Funk v. Funk

Citation363 Mont. 352,2012 MT 14,270 P.3d 39
Decision Date31 January 2012
Docket NumberNo. DA 11–0209.,DA 11–0209.
PartiesIn re the MARRIAGE OF Bernita FUNK, Petitioner and Appellee,andKevin Funk, Respondent and Appellant.
CourtUnited States State Supreme Court of Montana

2012 MT 14
270 P.3d 39
363 Mont. 352

In re the MARRIAGE OF Bernita FUNK, Petitioner and Appellee,andKevin Funk, Respondent and Appellant.

No. DA 11–0209.

Supreme Court of Montana.

Argued and Submitted Nov. 9, 2011.Decided Jan. 31, 2012.


[270 P.3d 40]

For Appellant: P. Mars Scott (argued), Attorney at Law, Missoula, Montana.

For Appellee: Kay Lynn Lee (argued), Henning, Keedy & Lee, PLLC, Kalispell, Montana.

Justice Patricia O. Cotter delivered the Opinion of the Court.

[363 Mont. 353] ¶ 1 Kevin and Bernita June Funk (hereinafter Kevin and June) were married in December 1990. In 1996, Kevin inherited 2.5 acres of lakefront property on Flathead Lake and 113 acres of non-lakefront property as well as several vehicles and an undisclosed amount of cash. June filed for dissolution in February 2009. In distributing the marital assets upon dissolution, the District Court included Kevin's inherited real property in the marital assets and awarded a portion to June. Kevin appeals. We affirm in part and remand in part.

ISSUE

¶ 2 The dispositive issue on appeal is whether the District Court erred in its application of the law when it awarded June a portion of Kevin's inherited property.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 3 Kevin and June married in December 1990 in Polson, Montana. At the time they married, June worked as a solderer in Polson and Kevin had been working for Montana Rail Link (MRL) for approximately three years. In 1993, June, who has a GED but no post-secondary education, became a full-time homemaker. In 1996, Kevin's [363 Mont. 354] father died and Kevin inherited over 115 acres of real property, 2.5 acres of which is lakefront property on Flathead Lake. The remaining two parcels consisted of 73 acres and 40 acres respectively. He also inherited some automobiles and cash. The couple had a daughter in 1997. In late 2007, Kevin quit working for MRL maintaining it was an unsafe working environment. He began living on the proceeds from his IRA and engaging in unsuccessful day trading. In February 2009, following a several month separation, June filed for dissolution. While the dissolution proceeding addressed numerous disputes between the parties, including a parenting plan for their daughter, the focus of this appeal is the District Court's distribution of the property Kevin inherited or acquired with inherited funds.

¶ 4 The District Court issued a detailed 16–page Findings of Fact, Conclusions of Law and Order of Decree of Dissolution (Decree) on October 21, 2010. At the time the Decree was issued, June was 60 years old and Kevin was 47. In the Decree, the court valued the inherited lakefront property at

[270 P.3d 41]

$550,000 and the remaining inherited real property at $415,000. It awarded June $275,000, representing one-half of the value of the lakefront property, and $69,167, representing one-third of the increased value of the non-lakefront property. Kevin was instructed to pay June the total amount of $344,167 within six months of the Decree. However, if Kevin could not finance June's award by any means other than selling the property, the court instructed Kevin to sell the property within two years of the date of the Decree.

¶ 5 The court also awarded June one-half of 17/20s (the years of marriage/the years of MRL employment) of Kevin's railroad retirement, the couple's 2005 Toyota Sienna, and $42,547 representing the value of a 2011 Toyota Sienna Kevin purchased post-separation. Additionally, by agreement of the parties, Kevin retained substantial personal property, including but not limited to several vehicles, jet skis, tractors, trailers and a sailboat. The court further instructed Kevin to pay June $500 per month in maintenance, retroactive to March 2009, for a period of five years or until June received her entire award. Kevin appeals certain of these rulings.

STANDARD OF REVIEW

¶ 6 Section 40–4–202, MCA, governs the distribution of a marital estate. A district court's interpretation of a statute is a conclusion of law that we review de novo for correctness. In re C.D.H., 2009 MT 8, ¶ 21, 349 Mont. 1, 201 P.3d 126. Section 40–4–202, MCA, vests the [363 Mont. 355] district court with broad discretion to apportion the marital estate in a manner equitable to each party under the circumstances. We review a district court's division of marital property to determine whether the court's findings of fact are clearly erroneous and the conclusions of law are correct. Absent clearly erroneous findings, we will affirm a district court's division of property and award of maintenance unless we identify an abuse of discretion. As we have stated previously, each case must be examined individually, with an eye to its unique circumstances. Marriage of Spawn, 2011 MT 284, ¶ 9, 362 Mont. 457, 269 P.3d 887 (citations omitted).

¶ 7 We have further instructed that “the factors listed in [§ ] 40–4–202, MCA, must be considered and referred to in the [district] court's findings and conclusions and there must be competent evidence presented on the values of the property.” Marriage of Collett, 190 Mont. 500, 504, 621 P.2d 1093, 1095 (1981).

DISCUSSION

¶ 8 Did the District Court err in its application of the law when it awarded June a portion of Kevin's inherited property upon dissolution of the marriage?

¶ 9 After the appeal briefs were submitted in this case, the Court ordered the parties to present oral arguments. Kevin's argument was somewhat different from that presented in his written appellate brief. In his brief he argued inherited property should not be included in the marital estate if the non-inheriting spouse did not contribute to the preservation, maintenance or improvement of the property. However, during oral argument, both parties maintained that under § 40–4–202, MCA, inherited property should not be automatically excluded from the marital estate; rather, a district court should be allowed to determine if the non-inheriting spouse is entitled to any portion of the inherited property based upon an analysis of the factors set forth in the statute. If the non-inheriting spouse is not entitled to any portion of the inherited property after the court has analyzed the statutory factors, a district court should award the inherited property to the inheriting spouse rather than excluding it from the marital estate.

¶ 10 In addition to the arguments made on behalf of their respective clients, both counsel pointed out that our jurisprudence pertaining to § 40–4–202, MCA, is confusing for practitioners and has led to conflicting results. Attorney Scott stated:

Where the confusion has arisen ... are the cases that ... talk about excluding out from consideration inherited property or [363 Mont. 356] premarital property or gifted property. When you read § [40–4–202, MCA] there is no opportunity to exclude out any property.

[270 P.3d 42]

...

If we are to ... be intellectually honest about how to deal with these kinds of issues, we have to get rid of all those “excluded” cases because it creates so much confusion with the practitioners ... in the field about “do we consider the inherited property? Do we not consider the inherited property?” I show up at settlement conferences and people refuse to give me any information about the inherited property. We have discovery wars over this where people say “objected—you don't get to learn anything about the inherited property because there was no contribution.” We need to get over that because that's where all the cost and expense is going in these cases. [Additionally], there are a lot of attorneys out there that have made a ton of money fighting these wars legitimately on either side of the case.... I can find the cases that will support whatever position I want to take.

Similar comments and concerns have been raised by other family law practitioners in briefs filed with this Court over the years.

¶ 11 Based upon an exhaustive review of the many cases interpreting § 40–4–202(1), MCA (hereinafter referred to as § 202(1)), we conclude that our jurisprudence in this area has indeed been confusing and inconsistent. Therefore, for the edification of the courts and litigants, we seek now to clarify the manner in which the statute should be applied when apportioning property in a dissolution proceeding.

¶ 12 Section 40–4–202, MCA, is set forth below in relevant part:

(1) In a proceeding for dissolution of a marriage ... the court, without regard to marital misconduct, shall ... finally equitably apportion between the parties the property and assets belonging to either or both, however and whenever acquired and whether the title thereto is in the name of the husband or wife or both. In making apportionment, the court shall consider the duration of the marriage and prior marriage of either party; the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, and needs of each of the parties; custodial provisions; whether the apportionment is in lieu of or in addition to maintenance; and the opportunity of each for future acquisition of capital assets and income. The court shall also consider the contribution or dissipation of value of the respective estates and the contribution of a spouse as a homemaker or to the family unit. In dividing property acquired ... [363 Mont. 357] by gift, bequest, devise, or descent; property acquired ... in exchange for property acquired by gift, bequest, devise, or descent; the increased value of property acquired prior to 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.

¶ 13 This statutory provision is part of the Uniform Marriage and Divorce Act (UMDA). The Montana Legislature adopted the UMDA...

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