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In re Marriage of Frank

Supreme Court of Montana

June 4, 2019

IN RE THE MARRIAGE OF: BRIAN FRANK, Petitioner and Appellee,
v.
SONIA FRANK, Respondent and Appellant.

          Submitted on Briefs: March 20, 2019

          APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DR 16-130 Honorable John W. Larson, Presiding Judge

          For Appellant: P. Mars Scott, Jason M. Scott, P. Mars Scott Law Offices

          For Appellee: Dennis E. Lind, Datsopoulos, MacDonald & Lind, PC

          Jim Rice, Justice delivered the Opinion of the Court.

          OPINION

          Jim Rice, Justice.

         ¶1 Sonia Frank (Sonia) appeals from the Fourth Judicial District Court's decree of dissolution of the marriage between her and Brian Frank (Brian), distributing marital assets and awarding Sonia five years of spousal maintenance. We address the following issue, and affirm:

         Did the District Court abuse its discretion in determining the amount and duration of the maintenance award granted to Sonia?

         FACTUAL AND PROCEDURAL BACKGROUND

         ¶2 Sonia and Brian were married in 1987 in California. Brian petitioned for dissolution in February 2016, and the District Court entered a dissolution decree in February 2018. At that time, both parties were 50 years old and in good health. They had three adult children and resided in Whitefish, Montana.

         ¶3 Brian and Sonia both attended some college, although neither graduated. In 1987, prior to their marriage, Brian, along with his father, Gerald Frank, and his step-mother, Tina Hansen Frank, incorporated a business in California called Hansen and Frank, Inc., to sell nutritional supplements to endurance athletes. Capital contributions from Gerald primarily financed the company, but Brian personally contributed $35, 000. Early in their relationship, Sonia assisted at the company by answering phones and filling orders, but significantly decreased her involvement after the birth of the couple's first child in 1988. Brian inherited the company after his father's death in 1991. Sonia became an officer and director of the corporation, and invested $15, 000 into the company, but except for her daily conversations with Brian about human resource and personnel issues, Sonia focused on being a homemaker and raising the couple's three children.

         ¶4 Brian and Sonia moved to Whitefish in 1995 to raise their family and operate the business there. Hansen and Frank, Inc. was dissolved in 1996, and after two corporate restructurings, became Hammer Nutrition, Ltd., as it is known today.[1] The company remains focused on selling nutritional supplements. Following the last restructuring, Sonia was recognized as a 50% owner of Hammer Nutrition. As President, Brian grew Hammer Nutrition into a successful company. However, the company's gross sales steadily declined for five years prior to the parties' 2016 divorce and net income fell significantly. By the end of 2017, Hammer Nutrition was earning approximately $1, 800, 000 in annual net income, virtually all of which flowed to the Franks as personal earnings. During the two-year dissolution proceeding, Hammer Nutrition paid out almost all of its net profits to the parties and did not maintain an appropriate cash reserve for business contingencies.

         ¶5 During their marriage, Brian and Sonia accumulated a substantial estate, including the Hammer Nutrition business, real estate holdings, luxury vehicles, and other valuable personal property, such as jewelry, precious metals, artwork, wine, and firearms. The Franks also enjoyed a luxurious lifestyle that included travel, fine lodging and dining, and personal assistants. They experienced marital difficulties for several years prior to the divorce, and in 2012, Sonia filed for legal separation. The parties temporarily reconciled but continuing problems led to dissolution.

         ¶6 Historically, Hammer Nutrition carried a $1, 000, 000 line of credit with First Interstate Bank. In 2015, Sonia surreptitiously transferred over $800, 000 from the company's business accounts into her personal account. These unauthorized withdrawals violated the bank's covenants because they created a deficit between the outstanding balance on the line of credit and the value of company assets upon which the credit was extended. Sonia refused requests from the bank to return the funds, so to remedy the imbalance, the Franks pledged three additional real estate properties as security for the loan. Brian subsequently made other disbursements from Hammer Nutrition to himself. The District Court found: "The parties exercised sole control and discretion over the funds withdrawn. Each of the parties has thus already received an equal disbursement of funds from the marital estate. No further accounting of how these funds have been spent or maintained is necessary." The District Court also found that Sonia interfered with company affairs by these transactions and by firing a key employee, which created personnel problems for the company. After a pre-trial hearing, the District Court ...


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