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In re Marriage of Tvetene

Supreme Court of Montana

March 7, 2017

IN RE THE MARRIAGE OF: DEBRA TVETENE, Petitioner and Appellee, and GREGG TVETENE, Respondent and Appellant.

          Submitted on Briefs: February 1, 2017

         APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DR 15-0022 Honorable Gregory R. Todd, Presiding Judge

          For Appellant Jock B. West, West Law Firm, P.C., Billings, Montana

          For Appellee Stephen C. Mackey, Towe, Ball, Enright, Mackey & Summerfeld, PLLP, Billings, Montana

          Dirk M. Sandefur Justice

         ¶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. [1]

         ¶2 Gregg Tvetene (Gregg) appeals the findings of fact, conclusions of law, and final decree of the Thirteenth Judicial District Court, Yellowstone County, that ended his 12-year marriage with Debra Tvetene (Debra). Gregg disputes the apportionment of the marital estate, award of maintenance, and order to pay Debra's attorney's fees. We affirm.

         ¶3 Section 40-4-202, MCA, governs the distribution of assets and property in a marriage dissolution proceeding. The statute vests a district court with broad discretion to apportion the marital estate in a manner equitable to each party under the circumstances. In re Marriage of Bartsch, 2007 MT 136, ¶ 9, 337 Mont. 386, 162 P.3d 72. We initially review a district court's division of marital property and maintenance award to determine whether the findings of fact upon which the division is based are clearly erroneous. In re Marriage of Swanson, 2004 MT 124, ¶ 12, 321 Mont. 250, 90 P.3d 418 (citations omitted). Absent clearly erroneous findings, we will affirm a district court's division of property and award of maintenance unless we identify an abuse of discretion. In re Marriage of Crilly, 2005 MT 311, ¶ 10, 329 Mont. 479, 124 P.3d 1151. In a dissolution proceeding, the test for an abuse of discretion is whether the district court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in a substantial injustice. Crilly, ¶ 10 (citation omitted).

         ¶4 At the time of proceedings, Gregg held a 40% share in Trebro Holding Inc. (hereinafter "Trebro") and played a principal role in three, interconnected, family-owned, corporations. Because he acquired his Trebro stock by inheritance or gift prior to the marriage, Gregg argues the District Court erroneously included his Trebro stock as part of the marital estate for distribution. Gregg further asserts that Debra did nothing to enhance Trebro's value and claims the court assigned a speculative value to his 40% share. Gregg cites Arnold v. Sullivan, 2010 MT 30, 355 Mont. 177, 226 P.3d 594, for the proposition that "assets belonging to a spouse prior to marriage, or acquired by gift during the marriage, are not a part of the marital estate unless the non-acquiring spouse contributed to the preservation, maintenance, or increase in value of that property." Arnold, ¶ 28 (quoting Bartsch, ¶ 21) (emphasis added).

         ¶5 We based the cited language from Arnold on a long line of authority that imprecisely construed § 40-4-202, MCA, to require exclusion from the marital estate of prior-acquired, gifted, or inherited property when equitable to distribute that property to the acquiring spouse. Arnold, ¶ 28. We have since clarified that § 40-4-202, MCA, requires the district court: to equitably apportion between the parties all assets and property of either or both spouses, regardless of by whom and when acquired. This directive applies to all assets, including pre-acquired property and assets acquired by gift, bequest, devise or descent. The party claiming

ownership of the pre-acquired, bequested or gifted property is entitled to argue that it would be equitable to award him or her the entirety of such property. Accordingly, when distributing pre-acquired property or assets acquired by gift, bequest, devise or descent, the court must also consider the contributions of the other spouse to the marriage, and take account of the three factors set forth at § 40-4-202(1)(a)-(c), MCA. The court's decision with respect to this category of property must affirmatively reflect that each of these factors was considered and analyzed, and must be based on substantial evidence. However, we stress that while the factors set forth in § 40-4-202(1)(a)-(c), MCA, must be considered by the court, they are not limitations on the court's obligation and authority to equitably apportion all assets and property of either or both spouses, based upon the unique factors of each case.

In re Marriage of Funk, 2012 MT 14, ¶ 19, 363 Mont. 352, 270 P.3d 39 (emphasis added). Contrary to our imprecise language in Arnold, all assets and liabilities of either or both spouses, regardless of how and when acquired, are part of the marital estate as a matter of law, notwithstanding that equity may warrant distribution to the acquiring spouse on the facts and circumstances of a particular case. See Funk, ¶¶ 24-26 (overruling inconsistent line of authority). The question is not whether prior-acquired, gifted, or inherited property is part of the marital estate but, rather, how should the court equitably apportion such property between the parties under the totality of relevant circumstances. Therefore, the District Court correctly included Gregg's 40% Trebro interest in the marital estate for equitable apportionment.

         ¶6 As required by Funk, the court duly considered Debra's nonmonetary contributions during the marriage both as a homemaker and to the Trebro business enterprise. Debra worked for a Trebro subsidiary for a number of years, sometimes for compensation, sometimes not. She provided homemaking services and facilitated Gregg's ability to carry out his employment responsibilities and to travel extensively on behalf of Trebro. The court determined Debra's efforts directly and indirectly contributed to Trebro's success during the course of the parties' marriage.

         ¶7 The District Court heard testimony regarding the history, success, restructuring, and debt load of Trebro. At the time of the hearing, Gregg owned a 40% share of the business. Gregg testified that each of his two brothers received a 9% interest in Trebro in 2013, in exchange for forgiving a company debt to each in the amount of $2, 500, 000, plus accrued interest. In 2014, Gregg valued the net worth of his 40% Trebro stock interest at $2, 000, 000 in his application for a consumer loan from Western Security Bank. Gregg's accountant testified that Trebro was an I.R.C. subchapter S pass-through entity. Previously, when Gregg was the principal shareholder, the business had generated substantial net operating losses. Gregg used those losses to off-set other income for ...

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