NO. 93-110
IN THE SUPREME COURT OF THE STATE OF MONTANA
1994
IN RE THE MARRIAGE OF
,-
GARNET SIMMS,
Petitioner and Respondent,
and yfip," 8 1994
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable Jack L. Green, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Julio K. Morales, Morales Law Office, Missoula,
Montana
For Respondent:
Neil M. Leitch, Missoula, Montana
Submitted on Briefs: December 2, 1993
Decided: March 28, 1994
Filed:
Clerk
_..-.--.--
Justice James C. Nelson delivered the Opinion of the Court.
This is an appeal from Findings of Fact, Conclusions of Law,
and a subsequent Decree of Dissolution entered by the Fourth
Judicial District. Court, Missoula County. We reverse and remand.
The issues on appeal are as follows:
1. Is the oral marital settlement agreement entered into
between the parties enforceable?
2. Did the District Court err in distributing the property
of the parties?
3. Did the District Court err in awarding maintenance?
4. Did the District Court err in establishing a trust for
the minor child's college education?
The petitioner, Garnet Simms (Garnet), and the respondent,
Arlyn Simms (Arlyn) were married on August 8, 1959 and had five
children. During the pendency of these proceedings, only one of
the parties' children, Katy, was a minor.
During the course of the marriage, Arlyn worked outside the
home and Garnet worked in the home. The major asset acquired by
the parties was a ranch purchased in 1971 from money gifted to
Arlyn by his late grandmother. The rest of the assets acquired by
Garnet and Arlyn during their marriage consisted of some personal
property and various retirement and pension accounts. However
immediately preceding and subsequent to their separation in 1989,
Arlyn received substantial inheritances from his family.
Garnet filed for a dissolution of marriage on July 17, 1987;
however, the parties apparently reconciled after this pleading was
2
filed. The parties separated on June 6, 1989, and, on September
13, 1989, Garnet filed an Amended Petition for Dissolution of
Marriage. Arlyn subsequently requested that a settlement
conference be conducted and the presiding judge, Jack Green,
invited District Judge John Henson to conduct the conference.
Judge Henson met with the parties for the settlement conference on
December 3, 1990.
Both parties, with counsel, were present at the settlement
conference and entered into an oral "marital settlement agreement".
This agreement granted joint custody of the minor child with
residential custodianship to Garnet and reasonable visitation to
Arlyn, ordered Arlyn to pay $250.00 per month in child support
until the minor child reached the age of eighteen, awarded Garnet
certain personal property and cash in the amount of $62,500.00,
awarded Arlyn certain personal property and the family home, and
waived Garnet's claim on maintenance. This agreement was entered
on the record and both parties were sworn and testified they agreed
to its contents.
Judge Henson approved the agreement and, on March 19, 1991,
entered Findings of Fact, Conclusions of Law, and a Decree of
Dissolution. On that same day, Judge Green sent a letter to Judge
Henson objecting to the entry of the Decree based on Judge Henson's
lack of jurisdiction for anything but the settlement conference
itself.
Thereafter, on May 20, 1991, Garnet filed a Motion to Vacate
Decree of Dissolution, because Judge Henson was not the presiding
3
judge in the case. As a result, Judge Henson filed a memorandum on
July 15, 1991, declaring that the Decree was a nullity and
declining to assume jurisdiction over the case. However, Arlyn
continued to pay $250.00 per month in child support, despite the
fact that there was no binding order in place requiring him to do
so.
Garnet then filed a Motion to Set Aside Property Settlement
Agreement and Request for Trial, alleging that there was possible
fraud, mistake, misrepresentation, and undue influence. On
February 10, 1992, Judge Green granted Garnet's motion, vacated the
parties' oral marital settlement agreement, and ordered the case to
be set for trial. In the meantime, on June 19, 1992, Garnet moved
for temporary maintenance in the amount of $300.00 per month and
for an increase in the child support Arlyn had been voluntarily
paying from $250.00 per month to $500.00 per month. Due to time
constraints, a hearing on these motions was never held. However,
the trial in the matter was held on August 10, 1992.
On December 21, 1992, Judge Green entered Findings of Fact and
Conclusions of Law and, on December 23, 1992, entered a Decree of
Dissolution incorporating those findings and conclusions. The
Decree awarded the parties joint custody of the minor child, with
Garnet named as the primary residential custodian. Garnet was
awarded the family home worth approximately $100,000 and was
awarded her personal property worth approximately $23,056.61.
Arlyn was awarded some personal property valued at $60,888.00 and
the inheritance he received subsequent to the parties' separation.
4
Be received no portion of or credit for the family home. Based on
the District Court's finding that Arlyn's total known inheritance
was approximately $624,917.00, Arlyn was ordered to pay Garnet
$900.00 per month in maintenance until death or marriage. This
award was retroactive to June 19, 1992, the date of Garnet's motion
for temporary maintenance. In addition, Arlyn was ordered to pay
$400.00 per month in child support, also retroactive to the date of
the motion for an increase in child support; and to pay all
insurance for medical, hospital, ocular, orthodontic, counseling
and drug expenses, as well as all medical expenses not covered by
insurance. The District Court also ordered Arlyn to set up a trust
for the minor child's college education. From the Findings of
Fact, Conclusions of Law, and Decree of Dissolution entered by the
District Court, Arlyn appeals.
I -. ORAL MARITAL SETTLEMENT AGREEMENT
Arlyn contends that the oral marital settlement agreement
stipulated to between the parties is enforceable as a property
settlement agreement. We disagree.
Section 40-4-201, MCA, allows only one sort of marital
settlement agreement (referred to in the statute and in this
opinion as a separation agreement), and that is one which is
reduced to writing.
That section provides, in pertinent part:
(1) To promote amicable settlement of disputes between
parties to a marriage attendant upon their separation or
the dissolution of their marriage, the parties may enter
into a written separation agreement containing provisions
for disposition of any property owned by either of them,
maintenance of either of them, and support, custody, and
5
visitation of their children.
(2) - . . [T:lhe terms of the separation agreement, except
those providing for the support, custody, and visitation
of children, are binding upon the court unless it finds,
after considering the economic circumstances of the
parties and any other relevant evidence produced by the
parties, on their own motion or on request of the court,
that the separation agreement is unconscionable.
(Emphasis added.)
In this case, there was no written separation agreement.
While the parties stipulated on the record to settlement and
disposition of the various issues mentioned above, including
property distribution, debt distribution, maintenance, custody and
support, nevertheless their agreement was never reduced to writing
as required by the statute. The fact that the parties may orally
agree to a certain disposition of the various matters usually
covered by a written separation agreement does not negate the
requirement that, to be enforceable as a separation agreement
contemplated by the statute, the agreement must be reduced to
writing.
It is only when the agreement is reduced to writing that the
court is statutorily bound by the agreement as to matters involving
property distribution and maintenance (assuming the court finds
that the agreement on those matters is not unconscionable).
Whether the parties have entered into a written agreement or an
oral, in-court stipulation, the court is not bound by the parties'
determinations on matters of support, custody and visitation but,
on those issues, must apply the appropriate statutory criteria.
See 5 40-4-201(2), MCA, and In re the Marriage of Mager (1990), 241
Mont.78, 785 P.2d 198, wherein we held that the district court did
6
not err in refusing to follow the oral stipulations of the parties,
but correctly applied the statutory criteria to issues of custody,
visitation and support.
We recently dealt with the matter of the enforceability of
oral separation agreements and held that a separation agreement not
reduced to writing was not enforceable. In re the Marriage of
Hayes (1993), 256 Mont. 266, 846 P.2d 272. In Haves, the terms of
the separation agreement were read into the record and the court
directed that the terms of the agreement be incorporated into a
formal written document. No formal agreement was prepared, but the
district court proceeded to enter findings of fact, conclusions of
law, and a decree. The husband appealed those findings and
conclusions, and argued that the parties had never agreed to the
settlement. We stated that:
The pivotal question here is whether an agreement exists
between the parties upon which the court could have based
its Findings and Conclusions. The record does not
contain a written separation agreement. The record does
contain the court's directive to counsel to prepare such
a document. It is clear that the court understood the
importance of having the agreement reduced to writing.
And while we commend the court for its efforts in getting
the parties to reach a settlement agreement, such
agreement of necessity needs to be specific to avoid the
type of controversy presented here.
Haves, 846 P.2d at 273.
Section 40-4-201, MCA, provides that the district court is
bound by the parties' separation agreement in matters of property
distribution and maintenance if the court finds that the separation
agreement is not unconscionable. However, the & separation
agreement referred to in the statute is the written separation
7
agreement. Absent a written separation agreement, there is nothing
for the district court to review and on which to make a finding
regarding conscionability. Under such circumstances, the district
court has no alternative but to try the case on the merits and to
dispose of the property, maintenance, support, custody and
visitation issues on the basis of the applicable statutory
criteria, evidenced by the entry of appropriate findings of fact,
conclusions of law and judgment. See In re the Marriage of Miller
(1989) t 238 Mont. 197, 777 P.2d 319. (The district court erred in
applying the "not unconscionable" standard where the parties had no
agreement on division of property and, instead, should have applied
the "equitable apportionment" standard required by 5 40-4-202,
MCA.)
In that respect, Judge Green was not in error in setting aside
the oral separation agreement and in trying the case on the merits.
Notwithstanding, we must, nevertheless, reconcile the
statutory requirements and rules above referred to with another
principle of law regarding enforcing the stipulations of parties
and counsel made on the record during litigation.
Within a few weeks prior to our decision in Haves, we also
made it clear that parties are bound by the stipulations made by
them, or by their counsel, in open court. In re the Marriage of
McLean/Fleury (1993), 257 Mont. 55, 60, 849 P.2d 1012, 1015.
In McLean/Fleurv, the parties, prior to trial, attended
several hearings and meetings with the district court in an effort
to reach an agreement relating to maintenance, child support, and
8
custody. The parties were unable to enter into a separation
agreement, however, and, ultimately, the court determined those
issues and others after a trial on the merits. During trial, the
parties, by counsel, stipulated to certain matters regarding
custody. On appeal, the wife claimed that her counsel's
stipulation was made without her knowledge or consent,
notwithstanding that the record showed that the matters stipulated
to were in open court and with both parties in attendance.
McLean/Fleurv, 84:9 P.2d at 1015.
In response to the wife's claim, we stated:
Section 40-4-201(l), MCA, allows the parties to enter
into agreements regarding support, custody, and
visitation of the children. We have held that parties
are bound by the stipulations made by their counsel in
open court. Daniels v. Dean (Mont. 1992), 833 P.2d 1078,
1081, 49 St. Rep. 535, 537; Section 37-61-401, MCA. We
hold that the District Court did not err in awarding
joint custody to both parties.
McLean/Fleury, 849 P.2d at 1015.
While in that case, we found no abuse of discretion in the
district court holding the parties to their in-court stipulations
regarding matters of custody, we, nevertheless, hasten to reaffirm
what is obvious from the plain language of § 40-4-201(2), MCA, and
our decision in Maqer: in matters of custody, support, and
visitation, the district court is not bound by the parties' oral or
written agreements but, in those matters, is required to apply the
applicable statutory criteria. Maqer, 785 P.2d at 200.
In the instant case, Arlyn's counsel recited the terms of the
separation agreement into the record. Those terms included ones
addressing custody, support, property and debt distribution,
9
maintenance, and Arlyn's inheritance. Garnet's counsel stipulated
that the recited terms were correct, and both parties were then
sworn. The following exchange took place on the record between the
District Judge and Garnet:
The Court: Now, you have heard [Arlyn's counsel] recite
this settlement agreement to which your counsel has
stipulated. And you should understand that all this is
being taken down here and you are going to be bound by
it. Do you understand that?
Mrs. Simms: Yeah.
The Court: Now, in light of the settlement agreement, do
you have full knowledge of the value of all the assets of
the marriage and the amount of the debts and so forth?
Mrs. Simms: Yes.
The Court: At this time do you agree to this as a full
and final settlement?
Mrs. Simms: Yes.
The following exchange took place on the record between the
District Judge and Arlyn:
The Court: Now, you do have full knowledge of the assets
of the marri.age and the debts of the marriage; is that
correct?
Mr. Simms: Yes.
The Court: You do understand that all this is being taken
down and if you agree to it you will be bound by this
agreement?
Mr. Simms: Yes, sir.
The Court: Do you agree to this as a full and final
settlement?
Mr. Simms: Yes, Your Honor.
While the holding of Haves regarding the necessity for written
settlement agreements and the holding of McLean/Fleurv regarding
10
the binding effect of oral, on-record stipulations appear to
conflict, in actuality, they do not.
Reading together and harmonizing the requirements of § 40-4-
201, MCA, and our decisions in Miller, Maqer, McLean/Fleurv, and
Haves, the following rules emerge.
A. LEGAL EFFECT OF STIPULATIONS AND AGREEMENTS
A party is bound by and may not contravene the stipulations
and agreements he, she, or counsel, make on the record.
In the case of stipulations and agreements (whether oral or
written) regarding custody, support and visitation, those are not
binding upon the district court: the court must decide those issues
on the basis of the applicable statutory criteria.
In the case of stipulations and agreements regarding the
division of marital property and maintenance, those agreements, to
be binding upon the district court, must be reduced to writing and
must be found by the court to be not unconscionable. If the
separation agreement is not reduced to writing, there is nothing
for the district court to review, and the court cannot make a
finding of conscionability. Under those circumstances, the court
must then proceed to a trial on the merits, and in disposing of the
property division and maintenance issues (and any other issues
regarding custody, support and visitation), the court must apply
the applicable statutory criteria and enter appropriate findings of
fact, conclusions of law and judgment.
In short, in a marriage dissolution case, the parties, as
between themselves, are bound by their written agreements found by
11
the court not to be unconscionable and by their on-record oral
stipulations whether those agreements and stipulations concern
matters of property division, maintenance, custody, support and
visitation. The district court, however, is not bound by the
parties' oral or written agreements or stipulations in matters of
custody, support and visitation (the applicable statutory criteria
always being paramount), and is bound on matters of property
division and maintenance only to the extent that the parties'
agreement is reduced to writing and is found, after review, to be
not unconscionable.
B. USE BY COURT OF STIPULATIONS AND AGREEMENTS
Finally, there remains the matter of how, if at all, the
district court is to utilize the parties oral, on-record
stipulations and agreements when there is no written separation
agreement. We conclude that in matters of property division and
maintenance the parties' oral, on-record stipulations should, to
the extent possible, form the evidentiary base upon which the
district court applies the statutory criteria. Since the court's
decision must be based upon those criteria, the court is not
precluded from ordering and considering, in its discretion, such
additional evidence as may be necessary to properly apply those
statutory criteria, nor are the parties precluded from offering
evidence on matters and issues to which there are no stipulations.
Nevertheless, to the extent that the court is able to apply the
statutory criteria while, at the same time, holding the parties to
their on-record stipulations and agreements, it should do so.
12
In matters of custody, visitation and support, the court's
primary obligation is to decide those issues on the basis of the
applicable statutory criteria regardless of the written agreements
or on-record stipulations of the parties. The district court must
order and consider whatever evidence, in its discretion, it
requires to properly make its decision in accordance with the
mandates of the applicable statutes, and the parties may offer
evidence on matters and issues to which there are no stipulations.
Again, however, to the extent that the court is able to correctly
apply those statutory requirements while, at the same time, holding
the parties to their on-record stipulations and written agreements,
it should do so.
Applying the above rules to the instant case, we hold that
Judge Green was not in error in proceeding to trial on the various
matters at issue, given the parties' failure to reduce their
stipulated agreements to writing. Further, the District Court was,
as stated above, required to dispose of all contested issues on the
basis of the statutory criteria applicable to each, while, to the
extent possible,. holding the parties to their on-record
stipulations and agreements.
In that regard, it appears that the District Court ignored or
rejected the parties' on-record stipulations and agreements. Under
the rules set forth above, the court should have considered those,
and should have held the parties to their stipulations and
agreements to the extent that was possible and consistent with the
court's paramount duty to apply the appropriate statutory criteria
13
in deciding the various property division, maintenance and support
matters as issue.
Furthermore, the matter of the parties' on-record stipulations
and agreements aside, the District Court failed to properly apply
the applicable statutory criteria to the issues of property
division, maintenance and support in this case.
By reason of the District Court's failure in the foregoing
respects, we reverse and, in so doing, discuss the following issues
for the guidance of the court on remand.
II - PROPERTY DISTRIBUTION
The distribution of the marital estate is governed by 5 40-4-
202, MCA, which provides, in pertinent part:
(1) In a proceeding for dissolution of a marriage . . .
the court, without regard to marital misconduct, shall .
. . finally equitably apportion between the parties the
property and assets belonging to either or both, however
and whenever acquired and whether the title thereto is in
the name of the husband or wife or both. . . .
This statute vests the district court with broad discretion to
apportion the marital estate in a manner which is equitable to each
party under the circumstances. In re the Marriage of Zander
(1993), _ Mont. -, 864 P.2d 1225, 1230.
In this case, the District Court awarded Garnet the family
home worth approximately $100,000 and personal property worth
approximately $23,056.61. Arlyn was awarded personal property
valued at $60,888.00. Arlyn received no credit for or portion of
the family home, despite the fact that his grandmother is the
person who gave .the parties the funds to purchase the home. We
note that, when dividing property acquired by gift, bequest,
14
devise, or descent, the court must consider the contributions of
the other spouse to the marriage, including:
(a) the nonmonetary contribution of a homemaker:
(b) the extent to which such contributions have facilitated
the maintenance of this property; and
Cc) whether or not the property division serves as an
alternative to maintenance arrangements.
Section 40-4-202(l), MCA.
In this case, there is no question that Garnet contributed to
the maintenance of the family home which was acquired through a
gift from Arlyn's grandmother. However, it is equally clear that
the District Court failed to give appropriate consideration to the
statutory factors when it awarded Garnet the entire value of the
major marital asset simply because of Arlyn's receipt of a
substantial, post-separation inheritance -- an inheritance to which
there is no evidence that Garnet contributed. We have required in
prior cases that the district court give appropriate consideration
to the source of the property in dividing the marital estate. See
In re the Marriage of Summerfelt (1984), 212 Mont. 332, 688 P.2d 8.
We have also held that, if the contributions of the non-owning
spouse have not facilitated the maintenance of property brought
into the marriage by the other spouse, the district court may
properly exclude that property from the marital estate. In re the
Marriage of Gallagher (1991), 248 Mont. 100, 103, 809 P.2d 579,
581. Here, the District Court's award of the entire value of the
marital home to Garnet without credit to Arlyn was clearly an abuse
of discretion. We hold that the District Court erred in failing to
15
award Arlyn any credit for or portion of the family home merely on
the basis of his receipt of the post-separation inheritance, and we
reverse and remand for further consideration of the property
distribution in this case.
The District Court made other findings which are erroneous and
not supported by the evidence. However, because we are reversing
and remanding on the issue of property division, we need not
address those other findings.
III - AWARD OF MAINTENANCE
In considering the award of maintenance, this Court will not
reverse a distrirzt court's award of maintenance unless the findings
of fact are clearly erroneous. Zander, 864 P.2d at 1231. An award
of maintenance is governed by g 40-4-203, MCA, and is dependent
upon a finding that Garnet lacks sufficient property to provide for
her reasonable needs and is unable to support herself through
appropriate employment. See Zander, 864 P.2d at 1231.
In this case, the District Court found that Garnet's monthly
living expenses totaled $1,458.00, which included a rent expense of
$460.00. The District Court also found that Garnet earned an
average take-home pay of approximately $916.00 per month (although
Garnet testified the amount was $960.00), thereby leaving a deficit
of $542.00 per month. The court then proceeded to impose a $400.00
per month child support obligation, which reduced the deficit to
$142.00 per month, and imposed a maintenance obligation of $900.00
per month, which gave Garnet a surplusage of $758.00 per month. In
addition, the District Court awarded Garnet the family home, which
16
has no debt obligation, but did not deduct the $460.00 per month
rent expense from Garnet's budgeted monthly living expenses. When
this amount is calculated, Garnet had a surplus of $1,218.00 per
month under the District Court's findings.
In addition, Garnet works only ten months out of the year and
voluntarily does not seek employment the other two months out of
the year. Apparently, the District Court did not consider Garnet's
ability to support herself through appropriate employment when
considering the award of maintenance.
Again, it is clear that the District Court considered Arlyn's
post-separation inheritance by granting Garnet the excessive award
of maintenance. In fact, the District Court found that Garnet
"need[s] a substantial share of her husband's assets so she can
live comfortably." We hold that these findings are clearly
erroneous. We reverse and remand the issue of maintenance for
review, in light of our holding regarding the division of the
marital estate and for application of the statutory criteria.
IV - TRUST FOR MINOR CHILD'S COLLEGE EDUCATION
Finally, the District Court erred in setting up a trust fund
for the minor child's college education.
The District Court found that it had "the power to supplement
the child support for the college education of the parties' minor
child by setting aside a portion of Respondent's estate in a trust
for the child's college education." Montana law allows the
establishment of a trust for the support of a child who is a minor,
dependent, or incompetent. Section 40-4-202(2), MCA. However,
17
there is no provision for creating a trust for a child after that
child reaches majority, unless the child is dependent or
incompetent. In re the Marriage of Alt (1985), 218 Mont. 327, 335,
708 P.2d 258, 262. The District Court may not create a trust to
support a non-dependent, competent child after the parent's
obligation of support has ended. m, 708 P.2d at 262. Therefore,
we hold that the District Court abused its discretion and violated
Montana law in imposing the trust obligation at issue.
We reverse and remand for further proceedings and for the
entry of new findings of fact, conclusions of law and judgment
consistent with this opinion.
Justice
We Concur:
Chief Justice
Justices
18
Justice Karla M. Gray, dissenting.
I must respectfully dissent from the Court's opinion on issue
one, relating to the enforceability of the parties' settlement
agreement.
It is my view that the settlement agreement reached by Garnet
and Arlyn Simms is enforceable insofar as it relates to the marital
property and maintenance. The Court approaches this settlement
agreement as though it were a separation agreement under § 40-4-
201, MCA, between parties to a marital dissolution. If I shared
that view, I would agree that the agreement did not meet the
requirement of li 40-4-201, MCA, that it be in writing and,
therefore, would conclude that it was not enforceable.
I see this agreement differently, however. This was an
agreement which resulted from a settlement conference scheduled and
presided over by the District Court. As a result of that
conference, the parties agreed to a specific distribution of the
marital assets, including a substantial cash payment toward
equalizing the property distribution and in lieu of maintenance.
The contents of the settlement agreement were recited on the
record. The parties were then sworn and advised by the court that
the agreement would be binding on them, testified that they had
full knowledge of the value of all the assets and liabilities of
the marriage, and agreed to the recited terms as a full and final
settlement. The agreement should be enforced.
The Court suggests that the only enforceable "settlement
19
agreement" in a marital action is one which meets the requirements
of § 40-4-201, MCA. In my view, the statute does not support such
an interpretation. The statute merely provides that parties to a
marital separation or dissolution action may enter into a written
separation agreement which, insofar at it relates to property
distribution and is not unconscionable, will be binding on the
court. The statute does not state that no other kind of settlement
agreement is enforceable in a marital action: nor is such a
conclusion sound public policy.
Faced with an ever-increasing caseload and limited resources,
the district courts of Montana undertake a variety of appropriate
methods to control litigation, expedite cases, and clear their
dockets. One of the most productive of such methods is the
increasing use by the courts of various settlement procedures in
all manner of civil cases, including settlement conferences
presided over by district judges. Settlement conferences can
achieve mutually acceptable results for the parties at a
significantly decreased financial cost and in much less time than
proceeding through costly, time-consuming and emotionally draining
trials. Correspondingly, settlement conferences can clear the
courts' dockets for those cases which ultimately must proceed to
trial.
The sheer number of marital dissolution cases in the district
courts of Montana makes those cases particularly appropriate for
the use of settlement conferences. Too, the emotional nature of
the disputes between the parties can sometimes be put into a more
20
objective framework during a judicially conducted settlement
conference. I believe the district courts should be recognized and
applauded for their efforts in conducting settlement conferences
and encouraged to keep up the good work.
The Court's result here does just the opposite. It
essentially tells the district courts not to bother with settlement
conferences in marital cases unless they also put the parties to
the extra time, expense and aggravation of preparing written
documents. The Court apparently does not find a specific
agreement, reached as a result of a court-conducted settlement
conference, recited on the record, and accepted by both parties in
sworn testimony a suitable substitute for a written separation
agreement under § 40-4-201, MCA. I disagree.
Nor am I persuaded that T
Haves has any applicability here.
h e
facts and the record before us in Haves differed significantly from
the present case. In Haves, the court encouraged the parties to
attempt to reach settlement. At the end of lengthy negotiations,
the parties reported to the court that they believed settlement had
been reached and the purported terms of the settlement were recited
into the record. The terms were murky, at very best, containing
such statements as We can't vouch for that to be sure but we
believe that's a fairly accurate representation;" the terms also
indicate a clear lack of knowledge about such an important element
of the marital assets as the parties' separate retirement
entitlements. As a result, the court properly required the parties
to submit the agreement in written form but no written agreement
27
was ever submitted. Notwithstanding the absence of the written
agreement, the court proceeded to enter findings, conclusions and
a decree. The husband appealed.
The Court states here that in Haves we held that a settlement
agreement not reduced to writing is not enforceable. I disagree
with that interpretation. The question in Haves, as the Court
correctly states, was whether the district court erred in
determining that both parties had agreed to a property settlement
and in basing its findings and conclusions on that agreement.
While we noted that no written separation agreement was submitted,
we did not hold that no other type of settlement agreement was
enforceable. We recognized that a settlement agreement "of
necessity needs to be specific to avoid the type of controversy
presented here." Haves, 846 P.2d at 273. As noted above, the
Haves agreement was totally lacking in such specificity. The
murkiness and lack of specific agreement about specific property is
what prompted our decision in Haves that the parties had not
reached an agreement on which the court could act, not the absence
of a written agreement.
The agreement recited into the record here and agreed to as a
full and final settlement by both parties in sworn testimony is
very different from that in Haves. Here, the property and
maintenance-related terms of the settlement agreement were as
follows: that Garnet would receive the money market account with
Montana Bank, the 1986 Buick equity, the personal property in her
possession, the public employees retirement fund, the IRA Pioneer
22
mutual fund, the Bateman Either money market fund, the Ford Motor
Company shares and the Phillip Morris Company shares. In addition,
Garnet was to receive, "in equalization of property and in lieu of
any maintenance," $62,500 in cash, to be paid within sixty days.
All of this represented a "full and final settlement of any and all
property which [Garnet] may have a claim on, including any property
. . . [Arlyn] may have inherited . . . .I1
Here, the terms of the agreement were clear and there was no
order from the court to reduce them to writing. Indeed, given the
clarity of the agreement's terms, such an order was unnecessary.
The agreement, together with the parties ' testimony regarding their
knowledge of all marital assets and their acceptance of the terms,
provided a sufficient basis for the court to accept and enforce the
agreement. This Court should do the same.
Because it is my view that the settlement agreement is
enforceable, I would not reach issues two and three. I do,
however, concur in the Court's rationale and result on those
issues. I also concur in the Court's opinion on issue four.
Justice John Conway Harrison joins
Justice Karla M. Gray.
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Justice Fred J. Weber concurs and dissents as follows:
I concur in the majority opinion with regard to Issue I--Is
the oral marital settlement agreement entered into between the
parties enforceable, and Issue IV--Did the District Court err in
establishing a trust for the minor child's college education? I
dissent from Issues II and III.
II - PROPERTY DISTRIBUTION
In reviewing the property distribution as well as the award of
maintenance, I find it important to consider the District Court's
findings and conclusions which are summarized as follows in
pertinent part:
At the time of hearing Garnet was 52 years old and Arlyn was
55. Both are in good physical health. Garnet is, a high school
graduate with one year of business school and she completed a word
PrOCessing class in 1986-87. She currently is employed ten months
out of the year as a secretary for the Arlee School District where
she earns $9.30 an hour. She has been a homemaker for 33 years.
She anticipates minimal inheritance from her parents. Arlyn is a
high school graduate who has spent the majority of his life as an
operator of heavy equipment and has two years of college. He
operates a small cattle ranch at the family home in Arlee. Since
the death of his parents he has quit his employment as a heavy
equipment operator and spends most of his time at rodeos and doing
as he pleases. His total known inheritance is approximately
$624,917. It may be greater with additional payments to be
received from his father's ranch. In finding of fact IX, the
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District Court set forth in detail all of the assets accumulated by
both parties during their marriage. Included in this are the
following with regard to inheritance on the part of Arlyn:
Inheritance from respondent's
(Arlyn's) mother as of December 1989 - $178,500
Certificates of deposit from
respondent's grandmother as of December 1989 - 78,124
Known inheritance from father's estate 368,293
Balance owed on contract due from
sale of father's land to Simontons
& Murdocks value unknown
As a result the District Court gave the total approximate value of
Arlyn's assets at $785,805.
The court determined Garnet's monthly living expenses to be
$1458. As pointed out in the majority opinion, no deduction was
made for the $460 rent figure included in that total. In finding
of fact XI the District Court found that Garnet has accumulated
only $7291 in her retirement pension fund and that she will need a
substantial share of Arlyn's assets to live comfortably as she gets
older; she has little saved for her retirement because of the
thirty-plus years she spent working as a homemaker for her husband
and five children. She has had to deplete her savings account,
money market account and stocks to provide for her basic daily
needs. Arlyn has retained the marital home and surrounding acreage
as his residence. Garnet has no real property and must pay rent.
The District Court found that Garnet "lacks sufficient property to
provide for her reasonable needs, and she is unable to support
herself through appropriate employment." As to Arlyn, the court
25
found that he could afford to retire because of "the approximate
$624,917 plus inheritance money he has received" and because his
needs are much less than his total assets and he is capable of
providing Garnet with a greater proportion of marital property and
maintenance.
In finding of fact XII the court found that after thirty-three
years of marriage, raising five children and providing for her
husband's needs, Garnet's contributions as a homemaker were
extensive indeed and that her contributions exceeded the call of
duty when she put up with an enormous amount of mental and physical
abuse from Arlyn. She maintained the household, cared for the
children and was the family's provider for domestic chores. Since
the marital home was a working livestock ranch, she was required to
nurse sick calves, vaccinate cattle and help pull calves. She is
a hard-working woman who took responsibilities seriously and
everything she did served to facilitate the maintenance of the
family and the property. Arlyn was a hard-working man who provided
for the needs of his family and ran a small marital cattle
operation and did the chores and worked on the machinery and kept
the ranch going. His non-monetary contributions are less than
Garnet's because he did not provide for the care of the children as
did she, nor did he do as much around the family home. However,
Arlyn's efforts and money received from his family did provide a
very good standard of living for his family.
In finding of fact XIII the court concluded that Garnet should
be awarded the family home in Arlee worth $100,000 and that Arlyn
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should receive all of his assets accumulated during the course of
the marriage currently in his possession less only the family home.
This would then give assets to Garnet of $123,056 and assets to
Arlyn of $685,805.
In finding of fact XIV, the District Court found that Garnet's
net available resources totaled $11,000 per year. As to Arlyn, the
court assumed that if he received a rate of 8-10 percent interest
on his assets, his annual income would be approximately $40,000.
From the tables the District Court computed a monthly support
obligation of $154 per month for Garnet and $560 for Arlyn. The
court then concluded that an appropriate child support payment of
$400 per month was not unreasonable and that it was fair and
equitable to reguire Arlyn to pay $400 per month for Katy's
support. There is no appeal from this determination.
In finding of fact XV, the court pointed out that with
Garnet's net available resources of $916 per month, she lacks
sufficient property to provide for her reasonable needs and is
unable to support herself through appropriate employment. The
court further determined that if a cash settlement is not awarded,
she should receive a maintenance award in the amount of $900 per
month. The maintenance amount would provide her with $10,800 per
year which added to her wages of $11,000 would provide her with
$21,800 per year which would provide for her reasonable needs. The
court further pointed out that after thirty-three years of marriage
she is entitled to maintenance because of the long duration of the
marriage and being 52 years of age, although she is not elderly,
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she is at an age where it is difficult to begin training for a
better paying job.
While the majority opinion refers to 5 40-4-202, MCA, it
concludes it is clear that the District Court failed to give
appropriate consideration to the statutory factors when it awarded
Garnet the entire value of the major marital asset (the family
home) simply because of Arlyn's receipt of a substantial post-
separation inheritance. The majority states:
Here, the District Court's award of the entire value of
the marital home to Garnet without credit to Arlyn was
clearly an abuse of discretion. We hold that the
District Court erred in failing to award Arlyn any credit
for or portion of the family home merely on the basis of
his receipt of the post-separation inheritance, and we
reverse and remand for further consideration of the
property distribution in this case.
I disagree with the majority's conclusion and holding. I conclude
that the majority has failed to consider all of the appropriate
code provisions and instead has focused on one portion only of the
code. Following are the pertinent provisions of § 40-4-202, MCA:
Division of property. (1) In a proceeding for dissolution
of a marriage, . . . the court, without regard to marital
misconduct, shall . . . finally equitably apportion
between the parties the property and assets belonging to
either or bo-th, however and whenever acquired and whether
the title thereto is in the name of the husband or wife
or both. . . . In dividing property acquired prior to the
marriage; property acquired by gift, bequest, devise, or
descent; property acquired in exchange for property
acquired before the marriage or in exchange for property
acquired by gift, bequest, devise, or descent: . . . the
court shall consider those contributions of the other
spouse to the marriage, including:
(a) the nonmonetary contribution of a homemaker;
. (b) the extent to which such contributions have
facilitated the maintenance of this property; and
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Cc) whether or not the property division serves as
an alternative to maintenance arrangements.
The essence of the conclusions and holding of the majority is that
the District Court improperly awarded the $100,000 home to Garnet
because of Arlyn's receipt of a substantial post-separation
inheritance; that the court erred in failing to award Arlyn any
credit in the family home merely because of his receipt of such
post-separation inheritance: and as a result, the District Court's
award of the entire $100,000 value of the marital home to Garnet
was an abuse of discretion. I disagree with those conclusions and
holdings. In contrast, I believe that the above quoted § 40-4-
202(1), MCA, requires that the court consider all properties,
including post-separation inheritances.
The first several sentences of subsection (1) of 5 40-4-202,
MCA, require the District Court to "equitably apportion" between
the parties the property belonging to Garnet and Arlyn or either of
them, however and whenever acquired, and whether title is in one or
both. Clearly that portion of the statute affords no basis to
suggest that property acquired by post-separation inheritance is
not to be equitably apportioned between the parties.
In a similar manner, the subsequent portions of § 40-4-202(l),
MCA, in this case require the District Court to consider the
contributions of Garnet to the marriage. Note those contributions
are not limited to some form of monetary contribution. The
contributions are required by statute to include the nonmonetary
contributions of Garnet; the extent to which such contributions
have facilitated the maintenance of the property--note this is not
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even stated in the statute to be limited to monetary contributions
but can include other types of contributions--and, finally, the
court must consider whether or not the property division to Garnet
served as an alternative to maintenance arrangements. The majority
has apparently concluded that it was totally inappropriate to
consider the substantial post-separation inheritance received by
Arlyn. I do not :find that the statute contains any basis for such
a conclusion.
As above set forth, the statute requires consideration of
contributions of Garnet "to the marriage" which is not limited to
monetary contributions. In a similar manner, the statute expressly
says that the district court shall consider the nonmonetary
contributions of Garnet. Last, the court must consider whether the
property division serves as an alternative to some part of the
maintenance arrangements. The majority has disregarded all of the
statutory provisions and focused on one aspect only--the separation
of the parties which has led the majority to conclude there is no
right to share on the part of Garnet to inheritance received after
the separation of Garnet and Arlyn. I can only reemphasize that
the opening provisions of 5 40-4-202, MCA, require the District
Court to equitably apportion the property and assets "however and
whenever acquired." I find no basis for the narrow holding on the
part of the majority.
Under the statutory requirement that the District Court is to
consider the contributions to the marriage on the part of Garnet,
including her nonmonetary contributions, it is important to
30
consider the extensive findings of fact by the District Court which
state that Garnet has devoted 33 years of marriage to the raising
of five children and providing for Arlyn's needs, and that her
contributions exceeded the call of duty. The District Court
further pointed out that Garnet has accumulated very little in her
retirement pension fund and emphasized the limited nature of her
education and her limited capacity to retrain at her age.
The District Court concluded that it was reasonable to award
the family home worth $100,000 to Garnet (keeping in mind that the
ranch awarded to Arlyn also has a family home). Following the same
findings of fact,. the court concluded that it was reasonable to
award Garnet a maintenance award of $900 per month--pointing out
that the maintenance would provide $10,800 per year which added to
her wages of $11,000 would provide her with $21,800 and which would
provide for her reasonable needs. I suggest the making of the
foregoing conclusions with regard to the family home are clearly
within the discretion granted to the District Court under the
express provisions of § 40-4-202(l), MCA. I conclude there was
substantial evidence to support the District Court's division of
property and in particular the award of the $100,000 family home to
Garnet. I would affirm on this issue.
III - AWARD OF MAINTENANCE
In the discussion of the maintenance award of $900 per month
to Garnet, the majority states:
Again, it is clear that the District Court
considered Arlyn's post-separation inheritance by
granting Garnet the excessive award of maintenance. In
fact, the District Court found that Garnet "need[s] a
31
substantial share of her husband's assets so she can live
comfortably." We hold that these findings are clearly
erroneous. We reverse and remand the issue of
maintenance :for review, in light of our holding regarding
the division of the marital estate and for application of
the statutory criteria.
The essence of the foregoing holding is that the District Court
erroneously considered the post-separation inheritance in making an
award of maintenance. I do not agree with that holding.
Section 40-4-203, MCA, provides in pertinent part:
Maintenance. (1) In a proceeding for dissolution of
marriage . . . the court may grant a maintenance order
for either spouse only if it finds that the spouse
seeking maintenance:
(a) lacks sufficient property to provide for his
reasonable needs: and
(b) is unable to support himself through appropriate
employment . . .
(2) The maintenance order shall be in such amounts
and for such periods of time as the court deems just . .
. and after considering all relevant facts including:
(a) the financial resources of the party seeking
maintenance, including marital property apportioned to
him, and his ability to meet his needs independently,
including the extent to which a provision for support of
a child living with the party includes a sum for that
party as custodian;
(b) the time necessary to acquire sufficient
education or training to enable the party seeking
maintenance to find appropriate employment:
(c) the standard of living established during the
marriage:
(d) the duration of the marriage:
(e) the age and the physical and emotional condition
of the spouse seeking maintenance; and
(f) the ability of the spouse from whom maintenance
is sought to meet his needs while meeting those of the
spouse seeking maintenance.
The majority suggests that it was improper to consider Arlyn's
post-separation inheritance. Under the maintenance statute the
court was required to consider all relevant facts with regard to
maintenance including the financial resources of the party seeking
32
fact to which reference has previously been made. As an example,
I would emphasize that the $1458 expenses allocated to Garnet were
found by the District Court to be based on a "bare and frugal
lifestyle" which she has lived since the date of separation. Under
the statute, Garnet is entitled to sufficient property to provide
for her "reasonable" needs.
I would therefore remand on the issue of the maintenance
award, but I disagree with the apparent majority holding that in
that remand, the District Court is not allowed to consider
inherited property or post-separation inherited property. On
remand I would require that the District Court consider all of the
elements of 5 40-4-203, MCA, which are pertinent to this case,
including the facts as previously foun
Chief Justice J.A.. Turnage concurs in the foregoing coyrence and
dissent.
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