No. 81-527
IN THE SUPREME COURT OF THE STATE OF MONTANA
1982
SHERRIE HERRIG, KATHY HERRIG,
and PATTI HERRIG,
Plaintiffs and Respondents,
-vs-
HELEN M. HERRIG,
Defendant and Appellant.
Appeal from: District Court of the First Judicial District,
In and for the County of Lewis & Clark,
The Honorable Peter G. Meloy, Judge presiding.
Counsel of Record:
For Appellant:
Skedd, Ashley, McCabe & Weingartner; J. C.
Weingartner, Helena, Montana
For Respondents:
Smith Law Firm, Helena, Montana
Submitted on Briefs: April 1, 1982
Decided: July 12, 1982
Filed : JuL 1 2 1982
Mr. Justice Fred J. Weber delivered the Opinion of the
Court.
Defendant appeals from summary judgment in this action
for enforcement of divorce decree in the First Judicial
District Court, Lewis and Clark County. We affirm the
District Court.
Defendant presents the following issues to this Court
for review:
1. Whether the information contained in the deposition
of the husband's attorney was inadmissible as violative of
the attorney-client privilege.
2. Whether the provision in the divorce decree requiring
the father to maintain a life insurance policy for the
benefit of his children was valid and within the power of
the District Court to order.
Charles and Betty Herrig were divorced on February 24,
1972. The three minor children of the marriage remained
with their mother, who received $50 per child per month in
support, payable until each child reached her majority. The
divorce decree also provided, in pertinent part:
"The defendant [husband] shall retain Twenty-
two Thousand Five Hundred Dollars ($22,500.00)
life insurance on his own life, naming his
children as beneficiaries thereof. . ."
Charles Herrig carried life insurance with Metropolitan Life
Insurance Company, through his employer, Montana Power
Company. The policy was worth $22,500 at the time of the
divorce.
Charles Herrig remarried, and on February 26, 1975,
changed the beneficiary on his Metropolitan Life Insurance
policy, designating his second wife, defendant Helen Herrig,
as sole beneficiary. On October 27, 1979, Charles Herrig
died. At the time of his death, only one of the three
children from his marriage to Betty Herrig was still under
18 years of age. The value of his life insurance policy was
$50,000. In November of 1979, defendant claimed, and received,
the entire $50,000 from Metropolitan Life.
Plaintiffs, Charles Herrig's three children from his
first marriage, filed suit against defendant on August 4 ,
1980, seeking recovery of $22,500 from the proceeds of the
insurance policy, plus interest.
On November 3, 1981, following hearing on plaintiffs'
motion for summary judgment, the District Court granted the
motion. Defendant appeals to this Court.
During discovery, plaintiffs deposed the attorney
(Sternhagen) who had represented Charles Herrig in the 1972
divorce action. Defendant objected to the use of the deposition
and certain papers from the Herrig divorce file, arguing
that the information therein was protected by the attorney-
client privilege and could not be considered in this action.
The District Court in its findings of fact and conclusions
of law entered November 2, 1981, stated:
"Because of Mr. Sternhagen's uncertainty regard-
ing Mr. Herrig's intention, this deposition does
not support either plaintiffs' contention that
the daughters were to receive the insurance
proceeds no matter what, or defendant's conten-
tion that Herrig wanted to retain the right
to change the beneficiary on the policy. There-
fore, this deposition has not been used by this
Court to discern Mr. Herrig's intent concerning
the disposition of the insurance proceeds."
However, the order included extensive reference to and
reliance upon the divorce file submitted with Sternhagen's
deposition which leads us to conclude that the District
Court did, in some degree, rely upon the challenged information.
Thus, the question remains whether evidence, which could be
barred by the attorney-client privilege during the client's
lifetime may be disclosed after the client's death.
The parties do not dispute that the pertinent information
in Sternhagen's deposition as well as his file on the Herrig
divorce could have been barred during Herrig's lifetime, as
work product or privileged communication. But defendant
argues that section 26-1-803, MCA, read together with section
37-61-401(2), MCA, indicates the intent of the legislature
to extend the attorney-client privilege beyond the death of
the client. Those sections provide:
"An attorney cannot, without the consent of
his client, be examined as to any communica-
tion made by the client to him or his advice
given thereon in the course of professional
employment." Section 26-1-803, MCA.
"The death of a party to an action or proceed-
ing does not revoke the authority of his attor-
ney of record in said action or proceedings but
the authority of the attorney is continued in
all respects the same and with like effect as
it was prior to the death of such party until
such attorney shall withdraw his appearance in
said action or proceeding or some other attorney
shall be substituted for him or his authority
shall be otherwise terminated and entry thereof
made to appear in the record of such action or
proceeding." Section 37-61-401(2), MCA.
Defendant further argues that because the deceased
client can no longer contradict his attorney's disclosures,
it is crucial that the privilege be applied, to prevent the
attorney from disclosing evidence which can be used against
the client's estate.
Plaintiffs argue that the action is not against the
estate of Charles Herrig, but against defendant as constructive
trustee, to recover money from her which they claim was
equitably assigned to the children.
Plaintiffs also point out that section 26-1-803, MCA,
has never been construed by this Court where the client is
deceased. They argue that defendants have misapplied section
37-61-401(2), MCA, which, according to plaintiffs, does no
more than continue the authority of an attorney to serve in
a pending action after the death of his client. Plaintiffs
cite State ex rel. Ross v. District Court (1967), 150 Mont.
233, 433 P.2d 778, as supporting the same limited extension
of an attorney's authority beyond the death of his client.
Plaintiffs urge this Court to adopt the generally
accepted exception to the privilege rule. In 81 Am. Jur.
2d, WITNESSES 211, 8175, the general rule regarding duration
of privilege is stated as follows:
"Ordinarily, the protection given by the law
to communications made during the relation-
ship of attorney and client is perpetual,
and does not cease with the termination of
the suit, nor is it affected by the party's
ceasing to employ the attorney and retaining
another, or by any other change of relation
between them, or by the death of the client.
The seal of the law once fixed upon them remains
forever, unless removed by the party himself
in whose favor it is there placed. Some
privileged communications, however, may lose
their privileged character by the lapse of
time. That which may be confidential at one
time may not be so at an after time. Thus,
directions to an attorney to make a certain
contract are a confidential communication be-
fore but not after the contract is made. And
while an attorney cannot be compelled to dis-
close the contents of an answer in equity be-
fore it is filed, he may be afterward.
"The privilege -- apply in litigation,
does not
after the client's death, between parties, all
--
- - claim under the client, --- the
of whom as where
auestion - - - - shall take bv succession
-- - - - - - - is as to who
. -
- A
the property - - decedent. And- generally,
of the - so
where - -of the parties - - lawsuit claim
both - to a
under a deceased client, neither can assert
the prrvilege against the other. -- This rule
has been applied where the heirs - - grantor
-- of a -
-- grantee of a deed for recovery -
sued the of
the property conveyed by the decedent." (Emphasis
added. )
Plaintiffs refer us to McSpadden v. Mahoney (1967),
Okla. , 431 P.2d 432, where the Oklahoma Supreme Court
held that both the physician and the attorney for deceased
donor were competent to testify in an action by the deceased
donor's heirs at law against the donee to set aside inter
vivos gifts of real property. The court made the following
statement concerning the attorney-client privilege after
death of client:
"There can be no doubt that the testimony of
an attorney concerning communications with his
client is not admissible against the client
where the privilege against such testimony is
properly invoked. Jayne v. Bateman, 191 Okl.
272, 129 P.2d 188. The same rule applies to
the testimony of a physician. St. Louis-San
Francisco Ry. Co. v. Kilgore, Okl., 366 P.2d
936. But the privilege to exclude such testi-
mony is not applicable in the instant proceed-
ings. Here both parties are claiming under
the deceased, the plaintiff as an heir and
devisee and the defendant as a grantee and
assignee. In Gaines v. Gaines, 207 Okl. 619,
251 P.2d 1044, a case in which both parties
were claiming property under an assignment
from the deceased, this court held:
---
"'The rule of privilege between attorney and
client -- apply in litigation, after
does not
the client's death, between parties, - -
all of
whom claim under -- client.'
the same
"This exception has often been applied in
cases in which heirs or devisees of the gran-
tor sued the grantee of a deed for recovery
of the property conveyed. (citing cases)."
431 P.2d at 440. (Emphasis added.)
Plaintiffs also rely upon Bergsvik v. Bergsvik (1955),
205 Or. 670, 291 P.2d 724, which considered whether or not
testimony of an attorney for the deceased client should be
admitted where the conversation with the deceased client and
the attorney concerned the interpretation of a community
property agreement. The community property agreement conflicted
with the will, and the testimony of the attorney was necessary
to clear up the conflict. The court, in response to the
objections that such information was privileged between the
attorney and client, responded:
"[Allthough the conversations might have been
privileged during the lives of the parties,
after the death of both of them the privilege
is removed. The rule is stated in Corpus
Juris in this way:
"'It is generally considered that the rule
of privilege does not apply in litigation,
after the client's death, between parties,
all of whom claim under the client; and, so,
where the controversy is to determine who
shall take by succession the property of a
deceased person and both parties claim under
him, neither can set up a claim of privilege
against the other as regards the communica-
tions of deceased with his attorney.' 70
C.J. 438, Witnesses, 8587." 291 P.2d at 731.
In Tanner v. Farmer (1966), 243 Or. 448, 414 P.2d 340, the
Oregon Supreme Court allowed deceased wife's attorney to
testify that the wife had intended to divorce her husband
and cut him from her will. The court said:
"The Uniform Rules of Evidence propose that
the privilege shall not extend 'to a communi-
cation relevant to an issue between parties
all of whom claim through the client, regard-
less of whether the respective claims are by
testate or intestate succession or by inter
vivos transaction.' Rule 26(2) (b) Uniform
Rules of Evidence [now Rule 502 (d)(2) Uniform
Rules of Evidencejnot included in Montana
Rules of Evidence]. This is in keeping with
the Bergsvik decision and with the rule follow-
ed by the other courts. See McCormick on
Evidence (1954) 598, pages 199,200." 414 P.2d
at 342.
While the cases relied upon by plaintiffs are not
identical factually to the present case, we find plaintiffs'
argument persuasive. In the present case, all the parties
are next of kin to Charles Herrig and claim an interest in
his life insurance policy. The provision in the divorce
decree requiring that the insurance policy be maintained for
the benefit of plaintiffs conflicts with the amended provision
in the policy itself naming defendant as sole beneficiary. In
order to determine whether the insurance provision in the
divorce decree was something desired or agreed to by Charles
Herrig or was something which was imposed upon him by the
court, it is necessary to consider Sternhagen's deposition,
which indicates Charles Herrig's intent.
This Court has not considered whether section 26-1-803,
MCA, extends the attorney-client privilege beyond the client's
death; we now hold that, under the facts of this case it
does not; Sternhagen's deposition was admissible. We hereby
adopt the above exception to the general attorney-client
privilege rule; where both parties to a lawsuit claim under
a deceased client, neither can assert the attorney-client
privilege against the other. The District Court did not err
in considering Sternhagen's testimony and those papers which
were part of the Herrig divorce file.
11.
Defendant argues that the District Court in 1972 was
without power to require Charles Herrig to maintain his life
insurance for the benefit of his children, particularly,
where there was no provision for the termination of the
requirement as to each child when she reached her majority.
Defendant relies upon the following rules for support:
(1) A divorced parent has no greater obligation to his
children than a non-divorced parent. Clavin v. Clavin
(1977), 238 Ga. 421, 233 S.E.2d 151.
(2) A parent's legal obligation to support his children
ends with their emancipation--in Montana, at 18 years of
age. Chrestenson v. Chrestenson (1979), 180 Mont. 96, 589
P.2d 148.
Defendant concedes that a mutual separation agreement
or property settlement agreement which "clearly and unmistakably"
provided for insurance maintenance would be enforceable.
But defendant points out that "no property settlement agreement
was ever signed or filed with the [~istrict]court," and
argues that, even if it had been, such an agreement should
be enforceable as to each child only until that child reached
majority. Finlay-Wheeler v. Rofinot (1976), 276 Or. 865,
556 P.2d 952.
Defendant argues, too, that, apart from the question of
the admissibility of the deposition of Charles Herrig's
attorney, the attorney's speculations about Charles Herrig's
intent a decade earlier are not very conclusive evidence.
Defendant has raised a number of questions which are
not applicable here. In Chrestensen, supra, this Court did
not hold that all legal obligations cease when the child
reaches majority, but that the legal obligation to provide
child support ceases at that time. Justice Sheehy, in a
special concurrence, recognized "that the parties could
agree to an obligation to support a child beyond the age of
eighteen years." This is consistent with case law in other
states, and is perfectly logical. Similarly, where there
is no settlement agreement, a parent may, through his attorney,
suggest to the court certain provisions for the benefit of
the children which are agreeable to that parent. When the
court accepts the parent's suggestions, and incorporates
them into the decree, they are enforceable. In Clavin v.
Clavin, supra, the court stated:
"There is, of course, no question that a father
may agree to provide life insurance for the
benefit of his child. Such an agreement, if
valid and incorporated in the decree, will be
enforced. (Citations omitted.)" 233 S.E.2d
at 152.
Here, the District Court judge acted upon the husband's
offer to maintain his life insurance for his childrens'
benefit. The return on the order to show cause dated November
15, 1971, shows that the husband, whose take-home pay was
approximately $425.00 per month declared himself incapable
of paying $300.00 per month child support. He offered
instead to pay $50.00 per child per month ($150.00), and
further stated:
"The defendant is also agreeable to keeping
the group life insurance policy of the Mon-
tana Power Company, defendant's employer,
in the amount of $22,000, but alleges that
the beneficiary provision on such policy
should be changed to retain the children of
the parties but to exclude the plaintiff."
The attorney's records and testimony support plaintiffs'
argument that the District Court did no more than incorporate
into the divorce decree a provision for the protection of
the children, suggested to the court by the husband. The
District Court referred to those sections of the Herrig
divorce file which indicated Charles Herrig's intent to keep
up his life insurance for his children:
"Evidence of the existence of the oral property
settlement agreement, is found throughout the
court record of the Herrig divorce case, and
in the file kept on that case by William Stern-
hagen. Documents in Sternhagen's file have
become a part of the record in the instant
action.
"In notes taken over the phone by William Stern-
hagen in a conversation with Charles Herrig on
about November 24, 1970, the following appears:
"'5. MPC group life in. $22,000-beneficiary
will be children'
"The next document in Sternhagen's file is more
notes. At the top of the single page, he has
written, 'Maybe write to Kottas and make this
offer as the terms for a separation agreement.'
Written on that page is this notation:
"'Life Ins--$22,500 ben is wife-to be changed
to children---will keep up payments---right
reserved to change beneficiaries after youngest
child (12) becomes of legal age.'
"Attached to that page of notes is a letter to
Leo Kottas dated December 2, 1971, which pro-
poses terms for a separation agreement. Item
number 3 reads:
"'3. Mr. Herrig will keep up his life insurance
changing the beneficiaries to his children
reserving the right to change beneficiaries
if he so desires, but not until his youngest
child becomes of legal age.'
"A return on order to show cause was filed
December 15, 1971 by Mr. Sternhagen. The life
insurance provision therein states:
"'4. The defendant is also agreeable to keep-
ing the group life insurance policy of the Mon-
tana Power Company defendant's employer, in the
amount of $22,000.00, but alleges that the
beneficiary provision on such policy should
be changed to retain the children of the
parties but to exclude the plaintiff.' [see
above]
"In a post-trial memorandum, filed February
14, 1972, and prepared by defendant's attorney,
Mr. Sternhagen, he summarized Mr. Herrig's
testimony:
Mr. Herrig, in addition to the above, agreed
11 1
that he would continue to pay about $14 per
monthfor $22,500 insurance on his life and
that the children would remain beneficiaries
of this.' (emphasis added)
"In that memorandum was a section entitled
'Suggestions and requests for property settle-
ment.' Items 11. .
.read[s]:
"'11. Mr. Herrig continue the life insurance
for his children in the total coverage of
$22,500 which is at a cost to him of $14 per
month. ' "
These records were compiled during the 1972 divorce action.
Defendant's objection to Sternhagen's evidence, as being
unreliable due to the passage of years, is without merit.
This Court must determine whether summary judgment was
appropriate. The general rules governing summary judgment
were stated in Krone v. McCann (1982), Mont. , 638
"Under Rule 56(c), M.R.Civ.P., a summary judg-
ment is proper only if the record discloses no
genuine issue of material fact and that the
movant is entitled to judgment as a matter of
law. (Cites omitted.) The party moving for
summary judgment has the burden of showing the
complete absence of any genuine issue as to
all facts which are deemed material in light
of those substantive principles which entitle
him to a judgment as a matter of law. (Cites
omitted.) Once the movant has established
that no material issues of fact exist, the
burden shifts to the opposing party to raise
an issue of fact. As we stated in [Rumph v.
Dale Edwards, Inc. (19791, Mont. I
600 P.2d 163, 167, 36 St.Rep. 1022, 10261:
"'While the initial burden of proof must attach
to the moving party, that burden shifts where
the record discloses no genuine issue of mat-
erial fact. Under these circumstances, the
party opposing the motion must come forward
with substantial evidence raising the issue
[Citations omitted.] Once the burden has shift-
ed, the party opposing the motion is held to a
standard of proof which is as substantial as
that initially imposed upon the moving party.
[Citation omitted. 1 ' "
Respondents' brief in support of their motion for
summary judgment is adequately supported by reference to
the above rule and case law interpreting it. The brief sets
forth copious facts supporting respondents' argument that
Herrig's clear and continuing intent was to maintain his life
insurance policy for the benefit of his children. It points
out the offer in Herrig's return on order to show cause,
November 15, 1971, which stated that Herrig was agreeable to
keeping the policy but that the beneficiary provision should
be changed to retain the children.
Appellant's brief in opposition failed to raise any issue
of disputed fact, or to argue that there was any genuine issue
of material fact.
We find nothing in the record of the divorce itself
or of this action to indicate that any property settlement
agreement, oral or otherwise, had been reached between the
Herrigs at the time of their divorce. But the record leaves
no doubt that Charles Herrig intended his children to be the
beneficiaries of his life insurance, and that he offered that
benefit to the court in return for the court's lowering the
requested $300/mo. total child support to $50 per child per
month, or $150/mo.
The District Court never directly addressed the question of
--
whether Herrig effectively contracted with the court to waive
his right to change beneficiaries. But, the abundant evidence
from the Sternhagen file, which is undisputed except for the
question of its admissibility and the question of the duration of
the waiver, adequately supports the District Court's conclusion
that there is no genuine factual dispute over Charles Herrig's
intent to maintain the policy for his children. It would
be unreasonable for this Court to render invalid or unenforce-
able, the provisions of a divorce decree offered by one party
and accepted by the trial court, although unsought by the other
party, when those provisions involve benefits to the children.
A parent who offers to put his children through college, for
example, rather than pay the entire amount of support sought
by the other parent should be held to that agreement once
it is incorporated into the decree. Or a parent who offers
to pay medical/dental bills until his children are 21, rather than
pay full support asked until their majority, should not be
able to escape that bargain, once his offer has been accepted
by the court.
Here, Herrig offered to the court the life insurance
policy as trade for lower support. The court accepted the
offer. The record is clear and reflects no factual dispute
regarding that offer. We find there is no genuine issue of
material fact as to Herrig's intent to maintain his life
insurance for his childrens' benefit.
The second factual question was whether Herrig intended to
retain the right to change beneficiaries
(a) From the time of the divorce.
(b) When his youngest reached majority.
(c) As to each child when she reached her majority.
(d) Never.
There is absolutely no evidence to support (a) or (c) .
The insurance provision in the decree is meaningless if (a)
is found applicable; and the only argument in support of (c)
is that what appellant presents as the minority view (that
a parent can be required to maintain his life insurance for
his childrens' benefit), generally holds that the requirement
terminates upon the child's reaching majority. The minority
view is not applicable here, where the decree is obviously not
an imposition of the court's will upon Herrig, but rather an
incorporation of Herrig's offer into the decree. A parent's
legal obligation to support his children ceases with their
majority, but the parent can agree to extend their support or
benefits beyond that time. See Chrestensen concurrence, above.
That obviously is what happened here.
If (b) and (d) are the only two legitimate offers, as
indicated by the Sternhagen file, then the factual dispute is
not material, since in either case, the $22,500 policy for all
three children would be in effect at least until the youngest
reached her majority, which she had not, at the time of Herrig's
death.
Thus, although the District Court wrongly relied upon
an apparently non-existent settlement agreement between husband
and wife, the result was correct. There is no genuine issue of fact
as to whether Herrig intended to maintain the policy for his
children, and no issue of material fact as to when his right
to change beneficiaries came into effect. This Court has often
held that if the result reached by the trial court is correct,
it will be upheld regardless of the reasons given for the
conclusion. Steadman v. Halland (1982), Mont . , 641
P.2d 448, 452, 39 St.Rep. 343, 347; Johnstone v. Sanborn (1960),
138 Mont. 467, 471, 358 P.2d 399, 401.
Here, Charles Herrig, through his attorney, clearly indicated
to the trial court his willingness to keep up his life insurance
policy in the amount of $22,500 for his children, at least until
his youngest child reached her majority. The court incorporated
that offer into the divorce decree; the provision is enforceable
and may not be defeated by Herrig's subsequently naming his
second wife sole beneficiary. We refer to Matter of Estate of
Lemer (S.D. 1981), 306 N.W.2d 244, a case factually similar
to the case at bar, wherein the South Dakota Supreme Court
stated:
"[Tlhough a beneficiary named in a policy which
contains a provision reserving a right in the
insured to change the beneficiary is without
a so-called vested right in the policy, he may
nevertheless become invested with equitable
rights therein through a separate contract with
the insured, and. . .such rights may prevail
over the legal and equitable rights of one who
has been subsequently substituted as the named
beneficiary. (Cites omitted.) That such an
equitable right in the policy may arise from
a settlement of property rights in connection
with a divorce proceeding is not questioned.
(Cites omitted.)" 306 N.W.2d at 245-246.
Here, although plaintiffs were never actually named beneficiaries,
and their interest was created by agreement between the husband
and the court, the incorporation of the husband's offer into the
divorce decree created equitable rights in the policy, in the
children. Those rights prevail over the defendant's rights to
the extent of the value of the insurance policy referred to in
the divorce decree.
The District Court correctly granted judgment against
defendant in the amount of $22,500.
Af firmed .
We Concur: