NO. 93-038
IN THE SUPREME COURT OF THE STATE OF MONTANA
1993
MARIAN JOAN WISE,
Plaintiff and Respondent,
V .
EDWIN KEITH NIRIDER, iid Szid
CLERMOFSUPAEMECOURT
53tAIE OF MONTANA
Defendant and Appellant.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable Ted 0. Lympus, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
James C. Bartlett, Hash, O'Brien & Bartlett,
Kalispell, Montana
For Respondent:
Donald E. "Gene" Hedman, Hedman,
Hileman & LaCosta, Whitefish, Montana
Submitted on Briefs: June 1, 1993
Decided: November 2, 1993
Filed:
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Justice Terry N. Trieweiler delivered the opinion of the Court.
Marian Joan Wise filed a complaint in the District Court for
the Eleventh Judicial District in Flathead County to set aside the
property settlement agreement she entered into with Edwin Keith
Nirider, and to reopen their dissolution proceedings. After a
trial on the merits, the District Court entered judgment for Marian
granting the relief she sought. Edwin appeals from that judgment.
We reverse the District Court.
The issue on appeal is whether the District Court erred when
it set aside the property settlement agreement and reopened the
dissolution proceedings based on findings of extrinsic fraud upon
the court and unconscionability of the agreement.
The marriage of Marian Joan Wise and Edwin Keith Nirider was
dissolved on August 6, 1987, after 33 years. Judge Michael H.
Keedy, who presided over the dissolution proceedings, approved a
property settlement agreement entered into by the parties on
July 9, 1987, and amended on July 30, 1987. This agreement, which
was incorporated into the dissolution decree, purported to
distribute the parties' entire marital estate.
Marian and her attorney, Randy Ogle, drew up the property
settlement agreement. Edwin did not discuss the contents of the
agreement with Randy Ogle, and did not retain his own counsel.
Edwin voluntarily signed the agreement and concurred with the
amendments, but made no appearance in court during the proceedings.
The agreement, in part, provided for a distribution of the
marital estate. The parties' real property was to be sold and the
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proceeds divided equally. Marian was to receive certain tangible
items, and approximately $22,500 consisting of an IRA and an
inheritance from her mother. Edwin was to receive certain tangible
items, the "personal property in his possession," and cash and IRA
funds totalling $19,500. Additionally, Marian was to receive $50
per month as maintenance, and she reserved the right to petition
the court for a modification in the event of changed circumstances.
The addendum to the separation agreement provided that Marian
would receive $3,600 from Edwin's share of the proceeds from the
sale of the residence as compensation for her interest in a
windshield business which was retained by Edwin.
At the time of the dissolution, Edwin was retired from the
Atlantic Richfield Company (ARCO) Aluminum Plant at Columbia Falls
and was drawing retirement income of $1,120 per month. This would
continue until July 1, 1992, at which time he would become eligible
for Social Security benefits and the pension would be reduced to
$495 per month. Although Marian's knowledge of her right to share
in the pension plan as a marital asset is disputed, it is
undisputed that both parties knew of the existence of the ARC0
pension plan at the time they entered into the separation
agreement. Marian's attorney also testified that he knew of the
pension plan when he prepared the settlement agreement. However,
neither the agreement, nor the dissolution decree, mention the
pension plan specifically and no part of the pension was
distributed to Marian.
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Three months after the dissolution was finalized, Marian
petitioned for modification of the maintenance award. She sought
to increase maintenance to $800 per month because she was unable to
meet her living expenses. Edwin resisted this motion and it was
ultimately dismissed by stipulation on November 1, 1988.
On May 25, 1989, Marian filed this independent cause of action
against Edwin for fraud. She alleged that, while negotiating the
settlement agreement, Edwin represented to her that the retirement
program was personal in nature and was not a marital asset subject
to division between the parties. The complaint was later amended
to include claims of unconscionability and extrinsic fraud upon the
court. It was Marian's contention that Edwin's failure to disclose
the provisions of the pension plan, and her entitlement to a
portion of the pension, constituted a fraud upon the court which
rendered the property settlement agreement unconscionable, and that
it should, therefore, be set aside and the dissolution reopened.
A trial was held on April 27, 1992, before Judge Ted 0. Lympus
in which Marian, Edwin, and Marian's attorney, Randy Ogle,
presented contradictory testimony. In deposition testimony, Ogle
stated that he informed Marian that the pension was a marital asset
subject to division. However, Ogle testified that Marian told him
not to make the pension an issue because she did not want to delay
the divorce. She said that Edwin considered the pension to be his
asset that he had accumulated during his years of work at ARCO, and
would become upset if she sought a share in it.
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Ogle stated that he told Marian she was asking for too little
maintenance and that she ought to pursue a portion of the pension
as a marital asset. Marian had originally wanted $350 per month in
maintenance, but reduced her request to $50 per month when,
according to her, Edwin became angry. Edwin did admit that he told
Marian that if she sought more financial support from him, he would
retain a lawyer.
Ogle did not explain the failure to identify the ARC0 pension
fund in the settlement agreement, but stated that when he drafted
the agreement using the phrase "the personal property in his
possession, I' it was his intent, based on Marian's statements, that
the pension fund was to go entirely to Edwin.
Marian, however, testified that she had no idea of the value
of the pension plan, never asked her attorney about it, and never
believed she was entitled to share in the pension as a marital
asset. Although she acknowledges that she told Ogle of the
existence of the pension, she denies Ogle's claim that he told her
the pension was a marital asset and she had the right to share in
it. Marian said she did not discuss a possible division of the
pension with Edwin because she was intimidated by him and was
fearful of him. It is her contention that she never willingly
waived an interest in Edwin's pension benefits.
In contrast, Edwin testified that Marian told him she was
entitled to half of the pension plan but was not going to seek this
in the separation agreement. He admitted, however, that he may
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have told Marian, prior to the time she retained counsel, that the
pension was his and she had no right to any of it.
In its findings of fact, conclusions of law, and judgment
issued on October 30, 1992, the court set aside the property
settlement agreement and reopened the dissolution proceeding in
order to effect a "fair and equitable division of all marital
assets," including the ARC0 pension plan. This conclusion was
based on the court's finding that the separation agreement did not
provide for a division of the pension plan and that Marian had not
willingly, voluntarily, or knowingly waived her interest in this
marital asset. The court rejected Ogle's argument that the phrase
"all personal property in [Edwin's] possession" included the
pension plan. Although the court found that Marian was aware of
the existence of the pension plan benefits, it found that she was
not aware that she had a legal right to a portion of this until the
time that her action for fraud was commenced.
The court further found that there had been no disclosure of
the existence of the pension plan at the time Judge Keedy presided
over the dissolution proceedings, and it concluded that this
absence of evidence constituted "however unwittingly, the
commission of an extrinsic fraud upon that Court." The court did
not attribute fault to either Marian or her attorney, but found
that/because Marian was under stress due to her intimidation and
fear of Edwin's anger and wished to end the marriage without delay,
these factors resulted in a fraud upon the court. Finally, the
court concluded that because Marian had received none of the
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retirement benefits, the provisions of the separation agreement
were unconscionable.
Edwin filed a motion to alter or amend the judgment. This
motion was denied on December 30, 1992. In its order and
rationale, the court clarified its conclusion that Edwin had
committed a fraud on Marian which resulted in the commission of a
fraud upon the court.
From the court's judgment, and subsequent order denying the
motion to alter or amend the judgment, Edwin appeals.
Did the District Court err when it set aside the property
settlement agreement and reopened the division of property based on
findings of extrinsic fraud upon the court and unconscionability of
the agreement?
We note first that Marian did not file a timely appeal from
the dissolution decree but instead sought relief from the judgment
through an independent action as provided for in Rule 60(b),
M.R.Civ.P., which provides:
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.
Marian's independent action, filed nearly two years after the
dissolution decree was entered, was premised on allegations of
fraud by Edwin, unconscionability of the separation agreement, and
extrinsic fraud upon the court. However, the only allegation upon
which relief could be granted at the time she filed her action was
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her allegation of fraud upon the court. With regard to
unconscionability or fraud between the parties, Marian did not seek
timely relief through an appeal, or a Rule 60(b)(3) motion which
would allow for relief from a final judgment in instances of
"fraud, misrepresentation, or other misconduct."
Although the District Court discusses the resulting
unconscionability of the separation agreement, its judgment rests
on its conclusion that a fraud was committed upon the court which
justified setting aside the property settlement agreement and
reopening the dissolution decree. Therefore, our analysis must
focus on whether the court properly reached this conclusion.
This Court has made clear that fraud upon the court is "that
species of fraud which does or attempts to subvert the integrity of
the court itself." Brownv. hall (1992), 251 Mont. 414, 421, 825
P.2d 1209, 1213 (citing Salwayv.Arkava (1985), 215 Mont. 135, 695
P.2d 1302). Such fraud has been construed to include only the most
egregious conduct, such as bribery of a judge or member of the
jury, evidence fabrication, and improper attempts to influence the
court by counsel. Brown, 825 P.2d at 1213; Filler v. Richland County
(1991) I 247 Mont. 285, 289, 806 P.2d 537, 539. Generally, fraud
between the parties, without more, does not rise to the level of
fraud upon the court. Brown, 825 P.2d at 1213.
In this instance, the District Court found that there had been
no disclosure of the existence of the pension plan at the time of
the dissolution proceedings, and concluded that this absence of
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evidence constituted "however unwittingly, the commission of an
extrinsic fraud upon that Court." It concluded that the fraud
resulted not from an affirmative misrepresentation by either party,
but the fact that Marian was under stress and wished to end the
marriage without delay.
Although we recognize that the separation agreement was the
product of Marian's desire to quickly terminate the marriage and
may have resulted in an inequitable distribution of the marital
assets, we reiterate that the only basis upon which to set aside
this judgment, nearly two years after its entry, is the commission
of a fraud upon the court.
After reviewing the record, we conclude that the evidence is
insufficient to support the court's determination that there was
fraud upon the court. Neither Marian's nor Edwin's conduct rises
to a level which is egregious enough to be characterized.as fraud
upon the court. Even if we disregard the testimony of Edwin and
Marian's attorney, as did the District Court, and accept Marian's
assertion that she was not advised of the nature of the pension,
the record is void of such things as evidence fabrication, bribery,
or attempts to improperly influence the court.
The allegations that Edwin told Marian the pension was a
personal asset and that she was not advised otherwise by her
counsel, would, at most, amount to fraud between the parties. In
Salway, 695 P.2d 1306, we concluded that a party's fraudulent
conduct, "although reprehensible, is not the type of fraud that
furnishes grounds on which to vacate the judgment" under the
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residual clause in Rule 60(b), M.R.Civ.P. We reach the same
conclusion in this case. Although grounds may have existed for a
motion pursuant to Rule 60(b)(3), or for Marian to appeal from the
judgment in which the dissolution decree was entered, this does not
mean that the judgment can now be set aside for the same reason
after the time for post-trial motions and appeal has expired.
Marian relies on this Court's decision in InreMam’age of Madden
(1984), 211 Mont. 237, 683 P.2d 493, for the proposition that the
failure to inform the trial court of the value of a pension during
a dissolution proceeding constituted an extrinsic fraud on the
court, justifying the reopening of a dissolution decree. However,
the facts of that case are dissimilar from the situation presented
here. In Madden, we concluded that a property settlement agreement
incorporated into the decree was based on "extrinsic fraud" because
it failed to disclose the wife's interest in the husband's pension
and the fact that she would be liable for a balloon payment on a
mortgage. This holding, however, was based on the fact that the
wife took no part in the process of drafting the agreement, did not
have independent counsel because the husband assured her that the
attorney would represent both of their interests, and had no
knowledge of the pending liability for the balloon payment on the
mortgage. In this instance, however, Marian was the party
represented by counsel while Edwin was not, and she was the one who
drew up the separation agreement with knowledge of the existence of
the pension plan.
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We conclude that the allegations of fraud relied upon by
Marian fall short of what is legally required to vacate a final
judgment pursuant to the residual clause in Rule 60(b). Therefore,
we hold that the District Court erred when it set aside the
property settlement agreement and reopened the dissolution
proceedings.
Edwin contends that he is entitled to an award of attorney
fees for prevailing on appeal of the District Court's judgment.
This contention is based on the following language in the property
settlement agreement which was agreed upon by the parties:
In the event that either party brings legal action
to interpret or enforce any of the terms or provisions of
this Agreement, the prevailing party in said legal action
is entitled to recover, as a part of their costs and
disbursements, such sum as the Court may find reasonable
as attorney fees in said controversy.
Marian's cause of action, based on allegations of fraud upon the
court, was not an action to "interpret or enforcel' the provisions
of the agreement. Therefore, we conclude that the attorney fee
provision of the separation agreement is not applicable in this
proceeding, and hold that neither party is entitled to an award of
attorney fees based on that provision.
The October 30, 1992, judgment of the District Court is
reversed.
11
c
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November 2, 1993
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the following
named:
James C. Bartlett
HASH, O’BRIEN & BARTLETT
P.O. Box 1178
Kalispell, MT 59903-l 178
Donald E. Hedman
HEDMAN, HILEMAN & LaCOSTA
433 Second Street
Whitefish, MT 59937
ED SMITH
CLERK OF THE SUPREME COURT
STATE&OF MONTANA