Marriage of Lassila ( 1996 )


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  •                             NO.    95-215
    IN THE SUPREME COURT OF THE STATE OF MONTANA
    1996
    APPEAL FROM:   District Court of the Fourth Judicial District,
    In and for the County of Missoula,
    The Honorable John W. Larson, Judge presiding.
    COUNSEL OF RECORD:
    For Appellant:
    Arthur D. Agnellino, Athens, Pennsylvania
    For Respondent:
    John H. Gilliam,     Skjelset   Law     Offices,   Missoula,
    Montana
    Submitted on Briefs:         February 8, 1996
    Decided:      March 21, 1996
    Filed:
    Justice William E. Hunt, Sr. delivered the Opinion of the Court.
    Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
    1995 Internal Operating Rules, the following decision shall not be
    cited as precedent and shall be published by its filing as a public
    document with the Clerk of this Court and by a report of its result
    to State Reporter Publishing Company and West Publishing Company.
    Appellant Donald A. Lassila (Donald) appeals the amended order
    of the Fourth Judicial District Court, Missoula County, dissolving
    his   marriage     to    Respondent       Barbara    A.     Lassila (Barbara) and
    dividing their marital property.
    Affirmed.
    The following restated issued are presented on appeal:
    1.     Did the District Court abuse its discretion in its
    division of the parties' respective              retirement     benefits?
    2.     Did the District Court abuse its discretion by not
    granting Donald a set-off equal to part of Barbara's Montana
    retirement     benefits?
    Donald and Barbara were married in 1958 and divorced in 1994.
    Donald     appealed     the   District    Court's    findings,    conclusions,   and
    decree of dissolution to this Court after entry of the decree. We
    previously       remanded      this      case   to    the     District   Court   for
    clarification of its order, and reserved to the parties the right
    to re-assert any alleged error following the issuance of the
    District Court's amended order.             On February 27, 1995, the District
    Court issued its amended findings of fact, conclusions of law, and
    order.     Donald filed the instant appeal shortly thereafter.
    2
    During the parties' marriage, Donald worked for the United
    States Forest Service and Barbara was employed as a teacher. In
    1981, Barbara quit teaching and, against Donald's wishes, withdrew
    her entire Montana retirement fund to start a small ice cream
    business.       The business failed about two years later, and Barbara
    lost her entire investment.                 In 1990, after separating from Donald,
    Barbara moved to Washington State and resumed teaching.                              At the
    time of        this     appeal,      she     remains      employed as a         teacher in
    Washington,        while Donald continues to be employed by the Forest
    Service here in Montana.
    By the time he retires, Donald will have worked for the Forest
    Service for more than thirty years and will receive benefits
    accordingly.          Barbara will receive no retirement benefits from the
    State of Washington unless and until she works there as a teacher
    for five years. After that, she will receive benefits commensurate
    to the number of years worked.
    In its amended decree, the District Court held that each party
    would be entitled to half of that portion of the other party's
    retirement      benefits        which      accrued    during     the   marriage.       Donald
    alleges     this      holding     is erroneous         because    it   places   no   present
    value     on    the     pension      funds,         but   instead      relies   upon     some
    undetermined          future      value.       He further alleges error in the
    District Court's refusal to allow him a set-off equal to part of
    Barbara's Montana retirement, which he claims she "dissipated" in
    her small-business venture.
    A district court's findings of fact regarding the division of
    marital property will not be set aside unless clearly erroneous.
    3
    In re Marriage of Dewitt (Mont. 1995), 905 P..?,d 1084, 1087, 52
    St.Rep. 1089,      1091 (citations omitted).        If the district court's
    judgment is supported by substantial credible evidence, it will not
    be disturbed absent an abuse of discretion.               In re Marriage of
    Griffith (Mont. 1996) I         - P.2d _, _,       53 St.Rep.   28, 30 (citing
    In re Marriage of Maedje (1994), 
    263 Mont. 262
    , 
    868 P.2d 580
    ).
    Did the District Court abuse its discretion in its division of
    the parties' respective         retirement    benefits?
    In its amended order, the District Court set out the formula
    by which the parties' retirement benefits are to be divided.               The
    District Court determined that each party would receive one-half of
    that portion of the other's retirement benefits which was earned
    during the marriage. In effect, the District Court gave each party
    a percentage of the other's total retirement based on the amount of
    benefits accrued during the time the parties were married.             This is
    the so-called "time     rule"    method of dividing a pension.      See Rolfe
    v. Rolfe (1988), 
    234 Mont. 294
    ,             
    766 P.2d 223
    ; In re Marriage of
    Truax    (1995),   
    271 Mont. 122
    , 
    894 P.2d 936
    .
    Donald alleges this formula constitutes an abuse of discretion
    because it gives no present value to either party's retirement
    benefits,     but instead is dependent on how much the retirement
    benefits will be worth whenever the parties retire.               He claims a
    fixed present value is necessary because there is                "great future
    risk"    that the retirement benefits of one party will not vest.
    Generally,   the proper test for determining the value of a
    pension is present value.           In re Marriage of Bowman (1987), 
    226 Mont. 99
    , 108, 
    734 P.2d 197
    ,          203 (citing Kis v. Kis (1982), 196
    
    4 Mont. 296
    ,     
    639 P.2d 1151
    ).             However,    a   court may decline to
    presently value a pension under certain circumstances, and instead
    employ the "time rule"           formula.      The "time rule" is appropriately
    used    if      the    pension     to    be    valued    is    subject to        unknown
    contingencies          which     makes    present       valuation     impractical or
    inequitable.
    Curiously,      Donald argues that the pensions in this case are
    subject to various contingencies, and therefore the District Court
    must give the pensions a present value.                  This directly contradicts
    previous cases where we have held that the "time                     rule"   valuation,
    rather than present valuation, is                      appropriate    if     substantial
    contingencies         exist.     ,
    
    Rolfe 766 P.2d at 226
    ; 
    Truax 894 P.2d at 938
    .    Since Donald himself argues that the pensions are subject to
    such contingencies, we             find no error in the District Court's
    employment of the "time rule" formula in valuing the pension funds.
    The District Court set out a rational formula by which the benefits
    are to be divided.             Donald has failed to show that the employment
    of this formula constitutes an abuse of the District Court's
    discretion.
    Did the District Court abuse its discretion by not granting
    Donald a set-off equal to part of Barbara's Montana retirement
    benefits?
    In 1982, after numerous years working as a teacher in Montana,
    Barbara retired.         She then withdrew all her retirement benefits and
    started a small ice cream store.                   The business subsequently failed
    and Barbara lost her entire investment.
    5
    Section      40-4-202,   MCA,     lists the factors which a district
    court must consider when dividing marital property.                         One such
    factor is whether,           and to what extent, a party has dissipated a
    marital     asset.      Section 40-4-202, MCA.            Donald   argues   that   the
    District Court should have                found that Barbara dissipated her
    retirement and that, had she not done so, Donald would have been
    entitled to part of it.           He contends that the District Court then
    should have used the amount of the dissipated funds as a set-off
    against whatever amount Donald may owe Barbara from his pension.
    Although the District Court found that Barbara's Montana
    pension had been            "dissipated    during   the   marriage,"   no   specific
    finding or conclusion indicates that the District Court used the
    word     "dissipated" to mean that Barbara had frittered the money
    away.      Indeed,     from the testimony presented at the hearing, it is
    uncontroverted that Barbara worked long hours to try to make the
    business      a     going   concern,      albeit    without   success.       Nothing
    indicates that Barbara purposely wasted her retirement.                     There is
    no reasonable basis for penalizing her now, more than ten years
    later,     for a business venture embarked on during the marriage.
    Under     similar   circumstances, this Court refused to allow a set-off
    because of such business losses:
    [Flundamental   legal   principles of    marital    status
    [indicate  that1    spouses  possess    mutual    powers,
    obligations and interests which endure until lawfully
    modified or terminated. One of those powers is the power
    to   freely contract    with others   regarding    marital
    property.   Section 40-Z-301, MCA.    Appellant may have
    used poor judgment in his business transactions . .
    however, he lawfully possessed that power.      The record
    does not indicate the respondent attempted to modify the
    appellant's right to control and dispose of the property
    6
    as he did or that she claimed breach of fiduciary
    obligation by the appellant.
    In re Marriage of Lippert (1981), 
    192 Mont. 222
    , 227-28, 
    627 P.2d 1206
    ,    1209.     The Lippert rationale is directly on point to the case
    at bar.        It is also noteworthy that Donald and Barbara remained
    married for six additional years following the business failure.
    The task of the District Court is to divide the existing
    marital estate at the time that the parties are separated or
    divorced.         Section   40-4-202,   MCA.     It is not the task of the
    District Court to reach back through the years of the marriage and
    attempt to divide assets which, for whatever reason, no longer
    exist.     It was not error for the District Court to refuse to do so.
    The District Court has broad discretion to apportion the
    marital estate in a manner which is equitable to each party under
    the circumstances.          In re Marriage of Binsfield (1995), 
    269 Mont. 336
    ,    343,     
    888 P.2d 889
    , 893 (citation omitted).       We find no abuse
    of discretion in the District Court's apportionment of the marital
    estate in this case.          Accordingly,     the decree is affirmed.
    We Cog