In re Marriage of Helzer, 04-275.

• Decision Date: 14 December 2004
• Docket Number: No. 04-275.,04-275.
• Citation: 102 P.3d 1263,2004 MT 352,324 Mont. 371
• Parties: In re the Marriage of Sherri L. HELZER, Petitioner and Respondent, and Steve Helzer, Respondent and Appellant.
• Court: Montana Supreme Court

102 P.3d 1263

2004 MT 352

324 Mont. 371

In re the Marriage of Sherri L. HELZER, Petitioner and Respondent, and

Steve Helzer, Respondent and Appellant.

No. 04-275.

Supreme Court of Montana.

Submitted on Briefs August 25, 2004.

Decided December 14, 2004.

For Appellant: James D. Moore, Attorney at Law, Kalispell, Montana.

For Respondent: Paula M. Johnson-Gilchrist, Attorney at Law, Whitefish, Montana.

Justice JIM REGNIER delivered the Opinion of the Court.

¶ 1 Respondent Steve Helzer (Steve) appeals from the Amended Findings of Fact and Judgment entered by the Eleventh Judicial District, Flathead County awarding marital assets to his former spouse, Sherri Helzer (Sherri). We reverse in part and affirm in part.

¶ 2 We restate the following issues on appeal:

¶ 3 1. Whether the District Court erred in determining the property valuation at the time of marriage.

¶ 4 2. Whether the District Court erred in determining Steve's sustainable income for purposes of calculating child support.

¶ 5 3. Whether the District Court erred by reapportioning a percentage of the marital estate in its amended findings to Sherri after it had mistakenly doubled Steve's share of the marital estate.

¶ 6 4. Whether the District Court erred in awarding Sherri a disproportionate share of the marital estate.

¶ 7 At the outset, we note Sherri has raised five additional issues in her brief. However, in order to preserve an issue not raised by the appellant, a respondent must file a notice of cross-appeal. Billings Firefighters Local 521 v. Billings, 1999 MT 6, ¶ 31, 293 Mont. 41, ¶ 31, 973 P.2d 222, ¶ 31 (citing Gabriel v. Wood (1993), 261 Mont. 170, 178, 862 P.2d 42, 47). Sherri has not filed a notice of cross-appeal. As a result, we will not address the additional issues she has raised on appeal.

PROCEDURAL AND FACTUAL BACKGROUND

¶ 8 Steve and Sherri were married on May 22, 1993. Steve and Sherri separated on March 13, 2001, and on March 27, 2001, Sherri field a petition for dissolution. Steve and Sherri have two children as a result of their marriage.

¶ 9 At the time of their marriage, Steve was the sole proprietor of Northwest Precision, Inc., a machine manufacturing business. Among his other assets, Steve also owned two trucks, a tract of land with a mobile home and two shop buildings as well as interest in real property owned in common with his family. Sherri, on the other hand, came into the marriage with minimal personal items and a 1985 Honda. During the marriage, however, Sherri started Paper Inspirations, a hand-stamp business which personalizes clothing and gift cards.

¶ 10 At the time of separation, both parties agreed to a parenting plan, division of personal property and retention of their respective businesses. Both parties could not agree, however, on the valuation of Northwest Precision and its assets for the purpose of distributing the marital estate. The parties could also not agree on the income that should be attributed to Steve for determining child support.

¶ 11 The District Court entered its Findings of Fact, Conclusions of Law and Judgment on September 3, 2003. Steve filed a motion to reconsider, contending the District Court erred by including $258,357 in real property and improvements twice in its valuation of marital assets. On November 5, 2003, the District Court issued its Amended Findings of Fact and Judgment.

DISCUSSION

ISSUE ONE

¶ 12 Whether the District Court erred in determining the property valuation at the time of marriage.

¶ 13 Steve argues the District Court abused its discretion in determining the date of marriage valuation of his real property and improvements associated with his business. He claims the court erred when it relied on Sherri's expert property appraiser, Gene Lard, who incorrectly used the market approach in estimating the property's value at $100,000 at the time of marriage. Steve alleges no genuine comparable sales existed at the time to accurately gauge his property's value and contends the cost approach used by his expert, Tom Donovan, was more comprehensive in evaluating the property at $145,000 at the time of the marriage. Finally, he maintains Sherri made no contributions to the purchase price and her assistance with improvements to the property was compensated at that time.

¶ 14 Sherri counters the District Court correctly considered her expert's property valuation of $100,000 at the time of marriage. She maintains her expert properly used the market method of evaluating Steve's property holdings, reviewing some 400 sales in the time period in an attempt to find comparable sales and reach a fair market value. Further, Sherri argues Steve's expert's testimony was obtained in the form of a perpetuation deposition during which Sherri's counsel was unable to attend and participate in due to illness. Moreover, Sherri contends Steve's expert's testimony was based exclusively on Steve's estimates regarding improvements and labor on the property. Sherri maintains these improvements occurred after the date of marriage.

¶ 15 The district court has broad discretion in determining the value of property in dissolution. Its valuation can be premised on expert testimony, lay testimony, documentary evidence, or any combination thereof. The court is free to adopt any reasonable valuation of marital property which is supported by the record as long as it is reasonable in light of the evidence submitted. In re Marriage of Meeks (1995), 276 Mont. 237, 242-43, 915 P.2d 831, 834-35.

¶ 16 Based on our review of the record, we conclude the District Court did not abuse its discretion in determining the property value at the time of marriage. The District Court received testimony at trial concerning the appreciation in the value of the property. Between the two experts presented, the court found the appraisal of Sherri's expert to be more reliable, citing his use of comparable sales as justifying its finding. The court stated, "Mr. Lard used a comparable sales method to determine the May, 1993 value and although true comparable sales were hard to find, his comparison and analysis appeared to be justified." Similarly, the District Court found Donovan's cost approach valuation "appeared to be unrealistic," believing his reliance on Steve's calculations improper. We therefore affirm the District Court's determination the value of Steve's property was $100,000 at the time of marriage.

ISSUE TWO

¶ 17 Whether the District Court erred in determining Steve's sustainable income for purposes of calculating child support.

¶ 18 Steve argues the District Court's finding he had sustainable income of $46,000 was unsupported by substantial credible evidence. Steve contends the District Court misconstrued his expert witness's testimony regarding his annual average income. He also asserts the District Court incorrectly relied on Sherri's expert, Nick Bourdeau (Bourdeau), who arbitrarily arrived at a determination Steve earned $52,028 in wages plus an additional $35,161 from scrap metal sales and adjustments for business expenses and deductions. Included in Bourdeau's estimate is $15,000 in income which Steve contends not only is unsupported by evidence in the record but is, in fact, a product of alchemy. Further, Steve maintains the District Court, in using Bourdeau's testimony, incorrectly considered the three year period immediately preceding the dissolution which failed to reflect the inherent unpredictability of Steve's business and client base.

¶ 19 Sherri also contends the District Court erred in determining Steve's income. However, Sherri counters the District Court's findings fail to reflect Bourdeau's full estimates regarding Steve's earnings. Specifically, Sherri maintains the District Court should have used the average of Steve's income from the prior three years of $52,028 plus an additional $35,161 from unreported scrap income as well as business expenses, depreciations and deductions to estimate Steve's estate share. Sherri argues Bourdeau is a noted expert in the field of marital asset distribution who correctly followed standard calculations in arriving at his conclusions.

¶ 20 We review a district court's award of child support to determine whether the district court abused its discretion. In re Marriage of Bee, 2002 MT 49, ¶ 19, 309 Mont. 34, ¶ 19, 43 P.3d 903, ¶ 19. To conclude a district court abused its discretion in child support calculations, we must determine whether the district court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in substantial injustice. In re Marriage of Kovarik, 1998 MT 33, ¶ 21, 287 Mont. 350, ¶ 21, 954 P.2d 1147, ¶ 21.

¶ 21 The criteria for determination of income under the child support guidelines is defined in § 37.62.106, ARM, which provides:

(1) Income for child support includes actual income, imputed income, or any combination thereof which fairly reflects a parent's resources available for child support.

(2) Actual income includes:

(a) economic benefit from whatever source derived....

....

(6) `Imputed income' means income not actually earned by a parent, but which will be attributed to the parent based on:

(a) the parent's earning potential if employed full-time;

....

(7) Income should be imputed whenever a parent:

(a) is unemployed;

(b) is underemployed....

¶ 22 We conclude the District Court abused its discretion in determining Steve's sustainable income. In its order, the District Court allocated income of $46,000 to Steve for child support calculations based upon the following: stipulated annual income of $37,000; his average wage of $50,000 for the years 1999 through 2001; Steve's expert's opinion he should earn $46,000 annually; and unreported scrap income of $5,000. However, the District Court failed to properly support its findings as to Steve's average annual income as well as his scrap income.

¶ 23 In arriving at its findings concerning Steve's average annual income, ...