In re George

Decision Date20 September 2022
Docket NumberDA 21-0259
Citation410 Mont. 73,517 P.3d 188
Parties IN RE the MARRIAGE OF: Chelsey E. GEORGE, f/k/a Chelsey E. Frank, Petitioner and Appellant, and Michael E. FRANK, Respondent and Appellee.
CourtMontana Supreme Court

410 Mont. 73
517 P.3d 188

IN RE the MARRIAGE OF: Chelsey E. GEORGE, f/k/a Chelsey E. Frank, Petitioner and Appellant,
and
Michael E. FRANK, Respondent and Appellee.

DA 21-0259

Supreme Court of Montana.

Submitted on Briefs: January 19, 2022
Decided: September 20, 2022


For Appellant: David B. Cotner, Cotner Law, PLLC, Missoula, Montana

For Appellee: Molly K. Howard, J.R. Casillas, Datsopoulos, MacDonald & Lind, P.C., Missoula, Montana

Justice James Jeremiah Shea delivered the Opinion of the Court.

517 P.3d 193
410 Mont. 78

¶1 Chelsey E. George, f/k/a Chelsey E. Frank (Chelsey), appeals the April 22, 2021 Findings of Fact, Conclusions of Law and Order of the First Judicial District Court, Lewis and Clark County, distributing the marital estate and calculating child support after her dissolution of marriage from Michael E. Frank (Mike). We restate and address the following issues:

1. Whether the District Court abused its discretion regarding the division of property.

2. Whether the District Court abused its discretion in calculating child support.

3. Whether the District Court's adoption of Mike's proposed Findings of Fact and Conclusions of Law warrants a new trial.

¶2 We affirm in part, reverse in part, and remand for further proceedings consistent with this Opinion.

PROCEDURAL AND FACTUAL BACKGROUND

¶3 Chelsey and Mike married in November 2007 and separated on November 1, 2018. On January 8, 2019, Chelsey filed a petition for dissolution, seeking equitable distribution of assets and liabilities, a parenting plan for their child, E.F. (age 11), child support, health insurance, maintenance, and attorney fees. On June 7, 2019, the parties filed a Stipulated Final Parenting Plan, agreeing to a 50/50 split of parenting time and resolving all issues except child support. The parenting plan, adopted by the District Court on June 29, 2020, requires Mike to pay E.F.’s health, dental, and vision insurance premiums, and all uncovered medical expenses, as well as 50% of E.F.’s extracurricular activity expenses. From November 2018 until September 30, 2019, Mike paid Chelsey $1,500 per month in temporary family support. In September 2019, the parties stipulated that Mike would receive $50,000 from the estate and Chelsey would receive a lump sum of $100,000 from the estate. Mike also agreed to pay Chelsey $5,000 per month in support. The parties received $25,000 each for attorney fees.

¶4 The matter proceeded to trial in June 2020. Six witnesses testified, including three experts, and 260 exhibits were admitted over three days. The parties submitted post-trial briefing and proposed findings of fact and conclusions of law. The parties stipulated to the entry of a decree of dissolution on June 26, 2020, reserving the

410 Mont. 79

contested issues from trial to be decided by the District Court. The District Court filed its Findings of Fact, Conclusions of Law and Order on April 22, 2021.

¶5 Chelsey appeals, asserting that the court's division of property was clearly erroneous, resulting in an abuse of discretion and requiring remand for a new trial. Chelsey also argues on appeal that the court abused its discretion by deviating from the child support guidelines and improperly adopted verbatim Mike's proposed findings of fact and conclusions of law.

Financial History

¶6 When Mike and Chelsey married, Mike was 40 years old and was the Vice President of Corporate Integrity in the Human Resources Department at Blue Cross Blue Shield of Montana (BCBS). Mike was earning $135,701 per year. Chelsey was 31 years old and worked for Helena-based George's Distributing, Inc., her family's business. Chelsey was earning $86,388 per year. By December 2010, Mike was the President and the Chief Executive Officer (CEO) at BCBS, making $405,819 per year. Mike later became an executive in Healthcare Service Corporation (HCSC), the company that acquired BCBS in 2013, and was earning a base salary of approximately $520,000 per year.

¶7 Mike's HCSC compensation package included an annual performance incentive (API) that rewarded employees for hitting short-term performance goals over the previous 12-month period, and a long-term incentive program (LTIP) that was based on performance

517 P.3d 194

over a three-year period. Both the API and the LTIP allowed Mike to defer up to 100% of this income into a Master Deferred Compensation Plan. The incentive plans do not accrue during the performance period. They are paid during the first quarter of each future projection year; they are not guaranteed; and they are unfunded. The plans are non-assignable and cannot be transferred.

¶8 Chelsey and Mike primarily lived on Chelsey's income and Mike's base pay throughout their marriage. Mike and Chelsey agreed that Mike should defer almost all his bonus income into retirement so that he and Chelsey could put money aside for the future. During the three years prior to trial, Mike's income totaled $2,495,314 (2017), $2,619,992 (2018), and $3,052,951.71 (2019). Chelsey's income totaled $247,903 (2017), $152,599 (2018), and $115,345 (2019). By the date of trial, the marital estate exceeded $16,000,000. Chelsey testified that she had no idea how much money Mike was putting away and was shocked to learn through the discovery process that Mike was making between $2 and $3 million per year.

¶9 After the parties physically separated, they maintained separate

410 Mont. 80

personal checking accounts and credit cards. Mike continued to manage the parties’ real property and joint finances. Mike and Chelsey purchased a residence in the same neighborhood as the family home in both of their names so that Mike could live near E.F. The parties continued to jointly own three other parcels of real property until March 2020, when they decided to sell their Big Sky home and put the net proceeds in a joint account. Since their separation, Mike has paid all mortgages, real estate taxes, and insurance, as well as all maintenance expenses related to their real property holdings, including housekeeping, landscaping, and remodeling expenses for Chelsey's residence. Mike also paid all income taxes and some, but not all, of Chelsey's medical bills during the separation.

Date of Separation Valuation

¶10 The parties dispute whether the marital estate should be valued as of the date that the parties separated, November 1, 2018, or June 2020, closer to the date the parties’ marriage was dissolved. The estate includes several jointly-owned real properties and vehicles, as well as multiple shared and individual checking, investment, and retirement accounts, $1.2 million in premarital contributions, and $1.5 million in liabilities.1

¶11 Chelsey testified that the parties continued to comingle their finances and other assets after they separated. She testified that she and Mike went to counseling together until shortly before the end of 2018. She testified, "Even when we were so-called separated, we still bought a house together, because we were working on our marriage. ... I took care of [E.F.] the majority of the time for ... the first five months of 2019." Chelsey contended that Mike traveled 31 times in 2019, during which time she had sole parenting responsibilities. Chelsey traveled as well, roughly 15 times between 2019 and early 2020.

¶12 Mike testified that the parties did not live together or operate as a family unit post-separation. He testified that he solely supported the marital estate financially during the separation and felt that a later valuation date would create an unjust distribution in Chelsey's favor because "once we were separated, there were no contributions from Chelsey to, you know, my work, my home, or otherwise."

¶13 At the close of the trial, the District Court discussed its inclination to value the marital estate at the date of separation and announced that the court would accept post-trial briefing on the issue. The District

410 Mont. 81

Court stated:

In nearly every case that I have, the parties’ marital estate is essentially assessed on the day that they split up .... I understand Chelsey's position here is that she worked incredibly hard during the years of their marriage in order to help Mike succeed
517 P.3d 195
in his position. I mean, I get that. That testimony came through loud and clear. But it's hard for me to say that that continued -- you know -- we know that it didn't continue to occur after November 1st, 2018. Mike continued to have success and continued to rise in the ranks of the corporation at HCSC. So it's hard for me to attribute that portion of Mike's income or success to the marital estate when the parties clearly had separated prior to that time.

¶14 Both parties submitted post-trial briefing on the issue. The court concluded that the date of separation was appropriate because "[b]ased on the evidence presented ... the parties were separated and the marital relationship was terminated on or before November 1, 2018." The District Court found that "Chelsey made no contributions, non-monetary or otherwise, which facilitated the receipt or maintenance of any property." The District Court determined that "[t]o include in the valuation of the marital estate the accumulation of assets or growth of assets after the parties’ separation would effectuate an injustice and frustrate the intended purpose of equitable property division."

Retirement Accounts

¶15 The parties agreed at trial that Chelsey should receive a portion of Mike's two-part pension plan divided in accordance with In re Marriage of Rolfe , 234 Mont. 294, 298-99, 766 P.2d 223, 226-27 (1988) (" Rolfe II "), where the court determined the marital interest of the ex-husband's retirement benefits by dividing the length of the ex-husband's employment during the marriage by the ex-husband's entire length of employment and applying the fraction to all future benefit payments.

¶16 Mike argued that the numerator 11 should be used to calculate both parts of the pension plan, representing Mike's years of service from the date of marriage...

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