Harper v. Harper

• Decision Date: 22 December 1999
• Docket Number: No. 98-643.,98-643.
• Citation: 1999 MT 321,297 Mont. 290,994 P.2d 1
• Parties: In re the Marriage of Roberta M. Hall HARPER, Petitioner and Appellant, v. Ronald Ray HARPER, Respondent and Respondent.
• Court: Montana Supreme Court

994 P.2d 1

1999 MT 321

297 Mont. 290

In re the Marriage of Roberta M. Hall HARPER, Petitioner and Appellant, v. Ronald Ray HARPER, Respondent and Respondent.

No. 98-643.

Supreme Court of Montana.

Submitted on Briefs May 13, 1999.

Decided December 22, 1999.

Diane E. Savage, Habedank, Cumming, Best & Savage, Sidney, Montana, For Appellant.

Peter O. Maltese, Sidney, Montana, For Respondent.

Justice WILLIAM E. HUNT, SR. delivered the Opinion of the Court.

¶ 1 Roberta M. Hall Harper (Bobbie) appeals from the Findings of Fact, Conclusions of Law and Decree of Dissolution of the Seventh Judicial District Court, Richland County, dissolving the marriage of Bobbie and Ronald Ray Harper (Ron) and equitably dividing the parties' marital assets and debts. We affirm.

Issues Presented

¶ 2 Bobbie raises three issues on appeal:

¶ 3 (1) Did the District Court err in refusing to award Bobbie an equitable portion of the value of Ron's stock shares in the closely-held family corporation?

¶ 4 (2) Did the District Court abuse its discretion in refusing to award Bobbie maintenance in lieu of marital property?

¶ 5 (3) Did the District Court abuse its discretion in refusing to award Bobbie the full amount of her attorney's fees?

Factual and Procedural History

¶ 6 Ron and Bobbie were married on June 25, 1966. They remained married for nearly 32 years, residing for most of that time period in Sidney, Montana. At the time of trial, Bobbie was 52 years old and Ron was 53. Ron and Bobbie have five children, all of whom had attained the age of majority at the time of dissolution. Both parties are of good health. Ron and Bobbie each have college educations.

¶ 7 Bobbie did not work outside of the family home for the first seven years of the marriage, during which time she was exclusively a homemaker and cared for the parties' children. Then, for a period of years, Bobbie worked part-time as an assistant teacher and continued to function as a homemaker with the remainder of her time. For about the past ten to twelve years, Bobbie has been employed full-time as a teacher for the Sidney Senior High School. While Bobbie was employed part-time or full-time, Ron contributed to child-rearing and maintaining the family home. However, Bobbie testified that even when she was working full-time outside of the family home, her "principal role was that of homemaker and caring for... [the] children and the home."

¶ 8 At the time of trial, Bobbie earned $31,445 annually, grossing $2,853.12 and netting $1,904.49 in monthly salary. Bobbie also receives medical insurance through her teaching employment, although she contributes $59.82 a month towards the health insurance premium. Bobbie's employer also makes monthly contributions to the teachers' retirement program, and a total of $64,000 had been contributed to Bobbie's retirement fund as of the date of dissolution.

¶ 9 At the time of trial, Ron had multiple sources of income, earning between $35,000 and $45,000 per year. Ron's earnings stem from his work as a real estate salesman (approximately $10,000 per year), an appraiser (approximately $5,000 per year), a real estate property manager (approximately $2,500 per year), an employee of the family corporation performing cattle feeding and other ranching functions (approximately $12,000 per year), rental income from commercial and residential real estate (approximately $7,000 per year), and other miscellaneous sources of income. At the time of trial, Ron's net monthly income was approximately $2,500 to $3,000, exclusive of gambling revenues.

¶ 10 Ron, as a shareholder of the Sub-Chapter S family corporation, the Sidney Oil Company (Sidney Oil), also receives some annual dividend income. However, that dividend income is passed through to the shareholders only in an amount necessary to offset any personal income taxes owed by the shareholders, such that, following the payment of taxes, Ron receives little to no additional income from the dividends. Ron receives no health insurance or retirement benefits through his various modes of employment, although he testified at trial that his stock shares in the family corporation are a "form of retirement."

¶ 11 The District Court found that Ron and Bobbie possessed little property at the time of marriage and, therefore, "that substantially all of the property [was] acquired by the parties during the time of the marriage." In this respect, a hotly disputed property interest is 935 shares of stock in Ron's name in the closely-held family corporation, Sidney Oil, incorporated in 1977. Sidney Oil consists of a retail and wholesale gasoline business, a mechanic's shop, and a farm and cattle ranching operation. Originally, all of the corporate stock was owned by Ron's parents; the shareholders are now Ron's parents, Ron, his two brothers, and a sister. Ron is a corporate vice-president, and he functions in both a managerial and labor capacity with respect to the corporation's cattle ranching operation, devoting a majority of his time every year to such ranching activities. For his "contract services," Ron receives income "as needed," rather than a set monthly salary.

¶ 12 Ron's parents began gifting him shares of stock in the family corporation approximately ten years after the couple was married. The first gift of Sidney Oil stock occurred on December 31, 1976, when Ron received sixty shares of stock. Thereafter, Ron received an additional sixty shares of corporate stock from his parents each succeeding year through 1980, by which time Ron had accumulated 300 shares of stock. There was then a hiatus in the gift-giving for roughly nine years. In 1989, the gifting of stock resumed, and Ron continued to receive stock gifts from his parents through 1996. Today, Ron owns 935 shares in Sidney Oil, which constitutes 23.9% of the 3,900 issued and outstanding shares of the corporation.

¶ 13 The District Court found and valued the real property interests of the parties as follows: the family home ($113,500), a one-half interest in the Meridian Building ($38,500), the blue rental house ($30,000), two surveyed lots and adjoining acreage ($5,500), the Concrete Building ($10,000), and a one-fifth undivided interest in Big Sky Condo ($24,000). As to the parties' real estate, the court found that the following marital debts exist: approximately $7,500 owed on the family home; approximately $2,000 owed on the Concrete Building; and approximately $4,500 owed against the surveyed lots and acreage. ¶ 14 The District Court further found and valued the parties' personal property interests as follows: 935 shares of Sidney Oil corporate stock, valued at $319,000 based solely on the value of the underlying assets owned by the corporation; $64,000 in a vested retirement pension in Bobbie's name in the Montana State Teachers Retirement System; and a negligible amount of savings, as well as miscellaneous household furnishings, appliances, and personal property.

¶ 15 In equitably dividing the marital property, the District Court found that:

[I]t would be equitable to divide the property so that [Bobbie] receives the house and all of her teachers' retirement fund together with the savings and such personal property located in the house as she wishes to keep. All of the remainder of the property, being the business real estate, undivided interest in the condominium and the corporate stock, should be received by [Ron. Bobbie] should be responsible for payment of her credit card debt and doctor bills. [Ron] should be responsible for payment of the debt owed against the personal residence, any debt owed against the property he is receiving and any of his personal debts, including any alleged debts owed to Sidney Oil Company, Inc.

¶ 16 Thus, although the District Court found that "the parties own 935 shares of ... corporate stock which has a value of approximately $319,000 based solely on the value of assets owned," it declined to award Bobbie any share of the value of Ron's stock shares in the family corporation. The court reasoned thus:

In determining the distribution of property, the Court considers that the house has significant value. However, it is not an income-producing property; [Bobbie], through her labors, has earned the retirement benefits of the teacher's retirement fund; that the stock certificates in Sidney Oil Company, Inc. were gifted to [Ron] and not to [Bobbie and Ron] jointly; that [Bobbie] has had no involvement in the corporation nor is there any evidence that her work, either as a teacher or as a homemaker and mother, has contributed in any significant fashion to an increase in value of the Sidney Oil Company, Inc. stock; that the other real estate (except for the condo unit) are income-generating properties upon which [Ron] relies to earn his living while [Bobbie] has a full-time teaching job upon which she relies to earn her living; that [Ron's] past income appears to have been greater than the income of [Bobbie], and so it is equitable that he should pay off the remaining debt against the personal residence....

In its dissolution decree, the District Court also awarded Bobbie $3,500 in attorney's fees, $2,500 of which was intended to cover the costs incurred by Bobbie in forcing Ron to comply with discovery requests during trial.

Standard of Review

¶ 17 In assessing an equitable apportionment of the marital estate, this Court reviews a district court's findings of fact to determine whether the findings on which the court relied are clearly erroneous. In re Marriage of Stufft (1996), 276 Mont. 454, 459, 916 P.2d 767, 770. We review a trial court's conclusion of law relating to the division of marital property to determine whether those conclusions are correct. In re Marriage of DeCosse (1997), 282 Mont. 212, 217, 936 P.2d 821, 824. Notwithstanding the foregoing standards of review,

this Court is not in any way discounting the considerable discretionary power that must be exercised by district courts in

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