No. 85-109
I N THE SUPREME COURT O F THE STATE O MONTANA
F
1985
KAY HUNT,
P l a i n t i f f and R e s p o n d e n t ,
-vs-
HAROLD RALPH H U N T ,
Defendant and A p p e l l a n t .
APPEAL FROM: D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t ,
I n and f o r t h e County o f Y e l l o w s t o n e ,
The H o n o r a b l e D i a n e G . B a r z , J u d g e p r e s i d i n g .
COUNSEL O RECORD:
F
For Appellant:
A. L . C r a d d o c k , R e d Lod-gel Montana
For Respondent:
James P. Murphy, B i l l i n g s , Montana
S u b m i t t e d on B r i e f s : Aug. 22, 1985
Decided: December 1 8 , 1385
Filed:
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Mr. Justice Fred J. Weber delivered the Opinion of the Court.
The Yellowstone County District Court held that Harold
Ralph Hunt (husband) owed Kay Hunt (wife) $24,064.03, which
arose out of an obligation under a
. property settlement
agreement and divorce decree entered in 1981. Husband
appeals. We affirm.
The issues are:
1. Did the District Court err in concluding that the
original debt of $10,000 in connection with the motel
purchase was not satisfied by the transfer of the house by
the husband to the McCartys?
2. Did the District Court err in concluding that the
payment of $15,000 by the wife to the McCartys was reasonable
and that the payment of $15,000 was legally owed by the
husband?
3. Did the District Court err in concluding that the
second mortgage on the house was the husband's obligation,
and that the wife paid $11,255.63 to satisfy that obligation?
4. Did the District Court err in granting the wife a
credit for material and labor for remodeling the house?
5. Did the District Court err in awarding the wife
$24,064.03?
Kay and Ralph Hunt were divorced in October 1981.
During their marriage, the parties purchased a house subject
to a purchase money trust indenture. They also purchased by
separate contracts for deed a motel property and a rural
building lot (Fox property). IJnder the motel contract for
deed, a payment of $10,000 was due to the McCartys, the
sellers of the motel. Under the divorce property settlement
agreement, the wife was awarded the motel property and the
husband was awarded the house and the Fox property. The
parties receiving the properties were to assume the
outstanding debts, with the exception that the $10,000 due to
the McCartvs on the motel property was to be paid by the
husband. When he was unable to pay the $10,000 due, he
quitclaimed to the McCartys his interest in the house.
McCartys reserved the right to a deficiency judgment should
the house sell for less than the debt. The husband testified
that he considered the obligation due McCartys to have been
satisfied in full by the transfer.
In October 1983, the wife sold the motel property.
Prior to the sale, she was required to obtain the McCartys'
consent to the sale. She testified the McCartys would not
give their consent to the sale of the motel property without
payment in cash. The wife asked the husband to pay the
amount demanded by the McCartys. He did not do so because
he claimed the original obligation was satisfied. As a
result, the wife negotiated an arrangement with McCartys to
pay them $15,000 in two installments from the proceeds of the
motel sale. Their agreement specified that the payment of
$15,000 represented the balance due under the original
contract for deed of $10,000 plus interest and costs.
As a part of the settlement, McCartys deeded the house
to the wife. After completion of the motel sale, the wife
moved into the house and improved the house to make it more
marketable. In February 1984, the wife sold the house. Prior
to the sale, Kay Hunt paid Household Finance $563. From the
proceeds of the sale, she paid the second mortgage on the
house in the sum of $10,692.53. The second mortgage was
originally made in connection with the purchase of the Fox
property.
The District Court concluded that the husband was
obligated to pay the $10,000 plus interest under the property
settlement agreement; that the debt was not satisfied by his
transfer of the house to the McCartys; that the wife's
payment of $15,000 to the McCartys was a reasonable sum and
that that payment was legally owed by the husband; that
because the house was Ralph's, the second mortgage was the
obligation of the husband; and that the wife's payment of the
second mortgage was the payment of an obligation owed by the
husband. The court concluded that the husband owed the wife
$24,064.03. The husband appeals.
Did the District Court err in concluding that the
original debt of $10,000 in connection with the motel
purchase was not satisfied by the transfer of the house by
the husband to the McCartys?
Both parties agreed that the husband originally owed
the McCartys $10,000. When Ralph was unable to pay that
obligation, he agreed to quitclaim the house to the McCartys.
He also agreed that if a deficiency resulted from the sale,
the McCartys could proceed against him for a deficiency
judgment.
The husband argues that the transfer of the house
amounted to an accord and satisfaction. He cites Hale v.
Belgrade Co. (1925), 75 Mont. 99, 242 P. 425. In Hale, the
Court concluded that the conveyance of the real property was
full consideration for the antecedent debt and was
unconditionally accepted as a full satisfaction of the debt
with nothing remaining to be done. That case is clearly
distinguishable from the present case because the husba-nd
agreed with the McCartys in writing that if there was a
deficiency after the house sale, he remained responsible for
the deficiency. It is clear that the agreement did not
constitute an accord as defined in S 28-1-1401, MCA.
We conclude there is substantial evidence to support
the factual determination by the court that the original debt
owing to the McCartys was not satisfied by the husband's
transfer of the house to them.
I1
Did the District Court err in concluding that the
payment of $15,000 by the wife to the McCartys was reasonable
a.nd that the payment of $15,000 was legally owed by the
husband?
The husband attempts to argue that the wife's payment
of $15,000 to the McCartys was not a reasonable sum. There
is substantial evidence in the record to support the District
Court's conclusion that the $15,000 was a reasonable sum in
settlement of the total balance due.
The husband attempts to reargue that the $1.5,000 was
not actually his obligation because the transfer of the house
was in full satisfaction of his obligation owing to the
McCartys. There is substantial evidence in the record to
support the District Court's conclusion that the $15,000 was
an obligation legally owed by the husband.
We affirm these conclusions of the District Court.
111
Did the District Court err in concluding that the
second mortgage on the house was the husband's obligation and
that the wife in fact paid $11,255.63 to satisfy that
obligation?
Ralph argues that under the terms of the dissolution
decree, the house became his and all interest on the part of
the wife terminated. He further argues that when he conveyed
the house to the McCartys, it then became the McCartys' house
and his interest and obligations were terminated. In turn,
when the wife accepted a deed from the McCartys, he no longer
had any legal interest in the house and therefore should not
be required to make any payments in connection with the
house.
The District Court found that the wife asked the
husband to pay the debt owing to the McCartys, but he did not
do so because he considered the obligation to have been
satisfied. The District Court further found that the
McCartys did not want the house and transferred it to the
wife in connection with the settlement of the amount due to
them. The District Court correctly concluded that the house
was the husband's property under the divorce and property
settlement agreement, and that the obligation owing on the
second mortqase was the husband's obligation.
The husband then argues that the wife did not pay the
second mortgage but only allowed it to be paid through the
sale proceeds. Again the District Court correctly concluded
that the effect of the sale was to pay $11,255.63 to satisfy
the second mortgage, which was an obligation owed by the
husband under terms of the dissolution decree. We affirm the
determination of the District Court in this regard.
IV
Did the District Court err in granting the wife a
credit for material and labor for remodeling the house?
The record contains substantial evidence to support the
conclusion by the District Court that the wife should receive
credit for the amount of material and labor which she
expended for the remodeling of the house. We affirm the
conclusion of the District Court.
Did the District Court err in awarding the wife
In arguing against the judgment, the husband restates
the same arguments previously considered. The record
contains substantial evidence to support the District Court.
The wife concedes there was one error in computation. The
District Court improperly includ.ed $328.97 in the $24,064.03
judgment. We therefore instruct the District Court to reduce
the judgment by $328.97.
The case is remanded to the District Court with
instructions to enter an amended judgment for the wife in the
amount of $23,735.06.
We concur:
hie£ Justice