Marriage of Labeau , 2015 MT 174N ( 2015 )

June 23 2015
DA 14-0725
Case Number: DA 14-0725
IN THE SUPREME COURT OF THE STATE OF MONTANA
2015 MT 174N
IN RE THE MARRIAGE OF:
DARCY A. LABEAU,
Petitioner and Appellant,
and
BENJAMIN LABEAU,
Respondent and Appellee.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and For the County of Yellowstone, Cause No. DR 13-638
Honorable Gregory R. Todd, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Kenneth D. Tolliver, Joshua P. Oie, Tolliver Law Firm, PC, Billings,
Montana
For Appellee:
Casey J. Heitz, Parker, Heitz & Cosgrove, PLLC, Billings, Montana
Submitted on Briefs: May 20, 2015
Decided: June 23, 2015
Filed:
__________________________________________
Clerk
Justice Beth Baker delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating
Rules, this case is decided by memorandum opinion and shall not be cited and does not
serve as precedent. Its case title, cause number, and disposition shall be included in this
Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana
Reports.
¶2 Darcy LaBeau appeals the Thirteenth Judicial District Court’s final decree
dissolving her marriage to Benjamin (Ben) LaBeau. Darcy and Ben married in 1998 in
Billings, Montana, and separated in April 2013. Darcy petitioned for dissolution in June
2013. Darcy and Ben have three children, who were all minors during the District Court
proceedings. Ben holds degrees in business finance and law, and he worked as an
attorney throughout the parties’ marriage. In 2000, Ben started a solo practice, LaBeau
Law Firm, which he continued to operate at the time of trial. Darcy holds degrees in
business marketing and human resources management. During the marriage, Darcy had
various part-time jobs and devoted much of her time as a homemaker and to raising the
children.
¶3 On August 15, 2014, the District Court entered its Findings of Fact, Conclusions
of Law, and Decree of Dissolution. Darcy appeals only the court’s distribution of marital
property and its decision not to award her maintenance.
¶4 Ben and Darcy agreed that Darcy should receive her interest in property inherited
from her parents, which Darcy shares with her two siblings. After awarding Darcy that
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property, the District Court divided the parties’ remaining net worth, which the court
valued at $404,496. The court allocated $88,687 (21.9%) to Darcy and $315,809
(78.1%) to Ben. With Darcy’s inherited property included in the calculation, Darcy
received a net value of $4,035,354 (92.7%) and Ben received a net value of $315,809
(7.3%) of the marital estate.1 The court further concluded, “Given the amount and value
of assets apportioned to Darcy, resulting in a net worth to her of over $4,000,000, she is
not entitled to further maintenance.”
¶5 Darcy argues that the District Court’s decision not to award her spousal
maintenance was based on erroneous findings regarding the amount and sources of her
income, and that the District Court erred in its findings regarding temporary maintenance,
the value of Ben’s law practice, and the value of each party’s contributions to the
marriage. Darcy further argues that the District Court abused its discretion by awarding
cash that does not exist in the estate and by not allocating to Darcy the marital home or
the means to procure suitable housing.
¶6 In apportioning marital property, a district court must consider each factor listed in
§ 40-4-202, MCA, “and there must be competent evidence presented on the values of the
property.” In re Funk, 2012 MT 14, ¶ 7, 363 Mont. 352, 270 P.3d 39 (quoting Marriage
of Collett, 190 Mont. 500, 504, 621 P.2d 1093, 1095 (1981)). As long as a district court
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The District Court’s Findings of Fact, Conclusions of Law, and Decree of Dissolution uses
these numbers, which the court says are adopted from Ben’s assets and liability valuation and
distribution proposal. Ben’s proposal appears to assert a net worth of $4,401,970.05, of which he
receives $375,681.18 and Darcy receives $4,020,788.87. Ben’s proposed calculations award
Darcy a lower net value and Ben a higher net value than do the District Court’s calculations. On
appeal, Ben cites the numbers used by the District Court and does not dispute them.
Accordingly, we will not disturb the District Court’s valuations.
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complies with these requirements, it has “broad discretion to apportion the marital estate
in a manner equitable to each party under the circumstances.” Funk, ¶ 6. Absent clearly
erroneous findings of fact or an incorrect application of the law, “we will affirm a district
court’s division of marital property and award of maintenance unless we identify an
abuse of discretion.” Funk, ¶ 6.
The District Court’s findings regarding spousal maintenance
¶7 Under § 40-4-203(1), MCA, a district court may award maintenance “only if it
finds that the spouse seeking maintenance: (a) lacks sufficient property to provide for the
spouse’s reasonable needs; and (b) is unable to be self-supporting through appropriate
employment . . . .” The District Court declined to award Darcy spousal maintenance
because it determined that Darcy had the following potential sources of income:
anticipated profits from property inherited from her parents; her employment at Energy
Jobs Solutions; her interior design company; and $1,620 per month in child support, to
which the parties stipulated. Darcy argues that deriving income from her inherited
property is unlikely and beyond her control, that the District Court erred in determining
the amount of her commission at Energy Jobs Solutions, and that the court erred in
finding that she would generate income from interior design work.
¶8 Darcy’s inheritance comprises a one-third interest in a house located on Camano
Island, Washington, and a one-third interest in the Mission Ranch, Inc. Darcy’s siblings,
Rob Stephens, Jr. (Robbie) and Zena Dell Dowe, own the remaining two-thirds of both
properties. The Mission Ranch, Inc. comprises 3,900 acres of deeded land, plus a 640-
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acre section that the Ranch leases through the Montana Department of Natural Resources
and Conservation. Each sibling also has a one-third interest in the Mission Ranch
livestock, Farm Equipment LLC, and the Mission Ranch Lodge LLC. Additionally,
Darcy owns a one-half interest in S&L Farm Equipment LLC. Based on evidence
presented at trial, the District Court found that the Mission Ranch, Inc. and its associated
properties and business entities (collectively, “the Mission Ranch”) have a net value of
between $10 million and $13.5 million. Darcy owned three percent of the shares in the
Mission Ranch when she and Ben married, and she received an additional thirty percent
during the marriage. The court valued Darcy’s shares in the property at $3,946,667.
¶9 The District Court found that, though the Mission Ranch has never made a
distribution of income, the siblings expected a recently-hired, experienced ranch manager
to help the Mission Ranch gain profitability. The court further found that Darcy could
sell her shares to produce income. Darcy contends that unanimous director approval is
required for any sale, and that Darcy’s siblings, who are the two other directors, are
opposed to selling the Mission Ranch. However, record evidence shows that the siblings
have listed various portions of the ranch for sale in recent years. For example, in 2012,
Darcy, Robbie, and Zena listed the Mission Ranch for sale, excluding the Mission Ranch
Lodge, a fifteen-acre tract containing historic Fort Parker, and forty acres on Mission
Creek. The siblings’ asking price was $14 million. In April 2014, two months before
trial, Darcy agreed to remove the ranch from active listing. Also in 2014, the siblings
signed an agreement to sell a fifteen-acre tract of land containing historic Fort Parker for
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$150,000, or $10,000 per acre. Before that sale, the siblings sold forty acres of the ranch
to a previous ranch manager for $150,000. The Mission Ranch Lodge also was listed for
sale at least twice at $1.5 million. Robbie testified that he thinks the lodge would “sell
pretty quickly” at $900,000. The District Court’s finding that Darcy could sell portions
of the Mission Ranch to produce income was not clearly erroneous in light of this history.
The court was presented with substantial evidence to contradict Darcy’s statement that
her siblings were unwilling to sell.
¶10 Citing In re Marriage of Cole, 234 Mont. 352, 763 P.2d 39 (1988), Darcy argues
that her inherited property is income-consuming, not income-producing, and therefore
cannot fulfill her financial needs. At trial, however, the siblings testified to various ways
in which the Mission Ranch could make money, including livestock sales, leasing out
farm equipment, and renting rooms at the Mission Ranch Lodge. In addition, the District
Court noted that Darcy could sell some of her shares in the Mission Ranch to her siblings
and invest the proceeds to produce income.
¶11 In addition to Darcy’s assets in the Mission Ranch, the District Court determined
that Darcy could earn income through her corporate recruiting job at Energy Jobs
Solutions. The court stated that Darcy would make more than $30,000 in 2014 and that,
in the future, she could earn commissions equal to thirty-five or forty percent of the
salary of any placement she makes. Darcy argues that the District Court erred because
Darcy’s actual commission would be between seven and ten percent of a placement’s
salary, and she would not make more than $30,000 per year. Even with this factual error
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in the court’s findings, the record shows that Darcy agreed to Ben’s child support
calculations, which stated that Darcy earned $35,000 in wages, salary, and commissions.
Further, in calculating Darcy’s income, the court relied on her predicted annual salary,
not on her commission percentage. Accordingly, the District Court’s findings regarding
Darcy’s expected income were not clearly erroneous.
¶12 Finally, Darcy argues that she cannot generate income from her interior design
work. But Darcy stated in her answers to interrogatories that her income from her
interior design company, My Montana, would range between $200 and $700 per month.
Moreover, the District Court did not put a monetary value on Darcy’s ability to earn
income from My Montana and did not calculate future income potential from that
business. The court’s statement that Darcy could earn future income from My Montana
did not materially affect its determination regarding maintenance.
¶13 In sum, the District Court’s findings regarding the amounts and sources of Darcy’s
income were not clearly erroneous. The court did not abuse its discretion by declining to
award Darcy spousal maintenance.
The District Court’s findings regarding temporary maintenance
¶14 After the parties separated in April 2013, Ben moved into an apartment but
continued to pay the family household expenses until Darcy became employed. At that
time, he reduced his payments to $3,000 per month. The District Court found that Ben’s
payments to Darcy constituted temporary spousal maintenance and retroactively credited
Ben with $45,315. This figure represented the total in payments Ben made to Darcy
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between April 2013, and June 16, 2014, minus the parties’ stipulated monthly child
support. Darcy argues that the District Court erred by categorizing these payments as
“temporary maintenance.”
¶15 Darcy cites In re Marriage of Rudolf, 2007 MT 178, 338 Mont. 226, 164 P.3d 907,
to support her argument that a designation of temporary maintenance may be made
retroactive only to the date of a motion for a temporary family support order. In Rudolf,
we held that a district court cannot order retroactive payment of temporary maintenance
going back to three years before a petition for temporary maintenance is filed. Rudolf,
¶ 41. By contrast, the District Court credited Ben with the temporary support payments
he voluntarily made after the parties separated. Darcy acknowledged that these payments
constituted temporary maintenance in her April 11, 2014 Motion for Temporary Orders
and Brief in Support, when she requested that the court require Ben “to continue paying
temporary support/maintenance in the amount of $4,000.00 per month.” The District
Court did not err by categorizing the $45,315 Ben paid to Darcy as temporary spousal
maintenance.
¶16 Darcy further argues that the court’s award to Ben of the marital home means that
its designation of temporary maintenance directly conflicts with Internal Revenue Service
(IRS) guidelines for the treatment of maintenance awards. In its order denying Darcy’s
Motion to Alter or Amend Findings and Conclusions, the District Court noted, “Darcy
argues that she should be entitled to temporary maintenance and that the [c]ourt’s ruling
cannot trump [IRS] rules or regulations. The Court received no evidence regarding IRS
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regulations or rulings.” A motion to alter or amend a court’s judgment may not be used
to raise arguments that could have been raised prior to judgment. In re Johnson, 2011
MT 255, ¶ 15, 362 Mont. 236, 262 P.3d 1105. Because Darcy did not raise the IRS rules
prior to judgment, we will not consider that argument on appeal.
¶17 Finally, Darcy argues that the court erred by designating proceeds from the sale of
a vehicle as temporary maintenance. The court did not require a specific amount of
temporary maintenance, but credited Ben with voluntarily providing Darcy $45,315 in
payments. The District Court’s characterization of the vehicle sale proceeds as
temporary maintenance was not error in the context of its ruling that Ben provided Darcy
with funds to support the family during the pendency of the case and until she obtained
employment and could support herself.
The District Court’s findings regarding the value of Ben’s law practice
¶18 The District Court valued Ben’s law practice at $10,000. In addition, the court
valued LaBeau Law Firm’s savings account at $27,000 and its checking account at
$1,000. Darcy argues that these findings are clearly erroneous because the court should
have valued the goodwill of LaBeau Law Firm and evidence showed that LaBeau Law
Firm’s checking account contains $5,000.
¶19 It is a district court’s job to weigh competing evidence. See In re Marriage of
Milesnick, 235 Mont. 88, 95, 765 P.2d 751, 755 (1988) (“Unless there is a clear
preponderance of the evidence against the District Court’s valuation, its findings, where
based on substantial though conflicting evidence, will not be disturbed on appeal.”). At
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trial, Ben testified that LaBeau Law Firm’s checking account had “probably . . . about”
$5,000. By contrast, Ben’s Preliminary and Final Asset and Liability Disclosure listed
the account as containing $1,000. Without contrary evidence from Darcy, and in light of
the marital estate’s net worth, the District Court did not commit clear error by using the
written value of the account, presented in Ben’s Preliminary and Final Asset and Liability
Disclosure, instead of Ben’s oral estimate of the account’s value at trial.
¶20 Given the District Court’s finding that LaBeau Law Firm has an annual net profit
of $125,000, Darcy maintains that the court was required to consider the business’s
goodwill. “A district court has far reaching discretionary powers to determine the value
of property in a dissolution action . . . . As long as the valuation is reasonable in light of
the evidence submitted, we will not disturb that finding on appeal.” Milesnick, 235 Mont.
at 94-95, 765 P.2d at 755. In In re Marriage of Stufft, 286 Mont. 239, 249, 950 P.2d
1373, 1379 (1997), we held that a district court did not err by relying on expert testimony
on the value of a law firm when the opposing party offered no evidence to contradict that
testimony. Darcy never provided a goodwill value for the firm. When asked about
LaBeau Law Firm’s goodwill at trial, Darcy’s attorney stated, “The value of the firm on
the market for [Ben’s] operation cannot adequately be related to what someone else
would pay for it.” In her reply brief, Darcy acknowledged that her arguments regarding
LaBeau Law Firm’s goodwill “could be better.” By contrast, Ben testified that the total
value of the firm was $10,000.
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¶21 Further, the cases Darcy cites do not support her position that the District Court
was required to value the firm’s goodwill. In Milesnick, we determined that a district
court did not abuse its discretion by considering a business’s goodwill when the parties
did not propose a goodwill value. Milesnick, 235 Mont. at 94-95, 765 P.2d at 755. We
did not hold that a district court is required to value goodwill when it has not been
presented with evidence of a goodwill value. Additionally, the District Court did not
assign a goodwill value to any of the businesses that it attributed to Darcy: Farm
Equipment LLC, S&L Farm Equipment LLC, My Montana Interior Design, and Mission
Ranch Beef Company. Without any evidence of goodwill value, the District Court did
not abuse its discretion by deciding not to assign such value to LaBeau Law Firm.
The Court’s valuation of the parties’ contributions to the marriage
¶22 Throughout the marriage, Ben performed uncompensated legal services to Darcy
and her family for the Mission Ranch. The District Court assigned a $144,000 value to
these services. The court also found that Darcy contributed to the family as a
homemaker. Darcy disputes these findings, arguing that the court erroneously valued
Ben’s legal contributions to the Mission Ranch and did not place sufficient value on
Darcy’s contributions as a homemaker.
¶23 Ben did not specifically document time he spent on uncompensated legal services,
but he estimated that he spent at least 1,200 hours on various projects for the Mission
Ranch during the parties’ marriage. The District Court found that, during the time Ben
was providing legal services to the Mission Ranch, his hourly rate fluctuated between
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$120 and $200 per hour. The court multiplied Ben’s lowest hourly rate—$120 per
hour—by 1,200 hours to arrive at $144,000, representing the total value of Ben’s legal
contributions to the Mission Ranch. The court noted that this number represented a “very
conservative” estimate of the value of Ben’s time.
¶24 Darcy argues that the District Court erroneously relied on Ben’s estimate that he
spent 1,000 hours working on a legal issue involving a claim to ownership of the Mission
Ranch by Darcy’s stepfather, Doug Ensign. According to Darcy, the District Court
overstated the precariousness of the Mission Ranch and the impact of Ben’s work
because Ben “did not materially contribute” to the settlement agreement with Ensign.
¶25 While Darcy acknowledges Ben’s work, she argues that the court should have
relied on testimony from her father, also an attorney, that Ben spent far less than 1,000
hours on the dispute with Ensign. As we have stated, it is the role of the District Court to
weigh conflicting evidence, which includes testimony. There is sufficient evidence in the
record to support the court’s finding that Ben contributed significantly to the dispute with
Ensign. The District Court did not err by relying on Ben’s estimate that he spent 1,000
hours on that issue. Darcy does not contest the remaining 200 hours of Ben’s estimated
time.
¶26 Darcy also argues that the court did not adequately address her contributions as a
homemaker because the court provided an in-depth analysis of Ben’s contributions to the
Mission Ranch but addressed Darcy’s contributions in just one sentence. Darcy implies
that the court should have assigned a dollar value to Darcy’s contributions. The District
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Court stated that it considered all testimony of the parties and the factors set forth in
§ 40-4-202, MCA, and that “Darcy did contribute as a homemaker. Ben contributed
significantly to protecting the value of the Mission Ranch. For these reasons, the Court
finds that Ben’s asset and liability valuation and distribution proposal is fair and equitable
. . . .” The court then awarded Darcy more than ninety-two percent of the marital estate,
noting that the “net worth designation to each party, while not equal, is both fair and
equitable, given the parties’ duration of marriage and assignment of [a] majority of [the]
assets to Darcy.” Though Darcy argues that the parties are left to speculate as to how the
court evaluated Darcy’s contributions as a homemaker, the court’s findings and
conclusions make clear that the court considered the length of the parties’ marriage and
Darcy’s role as a homemaker during that time. The District Court’s findings regarding
Darcy’s contributions to the marriage were not clearly erroneous. The court did not
abuse its discretion in assigning Darcy 92.7% of the marital estate.
The District Court’s allocation of Ben’s contributions to the Mission Ranch
¶27 Darcy argues that the District Court abused its discretion because, in a spreadsheet
labeled “Exhibit 1” of its findings and conclusions, the court awarded Darcy $144,000 in
cash that does not exist in the estate. However, the court’s allocation of this value to
Darcy was merely an illustration of the court’s recognition that Ben contributed $144,000
to the value of Darcy’s assets in the Mission Ranch. It did not affect the distribution of
the net marital estate, which was $4,035,354 to Darcy and $315,809 to Ben.
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Accordingly, we agree with Ben that the $144,000 figure is an allocation of value, not an
award in cash.
The District Court’s decision not to allocate the marital home to Darcy
¶28 Darcy argues that the District Court abused its discretion by declining to award her
the marital home or to provide the means to procure housing. Darcy’s arguments
regarding her inability to procure housing mirror her arguments regarding her sources of
income, addressed above. The court awarded Darcy over four million dollars in assets.
That amount is more than sufficient to procure suitable housing, even with the limitations
on liquidity of the assets. Because the District Court provided Darcy with the means to
procure housing, it did not abuse its discretion in declining to award Darcy the marital
home.
¶29 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of
our Internal Operating Rules, which provides for memorandum opinions. In the opinion
of the Court, the case presents a question controlled by the clear application of applicable
standards of review. The District Court did not abuse its discretion in dividing the
marital estate or in declining to award maintenance. The Decree of Dissolution is
affirmed.
/S/ BETH BAKER
We concur:
/S/ MICHAEL E WHEAT
/S/ JAMES JEREMIAH SHEA
/S/ LAURIE McKINNON
/S/ JIM RICE
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