Kessler v. Kessler

March 23 2011
DA 10-0395
IN THE SUPREME COURT OF THE STATE OF MONTANA
2011 MT 54IN RE THE MARRIAGE OF
CELEST MARIE KESSLER,
Petitioner and Appellee,
and
WILLIAM CHARLES KESSLER,
Respondent and Appellant.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and For the County of Yellowstone, Cause No. DR 09-0452
Honorable Gregory R. Todd, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Kevin T. Sweeney, Attorney at Law, Billings, Montana
For Appellee:
J. Reuss; Guthals, Hunnes & Reuss, P.C., Billings, Montana
Submitted on Briefs: February 9, 2011
Decided: March 23, 2011
Filed:
__________________________________________
Clerk
Justice Brian Morris delivered the Opinion of the Court.
¶1 William Kessler (William) appeals from the decree of the Thirteenth Judicial District,
Yellowstone County, that dissolved his marriage to Celest Kessler (Celest) and distributed
their marital estate. We affirm.
¶2 We consider the following issues on appeal:
¶3 Did the District Court incorrectly allow William to represent himself pro se after it
had appointed William a guardian ad litem due to mental health concerns?
¶4 Did the District Court improperly distribute Civil Service Retirement System benefits?
¶5 Did the District Court improperly distribute appreciation on William’s inherited
property?
FACTUAL AND PROCEDURAL BACKGROUND
¶6 Celest and William married on January 26, 1980. They have two adult children who
are capable of self-support. William worked as a Revenue Agent for the U.S. Treasury until
his disability and retirement on March 1, 2008. Celest holds an accounting degree and works
as an accountant in Billings, Montana. Celest petitioned for dissolution of marriage on April
22, 2009.
¶7 William initially retained attorney Connie Camino to represent him in the dissolution.
Camino filed a petition to appoint a guardian ad litem on June 15, 2009. Camino had
learned from William’s psychologist, Dr. William Bredehoft, that William suffered from
organic affective disorder. Bredehoft advised Camino that William had been seeing a
psychiatrist, Dr. Kelso, and had been taking psychiatric medication. Bredehoft opined that
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William could not represent himself competently in stressful situations such as being in a
court setting. The District Court appointed William’s sister, Colleen Kirven, as guardian ad
litem on June 17, 2009.
¶8 Camino served Celest with William’s preliminary asset and liability disclosure and
conducted initial discovery. Camino withdrew as counsel on February 8, 2010. The record
discloses only that Camino withdrew for good cause and without objection. Camino asked
in her motion to withdraw that the court give William enough time to retain new counsel.
Camino mailed the case file to Colleen on February 10, 2010. In her letter, Camino advised
Colleen to seek an independent evaluation of the value of William’s Civil Service
Retirement System (CSRS) disability pension and expressed her hope that William had
retained new counsel. Camino copied William on the letter.
¶9 William chose not to retain another attorney. William filed an entry of appearance
pro se on February 25, 2010. The record does not contain evidence of Colleen’s
involvement in William’s choice to represent himself pro se. The court held a trial on the
morning of May 28, 2010. Colleen accompanied William throughout the trial. William
informed the court at the beginning of the trial that he would represent himself pro se and
that Colleen’s husband, a Wyoming attorney, would sit with him through the trial. Both
William and Celest testified and offered exhibits during the trial.
¶10 The marital estate consisted of approximately $1.5 million worth of assets. William’s
CSRS disability benefit comprised the largest asset of the marital estate with a present value
of $860,201. William selected 100% survivor benefits payable to Celest when he retired.
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Celest testified that it was not feasible for William to pay one half of his disability to her.
The court found that William could not meet his monthly expenses if Celest received one-
half of his CSRS benefits.
¶11 Legal Economic Evaluations had valued William’s CSRS benefit for Celest.
William’s CSRS benefit represented both his pension and any payments that he would
receive from Social Security. The court concluded that the pension amount of the CSRS
benefit could not be divided from the Social Security amount. The court recognized that the
pension amount, but not the Social Security amount, was subject to distribution. The court
concluded that the fairest resolution required it to calculate both William’s and Celest’s
retirement income streams and equally apportion the amounts.
¶12 The parties also contested the distribution of $253,744 that William had inherited
from his mother’s estate in 2003. William had invested these funds in Schwab and Scottrade
accounts and had purchased personal property used by Celest and William. The District
Court concluded that the inheritance funds should be set over to William and not be included
in the distributable marital estate to the extent the funds could be traced to William’s
inheritance. An issue remained regarding entitlement to appreciation on the investment
accounts. William claimed that the appreciation should be set aside separately to him.
William did not provide evidence of appreciation. William did not provide an allocation of
appreciation in the accounts that could be traced to the inheritance funds as opposed to
appreciation in the accounts that could be traced to marital property that had been deposited
into the accounts.
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¶13 The court did not rule at the close of the trial, but decided to consider further the
evidence of the disputed accounts. The court requested that the parties file post-trial
amended proposed findings of fact and conclusions of law, including the value of their
accounts as of May 28, 2010. The court issued a written order directing the parties to
provide documentation to verify the value of their accounts as of May 28, 2010. The court’s
order required the parties to submit account balance verifications by July 2, 2010.
¶14 The court issued a finding of fact that Celest had provided her account documentation
on June 9, 2010. Celest also filed her post-trial proposed findings of fact, conclusions of law
and final decree on July 6, 2010. William did not make a similar filing and did not provide
the court with account balances information. William did submit other information after the
deadline. The court rejected these submissions for untimeliness and because they constituted
new evidence. The court divided equally the value of William’s investment accounts in the
absence of any account balance information from William.
STANDARD OF REVIEW
¶15 This Court will not set aside a district court's findings of fact regarding the division of
marital property unless they are clearly erroneous, giving due regard to the opportunity of the
court to judge the credibility of witnesses. In re Marriage of Williams, 2009 MT 282, ¶ 14,
352 Mont. 198, 217 P.3d 67. A finding is clearly erroneous if it is not supported by
substantial evidence, if the district court misapprehended the effect of the evidence, or if our
review of the record convinces us that the district court made a mistake. Id. Absent a clearly
erroneous finding of fact, we affirm a district court’s distribution of property unless the
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district court has abused its discretion. Id. A district court abuses its discretion when it acts
arbitrarily without conscientious judgment or so exceeds the bounds of reason as to work a
substantial injustice. Id. We review a district court’s conclusions of law for correctness. Id.DISCUSSION
¶16 Did the District Court incorrectly allow William to represent himself pro se after it
had appointed William a guardian ad litem due to mental health concerns?
¶17 William argues that the court should not have allowed him to represent himself in the
dissolution proceedings. William argues that the trial record demonstrates that he failed to
represent himself competently. Celest responds that William failed to preserve the issue for
appeal. Celest also contends that the District Court did not have a duty to appoint counsel
for William in this dissolution proceeding.
¶18 William cites the Montana Rules of Civil Procedure, the Canons of Judicial Ethics,
and In re Marriage of Rolfe, 216 Mont. 39, 699 P.2d 79 (1985), in support of his proposition
that the court should appoint counsel or stand-by counsel whenever it appoints a guardian ad
litem. No legal authority or argument supports applying the Canons of Judicial Ethics to the
District Court’s decision to allow William to represent himself. Moreover, this Court
replaced the Canons of Judicial Ethics with the Code of Judicial Conduct in 2008. The Code
of Judicial Conduct explains that it does not provide “the basis for litigants to seek to change
a judge’s decision” or “to obtain tactical advantages in proceedings before a court.” 2008
Mont. Code of Jud. Conduct 2.
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¶19 The District Court also did not violate M. R. Civ. P. 17(c) by allowing William to
represent himself. M. R. Civ. P. 17(c) requires the appointment of a guardian ad litem for an
incompetent person or “such other order as it deems proper for the protection” of the
incompetent person. The District Court appointed Colleen as William’s guardian ad litem.
¶20 M. R. Civ. P. 17(c) does not require that an attorney be appointed in addition to a
guardian ad litem. Nothing in the record indicates that Colleen sought to obtain counsel, but
was unable to obtain counsel for any reason. In fact, Colleen’s husband is an attorney
licensed in Wyoming. Both Colleen and her husband accompanied William throughout the
trial. They did not object or assert to the District Court that William’s interests had not been
protected.
¶21 William did not request that an attorney be provided to him during pretrial or at trial.
He did not indicate to the District Court that he could not proceed without court-appointed
counsel. He did not indicate that he could not afford an attorney. William cites In re
Marriage of Rolfs, but that case has no application here. The Court specifically limited that
case’s applicability to “court-appointed representation of a child in a custody dispute arising
out of a divorce.” In re Marriage of Rolfs, 216 Mont. at 50, 699 P.2d at 85. The District
Court did not incorrectly allow William to represent himself pro se after having appointed
Colleen as his guardian ad litem. The District Court also did not fail to “make such other
order” as proper for William’s protection. M. R. Civ. P. 17(c).
¶22 Did the District Court improperly distribute Civil Service Retirement System benefits?
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¶23 Section 40-4-202(1), MCA, controls a district court’s division of property in a marital
dissolution. The court shall “equitably apportion between the parties the property and assets
belonging to either or both, however and whenever acquired and whether the title . . . is in
the name of the husband or wife or both.” Section 40-4-202(1), MCA. The district court
must consider many factors in its apportionment, including the duration of the marriage; the
age, health, station, occupation, amount and sources of income, vocational skills,
employability, estate, liabilities, and needs of each of the parties; whether the apportionment
is in lieu of or in addition to maintenance; and the opportunity of each party for future
acquisition of capital assets and income. In re Marriage of Williams, ¶ 16.
¶24 William argues that the court erroneously adopted the valuation of William’s CSRS
disability benefit because the valuation did not consider William’s shortened life expectancy
due to his mental illness. The court found William’s CSRS benefit to have a present value of
$860,201. The court based this finding on Celest’s trial Exhibit 2, an evaluation of the CSRS
benefit compiled by Legal Economic Evaluations. William had notice of the Legal
Economic Evaluation since at least February 2010, when Connie Camino referenced the
evaluation in her withdrawal letter to William and Colleen and advised them to seek a
second evaluation. William apparently did not seek a second evaluation and did not object to
the exhibit’s admission at trial.
¶25 William raises the issue of his life expectancy for the first time on appeal. William
cites In re Marriage of Bowman, 226 Mont. 99, 734 P.2d 197 (1987), for the rule that a court
must use sound, reliable life expectancy calculations in determining the present value of a
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pension benefit. William overlooks the fact that the parties in that case both presented
evidence and disputed the calculations before the district court. In re Marriage of Bowman,
226 Mont. at 109, 734 P.2d at 203. The Court reversed in In re Marriage of Bowman
because the district court had made an arbitrary calculation of life expectancy that had no
foundation in the evidence presented. Id., 734 P.2d at 203.
¶26 William did not present evidence on the value of the CSRS benefit. William did not
contest the accuracy of the valuation provided by Legal Economic Evaluations. William did
not object to the normal life expectancy assumption underlying the valuation completed by
Legal Economic Evaluations. William did not put on any evidence that he suffered a mental
illness and that his mental illness lessened his life expectancy.
¶27 This Court generally will not address an issue raised for the first time on appeal or a
party’s change in legal theory. In re T.C., 2008 MT 335, ¶ 20, 346 Mont. 200, 194 P.3d 653.
We repeatedly have held that the complaining party must make a timely objection and state
the specific grounds for objection in order to preserve an objection for purposes of appeal.
In re Bower, 2010 MT 19, ¶ 20, 355 Mont. 108, 225 P.3d 784. The District Court did not
abuse its discretion by not reducing the CSRS valuation for reduced life expectancy when the
parties presented no evidence that William’s mental illness reduced his life expectancy.
¶28 Did the District Court improperly distribute appreciation on William’s inherited
property?
¶29 William and Celest agreed that the $253,744 that William had inherited from his
mother’s estate belonged solely to William. William had invested some of the inheritance in
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several investment accounts and had used some to purchase personal items, like vehicles and
a trailer. Both parties submitted spreadsheets identifying the marital assets, including the
investment accounts. The court granted to William the amount in each account that he
claimed as traceable to the inheritance.
¶30 The investment accounts also may have included amounts attributable to the marital
estate and to appreciation. William argued that appreciation on the amounts traceable to
inheritance belonged solely to him. William failed to present legal authority for this
argument. William also failed to present accurate account balances. He claimed that market
fluctuations prevented him from providing that information. The court ordered the parties to
submit post-trial documentation that verified the balances of the accounts. William failed to
provide this information and the court decided that the accounts, after subtracting the
traceable inheritance amounts, would be divided equally between the parties without
adjustments for traceable appreciation.
¶31 William argues that Celest contributed nothing to the appreciation of the inheritance
funds. William and Celest agree that appreciation on the assets traceable to one spouse’s
inheritance may be allocated solely to the inheriting spouse. In re Marriage of Steinbeisser,
2002 MT 309, 313 Mont. 74, 60 P.3d 441; In re Marriage of Grendy, 2004 MT 36, 320
Mont. 38, 85 P.3d 788. Celest responds, however, that William failed to preserve the issue
for appeal, that William waived this argument by not complying with the court’s order to
provide updated account balances, and that the accounts likely accrued no appreciable value,
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as most all investment accounts of this type suffered large losses between the time of
inheritance in 2003 and the time of trial in 2010.
¶32 We conclude that William preserved this argument for appeal by arguing to the
District Court that appreciation on the accounts should be attributed solely to him. The
court’s findings of fact reflect that William presented the court with this argument. Even
though William preserved the legal argument for appeal, however, William failed to submit
substantial, credible evidence that appreciation on the accounts actually existed. William’s
refusal or neglect to provide the court with evidence of the account balances left the court
without evidence of appreciation in the accounts.
¶33 William could have attempted to prove that appreciation existed, either at the time of
trial or pursuant to the court’s order to supplement the record with verification of the account
balances. By refusing or failing to provide the court with this evidence, William failed to
prove that any appreciation actually existed. The court divided the investment accounts by
first setting aside to William the asserted inheritance amounts that had been allegedly
deposited into those accounts. The court then equally divided the remainder of the accounts’
balances. The equitable resolution crafted by the court protected Celest’s one-half interest in
any amounts of marital property that had been deposited into the investment accounts. We
conclude that the court did not distribute incorrectly the investment accounts when it equally
distributed them after setting aside the asserted inheritance amounts.
¶34 Affirmed.
/S/ BRIAN MORRIS
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We Concur:
/S/ MIKE McGRATH
/S/ PATRICIA COTTER
/S/ BETH BAKER
/S/ JIM RICE
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