Marriage of Richards Trusler , 381 Mont. 357 ( 2015 )

November 5 2015
DA 14-0766
Case Number: DA 14-0766
IN THE SUPREME COURT OF THE STATE OF MONTANA
2015 MT 314IN RE THE MARRIAGE OF:
VANESSA S. RICHARDS,
Petitioner and Appellant,
v.
ERNEST W. TRUSLER and
TRUSLER, INC.,
Respondents and Appellees.
APPEAL FROM: District Court of the Sixteenth Judicial District,
In and For the County of Powder River, Cause No. DR-2011-31
Honorable Michael B. Hayworth, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Stephen C. Mackey, Towe, Ball, Mackey, Sommerfeld & Turner,
P.L.L.P., Billings, Montana
For Appellee:
Daniel Z. Rice, Avon Whitworth, Lucas & Tonn, P.C., Miles City,
Montana
Submitted on Briefs: August 19, 2015
Decided: November 5, 2015
Filed:
__________________________________________
Clerk
Justice Patricia Cotter delivered the Opinion of the Court.
¶1 In December 2011, Vanessa S. Richards petitioned to dissolve her marriage with
Ernest W. Trusler. The couple began their relationship in July 1991, had three children
between 1992 and 2000, and formally engaged in a marriage ceremony in May 2008.
Prior to 2008, under various circumstances and on multiple occasions, the couple held
themselves out as married beginning with the birth of their first child in 1992. On August
8, 2014, the Sixteenth Judicial District Court, Powder River County, issued its Findings
of Fact and Conclusions of Law and Decree of Dissolution, dissolving the marriage of the
parties and dividing the marital property. Richards appeals the District Court’s allocation
of assets, arguing it was grossly disproportionate and inequitable. We reverse and
remand.
FACTUAL AND PROCEDURAL BACKGROUND
¶2 Richards and Trusler began their relationship in July 1991, at ages 20 and 21
respectively. Later that summer, Richards moved in with Trusler on his family’s ranch
property, Trusler Ranch, in Ashland, Montana. Richards was working at a local grocery
store at the time and Trusler was a ranch hand for Trusler Ranch. In April 1992, the
couple had their first child, son TR. TR was born severely disabled and required near
constant, full-time care until his death at age 22 on August 12, 2014. Richards and
Trusler agreed that TR’s care would be provided by Richards. In 1999, Richards gave
birth to a healthy daughter, and in 2000, a healthy son was born.
¶3 From 1991 until 2003, Trusler, Richards, and the children lived on the Ranch in a
home owned by the family corporation, Trusler, Inc. William and Jacqueline Trusler,
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Trusler’s parents, incorporated Trusler, Inc. and controlled the majority of the stock
during this time. Trusler, Inc.’s assets include, among other things, real property, coal
leases, cattle, equipment and machinery. At the time of dissolution, Trusler, Inc. was
valued at $7.2 million.
¶4 Trusler became a minority stockholder in 1992, an officer of the corporation in
1994 and a member of the board of directors in 1996. He remains both an officer and a
director. In addition to these managerial positions, since at least 1990 Trusler has
worked, and continues to work, as a Ranch hand. He is paid a salary, provided corporate
housing and utilities, an insured company vehicle, health insurance for himself and his
family, an annual $6,000 Costco account, and other benefits that the family utilized
throughout the parties’ relationship.
¶5 In 2003, Richards and the children moved from the Ranch to Broadus, Montana,
and in 2004, the couple bought a home in Broadus, which became the primary residence
for Richards and the children. Trusler stayed in Broadus some of the time and Richards
stayed on the Ranch some of the time. At both home locations, Richards spent her time
maintaining the household and providing care for their special needs child and the two
other children. Richards testified that she moved the children to Broadus primarily to
escape Trusler’s then-ongoing alcohol and drug abuse. When circumstances allowed, she
cleaned and prepared ranch cabins and bunkhouses for work crews and hunters, cooked
meals for work crews, and cleaned Trusler’s mother’s home. She performed these tasks
at times without compensation and at other times for an hourly wage.
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¶6 On December 16, 2011, Richards filed a petition for dissolution against Trusler
claiming the marriage was irretrievably broken. By agreement of all parties, Trusler, Inc.
was named as a party to the dissolution in a later amended petition based upon its co-
ownership of Ranch property and corporate stock with Trusler.1 The parties stipulated to
a Final Parenting Plan in May 2014 and neither the parenting plan nor child support is at
issue in this appeal.
¶7 In Richards’ original petition, her amended petition, and her proposed findings of
facts and conclusions of law, Richards consistently sought maintenance from Trusler
based upon the lack of sufficient income or assets to provide for her reasonable support.
The District Court conducted a bench trial in May and July 2014. In August 2014, the
District Court issued its Findings of Fact and Conclusions of Law and Decree of
Dissolution. The court valued the marital estate at $2,100,666. The court awarded
Richards assets totaling $115,844, an equalization payment of $100,000, and liabilities of
$8,200, for a net award of $207,644. It awarded Trusler total assets of $1,984,822, and
liabilities of $94,500, for a net award of $1,890,322.
¶8 In September 2014, Richards filed a motion to amend the court’s findings and
judgment and for a new trial. The District Court denied the motion on October 31, 2014.
¶9 Richards appeals the District Court’s apportionment of the marital estate.
1
While the presence of the corporation as a “party” in the case style does not change our
analysis or resolution of this case, corporations are not recognized as parties to a marital
dissolution under our statutes. Sections 40-4-101 through -136, MCA.
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ISSUE
¶10 A restatement of the issue on appeal is: Did the District Court err and/or abuse its
discretion in apportioning the marital estate?
STANDARD OF REVIEW
¶11 The distribution of marital property in a dissolution proceeding is governed by
§ 40-4-202, MCA, under which a trial court is vested with broad discretion to distribute
the marital property in a manner that is equitable to both parties. In re Marriage of Lee,
282 Mont. 410, 421, 938 P.2d 650, 657 (1997). When dividing marital property, the trial
court must reach an equitable distribution, not necessarily an equal distribution. In re
Marriage of Walls, 278 Mont. 413, 416, 925 P.2d 483, 485 (1996); In re Marriage of
Kostelnik, 2015 MT 283, ¶ 18, 381 Mont. 182, ___ P.3d ___. The district court’s
apportionment of the marital estate will stand unless there has been a clear abuse of
discretion as manifested by a substantially inequitable division of the marital assets
resulting in substantial injustice. In re Marriage of Larson, 234 Mont. 400, 402, 763
P.2d 1109, 1110 (1988).
¶12 We also review a district court’s findings of fact regarding division of marital
property, child support, and maintenance awards to ascertain whether they are clearly
erroneous. Patton v. Patton, 2015 MT 7, ¶ 18, 378 Mont. 22, 340 P.3d 1242 (internal
citation omitted). We apply a three-part test to determine if a finding is clearly
erroneous. First, the Court will review the record to see if the findings are supported by
substantial evidence. Second, if the findings are supported by substantial evidence we
will determine if the trial court has misapprehended the effect of evidence. Third, if
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substantial evidence exists and the effect of the evidence has not been misapprehended
the Court may still find that “A finding is ‘clearly erroneous’ when, although there is
evidence to support it, a review of the record leaves the [C]ourt with the definite and firm
conviction that a mistake has been committed.” Interstate Prod. Credit Ass’n v. Desaye,
250 Mont. 320, 323, 820 P.2d 1285, 1287 (1991). If the findings are not clearly
erroneous, we will affirm the distribution of property unless the trial court abused its
discretion. Patton, ¶ 19. The standard of review for an abuse of discretion in a
dissolution proceeding is whether the trial court acted arbitrarily, without employment of
conscientious judgment, or exceeded the bounds of reason resulting in substantial
injustice. In re Marriage of Engen, 1998 MT 153, ¶ 26, 289 Mont. 299, 961 P.2d 738,
overruled on other grounds by In re Funk, 2012 MT 14, 363 Mont. 352, 270 P.3d 39.
DISCUSSION
¶13 Did the District Court err and/or abuse its discretion in apportioning the marital
estate?
¶14 Richards argues on appeal that the District Court inequitably apportioned the
marital estate. She requests that we vacate the court’s order and remand for a new trial to
determine an equitable apportionment. Trusler responds that the court’s award is
appropriate, that there is no injustice to Richards, and that Richards did not make
substantial contributions to the Ranch business.
¶15 Section 40-4-202(1), MCA, provides:
In a proceeding for dissolution of a marriage, . . . the court, without
regard to marital misconduct, shall, and in a proceeding for legal separation
may, finally equitably apportion between the parties the property and assets
belonging to either or both, however and whenever acquired and whether
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the title to the property and assets is in the name of the husband or wife or
both. In making 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 needs 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.
The court shall also consider the contribution or dissipation of value of the
respective estates and the contribution of a spouse as a homemaker or to the
family unit. In dividing property acquired prior to the marriage, property
acquired by gift, bequest, devise, or descent, property acquired in exchange
for property acquired before the marriage or in exchange for property
acquired by gift, bequest, devise, or descent, the increased value of property
acquired prior to marriage, and property acquired by a spouse after a decree
of legal separation, the court shall consider those contributions of the other
spouse to the marriage, including:
(a) the nonmonetary contribution of a homemaker;
(b) the extent to which the contributions have facilitated the maintenance
of the property; and
(c) whether or not the property division serves as an alternative to
maintenance arrangements.
¶16 At the time of dissolution Trusler, Inc. held assets of $7,262,118, consisting of
10,108 deeded acres of land, income-generating leases with coal companies, gravel pit
income, cattle, equipment, machinery, and bank deposits. It is a closely held corporation
whose board and management has historically been, and continues to be, comprised
exclusively of Trusler family members. The members of the corporation’s current board
are Trusler’s mother, Trusler, and his brother and sister.
¶17 Trusler has worked at the Ranch for the majority of his life. In 1992, he was given
as a gift 29 shares of the corporation’s 2,109 shares. At that time, his stock constituted
1.375 % ownership in Trusler, Inc. Each year from 2007 through 2009, Trusler received
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as gifts 24 shares of stock. In June 2009, Trusler’s father died. In February 2011, Trusler
inherited 402 shares of corporate stock from his father’s estate and shortly thereafter
received 8 additional shares, bringing his total at the time of marital dissolution to 511
shares of 2,109, or 24.229% ownership of Trusler, Inc. There are corporate restrictions
on stock transfer that preclude Trusler from disposing of his shares.
¶18 Additionally, during the time Richards and Trusler were together, Trusler inherited
the “Rainey Place” valued at $150,000, a one-third interest in the “Potter Place” valued at
$25,000, and a one-fourth interest in the Tongue River Reservoir land and cabin valued at
$46,750. Trusler and his two siblings are beneficiaries of a trust established by their
father and will receive distribution of the trust’s assets upon their mother’s death or
remarriage.
¶19 Richards acquired relatively few individual assets during the relationship. The
couple owned individually or co-owned 11 vehicles and they co-own the Broadus home
which, at dissolution, was subject to a $62,000 mortgage.
¶20 The District Court determined the net worth of the marital estate was $1,997,966.
This included the couple’s vehicles, cows, Broadus home, and Trusler’s inherited or
gifted real property and corporate stock. The court apportioned the following marital
assets to Richards: 4 of the family’s used vehicles valued at $13,200, 2 Ranch cows
valued at $2,644, and the Broadus home valued at $100,000. The court assigned
Richards debts totaling $8,200. The District Court also awarded Richards a $100,000
equalization payment to be paid in 10 increments of $10,000 annually. Richards’ total net
award was $207,644. Additionally, Trusler was ordered to pay Richards spousal
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maintenance of $2,000/month to assist in the care of TR. These payments were to
continue for 3 months beyond TR’s death or other defined circumstances. The
Dissolution Decree was issued on August 8, 2014. TR died on August 12, 2014.
Richards therefore received a total of $6,000 in spousal maintenance per the Dissolution
Decree.
¶21 The District Court apportioned the following assets to Trusler: 7 family-owned
used vehicles valued at $31,057, the complete value of his interests in the Rainey Place,
the Potter Place and the Tongue River property totaling $221,750, and the value of his
24.229% interest in Trusler, Inc. at $1,732,015. Trusler was assigned the following
liabilities: the $62,000 Broadus home mortgage, the remaining balance due on one of the
vehicles he was awarded, and miscellaneous medical and credit card bills. His liabilities
totaled $94,500, resulting in a total net award of $1,890,322.
¶22 As required by § 40-4-202(1), MCA, the District Court considered the factors set
forth in the first three sentences of § 40-4-202(1), MCA—the “general purpose” section
of the statute as it was characterized in Funk, ¶ 13. The court analyzed the duration of the
parties’ marriage, beginning with a determination of whether the parties’ time together
before the May 10, 2008 wedding ceremony constituted a common law marriage. The
court concluded that the record did not support the statutory or common law presumption
of marriage. It determined therefore that the parties’ marriage began on May 10, 2008.
However, the court then applied our ruling in In re Marriage of Clark, 2003 MT 168,
¶ 16, 316 Mont. 327, 71 P.3d 1228, in which we upheld a district court’s consideration of
a parties’ premarital cohabitation in equitably apportioning the marital estate. The
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District Court considered the parties’ time together beginning in 1991 and issued findings
of fact that “specifically noted considerations related to the length of the parties’
relationship and the ongoing care needs for TR to be provided by [Richards], [Richards’]
absence of other assets, employment or income opportunities, and the significant
resources available to [Trusler].” The specific findings related to these factors are
supported by the record.
¶23 Turning to the remaining factors set forth in § 40-4-202(1), MCA, the District
Court noted the parties’ respective ages, good health, and that neither party had been
married previously. It addressed their occupations, amounts and sources of incomes,
skills, employability, liabilities, custodial provisions, and the opportunity of each for
future acquisition of capital assets and income. The court also repeatedly referenced
Richards’ contribution as a homemaker and to the family unit. The District Court
discretely divided Richards’ awards into three categories: apportionment of the marital
estate, an equalization payment, and maintenance.
¶24 The court next turned its attention to distribution of the assets acquired by Trusler
through family gifts and inheritance—the “inherited property” section of the statute as
referenced in Funk, ¶ 14. The court noted Richards’ nonmonetary contributions as a
homemaker and determined that while this work supported Trusler’s work as a Ranch
hand and allowed Trusler to work outside the home, Richards devoted “relatively minor”
time to work as a “traditional ranch wife” in the service of Trusler Ranch.
¶25 After issuing numerous factual findings that are supported by the record, the
District Court determined that equitable distribution of the marital assets to Richards
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would be accomplished by awarding her the Broadus house, 4 used cars and 2 cows for a
total property amount of $115,844. As “equalization” to Trusler’s interest in Trusler Inc.
worth $1,732,015, the court awarded Richards $100,000 to be paid in $10,000 increments
over 10 years. As noted above, the court also instructed Trusler to pay Richards
maintenance in the sum of $2,000/month for the remainder of TR’s life and for three
months thereafter. TR died 4 days after the Dissolution Decree was issued, and therefore
Richards received $6,000 in maintenance.
¶26 Relying on Funk, Richards argues that the District Court improperly minimized
her contribution as a wife and homemaker, resulting in a lesser apportionment than had
she been found to be a “traditional ranch wife” who provided services that enhanced the
value of the gifted or inherited property. As we are determining the equitability of the
apportionment based upon all relevant factors, we need not dwell on this distinction. In
Funk, ¶ 26, we expressly rejected the notion that the non-acquiring spouse is entitled only
to the equitable share of the appreciated or preserved value of the acquiring spouse’s
gifted contributions attributable to her efforts.
¶27 In Funk, the parties were married approximately 20 years. Both parties were
working at the time they married but the wife later became a full-time homemaker and
raised their daughter. During the marriage the husband inherited over 115 acres of
property, 2.5 acres of which was lakefront property on Flathead Lake. On appeal, the
primary issue became the district court’s distribution of the inherited property. Funk, ¶ 3.
Based upon the wife’s contribution to the family, the district court fashioned an
apportionment under which she received one-half the value of the lakefront property and
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one-third of the increased value of the non-lakefront property, totaling $344,167 to be
paid by the husband within six months of the decree. The court also awarded the wife
one-half of husband’s employment retirement. Funk, ¶¶ 4-5.
¶28 In our analysis in Funk, we noted that “much confusion” had developed through
our case law over the interpretation and application of § 40-4-202(1), MCA. We
concluded that the Court had “moved away from the overarching premise of the statute in
an attempt to interpret and apply those portions of the statute that specifically address the
division of . . . property acquired by gift, bequest, devise or descent.” Funk, ¶ 16. We
therefore reaffirmed that the overarching premise of the statute is to “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 the
husband or wife or both.” Funk, ¶ 16. We explained that while the statute specified
particular matters to be considered in dividing inherited property, the statute did not
provide “that these ‘considerations’ constitute a constraint on the district court’s essential
mandate, which is to equitably divide all assets of the parties, however and whenever
acquired.” Funk, ¶ 16.
¶29 Richards points out that her $100,000 equalization payment constitutes less than
6% of the value of Trusler’s Ranch interest of $1,732,015. She further notes that her
entire award of $207,644 is just slightly more than 10% of the net marital estate of
$1,997,966. She maintains that these percentages reflect an inequitable distribution and
an abuse of discretion warranting reversal and remand.
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¶30 In re Marriage of Berthiaume, 173 Mont. 421, 567 P.2d 1388 (1977), supports
Richards’ argument. In Berthiaume, the parties were married approximately six years
and had two children. The wife had worked for the first four years of the marriage and
then stayed home with the couple’s children. Berthiaume, 173 Mont. at 422, 567 P.2d at
1389. During the marriage, the parties purchased and sold a home in Helena, Montana,
and purchased another home in Elliston, Montana, using funds from the Helena sale.
Berthiaume, 173 Mont. at 423, 567 P.2d at 1389. Upon dissolution, the district court
awarded the marital home to the husband without making an offsetting provision for the
wife. We observed that the total market value of property awarded to the wife constituted
less than 10% of that awarded to the husband and such an award was “directly contrary”
to a requirement that “property . . . be divided as equally as possible.” Berthiaume, 173
Mont. at 424-25, 567 P.2d at 1390.
¶31 We acknowledge that an equitable award does not mean an equal award. We
nonetheless conclude that Richards’ award of 6% to 10% of the value of the marital
estate does not constitute an equitable award under the circumstances of this case and
thus amounts to an abuse of discretion by the District Court. As noted above, in its
Findings of Fact and Conclusion of Law and Decree of Dissolution, the court repeatedly
gave Richards credit for her extraordinary contribution to TR, the other children, and to
running the family household. The court further correctly found that Richards was not
“voluntarily underemployed” throughout the marriage. The court appropriately observed
that she had no retirement funds and probably would not qualify for future social security
benefits, and that her job prospects were limited or non-existent as long as TR was alive.
13
Taking account of these factors, however, the court nonetheless unduly minimized
Richards’ contributions as a wife and homemaker and failed to acknowledge that
Richards was unable at present to be self-supporting or to perpetuate the standard of
living the parties enjoyed during their relationship and marriage. Upon dissolution of the
marriage, Richards lost her financial underpinning. Once divorced, Richards became
responsible for everyday and extraordinary household expenses, such as groceries, fuel,
clothing, payment of her health, automobile and home insurance, taxes, and maintenance
costs on the Broadus home. In addition, she still has two teenagers at home through 2017.
Clearly, in the absence of maintenance, the apportionment fails to provide Richards with
sufficient property to provide for her reasonable needs. We therefore set aside the court’s
apportionment and remand for a new trial on the issue of equitable division of the marital
estate.
¶32 As noted, Richards requested an award of maintenance in the District Court.
However, the court awarded her maintenance only for as long as TR survived. Once TR
died within days of the entry of the decree of dissolution, the award of maintenance
terminated. On remand, the court should re-apportion the marital estate to achieve a
more equitable result. In addition or in the alternative to reapportionment, the court may
also consider imposing a maintenance award in favor of Richards, pursuant to
§ 40-4-203, MCA.
CONCLUSION
¶33 We conclude that the trial court erred in failing to achieve an equitable distribution
of the marital estate, and that the court’s award constituted an abuse of discretion
14
resulting in substantial injustice to Richards. We therefore affirm the court’s dissolution
of the marriage of the parties, but reverse and remand for a more equitable apportionment
of the marital estate, consistent with the provisions of this Opinion.
/S/ PATRICIA COTTER
We Concur:
/S/ MIKE McGRATH
/S/ LAURIE McKINNON
/S/ JAMES JEREMIAH SHEA
Justice Jim Rice, concurring.
¶34 The Court discusses the Funk holding at length, Opinion, ¶¶ 22-28, but ultimately
concludes, as it must, that the District Court did not misapply Funk. Indeed, the District
Court meticulously explained and carefully applied Funk, our other holdings, and the
statutes, and the Court can point to no error in its legal analysis. Instead, the Court
reverses based upon what is, in reality, only a subjective feeling that the property
distribution simply is not equitable. Opinion, ¶ 31. While I reluctantly join the Court’s
decision, it is not without misgivings about the propriety of second-guessing the District
Court’s judgment, and I believe several points should be clarified.
¶35 This case presented the District Court with numerous contrasting equities that it
wrestled with extensively. Basically, Trusler was a wage earner for most of the parties’
relationship, having little ownership interest in the ranch until late in the marriage. Long
before then, Richards had moved to Broadus and had ceased to be involved in the ranch
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operations. Trusler supported the family household in Broadus by providing Richards
with $2,330 per month for over 10 years. The Court generously credits Richards with
performing ranch tasks “at times without compensation,” Opinion, ¶ 5, but the District
Court clearly found that Richards had received a wage for all of her ranch work except
for “occasionally cook[ing] meals for work crews,” leading it to conclude that “the extent
and contribution of her work” on behalf of the ranch “was relatively minor.” The bulk of
the value of the marital estate was from land that Trusler inherited, and the Court cannot
fault the District Court’s handling of this property under Funk. The Court uses the value
of the inherited land interest to present a stark value contrast between the parties’
distributions, but it should be clarified, first, that Richards made no claim at all to a
significant portion of it, valued at about $412,000. Further, a difference in value alone
does not necessarily render the distribution inequitable. We clearly held in Funk that the
district court has discretion to distribute inherited property to a single party if the
evidence supports such a result. Funk, ¶¶ 19, 32. In its initial decision, the District Court
found a number of reasons in the evidence to award the property to Trusler, and even
though the Court is returning the case for a revised distribution, those reasons remain
valid considerations.
¶36 What convinces me to join the Court’s opinion is the District Court’s findings that
Richards’ work in the family home during the course of the relationship, including
attending to the needs of the parties’ disabled son, TR, “supported [Trusler] and his work
as a ranch hand, and allowed [Trusler] to work outside the home . . . .” Richards’
provision of TR’s extensive care, at the expense of any of her own career interests,
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enabled Trusler to dedicate his efforts to the ranch that ultimately resulted in his gaining
an extensive ownership interest in it. Consequently, I agree that Richards is entitled to
sufficient support for a sufficient time to enable her to adjust to the changed
circumstances of her life brought about by both the dissolution of the marriage and the
passing of TR.
/S/ JIM RICE
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