Court Opinion

ID: 880363
Source: CourtListenerOpinion
Date Created: 2013-06-05 00:04:40.950732+00
Date Added: 2024-06-11T10:55:09.969596
License: Public Domain

No. 89-149
                      IN THE SUPREME COURT OF THE STATE OF MONTANA

                                             1989

IN RE THE MARRIAGE OF
ROBERT MARTIN MILLER,
                       Petitioner and Respondent,
                and
ELIZABETH ANN MILLER,
                       Respondent and Appellant.

APPEAL FROM:           District Court of the Eleventh Judicial District,
                       In and for the County of Flathead,
                       The Honorable Michael Keedy, Judge presiding.
COUNSEL OF RECORD:
                For Appellant:
                       Sherlock   &   Nardi; Patrick D. Sherlock, Kalispell,
                       Montana
                For Respondent:

                       Randall S. Ogle; Murray, Kaufman, Vidal, Gordon,
                       and Ogle, Kalispell, Montana

                                             Submitted on Briefs:   July 20, 1989
                                                 Decided: August 25, 1989
Filed:.
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          .                                 Clerk
Mr. Justice Fred J. Weber delivered the Opinion of the Court.

      The parties' marriage was dissolved by decree dated
October 28, 1988 in the District Court for the Eleventh
Judicial District, Flathead County.      Wife appeals various
aspects of the decree and the findings of fact and conclu-
sions of law contained therein. We reverse and remand for
further proceedings consistent with this opinion.
      We rephrase the issues as follows:
      1. Whether the District Court erred in its valuation
and distribution of the marital property? We conclude that
there    was   sufficient error     to   require  remand   and
consideration.
      2.   Is it appropriate that a different Judge of the
District Court consider this case on remand? We conclude
that it is.
      Elizabeth Ann Miller (wife) and Robert Martin Miller
 (husband) married on January 31, 1959. Four children were
born during the marriage, all of whom were adults at the time
of trial. The parties separated in November of 1986, with
the wife remaining in possession of the family home in
Kalispell.    Since the date of separation, husband has paid
the monthly mortgage payment of $415 on the first mortgage on
the residence. In addition, he paid $200 per month temporary
maintenance from November 1986 to February 1988. By court
order dated February 22, 1988, the maintenance was increased
to $400 per month.
      Husband is employed as an electrician for the Bonneville
Power Administration earning approximately $43,000 per year
with a regular monthly net income of $2,218.46. At the time
of trial, husband had acquired retirement benefits valued at
$34,401. The District Court found that husband occasionally
worked overtime but that those hours were sporadic and that
his overtime compensation was not regular income.
     In addition to raising the parties' four children and
serving as homemaker, the District Court found that the wife
worked as a cake baker, cake decorator, and a professional
monogrammer.   At the time of trial, she was an enrolled
student at Flathead Valley Community College pursuing a
degree in education.
     In 1982, the parties mutually acquired the business
presently known as Miller Monogramming for $13,000.       The
business was operated as the joint business of husband and
wife through November of 1986, after which time the wife was
the sole operator. The business has been operated out of the
family residence since its acquisition. In conjunction with
the business purchase, the parties received a list of busi-
ness clients and a three-year covenant not to compete from
the seller. Since 1982, the parties have invested in Miller
Monogramming the additional sum of $21,682 which was secured
by a second mortgage on the family residence. The District
Court found the outstanding second mortgage obligation to be
$15,654.38.
     The District Court valued Miller Monogramming at $22,800
based on the testimony of Thomas Wynne, C.P.A., who evaluated
the tax returns and business schedules for 1983 through
August 1988. The court awarded the business to the wife and
ordered her to assume the second mortgage debt of $15,654.38.
     The court also ordered the family home to be sold with
the proceeds to be divided equally after payment of the first
mortgage, which was $6,928.11 at the time of trial.       The
District Court did not value the family residence, but found
that two appraisals were offered a% trial, one of $118,442
and one of $90,000. The court ordered that the residence be
appraised by a mutually agreeable appraiser and that the
parties accept any offer to purchase within ten percent of
the appraised value.    The court ordered the second mortgage
to be paid by the wife no later than the time of sale of
Miller Monogramming or at the time of sale of the residence,
whichever occurred first. Husband was awarded his $34,401 of
retirement benefits, and the parties' personal property was
divided in accordance with a list prepared by the husband.
      The District Court concluded that wife lacks sufficient
property to provide for her reasonable needs and is unable to
totally support herself through appropriate employment in the
immediate future. The court ordered the husband to continue
paying temporary maintenance of $400 per month directly to
wife.    In addition, the court required husband to pay the
first mortgage payments of $415 until the residence was sold,
at which time a hearing regarding further maintenance would
be held.     It is not clear from the court's order whether
maintenance payments of $400 per month shall continue after
sale of the house.
      On appeal, wife challenges the court's valuation and
distribution of the marital property.      In particular, she
challenges the valuation of the parties' business, Miller
Monogramming, and the court's decision to award her the
business in light of the court's duty to equitably apportion
the marital property.     She also argues that the District
Court Judge should have recused himself because of editorial
comments made during the divorce proceedings which she con-
tends may have affected his impartiality.
                             I.
      Whether the District Court erred in its valuation and
distribution of the marital property?
      The   District  Court    awarded  property   valued  at
$49,443.50, or 52% of the marital estate to the husband, and
property valued at $45,041, or 488 of the marital. estate to
the wife. Wife contends that while this property division is
approximately equal on its face, it is in no way an equitable
apportionment of the marital property if the evidence pre-
sented is reconsidered by this Court.
      The District Court has broad discretion in dividing the
marital estate.    In re Marriage of Luisi (Mont. 1988), 756
P.2d 456, 459, 45 St.Rep. 1023, 1025. In doing so, it is the
duty of the District Court to equitably apportion the proper-
ty under S40-4-202, MCA.      In reviewing the lower court's
division of property, this Court will look to see if the
judgment is based upon substantial credible evidence, and if
so, this Court will not disturb the judgment unless a clear
abuse of discretion is shown.      In re Marriage of Stewart
 (Mont. 1988), 757 P.2d 765, 767, 45 St.Rep. 850, 852. In this
case, wife contends that the District Court's findings of
fact and conclusions of law are not consistent with the
evidence presented, thereby constituting an abuse of the
lower court's discretion. Wife is particularly critical of
the valuation of Miller Monogramming and of the earning
capacity of that business as well as the distribution of the
business to her.
      The District Court found that, "Wife has the ability to
earn in excess of $1,000 per month from Miller Monogramming."
This finding is apparently based on other findings relating
to gross income and gross profits which are as follows:
26.    The gross income of Miller Monogramming in 1985 was
approximately $16,240.00, or an average of $1,353.33 per
month.
27. The cost of goods sold from Miller Monogramming in 1985
was $3,175.00.
28. The gross profit (i.e., gross income less cost of goods
sold) of Miller Monogramming in 1985 was the sum of
$13,064.71 or an average of $1,088.72 per month.
29.    The gross income of Miller Monogramming in 1986 was
approximately $14,486.00, or an average of $1,207.00 per
month.
30. The cost of goods sold from Miller Monogramming in 1986
was $2,007.16.
31. The gross profit (i.e., gross income less cost of goods
sold) of Miller Monogramming in 1986 was the sum of
$12,478.84, or an average of $1,039.90 per month.
32.   The gross income of Miller Monogramming in 1987 was
approximately $11,578.00.
33. The cost of goods sold from Miller Monogramming in 1987
was $1,689.00.
34. The gross profit (i.e., gross income less cost of goods
sold) of Miller Monogramming in 1987 was the sum of
$9,889.00, or $824.08 per month.
     Despite these extensive findings on gross income and
gross profit, the court made no findings which reflect the
net earnings of that business for the years in question.   The
same tax returns which the lower court used to determine
gross income also reflect the net income of the business,
however, no explanation is given for the absence of these
figures in the court's decree.    We have reviewed the tax
returns received in evidence which set forth the following
net earnings figures for the years 1983 to 1987:

The findings and conclusions do not address the contradiction
between the net earnings as disclosed by the tax returns and
the specific findings on gross income as contained in the
court's order.    As a result, we conclude that there is no
substantial credible evidence to support the findings of the
District Court that the wife has the ability to earn in
excess of $1,000 per month from Miller Monogramming.
      At trial, wife requested that Miller Monogramming be
sold and the proceeds, if any, be divided equally between the
parties. She expressed her lack of interest in operating the
business and her intent to pursue a degree in education.
Instead, the District Court gave the business and the corres-
ponding debt to the wife, which she now contends she neither
wants nor can afford. The lower court did not state why it
chose to award the business to the wife as opposed to honor-
ing her request to have the business sold.      The value of
Miller Monogramming adopted by the lower court was the value
offered by husband's expert, who examined the parties' tax
returns for the years 1983 through August 1988. The expert
admitted that his appraisal did not reflect the fair market
value for selling purposes, nor did he consider the business'
goodwill or equipment, or the impact of similar businesses in
the area upon the marketability of Miller Monogramming. In
contrast, the testimony of the real estate broker testifying
for the wife showed that it would be very difficult to sell
Miller Monogramming because of the local competition in the
area.   As a result, we are unable to find substantial evi-
dence to support the valuation of the business itself.
      In addition, the findings and conclusions of the Dis-
trict Court do not address the request on the part of the
wife to have the business sold and to allow her to continue
to pursue her college education. It appears that the award
of retirement benefits having a value of $34,000 to the
husband was basically offset against the award of the busi-
ness to the wife.     We conclude that the record does not
contain substantial evidence to support the evaluation of the
Miller Monogramming business itself and its distribution to
the wife.    We therefore conclude that the valuation and
distribution of the marital property should be set aside and
returned to the District Court for redetermination.
     Because the matter is being returned to the District
Court for redetermination, we also direct the court to con-
sider the question of maintenance of the wife.

     Is it appropriate that a different Judge of the District
Court consider this case on remand?
     Wife contends that the District Court Judge should have
disqualified himself prior to the October, 1988 hearing on
the merits due to a series of publications which appeared in
the Kalispell Daily Interlake in October of 1987. Wife did
not formally move to disqualify the Judge as set forth in
S3-1-805, MCA.   However, she did express her concern as to
the Judge's possible prejudice at the October, 1988 hearing
in a Motion for Rehearing dated November 11, 1988.
     Included in her Motion for Rehearing was an affidavit
which established that on October 1, 1987, a news article
appeared in the Kalispell Daily Interlake which was critical
of the District Judge who tried this cause.       The article
contained a reference to the wife's pending divorce case in
its news analysis of the Judge which stated in part:

     A couple files for divorce. A hearing on temporary
     support is held in May. No ruling is forthcoming.
     The husband, who makes $43,000 a year, voluntarily
     gives the wife $200 a month. The wife takes in
     sewing to make ends meet.
          A local attorney offers this example to back
     up his complaint that the 11th District Court - and
     in particular, the department presided over by
     Judge Michael Keedy - takes too long to resolve
     cases.
     In response to this article, the District Court Judge
wrote a letter to the editor which appeared in the October 7,
1987 edition of the newpaper, which stated in part:

     . . .  on the very day the hearing was conducted
     four months ago I ordered the husband to pay his
     estranged wife $615 per month pending further
     notice from the court.   (She had been a self-em-
     ployed seamstress for more than a year before the
     hearing).
     On October 11, 1987, the wife's own letter to the editor
appeared in the newspaper, which stated in part:

           I am the wife that is mentioned in both the
     article and letter.   . . .  My husband and I have
     been married for over 28 years. He left in October
     1986 and filed for divorce a week later. He have
      (sic) four grown children and three grandchildren.
     In May my lawyer finally got a "show cause" hearing
     for more financial support. He was satisfied that
     Judge Keedy would be handling the case and assured
     me that he was a fair and just person and we would
     have a ruling shortly.
          A ruling was never made though!      The $615
     mentioned in the article was already being paid
     when we went to court.     The $200 was to me for
     maintenance and the $415 was for the payment on the
     house that my husband and I own jointly.     . . .
           I do not envy a judge having to make a deci-
     sion in a divorce case.     But courts are suppose
     (sic) to show mercy. If I had committed a felony,
     my case would have already gone to trial, a deci-
     sion made and my fate decided. But my only crime
     was agreeing to a divorce. Now I wait.
     In her Motion for Rehearing, wife alleged that she was
denied a fair hearing of her case due to the publications and
that the Judge's prejudice was reflected by the manner in
which the hearing was conducted and also in the Judge's final
order. No ruling was issued on wife's motion within 45 days,
so it was deemed denied pursuant to Rule 59 ( g ) , M.R.Civ.P.
     We do not find it necessary for this Court to make a
ruling on the issue of disqualification raised by the wife.
We do note that a judge's official conduct is to be free from
even the appearance of impropriety and that his personal
behavior should be beyond reproach as set forth in Canon IV,
Canons of Judicial Ethics.   In order to eliminate any ques-
tion of impropriety or impartiality, we direct that on re-
mand, this proceeding shall be assigned for consideration and
redetermination by a District Judge other than the one who
previously made the determination.
     Reversed and remanded.