No. 13891
I N THE SUPREME COURT O TEE STATE OF M N A A
F O T N
1978
I N XE THE MARRIAGE OF
FLORENCE A. REILLY,
P e t i t i o n e r and R e s p o n d e n t ,
-vs-
RUDDY R - L E REILLY,
FY J R
R e s p o n d e n t and A p p e l l a n t .
Appeal from: D i s t r i c t Court of t h e Eighth J u d i c i a l D i s t r i c t ,
H o n o r a b l e J o e l G. Roth, J u d g e p r e s i d i n g .
C o u n s e l o f Record:
F o r Respondent :
Church, H a r r i s , J o h n s o n & W i l l i a m s , G r e a t F a l l s ,
Montana
C r e s a p E. JilcCracken a r g u e d , G r e a t F a l l s , Montana
For Appellant:
M a r r a , Wenz, Iwen a n d J o h n s o n , G r e a t F a l l s , Montana
David Hopkins a r g u e d , G r e a t F a l l s , PYlontana
Submitted: J a n u a r y 1 8 , 1978
Decided: fpf: 1 5 1978
jpD -
Filed :
Mr. Justice John Conway Harrison delivered the Opinion of the
Court.
This is an appeal from the judgment entered by the
District Court, Cascade County. The court dissolved the marriage
of the parties, awarded custody of the minor child to the wife,
required the husband to pay child support of $100 per month
plus all medical expenses incurred on behalf of the child, re-
quired the husband to pay the wife's attorney fees, awarded
the wife her separately owned property, and awarded the Cascade
residence to the husband.
The parties to this appeal were first married in 1955.
Two children resulted from this marriage. During this marriage,
the parties purchased a house and lot situated in Cascade, Mon-
tana, as joint owners. On March 25, 1971, the first marriage
was terminated by a decree of divorce. On or about March 1,
1971, the parties entered into a property settlement agreement.
Pursuant to the terms of the agreement, the wife relinquished:
"111. That the Plaintiff relinquishes all
right to title or equity in the land, resi-
dence, improvements, drapes, beds, stove,
washer, dryer & refrigerator situate in the
County of Cascade, State of Montana, at
Wellington Tracts, Lot One South, Cascade,
Montana. "
The husband in turn agreed:
"11. That the Defendant shall pay to the
Plaintiff the sum of not less than Two
Hundred Dollars ($200.00) per month as
alimony and for the care, support, and
maintenance and education of said minor
children in addition to any reasonable
expenses incurred on behalf of said minor
children for medical, hospital, dental
care and optical." (Emphasis added.)
After the property settlement was executed, the wife
with her two minor daughters took up residence in Michigan.
The husband in the meantime failed to stay current with his
$200 per month alimony/support obligation. On October 18, 1972,
/an order
for support under the Uniform Reciprocal Enforcement of Support
Act was settled. According to this order, it was stipulated
that the husband was in arrears to the wife from June 15, 1971.
The husband's payments were reduced to $50 per child plus all
reasonable medical costs incurred by the minor children.
The parties married for the second time in June, 1975.
After remarriage, the parties and their two children again re-
sided in their former home at Cascade, Montana. The wife sub-
sequently found employment. The income derived from this employ-
ment was expended on necessities for her and her family.
The second marriage was terminated in June, 1977. Dur-
ing trial for the second divorce, the attorney for defendant
objected to any evidence concerning the obligations of the first
divorce decree. The wife had attempted to amend the pleadings
to include rescission of the 1971 property settlement, but this
attempted amending was denied by the District Court. Following
discussion on the admissibility of this evidence, the trial
judye allowed the wife to proceed with the evidence, but reserved
the right to rule on the admissibility after presentation of
evidence. At the conclusion of the wife's presentation, the
trial judge ruled the evidence concerning the obligations of the
1971 divorce decree not admissible.
The trial judge's findings, conclusions and decree were
entered on June 6, 1977. From this judgment, the wife appeals.
The wife raises four issues for review:
1. Was there error when the wife was not granted an
interest in the family residence?
2. Was the evidence concerning the obligations of the
1971 divorce decree admissible?
3. Was the child support award proper in light of the
financial resources of each party?
4. Was the sum of $500 a proper award for attorney fees?
The husband raises one issue on cross-appeal: Are the
monetary obligations under a prior property agreement and divorce
decree extinguished by the remarriage of the parties?
Issue 1. The wife contends she is entitled to an
interest in the Cascade residence. The parties were married
on two separate occasions for a period in excess of 17 years.
During this time, the only valuable asset accumulated by the
parties was the Cascade residence. From her interest in this
residence, sufficient funds could be realized to independently
support herself and remaining minor daughter.
This issue requires review of the District Court's action
and a determination whether the District Court abused its discre-
tion. To facilitate this review, standards set forth under Mon-
tana's version of the Uniform Marriage and Divorce Act (U.M.D.A.)
are applicable. Section 48-321(1), R.C.M. 1947, vests discretion
in the District Court to I' * * * apportion between the parties
the property and assets belonging to either or both * * *." The
Court in Downs v. Downs, (1976), Mont . , 551 P.2d 1025,
1026, 33 St.Rep. 576, held District Courts have the power to
divide property on an equitable basis regardless of the fact
that title to the property is vested in only one of the parties.
Additionally, the Court in Cook v. Cook, (1972), 159 Mont. 98,
104, 495 P.2d 591, established the principal that in equitably
dividing the property, " * * * each case must be looked at by
the trial court individually with an eye to its unique circum-
stances. "
/'
Recently i n " - 3 d 3ohlkrud , ,(1977),
v. Mont .
, 572 P.2d 902, 34 St.Rep. 1417, this Court clearly set
forth at pp. 1421, 1422 the duty of the District Court in equit-
ably distributing the property on dissolution of the marriage:
" * * * it is the first duty of the District
Court to equitably distribute the marital
property. * * * "
"The distribution or division of property
acquired during marriage by the team effort
of the marital partners, is, strictly speak-
ing not alimony. * * * Where property is
acquired during marraige by the joint
efforts of the parties, it should be divided
between the spouses according to what is just
and reasonable." 34 St.Rep. 1422, quoting
from Colley v. Colley (Ky. 1970) , 460 S.W. 2d
821, 826.
In Johnsrud this Court could not determine from the
findings and record that the case was properly tried and con-
sidered under the provisions of the U.M.D.A. The case was
remanded for a redetermination of the disposition of the parties'
marital estate. The District Court was additionally instructed
to make specific findings of fact on each element delineated
in section 48-321, R.C.M. 1947. We reach the same conclusion
in the case at hand.
First, the District Court's findings and conclusions
refer to the parties' 1971 property agreement. By virtue of
this agreement, the District Court recognized a contribution by
the husband to the first marriage. Although the District Court
recognized the husband's contribution according to this agree-
ment, no findings or record exists demonstrating a consideration
of the wife's contribution by virtue of this same agreement.
For this reason, we find the District Court abused its discre-
tion in not complying with section 48-321.
The agreement and facts of this case imply that the
wife had some property interest in the Cascade residenebefore
the 1971 divorce. At that time, the parties had been married
for 15 years and had lived in the Cascade residence for over
two years. According to the agreement, the wife was to receive
$200 per month as alimony and for the care, support, maintenance
and education of the two minor daughters. In consideration for
this $200 per'month, the wife relinquished to the husband all
right to title or equity in the land and residence at Cascade.
The husband additionally agreed to assume all debts, obligations
and financial responsibilities incurred for or on behalf of the
family.
Several pre-U.M.D.A. cases wherein the issue of alimony/
property settlement was raised add clarity to the relevance of
the 1971 property agreement. In Washington v. Washington, (1973),
162 Mont. 349, 354, 512 P.2d 1300, the wife entered into a prop-
erty settlement. As consideration for "alimony" payments of
$750 per month for nine years, the wife gave up the right to any
future support, and relinquished claims against property owned
by the husband. The Court held that the agreement was fully
supported by consideration from the wife and stated:
"In the property settlement agreement, the
payments to the wife for nine years were
labeled as 'alimony1,but, as is apparent
from the agreement the payments were not in
fact alimony per se, and the use of the term
'alimony' was o n l y a label."
In the case at hand, the wife relinquished to the husband all
right to title or equity in the land and residence at Cascade.
The wife gave up her right to the Cascade residence for the
right to receive payments, labeled as alimony, from the hus-
band.
The alimony/property settlement distinction of Washington
was reviewed by the Court in Movius v. Movius (19741, 163 Mont.
463, 468, 517 P.2d 884. There, the Court was faced with the
question whether the alimony provision of the property settlement
is integral and not severable from the rest of the agreement
and as such not subject to subsequent modification. The wife
sought an alimony award for her support. The divorce decree
made such an award pursuant to the parties1 agreement. The
alimony payments to the wife terminated absolutely in the event
of her remarriage. No provision was made concerning future payments
in the event of death of either the husband or wife. The ali-
mony payments in Movius were clearly alimony and not payments
in settlement of property rights.
The principles and rationale found in Washington
were reaffirmed, though an opposite conclusion was reached due
to the facts of Movius. In Movius, the wife assumed no liability
for any pre-existing indebtedness. The wife also did not give
up anything in the way of support and maintenance in consider-
ation of receiving a more favorable division of property acquired
during the marriage.
The case at hand is distinguishable from Movius. Here,
the wife gave up her right to the property as consideration for
the payments.
The distinction between alimony and property settlement
was further clarified by the Court in Jones v. Flasted, (1976),
169 Mont. 60, 544 P.2d 1231. There, the Court reviewed whether
the agreement between the parties passed permanent property
rights to the ex-wife or gave the ex-wife only alimony rights
terminating upon her death. The Court held the agreement did
not transfer property rights. It was simply a contract to pro-
vide support for the ex-wife for 20 years if she should live
that long. In reaching its decision, the Court stated at pp. 65-66.
"There is a distinction between a property
settlement on the one hand, and a contract to
pay stated sums periodically in lieu of alimony
on the other hand. This Court stated in Stefonick
v. Stefonick, 118 Mont. 486, 501, 167 P.2d 848, 855:
"'It is well settled that in this jurisdiction
alimony is in no way a property settlement, but
is the provision made for the support of the
wife. * * * '
"On the other hand, a property settlement
settles property rights and may or may not
mention the additional item of alimony. In
24 Am.Jur.2df Divorce and Separation, 5883,
p. 1003, it is stated:
* * * Comonly, such a settlement (1)
11 1
determines the rights of the parties in
jointly owned property and states the dis-
position to be made of it; (2) settles all
claims of each spouse in the property of the
other and claims of each spouse to title to
property held in the name of the other; (3)
mutually releases all past and present claims
except as established by the agreement; (4)
waives and releases all future rights as
spouse in the property of each other; (5)
surrenders the rights of each on the death
of the other, including rights of inheritance,
homestead, dower, and the right to administer
the estate of the other and to have exemptions
and allowances from the estate; and (6) agrees
that each will execute all documents necessary
or desirable to carry out the purposes of the
agreement.'"
Here, the elements commonly found in a property settlement are
present.
Finally, in Englund v. Englund, (1976), 169 Mont. 418,
421, 547 P.2d 841, this Court held it was obvious that the
monthly payments to the wife were intended to be part of the
property settlement and became mistakenly labeled as alimony.
In that case, the wife had worked for most of the marital years
in the business office of the husband's plumbing operation and
helped in the accumulation of considerable property. Following
divorce, the court ordered a property division consisting of
four installment lump sum payments of $2,500 each over a two
year period by the husband, with corresponding real property
conveyances from the wife. In addition, the court ordered the
husband to pay $400 per month alimony. On appeal, these monthly
payments were found not to be alimony, but instead part of the
property settlement.
In the present case, the 1971 property agreement mistaken-
ly labeled the $200 per month payments as "alimony" and child
support. The District Court in 1977 should have interpreted the
$200 per month payments as incorporating a property settlement and
child support. Thus, in 1971, the wife received a property
settlement from the assets of the marital estate. This property
settlement produced for the wife a vested right in the $200 per
month payment. Resultantly, in 1975 the wife entered the second
marriage and contributed her vested property interest to the
marital relationship.
Upon dissolution of the parties1 second marriage, the
District Court was required to consider the contributions of
both parties and reach an equitable property distribution. As
can be seen, the wife brought to the second marriage her vested
interest from the 1971 property agreement. This contribution
merited consideration. Since this Court cannot determine from
the findings and record that the District Court properly tried
and considered the contributions under the provisions of the
U.M.D.A., we remand for a redetermination of the disposition of
the parties1 marital estate. Additionally, the District Court
is instructed to make specific findings of fact on each element
delineated in section 48-321, R.C.M. 1947.
Secondly, this Court is also unable to determine if the
District Court considered the wife's contribution to the marital
estate during the life of the second marriage. Cases decided
following the enactment of the U.M.D.A. in Montana state that as
a housewife, the wife acquired a vested interes-tin the property
accumulated by the parties during the marriage. - J e h s s u L ~ -
J & m s d , supra; Biegalke v. Biegalke, (1977), Mont . I
564 P.2d 987, 34 St.Rep. 401; Eschenburg v. Eschenburg, (1976),
Mont . , 557 P.2d 1014, 33 St.Rep. 1198; Downs v. Downs,
supra. The wife in the present case lived in the family residence
from 1975 to 1977. During this time the wife's contributions as
a housewife and mother to the parties' two daughters though
"differed in kind, they were of equal weight to the financial
contributions of defendant [the husband]." Eschenburg, supra at
Issue 2. Given this Court's resolution of Issue 1, a
discussion of Issue 2 deems the evidence admissible.
Issue 3. Evidence was presented by both parties as to
the financial resources of each party. The record reveals that
the testimony presented by the husband and wife conflicted as
to the total expendible income of each party. The record also
reveals that both parties had the opportunity to cross-examine
and rebut any or all offered testimony. The District Court is
in the best position to judge the weight and credibility of the
witnesses, especially where there is a conflict of testimony.
_I ,
Easton v. Easton, ( d 9 4 ) ' , Mont . , 574 P.2d 989, 35 St.
Rep. 123, 127. The wife had the burden to overcome the pre-
sumption of correctness of the District Court's decision. Unless
there is a clear preponderance of evidence against the findings
of the District Court, this Court will not reverse. Crncevich v.
Georgetown Recreation Corp., (1975), 168 Mont. 113, 120, 541
P.2d 56. The wife failed to produce a preponderance of evidence
to support this issue.
Issue 4. The fourth issue raised on appeal concerns the
District Court's award of attorney fees. During trial, the
attorney for the wife presented evidence showing he had spent
34-1/2 hours to date, in the prosecution of the divorce action
and that his billing rate was $30 per hour. The attorney's
exhibit containing time slips kept on the case was admitted into
the record. Additionally, counsel for the husband stipulated
that the attorney for the wife spent 34-1/2 hours on the case
and that $30 was a reasonable rate if, in this case, it was
appropriate that an attorney fee be awarded.
The District Court granted attorney fees in the amount of
$500. Impliedly, the District Court ruled attorney fees were
appropriate in this case. Section 48-327, R.C.M. 1947, states
the court may order a party to pay a reasonable amount for attorney
fees.
- 10 -
In the present case, the District Court accepted a stipu-
lation that 34-1/2 hours had been spent in prosecuting the
divorce action and that $30 per hour was a reasonable rate if
attorney fees were appropriate. No evidence exists contrary
to the stipulation as to a reasonable rate. Since the District
Court ruled attorney fees were appropriate in this case, this
Court orders the fees to be calculated according to the reason-
able rate agreed upon by the attorneys.
The husband's cross-appeal raises the common-law theory
that an indebtedness between a husband and wife is extinguished
by the marriage. After a review of the husband's cited authority,
this Court finds the majority view, rejecting the common-law
approach, more persuasive.
While the husband cited 41 Am Jur 2d, Husband & Wife,
521, p. 34, for support, this Court notes 522, entitled "Married
Women's Act", which provides:
"The cases are not in accord on the effect of
Married Women's Acts on the common-law rule that
marriage extinguishes antenuptial obligations,
not in contemplation of marriage, between the
spouses. One view is that, under such acts,
securing to a wife her separate estate, marriage
does not extinguish such antenuptial debts, and
does not extinguish contracts between them, at
least not those relating to property, though it
does terminate contracts for such services of
the wife as the marriage obligates her to per-
form. * * *"
As additional support for the husband's proposition
45 ALR2d, Marriage of Debtor & Creditor, p. 718 was cited.
Again a review of this authority discloses the majority view
differs. Reference is made to 53, p. 724, which provides:
"Under the married women's acts of a number of
states, the common-law theory as to the unity
of the spouses has been abrogated, with the
result that marriage between the parties to a
contractual debt no longer extinguishes the
obligation."
The preceding authority discloses that the states of
Arkansas, California, Illinois, Maine, Maryland, Massachusetts,
Minnesota, New York, Ohio and Vermont recognize the majority
view that the Married Women's Acts have abrogated the rule
that contractual obligations are extinguished by marriage.
Florida has also adopted the view that debts survive the
marriage. Pinkas v. Fiveash (Fla.App. 1961), 126 So.2d 910.
Montana's "Married Women's Act" comences at section
36-101, R.C.M. 1947. In State Farm Mutual v. Leary, (1975), 168
Mont. 482, 486, 544 P.2d 444, this Court, in quoting from Dutton
v. Hightower and Lubrecht Construction Co., 214 F.Supp. 298, 300,
stated:
" ' * * * [these sections] are procedural and
create no new rights, but only remove the common
law disability of married women to enforce their
rights otherwise created and existing.'"
While State Farm Mutual involved the question of inter-family
tort immunity doctrine as applied in Montana the abrogation of
the common-law disability was clear. Montana, consequently,
adheres to the majority view and rejects the husband's contention.
For the reasons cited, this case is remanded to the
District Court for redetermination of the property distribution
and attorney fees.
Justice
We concur: 1 I
Justices