in light of the evidence submitted.”). ¶40 Bill argues that the 1536 Reserve Street property was erroneously declared “marital” since it was purchased with premarital funds and there was no evidence 22 provided by Laurie that she contributed to the acquisition or improvement of this property. Laurie testified that the property was purchased during the marriage and financed through Bill’s sale of premarital land. The District Court noted that the property was acquired during the marriage and attributed $90,000 to Bill for his premarital contribution. The District Court awarded this entire property to Bill as an offset against his commingled premarital interests on other properties, including those awarded to Laurie. Similarly, Bill argues that the purchase price of the 250 Mary property was funded by Bill’s premarital or gifted property, and the District Court erred by awarding him only a $23,000 premarital interest and fixing its value in time. The parties testified that this property was purchased during the marriage, and this property was not one stipulated as premarital. Bill suggested in his proposed findings that Laurie receive it. The District Court gave Bill premarital credit, but awarded the property to Laurie as part of its equitable distribution scheme. In light of this record and the overall equitable distribution of the estate, which we discuss below, we cannot conclude the District Court’s determination with regard to these properties was in error. ¶41 Finally, Bill argues that “[c]learly, the growth in the red cabin was strictly due to market factors and the district court erroneously distributed this growth as marital property.” First, as noted above, an increase in value due to market factors is not alone determinative under Funk. Beyond that, Bill testified that “Laurie and I worked together to come up with how we were going to fix it up, make it more habitable. It was not -- it had a lot of issues when we first bought it.” He also testified that Laurie helped with the 23 remodeling in terms of the design, and she helped decorate the cabin. We disagree with Bill’s contention that the District Court erred in considering the red cabin’s value as part of the marital estate. D. Distribution of the Marital Estate ¶42 In her appeal, Laurie argues that the District Court erred in its property distribution, in that it “fail[ed] to consider Laurie’s contributions as a homemaker” to the preservation and increase of the marital property. However, we disagree. As noted above, the District Court clearly considered Laurie’s homemaker contributions to Caras Nursery, which factored into its decision to designate Caras Nursery as a marital asset. The District Court further stated: “Laurie’s contribution to the marital estate was as a homemaker. Laurie raised not only her own children, but Bill’s children from a previous marriage. Bill testified that he never expected Laurie to work and Laurie testified that she handled almost all of the day-to-day parenting responsibilities . . . .” In its conclusions of law, the District Court held: “Laurie’s contribution to the marital estate was as a homemaker. As noted above, Laurie raised not only her own children, but Bill’s children from a previous marriage. These contributions preserved and enhanced the value of Bill’s premarital property.” We conclude that the District Court fully considered Laurie’s contributions as a homemaker, consistent with our decision in Funk. ¶43 Laurie contests the property distribution by arguing that “[s]he simply asked to be awarded two properties, free and clear: the house on Hilda, in which she lives, and the ‘red cabin.’” She argues that she only requested “a total of $1,361,000 in marital assets, 24 or 18.8% of the marital estate.”6 She states that she only received “9.6% of the estate, $694,050.” However, Laurie’s numerical arguments are not as simple as they appear. ¶44 First, Laurie’s numbers are based upon the $7.2 million valuation for the total marital estate which, as discussed above, she did not use in her written submissions to the District Court. While Laurie argues she requested assets valued at only $1,361,000, she fails to note the liabilities she asked that Bill be made to assume. The District Court set the value of the 2210 Hilda property at $395,000, but the mortgages totaled $367,000. The red cabin was valued at $750,000, with associated debts of $326,000. In asking for these properties “free and clear,” she was essentially requesting that Bill be made to assume debt of $693,000. Instead, the District Court distributed to Laurie the 2210 Hilda property valued at $395,000, with the $367,000 debt assigned to Bill, and the incomeproducing 250 Mary property valued at $250,000, free and clear. ¶45 For his part, Bill acquired more liabilities than the District Court expressly allocated to him. In addition to the approximately $1.36 million in total debt that Bill was assigned, the District Court, as discussed above, failed to credit him for the second mortgage on the 2210 Hilda property of $52,000, while also failing to credit him for the additional $25,000 premarital contribution on the Hilda property. However, in the context of this large and complicated estate, we deem these errors harmless and unlikely to have altered the outcome. See Newbauer v. Hinebauch, 1998 MT 115, ¶ 20, 288 Mont. 482, 958 P.2d 705 (citation omitted) (“[N]o civil case shall be reversed by reason 6 This number also includes a maintenance request in the amount of $216,000. The value of the properties alone was $1,145,000. 25 of error which would have no significant impact upon the result; if there is no showing of substantial injustice, the error is harmless.”). ¶46 After carefully considering Laurie’s and Bill’s issues, we conclude the District Court did not abuse its discretion in equitably dividing the marital estate. “We never have set an exact formula for district courts to divide marital property. We allow district courts to determine how to distribute property fairly and affirm unless they have clearly abused their discretion. We apply a presumption of correctness to a district court’s decision in these matters.” Chamberlin, ¶ 13 (citations omitted). Further, “[c]ourts have discretion under § 40-4-202, MCA, to craft ‘a fair distribution of the marital property using reasonable judgment and relying on common sense.’” Chamberlin, ¶ 19 (citations omitted). Laurie received substantial properties. Indeed, when viewed globally, Laurie basically received what she asked for: her residence, free from debt; and incomeproducing property, also free from debt. Bill received the businesses to continue his career, and the tools to manage the parties’ substantial debt. ¶47 Issues 3 and 6. Did the District Court err by failing to award maintenance to Laurie? Did the District Court err in requiring Bill to pay Laurie’s attorney fees and in the calculation of those fees? ¶48 Bill argues that the District Court erred in requiring him to pay Laurie’s attorney fees, arguing that there was no substantial credible evidence supporting such a distribution to Laurie. Laurie does not respond to this argument. Section 40-4-110, MCA, governs awards of professional fees in dissolution actions, the purpose of which is to “ensure that both parties have timely and equitable access to marital financial 26 resources for costs incurred.” We have held that an attorney fee award under this statute “must be reasonable, necessary, and based on competent evidence.” In re Marriage of Harkin, 2000 MT 105, ¶ 72, 299 Mont. 298, 999 P.2d 969 (citation omitted). ¶49 We disagree with Bill’s contention that “no evidence was taken which could support such a distribution or the necessity” of attorney fees. In its findings of fact, the District Court found that Laurie earned approximately $30,000 per year, whereas Bill’s average income for the years 2006 through 2008 was $271,191. The District Court listed several attorneys used by Laurie throughout the proceeding, and noted that Laurie’s first attorney had filed an attorney’s lien on the red cabin for approximately $30,000. The District Court noted that in August of 2009, Laurie hired a new attorney and owed that attorney $31,405.89. The District Court found that “Bill is in the best position to pay for the attorney’s fees and costs incurred in this dissolution of marriage proceeding, including those incurred at trial.” In its conclusions of law, the District Court recited the standards for awarding attorney fees and then stated “[a]n award of attorney’s fees is both necessary and reasonable given the disparity in income between the parties.” We conclude the District Court did not err in ordering Bill to pay Laurie’s attorney fees. See Stevens, ¶ 26 (evidence was sufficient to support award of attorney fees where the decree listed the parties’ annual salaries and there was testimony of the initial retainer paid to wife’s attorney, an approximate amount of an outstanding bill owed to the attorney, and an estimate of the amount owed to the attorney at the end of trial). 27 ¶50 Bill also argues that the District Court erred by ordering him to pay Laurie the remainder of the retirement distribution paid to the Internal Revenue Service in her name. Laurie does not respond to this argument. In December of 2009, Laurie filed a motion asking for $40,000 to pay for professional fees and costs, which the court granted. Bill withdrew $40,000 from the parties’ retirement account and, as found by the District Court, “paid Laurie only $29,600 because of the penalty and tax consequences of the withdrawal from the retirement account.” The District Court found that “Bill still owes Laurie $10,400 for her professional fees pursuant to this Court’s Order. This will be offset from additional attorney’s fees assumed by Bill and/or credit for his pre-martial [sic] contributions.” Accordingly, in a finding about the 2210 Hilda property, the District Court stated that Bill would receive credit for $55,000 of premarital interest on that property, but that the “$10,400 professional fee balance owed by Bill to Laurie is offset leaving $44,600 of premarital interest.” The District Court then added up Bill’s premarital interests in certain properties and awarded Bill the 1536 Reserve commercial rental property “in total as an offset against his comingled [sic] premarital interests.” However, in its conclusions of law, the District Court held that “Bill shall also pay Laurie the $10,400 that he was previously ordered to pay her for her professional fees and costs,” and ordered that payment to Laurie be made within thirty days of the Decree. (Emphasis added.) While the record is not completely clear, it appears the District Court ordered Bill to pay this $10,400 twice, once by offset and once in cash. However, in this large and complicated matter, $10,400 is insignificant. Because the property and 28 maintenance determinations would not likely change, we do not deem this error to be reversible. See Newbauer, ¶ 20. ¶51 Finally, Laurie argues that she should have been awarded the monthly maintenance she requested, offering that “[t]he evidence at trial showed that Laurie requires maintenance of some amount.” Section 40-4-203(1), MCA (2001), governs the award of spousal maintenance: (1) In a proceeding for dissolution of marriage . . . the court may grant a maintenance order for either spouse only if it finds that the spouse seeking maintenance: (a) lacks sufficient property to provide for his reasonable needs; and (b) is unable to support himself through appropriate employment or is the custodian of a child whose condition or circumstances make it appropriate that the custodian not be required to seek employment outside the home. ¶52 The District Court began by distributing the properties related to its maintenance determination: In order to fairly and equally divide the martial [sic] estate, each party will receive one property (“red cabin” and Hilda properties).7 Bill shall receive the “red cabin” and Laurie shall receive the Hilda property. In order to allow Laurie to receive the Hilda property debt-free, Bill will have to refinance it. Laurie will also receive the Mary property. Given the division of property without debt, Laurie will not receive maintenance. The District Court ordered Bill to pay child support in the amount of $1,678 per month. ¶53 The District Court further stated, “[t]he property division set forth above is sufficient to provide for Laurie’s long term financial needs. Laurie earns approximately $2,500 per month ($30,000 per year) in income and will have expenses of $ 4,545.83 per 7 The context for this sentence is that both parties had requested that they receive both the red cabin and the Hilda property. 29 month . . . . Given the real property awarded to Laurie debt-free, and the payment of her attorney’s fees, maintenance is not necessary for Laurie to meet her needs.” ¶54 Trial testimony indicated that the 250 Mary property yields a gross income of $12,000 to $14,400 per year. In total, the rental income from the Mary property, Laurie’s salary, and the ordered child support yield a gross household income of over $62,000 per year. Laurie’s projected expenses are $54,550 annually, and thus the funds which the District Court provided for her are sufficient to provide for her stated needs. See In re Marriage of Laster, 197 Mont. 470, 477, 643 P.2d 597, 601 (1982) (citations omitted) (“It is well established that in determining whether a spouse seeking maintenance ‘lacks sufficient property’ to provide for her need, ‘sufficient property’ means income producing, not income consuming, property.”). We note that payment of Laurie’s attorney fees was another consideration which entered the District Court’s maintenance determination. It reasoned, “[g]iven the real property awarded to Laurie debt-free, and the payment of her attorney’s fees, maintenance is not necessary for Laurie to meet her needs.” (Emphasis added.) We conclude that the District Court did not err in refusing to award maintenance to Laurie. ¶55 Affirmed. /S/ JIM RICE We concur: /S/ BETH BAKER /S/ BRIAN MORRIS /S/ JAMES C. NELSON /S/ PATRICIA COTTER 30