No. 83-484
IN THE SUPREME COURT OF THE STATE OF JIONTANA
1984
IN RE THE MARRIAGE OF
KATHLEEN T. MADDEN,
Petitioner and Respondent,
and
Respondent and Appellant.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable W. W. Lessley, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Larry W. Moran, Bozeman, Montana
For Respondent :
Landoe, Brown Law Firm; James M. Kommers, Bozeman,
Montana
Submitted on Briefs: April 5, 1984
Decided: July 13, 1 9 8 4
/ I . L\84
Filed: ' ' LJ
Clerk
P r Justice Daniel J.
l. Shea delivered the Opinion of the
Court.
Respondent husband, Willis Madden, appeals a judgment of
the Gallatin County District Court, modifying a prior final
dissolution decree on grounds that the property settlement
agreement that had been incorporated into that decree was
based on "extrinsic fraud" and was "unconscionable." The
trial court modified the decree by deleting that part of the
property agreement that required the wife to pay the husband
$15,325.00; ordered that the house premises of the couple
belong solely to the wife; and ordered the husband to pay
one-half of his retirement pension to the wife. We affirm.
The husband presents two issues. First, whether there
is substantial evidence to support the trial court's finding
of extrinsic fraud on the part of the husband. Second,
whether the property division resulting after the
modification of the decree is fair and equitable.
The parties were divorced on June 13, 1977, after a very
quick proceeding typical of uncontested dissolutions. The
wife appeared with the attorney who was representing both
parties; the husband did not appear. Although the wife was
named as the petitioner in the action, the husband actually
contacted the attorney, initiated the proceeding, and asked
that she be named as the petitioner.
The trial court entered findings and conclusions and
incorporated into the final decree a Property Settlement and
Child. Custody Agreement prepared by the attorney. The
"agreement" provided, among other things, that the wife was
to receive the house, but was also to pay off the mortgage.
However, the wife was not aware, and neither the husband nor
the attorney informed the trial court that the mortgage
required a balloon payment of $6,360 .OO two years after the
dissolution. The wife's take home monthly pay at the time of
the dissolution was $395.00, and the husband was paying no
maintenance and only $100 per month child support for two
minor children. The attorney and the husband also failed to
inform the trial court of the value of the husband's accrued
state employee pension, and the wife was awarded no part of
it.
The wife successfully petitioned to modify the decree on
grounds of extrinsic fraud. The trial court modified the
decree as stated above, and also ordered the husband to
deliver to the wife the quitclaim deeds to the house
premises, deeds he had wrongfully withheld after the original
decree.
The first issue is whether there is substantial evidence
to support the trial court's finding of extrinsic fraud,
sufficient to reopen the prior d-issolution judgment and
modify the decree under section 40-4-208(3) (b), MCA. That
section provides that a property disposition following a
dissolution may not be modified unless ". . . the court finds
. . . conditions that justify the reopening of a judgment . .
." Fraud is such a condition. Rule 60 (b)(3), M.R.Civ.P.
The husband contends that because there was full disclosure
of the balloon mortgage payment and the value of the pension
benefits between the parties, there was no fraud and no basis
to reopen the judgment. The wife contends that she was not
aware of the balloon payment, and even if she had been aware,
full disclosure between the parties is irrelevant to the
questicn of extrinsic fraud, as the fraud is on the court and
not on a party. We agree with the wife.
It is clear under section 40-4-202, MCA, that it is the
province of t.he trial court to divide the marital estate.
However, proper distribution cannot be made unless the
parties have informed the court of all marital assets and
liabilities. The trial court, at the modification hearing,
specifically found that the husband did not at the time of
the dissolution inform it of the mortgage balloon payment or
the value of the pension. That finding was based on the
testimony of the wife and the attorney who had represented
both parties in the dissolution. The ad-mission by the
attorney that he failed to divulge that information to the
court is sufficient evidence to support the finding, and that
finding is sufficient to establish extrinsic fraud and reopen
the judgment. Pilati v. Pilati (1979) 181 Mont. 182, 592
P.2d 1374.
The trial court then found the property settlement
agreement to be unconscionable because it included neither
the balloon payment liability nor the wife's interest in the
pension, and because of the circumstances surrounding the
agreement and the eventual dissolution. The circumstances
were that the husband initiated the dissolution but directed
the attorney to name the wife as the petitioner; that the
wife took no part in the process of drafting the agreement.;
that she met with the attorney only one time before the
dissolution proceeding; and, significantly, she did not seek
separate counsel because the husband assured her the attorney
would represent both interests. We agree that under those
circumstances the agreement was unconscionable and
unenforceable.
The trial court set aside in part the property agreement
in the original decree and redistributed the marital
property. The second issue is whether that property
redistribution is fair and equitable.
The rule in Montana is that the trial court has
"far-reaching d-iscretion" in making property divisions. We
reiterated the test in Torma v. Torma (Mont. 1982), 645 P . 2 d
"The reviewing court does not substitute its
judgment for that of the trial court, and will not
alter a judgment unless it finds an abuse of
discretion, i.e., that the trial court acted
arbitrarily without empl-oyment of conscientious
judgment or exceeded the bounds of reason resulting
in substantial injustice." Kowis v. Kowis (Mont.
,
1-983) 658 P. 2d 1048.
The effect of the modification was to award to the wife
the house a.nd surround-ing real property outright (with a
$9,350.00 encumbrance), and relieve her of her obligation to
pay the husband $15,325.00, purportedly representing his
share of the $50,000 appra-ised value on the home. The
modification also awarded to her one-half of the husband's
pension, and ordered him to turn over quitclaim deeds to the
house.
We see no abuse of discretion by the trial court. It is
p u Z z l - i n g to this Court how the husband expected the wife to
pay the balloon payment within two years of the marriage, and
then the $15,325.00 payment to him within five years of the
dissolution. She w a s taking home only $395 per month at that
t i n e and he was paying no maintenance and only $100 total
child support for two children. The wife has since been
injured on the job and is unemployed. The husba.nd is skilled
and rema.ins employed as a maintenance engineer at Montana
State University. We hold there is no substa.ntia1 injustice
in the resulting property distribution.
The judgment of the trial court modifying the original
June 13, 1977 decree and redistributing the marital property
is affirmed.
We Concur: