Marriage of Butler, In re, 88-64

• Decision Date: 21 June 1988
• Docket Number: No. 88-64,88-64
• Court: Montana Supreme Court
• Parties: In re the MARRIAGE OF Rodney Glenn BUTLER, Petitioner and Respondent, and Alberta Esther Butler, Respondent and Appellant.

Page 1159

756 P.2d 1159

232 Mont. 418

In re the MARRIAGE OF Rodney Glenn BUTLER, Petitioner and Respondent,

and

Alberta Esther Butler, Respondent and Appellant.

No. 88-64.

Supreme Court of Montana.

Submitted on Briefs June 2, 1988.

Decided June 21, 1988.

Donald E. Hedman, Whitefish, for respondent and appellant.

Alexander & Baucus, Ward E. Taleff, Great Falls, for petitioner and respondent.

TURNAGE, Chief Justice.

Alberta Butler appeals from the judgment of the District Court, Eleventh Judicial District, Flathead County, dissolving the marriage of Alberta and Rodney Butler and distributing the marital property. We reverse and remand for introduction of evidence relevant to the appraisal of motel property consistent with this opinion.

The issues considered on appeal are:

1. Did the District Court err in basing motel property value on a 1982 tax appraisal in the face of current appraisal testimony and market conditions?

2. Did the District Court err in refusing to recognize the rights of survivorship from marital property owned in joint tenancy when husband died after the dissolution decree but before final property settlement?

Rodney and Alberta Butler were married in 1963. Two children born of the marriage have reached their majority. Alberta was age forty-two at the time of trial. Rodney, age forty-eight at the time of trial, was a teacher in Chester, Montana, where the Butlers owned a home in joint tenancy with right of survivorship.

In August 1982, the Butlers purchased an eighteen-unit motel, the Cedar Lodge, in Columbia Falls, Montana, for $245,000. From the time of purchase until March 1984, Rodney resided in Columbia Falls and commuted to Chester to teach. During this time, Rodney contributed approximately $2,000 a month to the joint account to assist in maintaining the motel. After the parties separated in March 1984, the wife managed the motel alone and had no other source of income. Other marital property was equitably disbursed and is not at issue here.

The Butlers separated in March 1984. Rodney filed for divorce in January 1985 and was diagnosed with terminal cancer in September 1986. A decree dissolving the marriage was entered in December 1986 with property settlement left pending. Findings of fact, conclusions of law and an order dividing the marital estate were entered February 1987. The District Court, in April 1987, set a hearing on Alberta's motion to alter or amend the February 1987 order; a hearing was held on this motion in July 1987. The District Court entered its order denying the motion to alter or amend in December 1987, and this appeal followed. It must be noted that Rodney died in June of 1987, prior to the hearing on the motion and prior to the Court's ruling on the motion.

Issue 1. Valuation of Motel Property

Alberta contends that Rodney was awarded substantially free and unencumbered property including his teacher's retirement, the home in Chester and his personal car. This left him with a net distribution of property worth over $63,000.

Alberta was given the motel and contends its value is not greater than $163,000, the highest independent appraisal, and sets the debt on the property at $207,500. The District Court valued the property at $251,718 and set the debt on the property at $185,000. Thus, the wife contends she has been put in a deficit situation.

The District Court's value of $251,718 on the Cedar Lodge is identical to the market value on the 1986 Assessment Notice from the Flathead County Assessor. This notice was entered as plaintiff's exhibit 3. At trial, a real estate agent, a local motel owner and a court-appointed appraiser testified as to the value of the motel. These values ranged from $120,000 to $163,000. After the court adopted the tax assessment value in its findings of February 1987, the wife's counsel obtained an affidavit from the appraisal supervisor of Flathead County which stated:

The opinion of market value on the real estate known as the Cedar Lodge Motel ... was made as of January 1, 1982, ... Property values in Columbia Falls have been adversely affected since the date of our appraisal. That effect would be best demonstrated by a more recent appraisal of the property. [Emphasis added.]

Based on this affidavit, the District Court agreed to consider the wife's motion to amend the findings and limited new evidence to that relating to the value of the Cedar Lodge Motel.

A second hearing was held in July 1987. The court's "supplemental order" of December 1987 found the testimony of independent appraisers "not persuasive" and refused to change the value of the motel.

In re Marriage of Krause (1982), 200 Mont. 368, 654 P.2d 963, set forth three principles surrounding property valuations:

(1) Proper valuation is not tied to a specific event. (2) There may be more than one valuation point, depending on the kind of property involved, and (3) preferably valuation should occur at the time of distribution or stated another way present market values should be used. [Emphasis added.]

Krause, 654 P.2d at 968.

Section 40-4-202, MCA, gives the District Court authority to equitably apportion marital property in a dissolution proceeding. The District Court has discretion to give whatever weight it sees fit to the testimony of appraisal experts. Marriage of McCormack (Mont.1986), 726 P.2d 319, 321, 43 St.Rep. 1835, 1836. In Marriage of Watson (Mont.1987), 739 P.2d 951, 44 St.Rep. 1167, we found that the District Court has far-reaching discretion in resolving property divisions. The well-established standard of review in this state is that its judgment will not be altered unless a clear abuse of discretion is shown. Findings of fact will not be set aside unless they are clearly erroneous. Watson, 739 P.2d at 954.

In view of the current appraisal testimony...