Fiedler v. Fiedler
| Citation | 879 P.2d 675,266 Mont. 133 |
| Decision Date | 11 August 1994 |
| Docket Number | No. 93-452,93-452 |
| Parties | James FIEDLER, Plaintiff and Respondent, v. Joseph FIEDLER, Defendant and Appellant, and Joseph FIEDLER, Plaintiff on Counterclaim and Appellant, v. James FIEDLER and Judith Fiedler, Defendants on Counterclaim and Respondents. |
| Court | Montana Supreme Court |
Robert T. Cummins and James P. Greenan, Helena, for appellant.
Michael G. Barber and Donald L. Ostrem, Great Falls, for respondent.
James Fiedler brought this action in 1982 for dissolution of a partnership and for an accounting for purposes of distribution. Joseph Fiedler appeals from the Order of the District Court of the Eighth Judicial District, Cascade County, which divided and apportioned real and personal partnership property between him and James Fiedler pursuant The issues presented for review are restated as follows:
to the findings of a Special Master. We affirm
I. Did the District Court err in finding that real property located in Montana is a partnership asset?
II. Did the District Court err in finding that real property located in Wisconsin is a partnership asset?
III. Did the District Court comply with the requirements of Rule 53(e)(2), M.R.Civ.P.?
IV. Did the District Court err in determining that Joseph and James Fiedler operated the Taylor Ranch Corporation as a part of the partnership?
James and Joseph Fiedler are twin brothers who began a farming and ranching business in approximately 1950, operating as a family partnership under the name of "Fiedler Ranch Partnership." Testimony indicated that other family members were also involved, although all are now deceased. These family members were their older brother, William Frances Fiedler, and their parents, Frank and Katherine Fiedler.
The partnership farmed and raised sheep and cattle on properties in Judith Basin County near Stanford, Montana known as the Home Place, the Campbell Ranch, the Vann Ranch, Sleepy Hollow, 160 acres known as the "Isolated 160" and the Taylor Ranch. The Taylor Ranch was purchased with partnership funds in 1954 and was originally formed as a corporation with shares issued to James and Joseph Fiedler and their wives. The Taylor Ranch Corporation has since been dissolved by the Secretary of State and the Fiedler brothers have operated it as part of the partnership. Other property which the brothers inherited from their parents and which is located in Wisconsin has been leased with the income from the leases deposited in partnership accounts and included as income on partnership tax returns.
James and Joseph Fiedler operated the cattle operation together until 1968. Joseph Fiedler has since raised sheep on the Home Place and Sleepy Hollow while James has managed the cattle operation on the remaining properties. Joseph Fiedler testified at trial that he deposited income from the sheep operation in an account in a Lewistown bank under the name of Fiedler Ranch. He also testified that this was a joint account with access by both himself and James Fiedler. James Fiedler testified that he had no knowledge of this account and no documentation was provided relative to this account despite requests from the Special Master appointed by the court.
James Fiedler placed funds derived from the cattle operation primarily in a joint account under the name of Fiedler Ranch Partnership in the Basin State Bank in Stanford, Montana. James Fiedler's cattle operation was extremely successful and the money deposited in this account primarily came from the cattle operation. Both brothers made draws from this account. Testimony provided that in the period from January 1978 up to the time of the trial, Joseph Fiedler withdrew $455,343 from this account, $289,189 more than James Fiedler withdrew.
The relationship between the twin brothers became strained as years passed. In 1982, James Fiedler filed a complaint asking for dissolution of the partnership and an accounting for distribution purposes. Joseph Fiedler filed an answer and a counterclaim also asking for an accounting for distribution purposes. The parties agreed to the appointment of a Special Master to determine the final disposition of the partnership assets. On September 2, 1983, the District Court appointed Jack Stevens as Special Master.
Mr. Stevens was recommended by the appellant Joseph Fiedler and approved by both Joseph and James Fiedler. In preparing his Special Master's Report, Mr. Stevens relied on George Campanella, a Certified Public Accountant who had prepared partnership tax returns for over twenty years as the accountant for the partnership; James Volk, a certified real estate appraiser; and Bass Auction Company, which conducted the equipment appraisals. Mr. Stevens also considered the recommendations of Barry Dutton, a natural resource consultant hired by Joseph Fiedler after Joseph Fiedler disagreed with Mr. Stevens' preliminary findings.
The Special Master was asked to determine equitable distributions of partnership assets. Mr. Stevens proposed two methods for distributing real property and other assets. The first method--preferred by the Special Master and chosen by the District Court--essentially maintained the operations of both brothers and provided additional cash to compensate Joseph Fiedler for the additional real estate apportioned to James Fiedler. The second proposal awarded equal land values to each brother with more cash awarded to James Fiedler.
Mr. Stevens testified that among his reasons for recommending the first proposal were the comparative stewardship abilities of the parties over the preceding twenty years, and he specifically noted James Fiedler's management of the property which created a large amount of assets for the partnership as contrasted to the relatively poor fiscal management of other assets by Joseph Fiedler. Other testimony, including that of a banker who had done business with James Fiedler concerning partnership business for over twenty years, provided that James Fiedler was regarded as a sound financial manager and profitable rancher.
Despite requests, Joseph Fiedler did not provide documentation to the Special Master to support his testimony about his sheep operation. Other evidence presented at trial indicates that James Fiedler has successfully managed the vast majority of the real estate owned by the parties for more than twenty years, that there was no mismanagement on the part of James Fiedler involving any of the partnership assets and that there had been no commingling of partnership and personal assets by James Fiedler as had been alleged by Joseph Fiedler. Testimony also indicated that Joseph Fiedler and his wife Olivia had not filed income tax returns since 1982 and that they might need additional cash to cover their tax liability. This was one of the reasons stated by the District Court to support the adoption of the Special Master's preferred proposal.
Other facts will be provided as necessary throughout this opinion.
This case involves a review of findings of fact and conclusions of law. For conclusions of law, the standard of review is whether the district court correctly interpreted the applicable law. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474, 803 P.2d 601, 603. This Court applies a clearly erroneous standard using a three-part test to review a district court's findings of fact. The Court first reviews the record to determine if the findings are supported by substantial evidence; second, if the findings are supported by substantial evidence, we will determine if the trial court has misapprehended the effect of the evidence; and third, if substantial evidence exists and the effect of the evidence has not been misapprehended, the Court may still conclude that a finding is clearly erroneous when a review of the record leaves the Court with the definite and firm conviction that a mistake has been committed. Interstate Prod. Credit Ass'n v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287. Substantial evidence is defined as "evidence that a reasonable mind might accept as adequate to support a conclusion; it consists of more than a mere scintilla of evidence but may be somewhat less than a preponderance." Barrett v. Asarco, Inc. (1990), 245 Mont. 196, 200, 799 P.2d 1078, 1080.
Did the District Court err in finding that real property located in Montana is a partnership asset?
Joseph Fiedler contends that the real property located in Montana is and has always been held as tenants in common. He further contends that all real properties owned by the parties--with the exception of the Taylor Ranch--were acquired by various family members prior to 1950, the date James Fiedler has alleged as the time the partnership was created between James and Joseph Fiedler. According to Joseph Fiedler's arguments on appeal, no real property is held in the name of the partnership, no written partnership agreement has ever existed between James and Joseph Fiedler, and the Fiedler brothers never intended to convey real property held as tenants in common to the partnership. Thus, Joseph Fiedler contends that the District Court erred in relying on In the Matter of the Estate of Palmer (1985), 218 Mont. 285, 708 P.2d 242, to determine that James and Joseph Fiedler intended to operate the ranch lands as part of a partnership and in distributing such as partnership property.
James Fiedler counters that Joseph Fiedler has maintained since the beginning of this proceeding that all real property owned and operated in Montana for farming and ranching purposes was partnership property and that he is barred by principles of judicial estoppel from now contending otherwise on appeal. We agree.
Clearly standing out among the numerous instances in which Joseph Fiedler has previously asserted or maintained that the property is partnership property are the following:
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