In Re Petition of Fenzau , 311 Mont. 163 ( 2002 )

No. 00-853
IN THE SUPREME COURT OF THE STATE OF MONTANA
2002 MT 197IN RE THE PETITION OF
A. CAROLINE FENZAU,
Petitioner and Respondent,
and
WILLIAM FENZAU,
Respondent and Appellant.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
Honorable Ted O. Lympus, Judge Presiding
COUNSEL OF RECORD:
For Appellant:
Patrick D. Sherlock, Sherlock & Nardi, Kalispell, Montana
For Respondents:
George W. Best, Attorney at Law, Kalispell, Montana
Submitted on Briefs: August 30, 2001
Decided: September 5, 2002
Filed:
__________________________________________
Clerk
Justice Jim Rice delivered the Opinion of the Court.
¶1 A. Caroline Fenzau, Petitioner and Respondent (Caroline),
filed a petition for dissolution of marriage against William A.
Fenzau, Respondent and Appellant (William), on May 27, 1998.
William appeals the decree of dissolution entered by the District
Court of the Eleventh Judicial District, Flathead County. We
affirm in part and remand for further proceedings consistent with
this opinion.
¶2 William raises the following issues on appeal:
¶3 1. Whether the District Court erred by allowing and
considering evidence of physical and emotional abuse of Caroline by
William.
¶4 2. Whether the District Court failed to equitably apportion
the marital estate.
¶5 3. Whether the District Court erred by not exercising
independent judgment when it adopted Caroline’s proposed findings
of fact and did not establish the marital estate’s net worth.
¶6 4. Whether the District Court properly considered the issue
of attorney fees.
FACTUAL AND PROCEDURAL BACKGROUND
¶7 Caroline and William were married on March 12, 1993, in Reno,
Nevada. No children were born of the marriage.
¶8 William was 60 years of age at the time of the dissolution, in
good health, and retired from Turner Construction Company, where he
had been a project manager for approximately thirteen years. At
the time of the dissolution, William was incarcerated in federal
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prison on a weapons charge arising out of his earlier conviction of
felony domestic violence upon Caroline. Caroline was 53 years old,
in poor health, disabled, and receiving Social Security benefits of
approximately $770 per month due to a parasitic problem in her
stomach and a resulting clotting deficiency, conditions which
predate her marriage to William. Although Caroline was receiving
disability payments at the time of marriage, the present state of
her disability is a direct result of physical abuse she sustained
during the marriage with William.
¶9 Caroline entered the marriage with approximately $24,500 in
cash; antiques worth $25,000; a doll collection worth $15,000; a
vehicle valued at $17,000; $10,000 in equipment; and $5,000 from
her mother’s estate. William entered the marriage with $100,000 in
cash, which was an inheritance from his mother; an Employee Stock
Ownership Plan (ESOP) in the amount of approximately $11,321; a
401(K) plan valued at $51,000; a $588 per month pension once he
turns age 65; and a coin collection valued at approximately $500.
¶10 In 1995, William and Caroline purchased a bed and breakfast
business in Emigrant, Montana. In order to purchase the bed and
breakfast, William liquidated his 401(K) and Caroline contributed
most of her premarital assets. In 1997, the parties sold the bed
and breakfast, and purchased a house for approximately $222,000 in
Somers, Montana. They then divided their excess funds into two
separate investment accounts, each placing $88,000 into separate
Linsco/Private Ledger (LPL) stock accounts. At the time of
dissolution, which followed losses in the stock market, William’s
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account was valued at $6,683 and Caroline’s account was valued at
$1,285.
¶11 The District Court found that Caroline “sustained over seven
years of abuse during the course of her relationship” with William.
On one occasion, William cut Caroline’s wrist while trying to cut
the phone line when she was dialing 911. Caroline also suffered
facial bruises, a concussion, and broken teeth. In another
incident, William knocked Caroline to the floor and stomped on her
lower back, crushing a disc in her back. She was transported to a
hospital by ambulance, and hospitalized for seven days. In 1994,
William pushed Caroline down an outside stairway, injuring her
right knee, which required orthoscopic surgery. After the couple
moved to Somers in May 1997, William attacked Caroline one night
after she refused to have sex with him. He tied her hands and feet
with a telephone cord, bent her over a desk, and raped her.
William then locked Caroline in a closet, keeping her there for
eighteen hours.
¶12 Caroline’s testimony recounted additional incidents of abuse
during the marriage, including over a half dozen concussions, the
loss of most of her teeth, being kicked in the stomach, being
sexually assaulted, and having a gun put to her head and threatened
with her life. During their marriage, William was incarcerated
for assault on numerous occasions.
¶13 William denied causing these injuries. William asserted that
the injuries Caroline claims were either due to her disability or
caused by accidents or other natural causes. He argues that none
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of the medical records indicate he caused any of these injuries to
her. However, William does not deny being arrested for domestic
abuse nor his criminal record arising from charges related to his
abuse of Caroline.
¶14 Caroline has ongoing medical expenses as a result of her
injuries. She takes several prescription medications for her
physical pain and emotional injuries. The current cost of her
prescriptions is about $150 to $190 per month. Caroline faces at
least $10,000 in future dental bills to repair the teeth that were
broken or knocked out. She also faces probable surgery on her back
due to damaged discs. Caroline will require physical therapy
throughout the course of her life at a cost of approximately $85
per week. Additionally, Caroline faces an estimated $33,000 in
future counseling costs to address the mental and emotional
consequences of William’s actions.
¶15 Prior to the dissolution proceedings, William retained
attorney Patrick D. Sherlock (Sherlock) to represent him on
criminal charges of Partner Assault and Sexual Intercourse Without
Consent (6 counts), arising out of his attacks upon Caroline, as
well as other criminal charges. Initially, Sherlock consulted with
District Court Judge Ted O. Lympus regarding William’s eligibility
for appointment of a public defender. Judge Lympus determined
William was not entitled to a public defender, given the value of
his assets. William then assigned one-half of his undivided half
interest in the parties’ home to Sherlock as security for the fees.
Although Sherlock petitioned the District Court to approve his
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assignment and his fee, the Final Decree of Dissolution failed to
address Sherlock’s motion, simply holding that each party should
pay their own attorney fees.
¶16 In distributing the assets in the Final Decree of Dissolution,
the District Court awarded Caroline the following assets: the
marital residence located in Somers, Montana; a 1992 Chevrolet
pickup; an inoperable 1980 Datsun automobile; a 1995 sixteen-foot
trailer; recreational equipment; and miscellaneous household
furnishings, heirlooms, art, jewelry, silver, crystal, and china.
Additionally, Caroline was awarded William’s Turner Corporation
ESOP. The assets awarded to Caroline were valued at $263,571.
Caroline was assigned the debts incurred by her subsequent to the
parties’ separation, as well as all debt related to her medical
expenses.
¶17 The District Court awarded William his Turner Corporation
pension plan and personal effects, subject to any debt he had
incurred subsequent to the parties’ separation.
STANDARD OF REVIEW
¶18 In a dissolution proceeding, this Court reviews a district
court’s findings of fact to determine whether the district court
clearly erred. The clearly erroneous standard involves a three-
part test: (1) this Court will review the record to see if the
findings are supported by substantial evidence; (2) if the findings
are supported by substantial evidence, this Court determines if the
trial court has misapprehended the effect of the evidence; and (3)
if substantial evidence exists and the effect of the evidence has
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not been misapprehended, this Court may still find that a finding
is clearly erroneous when, although there is evidence to support
it, a review of the record leaves this Court with the definite and
firm conviction that a mistake has been committed. Pfeifer v.
Pfeifer (1997), 282 Mont. 461, 467, 938 P.2d 684, 688. We review a
trial court’s conclusions of law to determine whether those
conclusions are correct. In re Marriage of Harper, 1999 MT 321, ¶
17, 297 Mont. 290, ¶ 17, 994 P.2d 1, ¶ 17.
DISCUSSION
¶19 Did the District Court err by allowing testimony and evidence
in relation to the physical and emotional abuse of Caroline by
William?
¶20 William moved to strike allegations of his abuse of Caroline
from her pleadings and to exclude evidence of such abuse in the
dissolution proceeding. The District Court denied William’s
motions. On appeal, William asserts the District Court erred in
admitting and considering evidence of the abuse, citing the
prohibition against consideration of marital misconduct set forth
in § 40-4-202, MCA, and this Court’s affirmation of that principle
in our decisions.
¶21 The District Court made extensive findings about the physical
and emotional abuse inflicted upon Caroline by William, including
the facts referenced earlier in this opinion, as well as numerous
other instances. Although not raised as an issue on appeal,
William’s briefing also offers the contention that the findings of
abuse are not supported by the evidence. However, the District
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Court’s findings were clearly supported by substantial evidence.
The Court found that “the present state of [Caroline’s] disability
is a direct result of her marriage to [William].” The District
Court also noted the following findings about Caroline among the
reasons it gave for the distribution of the marital estate:
She is left with a damaged and disabled body solely as a
result of Respondent’s abuse;
She faces certain future physical, emotional and mental
pain with a lifetime of medical needs, again solely as a
result of such abuse inflicted upon her by Respondent.
¶22 The District Court forthrightly concluded that its
distribution of property was “[b]ased upon the evidence clearly
showing the extent of the abuse, both physical and emotional,
inflicted upon Petitioner by Respondent, [and] Petitioner’s
resultant and continuing need for medical treatment.”
¶23 Section 40-4-202, MCA, provides that the trial court shall
equitably apportion marital property between the parties “without
regard to marital misconduct.” We have thus held that
“[a]pportionment of a marital estate is based on equitable
principles and whether parties are at ‘fault’ should not affect the
court’s division of assets.” In re Marriage of Griffith (1993),
260 Mont. 124, 141, 860 P.2d 78, 89.
¶24 In Collette v. Collette (1981), 190 Mont. 500, 621 P.2d 1093,
the District Court required the husband to make all future payments
on the family home in “partial recompense” for his failure to
provide the wife with an accounting of her share of proceeds from a
sale of property. This Court reversed, finding that the District
Court’s actions were “akin to an assessment of punitive damages,”
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and a violation of § 40-4-202, MCA, which “expressly provides that
the court is not to consider any marital misconduct in disposing of
the marital assets.” 190 Mont. at 504, 621 P.2d at 1095. The
Court reached a similar result in In Re Marriage of Griffith,
supra.
¶25 In In re Marriage of Bultman (1987), 228 Mont. 136, 740 P.2d
1145, the wife asserted that the District Court impermissibly
relied upon marital misconduct in its division of the marital
estate. The wife cited the District Court’s reference to her
placement of the husband in the State Hospital at Galen, that the
husband had not been permitted to return to the family home, and he
had no access to the parties’ assets. However, in analyzing the
division of the estate, this Court found that the District Court
had made those findings to explain its decision to order the sale
of the family home and to equally divide the proceeds between the
parties, not to punish the wife. Bultman, 228 Mont. at 138, 740
P.2d at 1147. Similarly, we have held that the District Court’s
reference to a substantial loss in restaurant sales under a
spouse’s management did not interject fault into the dissolution,
but simply aided the court in considering and equitably
distributing the marital estate. In the Marriage of Hanni, 2000 MT
59, 299 Mont. 20, 997 P.2d 760.
¶26 In this case, the District Court considered Caroline’s medical
and financial needs resulting from William’s abuse during the
marriage when apportioning the marital estate. William argues this
violates § 40-4-202, MCA, which prohibits the consideration of
9
marital misconduct in dividing the marital estate. However, a
distinction exists between awarding a larger portion of the marital
estate in order to penalize marital misconduct, and, on the other
hand, considering the medical and financial consequences of marital
abuse in the allocation of the marital estate. Although this Court
has not had occasion to address this distinction previously, other
states with similar statutory prohibitions on the consideration of
marital misconduct have done so.
¶27 In Burt v. Burt (Minn. 1986), 386 N.W.2d 797, the trial court
had found that the wife’s earning capacity had been impaired as the
result of physical abuse inflicted by the husband during the
marriage, and awarded her maintenance therefor. Burt, 386 N.W.2d
at 799. The Minnesota Supreme Court affirmed, determining that
“[t]he statutory prohibition against considering marital misconduct
does not foreclose a judge from considering the financial needs
resulting from a chronic health problem that in turn was caused by
physical abuse during the marriage.” 386 N.W.2d at 800.
¶28 In In re Marriage of Severino (Ill. 1998), 698 N.E.2d 193, the
court considered the emotional state of the petitioner resulting
from physical abuse during the marriage in awarding maintenance to
the petitioner. “Noting that this . . . ‘fragile’ condition of
petitioner was apparently caused by the abuse from respondent does
not mean that the trial court considered the conduct of respondent
in an effort to punish him.” Severino, 698 N.E.2d at 195.
Likewise, in Wheeler v. Upton-Wheeler (Nev. 1997), 946 P.2d 200,
the Nevada Supreme Court determined that the economic consequences
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of spousal abuse can be considered in the division of property and
assets. “If spousal abuse . . . of one party has had an adverse
economic impact on the other party, it may be considered by the
district court in determining . . . [the] division of . . .
property.” Wheeler, 946 P.2d at 203.
¶29 The Court finds these holdings to be well founded. Likewise,
this Court holds that the statutory prohibition against considering
marital misconduct does not foreclose the district court from
considering the medical and financial needs of a spouse which
result from the other spouse’s physical, mental, or emotional abuse
during the marriage. Consideration of the economic effects of
abuse, such as medical expenses and a person’s ability to work and
earn an income, is not an interjection of fault or an assignment of
blame which is contemplated by the statutory prohibition of
judicial consideration of marital misconduct. If the economic
impact of abuse is excluded from consideration in making a division
of the marital estate, a truly equitable apportionment cannot
result.
¶30 We hold that the admission and consideration of evidence of
the consequences of marital abuse, and the findings made by the
District Court herein, were proper and aided the District Court in
fashioning an equitable distribution of the marital estate. These
findings did not interject fault or marital misconduct into the
dissolution, but allowed the District Court to give consideration
to the very real effects of William’s abuse of Caroline, and make
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provision for her ongoing needs. The District Court did not err in
so doing.
¶31 Did the District Court fail to equitably apportion the marital
estate?
¶32 Section 40-4-202, MCA, governs the distribution of property in
a marriage dissolution, and lists the factors the district court
must consider in making an equitable distribution. The statute
provides in part:
In a proceeding for dissolution of a marriage . . . the
court, without regard to marital misconduct, shall . . .
finally 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. In making the
apportionment, the court shall consider the duration of
the marriage and prior marriage of either party; the age,
health, station, occupation, amount and sources of
income, vocational skills, employability, estate,
liabilities, and need of each of the parties; custodial
provisions; whether the apportionment is in lieu of or in
addition to maintenance; and the opportunity of each for
future acquisition of capital assets and income.
Section 40-4-202, MCA.
¶33 William argues the District Court did not divide the marital
estate equitably, because Caroline received substantially more of
the marital estate than he received. Further, William argues that
the District Court failed to consider his contributions to the
marital estate.
¶34 In dividing the assets, the District Court determined that the
majority of both parties’ premarital assets were invested into the
marital estate. Additionally, the District Court found that
William was in good health, would be employable following his
release from prison, and had the ability to earn income and acquire
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assets. On the other hand, the District Court found that Caroline
was in poor health, disabled, physically unable to acquire gainful
employment, and did not have the ability to earn adequate income or
assets to provide for her needs. In addition to not being able to
earn income, the District Court found that Caroline has inevitable
expenses arising from William’s abuse. As set forth above, the
District Court extensively documented Caroline’s medical needs and
expenses.
¶35 The District Court awarded Caroline marital assets in lieu of
maintenance, in accordance with §§ 40-4-202 and 40-4-203, MCA. The
District Court reasoned that “in lieu of spousal maintenance to
which she is clearly entitled, . . . but payment of which by
[William] cannot be relied upon, . . . it is fair and equitable to
distribute the bulk of the tangible marital assets to [Caroline].”
Given the fact that William was incarcerated at the time of the
dissolution hearing and not working, his ability to make regular
maintenance payments was recognizably difficult. Thus, the
District Court made the reasonable choice of awarding Caroline a
larger portion of the marital estate, rather than providing her
with maintenance.
¶36 The District Court’s findings in this case reflect that Judge
Lympus considered, among other things, the duration of the
marriage; the parties’ assets; their health, occupation, amount and
sources of income; the needs of each of the parties; the
opportunity of each for future acquisition of capital assets and
income; and apportionment of property to Caroline in lieu of
13
maintenance, all of which are consistent with § 40-4-202, MCA.
Accordingly, we hold that the District Court did not err in
apportioning the marital estate.
¶37 Did the District Court err by not exercising independent
judgment when it did not establish the marital estate’s net worth
and adopted Caroline’s proposed findings of fact?
¶38 First, William argues the District Court failed to exercise
independent judgment when it failed to establish the marital
estate’s net worth. In support of his argument, William cites In
re the Marriage of Gochanour, 2000 MT 156, 300 Mont. 155, 4 P.3d
643, and In re the Marriage of Smith (1994), 264 Mont. 306, 871
P.2d 884. In those cases, we held that without a finding of the
marital estate’s net worth, this Court cannot determine if the
property was equitably divided. Gochanour, ¶ 42; Smith, 264 Mont.
at 310-11, 871 P.2d at 887.
¶39 In In re Marriage of Harkin, 2000 MT 105, ¶ 31, 299 Mont. 298,
¶ 31, 999 P.2d 969, ¶ 31, we concluded that the District Court did
not abuse its discretion by not making a specific finding of fact
regarding the total assets and liabilities of the marital estate,
holding “a net valuation by the district court . . . is not always
mandatory.” Harkin, ¶ 31 (quoting In re Marriage of Walls (1996),
278 Mont. 413, 417, 925 P.2d 483, 485). In determining whether a
finding of net worth is necessary, we have stated that “the test is
whether the findings as a whole are sufficient to determine the net
worth and to decide whether the distribution was equitable.”
Harkin, ¶ 31; Walls, 278 Mont. at 417, 925 P.2d at 485; In re
14
Marriage of Stephenson (1989), 237 Mont. 157, 160, 772 P.2d 846,
848.
¶40 In this case, the District Court made findings of fact as to
the value of Caroline’s and William’s significant assets and debts.
Although the District Court did not make a specific finding of the
estate’s net worth, the findings of fact taken as a whole are
sufficient to determine whether the property distribution was
equitable. Harkin, ¶ 31; Walls, 278 Mont. at 417, 925 P.2d at 485;
Stephenson, 237 Mont. at 160, 772 P.2d at 848. Accordingly, we
hold the District Court did not err in failing to determine the net
worth of the marital estate.
¶41 Second, William argues the District Court failed to exercise
independent judgment by adopting most of Caroline’s proposed
findings of fact. William claims the District Court did not give
individual treatment to the issues presented by the parties. We
disagree.
¶42 We have held that “the District Court can adopt a party’s
proposed findings of fact and conclusions of law if they are
sufficiently comprehensive and pertinent to the issues to provide a
basis for a decision and are supported by the evidence.” In Re the
Marriage of Ereth (1998), 232 Mont. 492, 495, 757 P.2d 1312, 1314.
Contrary to William’s argument, the record indicates that the
District Court did not simply “rubber-stamp” Caroline’s findings of
fact and adopt her findings as its own. The District Court
properly considered the evidence, the credibility of the witnesses,
and exercised independent judgment in issuing its findings and
15
conclusions. Accordingly, we hold the District Court did not err
in making its findings of fact and conclusions of law.
¶43 Did the District Court properly consider attorney fees?
¶44 William argues that the District Court “side-stepped” the
attorney fee issue by simply ordering each party to pay their own
attorney fees and costs. He contends that attorney fees in this
case for both his criminal defense and his representation in this
dissolution proceeding are “necessities of life” under § 40-4-121,
MCA, which are properly payable from the marital estate. William
further asserts that the District Court judge verbally indicated
that attorney fees would be awarded.
¶45 After being disqualified for appointment of a public defender,
William retained Sherlock to represent him on the criminal charges.
On November 5, 1998, William executed an assignment of one-half of
his undivided half interest in the home jointly owned by him and
Caroline to Sherlock as security for Sherlock’s fees. However,
because of the pending dissolution proceeding, a restraining order
was in effect restricting the parties from encumbering or
transferring any property, whether jointly or separately held,
“without either the consent of the other party or an order of the
court, except in the usual course of business or for the
necessities of life.” Section 40-4-121, MCA. After William and
Caroline failed to reach an agreement on a method for securing
William’s legal representation, William moved for a lift of the
stay, indicating in his motion that he had been charged with
several felony counts and did not have funds to hire legal counsel.
16
The District Court, on September 30, 1999, lifted the restraining
order “to the extent that [William] be allowed to encumber his
undivided half interest” in the parties’ home, which was owned
jointly. The assignment of interest from William to Sherlock was
thereafter recorded on October 4, 1999. Then, without explanation,
on February 3, 2000, the District Court vacated its September 30,
1999, order which had lifted the restraining order, thus
reinstating it. However, William’s assignment of the one-half
interest in the home to Sherlock remained of record. The District
Court failed to address either the assignment or the fees incurred
by William in defending himself against the criminal charges,
holding only that each party should bear his or her own attorney
fees related to the dissolution.
¶46 We affirm the District Court to the extent it addressed the
fee issue. We find that the District Court’s holding that each
party would bear his or her own attorney fees related to the
dissolution proceeding was a proper exercise of its discretion
herein.
¶47 However, the validity and status of the assignment and the
issue of the fees related to William’s criminal representation were
left unresolved. Therefore, we remand this matter for further
proceedings to address these issues. The District Court is
directed to determine the validity of William’s assignment of his
interest in the home, jointly owned by him and Caroline, to
Sherlock as security for Sherlock’s fees. Further, the District
Court shall determine whether William’s criminal defense fees are
17
properly payable from the marital estate. Finally, if the District
Court finds the criminal fees are payable from the marital estate,
it shall determine the amount of fees which shall constitute a
reasonable attorney fee for William’s criminal representation.
¶48 Accordingly, we affirm in part and remand to the District
Court for further proceedings consistent with this opinion.
/S/ JIM RICE
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We concur:
/S/ JIM REGNIER
/S/ PATRICIA COTTER
/S/ W. WILLIAM LEAPHART’
/S/ JAMES C. NELSON
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