No. 92-075 IN THE SUPREME COURT OF THE STATE OF MONTANA 1992

IN RE THE MARRIAGE OF WILLIAM RICHARD CARAS, Petitioner and Respondent, and LAURI CHRISTINE CARAS, Respondent and Appellant.

APPEAL FROM: District Court of the Fourth Judicial District, 

### In and for the County of Missoula, The Honorable Ed McLean, Judge presiding.

COUNSEL OF RECORD: For Appellant: 

### Noel K. Larrivee, Larrivee Law Offices, Missoula, Montana For Respondent: Richard Reep, Reep, Spoon & Gordon, Missoula, Montana

< ~, Submitted on Briefs: June 25, 1992 

## AUG6

# -1992 ~ecided: Ausust 6, 1992Justice John Conway Harrison delivered the Opinion of the Court.

This is an appeal from the FourthJudicial District Court, in and for the County of Missoula, the Honorable Ed McLean presiding. Lauri ChristineCaras appeals from the final decree of dissolution which was entered by the Fourth Judicial District Court, Missoula County, on November 22, 1991,which converted the prior decree of legal separation to 

### a decree of dissolution, and incorporated the parties1 prior marital and property settlement agreement by reference. We reverse. The sole issue on appeal is whether themarital and property settlement agreementexecuted by theparties should be setasideon the grounds that the agreement is unconscionable. InAugust of 1978,William ~ichard Caras (William)and Lauri Christine Caras (Lauri)weremarried in California. Two sons were born of the marriage; David, born June 9, 1980 and Nicholas, born November 16, 1983. In December 1988, the partiestmarriage began to deteriorate and William mentioned divorce but Lauri refused. She showed signs of depression,withdrawal and weight loss throughout 1989,and 

### in 1990 family and friends intervened when Lauri was totally withdrawn. Lauri's condition prompted ~illiamto schedule a marriage counselingappointment forthecouple. They attended just one session as a couple; Lauri, however, continued individual counseling between April and June 1990, in hopes that thecounseling would aid in a reconciliation with William. In July 1990, Lauri suggested, and the parties Later agreed, that she should attend school in Franklin, Tennessee. Although William was in favor of Laurirsschooling,he still desired a divorce. Lauri hoped the changewould avoid divorceand help themarriage. About this time, the couple began the process of establishing a Marital and Property SettlementAgreement (theAgreement). To that end, William contacted attorney Rick Baskett (Baskett)who previously representedhim invariousbusinessmatters,and discussedwithhim the specifics of the Agreement. However, due to William and Baskettrsmutual social and other associations, Baskett referred William to another attorney, Rick Reep. Lauri met with Baskett individually after determining that a divorce 

### was too drastic a step and decided to attempt a legal separation. Lauri alleges that Baskett told her she was possibly entitled toa larger property settlementthanwhathad beendrafted in the Agreement, but suggested that in order to maintain a friendly relationship with 

### William and 

### not to impact

### his business in 

### a negative manner, she should sign theAgreement. The Agreement addressed various matters including custody, visitation, maintenance, and property distribution. The record indicates that Lauri understood the Agreement to be an interim agreement and not the final word on these issues if the matter actually proceeded todissolution. LaurialsoallegesthatBaskett advised her to wait until her husband filed for the divorce atwhich time she could move the court to have the Agreement overturned. Lauri signed 

### the Agreement in August of 1990 and departed for school 

### inTennessee. Theexecuted agreementwas filed with the District Court on August 31, 1990. On October 11, 1990, the court issued a decree of legal separation which incorporated the partiestAgreement. Lauri discontinued her Tennessee schooling sometime early 

### in 1991 for various reasons including her individual counseling sessions. She also met with William and their children several times in Tennessee and California. Lauri remained in Tennessee until approximately April of 1991,when shereturned toMissoula in

an unsuccessful attempt to resolve the marriage problems. On May 17, 1991,William filed 

### a motion to convert the legal separation to a final decree of dissolution; that motion was granted on May 21, 1991 by Judge Jack L. Green. Lauri contacted Baskett to have the order set aside and on July 1, 1991, Judge Green did set aside entry of decree of dissolution and removed 

### himself as the judge. 

### Judge

### John Renson also recused himself 

### from thematter and Judge Ed McLean assumed jurisdiction of the matter

on July 10, 1991. Judge McLean held a hearing on July 31, 1991 regarding the issues of whether the decree of separation should be converted to



### a decree 

### of dissolutionand, secondlywhether theAgreement should be set aside. At theJuly 31, 1991 hearing,JudgeMcLean carefully set forth time constraints formotions and briefs. Baskett did notfile any brief or make any response to the court's directive of July 31, 1991. Baskett sent Lauri a stipulation which she alleges she was confused about signing. She alleges that Baskett told her that itwas the only means to get themoney thatWilliam owed her, but she refused to sign the stipulation. William again filed a motion to convert the decree of legal separation entered by the court on October 11, 1990, to a final decree of dissolution, incorporating all terms and conditions set forth in the Agreement. On November 22, 1991, after no filings were made by Lauri for a period of nearly two months, the court grantedWilliam's motion and entered the final dissolution decree,

as requested, which incorporated theAgreement. With new counsel of record, Lauri now appeals to this Court. The issue in the case at bar cannotadequately be reviewed by this Court because the final decree of dissolution contains no findings regarding the conscionability of the Agreement. The entire contents of the final decree dated November 22, 1991, is as follows: Upon Motion by Petitioner and good cause appearing, the Court orders that theDecree of Legal Separation entered by the Court on the 11th day of October, 1990, be converted to a Final Decree of Dissolution incorporating all terms and conditions set forth within the parties' Marital and Property Settlement Agreement as adopted by this Court in the Decree of Legal Separation previously referenced. While we will not discuss every term in the Agreement, with regard to the property division aspects of g 40-4-202,MCA, that

### statute establishes the criteria under which such property should be distributed. Thecourtmay "finallyequitablyapportion between the parties the property and assets belonging to either or both, however andwhenever acquired." Section 40-4-202,MCA;also see In

reMarriage of Scott (Mont.July 21, 1992), No. 92-081, Slip Op. at 5. 

### The statutethen lists factors which the courtmust consider in property distribution. The above-referenced decree contains no reference to the required criteria. This Court is not unmindful of the fact that both parties signed the Agreement in August of 1990 

### as a prelude to the legal separation proceeding. However, the record indicates that there

was substantial confusion regarding the parties1understanding of the long-term ramifications of the Agreement. Lauri repeatedly indicates that she believed the Agreement to be temporary or interim in nature while the couple pursued restoration of their marriage. The record indicates that with her departure to Tennessee fast approaching and her understanding of the temporary nature of the Agreement, she signed the Agreement. Lauri was apparently lead to believe that upon the initiation of actual divorce proceedings, the provisions of the Agreement could be replaced or revised. In the case at bar the District Court should have addressed the conscionability of the Agreement especially in light of the circumstancesandunderstandings of theparties; inparticular,the fact that theAgreementwas signed inAugust of 1990 and the finaldecree of dissolution which incorporated it was entered inNovember of 1991. Accordingly,wevacate and remand this matterback to the District Court for findings as to whether or not the Agreement is conscionable. If found unconscionable, the decree of dissolution should be set aside and an equitable division of the property and all related matters should be addressed. Reversed and remanded to the District Court.

We concur: A 

### 'r