Marriage of Gray ( 1992 )

NO. 92-247
IN THE SUPREME COURT OF THE STATE OF MONTANA
1992
IN RE THE MARRIAGE OF
BIRGIT I GRAY,
.
Petitioner and Respondent,
GARY E. GRAY,
Respondent and Appellant.
APPEAL FROM: District Court of the Second Judicial District,
In and for the County of Silver Bow,
The Honorable Mark P. Sullivan, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Daniel R. Sweeney, Attorney at Law, Butte, Montana
For Respondent:
Kevin E. Vainio, Attorney at Law, Butte, Montana
Submitted on Briefs: October 22, 1992
22
Decided: December 22, 1992
Filed: idsmith
C L E R K OF SUPREME COURi
STATE OF MONTANA
Justice John Conway Harrison delivered the Opinion of the Court.
Birgit Gray petitioned for dissolution of marriage on January
9, 1991, after nine years of marriage. A decree was entered on May
14, 1992, in the Second Judicial District, Silver Bow County. The
husband, Gary, appeals the property division ordered by District
Court Judge Mark P. Sullivan.
The parties were married on August 23, 1981, having lived
together for the preceding year in Gary's mobile home at 210
Lyndale Lane in Butte. No children were born of this marriage.
Gary's youngest child lived with the couple at 210 Lyndale Lane
until 1985, and Birgit's only child, John, lived with them
throughout their marriage.
Birgitls name was added to the deed on the mobile home after
she and Gary were married. She also owned a small house at 2500
Nettie Street in Butte, appraised in 1991 at $5,000. Birgit
purchased this house in her own name in 1985 and used it as a
rental property.
At the time Birgit filed the petition, she was 37 years old
and had been working as a customer service clerk at Montana Power
Company for about eighteen months. Her net salary was $880 per
month, in addition to which she received $125 per month as child
support and approximately $75 per month from rental property. Gary
was 48 and had worked nearly twelve years as a telecommunications
foreman at Montana Power Company. His net salary was $2,166 per
month.
Gary and Birgit were unable to agree on the value of the real
2
property or on a division of their furniture and household goods.
After a hearing in November 1991, the District Court entered an
Order Distributing Marital Property on January 24, 1992. This
order included household furnishings and other personal property.
Three items in particular had been disputed at the November 1991
hearing and are still disputed on appeal: a "six-piece bedroom setw
and a Honda motorcycle, both awarded to Birgit, and a l'mattress box
spring setw awarded to Gary.
In his Findings of Fact, Conclusions of Law, and Order, dated
April 8, 1992, Judge Sullivan assigned the following items to the
marital estate:
210 Lyndale Lane (increase in value) . . .$ 30,000
2500 Nettie St. . . . . . . . . . 5,000
Husband's retirement benefit. 18,616
. .
Wife's retirement benefit (not vested) 0
.
Husband's deferred savings 40,787
1983Dodgevan . . . . . . . . . . 3,500
1985Honda . . . . . . . . . . . 2,900
1992 Honda Accord . . . . . . . . . 18,160
. .
Paintings and art supplies . . . . 750
Home furnishings . . . . . . . . . 4,725
Total Marital Estate . . . . . . . . $124,438
Liabilities against the marital estate included the entire value of
the 1992 Honda, a $3,500 balance owed on the Dodge van, and $1,550
in debts related to the house at 210 Lyndale Lane.
Judge ~ullivandivided the parties1 assets and liabilities as
follows:
Assets Gary
Increase in value of
210 Lyndale Lane $ 15,000
2500 Nettie 0
Husband's retirement 9,308
Husband's savings 20,394
1983 Dodge van 0
1985 Honda 2,900
1992 Honda 18,160
Paintings and art supplies 0
Home furnishing 2,362
TOTAL $ 68,124 $ 56,314
Liabilities
Mortgage
Masonry debt
Home remodeling
1992 Honda
Dodge van
NET TOTAL $ 48,414 $ 52,814
Gary was ordered to pay Birgit her share of the increased
value of the house within ninety days, less the $2,200 due from
Birgit to equalize the division of the marital estate. Gary was
also ordered to pay Birgit $500 "for the purchase of a mattress and
box springs," and $750 for attorney's fees.
Gary presents the following issues for review:
1. Whether the District Court arbitrarily assigned a value,
unsupported by any evidence, to the family home for the
purpose of establishing a net increase in its value.
2. Whether the District Court arbitrarily assigned a value,
unsupported by any evidence, to the box springs and
mattress that it had ordered Gary to give Birgit in March
1992.
3. Whether the District Court should have included a Honda
motorcycle in its January 1992 Order Distributing Marital
Property.
4. Whether the District Court properly awarded Birgit
attorney's fees.
The primary issue at the November 1991 hearing and in this
appeal is the appreciation in value of the house at 210 Lyndale
Lane. The District Court determined that the house had appreciated
in value during the marriage by $30,000. Both parties challenge
this figure on the grounds that the court arbitrarily assigned a
1981 value to the property. Gary argues that the 1981 value should
be higher, thus reducing the increase in value assigned to the
marital estate, while Birgit argues that the 1981 value should be
lower.
Neither party disputes the District Court's conclusion that
the fair market value of the house in 1991 was $52,009. Birgitts
appraiser valued the house at $64,500, based on sales of comparable
single-family homes, while Gary's appraiser valued it at $47,600,
based on sales of comparable mobile homes. We hold that the court
acted within its discretion in selecting a figure within the range
of figures submitted in evidence. In re Marriage of Gerhart
(1990), 245 Mont. 279, 800 P.2d 698. The issue is whether the
court abused its discretion in assigning a 1981 value to the house.
Gary and his first wife (Karen Gray) bought the house as a
mobile home in 1974. They had already purchased and paid for the
lot. Between 1974 and 1976 they borrowed money to put in a
basement and to install a double garage. Gary testified at the
November 1991 hearing that when he married Birgit in 1981 he had
invested the following amounts:
Lotpurchasedin1971 . . . . . . . . .$1,975
. . . . . 6,980
Home improvement loans, 1974-1976
. . . . . 16,020'
Payments formobile home, 1974-81
'
Ninety payments at $178. Gary presented bank statements at
the hearing showing that 90 payments had been made before August
23, 1981, when he married Birgit.
TOTAL . . . . . . . . . . . . . . $24,9752
When Gary and Karen Gray were divorced in 1978, they agreed
that the house at 210 Lyndale Lane was to be Gary's sole and
separate property, subject to the balance payable on the purchase
price, and that their equity in the house was $9,256. This figure
is equal to the sum of the fifty-two payments that had been made
before Gary and Karen Gray signed their property agreement in 1978.
Gary agreed to pay Karen half that amount, or $4,628, when he sold
the house. At the November 1991 hearing, Birgit presented the 1978
property agreement as evidence of Gary's equity in the house at the
time of their marriage.
Gary disputed the implication that $9,256 represented the
value of the house in 1978 and stated that Karen Gray had proposed
' a figure that she felt would be fair and equitable.
' In his view,
as expressed at the hearing, the value of the house in 1981 was the
amount he had actually invested. No evidence on the fair market
value of the house in 1981 was presented at the hearing.
Birgit testified that the house was in very poor shape when
she moved in, in 1980: the roof leaked, the basement was
unfinished, the kitchen cabinets were falling apart, the only
bathroom needed repairs, and the lot had not been landscaped.
After she and Gary were married, they replaced the roof and built
Gary provides a different figure in his brief, asserting
that he spent $32,378, including 87 payments on the mobile home,
before he married Birgit. He did not itemize this figure. It may
include interest on the home improvement loans, which the court
specifically disallowed when Gary presented evidence of the loans
at the hearing.
a deck; covered the entire house with brick; finished the basement
and installed a new bathroom; replaced all the kitchen cabinets;
replaced all the interior doors and panelling; rewired the entire
house; and landscaped the yard. Birgit said that she had done at
least half the work on these improvements and had used part of her
salary to pay for building materials.
In estimating the 1981 value for the purpose of determining
the increase in value during the parties' marriage, Judge Sullivan
relied on the I1equityn in the 1978 property settlement. In his
Findings of Fact, Conclusions of Law, and Order he calculated the
1981 value as follows:
Equity in 1978 . $ 9,256
First wife's lien . . . . . . 4,678
.
Balance due on August 24, 1981 8,075
TOTAL . . . . . . . . . . $22,009
The $8,075 balance due was provided by Gary's lawyer, Daniel
R. Sweeney, on February 24, 1992, in a letter responding to the
judge's post-hearing request. Judge Sullivan also asked Mr.
Sweeney to obtain an opinion as to the value of the property from
appraiser James Burgess. Mr. Sweeney sent a copy of Burgess'
letter, dated February 14, 1992, to Judge Sullivan on February 24.
Another copy was submitted to this Court as an appendix to Gary's
brief. It expresses the view that the value of a double wide
mobile home situated on a one acre lot would remain nearly constant
from 1978 to the present.
Gary points out in his brief that Burgessv opinion referred to
the entire 1978-92 period, not merely to the 1978-81 period,
implying that during this fourteen-year period the house
depreciated to an extent that balanced the value of the post-1981
improvements. Therefore, he argues, the net increase in the value
of the home was zero.
Birgit contends in her brief that the District Court properly
assumed, based on Burgess' opinion, that the house did not increase
in value between 1978 and 1981, and that the court properly allowed
for an increase in value after 1981 because the parties "converted
the home to something resembling a conventional home." If the
court erred at all, Birgit says, it was to overvalue the house by
adding the amount of Karen Gray's lien to Gary's 1978 equity,
thereby counting the same value ($4,678) twice. Instead, she
argues, the court should have added to Gary's 1978 equity ($9,256)
the sum of the thirty-seven payments he made after his first
divorce and before their marriage, or $6,586,3 for a premarital
value of $15,842 and a postmarital appreciation of $36,167.
A district court has broad discretionary power to determine
the value of property in a dissolution action. In re Marriage of
Milesnick (1988), 235 Mont. 88, 94, 765 P.2d 751, 755. The court's
valuation need only be reasonable in light of competent evidence
submitted. In re Marriage of Hockaday (1989), 237 Mont. 413, 418,
773 P.2d 1217, 1221. We will review alleged valuation errors only
on a showing that the court acted arbitrarily or clearly abused its
discretion so as to create a substantial injustice. Hockadav, 773
Gary actually made thirty-eight payments between his first
divorce and his marriage to Birgit, adding $6,764 to his total
investment.
P.2d at 1221; see also In re Marriage of Danelson (Mont. 1992), 833
P.2d 215, 49 St.Rep. 597 (discretionary judgments by the trial
court are presumed to be correct and will not be disturbed absent
an abuse of discretion).
We hold that in the present case the District Court did not
abuse its discretion in assigning a premarital value of $22,009 to
the house at 210 Lyndale Lane, and that its action did not create
a substantial injustice. Although Judge Sullivan offered no
rationale for adopting the "equityw figure in Garyts 1978 property
settlement or for adding to that figure the lien held by Gary's
first wife, the total sum he adopted for the 1981 value is unlikely
to be substantially different from the true value. In the absence
of competent evidence from either party, he arrived at a reasonable
estimate.
I1
Did the District Court arbitrarily assign a value of $500 to
the box springs and mattress Gary was ordered in March 1992 to give
Birgit?
This question arose from the division of personal property
Judge Sullivan ordered on January 24, 1992. The Order consisted of
a list of items to be distributed to each party. This list closely
resembled but was not identical to a list submitted by Gary shortly
after the November 1991 hearing. Gary's list designated a "six-
piece master bedroom setw as Birgit's personal property and a
Itmattress box spring setM as Garyts personal property. Judge
Sullivan assigned the six-piece bedroom set to Birgit and the
mattress box spring set to Gary.
In February, 1992, Birgit filed a motion to hold Gary in
contempt because he had not given her the items assigned to her in
the court's January 24 Order. She amended her motion in March to
reflect the fact that some items had been turned over to her, but
in poor or unusable condition. Gary responded that he had in fact
turned over all items except for those Birgit had refused to take.
The District Court heard this matter on March 24, 1992.
At the March hearing it became clear that Birgit and Gary did
not agree as to the components of the "six-piece bedroom set."
Gary presented a receipt showing that furniture comprising a six-
piece bedroom set had been purchased by the couple without a
mattress or box springs. Birgit testified that she understood the
bedroom set to include the queen size mattress and box springs that
she and Gary had used with the bedroom furniture at 210 Lyndale
Lane. Gary testified that Birgit had taken two twin size box
spring-and-mattress sets with her when she and her son moved out of
the house, and that he understood that the queen size set in the
bedroom was the set awarded to him in the January 24 Order.
Birgit testified that one of the twin box spring sets was
broken and unusable and that she was sleeping on the floor in a
sleeping bag. Judge Sullivan said to Gary:
I want you to see that she has at least something to
sleep on by tomorrow night at nine o'clock. You give her
that queen sized mattress and box springs that was
originally with your six-piece bedroom set or another set
of mattress and box spring by nine o'clock tomorrow
night, delivered to her house.
These instructions apparently were without effect, and the court's
final order, entered April 8, 1992, included a $500 payment to
Birgit for the purchase of a mattress and box springs.
Gary argues that the true value of the disputed mattress and
box spring set was $250. At the hearing in November 1991 he
offered a list of various household furnishings that had been
appraised by a Butte furniture store. Included on this list was a
"Serta queen size bed1' valued at $250. No other evidence was
presented to establish the value of the mattress and box springs.
Birgit argues that the court properly awarded $500 because
that sum ltcloser
approaches the replacement value of a mattress and
box springs, and that the court could have fined Gary for contempt
after he refused to deliver them.
We hold that the District Court had discretion to determine an
appropriate value for an item it had repeatedly ordered Gary to
deliver to Birgit, and that it did not abuse that discretion in
determining that $500 was an appropriate value. See Milesnick, 765
P.2d at 755, and In re Marriage of Gallinger (1986), 221 Mont. 463,
719 P.2d 777 (upholding a district courttsdivision of property on
the grounds that the court had employed conscientious judgment in
arriving at a substantially just result).
I11
Should the District Court have included the Honda motorcycle
in its January 1992 Order?
A Honda motorcycle was awarded to Birgit in the District
Court's January 1992 Order. At the hearing in November 1991,
Birgit testified that she and Gary had given the motorcycle to her
son John, after buying it from Gary's sister, and that its current
value was $75. Later, Gary testified that he and Birgit had not
bought the motorcycle and that his sister still had title to it.
In the following exchange, the court ordered Gary to buy the
motorcycle and give it to Birgitts son, John:
THE COURT: We're talking about a bike valued at $75,
right?
THE WITNESS [Gary]: Yes.
THE COURT: Is that worth spending this time talking
about it?
THE WITNESS: Not to me, Your Honor.
THE COURT: Well, buy the bike. Give it to her. John is
using the bike, you dontt have kids that are using the
bike, right?
THE WITNESS: Right.
THE COURT: Okay. That's going to John, Mr. Sweeney.
Gary argues that the motorcycle belonged to his sister and
therefore could not be included in the marital estate. Birgit
argues that because the sister had left the motorcycle with Gary
for several years, she had no real interest in it, and that Gary
could in fact comply with the court's order.
It is the duty of the trial court to resolve conflicts in the
evidence presented, and we will not disturb its findings when they
are based on substantial though conflicting evidence. In re
Marriage of Obergfell (1985), 218 Mont. 83, 708 P.2d 561. We find
that substantial credible evidence supports Judge Sullivan's
decision to award the motorcycle to Birgit.
IV
The final issue is whether the District Court should have
awarded Birgit $750 in attorney's fees.
The District Court found that Birgit was without financial
resources to pay her attorney's fees and awarded her $750 for that
purpose. Gary argues that the court erroneously found that Birgit
had no income beyond her $880 net monthly salary, and that in fact
Birgit received $150 per month in rental income from her house at
2500 Nettie
We find no error on the part of the District Court. In its
Findings of Fact, Conclusions of Law, and Order it reported that
Birgit's monthly income included child support and rental income,
for a total of $1,080, or approximately half the net monthly income
reported for Gary. Because the record indicates that the District
Court was aware of each party's financial resources and obligations
we find no abuse of discretion in the award of attorney's fees.
See In re Marriage of Sullivan (1990), 243 Mont. 292, 794 P.2d 687;
In re Marriage of Carr (1983), 205 Mont. 269, 667 P.2d 425.
Birgit requests attorney's fees for this appeal. Section 25-
20-104, MCA, provides that the successful party shall recover the
costs of appeal from the other party, but attorney's fees are not
included as costs. Allen v. Allen (1978), 175 Mont. 527, 575 P.2d
74. Therefore we deny this request.
Testimony at the November 1991 hearing indicated that
officially the rent for 2500 ~ettie St. was $150 per month but
that the tenants did not always pay it. In his Findings of Fact,
Conclusions of Law, and Order, Judge Sullivan assumed that Birgit
actually received $75 per month as rent for 2500 Nettie St.
AFFIRMED.
Pursuant to Section I, Paragraph 3 ( c ) , Montana Supreme Court
1988 Internal Operating Rules, this decision shall not be cited as
precedent and shall be published by its filing as a public document
with the Clerk of the Supreme Court and by a report of its result
to Montana Law Week, State Reporter, and West Publishing Company.
We concur: I