IN RE MARRIAGE OF GRENDE, 02-737.

• Citation: 2004 MT 36,85 P.3d 788
• Decision Date: 24 February 2004
• Docket Number: No. 02-737.,02-737.
• Parties: In re the MARRIAGE OF Michael GRENDE, Petitioner and Appellant, and Patricia Grende, Respondent and Respondent.
• Court: Montana Supreme Court

85 P.3d 788

2004 MT 36

In re the MARRIAGE OF Michael GRENDE, Petitioner and Appellant, and

Patricia Grende, Respondent and Respondent.

No. 02-737.

Supreme Court of Montana.

Submitted on Briefs December 11, 2003.

Decided February 24, 2004.

For Appellant: Paul A. Sandry, Johnson, Berg, McEvoy & Bostock, PLLP, Kalispell, Montana.

For Respondent: D. Mark Hash, Hash & O'Brien, PLLP, Kalispell, Montana.

Justice JIM RICE delivered the Opinion of the Court.

¶ 1 Michael Grende (Michael) petitioned for dissolution of his marriage to Patricia Grende (Patricia) in the Eleventh Judicial District Court, Flathead County. Following a non-jury trial, the District Court divided the couple's property by a decree of dissolution and awarded maintenance to Patricia. Michael appeals from the District Court's property distribution and award of spousal maintenance. We affirm in part, reverse in part, and remand. ¶ 2 Michael presents five issues on appeal:

¶ 3 1. Did the District Court err in awarding Patricia the sum of $100,000.00, characterized as a portion of the increase in the value of Michael's pre-acquired ranch during the marriage?

¶ 4 2. Did the District Court err in awarding the sum of $11,050.00 to Patricia as an equitable distribution of the marital personal property?

¶ 5 3. Did the District Court err in awarding Patricia the sum of $1,650.00 based on what the court referenced as an agreement between Michael and Patricia concerning a rental property in Polson, Montana?

¶ 6 4. Did the District Court err in failing to provide Michael with a credit of $5,000.00 representing the amount ordered by the District Court to be paid by Michael to Patricia in connection with the court's interim division set forth in its January 10, 2002 Temporary Order?

¶ 7 5. Did the District Court err in awarding spousal maintenance to Patricia?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 8 Michael and Patricia were married on June 22, 1995, and resided together until January 2002. Both have had previous marriages. At the time of trial, Michael was 57 years of age, college educated, and in good physical and mental health. However, Patricia, 52 years of age and also college educated, suffered from arthritis and carpel tunnel syndrome, as well as anxiety and depression.

¶ 9 When Michael and Patricia began living together in 1994, Patricia was self-employed as a certified massage therapist, earning approximately $16,000 per year. Several years after marrying Michael, Patricia began experiencing pain as a result of arthritis and carpel tunnel syndrome. In January 2000, Patricia terminated her work as a certified massage therapist due to her painful physical condition and has not been employed since that time.

¶ 10 Prior to marrying Patricia, Michael had worked for the Montana Power and Western Energy Company for approximately twenty-eight years. In 1988, seven years before the marriage, he inherited a Montana ranch consisting of roughly 1,937 acres, which included a home and other improvements. In 1993, Michael terminated his employment with Montana Power to attend to the ranch. Since 1995, Michael has engaged in a combination of ranch work and real estate sales.

¶ 11 Throughout their marriage, Michael and Patricia took great care to keep their premarital property separate. They held no joint checking or savings accounts, and did not commingle their premarital investments. However, the parties generated little income during their marriage and, as a result, the record reflects a significant liquidation of assets throughout this time. Michael, in particular, expended a considerable portion of his premarital assets to sustain the parties' standard of living, which included driving nice cars, dressing well, taking vacations each year, and frequently dining out. Despite this, the value of Michael's premarital assets was not decreased overall, because, during the years 1995 to 2000, his stock investments increased significantly in value as a result of market forces.

¶ 12 Patricia also expended a portion of the income she derived from her premarital investments to pay marital expenses and purchase marital assets, albeit not to the same extent as Michael. For the two years preceding trial, Patricia's only source of income consisted of a $100.00 monthly interest payment on a promissory note, which is automatically reinvested with the note, and $820.00 per month from the sale of her premarital residence. Notwithstanding Patricia's minimal income, at the time of trial, the approximate total of Patricia's premarital investments greatly exceeded Michael's, whose primary investment the ranch—was as income-consuming as it was income-producing.

¶ 13 During their marriage, Michael and Patricia primarily resided on the ranch. While Patricia was responsible for cleaning and day-to-day maintenance of the household, she also utilized hired housekeepers to clean the family home. Occasionally, Patricia assisted in ranch operations, such as checking on the cows, fences, and gates; filling water troughs; feeding the horses, and other activities. However, her contributions were minimal. At the time of Michael and Patricia's marriage, the ranch was valued at approximately $1.6 million. By the time of trial, its fair market value had increased to $2.2 million. While Michael had made a number of improvements to the ranch which contributed to its appreciation, and had done so using his separate premarital assets, testimony received at trial suggested this increase in value was primarily due to market and inflationary factors.

¶ 14 Several months after filing his petition for dissolution of marriage, Michael brought a motion seeking to exclude Patricia from the marital residence. Patricia agreed to this physical separation, provided she received sufficient maintenance from Michael to support her separate housing and living expenses. Accordingly, Patricia brought a cross-motion seeking temporary spousal support in the amount of $1,500.00 per month. She additionally requested attorney fees and costs.

¶ 15 On January 10, 2002, the District Court issued a temporary order granting Michael's request to exclude Patricia from the family home. Pursuant to the court's order, Patricia was to be allowed to reside rent-free at the ranch's rental property and Michael was to arrange for her moving expenses. The court additionally ordered Michael to allow Patricia to use his 1989 Ford pickup, or alternatively, pay her the sum of $5,000.00, which Patricia would put towards the purchase of a suitable four-wheel drive vehicle. However, the court denied Patricia's request for temporary spousal maintenance, concluding that she had sufficient premarital property to meet her needs pending trial.

¶ 16 Shortly after moving into the ranch's rental property, however, Patricia began experiencing difficulties living there due to its isolated location and overall impracticability. In particular, Patricia had difficulty accessing the property without a four-wheel drive vehicle and Michael had failed to deliver the 1989 Ford pickup as previously ordered by the court. The parties eventually resolved this situation in favor of moving Patricia into a rental property located in Polson, Montana, and Michael paid Patricia $5000.00 in lieu of providing her the pickup. Patricia asserts that Michael additionally agreed to pay her rental expenses for the Polson residence in the amount of $550.00 per month, which he subsequently failed to pay.

¶ 17 On August 27, 2002, following a non-jury trial, the District Court entered its Findings of Fact, Conclusions of Law, and Decree of Dissolution, dissolving the parties' marriage, apportioning their marital property between them, and ordering Michael to pay Patricia $100,000.00 over the course of three years, which the court found reflected the increase in value of the ranch during the marriage due to Patricia's non-monetary contributions. The court additionally awarded Patricia maintenance in the amount of $750.00 per month for a period of one year, beginning April 2002. The court ordered that, following the one-year maintenance period, Michael would thereafter continue making $750.00 monthly payments to be applied to the $100,000.00 awarded to Patricia from Michael's ranch, until the award was satisfied. From this order, Michael appeals.

STANDARD OF REVIEW

¶ 18 We review the division of marital property by a district court to determine whether the findings upon which the court relied are clearly erroneous. In re Marriage of Engen, 1998 MT 153, ¶ 26, 289 Mont. 299, ¶ 26, 961 P.2d 738, ¶ 26. A finding 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. In re Marriage of Steinbeisser, 2002 MT 309, ¶ 17, 313 Mont. 74, ¶ 17, 60 P.3d 441, ¶ 17. "If the findings are not clearly erroneous, we will affirm the distribution of property unless the district court abused its discretion." Engen, ¶ 26. The test for abuse of discretion in a dissolution proceeding is "whether the district court acted arbitrarily without employment of conscientious judgment" or whether the district court "exceeded the bounds of reason resulting in substantial injustice." Engen, ¶ 26. ¶ 19 Finally, the standard of review of a district court's conclusions of law is whether the conclusions are correct. In re Marriage of Pfeifer, 1998 MT 228, ¶ 9, 291 Mont. 23, ¶ 9, 965 P.2d 895, ¶ 9.

DISCUSSION

¶ 20 Did the District Court err in awarding Patricia the sum of $100,000.00, characterized as a portion of the increase in the value of Michael's pre-acquired ranch during the marriage?

¶ 21 Michael concedes the ranch increased in value during the marriage. However, he argues that the appreciation of this premarital asset was due strictly to market and inflationary forces, and was not the product of Patricia's monetary or non-monetary...