In re Marriage of Dahm, 04-572.

• Decision Date: 13 September 2006
• Docket Number: No. 04-572.,04-572.
• Citation: 143 P.3d 432,333 Mont. 453,2006 MT 230
• Parties: In re the MARRIAGE OF Martha J. DAHM, Petitioner and Respondent, and Stephen G. Dahm, Respondent and Appellant.
• Court: Montana Supreme Court

143 P.3d 432

2006 MT 230

333 Mont. 453

In re the MARRIAGE OF Martha J. DAHM, Petitioner and Respondent, and

Stephen G. Dahm, Respondent and Appellant.

No. 04-572.

Supreme Court of Montana.

Submitted on Briefs November 16, 2005.

Decided September 13, 2006.

Scott B. Spencer, Libby, for Appellant.

Amy N. Guth, Libby, for Respondent.

Justice JIM RICE delivered the Opinion of the Court.

¶ 1 Stephen G. Dahm (Stephen) appeals from the findings of fact, conclusions of law, and decree of dissolution entered by the Nineteenth Judicial District Court, Lincoln County, excluding from the marital estate certain real property deeded to Martha J. Dahm (Martha) and ordering that Stephen pay a $54,232 equalization payment to Martha. We affirm in part, reverse in part, and remand.

¶ 2 We address the following issues on appeal:

¶ 3 1. Whether the District Court erred in concluding deeded property was solely a gift to Martha from her parents, and, therefore, not included in the marital estate.

¶ 4 2. Whether the District Court erred in concluding that Stephen did not contribute to the gifted property's preservation or appreciation during the marriage.

¶ 5 3. Whether the District Court erred in ordering Stephen to pay an equalization payment of $54,232 to Martha, a sum that represented the entire difference between the values of assets awarded to Stephen and Martha from the marital estate.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 6 Stephen and Martha were married on May 28, 1983, but had been together since approximately 1979, and had lived together since 1982. Stephen and Martha had three children during their marriage and separated in March 2004.

¶ 7 In March of 1981, Martha's parents, Fred and June Clark, prepared a warranty deed transferring certain real property (Eureka property) to Martha. The property, consisting of 17.5 acres of raw land near the Canadian border, north of Eureka, had been in Martha's family for several generations and Martha had spent time there as a child. Martha's parents deeded the property to Martha Clark, Martha's maiden name, and the property remained under that name throughout the twenty-year marriage. Although Martha's parents had signed the deed in March of 1981, approximately two years before Stephen and Martha were married, the deed was not actually recorded until April 8, 1983, slightly less than two months before their wedding.

¶ 8 On September 17, 2003, Martha petitioned the court to dissolve her marriage with Stephen. After trial, the District Court entered its findings of fact, conclusions of law, and decree of dissolution, finding the Eureka property had been deeded to Martha by her parents with the intent that it be a gift solely to Martha.

¶ 9 Consequently, the District Court held the property was Martha's exclusively, and it was not included in the marital estate. In so holding, the court noted the conflicting evidence on the issue—that the property had been titled solely in Martha's name since receipt from her parents, but that Martha referred to the property as a wedding gift after the parties' marriage—and held that neither fact was necessarily determinative. Taxes on the property were paid from joint funds since their marriage, but the taxes were minimal, ranging in amounts from a low of $47 to a high of $268.22. Furthermore, while the Eureka property had dramatically increased in value since the marriage, the court found the increase was attributed to real estate market forces and not to improvements made by either party.

¶ 10 The court also found that Stephen brought certain real property, located in the State of Washington (Washington property), into the marriage. Stephen continued to individually own the property throughout the course of the marriage, but Martha and Stephen retired approximately $2,000 to $5,000 in debt owed against the property. This property was also deemed to be pre-marital property by the court, and, as such, not part of the marital estate. The court, in determining that both properties would remain the individual assets of the respective recipients, held that Stephen's monetary contribution, paid from the parties' joint funds, toward the Eureka property taxes was offset by Martha's contribution toward the retirement of debt on Stephen's Washington property.

¶ 11 In considering the contributions to the marital estate, the court found that, while Stephen earned more income, Martha had worked during much of the marriage and was the primary caregiver for the children. The court determined that the parties' respective contributions to the marital estate were essentially equal, and that it was appropriate for the estate to be equally divided between them.

¶ 12 As such, the court awarded Stephen and Martha real and personal property valued at $299,545 and $243,813 respectively, but, after giving Stephen a $1,500 credit for debt Martha had charged on his credit card after the separation, ordered Stephen to pay an equalization payment of $54,232 to Martha. This amount represented the difference between the values of the properties awarded to each party and was intended to equalize the distribution of the estate. Stephen was given until January 1, 2005, to make the equalization payment, with the payment being secured by a lien on the family home, which had been awarded to Stephen.

¶ 13 On July 14, 2004, Stephen filed his notice of appeal challenging the District Court's exclusion of the Eureka property from the marital estate and the calculation of the equalization payment. On July 19, 2004, he filed a motion in the District Court to stay the equalization payment but failed to post a supersedeas bond, and, as a result, the court denied the motion. Stephen did not make the equalization payment by January 1, 2005. Martha offers, and Stephen does not deny, that on April 7, 2005, Martha caused the family home to be sold to satisfy the equalization payment.

¶ 14 On April 14, 2005, Martha moved to dismiss the appeal on the grounds that the matter was moot, and this Court denied the motion on May 4, 2005.

STANDARD OF REVIEW

¶ 15 We review a district court's findings of fact regarding a division of marital assets to determine whether the findings are clearly erroneous. In re Marriage of Gerhart, 2003 MT 292, ¶ 15, 318 Mont. 94, ¶ 15, 78 P.3d 1219, ¶ 15. "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. Absent clearly erroneous findings, this Court will affirm a district court's division of property unless we identify an abuse of discretion. Gerhart, ¶ 16. 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." In re Marriage of Engen, 1998 MT 153, ¶ 26, 289 Mont. 299, ¶ 26, 961 P.2d 738, ¶ 26.

¶ 16 Lastly, 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

¶ 17 Whether the District Court erred in concluding deeded property was solely a gift to Martha from her parents, and, therefore, not included in the marital estate.

¶ 18 Stephen argues that the District Court erred in determining that the Eureka property was conveyed as a gift solely to Martha in 1981, when the deed was not actually recorded until April 8, 1983, slightly less than two months before their wedding. He contends the date of the deed is not determinative of when real property is considered conveyed, but, rather, "[a] grant takes effect so as to vest the interest intended to be transferred only upon its delivery by the grantor." Section 70-1-508, MCA. Therefore, Stephen reasons that while Martha's parents kept possession of the deed, there was no gift, and that the delivery of the deed to Martha only shortly before the marriage indicates the property was a marital gift from Martha's parents to both Stephen and Martha. He argues that Martha's reference in the wedding gift book that the property was a wedding gift and a wedding card from June with Martha's handwritten acknowledgement that the Eureka property was a gift from her parents is clear evidence of a mutual gift.

¶ 19 In response, Martha argues that Stephen's argument is specious, because whether the Eureka property was given to her two years or six weeks prior to marriage does not change the legal conclusion that Martha acquired the property by gift in her maiden name prior to marrying Stephen and it remained in her maiden name throughout the twenty-year marriage. She reasons the property was gifted to her from her parents based on the sentimental significance of the property, as she had visited the property numerous times as a child and it had been owned by her family for several generations. Moreover, she maintains her parents gifted the property without intending it to be a gift to Stephen. Accordingly, Martha contends the court did not clearly err in entering findings in support of her version of the facts.

¶ 20 Section 40-4-202, MCA, requires special consideration of property "acquired prior to the marriage" or "acquired by gift." The District Court was required to determine whether the Eureka property was such property in order to determine how to properly distribute the property. In so doing, the district court judge is charged with listening to and weighing the evidence presented. In re Marriage of Grende, 2004 MT 36, ¶ 27, 320 Mont. 38, ¶ 27, 85 P.3d 788, ¶ 27. "The judge must determine the credibility of each witness based upon his or her demeanor, temperament, attitude, and candor, among other things." In re...