No. 14374
IN THE SUPREME COUKC O THE STATE O
F F m m
1979
l%vAlxxPILATI,
Petitioner and Appellant,
-vs-
P U A. PILATI,
AL
Respondent and Respondent.
Appeal f r m : D i s t r i c t Court of the Thirteenth Judicial D i s t r i c t ,
Honorable Mbert H. Wilson, Judge presiding.
Counsel of m r d :
For Appellant:
Terry Seifert and Gary Wilcox, Billings, Wntana
For Respondent:
Berger, Anderson, Sinclair and Mxphy, Billings, Pllontana
Suhnitted on briefs: February 9, 1979
Decided: --
Filed :
m<
- 7 TCT? AFT: - 5 1979
Mr. J u s t i c e J o h n Conway H a r r i s o n d e l i v e r e d t h e O p i n i o n o f
t h e Court.
P e t i t i o n e r a p p e a l s from a d e t e r m i n a t i o n o f t h e T h i r -
t e e n t h J u d i c i a l D i s t r i c t , t h e Honorable R o b e r t H . Wilson
g r a n t i n g , on J a n u a r y 1 9 , 1978, r e s p o n d e n t ' s m o t i o n t o q u a s h
a p p e l l a n t ' s p e t i t i o n praying f o r : (1) a n o r d e r d i r e c t e d t o
t h e r e s p o n d e n t , commanding him t o a p p e a r b e f o r e t h e c o u r t
t o show c a u s e , i f a n y , why t h e p r o p e r t y s e t t l e m e n t a g r e e m e n t
a n d t h e p a r t i e s ' d e c r e e o f d i s s o l u t i o n , i n t o which t h e
former w a s incorporated, should n o t be set a s i d e ; (2) a
r e s t r a i n i n g o r d e r a g a i n s t t h e r e s p o n d e n t , p r e c l u d i n g him
from s e l l i n g a n y p r o p e r t y a c q u i r e d by him o r by t h e p a r t i e s
j o i n t l y during t h e course of t h e i r marriage; (3) a restrain-
i n g o r d e r a g a i n s t t h e r e s p o n d e n t p r e c l u d i n g him f r o m i n t e r -
f e r i n g w i t h o r b o t h e r i n g t h e p e t i t i o n e r and h e r c h i l d r e n ;
and ( 4 ) a t t o r n e y ' s f e e s i n t h e e v e n t t h e p r o 2 e r t y s e t t l e m e n t
i s set aside. The p e t i t i o n was accompanied by a n a f f i d a v i t
s i g n e d by t h e p e t i t i o n e r - a p p e l l a n t , i n which s h e a l l e g e s
m a t t e r s which, i f f o u n d t o b e t r u e , would form t h e founda-
t i o n f o r s e t t i n g a s i d e o r amending t h e p r o p e r t y s e t t l e m e n t
agreement.
Some o f t h e s a l i e n t f a c t s f o l l o w . The p a r t i e s were
m a r r i e d f o r o v e r 1 3 y e a r s b e f o r e d i v o r c i n g on December 9,
1976. They had two c h i l d r e n , who a t t h e t i m e o f t h e d i v o r c e
w e r e a g e s n i n e and s i x . When m a r r i e d , p e t i t i o n e r was 1 6
y e a r s o l d , t h e r e s p o n d e n t 35 y e a r s o l d . She had a n i n t h
g r a d e e d u c a t i o n and was n o t employed t h e n o r a t any t i m e
during t h e course of t h e marriage. I n c o n t r a s t , respondent
i s w e l l e d u c a t e d ; h e h o l d s b o t h a b a c h e l o r ' s and m a s t e r ' s
d e g r e e and h a s worked toward a Ph.D. and, according t o t h e
briefs, a J.D. H e i s b o t h a r a n c h e r and h i g h s c h o o l t e a c h e r
and d o e s r e a l e s t a t e a p p r a i s a l s . During t h e c o u r s e of t h e
marriage, he handled a l l t h e f i n a n c e s of t h e family--even
t o t h e e x t e n t o f p u r c h a s i n g t h e g r o c e r i e s and c l o t h i n g .
P e t i t i o n e r a p p a r e n t l y knew n o t h i n g o f t h e i r f i n a n c i a l
s t a t u s , a l l e g e d l y having been d e l i b e r a t e l y k e p t i n t h e d a r k
by r e s p o n d e n t .
E a r l y i n November 1976 p e t i t i o n e r r e t a i n e d a n a t t o r n e y
t o f i l e f o r d i s s o l u t i o n of marriage. H e s o f i l e d on Novem-
b e r 1 8 , 1976, i n t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , Carbon
County. Subsequently, t h a t p e t i t i o n w a s dismissed and i n
i t s p l a c e o n e was j o i n t l y f i l e d by t h e p a r t i e s , t h r o u g h
r e s p o n d e n t ' s c o u n s e l , on December 9 , 1976. Petitioner
a l l e g e s i n h e r a f f i d a v i t t h a t s h e was m i s l e d by r e s p o n d e n t
and h i s a t t o r n e y and i n d u c e d t o f i l e t h a t l a t t e r p e t i t i o n .
On t h e v e r y d a y t h e j o i n t p e t i t i o n w a s f i l e d , t h e d i s s o l u -
t i o n was g r a n t e d ; t h e d e c r e e was s i g n e d and e n t e r e d and a
p r o p e r t y s e t t l e m e n t , p r e p a r e d by r e s p o n d e n t ' s a t t o r n e y a l o n e
a n d e x e c u t e d by t h e p a r t i e s some t e n d a y s e a r l i e r on Novem-
b e r 30, 1976, was i n c o r p o r a t e d t h e r e i n . P e t i t i o n e r even-
t u a l l y r e c e i v e d as h e r s h a r e of t h e p a r t i e s ' p r o p e r t y a one
bedroom h o u s e , o n e a c r e o f t h e 46 which was t h e " r a n c h " o n
which t h e y had l i v e d , and a 1976 Toyota a u t o m o b i l e . She w a s
awarded c u s t o d y o f t h e two minor c h i l d r e n , a n d was t o re-
c e i v e $250 p e r month f o r t h e i r s u p p o r t and $50 p e r month f o r
h e r maintenance. W i t h i n s i x months o f t h e d i s s o l u t i o n ,
p e t i t i o n e r , u n a b l e t o s u p p o r t h e r s e l f and h e r c h i l d r e n , was
f o r c e d t o a c c e p t p u b l i c a s s i s t a n c e i n t h e form of f o o d
stamps.
A t t h e t i m e o f t h e d i v o r c e , p e t i t i o n e r d i d n o t know t h e
e x t e n t of t h e p a r t i e s ' holdings o r t h e i r t r u e worth. She
l a t e r l e a r n e d t h a t t h e 45 a c r e s which r e s p o n d e n t r e c e i v e d
was w o r t h a b o u t $70,000 and t h a t t h e r e m a i n d e r of t h e p r o p -
e r t y owned by t h e p a r t i e s was w o r t h o v e r a h a l f m i l l i o n
dollars. Once s h e d i s c o v e r e d t h e e x i s t e n c e and w o r t h o f t h e
p r o p e r t y , s h e c o n t a c t e d a n a t t o r n e y who, o n J u n e 24, 1 9 7 7 ,
f i l e d a p e t i t i o n on h e r b e h a l f . The D i s t r i c t C o u r t , i n
r e s p o n s e , i s s u e d a n o r d e r , f i l e d J u n e 30, 1 9 7 7 , s e t t i n g a
h e a r i n g t o show c a u s e . S u b s e q u e n t l y , on J u l y 21, 1 9 7 7 , t h e
d a t e set f o r h e a r i n g , respondent f i l e d a motion t o quash.
During a September 1, 1977, h e a r i n g , c o u n s e l p r e s e n t e d o r a l
a r g u m e n t s , b u t t h e p a r t i e s o f f e r e d no t e s t i m o n y o f which
there i s record. On J a n u a r y 1 9 , 1 9 7 8 , a f t e r b r i e f s had been
f i l e d , J u d g e Wilson g r a n t e d r e s p o n d e n t ' s m o t i o n t o q u a s h ,
from which a p p e a l h a s been t i m e l y t a k e n . The c a s e was
deemed s u b m i t t e d o n b r i e f s , s o t h e r e h a s b e e n no o r a l
argument.
A p p e l l a n t - p e t i t i o n e r advances t h r e e i s s u e s f o r o u r
consideration:
1. Is p e t i t i o n e r e n t i t l e d t o a h e a r i n g t o d e t e r m i n e
whether o r n o t t h e p r o p e r t y s e t t l e m e n t should be s e t a s i d e ?
2. Did t h e c o u r t e r r i n g r a n t i n g r e s p o n d e n t ' s m o t i o n
t o q u a s h and t h e r e b y e f f e c t i v e l y d i s m i s s t h e p e t i t i o n t o s e t
aside t h e divorce decree?
3. I f a j o i n t p e t i t i o n i s f i l e d , must t h e D i s t r i c t
C o u r t w a i t 20 d a y s b e f o r e s i g n i n g a f i n a l d e c r e e ?
W e s h a l l c o n s i d e r t h e f i r s t two i s s u e s t o g e t h e r , inasmuch
as t h e r e s p o n s e t o one w i l l b e t h e r e s p o n s e t o t h e o t h e r .
Because w e f i n d p e t i t i o n e r i s e n t i t l e d t o a h e a r i n g , t h e
D i s t r i c t Court having e r r e d i n g r a n t i n g r e s p o n d e n t ' s motion
t o q u a s h , w e need n o t r e a c h t h e f i n a l i s s u e .
The r e a s o n s a r t i c u l a t e d i n r e s p o n d e n t ' s m o t i o n t o
q u a s h , o n which t h e l o w e r c o u r t g r a n t e d t h e m o t i o n , a r e :
"1. That t h e s a i d o r d e r i n p a r t m o d i f i e s a d e c r e e
o f d i v o r c e d a t e d December 9 , 1976.
"2. That t h e t i m e f o r appeal has elapsed pursuant
t o R u l e 5, Nontana R u l e s o f A p p e l l a t e P r o c e d u r e .
" 3 . T h a t t h e t i m e f o r m o d i f i c a t i o n o r amendment
o f t h e judgment o f December 9 , 1 9 7 6 , h a s e l a p s e d
p u r s u a n t t o R u l e 6 0 ( b ) , M.R.Civ.P."
I n b r i e f response, w e note f i r s t t h a t t h e p e t i t i o n i s
- a n a p p e a l from t h e g r a n t i n g o f t h e d e c r e e o f d i s s o l u -
not
t i o n ; h e n c e , t h e t i m e l i m i t a t i o n s o f R u l e 5 , M.R.App.Civ.P.,
a r e inapplicable. The t i m e l i m i t a t i o n upon a n i n d e p e n d e n t
a c t i o n s e e k i n g r e l i e f from a judgment t a i n t e d by f r a u d
"normally i s laches." 7 Moore's F e d e r a l P r a c t i c e Yi60.33
(2nd e d . ) . Respondent d i d n o t p l e a d l a c h e s , and q u i t e
r i g h t l y s o , f o r p e t i t i o n e r most a s s u r e d l y d i d n o t s l e e p o n
h e r r i g h t s s o a s t o b e b a r r e d from r e l i e f i n a c o u r t o f
equity .
Secondly, w e p o i n t o u t t h a t even i f t i m e has r u n o u t
u n d e r R u l e 6 0 ( b ) ( 3 ) , l4.R.Civ.P.--and w e do n o t d e c i d e t h a t
question--petitioner has alleged matters s u f f i c i e n t t o
i n v o k e t h e e q u i t a b l e powers o f t h i s C o u r t . S t i l l unchanged
i s t h e long standing p r i n c i p l e t h a t t h e a u t h o r i t y of a
c o u r t o f e q u i t y t o v a c a t e a d e c r e e o b t a i n e d by f r a u d i s
inherent. E.g., H a l l v. Hall ( 1 9 2 4 ) , 70 Mont. 460, 467, 226
P. 469, 471.
M o n t a n a ' s Uniform 24arriage and D i v o r c e A c t , s e c t i o n 48-
,
330 (1) ( b ) (ii) R.C.M. 1947, now s e c t i o n 40-4-208 (1)( b ) ( i i )
MCA, states that " [ t ]h e p r o v i s i o n s a s t o p r o p e r t y d i s p o s i t i o n
may n o t b e r e v o k e d o r m o d i f i e d by a c o u r t , e x c e p t . . . if
t h e c o u r t f i n d s t h e e x i s t e n c e of c o n d i t i o n s t h a t j u s t i f y t h e
r e o p e n i n g o f a judgment u n d e r t h e l a w s o f t h i s s t a t e . "
F r a u d upon t h e c o u r t and upon o n e o f t h e p a r t i e s t o t h e
p r o p e r t y s e t t l e m e n t agreement i s c e r t a i n l y w i t h i n t h e scope
of t h i s provision. The w i f e h a s a l l e g e d f a c t s ample t o
j u s t i f y a reopening such a s t o r e d i s t r i b u t e t h e property i n
a n e q u i t a b l e manner.
"[A] c o u r t o f g e n e r a l j u r i s d i c t i o n h a s t h e
r i g h t , e n t i r e l y independent of s t a t u t e , t o g r a n t
r e l i e f a g a i n s t a judgment o b t a i n e d by e x t r i n s i c
f r a u d , and may g r a n t t h a t r e l i e f e i t h e r on m o t i o n
i n t h e o r i g i n a l c a u s e o r upon a s e p a r a t e e q u i t y
s u i t , a n d a f t e r t h e p e r i o d p r e s c r i b e d by t h e
s t a t u t e [ p r o v i d i n g a s i x month l i m i t a t i o n ] r e l i e d
o n by [ t h e h u s b a n d ] . " Cure v . Southwick ( 1 9 6 0 ) ,
137 Mont. 1, 8 , 349 P.2d 575, 579. ( C i t a t i o n s
omitted. )
I n t h e m o t i o n t o q u a s h , r e s p o n d e n t makes a b s o l u t e l y no
mention of t h e substance of t h e a f f i a n t ' s a l l e g a t i o n s which,
i f a c c u r a t e , c l e a r l y show f r a u d on t h e p a r t o f t h e husband
i n f a i l i n g t o make a f u l l and a c c u r a t e d i s c l o s u r e of a l l t h e
assets of t h e p a r t i e s , whether h e l d s o l e l y , j o i n t l y o r
through a business e n t i t y . I n Bates v. B a t e s (1965), 1
Ariz.App. 1 6 5 , 400 P.2d 593, t h e c o u r t deemed t h a t , by
v i r t u e o f t h e h u s b a n d ' s m o t i o n t o d i s m i s s made i n r e s p o n s e
t o t h e w i f e ' s c o m p l a i n t s t a t i n g a c a u s e o f a c t i o n b a s e d on
f r a u d u l e n t p r o c u r e m e n t o f a d i v o r c e d e c r e e and t h e a t t e n d a n t
p r o p e r t y s e t t l e m e n t , h e had a d m i t t e d f a c t s a l l e g e d by t h e
wife. The c o u r t ' s l a n g u a g e was " [ d l e f e n d a n t ' s a d m i s s i o n s ,
v i r t u e - -s Motion - D i s m i s s ,
of h i to include t h e following
f a c t s -- a l l e g e d - p l a i n t i f f .
that are by . ." 400 P.2d a t 596.
(Emphasis added.) Among t h e f a c t s deemed a d m i t t e d w e r e t h e
f o l l o w i n g which b e a r a s t r i k i n g s i m i l a r i t y t o c e r t a i n o f
those i n t h i s case: t h e husband, d u r i n g t h e c o u r s e o f t h e
m a r r i a g e , s e c r e t l y p u r c h a s e d c e r t a i n r e a l e s t a t e , t h e owner-
s h i p o f which was c o n c e a l e d from t h e w i f e ; t h e w i f e d i d n o t
know o f t h e e x i s t e n c e o f c e r t a i n o f t h e p r o p e r t y a t t h e t i m e
o f t h e d i v o r c e and d i d n o t d i s c o v e r t h e f a c t s o f i t s owner-
s h i p and c o n c e a l m e n t u n t i l w i t h i n t h i r t y d a y s o f t h e f i l i n g
o f h e r c o m p l a i n t ; t h e p r o p e r t y was n o t known t o t h e c o u r t
and n o t made t h e s u b j e c t of a d j u d i c a t i o n by t h e c o u r t a t t h e
t i m e of t h e d i s s o l u t i o n .
I n t h i s c a s e , t h e w i f e d i d n o t know o f c e r t a i n of t h e
p a r t i e s ' a s s e t s , s p e c i f i c a l l y c e r t a i n r e a l p r o p e r t y of
considerable worth, u n t i l a f t e r t h e d i s s o l u t i o n . It appears
t h a t s h e became aware o f t h e c o n s i d e r a b l e v a l u e o f some o f
t h a t p r o p e r t y when t h e ex-husband a t t e m p t e d t o s e l l some o f
it. Almost i m m e d i a t e l y , s h e c o n t a c t e d a n a t t o r n e y who,
w i t h i n a v e r y few d a y s , f i l e d t h e c o m p l a i n t s u b j e c t o f t h i s
action. The D i s t r i c t C o u r t , n o t f u l l y a p p r i s e d , d o e s n o t
a p p e a r t o have a d j u d i c a t e d , i n i t s e n t i r e t y , t h e d i v i s i o n o f
t h e property. Being uninformed o f a l l o f t h e f a c t s o f t h e
m a t t e r , t h e D i s t r i c t C o u r t was u n a b l e t o " f i n a l l y e q u i t a b l y
a p p o r t i o n between t h e p a r t i e s t h e p r o p e r t y and a s s e t s b e l o n g -
i n g t o e i t h e r o r b o t h , however and whenever a c q u i r e d . . ."
,
S e c t i o n 48-321 (1) R.C.M. 1947, now s e c t i o n 40-4-202 (1) MCA.
L i k e t h e A r i z o n a c o u r t , w e a r e s o r e tempted t o deem
a d m i t t e d , by v i r t u e o f t h e h u s b a n d ' s m o t i o n t o q u a s h , t h e
s t a t e m e n t s i n t h e w i f e ' s a f f i d a v i t ; however, a s t h e p e t i -
t i o n e r has requested only t h a t w e provide her with a hearing
on t h e m a t t e r , w e a r e c o n s t r a i n e d t o p r o v i d e t h a t r e l i e f .
I n H a l l v . H a l l , 70 Xont. a t 467, 226 P . a t 471, w e
n o t e d t h a t t h e f r a u d from which r e l i e f w i l l b e g r a n t e d i s
t h a t which i s " e x t r i n s i c o r c o l l a t e r a l t o t h e m a t t e r s t r i e d
by t h e c o u r t , and n o t t o f r a u d i n t h e m a t t e r s on which t h e
d e c r e e was r e n d e r e d . " Although t h e H a l l c o u r t d e c l a r e d t h a t
n e i t h e r t h e f a l s i t y of a l l e g a t i o n s i n t h e complaint nor t h e
f a l s i t y of t e s t i m o n y g i v e n a t t r i a l c o n s t i t u t e d e x t r i n s i c
f r a u d such as t o a f f o r d r e l i e f , it affirmed t h e D i s t r i c t
C o u r t which g r a n t e d r e l i e f t o t h e w i f e on whom f r a u d had
been p r a c t i c e d t o procure a d i v o r c e . As justification for a
d e c i s i o n which a p p e a r s t o b e , b u t which was n o t acknowledged
a s b e i n g , i n c o n t r a v e n t i o n o f i t s own a r t i c u l a t i o n o f t h e
r u l e t h a t r e l i e f w i l l not be granted f o r i n t r i n s i c fraud,
the court stated: "A d e c r e e o f a c o u r t o f c o n s c i e n c e o u g h t
not t o afford a sanctuary f o r fraud." 70 Mont. a t 473, 226
P. a t 473. I n B u l l a r d v . Zimmerman ( 1 9 3 0 ) , 88 Mont. 271,
277-78, 292 P . 730, 732, o f t e n c i t e d f o r t h e f o l l o w i n g , t h e
Court declared:
"The power of a c o u r t o f e q u i t y t o g r a n t r e l i e f
from a judgment o b t a i n e d by f r a u d i s i n h e r e n t ;
i t d o e s n o t depend upon s t a t u t e . [ C i t a t i o n omit-
ted.] But ... ' n o t e v e r y f r a u d committed i n
t h e course of a j u d i c i a l determination w i l l furn-
i s h ground f o r s u c h r e l i e f . The a c t s f o r which a
judgment o r d e c r e e may b e s e t a s i d e o r a n n u l l e d
h a v e r e f e r e n c e o n l y t o f r a u d which i s e x t r i n s i c
o r c o l l a t e r a l t o t h e m a t t e r t r i e d by t h e c o u r t ,
a n d n o t t o f r a u d i n t h e m a t t e r on which t h e
judgment was r e n d e r e d . * * * What, t h e n , i s meant
by t h e e x p r e s s i o n " f r a u d which i s e x t r i n s i c o r
c o l l a t e r a l t o t h e m a t t e r t r i e d by t h e c o u r t ? " I t
i s e x t r i n s i c o r c o l l a t e r a l w i t h i n t h e meaning o f
t h e r u l e , when t h e e f f e c t o f i t i s t o p r e v e n t t h e
u n s u c c e s s f u l p a r t y from h a v i n g a t r i a l o r from
p r e s e n t i n g h i s case f u l l y . ' The r e c o r d d i s c l o s e s
ample e v i d e n c e t o b r i n g t h i s c a s e w i t h i n t h e r u l e
announced.
" ' F r a u d b e i n g t h e a r c h enemy o f e q u i t y , a judgment
obtained through fraud p r a c t i c e d i n t h e very a c t
o f g e t t i n g i t w i l l b e s e t a s i d e by a c o u r t o f
e q u i t y upon s e a s o n a b l e a p p l i c a t i o n . Indeed, t h e
power o f a c o u r t o f e q u i t y t o g r a n t s u c h r e l i e f
i s inherent. [Citation omitted.] The c o n s c i e n c e
o f t h e c h a n c e l l o r moves q u i c k l y t o r i g h t t h e wrong
when i t i s shown t h a t t h r o u g h i m p o s i t i o n p r a c t i c e d
upon t h e c o u r t by a l i t i g a n t a n u n f a i r a d v a n t a g e
h a s been g a i n e d by him and t h u s i t h a s been made
an instrument of i n j u s t i c e . [Citation omitted.]
* * * I n t h e l a n g u a g e o f Lord C h i e f Baron P o l l o c k
i n Rogers v . Hadley: " F r a u d -- e v e r y t h i n g .
c u t s down
The law sets
- - - i t s e l f a g a i n s t f r a u d - -e e x t e n t t o th
- breaking through - very r u l e , s a c r i f i c i n g
of almost e
e v e r y maxim, g e t t i n g - -f e v e r y g r o u n d o f o p p o s i -
rid o
tion. - - -s o a b h o r s - - - -a m i n n o t
The law f r a u d -
of an - - t o
a l l o w t e c h n i c a l d i f f i c u l t i e s - -y k i n d - i n t e r -
f e r-t o p r e v e n t t h e s u c c e s s of j u s t i c e , r i g h t and
- e
truth." . . .' [Citations omitted.]" (~mphasis
added. )
The i l o n t a n a c o u r t i s n o t a l o n e i n s t a t i n g t h a t t h e
f r a u d from which a p a r t y w i l l b e r e l i e v e d m u s t b e e x t r i n s i c
or collateral. E.g., B a t e s v . B a t e s , 400 P.2d a t 597-98.
The Supreme C o u r t o f Utah i n C l i s s o l d v . C l i s s o l d
( 1 9 7 4 ) , 30 Utah 2d 430, 519 P.2d 241, 242, s a i d :
- m a t e r i a l m i s r e p r e s e n t a t i o n o r concealment of
"A
as
a s s e t s o r f i n a n c i a l c o n d i t i o n - - r e s u l t of which
a
i s less - -
a l i m o n y o r p r o p e r t y awarded - - - o r m o r e t h a n
o t h e r w i s ~ w o u l d-- v i d e d -r-s
h a v e m r o fo i a proper
g r o u n d f o r which t h e c o u r t may g r a n t r e l i e f - -e t o th
p a r t y who was o f f e n d e d & s u c h m i s r e p r e s e n t a t i o n
--
o r c o n c e a l m e n t , a b s e n t o t h e r e q u i t i e s - -a s l a c h e s
such
or
- n e g l i g e n c e . [ C i t a t i o n s o m i t t e d and e m p h a s i s
added.] i-lowever, b e f o r e r e l i e f c a n b e g r a n t e d , i t
must be determined t h a t t h e a l l e g e d misrepresenta-
t i o n o r concealment c o n s t i t u t e s conduct, such a s
f r a u d , a s would b a s i c a l l y a f f o r d t h e c o m p l a i n i n g
p a r t y r e l i e f from t h e judgment. The p r o p e r d i s p o s i -
t i o n o f t h i s c a s e r e q u i r e s a n a n a l y s i s and d i s c u s -
s i o n of t h e c o n c e p t s o f ' i n t r i n s i c ' and ' e x t r i n s i c '
fraud. The p u b l i c i n t e r e s t r e q u i r e s t h a t t h e r e b e
a n end t o l i t i g a t i o n . To a c c o m p l i s h t h i s o b j e c t i v e
t h e c o u r t s h a v e a l w a y s d i s t i n g u i s h e d between t h e
a c t i o n s o f a p a r t y l i t i g a n t which b e a r upon t h e
opposing p a r t y ' s o p p o r t u n i t y f o r a f a i r submission
o f h i s c a s e and a p a r t y ' s m i s r e p r e s e n t a t i o n d u r i n g
trial. Those a c t i o n s a s s e r t e d t o b e f r a u d u l e n t
-7
which p r e v e n t a f a i r s u b m i s s i o n o f t h e c o n t r o v e r s y
s u c h a s d e c e i v i n g a p a r t y i n t o n o t f i l i n g a n answer
o r d e c e i v i n g a p a r t y i n t o s t a y i n g away from c o u r t
on t h e day o f t h e t r i a l a r e c l a s s e d a s e x t r i n s i c
f r a u d , and i f e x i s t e n t i n f a c t , e n t i t l e t h e o p p o s i n g
p a r t y t o r e l i e f from t h e judgment. Conduct a s s e r t e d
t o - f r a u d u l e n t which o c c u r s d u r i n g t h e c o u r s e o f
- be
t h e proceedings, such a s f a l s e testimony, whether
o r n o t e x i s t e n t i n f a c t , does n o t e n t i t l e a p a r t y
t o r e l i e f from t h e judgment. The p r i n c i p l e , o f
c o u r s e , i s t h a t d u r i n g a t r i a l v e r a c i t y i t s e l f i s on
t r i a l , and i n t h e p u b l i c i n t e r e s t c a n n o t b e t r i e d
a g a i n . Some e x c e p t i o n s t o t h i s r u l e e x i s t i n d i v o r c e
c a s e s where t h e r e h a s been a g r o s s m i s r e p r e s e n t a t i o n
o f a s s e t s by a p a r t y . [Emphasis i n o r i g i n a l . ] "
Because t h e c o u r t f o u n d t h a t t h e m i s r e p r e s e n t a t i o n w a s
n o t g r o s s , f o r " [ a l t m o s t t h e r e was a d i s p u t e as t o t h e
v a l u e o f some h i g h l y s p e c u l a t i v e p r o p e r t y , and a n answer t o
a n i n t e r r o g a t o r y which m i g h t b e i n t e r p r e t e d a s c o n c e a l m e n t , "
519 P.2d a t 242, t h e t r i a l c o u r t ' s d e n i a l o f a m o t i o n f o r a
new t r i a l was a f f i r m e d . I n t h e i n s t a n t c a s e , however, t h e
m i s r e p r e s e n t a t i o n i s g r o s s and t h e p e t i t i o n e r w i l l n o t b e
denied r e l i e f .
F r a u d upon t h e c o u r t i s a s p e c i e s o f e x t r i n s i c f r a u d
which w i l l a f f o r d e q u i t a b l e r e l i e f .
" [ F l r a u d upon t h e c o u r t .. . authorizes settina a
a s i d e a p r i o r judgment. Such f r a u d may c o n s i s t o f
---
affirmatively misrepresenting f a c t s t o t h e court
o r o f c o n c e a l m e n t o f m a t e r i a l f a c t s by a p e r s o n who
i s u n d e r a l e g a l d a y t o make a f u l l d i s c l o s u r e t o
the court. [ C i t a t i o n omitted. 1
"The power - -e c o u r t - -t a s i d e a judgment
of th t o se
- -e b a s i s o f f r a u d -- c o u r t
on t h upon t h e inherent rs
and i n d e p e n d e n t o f s t a t u t e , - t- i m e l i n e s s o f
and het
p r o c e e d i n g s - - t a i e p r i o r judgment - obr
to se s d so -
i s no
t a i n e d - - t s u b j e c t - -e-i x months --
to th s time limi
t a t i o n - - l e 6 0 ( b ) , M.R.Civ.P.,
i n Ru but - ulti-
- must
m a t e l y depend upon e q u i t a b l e p r i n c i p l e s and t h e
sound d i s c r e t i o n - -e c o u r t .
of t h [Citation omitted
I n r e J u l i a Ann Bad Yellow H a i r (1973) 162 Xont.
1 0 7 , 1 1 509 P.2d 9 , 1 2 .
1 , ( ~ m ~ h a sadded.)
is
.
A l t h o u g h w e d e t e r m i n e d t h a t f r a u d w a s n o t committed on
t h e c o u r t i n t h a t c a s e , w e f i n d t h a t h e r e t h e husband
committed f r a u d upon t h e c o u r t i n f a i l i n g t o d i s c l o s e f u l l y
t h e e x t e n t and n a t u r e o f p r o p e r t y s u b j e c t o f d i v i s i o n i n t h e
proceeding f o r d i s s o l u t i o n of marriage.
" I n a number o f c a s e s i n which t h e d i v o r c e judgment
was b a s e d upon a s e t t l e m e n t a g r e e m e n t t o which t h e
w i f e ' s c o n s e n t had b e e n o b t a i n e d t h r o u g h t h e hus-
b a n d ' s c o n c e a l m e n t o f p r o p e r t y and m i s r e p r e s e n t a t i o n
o f f i n a n c i a l s t a t u s , t h e judgment h a s b e e n h e l d n o t
c o n c l u s i v e o n t h e ground t h a t , by r e a s o n o f t h e
agreement, a c t u a l j u d i c i a l c o n s i d e r a t i o n o r d e t e r -
m i n a t i o n o f t h e p r o p e r t y r i g h t s o f t h e p a r t i e s had
been e f f e c t i v e l y prevented o r withdrawn." Annot.,
152 A.L.R. 1 9 0 , 213 ( 1 9 4 4 ) .
Selway v. Burns ( 1 9 6 7 ) , 150 Mont. 1, 8-91 429 P.2d 640,
644, r e c i t e s t h e s e b a s i c p r i n c i p l e s :
" [ R l e l i e f may b e g r a n t e d e i t h e r on m o t i o n i n t h e
original action o r i n a separate equity s u i t .
R u l e 6 0 ( b ) e x p r e s s l y p r e s e r v e d t h i s i n h e r e n t power
i n i t s l a s t s e n t e n c e which p r o v i d e s : 'This r u l e
d o e s n o t l i m i t t h e power o f a c o u r t t o e n t e r t a i n
a n i n d e p e n d e n t a c t i o n t o r e l i e v e a p a r t y from a
judgment, o r d e r , o r p r o c e e d i n g , o r t o g r a n t r e l i e f
t o a d e f e n d a n t n o t p e r s o n a l l y n o t i f i e d a s may b e
p r o v i d e d by law, o r t o s e t a s i d e a judgment f o r
f r a u d upon t h e c o u r t . '
"Our f e d e r a l c o u r t s a l s o r e c o g n i z e and u s e t h e
h i s t o r i c e q u i t y power t o s e t a s i d e judgments
g a i n e d by f r a u d . H a z e l - A t l a s C l a s s Co. v . H a r t -
f o r d Co., 322 U.S. 238, 64 S.Ct. 997, 88 L.Ed. 1250.
The o n l y l i m i t a t i o n t h a t h a s been p l a c e d upon t h e
e x e r c i s e o f t h i s power i s t h a t t h e i n v e s t i g a t i n g
c o u r t must o b s e r v e t h e u s u a l s a f e g u a r d s o f t h e ad-
v e r s a r y p r o c e s s by g r a n t i n g n o t i c e t o a f f e c t e d
p e r s o n s and by c o n d u c t i n g a f a i r h e a r i n g on t h e
e x i s t e n c e of t h e f r a u d . U n i v e r s a l O i l Co. v. Root
R e f i n i n g Co., 328 U.S. 575, 66 S . C t . 1176, 90 L.Ed.
1447.
"The f r a u d ---- i l l move a c o u r t o f e q u i t y t o
that w
e x e r c i s e i t s i n h e r e n t power t o v a c a t e judgments
h a s been d e s c r i b e d a s t h a t which p r e v e n t s t h e unsuc-
c e s s f u l p a r t y from h a v i n g a t r i a l - o r p r e s e n t i n g i t s
case f u l l y . [ C i t a t i o n s o m i t t e d . ] - - always t h e
It is
k i n-o f f r a u d t h a t g o e s - -e v e r y i n t e g r i t y o f
- d t o th
is
t h e j u d i c i a l system because t h e c o u r t - m i s l e d a n d
made o n e - t h e v i c t i m s - -e f r a u d .
--- of of t h [Citation
omitted.] C a s e s d e c i d e d by t h i s c o u r t show t h a t
t h e p r o h i b i t e d r e s u l t may be a c h i e v e d e i t h e r by a£-
firmatively misrepresenting f a c t s [ c i t a t i o n omitted]
o r by c o n c e a l m e n t o f f a c t s by a p e r s o n who was u n d e r
a l e g a l d u t y t o make a f u l l d i s c l o s u r e t o t h e c o u r t .
[Citations omitted. 1 " (Emphasis added. )
A c o u r t i s e n t i t l e d t o presume t h a t t h e s u b s t a n t i v e
c o n t e n t of documents, p r e s e n t e d f o r i t s c o n s i d e r a t i o n i n
d e t e r m i n i n g t h e l e g a l and e q u i t a b l e q u e s t i o n s o f a c a s e , a r e
t r u t h f u l and a c c u r a t e , "and a m i s r e p r e s e n t a t i o n o f a s s e t s
and income i s a s e r i o u s and i n t o l e r a b l e d e r e l i c t i o n on t h e
p a r t o f t h e a f f i a n t which g o e s t o t h e v e r y h e a r t o f t h e
j u d i c i a l proceeding." Casanova v . Casanova ( 1 9 7 4 ) , 166
Conn. 304, 348 A.2d 668, 668. Based on t h a t d e r e l i c t i o n ,
t h e C o n n e c t i c u t c o u r t d e t e r m i n e d t h a t t h e w i f e was e n t i t l e d
t o " a new and f u l l h e a r i n g . . . untainted by t h e [ h u s b a n d ' s ]
misrepresentation." 348 A.2d a t 668-69. I n t h a t case,
c e r t a i n d e p o s i t i o n proceedings, subsequent t o a h e a r i n g on
t h e w i f e ' s m o t i o n f o r a n o r d e r f o r t e m p o r a r y alimony and
s u p p o r t f o r t h e p a r t i e s ' minor c h i l d r e n o f whom s h e had
c u s t o d y , r e v e a l e d t h a t t h e husband had m a t e r i a l l y m i s r e p r e -
sented h i s financial status. I n the i n s t a n t case, t h e
m i s r e p r e s e n t a t i o n i s p e r h a p s more s u b t l e , b u t no l e s s
m a t e r i a l and i n t o l e r a b l e . In t h i s case, t h e property s e t t l e -
ment agreement makes no mention whatsoever of t h e t o t a l
a s s e t s of t h e p a r t i e s ; n e i t h e r d o e s i t r e c i t e what p r o p e r t y
t h e husband was t o g e t . The o n l y mention o f - p r o p e r t y i s
any
t h e following:
" T h a t t h e husband s h a l l f u r n i s h t h e w i f e and
c h i l d r e n [ t h e c u s t o d y of whom had been awarded
t o t h e w i f e ] w i t h a d e q u a t e and c o m f o r t a b l e l i v i n g
q u a r t e r s by e i t h e r : a . Buying a house i n 3ed
Lodge, Montana, b. Buying a m o b i l e home and mak-
i n g a r r a n g e m e n t s t o s e t same on a c r e a g e n e a r Red
Lodge, Montana, o r c . By moving t h e w i f e and
c h i l d r e n i n t o a home p r e s e n t l y owned by husband
on p r o p e r t y owned by husband on p r o p e r t y North
of Red Lodge, Montana. I n any e v e n t , once t h e
d e c i s i o n a s t o l i v i n g q u a r t e r s i s made, husband
a g r e e s t o c a u s e t i t l e t o same t o be t r a n s f e r r e d
t o wife within a reasonable t i m e . 5. T h a t hus-
band s h a l l f u r n i s h w i f e w i t h a n a d e q u a t e v e h i c l e
f o r t h e t r a n s p o r t a t i o n needs of h e r s e l f and t h e
children."
Thus, i n t e r m s of a " p r o p e r t y s e t t l e m e n t , " t h e w i f e was
t o g e t a house and a c a r , and t h e husband w a s t o g e t e v e r y -
t h i n g e l s e , which i t a p p e a r s was worth o v e r h a l f a m i l l i o n
d o l l a r s a t t h e t i m e o f t h e d i s s o l u t i o n of t h e m a r r i a g e . The
house and t h e one a c r e on which i t i s l o c a t e d and t h e 1976
Toyota have n o t been shown t o be worth o v e r h a l f a m i l l i o n
d o l l a r s , s u c h t h a t w e c o u l d s a y t h e p r o p e r t y d i v i s i o n was
equitable.
I t i s i n d e e d t h e r u l e t h a t a judgment must be r e g a r d e d
a s f i n a l and c o n c l u s i v e , u n l e s s it c a n b e shown t h a t t h e
j u r i s d i c t i o n of t h e c o u r t h a s been imposed upon, o r t h a t a
p a r t y , by some e x t r i n s i c o r c o l l a t e r a l f r a u d , h a s p r e v e n t e d
a f a i r s u b m i s s i o n of t h e m a t t e r . E.g., Bates v. Bates, 400
P.2d a t 597. B u t , a s i n B a t e s , t h e w i f e ' s c a s e h e r e comes
w i t h i n t h e e x c e p t i o n , f o r e x t r i n s i c f r a u d may a l s o c o n s i s t
o f d e c e p t i o n p r a c t i c e d by a p a r t y - - h e r e , t h e husband--in
purposely keeping another party--here, t h e wife--in ignorance.
400 P.2d a t 596. This s o r t of deception, j u s t i f y i n g e q u i t a b l e
r e l i e f , f i t s w i t h i n t h e s c o p e o f t h a t denominated " e x t r i n s i c
o r c o l l a t e r a l f r a u d " , d e f i n e d a s "some i n t e n t i o n a l a c t o r
c o n d u c t by which t h e p r e v a i l i n g p a r t y h a s p r e v e n t e d t h e
u n s u c c e s s f u l p a r t y from h a v i n g a f a i r s u b m i s s i o n o f t h e
controversy. [Citations omitted.]" 400 P.2d a t 597.
Although one might q u i b b l e t h a t i n a proceeding f o r d i s s o l u -
t i o n o f m a r r i a g e u n d e r i.lontana's Uniform M a r r i a g e and D i -
v o r c e A c t , t h e r e i s no " p r e v a i l i n g p a r t y " o r " u n s u c c e s s f u l
p a r t y , " t h e s p i r i t of t h e p r i n c i p l e of e q u i t y w i l l n o t be s o
e a s i l y downtrodden. T h e r e h a s n o t been a f a i r s u b m i s s i o n o f
t h e controversy here. Furthermore, " ' [ f l r a u d i n t h e s e n s e
of a c o u r t of e q u i t y , properly includes a l l a c t s , omissions,
a n d c o n c e a l m e n t s which i n v o l v e a b r e a c h o f l e g a l o r e q u i t a b l e
d u t y , t r u s t , o r c o n f i d e n c e j u s t l y r e p o s e d , and a r e i n j u r i o u s
t o a n o t h e r , o r by which a n undue and u n c o n s c i e n t i o u s advan-
t a g e i s taken of a n o t h e r . ' 1 S t o r y Eq.Jur. 5 187. (Emphasis
a d d e d . ) " B a t e s , 400 P.2d a t 598. S u r e l y undue a d v a n t a g e was
taken of Evalee P i l a t i , t o her i n j u r y , such t h a t she i s
e n t i t l e d t o r e l i e f i n a c o u r t of e q u i t y .
For t h e r e a s o n s a r t i c u l a t e d above, w e r e v e r s e t h e
judgment and remand t h e c a u s e w i t h i n s t r u c t i o n s t o r e i n s t a t e
i t and t o p r o c e e d a s l a w and e q u i t y d i c t a t e s .
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W e concur: / \
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Chief J u s t i c e