In re Marriage of Thorner

• Decision Date: 05 August 2008
• Docket Number: No. DA 06-0663.,DA 06-0663.
• Citation: 2008 MT 270,190 P.3d 1063,345 Mont. 194
• Parties: In re the MARRIAGE OF Julie THORNER, f/k/a Julie M. Davis, Petitioner, Appellee and Cross-Appellant, and Ronald S. Davis, Respondent and Appellant.
• Court: Montana Supreme Court

190 P.3d 1063

2008 MT 270

345 Mont. 194

In re the MARRIAGE OF Julie THORNER, f/k/a Julie M. Davis, Petitioner, Appellee and Cross-Appellant, and Ronald S. Davis, Respondent and Appellant.

No. DA 06-0663.

Supreme Court of Montana.

Submitted on Briefs August 9, 2007.

Decided August 5, 2008.

For Appellant: Christopher J. Gillette, Attorney at Law, Bozeman, Montana.

For Appellee: James D. McKenna, Walsh & McKenna, Bozeman, Montana.

Justice JOHN WARNER delivered the Opinion of the Court.

¶ 1 Ronald Davis (Ron) appeals, and Julie Thorner (Julie), formerly Julie Davis, cross-appeals from an order entered in the Eighteenth Judicial District Court, Gallatin County, dissolving their marriage, distributing the marital estate, and ordering a parenting plan for their two minor children.

¶ 2 Ron appeals the provisions of the decree ordering that Julie shall have primary custody of the parties' two minor children during the school year in North Carolina. He also appeals the distribution of the retirement account portion of the marital estate because it denied him a percentage of the increase in Julie's retirement account that accrued between the time of the parties' separation and the time of the decree.

¶ 3 Julie cross-appeals, asserting that she should be able to fulfill her monetary obligation by distributing to Ron pre-tax retirement funds instead of cash and that she should not be required to pay interest on the amount she owes him until the date payment was due, February 28, 2007.

¶ 4 We restate and discuss the issues on appeal as follows:

¶ 5 Issue 1: Did the District Court err in ordering that Julie retain primary custody of the children in North Carolina during the school year?

¶ 6 Issue 2: Did the District Court err by not including the post-separation appreciation of Julie's retirement account in its calculation of the marital estate's value?

¶ 7 Issue 3: Did the District Court err in ordering that Julie pay Ron the entire amount owed to equitably distribute the marital estate in cash without considering the tax implications of an early withdrawal from Julie's retirement account?

¶ 8 Issue 4: Did the District Court err in ordering that Julie pay Ron interest on her obligation to Ron before the date it was due?

BACKGROUND

¶ 9 Julie and Ron were married in Illinois in October 1995. Two children were born of the marriage. The youngest child was born with a heart condition that is currently stable and does not impact the parenting plan at issue here. Julie is a corporate marketing executive. Ron is an electrician.

¶ 10 After living several years in Colorado, the couple signed a contract to purchase a Montana business. In June 2003, Ron moved to Bozeman to begin learning the business. Julie and the children moved to Bozeman later that summer. Both intended to continue working in their previous occupations because they anticipated that the business would not be immediately profitable. Julie worked remotely for her Colorado employer. Ron eventually found work as an electrician in Bozeman. The purchase of the business fell through due to problems unrelated to this proceeding.

¶ 11 Julie petitioned for dissolution on April 27, 2004. Since that time, the parties have maintained separate finances. Despite the hostility between them, the couple continued to live together until July 2004, when they physically separated and maintained separate households.

¶ 12 Over the course of the next two years, while the divorce was pending, the children lived primarily with Julie, spending every other weekend and every Wednesday dinner with Ron under a verbal parenting arrangement. Julie, through her attorney, made several requests for support. However, Ron did not pay interim maintenance or child support.

¶ 13 Julie moved the District Court for an order allowing her to relocate to North Carolina with the children. She had found an employment opportunity in Bryson City, North Carolina, where she had previously worked and lived prior to attending business school. In February 2005, the District Court, considering the fact that their eldest son was midway through his second year in school and the divorce was not yet final, found:

it would be in the best interest of the children at this time to retain the children in a familiar environment and routine until a final decree of dissolution and parenting plan are entered in this matter.

The court ordered that the children stay in Bozeman with Julie, and if she moved to North Carolina, the children were to stay in Bozeman with Ron until the dissolution was final.

¶ 14 Not wanting to move without the children, Julie stayed in Bozeman. Having been laid off by her Colorado employer, she accepted the job in North Carolina. Her new employer allowed her to begin working remotely as long as she traveled frequently to North Carolina until she moved there. This arrangement was understood to be temporary.

¶ 15 In June 2005, the court ordered the parties to appoint an investigator or parenting evaluator to determine the best interests of the children. The parties did so, and the court considered the evaluation in its final decree of dissolution and parenting plan.

¶ 16 Trial was held on May 25 and 26, 2006. Substantial testimony and documentary evidence was presented. On August 28, 2006, the court made the following findings of fact:

22. ... Both parties agree that the children should, to the extent feasible, have frequent and continuing contact with each parent. However, Julie desires to change her residence, and that of the boys, to North Carolina because of her employment opportunities in North Carolina.... Ron desires that the children remain in Montana, with equal time and equal access for each parent.

...

25. ... Although the report states that the children should reside with Julie if she "must" relocate to North Carolina, the report clearly states that this option is "less desirable" and only "probably workable." The Court does not find that Julie "must" move to North Carolina but it does find that her desire to do so, under the circumstances, is reasonable and is in the best interests of the children.

...

30. As noted in the parenting evaluation report, both children, and especially [T.D.], are very attached to Julie. Julie has been the primary caregiver for each of the children since birth, and the children should continue to live with Julie.

31. The parties moved to Montana in September of 2003. The marriage dissolution action began in April of 2004, and the family has not been able to establish strong connections or "put down roots" in this area. In fact, [T.D.'s] best friend moved with his family to the state of Washington this summer. Although the parenting evaluation report notes that a move to North Carolina will, at least for the first few months, be difficult for the children, there is no evidence to show that such a move will cause significant or lasting problems for the children.

...

33. This Court is bound to apply the best interests of the children standard. While the Court believes it is in the children's best interests to maintain frequent contact with both parents, the Court finds that allowing the children to move to North Carolina with their mother is in their best interest.

¶ 17 The District Court concluded that relocating to North Carolina with Julie was in the children's best interests. The District Court ordered that the children spend two months every summer, every spring break through 2009, then alternating, and every other Christmas vacation with Ron in Montana. In addition, Ron was permitted to visit them for one week every month in North Carolina with proper advance notice to Julie. The District Court also ordered a contingent parenting plan to take effect if Ron moved to North Carolina.

¶ 18 After considering the evidence presented concerning the parties' debts, assets, and contributions to the marital estate, and after giving Julie credit for back child support owed by Ron, the District Court ordered Julie to pay Ron $51,990 on or before February 28, 2007. The court also ordered that Julie pay interest on this amount at ten percent per annum from the date of the decree (August 28, 2006) until paid.

¶ 19 Ron appeals the District Court's order granting Julie primary custody of the children and thus allowing her to relocate with their children to North Carolina. He also challenges the amount that Julie was ordered to pay him. Julie cross-appeals the court's determination that she pay Ron the entire amount she owes him in cash, rather than distribute to him a portion of her retirement account and avoid harsh tax consequences. She also cross-appeals the court's order that she pay interest on the amount owed between the time the decree was entered and the time it was due.

STANDARD OF REVIEW

¶ 20 We review a district court's findings of fact, including those underlying a dissolution proceeding, parenting plan, and division of marital assets, to determine if they are clearly erroneous. Bock v. Smith, 2005 MT 40, ¶ 14, 326 Mont. 123, ¶ 14, 107 P.3d 488, ¶ 14. A finding is clearly erroneous if it is not supported by substantial evidence, the district court misapprehended the effect of the evidence, or our review of the record convinces us the district court made a mistake. In re Paternity of C.T.E.-H., 2004 MT 307, ¶ 15, 323 Mont. 498, ¶ 15, 101 P.3d 254, ¶ 15. Where the court's findings are not clearly erroneous, we will reverse a district court's parenting plan decision only where an abuse of discretion is "clearly demonstrated." In re Marriage of Carter, 2003 MT 19, ¶ 9, 314 Mont. 84, ¶ 9, 63 P.3d 1124, ¶ 9.

¶ 21 The valuation and distribution of a marital estate is a discretionary district court ruling that we review for an abuse of discretion. Bock, ¶ 14. The test for an abuse of discretion is whether the district court acted arbitrarily without the employment of conscientious judgment or exceeded the bounds of reason resulting in...