No. 81-201
IN THE SUPREME COURT OF THE STATE OF MONTANA
1981
CHARLES SOHA et al.,
Defendants, Cross-Complainants,
Cross-Defendants, Respondents
and Appellants,
VS .
CYNTHIA WEST,
Defendant, Cross-Complainant,
Cross-Defendant, Appellant and
Respondent.
Appeal from: District Court of the Eighth Judicial District,
In and for the County of Cascade
Honorable Joel G. Roth, Judge presiding.
Counsel of Record:
For Appellants:
James, Gray and McCafferty, Great Falls, Montana
John C. Harrison, Jr. argued, Great Falls, Montana
For Respondents:
Howard F. Strause argued, Great Falls, Montana
Submitted: September 21, 1981
Decided:
DEC 2 i 1981
Filed: DEC 2 i l9@
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
Both defendants appeal from a summary judgment entered
in favor of defendant West in the Eighth Judicial District,
Cascade County.
This case began as an interpleader action wherein the
plaintiff, a life insurance company, filed a complaint and
admitted its obligation to pay $29,310.09 pursuant tc a life
insurance policy issued by the plaintiff on the life of
Frederick Charles Soha. The plaintiff was discharged from
liability by depositing the funds with the clerk of the
District Court. The defendants filed their respective answers
and cross-complaints. Thereafter, defendant West filed a
motion for summary judgment. The District Court granted the
motion and entered summary judgment in favor of defendant
West in the amount of $28,840.00, plus all interest which had
accrued thereon. This amount ($28,840.00) was arrived at by
subtracting $470.00, which was awarded to plaintiff for
attorney's fees and costs, from the $29,310.00 awarded to
defendant West. Defendants Soha, et al., appeal from the
judgment in favor of defendant West. West appeals from
that portion of the judgment ordering that plaintiff's
attorney's fees be paid out of the insurance proceeds with
no provision requiring reimbursement by defendants Soha,
et al.
On May 31, 1979, Frederick Soha purchased a home in Black
Eagle, Montana, taking title solely in his name.
Frederick Soha and Cynthia West were married on June 29,
1979, and separated on September 15, 1979, after living
together as husband and wife for a total of 79 days.
On October 11, 1979, Frederick Soha applied for life
insurance with the plaintiff, Northwestern National Life
Insurance Company, through Mark Lopez, an insurance agent.
The policy was issued on October 15, 1979. Frederick
designated the primary beneficiary on the policy to be his
wife, Cindy L. Soha (now Cynthia West), if living, otherwise
to Charles Soha and LaRue Soha (Frederick's parents). When
she entered into the property settlement and separation
agreement, Cynthia West did not know that Frederick had
purchased the insurance policy or that she was named as the
primary beneficiary.
Frederick Soha had the right to change the beneficiaries
under the policy but he never exercised that right.
On November 7, 1979, Frederick and Cynthia Soha executed
a property settlement and separation agreement. Under the
terms of the agreement Frederick retained title to the house
in Black Eagle and remained liable for the debt owing on it.
The agreement does not refer specifically to the life insurance
policy. It contains a "Mutual Release" provision which
provides :
"In consideration of the execution of this
agreement, and the terms and conditions thereof,
each party hereto releases and forever discharges
the other party, his or her personal representative,
and assigns from any and all right, claims, demands
and obligations except as herein specifically provided
and each party is forever barred from having or
asserting any such right, claim, demand or obligation
at any time hereafter for any purpose. . . ."
The agreement also contains a "Full Disclosure"
provision which states:
"Each of the parties hereto represents and
warrants to the other as an integral part of
this agreement that there has been a full
disclosure of assets between parties."
On November 8, 1979, a joint petition for dissolution
of marriage was filed .in the District Court, and on November
15, 1979, a decree of dissolution was entered. The decree
incorporated the property settlement and separation agree-
ment.
On December 6 , 1979, the insurance agent delivered the
life insurance policy to Frederick Soha. At this time, the
agent told Frederick that Cynthia was named as the primary
beneficiary under the policy and that Frederick could change
the beneficiary at any time. Frederick had told a friend
that he was in no hurry to remove Cynthia's name from the
policy because he believed the property settlement agreement
took care of the problem.
Frederick Soha died on May 3, 1980, as a result of an
accident. He was survived by his ex-wife, Cynthia West,
and by his parents, Charles and LaRue Soha.
On this'record, the District Court entered summary
judgment for Cynthia West. It is obvious, however, that
questions of fact exist which require findings and a deter-
rtination by a trier of fact, especially as to the intent of
the parties relating to the operation of the property settlement
agreement. If their intent was that the agreement was final
as to their property, then the right to proceeds would not
vest in Cynthia West. The intent of the decedent as to the
effect of the policy beneficiary designation in the light
of the property settlement agreement is also a factual
issue. Indeed, it may be an issue that the failure of
Charles to disclose the presence of the insurance policy
amounted to a breach of the full disclosure clause of the
property settlement agreement. Where factual issues exist,
entry of summary judgment is premature. Rule 56, M.R.Civ.P.
The courts are divided on the effect of a property
settlement agreement which for all purposes ends the claims
of one party against another, in the light of insurance
policies vesting later which have beneficiary designations
that contravene the finality of the property settlement
agreement. We have held that the function of a property
settlement agreement is to make a "full and final" disposition
of the parties' rights with respect to their joint and
separate property. Miller v. Miller (1980), - Mont. I
616 P.2d 313, 317, 37 St.Rep. 1523, 1525-26. A beneficiary
of a policy of life insurance may become a trustee of the
proceeds by force of attendant circumstances.. 44 Am.Jur.2d
Insurance 5 1736. Kansas holds that the property settlement
agreement is final, and neither party to the agreement can
make any further claim except as provided in the agreement.
Hollaway v. Selvidge (1976), 219 Kan. 345, 548 P.2d 835.
Colorado and Florida agree, Matter of Estate of McEndaffer
(1977), 192 Colo. 431, 560 P.2d 87; Hoffman v. White (Fla.
App. 1973), 277 So.2d 290. Holding the other way are Shaw
v. Board of Administration (1952), 109 Cal.2d 770, 241 P.2d
635 (overruled on other grounds); Cassiday v. Cassiday (1969),
256 Md. 5, 259 A.2d 299; and Cox v. Employer's Life Insurance
Company of Wausau (1975), 25 Ill.App.3d 12, 322 N.E.2d 555.
Wyoming, Costello v. Costello (Wyo. 1974), 379 F.Supp. 630,
reasoned that the expectancy of a beneficiary is not effected
unless the property settlement agreement clearly indicates
that a contrary result is indicated.
Since consent is an essential element of a contract,
section 28-2-102, MCA, and consent is not mutual unless all
the parties agree upon the same thing in the same sense,
section 28-2-303, MCA, the extent and nature of the parties'
consents to the property settlement agreement are questions
of fact which must be first determined. Those questions
have yet to be determined in this case.
We affirm the award of attorney fees and costs to
Northwestern National Life Insurance Company, the stakeholder
in this case. A stakeholder, disinterested in the result,
who interpleads money or property so that a court may decide
the true owner is entitled to costs and reasonable attorney
fees for the interpleader action. Mutual of Omaha Insurance
Company v. Walsh (Mont. 1975), 395 F.Supp. 1219. Such fees
and costs may be charged against the stake to be distributed.
Rocky Mountain Elevator Co. v. Bamrnel (1938), 106 Mont. 407,
81 P.2d 673. Whether the stake should be replenished by the
losing party to the extent of the awarded fees and costs is
a matter for the discretion of the District Court, depending
upon the equities of the case. Generally, where a bona
fide conflict exists between parties as to which is entitled
to the stake, no absolute duty devolves upon the losing
party to bear the interpleader's fees and costs as awarded.
The District Court has discretion under section 25-8-101,
MCA, to order the deposited money to be delivered "upon such
conditions as may be just."
Affirmed as to the appeal of Cynthia West with respect
to attorneys fees and costs to the interpleader, and reversed
and remanded for further proceedings as to the Soha appeal.
No costs on appeal to either party.
i/ Justice V
We Concur:
Chief Justice
Justices