No., 94-465
IN THE SUPREME COURT OF THE STATE OF MONTANA
1995
IN RE THE MARRIAGE OF:
ANDREA KATHRYN MILLER,
Petitioner and Respondent,
and
JOHN STANLEY MILLER,
Respondent and Appellant.
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable John S. Henson, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Mark E. Jones, Missoula, Montana
For Respondent:
P. Mars Scott, Mulroney, Delaney & Scott, Missoula,
Montana
Submitted on Briefs: May 25, 1995
Decided: September 21, 1995
Filed:
Justice James C. Nelson delivered the Opinion of the Court.
Respondent, Andrea Miller (Andrea), filed a motion with the
District Court of the Fourth Judicial District, Missoula County, to
'modify the parties' Decree of Dissolution and to award her certain
property of the marital estate that had been awarded to Appellant,
John Miller (John). The District Court issued an-opinion and Order
modifying the Decree of Dissolution and re-allocating various debts
and property. John appeals. We affirm in part and reverse in
part.
We address the following issues on appeal:
1. Did the District Court err when it modified the parties'
Decree of Dissolution and Marital Settlement Agreement?
2. Did the District Court err by not awarding attorney fees
to either party?
The District Court dissolved the marriage of Andrea and John
on September 22, 1992. The parties had previously entered into a
Marital Settlement Agreement for Division of Property, Child
Custody, Support, Visitation and Maintenance. The District Court
found that this agreement was not unconscionable and incorporated
the agreement into the Decree of Dissolution.
The agreement set forth the division of property and debts of
the parties' marital estate, custody of the parties' minor
children, child support, visitation and maintenance. John
represented to the District Court that if he were awarded certain
income-producing property of the marital estate amounting to
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approximately $23,650.00, he would pay the $23,389.72 in jointly
held debts of the marital estate. The property was so awarded, but
John has failed to pay the debts or make arrangements to pay them.
Because these debts were joint, the parties' creditors sought, and
continue to seek, collection of these debts from Andrea.
On May 17, 1993, Andrea filed a motion with the District Court
for an order modifying the parties' Decree of Dissolution
containing the Marital Settlement Agreement. At the May 25, 1993
hearing on her motion, Andrea testified she would pay the joint
debts of the marital estate if she were awarded the income-
producing property that had previously been awarded to John.
John did not appear at the hearing and on June 9, 1993, the
District Court awarded Andrea the property she requested and
ordered her to pay the joint debts of the marital estate. On July
16, 1993, John moved the District Court for a re-hearing on
Andrea's motion alleging that he had not received adequate notice
of the May 25th hearing. In addition, John filed a Chapter 13
bankruptcy petition on July 30, 1993, which imposed an automatic
stay on his property.
On September 1, 1993, the District Court set aside the June 9,
1993 Findings of Fact, Conclusions of Law and Order and on
September 13, 1993, John filed his response to Andrea's Motion to
Modify. On February 8, 1994, the Bankruptcy Court dismissed John's
Chapter I3 petition for bankruptcy. That same day John filed a
Chapter 11 petition in bankruptcy court, reimposing the automatic
stay. On February 23, 1994, Andrea filed a motion for the District
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Court to reissue or reconsider the Motion to Modify the Decree,
unaware that John had refiled under Chapter 11.
On May 4, 1994, the Bankruptcy Court lifted the automatic stay
on John's property, permitting Andrea to seek modification of the
Decree of Dissolution in District Court. On May 12, 1994, Andrea
again moved the District Court to renew her Motion to Modify the
Decree of Dissolution. A hearing regarding this motion was held on
July 12, 1994. Both Andrea and John were present and testified
regarding payment of the joint debts.
On July 26, 1994, the District Court issued an Opinion and
Order modifying the Decree of Dissolution and re-allocating various
debts and property. John appeals this Opinion and Order.
Issue 1
Did the District Court err when it modified the parties'
Decree of Dissolution and Marital Settlement Agreement?
The District Court concluded that John's representations that
he would pay certain joint debts of the marital estate if he were
awarded certain property of the marital estate and his subsequent
failure to pay those debts constituted extrinsic fraud. In
addition, the court concluded that if extrinsic fraud is committed
upon the court in violation of a marital settlement agreement, the
power of the court to set aside the agreement is not confined by
the terms of the agreement and the court may order such relief as
is equitable to the non-fraudulent party.
4
--.,,
We review a district court's conclusions of law to determine
whether the court's interpretation of the law was correct. In re
Marriage of Barnard (1994), 264 Mont. 103, 106, 870 P.2d 91, 93.
John contends that the District Court erred when it allowed
Andrea's motion for modification to come before the court since it
was filed in excess of the 60-day time limit allowed by Rule
60(b) (3), M.R.Civ.P. Moreover, John argues that the District Court
erred in concluding that his actions constituted extrinsic fraud.
In order to modify or revoke a final property disposition, §
40-4-209, MCA, requires in pertinent part:
(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. [Emphasis added. 1
Rule 60(b) (3), M.R.Civ.P., allows, upon motion, relief from a
final judgment, order, or proceeding for fraud, whether intrinsic
or extrinsic. However, the motion must be made not more than 60
days after the judgment, order or proceeding was entered. In this
case, Andrea's original motion to modify the decree was not made
until almost eight months after the judgment was entered.
Therefore, Andrea's motion was not timely filed to qualify for
relief under Rule 60(b) (3), M.R.Civ.P.
Nevertheless, the last sentence of Rule 60(b), M.R.Civ.P.,
provides several avenues of relief from a judgment whereby no such
time limitation is imposed. This residual clause of Rule 60(b),
M.R.Civ.P. provides:
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This rule does not limit the power of a court to
entertain an independent action to relieve a party from
a judgment, order, or proceeding, or to grant relief to
a ~defendant not actually personally notified as may be
required by law, or to set aside a judgment for fraud
upon the court.
Thus, the three separate avenues for relief from a judgment
under this clause are: lack of personal notification, fraud upon
the court, or an independent action for extrinsic fraud. See Rule
60(b), M.R.Civ.P.; Salway v. Arkava (1985), 215 Mont. 135, 140, 695
P.2d 1302, 1305. Lack of personal notification is inapplicable to
the present case and will not be addressed herein. Accordingly, we
examine the present case to determine whether sufficient grounds
for relief exist under the residual clause for fraud upon the court
or for an independent action for extrinsic fraud.
Fraud upon the court embraces only that species of fraud which
subverts or attempts to subvert the integrity of the court itself,
or fraud perpetrated by officers of the court so that the judicial
machinery cannot perform in an impartial manner. Filler v.
Richland County (1991), 247 Mont. 285, 289, 806 P.2d 537, 539
(citing Salwav, 695 P.2d at 1306). Fraud upon the court includes
only the most egregious conduct, such as bribery of a judge or
member of the jury; the fabrication of evidence in which an
attorney has been implicated; or the employment of counsel to
influence the court. Filler, 806 P.2d at 539; Salwav, 695 P.2d at
1306. We have repeatedly held that fraud between the parties or
perjury at trial is not fraud upon the court. Wise v. Nirider
(1993), 261 Mont. 310, 316, 862 P.2d 1128, 1132; Traders State Bank
of Poplar v. Mann (1993), 258 Mont. 226, 236, 852 P.2d 604, 610;
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Brown v. Small (1992), 251 Mont. 414, 421, 825 P.2d 1209, 1213;
Salwav, 695 P.2d at 1306. Thus, John's conduct does not rise to a
level which is egregious enough to be characterized as fraud upon
the court.
Courts of general jurisdiction have always possessed the power
to entertain independent, equitable actions to set aside judgments,
fraud being the chief, although not the exclusive, basis for such
an independent action. Salwav, 695 P.Zd at 1305. Montana adheres
to the general rule that the fraud must be extrinsic, as opposed to
intrinsic, to support an independent action for fraud under the
residual clause of Rule 60(b). Filler, 806 P.2d 537, 539.
Extrinsic fraud has been defined as some intentional act or
conduct by which the prevailing party has prevented the
unsuccessful party from having a fair submission of the
controversy. Salway, 695 P.2d at 1306 (citing Pilati v. Pilati
(1979), 181 Mont. 182, 193, 592 P.2d 1374, 1380). Extrinsic fraud
is collateral to the matters tried by the court, but does not
include fraud in the matters on which the judgment was rendered.
See Salway, 695 P.2d at 1306 (citing Hall v. Hall (19241, 70 Mont.
460, 467, 226 P. 469, 471.)
The District Court concluded that John had committed extrinsic
fraud by representing that he would pay certain joint debts of the
marital estate and then failing to pay those debts. However,
neither perjured testimony, nor false or fraudulent allegations
used in obtaining a judgment constitute extrinsic fraud. State
Compensation Ins. Fund v. Chapman (1994), 267 Mont. 484, 490, 885
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P.2d 407, 411 (citing Traders State Bank, 852 P.2d at 610). False
or fraudulent representations or concealments made during court
proceedings constitute intrinsic fraud and are not grounds for
reopening a decree or judgment by an independent action. State
Fund
-! 885 P.2d at 411; Salwav, 695 P.2d at 1307.
In the past we have wrongfully characterized intrinsic fraud
in marital dissolution cases as either fraud upon the court or
extrinsic fraud and allowed a decree or judgment to be reopened on
that basis. See In re Marriage of Lyman I1988), 233 Mont. 283, 762
P.2d 203 (misrepresentations or concealment of assets); Witbart v.
Witbart (1985), 216 Mont. 178, 701 P.2d 339 (failure to disclose
certain debts owed by parties); In re Marriage of Madden (1984),
211 Mont. 237, 683 P.2d 493 (failure to disclose balloon payment
due on house and value of husband's pension); Pilati v. Pilati
(19791, 181 Mont. 182, 592 P.2d 1374 (failure to make a full and
accurate disclosure of all assets); In re Bad Yellow Hair (1973),
162 Mont. 107, 509 P.2d 9 (misrepresenting facts or concealment of
material facts). To the extent that these cases used this
proposition, they are overruled. Hereafter, marital dissolution
cases will be treated the same as all other cases under Rule 60(b),
M.R.Civ.P.
As a result, a decree or judgment in a marital dissolution
case, as with judgments in other types of cases, may not be set
aside based on a motion or petition claiming intrinsic fraud filed
more than 60 days after it was entered. Rule 60(b) (3); State Fund,
885 P.2d at 411. To allow a motion for intrinsic fraud under the
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residual clause of Rule 60(b), M.R.Civ.P., would negate the intent
of the 60-day time limit of subsection (3) of that rule.
It is evident that John's misrepresentations do not constitute
extrinsic fraud or fraud upon the court and are thus not grounds
for relief under the residual clause of Rule 60(b). Although
grounds may have existed for a motion pursuant to Rule 60(b) (3),
this does not mean that the judgment can now be set aside for the
same reason after the time for post-trial motions has expired.
Accordingly, we conclude that the allegations of fraud relied
upon by Andrea fall short of what is legally required to vacate a
final judgment pursuant to the residual clause of Rule 60(b),
M.R.Civ.P. Therefore, we hold that the District Court erred when
it modified the parties' Decree of Dissolution and Marital
Settlement Agreement and we reverse the District Court on this
issue.
Issue 2
Did the District Court err by not awarding attorney fees to
either party?
The parties' Marital Settlement Agreement, which was
incorporated into the dissolution decree, provided that in the
event either party instituted legal proceedings to enforce, modify
or interpret any provision of the agreement, "the court, as a cost
of suit, shall award reasonable attorney's fee [sic] to the
prevailing party." On the basis of this provision, both John and
Andrea contend that the prevailing party is entitled to reasonable
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attorney fees in this action and that the court erred when it
ordered each party to bear their own costs and attorney fees.
A review of the record reveals that Andrea did not request
attorney fees as a form of relief in her motion for modification.\
Neither did John request attorney fees in his response to Andrea's
motion to modify. The issue of attorney fees was raised for the
first time on appeal of the District Court's order. When the issue
of attorney fees is omitted from the pleadings, and no evidence is
presented on that issue at trial, the issue is outside the purview
of the District Court. In re Marriage of Hill (1994), 265 Mont.
52, 60, 874 P.2d 705, 710 (citing Naftco Leasing Ltd. v. Finalco,
Inc. (1992), 254 Mont. 89, 835 P.2d 728). Accordingly, the
District Court did not err in failing to award attorney fees to
either party and, instead, ordering each party to pay their own
costs and attorney fees.
Affirmed in part and reversed in part.
September 21, 1995
CERTIFICATE OF SERVICE
I hereby certify that the following certified order was sent by United States mail, prepaid, to the
following named:
MARK E. JONES
Attorney at Law
P.O. Box 8923
Missoula, MT 598074293
P. Mars Scott, P.C.
MULRONEY, DELANEY & SCOTT
P.O. Box 8228
Missoula, MT 59807
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA
BY: (AT
Deputy u