In re Marriage of Williams

• Decision Date: 25 August 2009
• Docket Number: No. DA 08-0236.,DA 08-0236.
• Citation: 2009 MT 282,217 P.3d 67,352 Mont. 198
• Parties: In re the MARRIAGE OF Jenny L. WILLIAMS, Petitioner, Appellant and Cross-Appellee, and Bobby L. WILLIAMS, Respondent, Appellee and Cross-Appellant.
• Court: Montana Supreme Court

217 P.3d 67

2009 MT 282

352 Mont. 198

In re the MARRIAGE OF Jenny L. WILLIAMS, Petitioner, Appellant and Cross-Appellee, and Bobby L. WILLIAMS, Respondent, Appellee and Cross-Appellant.

No. DA 08-0236.

Supreme Court of Montana.

Submitted on Briefs May 20, 2009.

Decided August 25, 2009.

For Appellant: Mark D. Parker, Parker, Heitz & Cosgrove, Billings, Montana.

For Appellee: Stephen C. Mackey, Towe, Ball, Enright, Mackey & Sommerfeld, Billings, Montana.

Justice BRIAN MORRIS delivered the opinion of the Court.

¶ 1 Jenny L. Williams (Jenny) appeals from a decree entered in the Thirteenth Judicial District, Yellowstone County, that dissolved her marriage to Bobby L. Williams (Bobby), distributed their marital estate, and awarded child support. Bobby cross-appeals.

¶ 2 We review the following issues on appeal:

¶ 3 Did the District Court incorrectly include Bobby's interest in B & J Properties in the marital estate?

¶ 4 Did the District Court improperly reduce Bobby's income for the calculation of child support based on the fact that Bobby derived a portion of his income from B & J Properties?

¶ 5 Did the District Court improperly discount by 35% the value of Bobby's interest in B & J for the purposes of the distribution of marital property in order to reflect Bobby's lack of control in B & J Properties?

¶ 6 Did the District Court's property apportionment incorrectly double count against Jenny the retirement fund that she cashed out after the separation?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 7 Jenny and Bobby married in June of 1994. Jenny was 20 and Bobby was 35 at the time of the marriage. The parties have three minor children born in 1993, 1995, and 1998. Jenny filed a petition for dissolution of marriage on September 17, 2004.

¶ 8 Jenny and Bobby have high school educations. During the marriage, Jenny stayed at home and served as the primary caregiver for the three children. Bobby worked long hours outside the home in the family trucking business.

¶ 9 J.E. Williams, Bobby's father, began his own trucking business under the name of J.E. Williams Trucking, Inc. in 1969. Bobby began working in the business at a young age. Bobby started working as a full-time employee of J.E. Williams Trucking, Inc. when he graduated from high school in 1977. J.E. Williams began giving Bobby stock in J.E. Williams Trucking, Inc. in 1982. Bobby became the sole shareholder of J.E. Williams Trucking, Inc. in 2000, after the company redeemed all of J.E. Williams's stock.

¶ 10 Bobby and his father also each owned one-half interests in WHW, Inc., and J.E. Williams, Inc. WHW, Inc. is a trucking company that hauls a different type of cargo that requires specialized trucks. J.E. Williams, Inc. handles the payroll for shop mechanics, owns only a few trucks, and has no customers other than J.E. Williams Trucking, Inc.

¶ 11 J.E. Williams Trucking, Inc. and WHW, Inc. formed and were capitalized before the marriage. J.E. Williams, Inc. split off from J.E. Williams Trucking, Inc. after Jenny and Bobby had married. Bobby's interest in the entities derives from the interest in J.E. Williams Trucking, Inc. that his father originally gifted to him. Bobby manages all three entities. All three entities operate out of the same location.

¶ 12 Bobby also received income from B & J Properties, LLC (B & J). The income that Bobby received from B & J boosted his yearly taxable income to at least $200,000 to $300,000. B & J is a closely held corporation owned 50% by Bobby and 50% by his father. Bobby and his father formed B & J, a real estate holding company, in 1995. B & J owned five commercial real estate properties around the country and two commercial airplane hangers in Billings.

¶ 13 The District Court included B & J in the marital estate. The court reduced Bobby's income for child support calculation purposes, however, to reflect the fact that B & J was a sub-chapter S corporation and Bobby, as a 50% owner, could not require B & J to pay out income. The court also discounted the value of Bobby's interest in B & J by 35% to account for Bobby's lack of control over the business due to his undivided 50% interest. The District Court counted against Jenny in its property apportionment both the net proceeds of a retirement account that she cashed out after the parties' separation and the equity in a house that she bought using the retirement account proceeds as a down payment. Jenny appeals and Bobby cross-appeals.

STANDARD OF REVIEW

¶ 14 We review a district court's distribution of marital property and child support award to determine whether the court's findings of fact are clearly erroneous. Bock v. Smith, 2005 MT 40, ¶ 14, 326 Mont. 123, 107 P.3d 488. A finding of fact 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. Bock, ¶ 14. Absent clearly erroneous findings, we will affirm the district court unless we identify an abuse of discretion. Bock, ¶ 14. A district court abuses its discretion when it acts arbitrarily without conscientious judgment or so exceeds the bounds of reason as to work a substantial injustice. In re Marriage of Crilly, 2005 MT 311, ¶ 10, 329 Mont. 479, 124 P.3d 1151. We review a district court's conclusions of law to determine whether those conclusions are correct. In re Marriage of Bartsch, 2007 MT 136, ¶ 9, 337 Mont. 386, 162 P.3d 72.

DISCUSSION

¶ 15 Did the District Court incorrectly include Bobby's interest in B & J Properties in the marital estate?

¶ 16 Section 40-4-202(1), MCA, governs a district court's division of property in a marital dissolution. The district court shall "equitably apportion between the parties the property and assets belonging to either or both, however and whenever acquired and whether the title ... is in the name of the husband or wife or both." Section 40-4-202(1), MCA. The district court must consider many factors in its apportionment, including the duration of the marriage, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, and needs of each of the parties; custodial provisions; whether the apportionment is in lieu of or in addition to maintenance; and the opportunity of each party for future acquisition of capital assets and income. Section 40-4-202(1), MCA. The court also shall consider the contribution of a spouse as a homemaker or to the family unit. Section 40-4-202(1), MCA.

¶ 17 Section 40-4-202(1), MCA, also governs the court's equitable distribution of property acquired prior to the marriage or property acquired in exchange for property acquired before the marriage. For prior acquired property, the court shall consider the contributions of the other spouse to the marriage, including: (a) the nonmonetary contribution of a homemaker; (b) the extent to which such contributions have facilitated the maintenance of this property; and (c) whether the property division serves as an alternative to maintenance arrangements. Section 40-4-202(1)(a)-(c), MCA.

¶ 18 Bobby argues that his interest in B & J constitutes prior acquired property, as it was "traceable exclusively to the premarital entity Williams Enterprises." Bobby contends that B & J "was capitalized solely with monies from Williams Enterprises and $50,000 each from Bobby and [J.E.] Williams from prior savings." The District Court acknowledged that most of the business properties "find their genesis in J.E. Williams, Mr. Williams' dad," and "significantly pre-date[] the marriage." The court noted that "B & J, however, came into existence shortly after the marriage." The court included as apportionable property the B & J properties outside of Billings and acquired during the marriage "given M.C.A. 40-4-202 considerations and the fact that the marital home secures a line of credit which paid at least some of the taxes passed through to Mr. Williams" from B & J.

¶ 19 The District Court determined that the Billings properties constituted a pre-marital asset for Bobby. Jenny does not challenge the District Court's decision to exclude the B & J properties in Billings from the marital estate. Bobby challenges the court's decision to include any portion of the B & J properties in the marital estate. As a result, for the purposes of this opinion, we will refer to those B & J properties that the court included in the marital estate simply as B & J.

¶ 20 Bobby conceded that, according to tax returns, B & J officially came into existence on January 9, 1995, six months after the marriage. B & J acquired during the marriage all of the properties that the court included in the marital estate. Bobby testified that during the marriage he personally had guaranteed the loans that he and his dad used to acquire the B & J properties. Substantial credible evidence supports the District Court's determination that B & J was not prior acquired property. Bock, ¶ 14.

¶ 21 Bobby insists that the court abused its discretion when it apportioned part of B & J to Jenny, because "Jenny Williams put no money into B & J properties, nor did she provide any labor, services, or contributions of any kind whatsoever to its preservation, maintenance, operation, management, or acquisition." Bobby emphasizes that Jenny "testified at trial that she didn't even know about B & J properties until the divorce proceedings."

¶ 22 The District Court possessed "broad discretion" in its equitable apportionment of the Williams's property. Bartsch, ¶ 9. The District Court properly considered the applicable statutory factors in equitably dividing the Williams's property. Section 40-4-202(1), MCA. The court concluded that a number of factors argued toward apportioning to Jenny an equitable share of the property. The court noted that Bobby was a successful businessman, and that Jenny had "a high school education, has never worked outside...