No. 83-322
IN THE SUPREME COURT OF THE STATE OF MONTANA
1984
IN RE THE MARRIAGE OF
ANN MARIE LORGE,
Petitioner and Respondent,
and
ROGER WILLIAM LORGE,
Respondent and Appellant.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable James M. Salansky, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Murray, Kaufman, Vidal & Gordon; Marshall Murray,
Kalispell, Montana
For Respondent:
E. Eugene Atherton, Kalispell, Montana
--
Submitted on Briefs: September 8, 1903
Decided: January 6, 1984
Filed: !AC\j ,; .- 1984
Clerk
Mr. Justice Fred J. Weber delivered the Opinion of the
Court.
Roger William Lorge (the husband) appeals from an order
of the District Court of Flathead County, requiring him to
convey certain real property free of all liens to Ann Marie
Lorge (the wife), awarding attorney fees to the wife, and
stating that the parties' property settlement agreement would
be set aside and a hearing held to determine division of the
marital assets if the husband failed to convey the property
and pay the attorney fees. We reverse in part the order of
the district court.
The wife petitioned for dissolution of the marriage in
January, 1979. On July 30, 1981, the parties executed a
property settlement agreement which stated that they had
separated in 1977. The agreement purported to make a final
settlement of all claims either party might have against the
other.
Paragraph 6 of the agreement sets forth the division of
marital property. Subparagraph 6 (g) provides that a certain
tract of jointly-owned real property in Flathead County was
to be conveyed to the wife within 90 days of the date of the
agreement free of any liens and encumbrances. There was no
provision in the agreement regarding enforcement or attorney
fees.
The Decree of Dissolution of Marriage was entered the
following day. The court approved the agreement in the July
31, 1981 decree:
"[Tlhe parties having resolved all property and
custody disputes on the morning of trial and having
represented to the Court, on the record, the nature
of such resolution . . .
and the Court having duly
considered the custody and property settlement
agreement previously filed herewith and finding it
reasonable, not unconscionable and approving same;
... I1
No further reference is made to the agreement. The court did
not specifically incorporate the provisions of the agreement
into the decree.
A $10,350 mechanic's lien dated August 28, 1979
encumbered title to the property that was to be conveyed to
the wife. Summons and complaint for foreclosure of the
mechanic's lien were served on the husband by the lienholder
on August 5, 1981. The 90 days within which the husband had
agreed to convey clear title to the property to the wife
expired in October, 1981.
On December 21, 1981, the wife petitioned the court to
enforce the settlement agreement by compelling the husband to
convey clear title to the property to her. She also asked
for reasonable attorney fees and costs incurred in the
enforcement action. On May 27, 1983, approximately 17 months
after the date on which the enforcement petition was filed
and 19 months after the agreed date on which the husband was
to have conveyed clear title to the property, the court
issued the following order:
"It is hereby ordered that Respondent shall, before
June 1, 1983, convey unto Petitioner herein Tract
2J in the Northeast Quarter of the Southwest
Quarter of Section 11, Township 28 North, Range 22
West, M.P.M., according to his agreement in the
Marital Property Agreement executed between the
parties on July 31, 1981 and made a part of the
original Decree of Dissolution herein on June 31,
1981. When conveyed, said property shall be free
and clear of any and all liens whatsoever.
"It is hereby further ordered, that Respondent
shall, before June 1, 1983, pay to E. Eugene
Atherton, P. 0 . Box 1796, Kalispell, Montana, the
sum of $580.00, as and for attorney fees incurred
by Petitioner in bringing her action to enforce the
Property Settlement Agreement.
"If Respondent shall fail to comply with either or
both of the above orders by June 1, 1983 then, in
such event, this Court will thereupon promptly
order the Decree of Dissolution previously rendered
herein on July 31, 1981 to be set aside as it
relates to the unconscionability of the Property
Settlement Agreement that was attached thereto and
incorporated therein by reference and shall
thereupon set a further hearing to determine the
division of the marital assets between the
parties. "
From this order, the husband appeals the provisions
pertaining to attorney fees and conscionability of the
settlement agreement. The first part of the order, which
enforces paragraph 6(g) of the agreement, is not challenged
on appeal.
Two issues are presented:
1. Did the District Court err in awarding the wife
attorney fees incurred in bringing an action to enforce the
property settlement agreement?
2. Did the District Court abuse its discretion by
ordering the property settlement agreement to be set aside if
husband failed to comply with its order to convey the
property free and clear of liens?
The husband argues that because the agreement is a
private contract, was not incorporated into the decree, and
contains no provision for enforcement or fees, the court's
award of attorney fees to the wife is without basis and
clearly erroneous.
Paragraph 10 of the settlement agreement provides that
the "agreement may be submitted to the Court in the
proceedings for dissolution of marriage . .. for approval,
and that the same may be incorporated in any decree of
dissolution given by said Court with the provisions of this
Agreement made on order in said decree, to be performed by
the parties." Neither party appealed the decree, which
specifically approved but did not incorporate the provisions
of the agreement.
Section 40-4-201(4), MCA provides:
"(4) If the court finds that the separation
agreement is not unconscionable as to disposition
of property or maintenance and not unsatisfactory
as to support:
"(a) unless the separation agreement provides to
the contrary, its terms shall be set forth in the
decree of dissolution or legal separation and the
parties shall be ordered to perform them; or
"(b) if the separation agreement provides that its
terms shall not be set forth in the decree, the
decree shall identify the separation agreement and
state that the court has found the terms not
unconscionable."
Section 40-4-201 (4), MCA permits parties to choose whether
the terms of their agreement shall be set forth in the
decree. If this is done, the agreement is enforceable as a
judgment as well as a contract, and attorney fees are
statutorily authorized. Sections 40-4-201(5), 40-1-110, MCA;
Jensen v. Jensen (Mont. 1981), 629 P.2d 765, 769, 38 St.Rep.
Here the court identified the separation agreement and
stated that its terms were not unconscionable. The agreement
did not provide "that its terms shall not be set forth in the
decree," but the parties did not request that it be
incorporated into the decree. The court followed the
procedure prescribed in subsection 40-4-201(4) (b), MCA. It
identified the agreement and stated that the court found the
terms to be "reasonable, not unconscionable." It did not set
forth the terms of the agreement in the dissolution decree.
At the May 3, 1983 enforcement hearing, the court
reiterated that the agreement had not been incorporated into
the 1981 decree:
"THE COURT: I don't think that was made part of
the decree . .
. It [the separation agreement] is
not incorporated. It is approved." Transcript at
17-18.
On May 19, 1983, the wife petitioned the court for an order
nunc pro tunc adding the following language to the 1981
decree:
"The custody and property settlement agreement
previously filed herein is adopted by reference and
made a part of this decree; the parties hereto are
ordered to comply with its terms and conditions."
No ruling was made on the record concerning this petition,
and no order nunc pro tunc issued.
When the terms of an agreement are not set forth in the
decree, the agreement retains the status of a private
contract and the remedies for the enforcement of a judgment
are not available. Commissioners' Note, Annot. to section
40-4-201 (4), MCA.
Both parties concede that their property settlement
agreement contains no provision for attorney fees and that
there is no contract between them that provides for such an
award. Since the agreement was not raised to the status of a
judgment by incorporation into the decree, the wife's
remedies are limited to those available under contract
theory. Her right to attorney fees must stand or fall upon
the provisions of the agreement and contract law.
Section 27-1-311, MCA specifies that the measure of
damages for the breach of contract is the amount which will
compensate the aggrieved party for all the detriment that was
proximately caused or that would ordinarily be likely to
result from the breach. Section 28-3-704, MCA provides for
mutuality of obligation for attorney fees. Where one party
has an express right to recover attorney fees from the other
party to a contract, both parties are deemed to have the same
right of recovery. Absent a statute or a contractual
provision specifically providing for recovery, attorney fees
are generally not recoverable. Sliters v. Lee (Mont. 1982),
641 P.2d 475, 476, 39 St.Rep. 453, 455.
Here, there is neither contract nor statutory
authorization for the award of attorney fees. We reverse the
award of $580 for attorney fees incurred by the wife in
bringing her action to enforce the property settlement
agreement.
The husband also appeals from that part of the order
which states the court would set aside the parties' property
settlement agreement as unconscionable and set a hearing to
d-istribute the marital assets by court order if the husband
failed to comply with the other two provisions of the
enforcement order. He argues that compelling conveyance and
payment of attorney fees in this manner constitutes an abuse
of discretion.
Section 40-4-201(2), MCA imposes a duty upon the court
to inquire into the conscionability of the property
settlement agreement before it is approved:
"In a proceeding for dissolution of marriage . . .,
the terms of the separation agreement, ...
are binding upon the court unless it finds . . .
- - separation a g r e e m e n u~conscionable."
that the -
(emphasis added)
The district court specifically considered the question of
conscionability in 1981. It entered a decree stating that
the court had duly considered the property settlement
agreement, found it "reasonable, not unconscionable" and
approved it. No evidence challenging the conscionability of
the agreement was offered at the wife's enforcement hearing.
Modification of a property disposition is governed by
section 40-4-208(3), MCA, which provides:
"The provisions as to property disposition may not
be revoked or modified by a court, except:
(a) upon written consent of the parties; or
(b) if the court finds the existence of conditions
that justify the reopening of a judgment under the
laws of this state."
As noted by Justice Sheehy, dissenting in part, in
Hadford v. Hadford (Mont. 1981), 633 P.2d 1181, 1187, 38
St.Rep. 1308, 1316:
"The court may relieve a party under section
40-4-208(3) (b), MCA from a final judgment or order
for mistake, inadvertence, surprise, excusable
neglect, newly discovered evidence, intrinsic and
extrinsic fraud, misrepresentation, misconduct, and
'any other reason justifying relief from the
operation of the judgment. Rule 60(b),
M.R.Civ.P."
No facts indicating the existence of any of the
conditions specified by Justice Sheehy in Hadford were set
forth in the wife's petition, nor presented at the show cause
hearing. As was the case in In re the Marriage of Gibson
(Mont. 1983), 671 P.2d 629, 632, 40 St.Rep. 1780, 1784:
"The District Court made no findings or conclusions
indicating that there were conditions that
justified reopening the 1979 decree. No evidence
of oppression, fraud or malice was presented at the
show cause hearing."
We hold that, absent evidence justifying reopening the
decree and absent proper findings, the District Court abused
its discretion by ordering the Lorge settlement agreement set
aside if the husband failed to comply with the court's
enforcement order.
We reverse the provision of the court's order awarding
attorney fees and setting aside the agreement as
unconscionable for lack of compliance. We remand the cause
to the District Court for amendment of its order in
accordance with this opinion and for such further proceedings
as may be appropriate in the light of this opinion.
We concur:
Justice John C. Sheehy, dissenting:
I dissent because the majority does not give any direc-
tion to the district court or remand on how to afford relief
to the wife. The majority tells the wife she is stuck with a
decree that does not incorporate the settlement agreement.
Without the protection of an incorporated agreement in a
decree, enforcible as a judgment, there is little the dis-
trict court can do to aid the wife and prod a husband who is
flouting the court and the wife on terms he and the wife had
agreed to as proper. The wife is only further delayed here.
Larger than the effect of delaying wife's relief (and
that is serious in itself) is the effect this decision will
have on other cases.
Contrary to what is said in the majority opinion, the
district court did not follow section 40-4-201(4), MCA, when
it entered the original judgment as far as the property
settlement agreement is concerned. In subdivision 4 (a), it
is required ". . . unless the separation agreement provides
to the contrary, its terms shall be set forth in the decree .
. ." Here the district court had a statutory duty to incor-
porate the terms of the property settlement agreement. When
the agreement is silent as to incorporation, there is no
choice given to the court or the parties. The statute -
re-
quires incorporation in that event. Such a provision is a
protection to the parties, especially to a wife.
The wife ought not to be foreclosed from the protective
pro~rision of subdivision 4 (a) because the district court
missed its duty in the first instance. "That which ought to
have been done is regarded as done, in favor of him to whom
and against him from whom performance is due." Section
1-3-220, MCA. Equity regards as done what ought to have been
done. Shook v. Woodard (1956), 129 Mont. 519, 290 P.2d 750;
Montana Power Co. v. Federal Power Commission (CA 9, Mont. )
(19641, 330 F.2d 781. Dissolution of marriage is an equita-
ble proceedings.
Because in this case, under the statute, the district
court should have incorporated the agreeement in the decree,
I would hold that wife is now entitled to all available means
of enforcing her rights under the agreement, including con-
tempt proceedings, execution, specific performance, and
damages for breach.
For the same reasons, I would hold wife is entitled to
attorney's fees and costs under section 40-4-110, MCA, which
is a statutory grant in dissolution cases independent of any
contractual provisions.