Marriage of Wagner, In re, 83-338

• Citation: 208 Mont. 369,679 P.2d 753,41 St.Rep. 409
• Decision Date: 05 April 1984
• Docket Number: No. 83-338,83-338
• Parties: In re the MARRIAGE OF Richard Lambert WAGNER, Petitioner and Respondent, and Pearl F. Wagner, Respondent and Appellant.
• Court: Montana Supreme Court

Page 753

679 P.2d 753

208 Mont. 369

In re the MARRIAGE OF Richard Lambert WAGNER, Petitioner and Respondent and Pearl F. Wagner, Respondent and Appellant.

No. 83-338.

Supreme Court of Montana.

Submitted on Briefs Dec. 8, 1983.

Decided March 13, 1984.

Rehearing Denied April 5, 1984.

David L. Nielsen, Glasgow, for respondent and appellant.

Gallagher, Archambeault & Knierim; Matthew W. Knierim, Glasgow, for petitioner and respondent.

MORRISON, Justice.

This is an appeal from the final judgment entered in the District Court of the Seventeenth Judicial District, Valley County on February 18, 1983 distributing marital assets. No issue is taken with the granting of the decree of dissolution or the awarding custody of the one minor child to the petitioner. Appellant challenges only the disposition of the marital estate.

FACTS:

The parties were married on August 17, 1971. On December 17, 1980 the husband filed for dissolution of marriage. The trial court entered a temporary order on January 23, 1981, which ordered that the respondent, Pearl Wagner, be awarded temporary maintenance of $400 per month during the pendency of the action. Dissolution of the marriage was granted orally at a hearing on September 21, 1981 by the trial court sitting without a jury. The final decree of dissolution was entered on January 27, 1982. Shortly thereafter, husband petitioned the court claiming that he was not financially capable of continuing temporary maintenance payments to wife. On May 6, 1982, the trial court ordered the temporary maintenance terminated based on the husband's inability to provide. The final disposition of marital assets was entered on February 18, 1983.

Both husband and wife entered into the marriage with substantial personal assets. Prior to the marriage the husband owned real estate consisting of a 2280 acre ranch owned by the Wagner family for three generations with a 1971 appraised value of $236,000. Wife brought no real property into the marriage. Just prior to the marriage and shortly thereafter, wife sold certain cattle and contributed the proceeds of approximately $72,440 to the joint property of the parties. During the course of the marriage, the parties accumulated considerable personal property and a small amount of real estate, which consisted of the "Scott Place," 640 acres, and "Porcupine" grazing rights. At the time of the final distribution of the marital estate the trial court found that no equity existed in the "Porcupine" grazing rights as the indebtedness equaled the value of the rights and furthermore, the grazing rights were forfeited due to husband's inability to pay the annual 1982 grazing fees. The Scott Place was purchased on a contract for deed in 1979 for $64,000. The only equity in real estate acquired after the divorce was the sum of two principal payments made in 1979 and 1980 on the "Scott Place" in the total amount of $25,600.

During the course of the nine year marriage while the parties lived together they were equal partners in the ranching operation. Both are and were competent, experienced and resourceful ranchers. Undisputed testimony reveals that the wife contributed to operating the ranch not only as a housewife, but also as an active worker in the fields and with the cattle. During the husband's illness in 1980 with cancer, the wife was responsible for even more ranch tasks previously shared with her husband.

Early in the marriage the parties began breeding "exotic cattle." The Wagners extended a large financial commitment to establish themselves in this market. However by 1974 the price and demand for "exotic cattle" dropped drastically and subsequently the entire cattle market fell. The diminution of cattle market values together with rising operating costs created personal financial difficulties for the parties.

The December 1981 separation was acrimonious and the husband and wife were unable to reach a mutually acceptable agreement on any issue. The trial court directed the parties to summarize their contentions regarding the division of marital property in a pre-trial memorandum. Contentions of the parties varied widely on nearly every asset value. Since the husband and wife were unable to agree, the trial court on September 9, 1982, ordered a certified public accountant to serve as a Special Master of the proceedings, to assist the trial judge in defining the parties' contentions concerning the property. Originally, the CPA was ordered to prepare his Master's Report on the basis of the December 18, 1980, separation date. Early in October 1982 the parties agreed that the financial statements should reflect financial status at or near the time of trial so that the court would be aware of any changes in the parties' financial condition during the period from the separation, December 18, 1980 to the time of the trial. The final Master's Report included financial statements showing the net worth of the parties as of October 31, 1982.

The Master's Report indicated that the only area of agreement was the amount of the parties' liabilities. At the time of the marriage, husband had an indebtedness of about $5,000 on the family ranch. The wife entered the marriage with no debts. During the course of the marriage the parties accumulated a total indebtedness as of December 18, 1980 of approximately $672,000. The wife did most of the banking for the ranch. She was personally obligated on operating loans with Treasure State Bank for operating loans. However, through negotiation and court orders the wife was no longer liable for any ranch obligations at the time of final disposition of the marital estate.

Upon the separation of the parties on December 18, 1980 the financial status of each party took divergent courses. The wife established herself in a new ranching operation without assistance from the husband other than monies previously awarded her by the trial court. At the time of the separation, the wife retained her mineral interest which she inherited from her mother during the marriage and she also retained ownership of certain livestock from the marital estate. With this basis and loans from her family, the wife purchased several real properties, including the Gartside property for $50,000 and the Redd property for $41,000. At the time of the final disposition of marital assets the wife planned to acquire an additional 140 acres as evidenced by her earnest payment of $3,500. According to the trial court's findings at final distribution of assets the only indebtedness the wife had was the obligations she incurred in connection with establishing the new cattle operation.

The husband's financial status continued to deteriorate from separation to final disposition. A line of three operating loans held by Treasure State Bank of Glasgow, Montana were maintained for expenses to run the ranch. These loans accounted for $126,000 of the total $672,000 debt service encumbering the Wagner ranch. After numerous hearings and agreements negotiated by the parties, all of the livestock (except those cattle and horses retained by the wife) were sold early in 1981. The total amount received for the sale of these cattle was approximately $347,418. The husband applied a portion of these proceeds to reduction of $126,000 in operating loans. The husband did not raise any cattle or farm any crops during 1981 and 1982. While the husband was liquidating ranch livestock and ceasing all income-generating ranch operations he increased the operating loans. In January, 1981, the husband borrowed $16,775.27 as operating loan; in February of 1981, he borrowed an additional $70,756.93; and, in March, 1981, he borrowed $21,131.88. During March of 1981 the husband received reimbursement from the Agricultural Stabilization Conservation Service in an amount of nearly $17,000. These funds were not applied against the operating loans held by Treasure State Bank. Additionally, the husband received a seismograph payment in the sum of $3,000 in the spring of 1981 which he did not use to reduce the operating loans. Sometime late in 1980 or early in 1981 the husband borrowed $8,000 against a life insurance policy owned by the husband which insured the life of the wife. None of this money was applied against the operating loans with Treasure State Bank. The husband made 1981 and 1982 annual installment payments on the "Scott Place" in the total amount of $25,600. In 1982 the husband's credit was "frozen" pending final distribution of marital property. Husband borrowed the 1982 payment on the "Scott Place" utilizing his brother's co-signature on a loan from Treasure State Bank. Husband's liabilities on October 31, 1982 were $641,000 making his net worth $171,000 as compared to his net worth of $313,724 at time of marriage.

The appellant makes the following challenges to the District Court's final disposition of marital assets on February 18, 1983:

1. The trial court erred by using the Master Report date of October 31, 1982 instead of the date of separation, December 18, 1980 for the date of valuation of assets and determination of parties net worth.

2. The trial court failed to equitably divide the marital assets.

3. The $800 per month in back separate maintenance temporarily ordered by the court on January 9, 1981 was improperly modified.

4. The findings of the trial court do not support the division of marital property.

The multiplicity of legal proceedings separated by extended periods of time develop an unusual set of facts. After consideration of the unique circumstances presented by this case we find the challenge to the proper date of asset valuation to be dispositive.

A review of the record indicates that the District Court acted conscientiously to protect the marital estate and to equitably apportion it according to the rights of both parties. This was no easy task in the crossfire of divorce hostilities. In the findings of fact the trial court stated that the husband "is...