No. 82-291
IN THE SUPREME COURT OF THE STATE OF MONTANA
1984
IN RE THE OF
JAMES CARL BLANKENSHIP,
Petitioner and Appellant,
and
FLORLNCE R. BLANKENSHIP,
Defendant and Respondent.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis & Clark,
The Honorable Nat Allen, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Charles Graveley argued, Helena, Montana
For Respondent:
Smith Law Firm; James Sewell argued, Helena, Montana
Submitted: April 10, 1984
Decided: May 17, 1384
Filed:
Clerk
Mr. Chief Justice Frank I. Haswell delivered the Opinion of
the Court.
This is an appeal and cross-appea.1 from a decree divid-
ing marital property following a divorce in the District
Court of Lewis and Clark County.
Husband James Blankenship appeals the division of real
property, and wife Florence Blankenship cross-appeals the
denial of inclusion in the marital estate of the husband's
workers1 compensation award and division thereof.
Followi.ng entry of a 6ecree dissolving the marriage,
the parties and their respective attorneys signed a written
property settlement agreement dividing certain real property
in the Dry Gulch area near Helena between husband and wife.
The agreement dividing the real estate provided in relevant
part :
"Property Distribution. It is agreed
that the following property shall be
awarded to Ja.mesCarl Blankenship:
"24. Dry Gulch Property; legally identi-
fied as Placer Claim Survey No. 101,
situated in Section 12, TgN, R4W, Lewis
and Clark County; a portion of a parcel
of land and the residence at 1792 Dry
Gulch Road, Helena; said parcel of land
shall consist of the southerly end of the
original 16.26 acre tract of land pur-
chased by the parties in May, 1976. Said
parcel awarded to JAMES CARL BLANKENSHIP
shall include all land and improvements
southerly of a Line orj-ginating on the
westerly boundary of said 16.26 acre
parcel excepting any portion of that
tract of land, improved with mobile home
pads and improvements associated with
them, containing 1.26 acres; said Line
shall be parallel to the southerly bound-
ary of said 16.26 acre parcel and siad
[sic] Line shall be 150 feet northerly of
the nearest corner of the existing resi-
dence commonly known as 1792 Dry Gulch
Road, as shown on attached Exhibit 'A1.
Said parcel shall include a right of way
easement for the existing roadway that
traverses the length of the aforesaid
1 6 . 2 6 acre parcel, and shall include an
easement to use the existing well located
in said 1 6 . 2 6 acre parcel; Florence to
pay electricity for said pump and Carl
will maintain the same."
Exhibit "A" was a drawing of the Dry Gulch property and is
represented as follows:
Hence the dividing line was originally described in the
settlement agreement as being: ". . . 150 feet northerly of
the nearest corner of the existing residence."
Two days after the parties signed the agreement, their
attorneys signed an addendum to the agreement not signed by
the parties. The apparent intent was to eliminate ambiguity
as to where the dividing line would run and what partv would
receive the northern half. This addendum set the boundary at
a spot fifteen feet north of a garden spot on the parcel and
indicated that Florence Blankenship was to receive the land
to the north.
The property settlement agreement signed by the parties
and their attorneys reserved to the Court the issue of wheth-
er the husband ' s workers ' compensation award is marital.
property subject to equitable distribution by the Court.
On July 30, 1983, following a hearing, the District
Court held that the dividing line on the real estate com-
menced 125 feet north of the residence on the Drv Gulch
parcel with husbans awarded the southerly portion and wife
the northerly portion. This was a compromise of a dispute
that arose between the parties after execution of the proper-
ty settlement and addendum.
The Court further held that the workers' compensation
award was not a marital asset and the wife was not entitled
to any share thereof.
The issues on appeal and cross-appeal are whether the
District Court erred:
(1) in modifying the property settlement agreement and
addendum dividing the real estate; and,
(2) in holding the husband ' s workers ' compensation
award was not a marital asset subject to distribution.
I
Two statutory provisions are juxtaposed by the first
issue in this appeal. On the one hand, section 40-4-201,
MCA, provides for parties to a marriage to enter into a
property settlement agreement dividing their property. The
purpose of this section is clearly set forth: "To promote
amicable settl-ement of disputes between parties . . ." On
the other hand, section 40-4-202, MCA, provides the District
Courts with equitable powers to divide property and assets of
parties. In the present case, we have a situation where the
District Court substituted its particular division of proper-
ty in lieu of the parties' division as expressed in their
property settlement agreement.
Section 40-4-201, MCA, sets forth certain criteria that
must be present before a court may disregard a separation
agreement. Subparagraph two of the statute states that the
terms of the agreement are bindinq on the court unless it
finds the agreement ~~~~~~~~~~~~~~e. If the court does find
the agreement unconscionable, then the court may make its own
disposition of the property. Section 40-4-201(3), MCA.
There was no finding in the case at bar that the set-
tlement agreement was unconscionable. The trial court,
however, altered the dividing line of the Dry Gulch property.
In effect the court substituted its dividing line for the
dividing line described in Item 24 of the settlement agree-
ment. This substitution was made because the description set
forth in the aareement was alleged by counsel to be
confusing.
We find this substitution to be reversible error.
There was no requisite finding of unconscionablity prior to
the agreement being disregarded. Furthermore, the descrip-
tion in question is unambiguous. As we read the unambiguous,
a1 though cluttered, language of the agreement, the dividing
line is 150 feet north of the northwest corner of the house:
James Blankenship is awarded everything south of that line
except that part of the 1.26 acre tract improved with mobile
homes lying south of the dividing line. Florence Blankenship
is awarded the rest of the 16.26 acre parcel including that
portion of the 1.26 acres lying south of the dividing line.
The addendum signed by the attorneys is irrelevant.
The court had no power to substitute its judgment for an
unambiguous property description; the court's action in
fixing the dividing line at 125 feet north of the house is
void. The original description as set forth above is rein-
stated and the decree of dissol-ution shall be modified
accordingly.
By the nature of our decision on this issue, questions
concerning the propriety of the addendum signed only by the
attorneys are rendered moot.
I1
The District Court ruled as a matter of law that the
workers' compensation award of James Blankenship was not a
marital asset. This ruling precluded d.istribution of any
part of the award to his former wife. The question of wheth-
er workers' compensation benefits are marital property is one
of first impression for this Court.
In Heintzelman v. Heintzelman (Mont. 1981), 631. P.2d
290, 38 St.Rep. 1074, this Court decided that a District
Court could properly consider a husband's Fed-era1Employees'
Liability Act (FELA) settlement in evaluating his financial
ability to contribute to support or ma.intenance. We specifi-
cally did not reach the question of whether these benefits
constituted part of the marital property. In Kis v. Kis
(Mont. 1982), 639 P.2d 1151, 39 St.Rep. 11.9, this Court ruled
that a husband's retirement benefits from the Montana Depart-
ment of Fish and Game were properly included as a marital
asset of the parties.
It is clear from the record that James Blankenship was
awa-rded a workers ' compensation settlement that he presently
receives in monthly installments. The initial claim was
filed during his marriage in 1977. He began receiving pay-
ments in January 1981 after he filed for dissolution and
prior to issuance of a decree dissolving the marriage.
We are unable to discern from the record the function
or purpose of the award; whether the award was made to com-
pensate the claimant for lost earnings or future loss of
earning capacity. Nor are we able to discern when the award
vested in James Blankenship. The underlying iniury for which
this award was made is described variously. James Blankenship
in his deposition states that he had a continuing back prob-
lem, but that there was an accident that caused the injury in
June or July 1977. However, his counsel states in a supple-
mental brief filed with this Court that the injury occurred
in 1963, before his client's marriage to Florence
Blankenship.
Given the gaps and inconsistencies in the record we are
unable to make an informed decision as to whether the work-
ers' compensation award constitutes marital property. We
remand to the District Court for an evidentiary hearing on
the issue of the nature of the workers' compensation award.
This hearing and subsequent findings should address the
following subjects to the extent this information is
available:
1. The purpose of the award--that is, was it made for
lost earnings, loss of future earning capacity, or some other
purpose. The time period of any diminished earning potential
or disability will be relevant to our inquiry. The nature
and date of the underlying injury should be ascertained.
2. The terms of the award--it is important to note
when the award vested in James Blankenship, the total amount
of the settlement and any other known specifics of the award
itself.
Upon receiving such evidence, the District Court shall
enter its findings of fact, conclusions of law and order and
return them to this Court for our review.
The judgment of the District Court on the division of
the real property is reversed. The judgment pertaining to
the workers' compensation award is vacated and the case
remanded in accordance with this opinion.
%4Ar%,&
Chief Justice
We concur: