April 15 2008
DA 06-0482
IN THE SUPREME COURT OF THE STATE OF MONTANA
2008 MT 123
IN RE THE MARRIAGE OF
THOMAS DUDLEY GORTON, II,
Petitioner, Appellee and Cross-Appellant,
and
GERIANNE ROBBINS,
Respondent and Appellant.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead, Cause No. DR-04-062(B)
Honorable Katherine R. Curtis, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Patrick F. Flaherty, Attorney at Law, Great Falls, Montana
For Appellee:
Clifton W. Hayden. Attorney at Law, Whitefish, Montana
Submitted on Briefs: July 18, 2007
Decided: April 15, 2008
Filed:
__________________________________________
Clerk
Chief Justice Karla M. Gray delivered the Opinion of the Court.
¶1 Gerianne Robbins (Gerianne) appeals from the decree entered by the Eleventh
Judicial District Court, Flathead County, dissolving her marriage to Thomas Dudley Gorton,
II (Tom), and dividing the marital estate pursuant to the parties’ October 28, 2005 property
settlement agreement. Tom cross-appeals from the portion of the decree ordering the parties
to pay their respective attorney fees; he also raises a threshold mootness issue. We affirm.
¶2 The restated issues are:
¶3 1. Is Gerianne’s appeal moot?
¶4 2. Did the District Court abuse its discretion in determining the settlement agreement
was not unconscionable?
¶5 3. Did the District Court abuse its discretion in excluding the proffered testimony of
Dr. Annie Bukacek?
¶6 4. Did the District Court err in determining Gerianne had the mental capacity to
execute the settlement agreement and was not subject to undue influence?
¶7 5. Did the District Court abuse its discretion by failing to award Tom attorney fees?
BACKGROUND
¶8 Gerianne and Tom married in February of 2002. Before the marriage, Gerianne
owned a home in Kalispell, as well as a five-acre property near Creston. During the
marriage, Gerianne and Tom purchased property in Lakeside together.
¶9 Tom petitioned for dissolution of the marriage in January of 2004, and Gerianne and
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Tom had a conference (conference)—variously described as a settlement conference and a
mediation—on October 28, 2005. Near the end of the conference, the parties’ attorneys
drafted a settlement agreement, with the understanding that they would add boilerplate
language and certain details before submitting it to the District Court for approval. Gerianne,
Tom and their respective attorneys signed the drafted settlement agreement (agreement), and
the mediator notarized it.
¶10 Among other things, the agreement provided that Gerianne would transfer half of the
5-acre Creston property to Tom and, upon completion of the Creston property transfer, Tom
would quitclaim his interest in the marital Lakeside property to Gerianne. The agreement
did not address the Kalispell property, but it is undisputed that both parties understood
Gerianne would retain it.
¶11 In January of 2006, Tom gave notice of a hearing at which he would ask the District
Court to enter a final decree in accordance with the agreement. He later moved to enforce
the agreement, and Gerianne responded in opposition.
¶12 The District Court held a hearing in February of 2006. The mediator, Tom, Gerianne
and other witnesses testified. Among other things, Gerianne asserted the agreement was
unconscionable, she lacked the capacity to contract, she was subject to undue influence when
she signed the agreement, and Tom had not disclosed an appraisal of the Creston property
before the conference. The District Court excluded Gerianne’s proffered testimony of Dr.
Annie Bukacek, based in part on Gerianne’s failure to disclose certain medical records to
Tom.
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¶13 On June 9, 2006, the District Court entered a decree of dissolution which approved
the agreement. Among other things, the court determined the agreement was not
unconscionable, Gerianne had capacity to contract and Gerianne was not subject to undue
influence. The court denied Tom’s request for attorney fees under the agreement, and
ordered the parties to pay their respective attorney fees.
¶14 In the month following entry of the decree, the parties filed their notices of appeal and
cross-appeal. On August 2, Tom moved the District Court for an order in aid of execution of
judgment. He filed his supporting affidavit which stated he had performed all obligations
under the dissolution decree and had entered into an agreement to sell his 2½-acre Creston
property, but a title company had communicated it “need[ed] stronger conveyance language
in the order [apparently, the decree] to vest in Thomas Gorton’s name.” On August 3, the
District Court entered an order stating the title to the 2½-acre Creston property was vested in
Tom and Gerianne was divested of title to it. On August 14, Gerianne responded that she
had wished to contest Tom’s motion, but the order was signed the day after Tom filed his
motion and the property apparently had already sold. Gerianne appeals and Tom cross-
appeals.
DISCUSSION
¶15 1. Is Gerianne’s appeal moot?
¶16 Mootness is a threshold issue which, whether raised by this Court sua sponte or by a
party, must be resolved prior to addressing an underlying dispute. See Povsha v. City of
Billings, 2007 MT 353, ¶ 19, 340 Mont. 346, ¶ 19, 174 P.3d 515, ¶ 19 (citations omitted);
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Billings High Sch. Dist. v. Billings Gazette, 2006 MT 329, ¶ 12, 335 Mont. 94, ¶ 12, 149
P.3d 565, ¶ 12 (citation omitted). A question is moot when, due to an event or happening,
the disputed question has ceased to exist and no longer presents an actual controversy. In
other words, a matter is moot when a court cannot grant effective relief or restore the parties
to their original position. Billings High Sch. Dist., ¶ 12 (citations omitted).
¶17 Relying primarily on Turner v. Mountain Engineering and Const., Inc., 276 Mont. 55,
63, 915 P.2d 799, 804 (1996), Tom asserts this Court determines whether effective relief
may be granted by analyzing whether property has changed hands and whether third party
interests are involved. He maintains both factors are satisfied here because he sold the 2½-
acre Creston property to a third party and Gerianne did not move to stay the proceedings or
post a supersedeas bond. In response, Gerianne relies primarily on In re Marriage of Dahm,
2006 MT 230, ¶¶ 35-37, 333 Mont. 453, ¶¶ 35-37, 143 P.3d 432, ¶¶ 35-37, in positing her
appeal is not moot because effective relief requires only a return of any excess Creston sale
proceeds, and the marital estate distribution remains subject to this Court’s order regardless
of whether the property is in the form of cash or real estate.
¶18 We need not address our prior cases at length. As noted above, the basic question in
analyzing mootness is whether effective relief could be granted. See Billings High Sch.
Dist., ¶ 12. If we were to conclude the agreement is unconscionable or invalid, we would
remand to the District Court to fashion a remedy which could involve payment from the sale
proceeds or other adjustments. We conclude Gerianne’s appeal is not moot.
¶19 2. Did the District Court err in determining the agreement was not
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unconscionable?
¶20 Section 40-4-201(1), MCA, authorizes spouses contemplating separation or marital
dissolution to enter into a written separation agreement. In a dissolution proceeding, the
terms of a separation agreement relating to property are binding on the court unless it finds,
after considering the parties’ economic circumstances and any other relevant evidence
produced by the parties, that the agreement is unconscionable. See § 40-4-201(2), MCA.
We review a district court’s determination of whether a property settlement agreement is
unconscionable for abuse of discretion. See In re Marriage of Rolf, 2000 MT 361, ¶ 20, 303
Mont. 349, ¶ 20, 16 P.3d 345, ¶ 20 (citations omitted).
¶21 In challenging the District Court’s determination that the agreement was
conscionable, Gerianne primarily focuses on Tom’s alleged failure to disclose a $135,000
appraisal of the entire 5-acre Creston property before the conference. She notes Tom’s
discovery disclosure of an appraiser—different from the one who performed the $135,000
appraisal—and Tom’s statement that the appraiser’s analysis would be produced upon
receipt. She also points to documents reflecting counsel’s post-conference communications,
which were not introduced into evidence at the hearing and not addressed by the District
Court.
¶22 The agreement valued the Creston property at $75,000, apparently based on
Gerianne’s opinion regarding its value when she and Tom married in 2002. Gerianne asserts
her intent in the Creston-Lakeside trade was to give Tom half of the $75,000 Creston
property—approximately $37,500 in value—in exchange for getting all of the equity in the
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Lakeside property, which she maintains was approximately $38,000. In sum, Gerianne
asserts the $60,000 disparity between her $75,000 valuation of the Creston property and the
allegedly undisclosed $135,000 appraisal renders the agreement unconscionable.
¶23 The District Court found Gerianne was aware of a $220,000 valuation of the Creston
property during the conference, based on real estate flyers advertising two neighboring 2½-
acre parcels at $110,000 each—or $220,000 for 5 acres. Gerianne does not contest this
finding. Her argument is that she would not have agreed to trade half the Creston property
for Tom’s interest in the Lakeside property, based on her own $75,000 valuation, if she had
known of the $135,000 appraisal. Given Gerianne’s undisputed knowledge of the valuation
of similar nearby property at $220,000, this argument is specious and warrants no discussion.
¶24 Gerianne also posits that Tom’s sale of his 2½-acre Creston parcel for $138,000 was a
windfall based on the undisclosed $135,000 appraisal. She cites to Hess v. Hess, 580 A.2d
357 (Pa. Super. 1990), a case addressing the sufficiency of the evidence on claims stemming
from a spouse’s alleged failure to disclose that he was negotiating the sale of property for
$800,000 at the same time he entered a property settlement agreement valuing the property at
$45,000. Hess, 580 A.2d at 358. Gerianne advances no evidence, however, indicating that
Tom was negotiating the Creston property sale at the time of the conference, or that the
$135,000 appraisal of the 5-acre property had any bearing on Tom’s later sale of his 2½-acre
parcel for $138,000. Her reliance on Hess is misplaced.
¶25 Gerianne also discusses her financial circumstances, but does not challenge the
District Court’s findings in that regard. In any event, it appears Gerianne’s assertions
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regarding financial circumstances relate to the disparity between the $75,000 valuation and
the $135,000 appraisal, addressed above, rather than the overall property distribution.
¶26 Finally, we note Gerianne’s reply brief argument that—based on Richardson v. State,
2006 MT 43, 331 Mont. 231, 130 P.3d 634—the District Court should have sanctioned Tom
for failing to disclose the $135,000 appraisal. We do not address this argument because
Gerianne did not request a discovery sanction in the District Court and, thus, the issue is
raised for the first time on appeal. See Jones v. Montana University System, 2007 MT 82, ¶
23, 337 Mont. 1, ¶ 23, 155 P.3d 1247, ¶ 23 (citation omitted).
¶27 We hold the District Court did not abuse its discretion in determining the settlement
agreement was not unconscionable.
¶28 3. Did the District Court abuse its discretion in excluding the proffered
testimony of Dr. Annie Bukacek?
¶29 In her response to Tom’s motion to enforce the agreement, Gerianne gave notice of
her intent to introduce expert testimony from Dr. Bukacek. She provided a copy of Dr.
Bukacek’s letter stating she had “reviewed [Gerianne’s] medical records” of office visits
before and after October 28, 2005; the records “testify to a ‘massive’ amount of stress related
to her ex-husband and the up-coming divorce”; and her opinion to a reasonable degree of
medical certainty was that Gerianne “did not have the emotional/mental capacity to
reasonably enter into a contract the day she signed the settlement agreement.”
¶30 In his reply brief filed 12 days before the hearing, Tom noted his earlier request for
production of Gerianne’s medical records with respect to any health care providers she
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identified as experts, including Dr. Bukacek. He observed Gerianne’s answer to that request
was “Geri will provide as best as she can and has already made application to get them,” but
no records were provided. Tom also asserted that, at Gerianne’s deposition, she promised to
provide a release for Tom to obtain the records, but he had not obtained the release or the
records because the case settled at the conference the next day. Tom argued Dr. Bukacek’s
testimony should be excluded for violation of M. R. Civ. P. 26.
¶31 Tom objected when Gerianne called Dr. Bukacek to testify at the hearing. The
District Court ruled Dr. Bukacek could not testify regarding the records, in part because
Tom’s counsel raised an issue of nondisclosure over a week before the hearing via his
written reply, and the court had not “heard anybody tell me that anything was done to get
those [Gerianne’s records] to him other than she [Dr. Bukacek] walks in today to testify and
she’s got them with her.” The court denied Gerianne’s request to reset the hearing, and
allowed Dr. Bukacek to testify solely for the purpose of making an offer of proof.
¶32 On appeal, Gerianne asserts the sanction was too harsh. We review a discovery-
related sanction for abuse of discretion. See Culbertson-Froid-Bainville Health Care Corp.
v. JP Stevens & Co., 2005 MT 254, ¶ 10, 329 Mont. 38, ¶ 10, 122 P.3d 431, ¶ 10 (citation
omitted). We examine whether the sanction relates to the extent and nature of the discovery
abuse, relates to the extent of the prejudice to the opposing party resulting from the discovery
abuse, and is consistent with consequences expressly warned of by the district court, if a
warning was actually issued. See Culbertson, ¶ 14 (citation omitted).
¶33 Regarding the extent and nature of the discovery abuse, Gerianne asserts her
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discovery abuse is failure to provide the records in the 12 days before the hearing. She
observes her counsel’s statement at the hearing that the case was “on a real fast track,” and
notes Tom did not depose Dr. Bukacek. Gerianne advances no authority, however,
providing that sanctions are unwarranted if a party fails to comply with a discovery request
after another party raises a nondisclosure issue. We conclude the exclusion of Dr. Bukacek’s
testimony relates to the nature and extent of the discovery abuse.
¶34 With respect to the prejudice factor, Gerianne asserts any prejudice to Tom could
have been cured by a continuance of the hearing or of Dr. Bukacek’s testimony. Gerianne
does not, however, contest that her failure to provide the records impaired Tom’s ability to
prepare for cross-examination regarding the basis for Dr. Bukacek’s opinion. We conclude
the second factor concerning prejudice is satisfied here.
¶35 As Gerianne observes, the District Court did not issue a warning; thus, the third factor
does not apply here. See Culbertson, ¶ 15. We conclude, under our three-factor test, that
excluding Dr. Bukacek’s testimony was not too harsh a discovery sanction.
¶36 Gerianne also advances cases for the proposition that a trial court may grant a
continuance under circumstances similar to those here. The question is not, however,
whether the District Court could have granted a continuance in this case which commenced
in January of 2004, but whether it abused its discretion in excluding Dr. Bukacek’s
testimony. Thus, we do not address these cases.
¶37 Finally, Gerianne advances McGinty v. Superior Court, 26 Cal. App. 4th 204, 31 Cal.
Rptr. 2d 292 (Cal. App. 6th Dist. 1994), and State ex rel. Public Works Board v. Bragg, 183
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Cal. App. 3d 1018, 228 Cal. Rptr. 576 (Cal. App. 2nd Dist. 1986), in arguing trial courts
abuse their discretion when they effectively “gut” a party’s case rather than impose a lesser
sanction. McGinty and Bragg are legally and factually distinguishable. Moreover, Gerianne
could have prevented the alleged “gutting” by simply making the records available. Instead,
she failed to act on Tom’s assertion of her nondisclosure.
¶38 We hold the District Court did not abuse its discretion by excluding Dr. Bukacek’s
testimony.
¶39 4. Did the District Court err in determining Gerianne had the mental capacity to
execute the agreement and was not subject to undue influence?
¶40 The District Court also determined Gerianne had the mental capacity to contract and
was not subject to undue influence. Gerianne asserts error, based primarily on her testimony
regarding her physical, mental and financial conditions at the time of the conference. She
advances cases from other jurisdictions in which courts have set aside settlement agreements,
but does not address the cases in light of Montana law or attempt to analogize them to the
present case. Thus, we decline to address those cases.
¶41 Regarding capacity, Gerianne acknowledges that in Wilkes v. Estate of Wilkes, 2001
MT 118, ¶¶ 12-16, 305 Mont. 335, ¶¶ 12-16, 27 P.3d 433, ¶¶ 12-16, we affirmed a district
court’s finding that a person had not, via lay witness testimony, met the burden of proving
incompetence or inability to understand her rights under a prenuptial agreement. Gerianne
tries to distinguish Wilkes on grounds that she attempted to introduce Dr. Bukacek’s expert
testimony. In Issue 3, however, we concluded the District Court did not abuse its discretion
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in excluding Dr. Bukacek’s testimony as a discovery sanction. Thus, as in Wilkes, Gerianne
did not present expert testimony. Moreover, the evidence in this case does not suggest
Gerianne was unable to understand the agreement terms—indeed, it establishes she proposed
some of them, including the Creston-Lakeside trade. We conclude the District Court did not
err in determining Gerianne had capacity to contract.
¶42 Regarding undue influence, Gerianne advances part of the statutory definition
contained in § 28-2-407, MCA, and sets forth portions of her testimony. She does not,
however, address the nonexclusive criteria a court may consider in applying the statute. See
Stanton v. Wells Fargo Bank Montana, N.A., 2007 MT 22, ¶ 21, 335 Mont. 384, ¶ 21, 152
P.3d 115, ¶ 21 (citation omitted). In any event, absent developed argument, we cannot
conclude Gerianne has established error in the District Court’s determination regarding
undue influence.
¶43 We hold the District Court did not err in determining Gerianne had the capacity to
contract and was not subject to undue influence.
¶44 5. Did the District Court abuse its discretion by failing to award attorney fees to
Tom?
¶45 On cross-appeal, Tom asserts the District Court erred in denying his request for
attorney fees. We review a district court’s grant or denial of attorney fees for abuse of
discretion. See In re Marriage of Mease, 2004 MT 59, ¶ 57, 320 Mont. 229, ¶ 57, 92 P.3d
1148, ¶ 57 (citation omitted).
¶46 The District Court reasoned that the agreement’s attorney fee provision did not apply
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in an action to determine the conscionability of the agreement, but instead was intended to
apply in an action requiring a party to comply with the agreement’s terms once it had been
adopted by the court. The attorney fee provision states:
[i]f either party defaults in the performance of this agreement or the terms
hereof and the other party is required to enforce the agreement, the prevailing
party shall receive all reasonable attorneys fees and costs.
¶47 On appeal, Tom does not address the “default” portion of the attorney fee provision,
but asserts he has been “required to enforce” the agreement. He relies on Marriage of
Mease, ¶ 57, for the proposition that a settlement agreement’s attorney fee provision is
controlling.
¶48 In that case, a dissolution decree entered by the district court incorporated a settlement
agreement which included an attorney fee provision that “[s]hould any action be commenced
to enforce, modify, or interpret any provisions contained herein, the court, as a cost of suit,
shall award a reasonable attorney’s fee to the successful party.” Marriage of Mease, ¶ 57.
Years after entry of the decree, one former spouse moved to force the other’s compliance
with certain maintenance obligations, the district court granted the motion in its entirety, and
we affirmed in part. See Marriage of Mease, ¶¶ 13-54, 60. We determined the settlement
agreement was controlling regarding attorney fees, and the prevailing spouse was entitled to
fees under the contract term. Marriage of Mease, ¶ 57.
¶49 The issue in Marriage of Mease was whether a party had complied with the terms of a
settlement agreement after the agreement had been approved by the trial court. The validity
of the agreement was not at issue there, as it is in the present case. Here, Tom moved to
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“enforce” the agreement before the District Court approved it. Gerianne responded by
challenging the validity of the agreement. While the District Court ultimately rejected
Gerianne’s challenges, it could not do so prior to taking evidence of the parties’ economic
circumstances and other relevant matters. See § 40-4-201(2), MCA. Despite Tom’s
characterization of his motion as one for enforcement, Gerianne could not have “defaulted,”
as contemplated in the attorney fee provision, before the District Court resolved the dispute
over whether the agreement was conscionable.
¶50 We hold the District Court did not abuse its discretion by failing to award Tom
attorney fees.
¶51 Affirmed.
/S/ KARLA M. GRAY
We concur:
/S/ JAMES C. NELSON
/S/ PATRICIA COTTER
/S/ W. WILLIAM LEAPHART
/S/ BRIAN MORRIS
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