Marriage of Knudson, In re
| Decision Date | 30 January 1980 |
| Docket Number | No. 14595,14595 |
| Citation | 606 P.2d 130,186 Mont. 8 |
| Parties | In re the MARRIAGE OF Stanley M. KNUDSON, Petitioner and Appellant, and Frances Anne Knudson, Respondent Counter-Petitioner. |
| Court | Montana Supreme Court |
Berger, Anderson, Sinclair & Murphy, Billings, for appellant.
Marra, Wenz, Iwen & Johnson, Great Falls, for respondent.
Stanley V. Knudson (herein designated as the husband) appeals from that portion of a dissolution of marriage decree entered by the Hill County District Court which awarded Frances Anne Knudson (herein designated as the wife) an interest in his retirement benefits to which he is entitled under the Railroad Retirement Act. The wife cross-appeals from the same judgment, contending that it was error for the trial court to award her only 40 percent of the marital estate. She also contends she is entitled to maintenance, attorney fees, and costs.
We discuss first the issue of whether the wife can claim an interest in the husband's benefits to which he is entitled under the Railroad Retirement Act. Since the appeal was filed in this case, the United States Supreme Court has ruled in Hisquierdo v. Hisquierdo (1979), 439 U.S. 572, 99 S.Ct. 802, 59 L.Ed.2d 1, that such benefits are not part of the marital estate, and cannot be considered directly or indirectly in a divorce decree which distributes the assets of the marriage. For purposes of discussing the remainder of the property distribution award, it is useful to set forth how the railroad retirement benefits were handled by the trial court.
In responding to the husband's petition for divorce and an equitable distribution of the assets of the marriage, the wife contended that his railroad retirement benefits were an asset of the marriage, and therefore she claimed an interest in them. The court found that the husband through 1976 had accumulated 275 months of employment with the railroad which would have entitled him to an annuity of $560 per month if he were eligible to retire at the end of 1976. In the initial decree the trial court awarded the husband approximately 60 percent of the marital assets, and the remaining 40 percent was of course, awarded to the wife. But for some reason the original decree is silent as to disposition of the railroad retirement benefits.
After entry of the original decree, both parties moved to amend the findings and conclusions in several particulars. The wife at that time requested that the decree be amended to award her a portion of the husband's interest in his railroad retirement pension. The Court then arrived at a calculation of the husband's retirement benefits and distributed 40 percent of the benefits to the wife and 60 percent of the benefits to the husband. This was the same formula used by the trial court in dividing the other marital assets. At the time the court awarded railroad retirement benefits to the wife as a property interest, it had before it several state cases, including the California case of In Re Marriage of Hisquierdo (1977), 19 Cal.3d 613, 139 Cal.Rptr. 590, 566 P.2d 224, which case was then being reviewed by the United States Supreme Court.
Because of the way in which the railroad retirement benefits were treated by the trial court, it is clear to us that the trial court would not have distributed the marital estate in any different manner if the Court had known from the outset that Railroad Retirement Act benefits were not part of, and could not be considered for any purpose, as part of the marital estate and therefore subject to distribution.
As we have noted, the United States Supreme Court in Hisquierdo, supra, specifically ruled that retirement benefits receivable under the Railroad Retirement Act, 45 U.S.C.A. § 231, et seq. may not be included as part of a property distribution. The Court determined that distribution of a share of one spouse's expectation in retirement benefits under the Act would frustrate the purpose of the Act which is to encourage an early retirement by employees by providing them with adequate support in their old age. The Court further noted that the antigarnishment section of the Act, section 231m, protects not only a direct distribution of a share of a pension, but also an indirect distribution by an offsetting award, that is, an award to compensate the nonemployee spouse for retirement benefits not directly received. The Court concluded that an offset as well as a direct interest in the pension would frustrate the purpose of the Act. We note, however, that the Court was careful to add that pension benefits under the Act could still be reached for maintenance or for child support. Hisquierdo, supra.
Here, the trial court clearly awarded the wife as part of the property settlement a share in the husband's pension rights under the Railroad Retirement Act. Accordingly, that portion of the decree must be vacated. The question of whether the wife should have been awarded maintenance in lieu of a share of the railroad pension is discussed later in this opinion.
We reach now the wife's cross-appeal whereby she contends that the trial court should have awarded her 50 percent of the marital assets. She asserts two grounds. First, she contends that she asked for a 50 percent distribution in her counterpetition, that the husband did not respond to the counterpetition, and therefore he is deemed under pleading rules to have admitted she was entitled to 50 percent of the marital estate. Second, she argues that if her pleading argument should not prevail, that the distribution scheme is unfair to her.
The wife relies on Rule 7(a), and Rule 8(d) of Mont.R.Civ.P. in contending that the husband had a duty to respond to her counterpetition, and in failing to do so admitted that the wife was entitled to 50 percent of the marital assets. She argues that because of these rules, the hands of the trial court was tied, and he was bound by law to award her 50 percent of the marital estate. To accept her argument however, would be to exalt form over substance.
The essential pleadings required under the Uniform Marriage and Divorce Act are set forth in section 40-4-103(3), MCA. The first pleading is a petition, and the responsive pleading is denominated a response. If there are other pleadings under the Act, they are specifically governed by the Montana Rules of Civil Procedure. In his petition the husband asked the trial court to equitably apportion the marital estate. In her response the wife went another step and asked that she be awarded 50 percent of the marital estate. She contends that the husband was duly bound by the rules of civil procedure to respond to her demand for fifty percent of the assets, and that his failure to do so resulted in an admission that she was so entitled. But the husband was under no duty to answer the wife's "counter-petition."
The entire marital estate was brought before the trial court by the husband's petition asking the court to equitably apportion this estate. The husband did not take a position in this petition as to precisely how he felt the estate should be divided, but the wife in her counterpetition alleged that she was entitled to half of the parties assets. A reply to this counterpetition, might have indicated to the court how close or how far away the parties were from arriving at a percentage figure for distributing the marital estate, but he had no duty to reply. The entire marital estate was before the trial court for equitable distribution. We note, furthermore, that at the end of the trial counsel for the husband moved under Rule 15 that the pleadings be amended to conform to the proof and that the trial court granted this motion.
Nor does the Uniform Marriage and Divorce Act (section 40-4-105, MCA) require that a petition for marriage dissolution set forth how the petitioner believes the marital estate should be divided. The purpose of the petition is simply to inform the trial court that the parties' acquired property during the course of the marriage and that the court should equitably divide it in the event the parties' cannot reach an agreement in this regard. Here both sides conducted extensive discovery and there was a prolonged trial where the positions of the parties were set forth in great detail. The issue of an equitable division was clearly raised by the pleadings, and that is all that is required.
We next discuss the wife's contention that she should have been awarded 50 percent of the marital assets and a large share of the income-producing property.
The parties owned a 1,320...
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