Marriage of Ortiz, In re

• Decision Date: 27 May 1997
• Docket Number: No. 96-213,96-213
• Citation: 938 P.2d 1308,282 Mont. 500
• Parties: In re MARRIAGE OF Maureen E. ORTIZ, Petitioner and Respondent, v. Joseph J. ORTIZ, Respondent and Appellant.
• Court: Montana Supreme Court

Page 1308

938 P.2d 1308

282 Mont. 500

In re MARRIAGE OF Maureen E. ORTIZ, Petitioner and Respondent, v. Joseph J. ORTIZ, Respondent and Appellant.

No. 96-213.

Supreme Court of Montana.

Submitted on Briefs March 13, 1997.

Decided May 27, 1997.

Richard J. Carstensen, Billings, for Respondent and Appellant.

Karl Knuchel, Livingston, for Petitioner and Respondent.

TRIEWEILER, Justice.

Maureen E. Ortiz filed a petition for dissolution of her marriage to Joseph J. Ortiz in We address three issues on appeal:

the District Court for the Thirteenth Judicial District in Carbon County. Following a hearing, the District Court dissolved the parties' marriage and distributed their marital property. Joseph appeals from the District Court's valuation and distribution of the marital estate and its determination that he is liable for certain medical bills. We affirm the order of the District Court.

1. Did the District Court err when it valued the parties' ranch at $400,000 based on the testimony of an agricultural real estate broker?

2. Did the District Court err when it ordered that the parties' ranch be sold and that the proceeds be divided equally between the parties?

3. Did the District Court err when it determined that Joseph was liable for his medical debts which had been incurred prior to the parties' separation?

FACTUAL BACKGROUND

Maureen and Joseph Ortiz were married on February 10, 1962. In 1971, the parties purchased a 709 acre ranch located between Red Lodge and Billings for $72,000. The parties resided at the ranch until their separation on May 26, 1994. During the parties' marriage, they attempted to raise cattle on the ranch, but found that the operation was not economically viable. Joseph therefore continued his employment as a full-time cement contractor. Since 1992, however, Joseph has been unable to work due to physical disability.

On June 1, 1994, Maureen filed a petition for dissolution of marriage in the Thirteenth Judicial District Court. In her petition, Maureen requested that the parties' ranch be sold and the proceeds be divided equally between Joseph and her. Joseph, however, requested that the ranch be left intact, and that he be allowed to pay Maureen for her one-half interest in the property over a five-year period.

At the dissolution hearing on July 10, 1995, both parties disputed the value of the 709 acre ranch. Linda Bender, a real estate broker with nine years' experience marketing farm, ranch, commercial, and residential property in the area, testified for Maureen that the Ortizes' 709 acre ranch was worth $400,000. To arrive at that figure, Bender performed a detailed comparative market analysis, in which she compared the Ortizes' ranch with four properties that had sold within six months of the hearing, as well as with nine ranches that she had sold in the previous year. Based on her comparative market analysis, Bender testified that the parties' 709 acres were worth an average of $400 per acre. To this value, Bender added the $49,953 appraised value of the Ortiz home, and the $23,310 cost of replacement for the surrounding outbuildings, for a total valuation of $398,000 to $400,000.

Bender supported her per-acre valuation by comparing the parties' property to pending land sales on surrounding ranch properties, which ranged from $520 per acre to $1100 per acre. She testified that a farm appraisal would not be useful in determining the market value of the Ortiz property because a prospective purchaser would probably not buy the property for use as a ranch or farm. Instead, Bender testified that the highest value of the land was for a scenic retreat due to its proximity to Billings and Red Lodge.

In contrast, Joseph's expert, Vernon Schoulte, valued the Ortiz ranch based on its utility as a working ranch. Using the "cost approach" method of valuation, which is based upon the economic utility of the property, Schoulte valued the parties' ranch at $182,500. During the hearing, however, Schoulte acknowledged that during the time of the Ortizes' marriage, the ranch was "not a viable economic farm."

On October 30, 1995, the District Court entered its findings of fact, conclusions of law, and decree. In its findings of fact, the court determined that the parties' ranch "has a fair market value of $375,000.00 to $425,000.00." In its final property division, the court valued the ranch at $400,000 and ordered that the property be sold with the proceeds divided equally between Maureen and Joseph. In addition, the court ordered Joseph to assume liability in the amount of $15,100 for medical bills which he had incurred prior to the parties' separation.

ISSUE 1

Did the District Court err when it valued the parties' ranch at $400,000 based on the testimony of an agricultural real estate broker?

This Court reviews a district court's factual findings related to the division of marital property to determine whether those findings are clearly erroneous. In re Marriage of Danelson (1992), 253 Mont. 310, 317, 833 P.2d 215, 219. If the court's findings are not clearly erroneous, this Court will affirm the court's distribution unless the court abused its discretion. In re Marriage of Smith (1995), 270 Mont. 263, 267-68, 891 P.2d 522, 525.

On appeal, Joseph contends that the District Court's findings of fact regarding the valuation of the parties' ranch are clearly erroneous. Specifically, Joseph asserts that the District Court erred when it accepted the testimony of Maureen's real estate broker, who had no experience as a property appraiser, over the testimony of his expert, who had been a certified and licensed appraiser for fifteen years. Based on his contention that Maureen's expert did not have adequate qualifications to value the Ortiz ranch, Joseph asserts that the District Court's valuation of the ranch, based on that testimony, was unsupported by substantial evidence.

In this case, Linda Bender testified for Maureen regarding the present market value of the Ortizes' 709 acre ranch. Bender's credentials, as presented at the hearing, included five years' experience as a real estate broker and nine years' experience as a real estate sales person and real estate associate. Bender testified that her position as a real estate associate consisted of the marketing of farm, ranch, commercial, and residential property. In addition to her experience selling property, Bender had completed 120 credit hours of training and an additional 15 hours every two years of supplemental training.

Bender based her valuation of the Ortiz property upon both her inspection of the property and upon a detailed comparative market analysis. She testified that she was familiar with the sales of comparable property in Carbon and Stillwater Counties within the past two years, and based her comparative analysis on four similar properties that had sold within six months of the date of the hearing, as well as on nine properties that she had sold in the previous year. In addition, Bender testified that on the day before the hearing she had found one pending sale and several listings "right in the neighborhood" that supported her comparative market analysis. Based on her experience as a real estate broker in the area, Bender testified that she could sell the Ortiz ranch for between $360,000 and $430,000.

In contrast, Joseph's expert, Vernon Schoulte, testified that he had appraised the Ortiz ranch at $182,500 based on its "highest and best use" as a farm or ranch. Schoulte had experience as both an appraiser and a real estate broker; however, his testimony regarding the value of the Ortizes' ranch was based solely on his appraisal of the property. He did not express an opinion regarding the amount the Ortizes could expect to receive from a sale of their property. Furthermore, although Schoulte testified that the property's best use, pursuant to the cost approach method of valuation, was as a working farm or ranch, he admitted at the dissolution hearing that the property was "not a viable economic farm" during the time of...