No. 91-561
IN THE SUPREME COURT OF THE STATE OF MONTANA
1992
IN RE THE MARRIAGE OF
PHILLIP A. HAMILTON,
Petitioner and Respondent,
and
DEBRA M. DANELSON, f/k/a
DEBRA M. HAMILTON,
Respondent and Appellant,
and
and
Intervenors and Cross-Appellants., 8.
CLERK OF
CAROL A. MITCHELL, SFATE
Intervenor.
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable Douglas Harkin, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Richard A. Volinkaty, Attorney at Law, Missoula,
Montana
For Respondent:
Judith A. Loring, Attorney at Law, Stevensville,
Montana
For Intervenors and Cross-Appellants:
~ichard A. Reep, Reep, Spoon & Gordon, P.C.,
Missoula, Montana
For Intervenor:
Timothy ~eiszler,Geiszler & Newcomer, Missoula,
Montana
submitted on Briefs: ~ p r i l2 3 , 1992
Filed:
Justice John Conway Harrison delivered the Opinion the Court.
Phillip A. Hamilton (Phillip) commenced dissolution of his
marriage to Debra M. ane el son-~amilton (Debra) in the Fourth
Judicial District, Missoula County, Montana. The District Court
entered the Final Decree of iss solution on November 17, 1989 which
incorporated by reference a marital and property settlement
agreement. Debra later moved to modify, reopen, or revoke the
property settlement and division, child custody, support and
visitation provisions of the decree. The District Court denied the
motion and Debra appeals. We affirm.
The dispositive issues on appeal are as follows:
1. id the District Court err when it denied Debra's motion
to modify, reopen or revoke the property settlement and division.
2. Did the District Court err when it denied Debratsmotion
to modify child support, custody and visitation provisions of the
dissolution decree.
The parties were married in Missoula, Montana, on July 30,
1983. Prior to the marriage Debra obtained a college degree and
was employed as a television announcer. She was not employed
outside the home during the early years of the marriage but began
a day-care in her home during the later stages of the marriage.
Phillip worked as a musician, part-time bookkeeper and sometimes
operated a recording studio business. The parties had one child,
a son, Coleman.
The parties came to live in a lifestyle that they, by their
own means, could not support. Accordingly, throughout the marriage
both parties borrowed money and received numerous gifts from their
respective families. The couple separated in approximately October
of 1988 and Phillip petitioned for dissolution on December 8, 1988.
On November 6, 1989, Phillip and Debra entered into a marital
and property settlement agreement with an effective date of
September 18, 1989. On November 17, 1989, the District Court
entered a Final Decree of Dissolution which incorporated by
reference the marital and property settlement agreement of the
parties. The agreement addressed division of property, debt
allocation, maintenance, child custody, child support and other
related issues such as a trust fund for Coleman and tax exemption
issues.
On September 17, 1990, Debra filed a motion IfTO RE-OPEN,
MODIFY, OR REVOKE THE PROPERTY SETTLEMENT AND DIVISION, CHILD
CUSTODY AND SUPPORT, AND FOR TEMPORARY MAINTENANCE AND ATTORNEY'S
FEES." The District Court denied Debra's motion on May 15, 1991.
Debra now appeals on the grounds that the property division was
unconscionable.
It should be noted that in addition to the above events,
Leonard and Bonnie Hamilton, Phillip's parents, became parties to
this action when they intervened for grandparent visitation by
petition on July 12, 1989. Also, after the completion of the
partiesf dissolution, Debra's initial attorney, Carol A. Mitchell,
filed a notice of attorney's lien on May 17, 1990, to secure
payment of unpaid attorney's fees.
The record discloses that this dissolution was particularly
fraught with animosity and spite. The parties were uncooperative
and aggravating to one another throughout the entire proceeding.
It is against this unfortunate backdrop that w e address the
dispositive issues,
I. Modification, Revocation or Reopening of the Marital and
Property Settlement Agreement.
Debra asserts that it is necessary and proper to modify,
revoke, ox reopen the property settlement agreement (the agreement)
which was incorporated by reference in the dissolution decree. She
claims that since the signing of the agreement, several events have
substantially altered the valuation of the marital estate. We
note, however, that each of her contentions involve a change in her
own or ~hillipls financial status which took place after the
dissolution. For example, although the parties borrowed from both
sets of parents, a great deal of money was owed to Phillip's
parents, This debt figure was utilized in calculating the
agreement. Debra alleges that Phillip's parents waited until the
agreement was signed and then forgave approximately $100,000 of
debt. She also indicates that after the dissolution, Phillip's
parents made other gifts to him in the form of stock interests.
Debra argues that this information was concealed from her during
settlement negotiations.
Next, Debra asserts that after the agreement was signed, she
learned that her father was diagnosed with cancer and that he also
was going through a divorce. She states that she signed the
agreement relying on the fact that her father would be in a
4
position to help her financially.
Finally, she asserts that the May 17, 1990, action by her
former attorney Carol Mitchell has severely hampered her financial
condition. Ms. Mitchell intervened in the case at bar to protect
her interest in Debra's unpaid legal fees.
Debra claims that since none of these factors were known to
her at the time she signed the agreement, she should now be able to
revoke, modify or reopen the agreement. We disagree.
Section 40-4-208, MCA, states the basis for modification and
termination of provisions for maintenance, support, and property
disposition. The relevant portion regarding property disposition
is as follows:
(3) 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.
Section 40-4-208 ( 3 ) , MCA.
Phillip has not consented in writing to modification of the
property disposition and after reviewing the record, we do not find
conditions that justify reopening the judgment. In fact, the
record indicates that both Debra and Phillip stipulated to the
agreement which provided for property settlement and distribution.
Both were represented by counsel who assisted them during a lengthy
negotiation period. Further, the record indicates that the parties
freely, and with full understanding, signed the agreement. The
parties agreed to limit modification of the settlement and property
5
division as indicated by the following language in the agreement:
j. Modification. No modification or waiver of the
terms of this Agreement shall be valid unless in writing
and signed by both parties.
his modification limitation is authorized by § 40-4-201(6),
MCA. The District Court did not find the terms of the agreement
unconscionable and neither do we.
On appeal, our standard of review in the division of marital
property was recently clarified by this Court in In re Marriage of
Danelson (Mont. 19921, No. 91-255, decided July 9, 1992. In
Danelson, we stated:
This Court has recently clarified that our standard of
review in regard to the factual findings of the district
court relating to the division of marital property is
whether the district court's findings are clearly
erroneous. In re Marriage of Sacry (Mont. 1992), 49 St.
Rep. 452. Concerning this Court's review of conclusions
of law made by a lower court we have stated that "[w]e
are not bound by the lower court's conclusions and remain
free to reach our own.If Schaub v. Vita Rich Dairy
(l989), 236 Mont. 389, 391, 770 P.2d 522, 523. The basis
for simply determining if the lower court's conclusions
are correct is that there is no discretion in determining
a question of law. The lower court either correctly or
incorrectly applies the law. Steer, Inc. v. Department
of Revenue (1990), 245 Mont. 470, 803 P.2d 601.
In adopting these standards of review in division of
marital property cases, this Court is not in any way
discounting the considerable discretionary power that
must be exercised by district courts in these cases. The
courts are obligated to fashion a distribution which is
equitable to each party under the circumstances. In re
Marriage of Jones (1987), 229 Mont. 128 745 P.2d 350;
§ 40-4-202, MCA. The courts, working in equity, must
seek a fair distribution of the marital property using
reasonable judgment and relying on common sense.
Obtaining this equitable distribution will at times
require the lower court to engage in discretionary action
which cannot be accurately categorized as either a
finding of fact or a conclusion of law. These
discretionary judgments made by the trial court are
presumed to be correct and will not be disturbed by this
Court absent an abuse of discretion by the lower court.
Meridian Minerals v. Nicor Minerals, Inc. (1987), 228
Mont. 274, 742 P.2d 456.
Danelson, slip op. at 8-9.
Debra also alleges that in order to disadvantage her, Phillip
committed fraud. She claims that the information about future debt
forgiveness and stock gifts was concealed from her prior to the
dissolution. The result of Phillip's alleged fraud was Debra's
receipt of a reduced award under the agreement.
Debra relies on In re Marriage of Madden (1984), 211 Mont.
237, 683 P.2d 493, as an example of fraud due to one party's
failure to disclose financial information. In Madden, the husband
and the attorney failed to disclose a balloon payment on the house
awarded to the wife, and therefore the property agreement was set
aside.
The case at bar is clearly distinguishable from Madden in many
respects. Most importantly, both parties were represented by one
attorney in Madden, and neither the husband nor the attorney
informed the court about the balloon payment. In the case at bar,
both parties hired independent counsel and there is no proof that
relevant financial information was concealed from Debra when
executing the settlement agreement.
After a review of the record, we find no evidence that Phillip
concealed information from Debra or committed a fraud upon the
court in any way as to his representations of assets or net worth
as they relate to the marital and property settlement.
It is true that Phillip's financial status was and is
predictably better than Debra's since his parents possess
considerable wealth and as their son he may benefit from their
wealth. Even so, the gifts from Phillip's parents after
dissolution do not automatically become part of the marital estate
and grounds to reopen the agreement. What Debra suggests is that
simply because Phillip is the recipient of a gift, she should be
entitled to a portion of it. This we will not do.
Debra cites In re Marriage of Dalley (1988), 232 Mont. 235,
756 P.2d 1131, as a basis for claiming that a court can commit
error by failing to consider inheritance in the marital estate.
Such an interpretation of Dallev is selective and incomplete. In
Dalley, we excluded the wife's expected inheritance from the
marital estate.
However, property gifted during the marriage may be
excluded from the marital estate where an objecting
spouse can claim no contribution to the property's value.
[Citation omitted. 1 It follows ...that an expectation
of property where an objecting spouse can claim no
contribution may be properly excluded from the marital
estate.
Dallev, 232 Mont. at 242, 756 P.2d at 1135 (emphasis in original).
With regard to inheritance we previously held that property
given to one spouse during marriage may be excluded from the
property division calculations unless the non-acquiring spouse can
demonstrate that he or she actually contributed to any related
increase in the value of the property. In re Marriage of Eklund
(1989), 236 Mont. 77, 80, 768 P.2d 340, 342. Under such
circumstances, if a non-acquiring spouse is not entitled to a
portion of the gift during the marriage, we cannot imagine the non-
acquiring spouse obtaining a portion of a gift made after the
dissolution of the marriage as in the case at bar.
With regard to the ill health of Debra's father and the
resulting financial hardship she faces because of her reliance on
his promised financial assistance, we fail to see how Phillip can
be held responsible in any way. Similarly, the pending action by
Debra's former attorney for unpaid legal fees cannot be assigned to
Phillip. In short, Debra has failed to show that the property
division was unconscionable.
Debra also claims that she is entitled to relief from judgment
under Rule 60(b) M.R.Civ.P. She contends that she qualifies for
relief alternatively under subsection (6) of Rule 60(b) or under
the final portion of the rule that gives the court authority to
grant relief for fraud upon the court. We are not persuaded by her
arguments. Montana's Rule 60(b) is nearly identical to the
equivalent Federal rule and we previously have said that there must
be a delicate balance between the sanctity of final judgments and
the court's conscience that justice be done in light of the
individual circumstances and facts. Koch v. Billings School Dist.
No. 2 (Mont. 1992), - P.2d -, -, 49 St.Rep. 517, 518.
Under Rule 60(b)(6), M.R.Civ.P., there must be "extraordinary
circumstances" to justify reopening of the judgment. In m, the
plaintiff's injury claims were initially dismissed by the district
court based on governmental immunity. The unique circumstances and
bizarre timing of caselaw amounted to extraordinary circumstances.
The case at bar is not analogous to m. While the events that
eroded Debra's financial condition are unfortunate, they do not
amount to the extraordinary standard necessary to grant relief f r o m
judgment under Rule 60 (b)(6), M. R. Civ. P.
Not only do Debra's claims fail under subsection (6) of Rule
60(b), M.R.Civ.P., but, the claims do not amount to a fraud upon
the court. Finding no basis under Rule 6O(b) M.R.Civ.P., to grant
Debra relief from judgment, we decline to do so.
11. Motion to Modify Child Support, Custody and Visitation.
Debra contends t h a t the District Court erred when it denied
her motion to modify child support, custody and visitation. The
statutory authority for modification of child support is 3 40-4-
208 (2) (b) (i), MCA, which states that a modification can only be
made Wpon a showing of changed circumstances so substantial and
continuing as to make the terms unconscionable.'*
Debra again contends that the debt forgiveness, stock gifts,
her father's cancer and divorce, her former attorney's action
against her for unpaid attorney's fees, as well as the other events
impinging upon her financial condition, amount to "changed
circumstancesM under the statute. We disagree. The ~istrict
Court did not find any of the circumstances asserted by Debra to be
substantial and continuing so as to make the terms unconscionable
and warrant modification of child support. We hold there was
substantial evidence supporting the District Court.
Finally, Debra fails to make any arguments in her brief
regarding the modification of prior custody which is controlled by
5 40-4-219, MCA, nor does she address the issue of visitation
modification under 5 40-4-217, MCA. She merely references these
topics in her statement of the issues and briefly mentions them in
a constitutional argument which we find moot in light of our
holding here. Accordingly, we will not address them either.
After a review of the record, we find that the District
Court's division of the marital estate was not clearly erroneous.
Therefore, the rulings by made by the District Court will remain
undisturbed. Affirmed.
We concur:
I