IN RE MARRIAGE OF POSPISIL

• Decision Date: 23 May 2000
• Docket Number: No. 99-093.,99-093.
• Citation: 2000 MT 132,1 P.3d 364,299 Mont. 527
• Parties: In re MARRIAGE OF POSPISIL, George K. Pospisil, Petitioner and Respondent, and Joyce M. Pospisil, Respondent and Appellant.
• Court: Montana Supreme Court

1 P.3d 364

2000 MT 132

299 Mont. 527

In re MARRIAGE OF POSPISIL,

George K. Pospisil, Petitioner and Respondent, and

Joyce M. Pospisil, Respondent and Appellant.

No. 99-093.

Supreme Court of Montana.

Submitted on Briefs August 5, 1999.

Decided May 23, 2000.

Gary S. Deschenes, Randy L. Tarum, Deschenes Law Office, Great Falls, Montana, for Appellant.

Carl DeBelly, Lewistown, Montana, for Respondent.

Justice JAMES C. NELSON delivered the Opinion of the Court.

¶ 1 Joyce M. Pospisil (Joyce) appeals two orders issued by the Tenth Judicial District Court, Fergus County. Joyce first contends that a Scheduling Order, issued January 12, 1999, which set a hearing date for January 25, 1999, violated her due process rights. Second, she contends that the court's January 26, 1999 Order Implementing Property Division did not achieve an equitable division of marital assets in accordance with the Findings of Fact and Conclusions of Law, and the Final Decree and Judgment, entered by the same court on June 11, 1996, and June 20, 1996, respectively.

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

¶ 3 Joyce raises the following issues on appeal:

1. Did the District Court deny Joyce Pospisil due process by scheduling a hearing date on fourteen-days notice?

2. Did the District Court err by failing to make an equitable division of the marital estate?

Factual and Procedural Background

¶ 4 The parties were married on October 11, 1979, and separated in March of 1994. At the time of their marriage, Joyce was 45 years old, and George Pospisil (George) was 46 years old. They both have children from prior marriages, but none from their marriage to each other. While married, Joyce and George operated, and for a while lived on, a ranch and farm located in Fergus County, Montana.

¶ 5 The separation was not amicable. After more than two years of contentious litigation a final dissolution decree was entered by the District Court on June 20, 1996. Although Joyce entered the marriage with little property of her own, she was awarded $305,855 as her net share of the marital estate. Notwithstanding the fact that George did not directly appeal this judgment, Joyce's days of wrangling with her former spouse were far from over.

¶ 6 The primary source of contention between the parties — then and now — is property, namely the 1,400 acre farm and ranching operation near Moore, Montana. Prior to his marriage to Joyce, George was gifted 160 acres from his parents, and an undivided fifteen-percent interest in 1281 acres. In 1982, his parents entered a contract for deed with George, selling him the remaining eighty-five percent interest for $221,638. During their marriage, however, George and Joyce did not make any payments on the contract for deed. George's parents and then his mother (his father died in 1984), not once demanded payment or gave any notice of default while George and Joyce were married. Further, George and Joyce treated the property as their own by paying taxes, paying related insurance premiums, using it as security on numerous occasions, and placing the entire property on the market for sale several times.

¶ 7 The cloudy legal status of the contract for deed would prove to be stormy. In the midst of the dissolution proceedings, George's mother, Ruby Pospisil (Ruby), filed a quiet title complaint against George and Joyce on March 14, 1995. This action sought to invalidate the contract for deed, and thereby remove a majority of the marital property from the dissolution. At this same time, George had, in fact, assumed power of attorney over his mother's affairs as of January 11, 1994. Ruby, who was age 94 at the time, resided in a Lewistown nursing home.

¶ 8 Ultimately, the quiet title action would be joined with the dissolution proceedings, by an order issued May 15, 1995. In an order dated June 12, 1995, the court noted that "the belated quiet title action by his mother is highly suspect." In its Findings of Fact and Conclusions of Law, the court stated that "Ruby's belated quiet title action was and is a conspiratorial sham between son and mother to deplete the marital estate to the wife's detriment after a marriage of 17 years." The court dismissed the quiet title action in its June 20, 1996 decree. On August 12, 1996, Ruby appealed the dismissal of her quiet title action, which prevented Joyce from conducting a sale of the marital property as ordered by the District Court. This Court affirmed the District Court's dismissal of the quiet title action in May of 1997.

¶ 9 Within months, counsel for Ruby would pursue further legal action. On June 26, 1997, Ruby declared the contract for deed in default, and requested it be cured within 60 days. She requested that a total sum of $1,779,012.12 be paid in full. This sum represented the $221,638 purchase price, $449,189 in accrued interest, $1,008,185 in crops and proceeds, and an additional $100,000 for 1997 crops and proceeds. The court issued an order on January 30, 1998, denying Ruby's motion to intervene. Ruby filed a request for declaratory judgment in September 1998.

¶ 10 Not only did the District Court find that Ruby's quiet title action was a "sham" in its 1996 decree, it also determined that Joyce was entitled to a fifty-percent share of the property's value, even if it meant selling the operation to achieve such an equitable result. The court determined that throughout much of their marriage, Joyce managed the affairs of the ranch and farm, essentially "keeping the business afloat," while George pursued investment opportunities elsewhere, including several ranch and timber ventures in Oregon. According to the court's findings, these ventures were less than financially successful. Additionally, the record indicates that George on more than one occasion considered selling his family's Fergus County property himself, but stopped short when faced with the prospect that Joyce might share in the proceeds.

¶ 11 The court also found that as a result of one of these Oregon deals going sour in 1988, George quitclaimed his entire interest in all of the ranch properties to Joyce, and assigned to her his ownership interest in the livestock brands and ranch accounts. It is undisputed that he took this action in order to protect their ranch from a possible unfavorable judgment in the event a lawsuit was filed. George contended that the transfer was one of "trust," in that he could, upon request, have the property reconveyed to him. Once the parties separated, Joyce refused to reconvey the property to George. These circumstances would eventually lead to further confusion following the entry of the dissolution decree, as George took over "exclusive possession" of the farm and ranch, pursuant to the decree, while financial obligations concerning the ranch were directed to Joyce, who resided in Lewistown.

¶ 12 Following the entry of the decree and prior to this appeal, a considerable volume of legal maneuvers consumed the intervening years in addition to Ruby's appeal. For example, Joyce moved the court for temporary maintenance. On January 14, 1997, the District Court ordered that Joyce be awarded maintenance, retroactive to June 14, 1996, in the amount of $1,500 per month. George failed to comply with this order, forcing Joyce to engage in regular executions on George's assets. In May of 1998, Judge Davis recused himself from the case, and Judge David Cybulski was substituted. Most recently, with a potential sale of marital property and a final resolution of the dissolution looming, the parties disputed what marital assets had or had not been distributed since 1996, and who had paid what farm and ranch obligations. On August 28, 1998, Joyce claimed that the outstanding distribution owed to her was $341,477 — which accounted for appreciation of the marital assets — and that George still owed her an additional $16,500 in maintenance. According to George's August 31, 1998 accounting, however, Joyce had received $190,888 in distributions from the marital estate. This ongoing dispute led to a January 25, 1999 dispositional hearing.

¶ 13 On January 12, 1999, the court issued its scheduling order, which identified the issues that would be addressed by the parties at the hearing. Essentially, the court identified those issues that remained in dispute, which the parties — including Ruby — had spent the prior six months contesting in an exchange of replies and responses to each other's statements of accounting filed with the court.

¶ 14 Joyce objected to the hearing date on January 20, 1999, claiming that the time between the January 12th order and the January 25th hearing was insufficient to conduct discovery necessary to fully prepare for the issues identified by the court's order. She did not file a brief addressing seven issues identified by the court's scheduling order. George, on the other hand, filed a brief in response to the requests on January 22, 1999.

¶ 15 Nevertheless, the fact-finding hearing took place as scheduled. The court determined that as far as resolving the dispute over the marital assets, each party had "contributed to the mess" and both parties "share equal responsibility in frustrating the exchange of information between the sides."

¶ 16 The next day, the District Court issued an Order Implementing Property Division. The District Court reduced Joyce's 1996 $305,855 net share to $141,660, plus $20,687 owed in unpaid maintenance. First, based on the mutual concessions of the parties, the court determined that a total of $8,603, should be deducted from Joyce's share. The court then deducted $135,020 in assets that Joyce had allegedly received, including $23,721 from "Livestock and sales," a vehicle worth $10,378, $33,221 from a ranch bank account, $59,000 from another bank account in Joyce's name, and $8,700 from full payment of a promissory note. The court then added a total of $23,709 for obligations that...