Marriage of Waite Greenlee

Opinion

NO. 95-151

IN THE SUPREMECOURT OF THE STATE OF MONTANA 1995

IN RE THE MARRIAGE OF SHARONGAYLE WAITE, f/k/a Sharon Gayle Greenlee, Petitioner and Appellant, SEP 08 19%

and ROGERWAYNEGREENLEE, Respondent and Respondent.

APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Russell K. Fillner, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Kevin T. Sweeney, Sweeney & Healow, Billings, Montana

For Respondent:

Robert J. Wailer, Wailer & Womack, Billings, Montana

Submitted on Briefs: July 13, 1995 Decided: September 8, 1995 Filed:

Justice Terry N. Trieweiler delivered the opinion of the Court.

The appellant, Sharon Gayle Waite, filed a renewed motion for modification of decree of dissolution, a motion to determine dollar

value of judgment, and a motion to determine judgment, in the

District Court for the Thirteenth Judicial District in Yellowstone

County in which she asked the District Court to change residential

custody of the parties' minor son, modify the child support

language found in the dissolution decree, and determine the amount

the respondent, Roger Greenlee, owed her pursuant to the

dissolution decree. The District Court granted Waite's motion for

change of residential custody, established the child support

Greenlee owed Waite, and denied Waite's motion for payment of

income from Greenlee's partnership. Waite appeals the District

Court's child support and partnership decisions. We affirm the

order of the District Court.

Waite raises the following issues:

1. Did the District Court err when, for purposes of

calculating child support, it did not consider Greenlee's passive

income?

2. Did the District Court err when it failed to award Waite

a share of Greenlee's passive partnership income?

FACTUAL BACKGROUND

Sharon Gayle Waite and Roger Wayne Greenlee are in what

appears to be the final round of a twelve-round boxing match. By

all accounts, Waite and Greenlee have still not removed their gloves, tattered as they may be, and instead, continue throwing powerful head and body shots in an obvious attempt to reduce one

another to vegetable matter. What follows is our attempt to

referee the final round. See In re Marriage of Greenlee ( 19 9 1) , 2 4 9 Mont .

521, 816 P.2d 1073.

Greenlee is a dentist, and during the marriage entered into

the Rose Park Professional Center Partnership with four other

dentists. As a result, he became a one-fifth owner of the Rose

Park Professional Center. The sole purpose of the Partnership is

to "own, manage and maintain the Center, the building in which the

partners maintain their offices." The partnership generates income

by charging the partners and two non-partner tenants monthly rent,

although it appears from the record that the two non-partner

tenants pay an insubstantial amount of rent as compared to the

partners. The partnership uses the monthly rent to make its

regular mortgage payments and pay necessary expenses. At some

point, the partners agreed that they would use all but $1,000 of

each of the partner's yearly partnership distributions to make an

additional payment on the mortgage in an effort to retire the debt

owed for the Center at an early date.

On October 16, 1990, the District Court dissolved this

couple's marriage, ordered joint custody, and designated Greenlee

as the primary residential custodian of the two minor children,

Jene ' and Ryan.

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Eventually, Waite moved the District Court to designate her the primary residential custodian of Ryan, and it did so. However, Waite and Greenlee were unable to agree on the amount of child

support for which Greenlee was responsible. Therefore, the

District Court held a hearing, following which it found that

Greenlee had a net income in 1993 of $38,412, that he had interest

income in 1993 of $733, and that he had a total distribution from

the partnership in 1993 of $7,692, only $1,000 of which he actually

received. The remaining $6,692 was classified by the partnership accountant as "passive income," on which Greenlee was taxed.

The District Court found that the funds distributed to

Greenlee by the partnership represent a return of Greenlee's own

contribution to the partnership made during the course of the year.

In other words, Greenlee, through payment of rent, insured that at

the end of each year, he would receive a distribution from the

partnership, all but $1,000 of which the partnership would retain

in order to more quickly pay off the mortgage on the Center. The

District Court found that "it is not fair or reasonable to include

the passive income portion of this distribution as income for child

support purposes because it is not money over which Roger has any

control." Therefore, the court found that Greenlee's gross income

for child support purposes was $55,687, while his net income for

child support purposes was $40,145.

The District Court found that the dissolution decree

distributed Greenlee's interest in the partnership by awarding

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50 percent to Greenlee and 50 percent to Waite. However, for the following reasons, the District Court found that Waite was not

currently entitled to a share of the partnership distributions:

(1) the dissolution decree provided for Waite to receive her interest only upon sale of the Rose Park Professional Center;

(2) Waite benefits from the partnership retaining all but $1,000 of partnership distributions in order to reduce the debt owed on the Rose Park Professional Center;

(3) the distribution represented a return of Greenlee's own contribution to the partnership, rather than income from an independent source, and;

(4) the dissolution decree made it clear that Waite's interest in the partnership represents 50% of the expenses Greenlee paid to maintain his interest in the partnership. The District Court concluded that Greenlee should pay $400 per

month in child support from December 1993 through June 1994, and

$473 per month until Ryan reached the age of 19 or graduated from

high school, whichever occurred first. The court also concluded

that Waite was not entitled to any part of the distributions

Greenlee had received from the partnership since dissolution of the

parties' marriage in October 1990

ISSUE 1

Did the District Court err when, for purposes of calculating

child support, it did not consider Greenlee's passive income?

We have previously held that when reviewing modification of

child custody we will review the district court's findings of fact to determine whether they are clearly erroneous. We will review

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the district court's decision based on those findings of fact to

determine whether the district court abused its discretion. In re

Marriage ofElser (Mont. 1995) , 895 P.2d 619, 622, 52 St. Rep. 434, 436.

We conclude that the same standard of review is appropriate when

considering a district court's award of child support.

Waite contends that the District Court incorrectly applied the

Uniform Child Support Guidelines or, in the alternative,

misapprehended the effect of the evidence concerning Greenlee's income from the partnership, and therefore, awarded insufficient

child support. She claims that the correct application of the

guidelines in this case required that the District Court designate

any rent paid by Greenlee over the amount necessary to cover

necessary partnership expenses as income. Instead, the District

Court designated only $1,000 of the money annually returned to

Greenlee as income for purposes of determining child support.

Waite points to the definition of "gross income" in the

guidelines:

"[Glross income" for those who are self-employed, or who receive profits from a business enterprise such as . . a partnership . . . includes gross receipts minus ordinary and necessary expenses for . business operation.

Rule 46.30.1508(c), ARM. Waite asserts that this definition, along

with 5 40-4-204(l) and (2), MCA, requires that we reverse the

District Court's child support order.

Waite contends that because Greenlee elected, as a member of

the partnership, to apply partnership profits to payment of the

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mortgage on the Center, he cannot now claim that this income is unavailable to him to pay child support. She analogizes Greenlee's

partnership decision to apply part of his income toward payment of

the partnership mortgage to a "choice" to otherwise voluntarily

invest his money. However, the analogy is not valid. The partnership's decision to apply its profits toward payment of the

mortgage on the Center limited the extent to which Greenlee can

"choose" to "invest" his portion of the partnership profits.

Specifically, Greenlee can choose to invest only $1,000 of the

partnership profits or, in other words, that portion that he

actually receives.

Greenlee realizes only $1,000 of the rental income returned to

the partners, which the court correctly identified as income for

child support purposes. Moreover, Greenlee pays taxes on the full

$7,692, even though he receives only $1,000.

Greenlee correctly asserts that the cases upon which Waite

relies do not apply here because they all relate to parents who

have chosen to earn less than they were capable of earning, while

there is no indication in the record that Greenlee has a choice in

this matter.

Based on our review of the record we agree and conclude that

the District Court's findings are not clearly erroneous, and when

it applied those findings to its calculation of child support, the District Court did not abuse its discretion. We affirm the

District Court's child support award.

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ISSUE 2

Did the District Court err when it failed to award Waite a

share of Greenlee's passive partnership income?

We review the District Court's conclusions of law in relation

to the division of marital property to determine whether the

district court correctly interpreted the law. In re Marriage of Rock

(1993), 257 Mont. 476, 480, 850 P.2d 296, 298 (citing Schaubv. VitaRich

Dairy (1989), 236 Mont. 389, 391, 770 P.2d 522, 523).

Waite contends that the District Court's failure to award her

a share of Greenlee's partnership distribution "stood on its head"

the language in the prior decree which apportioned and distributed

the partnership interest.

In the decree of dissolution, the District Court divided the

interest in the Center "50/50 between the parties." The court

found that it could not give a specific market value for the

Center, so instead, "equitably" divided it '150/50" between Waite

and Greenlee. The court stated that Waite and Greenlee "will

assume the risks involved with this investment, will receive the

benefit of any tax consequences, any income or equity upon sale ofthis

property in thefuture T’

Waite emphasizes that the decree of dissolution states

specifically that both she and Greenlee are to receive the benefit

of "any income" from the partnership.

Waite contends that the District Court's ruling that she will

not receive income from Greenlee's share of the partnership until sale of the partnership is "utterly not true and not supported in the record." She initially asserts that the decree of dissolution

specifically states that she will receive half of any income

Greenlee generates from the partnership, and that the District

Court's failure to award her 50 percent of this income alters the

dissolution decree. Furthermore, Waite asserts that it defies

"both rules of grammar and logic" to hold to the contrary.

Greenlee responds that the dissolution decree states plainly that income will not be shared until the time of sale of the

partnership interest. We agree with this interpretation of the

District Court's decree.

The District Court's dissolution clearly provided that Waite

and Greenlee "will receive the benefit of . . any income .

upon sale of" the Center "in the future." The partnership has not

sold the Center, and Greenlee has not sold his interest in the

partnership. We conclude that the District Court was correct when

it held that Waite was not entitled to a share of Greenlee's annual

partnership distribution until sale of his partnership interest.

For these reasons, we affirm the order of the District Court.

Pursuant to Section I, Paragraph 3 (cl, Montana Supreme Court

1995 Internal Operating Rules, this decision shall not be cited as

precedent and shall be published by its filing as a public document

with the Clerk of the Supreme Court and by a report of its result

to Montana Law Week, State Reporter and West Publishing Company.

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We concur: