In re Watkins
Decision Date | 11 January 2022 |
Docket Number | DA 21-0006 |
Citation | 501 P.3d 932 (Table) |
Parties | IN RE the MARRIAGE OF: Johnette Gay Jones WATKINS, Petitioner and Appellant, and Charles Edward Watkins, Respondent and Appellee. |
Court | Montana Supreme Court |
For Appellant: Ann C. German, Attorney at Law, Libby, Montana
For Appellee: Amy N. Guth, Attorney at Law, Libby, Montana
¶1 Pursuant to Section I, Paragraph 3(c), of our Internal Operating Rules, we decide this case by memorandum opinion. It shall not be cited and does not serve as precedent. The case title, cause number, and disposition will be included in this Court's quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports.
¶2 Johnette Gay Jones Watkins (Johnette) appeals from the December 2020 judgment of the Montana Nineteenth Judicial District Court, Lincoln County, dissolving her marriage to Charles Edward Watkins (Charles) and apportioning their marital estate pursuant to § 40-4-202, MCA. We affirm.
¶3 Johnette and Charles were first married in 1993 and then divorced in 1999.1 They reunited in 2005 and remarried in September 2011. They separated again in February 2018 and Johnette filed for divorce in November 2018. Following an August 2020 bench trial, the District Court issued written findings of fact, conclusions of law, and a final decree of dissolution in December 2020. Johnette timely appeals.
¶4 In 2020, Johnette was 65 years-old and Charles was 48. Both were employed throughout their second marriage—Johnette continually as the manager of the State Job Service Office in Lincoln County and Charles at various times as a construction worker, mechanic, and logger. Based on the tax returns submitted at trial, Johnette earned in the range of $46,206.77 to $52,645.47 per year from 2011 through 2017.2 Charles earned in the range of $33,041.55 to $60,118.93 per year from 2011 through 2016, nothing in 2017, $40,985 in 2018, $26,033 in 2019, and $29,000 in 2020 as of the date of trial.3
¶5 Throughout their second marriage, the parties maintained separate checking and savings accounts, and each generally paid his or her own bills. Johnette also generally paid for various household expenses including home telephone service, internet access, and most of the groceries. Charles generally paid for necessary utilities.
¶6 Each party brought real property into their second marriage. Charles owned an unencumbered home on two lots in Libby (Highland Property). Johnette contributed $2,400 towards new flooring in Charles's home early-on, but presented no evidence of any other significant contribution to the maintenance or improvement of the home other than as a "carpenter's assistant" to Charles at times. The parties lived in Charles's home during the second marriage.
¶7 Johnette owned an unencumbered home in Libby (Snowshoe Property) which she had previously lived in before they remarried and then rented as income property thereafter. She personally retained all rental proceeds (approximately $500 to $1,200 per month). The parties made a number of substantial improvements to the home during the second marriage. Johnette generally paid for the materials and equipment. Charles performed all necessary construction and installation work and also paid for some of the materials and equipment. Charles gave unrebutted testimony that his work and contributions to the home resulted in a $75,000 increase in value over the course of the parties’ relationship. He attributed $28,000 of that increase to his work and contributions during the course of their second marriage.
¶8 When the parties reunited, Johnette also owned a 40-acre tract of unimproved land (East Fisher Property) in a remote area in Lincoln County. She became the sole owner of the property when she received it as part of the parties’ agreed apportionment of their marital estate in the 1999 divorce.4 Johnette presented evidence at trial that she paid approximately $192 per month ($2,304 per year) for taxes and insurance on the property through the second marriage. During 2006 and 2007, before they remarried in 2011, Charles built a small cabin on the property with a block foundation, a "little bedroom that just fits two double beds," a "small oblong kitchen," and a "small oblong place to fit a couch and chair." The parties both paid for the cabin materials and equipment and also received various contributions from others. Charles later purchased a log home kit for $17,500 and began constructing a 3,000 sq. ft. log home on the property. Construction continued throughout the second marriage, but the project remained unfinished when the parties separated in 2018. Except for certain subcontract work, Charles performed all of the construction work and paid for most of the building materials and equipment. However, Johnette paid for certain materials as well, including half of the costs of the windows and doors. Substantially complete by the time of separation were the poured concrete foundation/daylight basement, framing, roof, most of the electrical wiring/system, stairs, most of the interior ceilings, solar power system, and a substantial portion of the interior sheetrocking.
¶9 In addition to foregoing employment income for a year (2017) to work on the project, Charles testified that he spent approximately $73,000 from his own funds on the log home construction and related materials and improvements. The remaining work required to finish the home at the time of separation and dissolution included the balance of the interior sheetrocking, closet construction, 50% of the basement finishing, and various electrical wiring and lighting, inter alia . A real estate appraiser commissioned by Johnette testified that, when appraised in 2019, the estimated "as-is" value of the property and incomplete home was $307,000. The appraiser estimated the cost of completion as approximately $81,500, but Charles testified that he could complete it for $20,000 if he performs the work. Charles testified further that the cost of removing the partially constructed home from the property would be approximately $80,000 and that removal would further result in a $50,000 loss in construction materials.
¶10 Johnette also separately acquired and co-owns with an out-of-state partner a mortgaged multi-suite commercial rental property in downtown Libby (Mineral Plaza Property).5 She testified that the property has generated little profit to date. Charles remodeled two of the commercial suites in the building for new tenants (including new flooring, updated plumbing, and florescent lighting-ballast replacement). Johnette testified that he sometimes would refuse payment from her, "but other times ... took the payment."
¶11 Upon his brother's untimely death during the parties’ second marriage, Charles received approximately $84,000 in life insurance proceeds and a $17,900 cash inheritance. He testified that he spent most of that money before they separated to pay-off two vehicles (including one inherited from his brother), rebuilding his garage at the Highland Property following a fire, buying a snowmobile, and on the East Fischer Property construction project.
¶12 When they separated in 2018, the parties had separate retirement accounts/plans. Charles had $56,080 in an employment-related 401K account, which had increased by $16,000 during the marriage as of the date of trial. Johnette had two State employee retirements plans. She characterized them as a "deferred compensation" plan, in which her balance had increased by $7,313 during the second marriage prior to the parties’ 2018 separation, and a "defined contribution" or "defined benefit" plan, in which her balance had increased by $152,991 during that same period. The only evidence Johnette presented as to the value of her state retirement accounts/plans were two quarterly statements for each which together showed the balance increase from September 2011 through December 31, 2017.
¶13 Based on the evidence presented at bench trial, the District Court apportioned the parties’ second marital estate as specified in its December 2020 decree. Inter alia , Johnette received the Snowshoe Property,6 the Mineral Plaza Property, the entirety of her state retirement accounts/plans, and various items of personal property as agreed by the parties.7 The court expressly apportioned to Charles the Highland Property,8 the East Fisher Property,9 the entirety of his employment-related 401k retirement account/plan, and various items of personal property as agreed by the parties. The court recognized the various items of real property as prior or separately-acquired properties, but then characterized particular items as either included in, or excluded from, the marital estate.
¶14 Upon marital dissolution, district courts must "equitably apportion" all marital assets, property, and debts without regard to marital misconduct. Section 40-4-202(1), MCA. As a matter of law, all assets, property, and liabilities of either or both spouses, regardless of how or when acquired, whether before or during the marriage, are part of the marital estate subject to equitable apportionment under § 40-4-202, MCA. See In re Marriage of Funk , 2012 MT 14, ¶¶ 9, 13, and 24-26, 363 Mont. 352, 270 P.3d 39 (overruling inconsistent authority). In determining an equitable apportionment of the marital estate, the court must:
consider the duration of the marriage and [any] prior marriage of either party, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, and needs of each of the parties, [any] custodial provisions, whether the apportionment is in lieu of or in addition to maintenance, ... the opportunity of each for future acquisition of capital assets and income, ... the contribution or dissipation of value of the respective estates[,] and the contribution of a spouse as a homemaker or to the family...
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