Marriage of Butler , 232 Mont. 418 ( 1988 )

NO. 88-64
IN THE SUPREME COURT OF THE STATE OF MONTANA
1988
IN RE THE MARRIAGE OF
RODNEY GLENN BUTLER,
Petitioner and Respondent,
and
ALBERTA ESTHER BUTLER,
Respondent and Appellant.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable Michael H. Keedy, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Donald E. Hedman, Whitefish, Montana
For Respondent:
Alexander & Baucus; Ward E. Taleff, Great Falls,
Montana
Submitted on Briefs: June 2, 1988
Decided: June 21, 1988
Filed: JUM 2 1 1988
Mr. Chief Justice J. A. Turnage delivered the Opinion of the
Court.
Alberta Butler appeals from the judgment of the Dis-
trict 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 apprais-
al 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 re-
tirement, 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 Lodse 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. [Em-
phasis added.]
Based on this affidavit, the District Court agreed to consid-
er 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 (19821, 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 author-
ity to equitably apportion marital property in a dissolution
proceeding. The District Court has discretion to give what-
ever weight it sees fit to the testimony of appraisal ex-
perts. Marriage of McCormack (Mont. 1986), 726 ~ . 2 d319,
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 on the Cedar
Lodge Motel, we find it was an abuse of the District Court's
discretion to accept an outdated appraisal used in the tax
assessment. The difference between the highest current
appraisal and the tax assessment used by the court is nearly
$89,000. This difference is clearly significant.
Appellant wife contends the District Court's failure to
recognize the current appraisals after granting wife's motion
to amend was error and catastrophic to the wife. We agree.
The District Court admits in its order of April 14, 1987,
that the "tax appraisal ... figure is now suspect as a true
value of the property as of December 1986.'' In spite of
this, the District Court erroneously used the tax appraisal
as the motel's value in its final supplemental order of
December 1987. On remand the District Court should base its
valuation on current appraisals of the Cedar Lodge Motel and
not solely upon a 1982 Department of Revenue valuation.
Issue 2. Right of Survivorship
By deed dated July 12, 1974, the Butlers acquired
property in Chester, Montana. This property was owned in
joint tenancy with right of survivorship. Section
40-4-202(1), MCA, gives authority, in a proceeding for disso-
lution of marriage to ". . . equitably apportion between the
parties the property and assets belonging to either or both,
however and whenever acquired and whether the title thereto
is in the name of husband or wife or both . . ."
The District Court, in its findings, conclusions and
order dated February 23, 1987, Exhibit A thereof, grants the
husband property described merely as "House in Chester." We
do not approve of the inadequate real property descriptions
in Exhibit A of this order. Legal descriptions of real
property are necessary to insure proper disbursement of the
property in dispute. Although there is no complete descrip-
tion of the property in the District Court's order of Febru-
ary 23, 1987, we are able to determine from the record on
appeal that this reference, i.e., "House in Chester," is to
the following described real property situated in the City or
Town of Chester, County of Liberty, and State of Montana,
to-wit :
The West 90 Feet of Lots 7, 8, 9, and
10, and the South 70 Feet of the West 90
Feet of Lot 6, Block 10, Hamilton's
Addition to the Townsite of Chester,
according to the official plat thereof
now on file and of record in the office
of the Clerk and Recorder of Liberty
County, Montana, said property being
more particularly described as follows:
Beginning at the Southwest corner of
said Block 10, thence Northerly along
the West Boundary line of said Block 10,
a distance of 140 Feet to a point,
thence Easterly at right angles and
Parallel to the South boundary line of
said Lot 10, a distance of 90 Feet,
thence Southerly at right angles and
Parallel to the East boundary lines of
said Lots 6, 7, 8, 9 and 10, a distance
of 140 Feet, thence Westerly along the
Southerly boundary line of said Lot 10 a
distance of 90 Feet to the point of
beginning.
We conclude from the February 23, 1987, order that the Dis-
trict Court awarded the Chester property to the husband and
severed the joint tenancy.
Appellant contends that the District Court erred in
refusing to recognize that the title to this property was
held in joint tenancy with right of survivorship and should
therefor have given the wife ownership of the Chester proper-
ty after the husband's death. Appellant contends that,
because husband died before the final resolution of property
division, the wife's right of survivorship remains. Whether
the order of February 23, 1987, effectively severed the joint
tenancy is the issue relating to the property in Chester.
On March 12, 1987, appellant Alberta moved the District
Court for an order amending its February 23, 1987 findings of
fact, conclusions of law and order. On April 27, 1987, the
District Court entered an order setting the March 12, 1987
motion for hearing but limited the evidence the court would
receive at the hearing to "evidence relating to the value of
the Cedar Lodge Motel." The matters that the District Court
agreed to hear on the motion to amend had no relation to and
did not affect the Chester property. The District Court's
February 23, 1987 order effectively distributed the Chester
property to the husband.
Depending upon the determination on remand of the value
of the parties' interest in the Cedar Lodge Motel, it may be
necessary for the District Court to reconsider the allocation
of any or all of the marital estate to reach an equitable
distribution.
Reversed and remanded.
We concur: