In re Marriage of Engen

In In re Marriage of Engen, (1998) MT 153, 289 Mont. 299, 961 P.2d 738, 55 St. Rep. 595, Husband received real property by gift prior to the marriage of the parties. The title to the real property was held by Husband alone. The parties were married in August of 1984. Husband continued to own the property until 1994, when the property was sold for approximately $ 100,000.00. The proceeds from the sale were placed in an account in the Husband's name. The parties purchased a condominium in November of 1994. The primary source of funds for the purchase of the condominium was the money that Husband received from the sate of Husband's premarital real property. The deed to the condominium indicated that the parties held the condominium as joint tenants. Wife agreed that Wife has not been on the title to Husband's premarital real property, and that she had not contributed, financially or otherwise, to the maintenance of Husband's real property. Wife stated that Wife had kept the condominium "up," but admitted that Wife had not invested money in the maintenance of the condominium. Wife had also not made any improvements in the condominium, other that "...to hang some drapes." The Montana Supreme Court framed the issue in Engen as follows: "...Did the District Court err when it awarded Wife one-half of the condominium which was purchased during the marriage with proceeds from the sale of a home in Norway which was given to Husband before the couple's marriage?" Engen supra, at St. Rep., pg. 595. In interpreting Section 40-4-202, MCA, the Montana Supreme Court in Engen, supra, at St. Rep., page 597, proceeded to state as follows: "...We have previously construed this provision to mean that regardless of who holds title, reacquired or gifted property need not be included in the marital estate unless the nonacquiring spouse contributed to its preservation or appreciation. In that event, we have held that the nonacquiring spouse is entitled to an equitable share of the appreciated or preserved value which is attributable to his or her efforts." The Montana Supreme Court continued as follows: "...Based upon our prior decision in Morse. Snyder, and Fitzmorris, we conclude that the District Court erred when it based distribution of the condominium solely on the form in which title was held, rather than on a consideration of the source of the funds with which the condominium was purchased and the parties' contributions to the maintenance of the condominium after it was purchased. We conclude that when those factors are properly taken into consideration, as they must be pursuant to 40-4-202, MCA, the condominium is Husband's separate property; that nothing done by Wife during the short period of time that the couple owned the condominium during the marriage contributed to its appreciation; and that the condominium should therefore have been distributed to the Husband." Engen, supra, at St. Rep. page 598. The Court emphasized that under ?40-4-202, MCA, regardless of who holds title, preacquired or gifted property need not be included in the marital estate unless the nonacquiring spouse contributed to its preservation or appreciation.