No. 82-03 

IEJ THE SUPREME COURT OF THE STATE OF MONTANA 

1984 

IN RE THE MARRIAGE OF 

EARL MYERS, 

Petitioner and Appellant, 

and 

DONNA BIYE RS , 

Respondent and Respondent. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable Jack D. Shanstrom, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Holmstrom & Dunaway; Robert Holmstrom, Billings, 

Montana 

For Respondent: 

Robert L. Stephens, Jr., Billings, Montana 

Submitted on Briefs: January 19, 1954 

Decided: May 29, 1984 

illfil L, $ !984 

Filed: 

Clerk 
Mr. Justice Daniel J. Shea delivered the Opinion of the 

Court. 

Petitioner husband, Earl T. Myers, appeals from a 

Yellowstone County District Court judgment awarding 

approximately one-sixth of the marital property to him, and 

approximately five-sixt-hs of the marital property to the 

respondent wife, Donna F. Myers. The husband contends that 

because the trial court refused to divide the marital 

property on a 50/50 basis pursuant to an agreement executed 

between the parties on September 2, 1976, the trial court 

abused its discretion. We affirm. 

The sole issue is whether the trial court abused its 

discretion when it refused to divide the marital. property 

according to the September 2, 1976 agreement and awarded 

approximately five-sixths to the wife and one-sixth to the 

husband. 

At the time the parties were married on April 1-4, 1972, 

the husband was 47 and the wife 42. He had been married and 

divorced four times and she had been married and divorced 

twice. The trial court found that at the time of their 

marriage, the wife had a net worth of approximately $176,000, 

and he had a net worth of approximately $22,000. Following 

their marriage, the parties lived in a residence owned by the 

wife's father, located on Mariposa Drive in Billings, where 

the wife had been living prior to their marriage. The 

husband did some renovation work on this house, including 

redoing the showers and laying some carpet. The parties paid 

no rent to the wife's father. 

A majority of the wife's assets at the time of the 

marriage consisted of her one-quarter interest in a family 
partnership that owned several commercial buildings known as 

the Moran Property. The property included the Billings 

Pioneer Post Office and parking lot; the Laurel Post Office; 

the J. C. Penney building in Laurel; the McCleod Building in 

Billings; the Montana Power Complex (three buildings); and, a 

building referred to as the "Shell Shack." The wife's 

father, John H. Moran, had acquired the property over the 

years, and expressed many times his desire to keep the 

property in the family. 

Four or five months after the marriage, the parties 

separated. The wife remained living in the house on 

Mariposa, and he moved into an apartment somewhere in 

Billings. Sometime later, the wife's mother, Pearl M. Moran, 

approached the husband to see if he would be interested in 

buying some of the Moran property with his wife. The offer 

was made to attempt to persuade the husband to reconcile with 

his wife. The husband stated that he would be interested 

only if he would be brought in as an equal partner with his 

wife. 

The plan was for the parties to purcha-se the Billings 

Pioneer Post Office and parking lot, the J. C. Penney 

building in Laurel, and the Laurel Post Office. To 

effectuate the equal ownership, she gifted one-half of her 

one-quarter interest in that property to her husband. The 

partnership was then dissolved, and the above property was 

conveyed to the parties at a total purchase price of 

$255,000, though the appraised value of the property was 

$340,000. 

As a downpayment of $7,500, the wife conveyed to the 

other partners (her parents and brother) her one-quarter 

interest in the Montana Power Building in Laurel. The 
parties then executed a mortgage on the balance of $247,500, 

payable in monthly installments of approximately $2,100. The 

mortgage payments were made from rental income received from 

the properties. At the time of trial, a balance of 

$108,155.74 remained on the purcha-se price. It is important 

to note that the husband made no financial contribut.ion 

toward the purchase of the Moran property. He did, however, 

help to manage and maintain the property for a few years. 

The parties established the Big-M Company and transacted 

business as a partnership. In addition to the Moran real 

property, the parties also acquired a small tractor with 

attachments, two older model pickup trucks and a dump truck, 

and tools and equipment. The total value of this Big-M 

Company personal property was $9,100. 

In April 1973, after the Moran family partnership had 

been dissolved, and after the husband had been brought in as 

a 50/50 partner on some of the Moran property, the parties 

purchased the residence on Mariposa. in Billings. The husband 

paid $15,000 of his funds for a one-half interest in the 

house, though the original cost basis of the house was 

$32,000 and had appreciated in value since being built. The 

other one-half was gifted to the parties by the wife's 

father. The parties sold the residence the next year for 

$50,000, realizing a handsome gain. 

The parties had earlier arranged to purchase a tract of 

real estate on the Rimrock area overlooking the City of 

Billings, and had mortgaged the Mariposa residence to pay for 

the land. When the Mariposa residence was later sold, the 

mortgage obligation was retired. The parties began 

construction of a home on that property, both parties 

contributing time and effort, but with the husband providing 
most of the carpentry and labor skills. The husband stopped 

working on the home when further marital problems arose, and 

the house was unfinished at the time of trial. 

At the time of their marriage, the husband owned a tract 

of land on the North Frontage Road near Billings. The 

husband sold the property, realized the sum of $12,500 and 

used the money to make the $11,600 downpayment on the Scott 

Building in Laurel on April 1, 1976. The husband also used 

his funds to make the first of four $8,574.81 installment 

payments. The Scott Building was adjacent to the J. C. 

Penney building, and after the purchase, J. C. Penney 

expanded into the smaller Scott Building. The final three 

installments on the Scott Building were paid for completely 

out of rental in.come from the existing 1-eases on real estate 

purchased from the wife1 s famil-y. 

The parties were separated at the time the Scott 

Building was purchased in April 1976, and were still 

separated in August of that year. During this time, the wife 

had been attempting to encourage the husband to reconcile. 

But, the husband refused to reconcile unless the wife agreed 

to put into writing his one-half interest in all the 

property, including the Moran property. The resulting 

agreement of September 2, 1976, is the focus of this dispute 

because the trial court refused to divide the property 

according to its terms--i.e., 50/50. 

The pertinent provisions of the agreement state as 

follows : 

"NOW, THEREFORE, each party agrees as follows: 

111 . That each of the parties hereto own an 

undivided one half interest in real property 

described on Schedule 'A1 (all their real property) 

attached hereto, and any real estate acquired 
subsequent to the date hereof shall be held as 

tenants in common. 

"3. In the event of a divorce of the parties, the 

title to the real estate which is the subject of 

this Agreement, may either: 

"A. Remain as it presently is; 

"B. Be divided pursuant to agreement between the 

parties; 

"C. Be sold and the proceeds therefrom divided 

equally between the parties hereto . . ." 

After the parties executed the agreement, they 

reconciled and lived together for a short while. Seven 

months after the agreement was executed, and five years into 

the marriage, the husband filed for divorce. The divorce 

decree was entered November 16, 1977. 

The trial court awarded to the wife real property having 

an appraised value of $735,000, subject to a mortgage of 

$108,155.74. She was also awarded her separate vehicle and 

all of her home furnishings. The trial court awarded to the 

husband no real property, the Rig-M personal property 

consisting of the three trucks, the tractor, tools a.nd 

equipment ($9,100), and $95,000 in cashNeither party made any steadfast contention at the trial 

as to what exactly the September 2, 1976 agreement 

represents. The husband contends on appeal that because the 

agreement was executed during a period of reconciliation, it 

cannot be a separation agreement under section 40-4-201, MCA, 

and is therefore a postnuptial agreement under sections 

40-2-301 through -311, MCA. He contends in the alternative 

that if it was a sepa.ration agreement, it was binding on the 

trial court because the court failed to find it 

"unconscionable," as required by the statute. The wife 
contends that it was a separation agreement because they were 

separated at the time it was executed, and in fact the 

husband would not reconcile unless she signed the agreement. 

She al~so argues that the court's finding of fact no. XVI was 

sufficient for purposes of finding 'unconscionability' under 

section 40-4-201. The trial court's finding no. XVI 

"The history of the parties' marriage is a brief 

but stormy one, punctuated by numerous separations 

and attempted reconciliations. During the course 

of one such reconciliation, the parties entered 

into an agreement dated September 2, 1976, which 

purported to acknowledge eaual half interests in 

all of the parties' property and which was 

ostensibly designed to clarify the parties' 

respective rights. The parties had previously 

discussed other similar agreements which were not 

executed. In each case the agreements were created 

in an atmosphere of emotional turmoil, the 

Petitioner acting as instigator, and the Respondent 

seeking to preserve the marriage. While the Court 

- is required to consider -- such an agreement, --- it is in 

- no way bindi';ng -- and the Court finds that under - all 

-- of the circumstances the enforcement of such an -- 

agreement would - be inequitable -- in tEs case." 

(Emphasis added.) 

We believe the trial court properly refused to divide 

the property according to the agreement. We also believe 

that the result would. be the same whether the agreement was a 

separation agreement or a postnuptial agreement. 

Section 40-2-301, PICA, relied on by the husba.nd, 

specifica.11~ states that contracts between spouses are 

subject to the general rules "which control the a.ctions of 

persons occupying confidental relations with each 

other. . .," as defined in the trust provisions. The 

husband's actions were far from complying with those rules. 

In the fall of 1972, four months after their marriage, the 

parties were already separated. The wife wished to reconcile 

with her husband so she asked her mother to offer him a 
chance to join the wife in buying some of her parents' 

property. He refused to reconcile unless he was made a 50/50 

partner in ownership. Because she wanted to reconcile the 

marriage, the wife agreed, and that is when her family's 

partnership was dissolved and the Big-M Company formed. But, 

the husband made absolutely no financial contribution toward 

the purchase of the Moran property. 

The husband then made several efforts to ink his 

one-half interest in the property. Admitted over the 

husband's objections at trial were three separate property 

agreements, all drafted at the instigation of the husband, 

and all designed to make sure he received one-half of his 

wife's property. The first two were never executed and the 

last one was the September 2, 1976 agreement. 

The fact that makes the husband's attempt to secure 

one-half of her property most contrary to a trust 

relationship is that he was doing so during a short-lived and 

rocky marriage. The trial court found that "in each case the 

agreements were created in an atmosphere of emotional 

turmoil, the (husband) acting as the instigator, and the 

(wife) seeking to preserve the marriage. " Indeed, there was 

testimony that the parties were separated more than they were 

together during their stormy five year union. Furthermore, 

it did not take the husband long (seven months) to file for 

divorce after he succeeded in having his wife sign the 

September 2, 1976 agreement. 

We believe the evidence shows that the husband took 

advantage of his wife regarding her property as a condition 

to continuing the marriage. Such actions are not consistent 

with what is required of one in a confidential relationship. 

Therefore the agreement was invalid as a postnuptial 
agreement under section 40-2-301, MCA, and the trial court 

dividing the marital property was not bound by it. 

The only other possible interpretation of the agreement 

is as a separation agreement under section 40-4-201, MCA. 

This is the most likely interpretation because the agreement 

was executed at a time when the parties were separated and 

the agreement was made when at least the husband had one eye 

on divorce. - See, section 40-4-201(1), MCA. 

The husband contends that if the agreement was a 

separation agreement, the trial court was bound by it because 

it did not find that the agreement was "unconscionable, " as 

required by section 40-4-201 (2), MCA. Although it is true 

the trial court did not specifically find 

"unconscionability," (See finding no. XVI, supra), we believe 

the evidence supports a finding of "unconscionability" as a 

matter of law. We rely on the same evidence in finding 

"unconscionability" as a matter of law as we did in holding 

that the husband's actions were repugnant to what is required 

of one in a confidential relationship. The "agreement" was 

reached at a time when he was attempting to secure a greater 

cut of her property, and she was attempting to save the 

marriage. The marriage had been stormy from the start, and 

the husband himself admitted he was "surprised" when his 

wife's mother offered to have him join his wife in purchasing 

some of the Moran property. It is clear that the offer was 

made to encourage the husband to reconcile, but any such 

reconciliation was more form than substance. 

Based on the circumstances surrounding the execution of 

the September 2, 1976 agreement, we hold it was 

 unconscionable" as a matter of law and the trial. court 
properly refused to divide the property according to its 

terms. 

The final point to be addressed is the overall equity of 

the five-sixths/one-sixth split. We must admit such a 

division seems inequitable on its face. The well-established 

rule in Montana is: 

"The apportionment made by the District Court will 

not be disturbed on review unless there has been a 

clear a.buse of discretion as manifested by a 

substantial inequitable division of the marital 

assets resulting in substantial injustice." -- In re 

the Ma-rriage of Brown (Mont. 1978), 587 P.2d 361, 

35 St.Rep. 1733. 

Without more, a divisj-on awarding five-sixths to the 

wife would seem to be "substantially unjust." But it must be 

noted that the marriage was short-lived and rocky, this is 

the husband's fifth and the wife's third divorce, and, most 

significantly, a great majority of the property was acquired 

from the wife's family. We held in the case of In Re 

Marriage of Herron (Mont. 1980), 608 P.2d 97, that the source 

of the property was a major factor to be considered by the 

court dividing the property under section 40-4-202, MCA. In 

Herron, we held that the trial court had abused its 

discretion when it split the property 50/50, where "almost 

all of the property accumulated by the (husband. and wife) can 

be traced to gifts or bequests from (the wife's father)." 

"Almost all" of the marital property can be traced to 

the Morans, the wife's family. Clearly all the Moran 

property purchased in 1972 came from the Morans, and is being 

paid off from rental income from that property, without any 

financial contribution from the husband. The tract of land 

on the Rimrocks where the parties started constructing their 

new home was paid for by mortgaging the Moran residence on 

Mariposa., and the mortgage was then retired when the Mariposa 
residence was sold. The husband did contribute some of his 

own money to purchase materials for the partial construction 

of the new home, and the trial court considered that fact 

when it awarded him $95,000 cash. 

The only other real properties in which the husband had 

any equity were the Scott Building in Laurel.., and the 

residence on Mariposa which the parties sold in 1974. The 

husband used his own funds to make the $11,500 downpayment on 

the Scott Building and also paid the first $8,574.81 

installment. The last three installments were paid with 

rental income received from Moran property. The husband's 

$20,174.81 equity in the Scott Building was included in his 

cash award, as the trial court decided not to partition the 

property. 

Regarding the residence on Mariposa, the husband did pay 

$15,000 for a one-half interest, but that was a bargain 

considering the house cost $32,000 to build and had 

appreciated. The other one-half interest was gifted to the 

parties by the wife's father. The trial court considered the 

husband's $15,000 contribution, and also considered the fact 

that because the wife' s father had sold the home at such a 

bargain price, the parties were able to turn around the next 

year and sell it for $50,000. We find no error regarding the 

Scott Building or the Mariposa residence. 

Because we believe the trial court properly considered 

all the required factors set forth in section 40-4-202, MCA, 

includi.ng the husband's efforts in helping to manage and 

maintain the Moran property, we hold that there was no clear 

abuse of discretion resulting in "substantial injustice" by 

awarding approximately five-sixths of the property to the 

wife and one-sixth to the husband. 
The judgment is affirmed.. 

We Concur: 

/ \ Justices