No. 14791
IN THE SUPREME COURT OF THE STATE OF MONTANA
1979
JAMES F. PHENNICIE,
Plaintiff and Appellant,
WINIFRED M. PHENNICIE,
Defendant and Respondent.
Appeal from: District Court of the Eighth Judicial District,
Honorable H. William Coder, Judge presiding.
Counsel of Record:
For Appellant:
Church, Harris, Johnson & Williams, Great Falls, Montana
Donald LaBar argued, Great Falls, Montana
For Respondent :
Conner, Baiz & Olson, Great Falls, Montana
Thomas Boland argued, Great Falls, Montana
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Submitted: November 6, 1979
m=-7 4 $Tn
Filed:
Mr. Chief Justice Frank I. Haswell delivered the Opinion of the
Court.
Plaintiff James I?. Phennicie brought this action in the
District Court of Cascade County four years after his divorce
from the defendant Winifred M. Phennicie to enforce the divorce
decree and property settlement agreement. The wife petitioned
for an order to show cause why she should not be entitled to a
modification of the divorce decree and the property settlement
agreement. The District Court issued the order to show cause
and a hearing was held. The District Court granted judgment in
favor of the wife. From this judgment, the husband appeals.
The parties to this action were divorced on October 17,
1974. The decree of divorce incorporated a property settlement
agreement made between the parties. This agreement specifically
provided that it was not to be merged with the decree, but was
to be forever binding on the parties. The trial court judge in-
corporated the agreement into the decree but reserved for the
trial court the authority to alter or amend those provisions of
that agreement respecting custody and support of the children.
For purposes of this appeal the pertinent provisions of
that agreement are as follows:
(a) The wife was to have custody of the three minor
children of the marriage.
(b) The husband was to deposit to a bank account the
proceeds of his military retirement check,which at the time of
the divorce was about $850 per month. This money was to be used
for child support, medical expenses of the children, and certain
expenses relating to the home owned by the parties.
(c) The wife was to account to the husband for expenditure
of all sums paid from the account and return all remaining funds
to the husband once a year.
(d) The wife, as the custodial parent, was to be granted
exclusive use of the family home until six months after the
minor child, James I?. Phennicie, Jr. graduated from high school.
At that time the house was to be sold and each party was to receive
one-half of the equity.
James F. Phennicie, Jr. completed high school in June,
1978. The house was not sold within six months of that date and
has not been sold as of the time of hearing. The accounting made
to the husband by the wife consisted of tax statements, house
payment statements, and the amount paid for certain insurance
premiums. The husband testified that there should have been
$14,969 remaining in the account after payment of the authorized
expenditures. The wife testified that she spent all of the money
from the account every year for the care and support of the child-
ren and the home.
On November 13, 1978, the husband filed a motion for an
order to show cause in District Court to enforce the divorce
decree and for breach of the property settlement agreement. The
husband asked for the appointment of a receiver who would be auth-
orized to sell the residence pursuant to the property settlement
agreement. The husband also asked for an amount of money alleged
to be owed him under the property settlement agreement.
On December 18, 1978, the wife petitioned for an order to
show cause why she should not be granted the full amount of the
husband's military retirement check, together with the exclusive
use and occupancy of the parties' residence until their minor
daughter reached the age of majority, and for her attorney fees
in connection with the action.
The motions for orders to show cause were granted, and -
both were heard on January 3, 1979. On February 9, 1979, the
District Court entered its findings of fact, conclusions of law
and decree. The District Court granted judgment in favor of the
wife and modified the divorce decree and property settlement
agreement accordingly. The husband appeals from this judgment.
The husband has raised three issues on appeal:
1. Whether he has been denied due process?
2. Whether there was substantial credible evidence to
support the judgment of the District Court?
3. Whether the District Court reserved to itself the
authority and the power to alter the original property settle-
ment agreement between the parties?
The wife has raised one issue on appeal:
1. Whether an action for the appointment of a receiver
is appropriate when other remedies are available to the husband?
Wife's petition for an order to show cause, a subpoena
duces tecum and an affidavit, all dated December 18, 1978, were
served on the husband on December 30. His attorney was not pro-
vided a copy of this document until January 3, 1979, the day of
the hearing. The husband contends that the lack of service upon
the attorney denied the husband adequate notice and constitutes a
denial of due process.
Rule 5(b), M.R.Civ.P. provides in part that "Whenever
. . . service is required or permitted to be made upon a party
represented by an attorney the service shall be made upon the
attorney . . ." The documents should have been served upon
husband's attorney pursuant to Rule 5(b). Whether this is re-
versible error requires an examination of the facts and the Mon-
tana Rules of Civil Procedure.
On November 13, 1978, the husband who is the plaintiff
in this action, filed a motion for an order to show cause. The
District Court issued an order to the wife which ordered her to
show cause why the family home should not be sold and an account-
ing made of the funds which the wife disposed of under the property
settlement agreement. It was after being served with this doc-
ument that the wife petitioned for a modification of the divorce
decree and property settlement agreement. As both of these
motions were set for January 3, 1979, it is difficult to under-
stand the husband's argument that he was not given notice. While
it is true that the two motions did not pertain to identical
issues, it is equally true that both motions did pertain to the
same divorce decree and property settlement agreement. Husband's
contention that he did not have adequate time to prepare financial
statements in order to meet the wife's show cause hearing is ten-
uous. He was served four days before the hearing. He could have
notified his attorney at once and asked for a continuance. The
record does not disclose that any attempt was made to continue
the action.
During the hearing the husband was allowed to testify fully
as to his financial affairs. On appeal the husband has not dir-
ected this Court to any additional evidence which was not produced
before the trial court and which is of a material nature. With-
out some evidence of this kind it is difficult to understand how
the husband was prejudiced by the lack of service on his attorney.
Rule 61, M.R.Civ.P. says, in part:
"No error . .
. or defect ... in anything done
or omitted . . . by any of the parties is ground
for . .. disturbing a judgment or order, unless
refusal to take such action appears to the court
inconsistent with substantial justice . . ."
Given the facts of this case the failure to make service
upon husband's attorney is not inconsistent with substantial
justice. We hold that the District Court judgment may not be
reversed for this reason.
The husband next alleges that several of the findings of
fact were not supported by substantial credible evidence. Sev-
eral of these allegations are without merit and need not be dis-
cussed.
The general rule as to the approach this Court will take
in these matters was stated in Cameron v. Cameron (1978),
Mont . , 587 P.2d 939, 945, 35 St.Rep. 1723 at 1729:
"We will not substitute our judgment for that of
the trier of fact, but rather will only consider
whether substantial credible evidence supports the
findings and conclusions. Those findings will not
be overturned by this Court unless there is a
clear preponderance of evidence against them. We
will view the evidence in a light most favorable
to the prevailing party, recognizing that substan-
tial evidence may be weak or conflicting with other
evidence, yet still support the findings."
The property settlement agreement provided that the wife
was to provide an accounting to the husband for expenditures of
all sums paid from the account. The trial judge found that the
wife had made an accounting. The wife testified that she made
what she thought was a sufficient accounting. She also testified
that she was never asked by the husband to provide a fuller ac-
counting. The husband testified that the accounting that he re-
ceived was not sufficient and that he had informed the wife of
this.
Applying the Cameron test, we affirm the finding. There
is not a clear preponderance of evidence against this finding.
It is true that the evidence is conflicting, however, taken in
the light most favorable to the wife the evidence is sufficient
to support the finding.
The trial judge made several findings which are pertin-
ent to section 40-4-204, MCA (which deals with the granting of
child support). As this was a hearing, in part, to modify such
an order, the husband claims that it is error to make such find-
ings. At worst these findings are irrelevant, They do not con-
stitute error.
Under section 40-4-208(2)(b), MCA, a child support pro-
vision may be modified only when there is "a showing of changed
circumstances so substantial and continuing as to make the terms
unconscionable . . ." The trial judge made such a finding in
this case. The fact that this finding was partially based on
factors enumerated in a different statute does not constitute
error so long as he made the requisite finding of changed cir-
cumstances so substantial and continuing as to make the terms
unconscionable.
In another finding of fact the trial judge found that
there had been a substantial improvement in the husband's fin-
ancial condition and prospects. This finding is supported by
testimony concerning the amount of money that the husband had in
savings and checking accounts. The husband testified that he
was expecting future losses in his new real estate business and
that he needed his equity from the home in order to meet his
anticipated expenses. There is substantial credible evidence to
support the finding that the husband's financial condition had
substantially improved. This in turn supports the finding that
there had been a substantial change in financial conditions zLnd
that it would be unconscionable not to modify certain child sup-
port provisions.
The trial judge found that the wife required the use of
the family home in order to raise the youngest of the minor
children. The wife testified that she could not afford to sell
the home and move into another home which would be adequate for
the raising of the minor child. The husband presented evidence
which was to the contrary. Once again we must apply the test set
out in Cameron, supra. Even though the evidence is conflicting,
we must affirm the finding of the trial judge based on substan-
tial credible evidence. We may not substitute our judgment for
that of the trial judge.
The trial judge awarded $500 to the wife for attorney fees.
The wife testified that she could not pay for these fees out of
her own funds. However, we can find no evidence which supports
the $500 award. In Houtchens v. Houtchens (1979), Mont . I
592 P.2d 158, 36 St-Rep. 501, this Court considered a similar
set of facts. This Court said:
"We find the court was adequately apprised of the
relative financial means cf the parties, and suf-
ficient evidence supported the court's finding of
wife's necessity for the award of reasonable attor-
ney fees. However, we do not find the method used
to substantiate the amount of the attorney fees
sufficient to uphold the award. 'An award of fees,
like any other award, must be based on competent
evidence.' First Security Bk. of Bozeman v. Tholkes
(1976), 169 Mont. 422, 429, 547 P.2d 1328, 1331
(quoting Crncevich v. Georgetown Recreation Corp.
(1975), 168 Mont, 113, 120, 541 P.2d 56, 59). The
only evidence supporting the $1,000 fee was the
wife's acknowledgement in testimony that a $1,000
fee was reasonable under the circumstances. This
evidence standing alone, is insufficient to verify
the reasonableness of the attorney fees awarded.
The cause is therefore remanded for determination
of reasonable attorney fees consistent with the
authority cited." 8 2 P.2d at 162, 36 St.Rep. at
4
505. -1
Because there is insufficient evidence in the instant
case which would substantiate the $500 amount, the award may not
be upheld.
The husband contends that the District Court had no power
or authority to alter the property settlement agreement. Section
40-4-201, MCA, allows separation agreements to be incorporated into
a decree of dissolution. This statute provides that such agree-
ments may expressly preclude or limit modification of terms ex-
cept for terms concerning support, custody, or visitation of child-
ren.
The property settlement agreement in the instant case
provides that the agreement was to be incorporated into the final
decree, but "that this agreement shall not be merged with said
decree of divorce but shall survive and be forever binding on the
parties." In the divorce decree the District Judge incorporated
the property settlement agreement except that the "provisions
respecting custody and support of the children being subject to
further order. "
The property settlement agreement contains several sec-
tions. Section 2 is denominated Child Support and Alimony.
Section 3 is denominated Real Property. In Section 2 the wife
waived alimony in exchange for the bank account which was to be
funded by the husband's military retirement check. According
to this section the money in the account is to be used, in part,
for child support, certain medical expenses incurred on behalf of
the children, and expenses pertaining to the family home includ-
ing the house payments, taxes, insurance, home repair, electric-
ity, gas, telephone, and water. Section 3 provides, in essence,
that the family home was to be sold not later than six months after
the minor son graduated from high school.
The husband contends that the terms concerning the sale
of the family home constitute a property issue and that these terms
may not be modified. The wife contends that these terms consti-
tute a child support issue, and, as a result they may be modified.
We note that a large portion of the child support section of the
agreement deals with the paying for and maintenance of the family
home.
Why the home was to be sold after the second child grad-
uated from high school, rather than after the youngest graduated,
is not clear. What is clear is that the home was an integral
part of the child support provisions so long as the second child
was still a high school student. The husband has not supplied
us with any reason why the availability of the home to the wife
and third child should become any less important as a term of
child support once the second child has graduated from high school.
Consequently, we find that the terms concerning the home, in this
case, were part of the child support provisions and as such may be
modified by further order. There was no error in allowing the wife
and minor child to remain in the home until the youngest minor
child graduates from high school.
Having decided the case in this manner it is unnecessary
to consider whether the husband's petition to appoint a receiver
was proper.
The District Court is affirmed except as to the amount
of attorney fees. Following Houtchens, supra, the cause is re-
manded to the District Court for a hearing to determine a reason-
able amount to be awarded the wife for her attorney fees.
Chief Justice