Caras v. Caras

• Decision Date: 01 February 2012
• Docket Number: No. DA 11–0166.,DA 11–0166.
• Citation: 364 Mont. 32,2012 MT 25,270 P.3d 48
• Parties: In re the MARRIAGE OF Laurie F. CARAS, Petitioner, Appellant, and Cross–Appellee,andWilliam R. Caras, Respondent, Appellee, and Cross–Appellant.
• Court: Montana Supreme Court

2012 MT 25

270 P.3d 48

364 Mont. 32

In re the MARRIAGE OF Laurie F. CARAS, Petitioner, Appellant, and Cross–Appellee,andWilliam R. Caras, Respondent, Appellee, and Cross–Appellant.

No. DA 11–0166.

Supreme Court of Montana.

Submitted on Briefs Nov. 2, 2011.Decided Feb. 1, 2012.

For Appellant: Elizabeth Best; Best Law Offices, P.C.; Great Falls, Montana.

For Appellee: Richard A. Reep; Reep, Bell & Laird, P.C.; Missoula, Montana.

Justice JIM RICE delivered the Opinion of the Court.

[364 Mont. 33] ¶ 1 Appellant Laurie Caras (Laurie), now known as Laurie Robinson, filed a petition for dissolution of her marriage in March, 2003 to Appellee William Caras (Bill), in the Fourth Judicial District Court, Missoula County. Following trial in August of 2010, the District Court found the marriage to be irretrievably broken, divided property between the parties, ordered Bill to pay child support and Laurie's attorney fees, and denied Laurie's request for maintenance. Laurie appeals and Bill cross-appeals. We affirm. Laurie raises three issues:

¶ 2 1. Did the District Court err in identifying and valuing marital assets?

¶ 3 2. Did the District Court err in its division of the marital estate?

¶ 4 3. Did the District Court err by failing to award maintenance to Laurie?

¶ 5 Bill raises the following issues:

¶ 6 4. Is Laurie bound by stipulations and pleadings as to the character of premarital property?

¶ 7 5. Did the District Court err in calculating the amount of Bill's premarital contribution credit on certain properties?

¶ 8 6. Did the District Court err in requiring Bill to pay Laurie's attorney fees and in the calculation of those fees?

¶ 9 7. Did the District Court err in allocating to Bill $71,900 in “remaining artwork? ”

¶ 10 Due to the overlapping nature of the issues, we will address issues 2, 4, 5, and 7 together, and issues 3 and 6 together.¹

FACTUAL AND PROCEDURAL BACKGROUND

¶ 11 Bill and Laurie were married on June 19, 1992, and lived in Missoula. The parties separated in 2003. Two children were born of the marriage, one of whom is still a minor. The marriage was Laurie's first and the second for Bill.² Bill has two children from his first marriage who are now adults.

¶ 12 For the majority of the marriage, Laurie was a homemaker, taking primary responsibility for raising the parties' two children and Bill's two children from his first marriage, and maintaining the marital home. The District Court determined that Laurie would be the primary physical custodian, which is not challenged on appeal.

¶ 13 Laurie is now employed part-time at an interior design business, earning approximately $30,000 a year. Bill owns Caras Nursery, manages various rental properties, and receives income from certain partnerships he had acquired before the marriage. Bill's average income in the years leading up to the dissolution was $271,191.

¶ 14 At the time of dissolution, the parties had substantial real property interests. The District Court's description and distribution of these properties are as follows:

a. 2717 S. Third West, a residential rental property valued at $350,000 with a $50,000 mortgage. The parties used this property as the marital residence from 1992 until the parties' separation. Bill's parents gifted the property to Bill in 1999. The property is currently rented for $1,400 a month, income which Bill receives. Bill argued that this property should be his separate premarital asset, but the District Court concluded that the property had been commingled, making it a marital asset. The District Court awarded this asset and its debt to Bill.

b. 2210 Hilda, a residential property valued at $395,000 with a $315,000 mortgage. This property has been the primary residence for Laurie and the minor children since its acquisition in 2006. The down payment for this property came from Bill's premarital assets, and the District Court concluded that Bill had a premarital interest in the property of $55,000. The District Court awarded this property to Laurie, requiring Bill to assume and refinance the debt solely in his name.

c. 2803 S. Third West, a residential property valued at $525,000 with a $393,750 mortgage. Bill borrowed $135,000 from Caras Nursery to purchase the property in 2006, and he argued that $135,000 of this property should be designated as his premarital asset. The District Court, after determining that Caras Nursery and its income were marital assets, likewise designated this property to be commingled and a marital asset. The District Court awarded this property and its debt to Bill.

d. A Flathead Lake cabin (known as the “blue cabin”) valued at $1,000,000. There is no debt against this property. The District Court noted that the “parties' [sic] agree that this property should be awarded to Bill as his premarital property.”

e. A Flathead Lake cabin (known as the “red cabin”) that the District Court valued at $750,000. There is a mortgage of $136,000, an additional encumbrance of $160,000 for a bank loan, and an attorney's lien from one of Laurie's prior attorneys for approximately $30,000 against the property. The parties purchased the property in 2000, using $60,000 of Bill's premarital assets, which the District Court credited to Bill. While Laurie requested this property, the District Court awarded it to Bill, along with the debt.

f. A timeshare at a Whitefish, Montana resort, valued at $0. The District Court noted that the parties agreed this property should be awarded to Bill as his premarital property.

g. 1502 S. Sixth Street West, a residential rental property valued at $125,000, with a mortgage of $160,000. The District Court noted that the parties had agreed that this property should be awarded to Bill as premarital property.

h. 440 Blaine Street, a residential rental property valued at $300,000, with a mortgage of $89,000. The District Court noted the parties had agreed that this property should be awarded to Bill as his premarital property.

i. 1530 Reserve Street, a residential rental property valued at $283,140 with a mortgage of $112,000. Again, the District Court noted that the parties had agreed this property should be awarded to Bill as his premarital property. j. 250 Mary, a residential rental property valued at $250,000, with no debt. The parties purchased this property in 2000 and used Bill's premarital assets for the down payment of $23,000. The District Court credited Bill for his $23,000 premarital interest, but awarded the property to Laurie “free and clear.”

k. 1536 Reserve Street, a commercial rental property valued at $566,280 with a mortgage of $113,000. This property was acquired during the marriage using $90,000 of Bill's premarital assets. The District Court credited Bill for his $90,000 of premarital interest and combined Bill's other premarital interests together in determining that Bill should receive this commercial property “in total as an offset against his comingled [sic] premarital interests.”

¶ 15 At the time of this dissolution, the parties also had business interests, which the District Court awarded as follows:

a. Caras Nursery. Bill is the sole proprietor of this business, valued at $2,117,000 by professional report. In 1990, Caras Nursery also acquired approximately 11 acres of property adjacent to the business valued at $700,000 by professional report. The District Court awarded the business to Bill but found that “Laurie's contribution permitted Bill to develop and expand his business.”

b. JKW Investments/Quality Properties, LLP. Bill acquired a 1/3 interest in JKW in 1982 and a 1/6 interest in Quality Properties in 1998. The stipulated value of the combined businesses is $1,000,000. According to the District Court, the parties “have agreed that this business interest should be awarded to Bill as his premarital asset, but that the income he receives from the business should be considered in determining any child support or maintenance obligations.”

¶ 16 At the time of this dissolution, the parties had interests in the following retirement accounts, which were distributed as follows:

a. Employee Benefit Resources Pension/PS 401(k) with a balance of $110,734. The District Court determined that this pension was a marital asset to be distributed to Bill.

b. Solomon IRA with an estimated balance of $130,000. The parties agreed that this account should be awarded to Bill as his premarital property.

c. Putnam IRA with an approximate stipulated balance of $30,000, which the parties agreed should be awarded to Bill as premarital property.

d. Piper IRA with an approximate stipulated balance of $4,000, which the parties agreed should be awarded to Bill as premarital property.

¶ 17 The District Court found that Laurie had artwork valued at $28,100 in her possession, which would be awarded to her. The District Court also noted that “Bill testified that he believes that there is an additional $71,900 in artwork remaining in the marital estate. Bill should retain any remaining artwork.” Further, the District Court ordered that Bill would be responsible for Laurie's attorney fees and expenses of litigation. Other personal property has been divided between the parties and is not at issue.

STANDARD OF REVIEW

¶ 18 “We review a district court's findings of fact regarding a division of marital assets to determine whether the findings are clearly erroneous. Findings are clearly erroneous if: (1) they are not supported by substantial evidence; (2) the district court misapprehended the effect of the evidence; or (3) the district court made a mistake. We review a district court's conclusions of law to determine whether the conclusions are correct.” In re Marriage of Bartsch, 2007 MT 136, ¶ 9, 337 Mont. 386, 162 P.3d 72. If the findings are not clearly erroneous, then the court's division of property will be affirmed unless there is an abuse of discretion. In re Marriage of Payer, 2005 MT 89, ¶ 9, 326 Mont. 459, 110 P.3d 460 (citation omitted); see also In re Marriage of...