IN RE MARRIAGE OF DEBUFF, 01-233.

• Citation: 2002 MT 159,50 P.3d 1070
• Decision Date: 16 July 2002
• Docket Number: No. 01-233.,01-233.
• Parties: In re the MARRIAGE OF Laurie M. DeBUFF, Petitioner and Appellant, and Harold DeBuff, Respondent and Cross-Appellant.
• Court: Montana Supreme Court

50 P.3d 1070

2002 MT 159

In re the MARRIAGE OF Laurie M. DeBUFF, Petitioner and Appellant, and

Harold DeBuff, Respondent and Cross-Appellant.

No. 01-233.

Supreme Court of Montana.

Submitted on Briefs January 31, 2002.

Decided July 16, 2002.

Gary S. Deschenes, Deschenes Law Office, Great Falls, Montana, For Appellant.

Jock B. West, West, Patten, Bekkedahl & Green, Billings, Montana, For Respondent.

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

¶ 1 The Petitioner, Laurie M. DeBuff, appeals from an Order issued by the District Court for the Tenth Judicial District in Fergus County which redistributed the marital estate between her and the Respondent, Harold DeBuff, following this Court's opinion in DeBuff v. DeBuff, 1999 MT 278N, 1999 WL 1090568. Harold cross-appeals the District Court's failure to consider his tax consequences as a result of the District Court's Order. We affirm in part, reverse in part, and remand for proceedings consistent with this Opinion.

¶ 2 The following issues are presented on appeal:

¶ 3 1. Did the District Court err when it redetermined and redistributed the DeBuff marital estate?

¶ 4 2. Did the District Court correctly determine the prejudgment and postjudgment interest to which Laurie was entitled?

¶ 5 3. Did the District Court err by not considering the tax consequences to Harold which would result from the redistribution of the marital estate?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 6 This is the second appeal from the District Court in this case. Because the primary issue, the distribution of the marital estate, remains the same, it is helpful to summarize the relevant facts from our prior opinion, DeBuff v. DeBuff, 1999 MT 278N (DeBuff I) (a noncitable opinion).

¶ 7 Laurie and Harold DeBuff were married on February 4, 1978. Shortly thereafter, they acquired twenty-eight acres of property with a home in Fergus County, Montana. In 1982, they acquired a farm, consisting of 2360 acres, in Wheatland County, Montana. The couple operated the farm throughout their marriage. Of the 2360 acres, 1400 is planted, 340 is in a Conservation Reserve Program and the balance is native grasses.

¶ 8 During the marriage, Laurie was primarily a homemaker. On occasion, Laurie worked various part-time jobs. In May 1997, Laurie went to work as a grocery clerk for the IGA in Lewistown, Montana, earning $6.00 per hour. Harold worked part-time as a road construction equipment operator, earning $17.45 per hour, and operated the farm.

¶ 9 The couple separated on September 30, 1997. On November 6, 1997, Laurie filed a Petition for Dissolution. A dissolution hearing was held on March 30 and 31, 1998. Laurie asked for assets "suitable for liquidation" in order to purchase a home. On May 13, 1998, the District Court issued its Findings of Fact, Conclusions of Law and Order, along with the Final Decree of Dissolution of Marriage. The District Court awarded Harold the properties in Wheatland County and Fergus County, miscellaneous personal property and the accounts receivable. Harold's total distribution was valued at $334,439. Laurie was awarded farm machinery and equipment, grain, vehicles, and miscellaneous personal property. Laurie's total distribution was valued at $346,513. In addition, the District Court gave Laurie three weeks to remove her share of the distributed items from the farm.

¶ 10 In DeBuff I, this Court affirmed in part and reversed in part. We reversed the District Court's division of the marital estate insofar as it failed to consider the liabilities associated with the property distribution and failed to discuss any of the statutory criteria for the division of marital property found at § 40-4-202, MCA. We remanded for a redetermination and redistribution of the marital estate.

¶ 11 The District Court held an evidentiary hearing on March 22, 2000. On November 28, 2000, the District Court issued an Order in which it redetermined and redistributed the marital estate. To address the tax liability and liquidation costs associated with the sale of the grain, equipment and machinery, the District Court awarded Laurie an additional $66,728, "with said sum to bear interest at the rate of 7% from April 15, 2000.... On January 31, 2001, the interest rate is to increase to the legal rate on Judgments." The District Court also redistributed the marital estate based on the statutory criteria in § 40-4-202, MCA.

¶ 12 Following the filing of the Notice of Entry of Judgment, Harold filed a Motion for a New Hearing on Tax Liability, or in the alternative, sought to amend the order pursuant to Rules 52(b) and 59, M.R.Civ.P. A hearing was held on March 14, 2001, and the District Court denied Harold's motion, stating "[i]t is clear there was no newly discovered evidence, and thus no basis for a new trial."

¶ 13 Laurie filed a Notice of Appeal on April 3, 2001, challenging the District Court's redetermination and redistribution of the marital estate. On May 3, 2001, Harold filed a Notice of Cross-Appeal based on the District Court's failure to take into account the tax liability he would incur based upon the redistribution of the marital estate.

STANDARD OF REVIEW

¶ 14 We review a district court's division of marital property to determine whether the findings on which it relied are clearly erroneous. In re Marriage of Engen, 1998 MT 153, ¶ 26, 289 Mont. 299, ¶ 26, 961 P.2d 738, ¶ 26. If the findings are not clearly erroneous, we will affirm the distribution of property unless the district court abused its discretion. Engen, ¶ 26.

¶ 15 A district court's award of prejudgment interest is a question of law, and therefore, we examine whether the district court was correct in its application of the law. Semenza v. Bowman, (1994), 268 Mont. 118, 127, 885 P.2d 451, 456. Whether a party is entitled to postjudgment interest is a conclusion of law which we review de novo. Tipp v. Skjelset, 1998 MT 263, ¶ 11, 291 Mont. 288, ¶ 11, 967 P.2d 787, ¶ 11.

DISCUSSION

ISSUE 1

¶ 16 Did the District Court err when it redetermined and redistributed the DeBuff marital estate?

¶ 17 In DeBuff I, we held that the District Court erred in its distribution of the marital estate because it failed to consider the tax consequences and liquidation costs associated with the property distribution and failed to consider the mandatory statutory criteria for the division of marital property. ¶ 49. Therefore, we remanded to the District Court for a redetermination of the marital estate and redistribution of that estate in accordance with § 40-4-202, MCA.

¶ 18 Laurie contends that the District Court erred when it redetermined and redistributed the marital estate for two reasons. First, Laurie asserts that the District Court failed to include $120,000 of unaccounted-for cash in its redetermination of the marital estate, and that the District Court's finding that the monies existence was "speculative" was clearly erroneous. Second, Laurie contends that although the District Court correctly included the tax consequences and liquidation costs associated with the property distributed to her, the District Court inequitably divided the estate.

¶ 19 In its November 28, 2000, Order, the District Court first considered the liabilities which had been excluded in the original determination of the marital estate:

The issue before the Court is the tax liability and liquidation costs associated with the grain, equipment and machinery awarded to wife. The testimony presented shows the liquidation costs at $38,214 and a tax liability of $117,316, leaving wife with a deficiency as to her share of the marital estate. Although wife's accountant's testimony seems to the court to have overstated the tax and liquidation costs, the evidence otherwise available does not adequately support any different amount.

The District Court then subtracted those liabilities from what it had previously determined was the total marital estate:

Previously, wife received $346,513 and husband received $334,439, with a total marital estate of $680,952. When this estate is reduced by the liquidation and sale costs of $155,530, this leaves a revised marital estate of $525,422, with an equal division of that amount being $267,711. To equalize the estates, recognizing that the property had been previously divided, the husband will have to pay to wife the sum of $66,728. This sum represents the reimbursement required to equalize the marital estate after wife paid the income tax consequences and sale expenses.

After review of Laurie's accountant's testimony, it appears the District Court inadvertently misstated the appropriate amount of tax liability by $180, which resulted in a figure of $117,316. The appropriate amount was $117,136, rather than $117,316. After correcting the District Court's error, the appropriate amount of liabilities (tax liability and liquidation costs) is $155,350, not $155,530. Therefore, the correct value of the revised marital estate is $525,602, not $525,422.

¶ 20 Laurie contends that the District Court erred when it refused to include in the marital estate approximately $120,000 of "missing money." According to Laurie, handwritten notes prepared by Harold for his accountant in 1997 show that income in that year exceeded expenses by approximately $120,000. Furthermore, Laurie contends that that amount has never been accounted for, nor denied by Harold, and, therefore, should be included in the marital estate. Although evidence relating to the "missing money" was presented to the District Court in the original trial, the District Court did not make any findings on the matter and refused to include the amount in its original determination of the marital estate.

¶ 21 However, in the November 28, 2000, Order, the District Court specifically addressed Laurie's claim, and stated:

Wife's counsel introduced evidence attempting to show that husband had not accounted for some large sums of cash, with the basis in the testimony being

...