Marriage of Butler, In re

• Decision Date: 13 July 1990
• Docket Number: No. 90-053,90-053
• Citation: 243 Mont. 521,795 P.2d 467
• Parties: , 62 Ed. Law Rep. 360 In re the MARRIAGE OF Rodney Glenn BUTLER, Petitioner and Respondent, and Alberta Esther Butler, Respondent and Respondent, and Dale Butler, Intervenor and Appellant, Gina Kay Colwell, Intervenor.
• Court: Montana Supreme Court

Page 467

795 P.2d 467

243 Mont. 521, 62 Ed. Law Rep. 360

In re the MARRIAGE OF Rodney Glenn BUTLER, Petitioner and

Respondent,

and

Alberta Esther Butler, Respondent and Respondent,

and

Dale Butler, Intervenor and Appellant,

Gina Kay Colwell, Intervenor.

No. 90-053.

Supreme Court of Montana.

Submitted on Briefs June 14, 1990.

Decided July 13, 1990.

Katharine S. Donnelley and Leo Berry, Browning, Kaleczyc, Berry & Hoven, Helena, for intervenor and appellant.

Donald E. Hedman, Hedman, Hileman & LaCosta, Whitefish, Jeffrey D. Ellingson, Ellingson Law Offices, Kalispell for Estate of R.G. Butler.

Patrick D. Sherlock, Sherlock & Nardi, Kalispell, for Colwell.

Lewis K. Smith, Teachers' Retirement Board, Helena, amicus curiae.

Justice McDONOUGH delivered the Opinion of the Court.

This appeal involves the distribution of teacher retirement benefits as part of a marital estate. The intervenor appellant, Dale Butler, appeals the order of the Eleventh Judicial District Court, Flathead County, awarding one-half of the teacher's retirement benefits of his deceased brother, Rodney Glenn Butler, to Rodney's former spouse, Alberta Esther Butler, and the other half to Rodney's estate. The court's order is the result of a remand from an earlier appeal, prior to which order the retirement benefits were being paid to Dale Butler. We affirm the District Court's award of one-half the retirement benefits to Alberta as part of the marital estate and decline, in this divorce action, to determine title to the remaining benefits, as that issue is not properly before us and involves a question outside of this dissolution.

The issue on appeal is as follows: Did the District Court err in holding that the deceased husband's teacher's retirement benefits, which were being paid to the named beneficiary after entry of the initial decree, should be redistributed as part of the marital estate upon appeal and remand from the initial decree of dissolution?

Rodney and Alberta were married in 1963. Two children born of the marriage have now reached the age of majority. Rodney was a teacher in Chester, Montana, where the Butlers owned a home in joint tenancy with right of survivorship.

In August of 1982, the Butlers purchased the Cedar Lodge, a motel in Columbia Falls, Montana, for $245,000.00. The parties managed the motel together, with Rodney commuting to Chester to teach, until March of 1984 when the parties separated. Rodney then returned to Chester and Alberta continued management of the motel alone as her sole source of income.

Rodney filed for divorce in January of 1985; he was diagnosed with terminal cancer in September 1986. The District Court dissolved the marriage in December 1986, and entered an order dividing the marital estate in February 1987. The court awarded Rodney his teacher's retirement and the home in Chester and awarded Alberta the motel. In April of 1987 the District Court set a hearing for July 1987 on Alberta's motion to alter or amend the property distribution. Rodney married a second wife, Tammy, shortly before his death. He died on June 17, 1987, prior to the hearing. At this time Rodney's brother Dale, as the named beneficiary of the teacher's retirement account, began receiving monthly survivorship benefits of $1,048.02 per month.

In December of 1987, the District Court denied Alberta's motion to alter or amend and the first appeal ensued. See In re Marriage of Butler (1988), 232 Mont. 418, 756 P.2d 1159. In our first opinion we found that the District Court abused its discretion by utilizing an outdated appraisal of the Cedar Lodge Motel. We remanded the case for determination of the parties' interest in the motel, stating that "it may be necessary ... to reconsider the allocation of any or all of the marital estate to reach an equitable distribution." Butler, 756 P.2d at 1162.

A hearing was held upon remand on July 12, 1989, and the court entered its memorandum and order on October 6, 1989, redistributing the property. The court essentially revalued the motel at zero net value due to existing encumbrances. The District Court did not disturb its prior award of the Chester home, where Tammy now resides, to Rodney. The court ordered Dale to account for and return to the marital estate all retirement benefits received, and awarded one-half of such benefits to Alberta Ester Butler in lieu of the first award of the defunct Cedar Lodge Motel. The Court awarded the other half to the Estate of Rodney Butler.

On February 6, 1989, appellant Dale Butler intervened alleging that he had a vested property right to the retirement benefits precluding the District Court from redistributing such benefits as marital property. On April 18, 1989, Gina Kay Colwell, one of the adult children of Rodney and Alberta, also intervened. She alleged that pursuant to Rodney's last will and testament and his correspondence with the Teachers' Retirement System, a trust was created by Rodney out of his teacher's retirement account naming Dale as trustee and Gina and her sister Cynthia Rae Buck as beneficiaries. She alleges that Dale has breached the fiduciary duty he has as trustee and has also breached the covenant of good faith and fair dealing. Thus, all the parties claim an interest in the teachers' retirement benefits.

It is well-settled that a district court has far-reaching discretion in resolving property divisions. In re Marriage of Luisi (1988), 232 Mont. 243, 247, 756 P.2d 456, 459. Its judgment will not be altered or overturned absent a clear abuse of discretion nor will its findings of fact be set aside unless they are clearly erroneous. Butler, 756 P.2d at 1161; Marriage of Watson (1987), 227 Mont. 383, 387, 739 P.2d 951, 954. By statute the district court has the power to

finally equitably apportion between the parties the property and assets belonging to either or both, however and whenever acquired and whether the title thereto is in the name of the husband or wife or both.

Section 40-4-202, MCA. Montana law is well-settled that teachers' retirement benefits are properly considered to be a marital asset at the...