Marriage of Schwartz and Harris, 2013 MT 145 (May 30, 2013) (5-0) (Rice, J.)
Issue: (1) Whether the district court erred by valuing the estate as of 2009 rather than 2002, when the parties separated; (2) whether the district court erred in its valuation of the Grizzly Security business; (3) whether the district court erred by failed to award Greg an offset credit for $400,000 paid to Jean while they were separated; and (4) whether the district court erred by ordering Greg to pay Jean $1.259 million without providing a method of payment.
Short Answer: (1) No; (2) no; (3) yes; and (4) yes.
Affirmed in part, reversed in part & remanded
Facts: Greg and Jean married in 1988. Greg is the sole owner of one business, and half-owner of two others. All are sub-S corporations with income directly taxable to Greg. In 1995, Greg suffered a head injury while assaulted at work, and has memory loss and severe headaches as a result. The couple has four children, three of whom are adults.
Jean filed for divorce in 2002, and bought a house in 2003. Greg agreed to pay the mortgage, taxes, and insurance. The court’s temporary support order, issued in Dec. 2002, required Greg to pay Jean $2,000 a month as well as pay for her vehicle, her and the children’s medical insurance, and the children’s extracurricular and medical costs. The order did not mention Greg’s payment of the mortgage and costs on Jean’s home.
Jean’s expert valued the businesses at $2.58 million, using an income-based appraisal, and Greg’s expert valued them at $376,945, using an asset appraisal method.
Procedural Posture & Holding: The district court entered the final decree in March 2012, using the 2009 appraisal presented by Jean’s expert. It granted the business interests to Greg and ordered him to pay Jean an equalization payment of $1.259 million. It did not specify how the transfer of title and equalization should occur. Greg appealed to this Court and filed for bankruptcy. The Court affirms the 2009 valuation and the business value, but remands for findings on how much Greg paid for Jean’s housing so that Greg can be credited that amount, and to adopt a reasonable payment plan for the remainder.
Reasoning: (1) Generally, the marital estate should be valued as close to the time of dissolution as possible. Although the parties separated in 2002, the decree was not entered until 2012. The district court’s findings are not clearly erroneous and supported by the record. (2) The district court did not abuse its discretion by adopting one party’s value over the other’s. (3) Greg’s provided cost-free housing to Jean that has created a sizeable, appreciating asset for her benefit. Greg should receive credit for this. (4) Greg’s request for a deferred monetary award with a structured payment plan is justified under the circumstances, and provides finality as required by § 40-4-202(1) MCA.