Marriage of Berg


                                                 Marriage of Berg
                                               Decided Feb. 24, 1998
                                        (NOT TO BE CITED AS AUTHORITY)

                                                               No. 97-392

                       IN THE SUPREME COURT OF THE STATE OF MONTANA

                                                             1998 MT 38N

                                                     IN RE MARRIAGE OF
                                                        PIA DEE BERG,

                                                   Petitioner and Respondent,

                                                                     and

                                                       GEORGE W. BERG,

                                                   Respondent and Appellant.

                        APPEAL FROM: District Court of the Tenth Judicial District,

                                               In and for the County of Fergus,

                               The Honorable John R. Christensen, Judge presiding.

                                                   COUNSEL OF RECORD:

                                                            For Appellant:

                                       Gary S. Deschenes, Deschenes Law Office,

                                                        Great Falls, Montana

                                                           For Respondent:

                                        C. W. Leaphart, The Leaphart Law Firm,

                                                          Helena, Montana

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 Marriage of Berg




                                           Submitted on Briefs: February 5, 1998

                                                  Decided:         February 24, 1998

                               Justice Jim Regnier delivered the opinion of the Court.

¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
1996 Internal Operating Rules, the following decision shall not be
cited as precedent but shall be filed as a public document with the
Clerk of the Supreme Court and shall be reported by case title,
Supreme Court cause number, and result to the State Reporter
Publishing Company and to West Group in the quarterly table of
noncitable cases issued by this Court.


¶2 Appellant George W. Berg appeals the decision of the Tenth
Judicial District Court, Fergus County, dissolving his marriage to
respondent Pia Dee Berg and dividing their marital estate. We
affirm.


¶3 We address the following issues on appeal:


¶4 1. Did the District Court err in its valuation of the
marital estate?


¶5 2. Did the District Court err in its distribution of the
marital estate?


¶6 3. Did the District Court err by imputing income to George
in the determination of his child support obligation?


              FACTUAL AND PROCEDURAL BACKGROUND




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¶7 George and Pia were married on August 19, 1975, in Elko,
Nevada. The parties moved to Lewistown, Montana, and founded the
Berg Lumber Company, which George continues to run. They had five
children together, three of whom were minors at the time of trial
in November 1996. During their marriage, Pia was the primary care
giver to their five children, and participated, along with George,
in the operation of the sawmill.


¶8 Pia executed a petition for dissolution of marriage on
September 7, 1990, and subsequently filed the petition on September
22, 1992, in Jefferson County, Montana. Although experiencing
intermittent marital difficulties, the parties remained together
until Pia filed her petition for dissolution in September 1992.
Following a change of venue and a number of procedural delays, the
court conducted a dissolution hearing on January 3, 1996. On
January 4, 1996, the court issued its preliminary findings of fact,
conclusions of law, and decree of dissolution. The court
additionally set a trial date of July 17, 1996, following which
time the court would reach a final decision with respect to
property division, maintenance, permanent child support, and
attorney fees and costs. After additional delays, the parties
convened for trial on November 13 and 14, 1996. The court held a
supplemental hearing on December 19, 1996, and entered its amended
findings of fact, conclusions of law, and final judgment on May 1,
1997. George filed a motion for new trial and motion to alter or
amend the judgment, which the court denied in a June 18, 1997,
order.


¶9 It is from the court's May 1, 1997, findings of fact,
conclusions of law, and final judgment, as well as from the court's
order denying his motion for new trial and motion to alter or amend
the judgment, that George presently appeals.


                          ISSUE 1

¶10 Did the District Court err in its valuation of the marital
estate?

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¶11 The district court has broad discretion in valuing the marital
estate in a dissolution proceeding, and may adopt any reasonable
valuation of marital property which is supported by the record. In
re Marriage of Meeks (1996), 276 Mont. 237, 242-43, 915 P.2d 831,
834-35. This Court will not disturb the district court's findings
unless clearly erroneous. Meeks, 276 Mont. at 242, 915 P.2d at
834.
         A. Workers' Compensation Bill


¶12 On appeal, George argues the District Court made several
errors in valuing the marital estate, the first of which George
asserts was the court's decision to exclude from its valuation a
$1,000,000 liability owed to the State Compensation Insurance Fund.
 In its findings of fact, the court noted that the State
Compensation Insurance Fund had billed George and Berg Lumber
Company for $1,043,954, based upon audit premiums for the period of
time from June 20, 1991 through August 27, 1994. The court
determined the liability was merely a contingent one, however, and
ultimately chose to exclude the liability from its valuation of the
marital estate. The court observed that the amount owing "is
disputed by George and no doubt will become the subject of
litigation," and noted that "final resolution of the" billing was
unknown at the time of trial. In its order denying George's motion
for a new trial, the court additionally explained that
absolutely no evidence was provided to the Court relating to

   that particular lien and its enforceability. Rather,

   George simply requested the Court to assume it was valid

   in full and grant him an extra million dollars in assets

   to offset the lien. At trial, not only was there no

   evidence as to the enforceability of the lien, there was

   equally a complete absence of evidence relating to any

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   efforts made by George to determine its validity prior to

   trial.


¶13 George argues the court erred in determining the liability is
contingent, noting that the bill is still outstanding and that,
"as of yet, there is no evidence to establish that the bill is in
error." Having reviewed the record, however, we conclude the
District Court's determination that the liability was merely a
contingent one at the time of trial was not clearly erroneous.
Accordingly, we conclude the court did not err in excluding that
contingent liability from its valuation of the marital estate.


¶14 We additionally note that, faced with distributing a gross
marital estate worth in excess of $4,000,000, the court awarded Pia
roughly $1,124,425 in assets and liabilities. The court thus left
the bulk of the marital estate to George in the form of the Berg
Lumber Company. As the court observed, "George was in complete
control of the sawmill operation during [the] period of time" upon
which the workers' compensation bill was based. We conclude that
for the court to determine that, because "George will receive
nearly all of the assets" he would in turn "be responsible for
nearly all of the liabilities, including the contingent liability
owed to the State Compensation Insurance Fund," was not an abuse of
discretion, particularly in light of the fact that he was in
complete control of the sawmill operation during the period of time
upon which the bill was based.
         B. Time of Valuation


¶15 George next argues the court erred in valuing the marital
estate at the time of the parties' January 1, 1996, dissolution,
rather than at the approximate time of trial in the fall of 1996.
More specifically, George asserts the court should have determined
the value of the marital assets and liabilities as of October 31,
1996, because that date was closer to the trial date on property
distribution than was the January 1, 1996, date of dissolution

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relied upon by the District Court. George argues that, due to a
downtrend in the logging industry, the value of the marital estate
decreased, and various liabilities increased, in the months
following the dissolution of the parties' marriage on January 1,
1996. George notes that, because a number of appraisals had yet to
be completed at the time of the dissolution hearing in January
1996, the court had to order a subsequent trial to address the
valuation and division of marital property. George asserts this
delay was not his fault alone, and argues there exist unusual
circumstances in this case which mandate that the court look to a
date other than the date of dissolution to value the marital
estate.


¶16 Absent unique circumstances, the marital estate should be
valued at or near the time of dissolution. See, e.g., In re
Marriage of Lopez (1992), 255 Mont. 238, 244, 841 P.2d 1122, 1125.
Having reviewed the record, we conclude there exist no special
circumstances in this case which would warrant a deviation from the
general rule that the marital estate should be valued at the time
of dissolution. Moreover, we note, as did the District Court, that
it was indeed due in large part to George's dilatory tactics that
the parties were not prepared to proceed to trial on the issue of
property settlement until ten months after the date of dissolution.
For example, the record indicates that George failed to comply
with a number of scheduling orders, and that he repeatedly
requested that the court delay the trial in this case. Based on
the foregoing, we conclude the District Court did not err in
valuing the marital estate at the time of the January 4, 1996,
dissolution decree.
         C. Commercial Timber


¶17 George also argues the court erred in valuing commercial
timber on the parties' property separately from the real property
itself, and in including its value in the marital estate. George
urges that, pursuant to Montana law, live trees are considered a
part of real property, and argues that their value was included in
real estate appraiser John Wicks' property appraisal. George
points to that portion of Wicks' testimony in which he states that

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he included the value of the timber in his appraisal, and argues
the court thus erred in placing an additional value on the property
for the commercial timber in the amount of $880,089. George next
argues that, even if the court properly concluded that commercial
timber could have been removed without harming the value of the
land upon which it sat, the court relied on erroneous numbers in
determining the value of that commercial timber.


¶18 In ultimately deciding to value standing timber separately
from real property, the court relied in part upon testimony from
expert John Wells in which he opined that the standing timber alone
had a clear cut value of $2,673,948 and that the property had
commercial timber with an optimal cut value of $1,760,178.
Moreover, the court noted that, although Wicks had included the
value of standing timber in his appraisal, he opined that up to 50
percent of the merchantable timber could likely be harvested
without reducing the land's value. Following a review of the
record, we conclude the court did not err in valuing the standing
timber separately from the land upon which it stood, and in finding
that "the standing timber owned by the parties on their real
properties has a value in excess of the appraised value set forth
in Wicks' appraisal."


¶19 Although George argues the court relied on erroneous numbers
in determining the value of that timber, we again note that the
district court has broad discretion in valuing the marital estate
in a dissolution proceeding, and may adopt any reasonable valuation
of marital property which is supported by the record. Meeks, 276
Mont. at 242-43, 915 P.2d at 834-35. Here, the court's valuation
of the timber is supported by sufficient evidence of record, and is
not clearly erroneous.
         D. Reduction for Lack of Access


¶20 Finally, George argues the court erred in determining not to
reduce the value of certain real property due to lack of access.
More specifically, George argues that because the Red Hill property
is landlocked, the court erred in determining not to reduce the

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land's value by 30 percent to account for lack of access. George
points to expert testimony from Wicks in which he opined that lack
of access would affect the value of the Red Hill property, and
concluded that a $36,000 reduction in its value would be
appropriate.


¶21 The court ultimately chose not to reduce the value of the Red
Hill property by 30 percent, finding that "even without legal
access, George has been able to harvest approximately 800,000 board
feet of timber off 140 acres at a value of at least $80,000, and he
still owns the real property and remaining timber." Having
reviewed the record, we conclude the court did not err in finding
it unnecessary to reduce the value of the Red Hill property due to
lack of access.

                          ISSUE 2


¶22 Did the District Court err in its distribution of the marital
estate?


¶23 We review a district court's division of marital property to
determine whether its findings of fact are clearly erroneous. In
re Marriage of Hogstad (1996), 275 Mont. 489, 496, 914 P.2d 584,
588. If substantial credible evidence supports the district
court's findings and judgment, we will not disturb its decision
absent an abuse of discretion. Hogstad, 275 Mont. at 496, 914 P.2d
at 588. We review a district court's conclusions of law relating
to the division of marital property to determine whether those
conclusions are correct. In re Marriage of Danelson (1992), 253
Mont. 310, 317, 833 P.2d 215, 219-20.
         A. Liquidation Costs

¶24 George argues the District Court erred in failing to consider
liquidation costs in its distribution of the marital estate.
George asserts that both parties have acknowledged that there can
be no distribution without liquidation of assets, and that
liquidation would be necessary to meet outstanding liabilities,

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including the workers' compensation bill discussed above. George
thus argues the court abused its discretion by failing to consider
liquidation costs in its distribution of the marital estate.


¶25 As Pia argues, however, the court awarded her property, in the
form of real estate and timber, thereby devising a property
distribution pursuant to which no liquidation appears necessary.
In its order denying George's motion for a new trial, the court
specifically stated that it did not consider liquidation costs in
arriving at its decision because the record contained absolutely no
evidence that "George intended to liquidate any assets in
satisfaction of sawmill liabilities." Rather, the court noted,
"the evidence is clear [that] George intends to continue to operate
the Berg sawmill as he is doing today," and that "[l]iabilities
will be paid from the profits of the sawmill as they have been in
the past." Having reviewed the record, we conclude the District
Court did not abuse its discretion in deciding not to consider
liquidation costs in its distribution of the marital estate.
         B. Properties Acquired During Separation


¶26 George contends the court erred by including properties
acquired during the parties' separation in the value of the marital
estate. More specifically, George asserts the court erred in
including the Red Hill property, purchased in January 1990, and the
Lewistown Stafford Addition, purchased in 1992. George
additionally argues the court erred in including in the marital
estate a number of properties purchased in 1993. George asserts
that, because he acquired these properties following the parties'
separation, which he alleges occurred prior to January 1992, the
court erred in including their value in the marital estate and
including them in the property distribution.


¶27 Although George argues he and Pia separated prior to 1992, the
court specifically found otherwise, noting that Pia did not move
permanently from the family home until 1992. The Red Hill property
was acquired in 1990, well prior to the parties' separation.
Accordingly, we conclude the court did not err in considering it a

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part of the marital estate.


¶28 To determine whether the court erred in including property
acquired after the parties' separation in 1992 in the marital
estate, we turn to the provisions of Sec. 40-4-202, MCA, which
controls the division of property in dissolution proceedings.
Section 40-4-202(1), MCA, specifically provides that:
In a proceeding for dissolution of a marriage . . . the court,

   without regard to marital misconduct, shall . . . 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.

(Emphasis added.)


¶29 Pursuant to the specific terms of Sec. 40-4-202, MCA, and in
light of the fact that George has pointed to no authority to the
contrary, we conclude the court did not err in including properties
acquired following the parties' separation in 1992 in its
distribution of the marital estate.

                          ISSUE 3


¶30 Did the District Court err by imputing income to George in the
determination of his child support obligation?


¶31 We review a district court's award of child support for an
abuse of discretion. In re Marriage of Craib (1994), 266 Mont.
483, 490, 880 P.2d 1379, 1384.



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¶32 On appeal, George argues the court abused its discretion in
imputing income to him in the amount of $50,000 per year for the
purposes of determining his child support obligation. Two of the
parties' five children, both minors, reside with Pia. Although
George does not take issue with the custody arrangement, he does
dispute the court's determination that he pay a total of $996 in
child support each month. George asserts that his actual income is
roughly $12,000 per year, rather than the $50,000 imputed by the
court, and that he should thus be required to pay a total of only
$40 per month in child support.


¶33 In calculating George's child support obligation, the court
reviewed the parties' income tax returns for the years 1988 through
1995, and found that they "reflect[ed] a much greater income for
George than he is projecting for child support purposes." The
court thus found "that through the sawmill and ancillary income
producing assets (including yaks and leased property) owned by
George, it [would] impute income of $50,000 per year for purposes
of child support calculations."


¶34 Moreover, in its order denying George's motion for a new
trial, the court again explained that, in calculating child
support, it had
carefully analyzed all of the tax returns submitted to the

   Court and noted many unusual deductions in addition to

   depreciation and Sec. 179 deductions. The Court also was

   aware, through testimony, that George essentially pays

   all of his bills from the sawmill including his personal

   legal fees. This is a sawmill that generates from 3-4

   million dollars in annual income.



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¶35 Having reviewed the record, we conclude the court did not
abuse its discretion in imputing $50,000 of annual income to
George, and in ordering him to pay a total of $996 per month in
child support.


¶36 Affirmed.

                           /S/ JIM REGNIER
We Concur:
/S/ J. A. TURNAGE
/S/ WILLIAM E. HUNT, SR.
/S/ KARLA M. GRAY
/S/ TERRY N. TRIEWEILER




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