Marriage of Griffin, In re

Decision Date18 August 1993
Docket NumberNo. 92-435,92-435
Citation860 P.2d 78,50 St.Rep. 945,260 Mont. 124
PartiesIn re the MARRIAGE OF Martin Paul GRIFFIN, Petitioner and Respondent, and Nancy Lien Griffin, Respondent and Appellant.
CourtMontana Supreme Court

Edmund P. Sedivy, Jr., Morrow, Sedivy & Bennett, Bozeman, for appellant.

John S. Warren, Schulz, Davis & Warren, Dillon, for respondent.


A dissolution decree was entered by the District Court for the Fifth Judicial District, Beaverhead County, on November 25, 1991, in which the court divided the parties' marital estate, determined custody, child We reverse and remand to the District Court.

                support, and maintenance obligations, and awarded appellant, Nancy Griffin, an option to purchase the family business within 180 days.   Nancy moved the District Court on four separate occasions to allow her to exercise this option, but these motions were denied.   Respondent Martin Griffin moved the court to reduce his property settlement obligation and this motion was also denied.   From the original decree and judgment, and the subsequent orders denying their motions, the parties appeal

The following issues are before this Court:

1. Is this appeal limited to a review of the District Court's May 12, 1992, order?

2. Did the District Court abuse its discretion when it refused to either allow Nancy to exercise her option to purchase the family business or to adjust the property distribution based on a market valuation of the business?

3. Did the District Court abuse its discretion when it determined Martin's child support obligation without considering the factors specified in § 40-4-204, MCA?

4. Did the District Court err when it refused to reduce Martin's property settlement obligation by the amounts Nancy withdrew from the parties' business account?


Nancy Lien Griffin and Martin Paul Griffin were married on February 4, 1978. At the time of dissolution, the parties had four children whose ages were 12, 10, 8, and 7. The parties stipulated to joint custody of the children. Nancy was to be the primary residential custodian. The remaining issues of child support, maintenance, and division of the marital assets were to be determined by the trial court following a hearing conducted on October 25, 1991.

The parties' primary asset, the value of which forms a basis of this appeal, is the family-owned Madison Lumber Company, located in Ennis, Montana. It is undisputed that the parties started this retail lumber and building supply business in 1979, and contributed equally to its successful development. Martin's role was that of manager, and Nancy acted as chief financial officer. Because it was evident during the dissolution proceedings that both parties desired the lumber company to the exclusion of the other, the primary issues for the court to determine were the value of the business and a method of equitably apportioning this marital asset.

Prior to the trial, the parties jointly hired an appraiser, John Wicks, who utilized cost and income methods of valuation and concluded that the parties' equity in the business was $340,000. Believing that the Wicks appraisal considerably undervalued the business, Nancy hired James Simons, a certified public accountant, who evaluated the company's earnings and concluded that the parties' equity was worth $862,274.

During the hearing, the court also considered conflicting testimony regarding the value of the parties' home. Wicks appraised the family home at $222,000 but Nancy testified that no offers had been received on the house when it was listed at $230,000 so she believed the value to be $190,000. Finally, the court heard testimony on the issues of maintenance and support, which included the submission of a child support guideline worksheet by Nancy.

After considering the evidence, the court adopted Wicks' appraisal of both the home and lumber company after it found Wicks' valuation of the business "more credible and believable." The court divided the marital estate as follows:

To Nancy: The family home $222,000

subject to its mortgage (63,309)

Contents of home 20,290

Dean Witter account 42,271

Profit sharing plan 4,755

1990 Subaru 10,000

Settlement from husband 54,000


TOTAL: $290,007

To Madison Lumber Co. (total $330,000


equity reduced by value of Subaru awarded to Nancy) (16,494)

subject to shareholders advance

Profit sharing plan 9,848

Settlement paid to wife (54,000)


TOTAL: $269,354

---------- In its findings of fact and conclusions of law issued on November 14, 1991, the court stated that "despite the alarming discrepancy in the experts' appraisals (of the business), the court finds that Nancy in equity should have an opportunity to put her private appraisal to the fair market value test." Therefore, it awarded her an assignable option to purchase the lumber company which was structured as follows:

NANCY LIEN GRIFFIN is hereby granted a 180 day exclusive assignable option to purchase the assets of the Madison Lumber Company. The purchase price as equitably adjusted by the court from the conflicting appraisals, and other distributed property, shall be the sum of $540,000. The option if exercised shall be for cash or in the alternative, a secured installment sale, $180,000 down and the balance in 20 annual, equal, amortized installment payments at eight and one-half percent (8 1/2%) interest. In the alternative the parties may implement any other agreed to purchase plan.

The court further stated that it reserved the right "to amend its decision as to maintenance, child support, and any other matters which in equity should be adjusted in the light of such a sale."

Finally, the court concluded that Nancy was entitled to a temporary maintenance award, and that Martin should pay Nancy $1200 per month for child support. The court also found that neither party was entitled to an award of attorney fees.

A dissolution decree and judgment, which conformed to the court's findings and conclusions of law, was entered on November 25, 1991. Neither party raised objections to the court's purchase option plan, nor filed notices of appeal.

During the time period between the court's issuance of the findings and conclusions, and the subsequent entry of judgment, Nancy sought to exercise her option under the installment terms of the court's plan and moved the court to amend its division of the marital estate. Nancy claimed that the court-ordered purchase price of $540,000, as compared to the $330,000 figure used in the property division, created an additional marital value of $210,000 which should be split between the parties. She stated that, in order to obtain a loan for the sale, she needed to know if the court was going to deduct her share of the additional value ($105,000) from the purchase price.

The actual purchase plan that Nancy proposed was structured as follows: Nancy would be purchasing the unencumbered assets of the lumber company for $540,000. The $180,000 down payment would consist of crediting Martin with the $25,000 which he owed to Nancy as the first installment of the property settlement and releasing him of his obligation to repay the $16,494 shareholder's advance; Nancy would transfer her Dean Witter stock to Martin, valued at $42,271; and, finally, a payment of $96,235 Nancy also moved the court to order that any installment sale contract entered into between the parties include a non-competition clause in order to afford Nancy a "reasonable opportunity to earn the monies to pay the balance of the installment sale contract."

                in cash would be made to Martin.   [260 Mont. 130] The remaining $360,000 of the contract price would be decreased by $105,000 (her share of the increased net valuation of the business).   The balance would be paid with a cash installment payment of $29,000, and a secured contract for $226,000, payable in 20 annual installments at an interest rate of 8.5 percent

After a hearing, the court denied Nancy's motion on the basis that it was premature because it was filed before a formal execution of a written contract and the tendering of the $180,000 down payment. The court denied the motion on November 25, 1991, stating that "the option to purchase has not been properly exercised ... [and] the proposed purchase plan fails to meet the fair market value test as contemplated within the spirit and intent of the Court's findings."

In a subsequent motion, Nancy requested access to the company's records and permission to do an on-site inspection with potential investors for the stated purpose of "processing loan applications." In an order issued on January 7, 1992, Nancy's motion for personal access to the property and records was denied, but Martin was ordered to cooperate fully with bank representatives to assemble any data necessary for a loan or sale. Furthermore, Martin was enjoined from conducting the business in a manner which would impair the assets or value of the company during the 180 day option period. The court added the following comment at the end of the order:

The purpose of the assignable option was to put to the fair market value test the appraisal of the expert Simon[s]. The efforts to date have not been within the spirit and intent of that purpose.

On February 24, 1992, Nancy again attempted to exercise her option and moved the court to approve a contract for deed which conformed to the terms prescribed by the court and was structured in essentially the same manner as the plan she had proposed in November 1991. The down payment would consist of releasing Martin of his obligations to pay the shareholders advance and the initial property settlement payment, assigning the balance of the Dean Witter account at the date of closing, and the remainder payable in cash. The balance of the purchase price would be in the form of a promissory note, "subject to the equitable determination of the...

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