Court Opinion

ID: 4668512
Source: CourtListenerOpinion
Date Created: 2021-03-16 23:08:33.024395+00
Date Added: 2024-06-11T08:03:03.102841
License: Public Domain

03/16/2021

                                           DA 20-0308
                                                                                       Case Number: DA 20-0308

              IN THE SUPREME COURT OF THE STATE OF MONTANA
                                           2021 MT 69N

IN RE THE MARRIAGE OF:

KAREN M. MYERS,

               Petitioner and Appellant,

         v.

ROBERT N. MYERS, JR.,

               Respondent and Cross-Appellant.

APPEAL FROM:           District Court of the Twelfth Judicial District,
                       In and For the County of Hill, Cause No. DR 2013-083
                       Honorable David Cybulski and Honorable Richard A. Simonton,
                       Presiding Judges

COUNSEL OF RECORD:

                For Appellant:

                       Gary S. Deschenes, Deschenes & Associates Law Offices, Great Falls,
                       Montana

                For Appellee:

                       Jamie Vines, Stephen R. Brown, Jr., Bosch, Kuhr, Dugdale & Brown,
                       PLLP, Havre, Montana

                                                   Submitted on Briefs: December 2, 2020

                                                             Decided: March 16, 2021

Filed:

                                 cir-641.—if
                       __________________________________________
                                         Clerk
Justice James Jeremiah Shea delivered the Opinion of the Court.

¶1     Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating

Rules, this case is decided by memorandum opinion, shall not be cited and does not serve

as precedent. Its case title, cause number, and disposition shall be included in this Court’s

quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports.

¶2     Karen M. Myers appeals from the Twelfth Judicial District Court order distributing

assets pursuant to a marital dissolution between Robert N. Myers and Karen M. Myers.

We consider the following issues which we determine are properly before us: (1) whether

the District Court erred in its valuation of one of the marital properties (the

“Gruszie Property”);1 (2) whether the District Court made mathematical errors in

calculating the net value of the marital estate; (3) whether the District Court erred by

refusing to grant Karen a security interest in personal property; and (4) whether the District

Court abused its discretion by setting an interest rate for the equalization payment at 2.5%.

We affirm in part and reverse and remand in part.

1
  Robert argues that Karen waived her right to appeal the amount of the equalization payment by
accepting several partial payments towards satisfaction of the note guaranteeing the equalization
payment. Robert fails to articulate a cogent argument as to how Karen’s acceptance of the
equalization payments constituted a waiver of her right to appeal the District Court’s denial of her
motion challenging the valuation of the Gruszie Property, and he cites no legal authority for his
argument other than a generalized reference to In re Marriage of Clark, 2015 MT 263, ¶ 12,
381 Mont. 50, 357 P.3d 314, that is inapposite to the issue of waiver. We therefore decline to
consider this argument. “[W]e are not obligated to develop arguments on behalf of parties to an
appeal, nor are we to guess a party’s precise position, or develop legal analysis that may lend
support to his position.” McCulley v. Am. Land Title Co., 2013 MT 89, ¶ 20, 369 Mont. 433,
300 P.3d 679 (citations omitted).
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¶3     Karen and Robert married on October 5, 1985. Karen petitioned for dissolution of

marriage in 2013.

¶4     On January 28, 2016, the District Court issued Findings of Fact, Conclusions of

Law, and Order,2 dissolving the marriage and distributing the marital estate.

¶5     Among other items in the marital estate, Karen and Robert were equal shareholders

of Myers Ranch, Inc., a family farm and ranch, and owned multiple pieces of real property.

The District Court awarded Myers Ranch, Inc. to Robert. The District Court awarded all

the real property to Robert because it determined that dividing up the properties would

jeopardize the viability of Myers Ranch, Inc. to continue operating as a family farm and

ranch. The District Court determined the net combined value of the real property to be

$2,682,000.

¶6     The District Court calculated the net value of the entire marital estate to be

$4,250,000. The District Court determined the marital estate should be divided evenly

between the parties. After distribution of the various items in the marital estate, the

District Court found Karen was due an equalization payment of $1,715,000.                The

District Court ordered Robert to execute a note to Karen in that amount, but the Order did

not set the terms for payment of the equalization payment. The District Court ordered the

parties to confer regarding the terms of the note.

2
 The District Court also issued Supplemental Findings on January 28, 2016. Since the Findings
of Fact, Conclusions of Law and Order were issued contemporaneously with the Supplemental
Findings, we treat them collectively for purposes of this Opinion.
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¶7     On April 7, 2016, Karen filed a motion to correct the order, arguing the

District Court’s valuation of one of the marital properties (the “Gruszie Property”) was

incorrect as a matter of law, and that the District Court made some mathematical errors in

its calculation of the total value of the marital estate. Karen contended the District Court

erroneously valued the Gruszie Property at $420,000, its liquidated value after taxes.

Karen contended the District Court should have used the appraised fair market value, net

of encumbrances, of $752,454. Karen argued the District Court’s undervaluation of the

Gruszie Property amounted to a windfall to Robert since the property was awarded to him

and the District Court’s Order did not require him to sell the property.

¶8     Karen argues on appeal that the District Court abused its discretion by reducing the

value of the Gruszie Property to account for tax consequences of a sale when the order did

not require a sale of the property nor was a finding made that a sale was imminent if the

property was awarded to Robert. We agree.

¶9     A district court has discretion to adopt any reasonable valuation of property

supported by the record. In re Marriage of Haberkern, 2004 MT 29, ¶ 13, 319 Mont. 393,

85 P.3d 743. In a final distribution, a court must consider tax liabilities which are

reasonably concrete and imminent. Haberkern, ¶ 17. To determine whether the tax

consequences are concrete and imminent, the district court must consider the context

around the distribution order. Haberkern, ¶ 17. At the least, this Court has required that

“the distribution order reasonably appear to trigger a taxable event in the context of

surrounding circumstances.”      In re Marriage of Broesder, 2017 MT 223, ¶ 13,

388 Mont. 476, 402 P.3d 1193.

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¶10    The District Court abused its discretion by valuing the Gruszie Property net of

applicable taxes. Nothing in the District Court’s Order indicated that tax liabilities relative

to the Gruszie Property were reasonably concrete or imminent. Nor did the distribution

order reasonably appear to trigger a taxable event in the context of surrounding

circumstances. Marriage of Broesder, ¶ 13. The reason the District Court gave for valuing

the Gruszie Property at the net liquidated price was because it speculated that Robert

“will probably be forced to sell it first, if and when he has trouble paying the sums due

[to Karen].” (Emphasis added.) “If and when” does not constitute a reasonably concrete

or imminent incurring of tax liabilities.         Accordingly, the District Court erred by

discounting the value of the Gruszie Property to account for tax liability.

¶11    Aside from its valuation of the Gruszie Property, Karen contends the dissolution

order contained mathematical errors in the valuation of various components of

Myers Ranch, Inc. Karen argues that the District Court’s order does not comport with the

valuations she submitted with her “Motion to Correct Order” as Exhibits B and F, which

referenced stipulations, testimony, and the District Court’s oral ruling.

¶12    A District Court has broad discretion in determining the value of property in a

dissolution. In re Marriage of Walls, 278 Mont. 413, 416, 925 P.2d 483, 485 (1996). It

may adopt any reasonable valuation of marital property which is supported by the record,

and its findings regarding property valuation will not be disturbed unless clearly erroneous.

Marriage of Walls, 278 Mont. 413, 925 P.2d at 485. Although Karen takes issue with the

correlation between the District Court’s oral pronouncements and its written findings, as

Robert points out the District Court made it clear when it made its oral findings that the

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findings were “rough” and “preliminary,” and noted that more specific findings would

follow. Absent clearly erroneous findings, we will affirm a district court’s division of

property unless we identify an abuse of discretion. Hollamon v. Hollamon, 2018 MT 37,

¶ 8.   Based on our review of the record in this case, we cannot conclude that the

District Court’s division of the marital estate was clearly erroneous.

¶13    Karen argues the District Court erred in refusing to award Karen a security interest

in personal property because its ruling was based primarily on an incorrect conclusion of

law.

¶14    A trial court may secure a marital settlement by granting a security interest in stock

or other security arrangements as the court may find necessary to enforce its decree.

Buxbaum v. Buxbaum, 214 Mont. 1, 692 P.2d 411 (1984). In this case, the District Court

determined it was sufficient to grant Karen a security interest in the real property that had

been awarded to Robert. The District Court did not err in refusing to award Karen a

security interest in personal property. The District Court acted in its discretion when it

found it necessary to only grant a security interest in the real property and not personal

property to enforce the decree.

¶15    Karen asserts the District Court abused its discretion in setting the interest rate on

the equalization payment at 2.5% per annum.

¶16    A financial obligation imposed by a decree that is silent regarding interest is subject

to the 10% statutory interest rate under § 25-9-205, MCA.                Schwartz v. Harris,

2013 MT 145, ¶ 34, 370 Mont. 294, 308 P.3d 949. A district court retains discretion to set

                                              6
an alternate rate of interest. Schwartz, ¶ 34. If the district court sets an interest rate that

varies from the statutory rate, it must be fair and reasonable. Schwartz, ¶ 34.

¶17    The District Court heard conflicting testimony regarding an appropriate interest rate

to apply to the equalization payment. Doug Kallenberger, an agricultural loan officer from

Stockman Bank in Havre, where the Myers had been conducting business for a number of

years, testified that Robert would qualify for an agricultural real estate loan at an annual

interest rate of 4.75%, the bank’s lowest rate for such loans, over a twenty-year term.

Kallenberger clarified, however, that Robert would not qualify for a loan in the amount

necessary to make the equalization payment. Robert presented testimony from James Kato,

a certified public accountant, who testified that the minimum rate the IRS would allow

between related parties was between 2.4% and 2.62%. The District Court settled on a

2.5% interest rate, amortized over 30 years, but noting that Karen should not have to wait

that long to get the money to which she was entitled, it ordered Robert to make an initial

payment of $500,000, monthly payments subject to the 2.5% interest rate, and the entire

amount payable by December 1, 2026.

¶18    The District Court did not abuse its discretion in setting an interest rate based on its

consideration of the testimony and balancing the equities of enabling Robert to realistically

make the payments necessary while also ensuring that Karen receive the total equalization

payment in a timely fashion.

¶19    We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our

Internal Operating Rules, which provides for memorandum opinions. This appeal presents

no constitutional issues, no issues of first impression, and does not establish new precedent

                                              7
or modify existing precedent. With the exception of the District Court’s valuation of the

Gruszie Property, its rulings are affirmed.      As it pertains to the valuation of the

Gruszie Property, we reverse and remand for the District Court to enter an order consistent

with this Opinion.

                                                /S/ JAMES JEREMIAH SHEA

We Concur:

/S/ MIKE McGRATH
/S/ INGRID GUSTAFSON
/S/ BETH BAKER
/S/ LAURIE McKINNON

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