In re Marriage of Steinbeisser

• Decision Date: 12 December 2002
• Docket Number: No. 01-394.,01-394.
• Citation: 2002 MT 309,60 P.3d 441,313 Mont. 74
• Parties: In re the MARRIAGE OF James STEINBEISSER, Petitioner and Appellant, and Jackie Steinbeisser, Respondent, Respondent and Cross-Appellant.
• Court: Montana Supreme Court

60 P.3d 441

313 Mont. 74

2002 MT 309

In re the MARRIAGE OF James STEINBEISSER, Petitioner and Appellant, and

Jackie Steinbeisser, Respondent, Respondent and Cross-Appellant.

No. 01-394.

Supreme Court of Montana.

Submitted on Briefs March 14, 2002.

Decided December 12, 2002.

For Appellant: W. Corbin Howard, Attorney at Law, Billings, Montana, Phillip N. Carter, Attorney at Law, Sidney, Montana.

For Respondent: Laura Christoffersen, Christoffersen & Knierim, P.C., Culbertson, Montana.

Justice TERRY N. TRIEWEILER delivered the Opinion of the Court.

¶ 1 The Petitioner, James Steinbeisser (Jim), filed a petition for dissolution of his marriage to Respondent, Jackie Steinbeisser, in the District Court for the Seventh Judicial District in Richland County. Following trial, the District Court entered its Findings of Fact, Conclusions of Law, and Decree of Dissolution. Jim appeals the District Court's distribution of property and award of attorney fees to Jackie. Jackie cross-appeals the District Court's consideration of certain family debt in the computation of Jim's net worth. We reverse the judgment of the District Court.

¶ 2 We address the following issues on appeal:

¶ 3 1. Did the District Court err in its valuation of the premarital and marital assets?

¶ 4 2. Did the District Court err when it valued Jackie's financial contribution to the marital estate?

¶ 5 3. Did the District Court err when it required Jim to reimburse Jackie for the entire amount of her inheritance?

¶ 6 4. Did the District Court err when it found that Jackie gave up her teaching career for the marriage?

¶ 7 5. Did the District Court err when it awarded Jackie two-thirds of the appreciated value of Jim's pre-acquired property?

¶ 8 6. Did the District Court err when it awarded attorney fees to Jackie?

¶ 9 7. Did the District Court err when it reduced the divisible marital estate on account of premarital debt that Jim purportedly failed to disclose prior to trial?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 10 On February 11, 1994, Jim and Jackie were married in Sidney, Montana. Jim was 34 years of age and Jackie was 52 years of age when the parties married. Aside from a two-year stint in Williston, North Dakota, to attend junior college, Jim has farmed and ranched in Richland County, Montana, throughout his lifetime. Initially, Jim worked for Steinbeisser and Sons, Inc., on his family's farm and ranch. In the mid 1980s, Jim, his two brothers, and two of his cousins borrowed money from their family to purchase their own farming and ranching operation. They formed a partnership, 5 S Partnership, which owned the land and established a corporation, VS, Inc., to operate the farm and ranch. In 1990, Jim purchased an apartment complex for $41,000, which he intended to utilize as rental property. Jim entered the marriage with the rental property, a 1/5 undivided interest in 5 S Partnership and VS, Inc., and some other property discussed in greater detail below.

¶ 11 Prior to the marriage to Jim, Jackie worked as a substitute teacher in the Sidney, Montana, school system while she renewed her teaching certificate. Thereafter, Jackie taught full time at a rural school during the 1992-93 school year. Jackie entered into the marriage with $12,615.73 in an investment account, $1100 in an IRA, a vehicle worth $5000, and a mineral interest and personal property worth nominal sums. Further, Jackie received one thousand dollars a month in maintenance from a previous marriage during the first twenty-two months of her marriage to Jim.

¶ 12 During the marriage, the parties worked in various capacities on the farm and ranch owned by the 5 S Partnership. Jackie did not return to teaching following the 1992-93 school year and her teaching certification has since expired. Neither party maintained employment off of the farm and ranch. However, both Jim and Jackie remained actively involved with the Montana Farm Bureau throughout the marriage in volunteer capacities. Further, Jackie assumed responsibility for the management of Jim's apartment complex.

¶ 13 Each of the parties inherited property during the marriage. Jackie inherited a house from her aunt which she sold for $51,261.73. With Jackie's inheritance money, the parties paid off a portion of the apartment complex's mortgage, purchased stock, and placed the remainder in a joint savings account. In 1999, Jim inherited a minority interest in Steinbeisser & Sons, Inc., from his grandmother, valued at approximately $52,000. The parties did accumulate joint property during the course of the marriage which will be discussed in greater detail below as necessary.

¶ 14 On November 12, 1999, Jim filed a petition for dissolution with the District Court. The matter proceeded to trial on January 4, 2001. Because no children were born during the marriage, the dispute at trial primarily involved the valuation and distribution of the parties' premarital and marital assets. Jim relied on expert testimony from two appraisers to establish the premarital and date of separation values for the apartment complex and his interest in the farming and ranching operation. Jackie did not offer expert testimony to rebut Jim's valuations. Instead, Jackie primarily relied on Jim's financial statements and her opinion to value the marital estate. Following presentation of the testimony and evidence, the District Court entered its Findings of Fact, Conclusions of Law, and Decree of Dissolution.

¶ 15 The District Court adopted Jackie's valuations for virtually every asset within the premarital and marital estate. In calculating the estates, the District Court reduced Jim's net worth by approximately $148,000 because of debts he owed to his family. Jackie objected, although unsuccessfully, to the inclusion of the family debt because Jim allegedly failed to disclose the information prior to trial. Although its decision is not completely clear, the District Court purported to award assets to Jim worth $582,561.86. The District Court awarded Jackie assets worth $230,581.14. Jackie's award consists primarily of cash payments in the amount of $157,964.41 (2/3 of the increase in Jim's net worth from the time of marriage to separation) and $51,261.73 (the value of the inheritance from Jackie's aunt). Further, the District Court awarded Jackie her reasonable attorney fees incurred in the dissolution proceedings.

¶ 16 Jim appeals the District Court's property distribution and attorney fee award. Jackie cross-appeals the District Court's consideration of the premarital debt in computing Jim's net worth.

STANDARD OF REVIEW

¶ 17 We review a district court's findings of fact regarding the division of marital property to determine whether they are clearly erroneous. In re Marriage of Ortiz (1997), 282 Mont. 500, 503, 938 P.2d 1308, 1310. A finding is clearly erroneous if it is not supported by substantial evidence, if the district court misapprehended the effect of the evidence, or if our review of the record convinces us that the district court made a mistake. Kovarik v. Kovarik, 1998 MT 33, ¶ 20, 287 Mont. 350, ¶ 20, 954 P.2d 1147, ¶ 20. If the findings are not clearly erroneous, we will affirm the distribution of property unless the district court abused its discretion. In re Marriage of Stufft (1996), 276 Mont. 454, 459, 916 P.2d 767, 770.

¶ 18 Further, we will not overturn a district court's award of attorney fees absent an abuse of discretion. Harper v. Harper, 1999 MT 321, ¶ 47, 297 Mont. 290, ¶ 47, 994 P.2d 1, ¶ 47. The test for an abuse of discretion is whether the trial judge acted arbitrarily without employment of conscientious judgment or has exceeded the bounds of reason resulting in substantial injustice. Schmieding v. Schmieding, 2000 MT 237, ¶ 22, 301 Mont. 336, ¶ 22, 9 P.3d 52, ¶ 22.

DISCUSSION

ISSUE 1

¶ 19 Did the District Court err in its valuation of the premarital and marital assets?

¶ 20 In its Findings of Fact, Conclusions of Law, and Decree of Dissolution, the District Court found "that the value of [Jim's] assets at the time of marriage was $266,885.73 and at the time of separation it was $555,052.24...."¹ The District Court ordered Jim to pay Jackie $51,261.73—the value of an inheritance she received during the marriage. Therefore, the District Court reduced Jim's date of separation value for his premarital assets by this amount and calculated the increase in Jim's net worth during the marriage at $236,934.78 ($503,790.51—$266,855.73).² The District Court then awarded approximately two-thirds of this increase to Jackie in the form of a $157,964.41 cash award.

¶ 21 Jim contends that the District Court erroneously valued Jim's interest in the 5 S Partnership, the apartment complex, and the parties' 1997 Subaru Outback. Jim claims that these incorrect valuations skewed each respective parties' allocation of the marital estate and, ultimately, altered the calculation of Jackie's cash award to his detriment.

¶ 22 At trial, Jim offered expert testimony from Roger Cymbaluk, a licensed realtor and appraiser with extensive real estate experience in eastern Montana, to establish the necessary real property values. Using comparable sales information, Cymbaluk estimated the date of separation value for Jim's interest in the 5 S Partnership at $101,572.80 and the apartment complex at $72,500. Jackie did not offer expert testimony regarding the valuation of the real property at issue. Instead, Jackie submitted an "Agricultural Financial Statement" which Jim filled out and submitted to the farming and ranching operation's bank (First Bank). On this annual financial statement, Jim itemized his assets and liabilities and approximated the value of each. In the 1999 financial statement, Jim estimated that the date of separation values for his interest in the 5 S Partnership and the apartment complex were $284,128 and $70,000 respectively. The financial statement estimated the value of the Subaru Outback at $15,900.

¶ 23 Jackie...