No. 81-356 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1982 

IN RE THE MARRIAGE OF 

JOHN CARLYLE LAWRENCE, 

Petitioner and Respondent, 

and 

SHARON M. LAWRENCE, 

Respondent and Appellant. 

Appeal from: District Court of the Fourth Judicial District, 

In and for the County of Missoula, 

Honorable Jack L. Green, Judge presiding. 

Counsel of Record: 

For Appellant: 

Ferguson & Mitchell, Missoula, Montana 

Kinsey & Lashlee, Long Beach, California 

For Respondent: 

Datsopoulos, MacDonald & Lind, Missoula, Montana 

Submitted on briefs: February 2, 1982 

Decided : 

Filed: MAR 2 2 1982 

Clerk 
Ivlr. Justice John Conway Harrison delivered the Opinion of 

the Court. 

This appeal arises out of the Fourth Judicial District, County of Missoula, State of Montana, from an order 

directing the wife to specifically perform a separation 

agreement that had been entered into with the husband in 

1976 and incorporated into the dissolution decree of April 

27, 1976. Specific performance consisted of wife's executing quitclaim deeds for certain mining properties, upon 

which a cloud to title apparently existed because they had 

at one time been held by the parties as husband and wife. 

The wife responded to her husband's suit for specific performance by requesting, among other things, that the 

1976 property settlement be set aside as unconscionable and 

a fraud on the court. Two lengthy hearings were held in 

July and August, 1980, followed by the court's order 

directing the wife to sign the deeds and denying her motion 

to set aside the property settlement. 

The wife sets forth only two issues to be considered. 

The husband sets forth five issues out of the wife's suggested two, which we find more inclusive and useful for a 

proper discussion of the case. Those issues are: 

1. Should the trial court have set aside the decree 

of dissolution entered in this matter on the grounds that it 

was obtained by a fraud on the court? 

2. Is the separation agreement entered into by the 

parties unconscionable? 

3. Is the separation agreement contrary to public 

p o l i c y ? 

4. Is the wife's attack on the decree of dissolution 

barred by laches? 
5. Should the trial court have refused to enforce 

the decree of dissolution on the grounds that the husband 

came before it with unclean hands? 

The parties were married on March 27, 1968, at 

Mackey, Idaho, and have two children. Early in the marriage 

they moved to the Thompson Falls, Montana, headquarters of 

the U.S. Antimony Corporation. The husband is employed by 

the corporation as manager of mining, geology and metallurgy. He is also the largest stockholder with approximately 

14 percent of the issued shares. At the time of the dissolution, the husband had between 660,000 and 800,000 shares 

valued by various parties from $.50 to $1.50. 

The marriage was not one made in heaven. The wife's 

counsel describes it as mercurial, marked by disagreement 

and violence. In 1974, the husband filed for a divorce 

alleging adultery. The wife retained Missoula counsel, 

briefed him on her case and asked him to prepare a "postnuptial agreement ." Thereafter, the wife returned to the 

home in Thompson Falls, and the parties attempted a reconciliation. Both parties agree the reasons for the reconciliation were the children. During this period, the 

husband dismissed the original dissolution proceedings. 

In 1976, for the same reasons given in his original 

cause, the husband reinstituted the dissolution of the 

marriage. This time, the wife obtained the services of 

another attorney who served her throughout the second 

dissolution proceedings. Numerous meetings were held by the 

new counsel with the wife and the husband's counsel. Again, 

a full disclosure of the property involved was discussed, 

and the wife was advised by counsel as to her rights to the 
property of the couple. In fact, both counsel employed by 

the wife, the first who advised her in 1974 on the "postnuptial agreement" and the second who represented her on the 

"property settlement, support and custodial ayreement," 

advised her that she could, if she contested the dissolution, "get more property." The trial court noted in its 

Conclusion of Law XIII: 

"The Court would, under the circumstances of 

this case, ordinarily consider the Marital 

and Property Settlement unconscionable. However, the Respondent was represented by a 

very competent and knowledgeable attorney. 

She entered into the Property Settlement 

Agreement with a fairly complete knowledge of 

the marital assets and despite the protestations of her counsel that he felt the property settlement was neither fair nor equitable and his advice that if she went to Court 

on the property aspects of the case she could 

probably get more." 

However, nearly two years after the first filing by 

the husband, the wife directed her attorney to prepare for 

signature the separation agreement she now wants to set 

aside on the basis of fraud upon the court, coercion and 

unconscionabil ity. 

The separation ayreement gave the wife four lots in 

Mackey, Idaho, with improvements thereon, including a house 

free and clear of liens and encumbrances, all the furniture 

in the house in Thompson Falls, attorney fees, moving 

expenses, $2,500, and maintenance of $200 per month for four 

years. The total amount to her in money and property was 

The husband fared much better. He received the family 

horne in Thompson Falls and the ninety-nine acres on which it 

was located, all the stock in U.S. Antimony Corporation, an 

airplane, a pickup truck, and bank accounts amounting to 
approximately $5,800. The total value of the property was 

between $227,000 to $422,500 depending on the value given 

the stock. 

Of special note in arriving at the value of the stock 

is that, at the time of the dissolution, the stock was 

restricted by Security and Exchange rules which could have 

resulted in the husband receiving a price discount of as 

rnuch as 50 percent if he had sold or transferred a substantial portion of the same. The husband testified that at the 

time of dissolution he had 660,000 shares. During the first 

trading quarter of 1976, free trading stock had a value of 

$.a875 to $1.00 per share. In addition, during the first 

quarter of 1976, the corporation was in serious financial 

trouble. The company's primary product was battery grade 

antimony. The market for this product collapsed in 1975 

when the automobile industry switched to a calcium lead 

battery. Due to the switch, corporate profits went from 

$200,000 in 1975 to a loss of $213,000 in 1976. Substantial 

losses occurred in subsequent years as well. On April 1, 

1976, the company was barely able to make its payroll. 

Shortly after the dissolution, the husband had to personally 

guarantee a small business loan of $300,000 to save the 

operations. Since 1976 the company has had to get into 

extensive research operations to find a use for a previously 

salable product. All of these facts were known to the wife 

and her attorney in deciding whether to try to obtain some 

of the stock in the property settlement. The decision of 

the wife was not to do so. 

The wife now alleges that the husband personally 

attempted to persuade or coerce her into taking the one- 
sided property agreement ~y threatening to get custody of 

the children. In addition, the wife alleges that the 

separation agreement approved by the court is faulty because 

it does not contain an inventory of the marital assets but 

merely lists what the wife is to receive and leaves the rest 

to the husband. 

The District Court was also considering the husband's 

petition for specific performance. The U. S. Antimony Corporation owned mining claims in both Montana and Idaho. In 

1979, three years after the dissolution, the corporation 

sought to sell the Idaho properties and to grant an easement 

to the Forest Service over some of the Montana properties. 

A title search revealed a cloud on the title involvii~g the 

wife's name. 

At the time of its acquisition, the husband took the 

Idaho property in his own name. He later assigned all rights 

to a predecessor corporation of U.S. Antimony Corporation 

and was reimbursed by the corporation for the downpayment. 

The corporation paid all sums remaining on contract. Since 

he was married to the wife at the time of acquisition, the 

question of an inchoate right in her arose, based on the 

marital relationship. 

The acquisition of the Montana properties was handled 

in much the same fashion, except both the wife and husband 

signed the papers acquiring the property, and, on advise of 

the corporation's counsel, they signed only a mineral deed 

in transferring the claims to the company. As was done on 

the Idaho property, the husband was fully reimbursed for his 

downpayment, and the company paid the remainder. The record 

indicates neither of the parties intended to keep any 
interest in the clairns or surface rights and that neither 

paid money for which they were not reimbursed. The methods 

used in acquiring the properties by the corporation is 

common in the industry. 

The first issue is whether the District Court should 

have set aside the decree of dissolution on the grounds that 

it was obtained by a fraud upon the court. This issue is 

not one of first impression in Montana. This Court recently 

col~sidered the issue in Pilati v. Pilati (1979), - Mont. 

- , 592 P.2d 1374, 36 St.Rep. 619, and in earlier cases 

before the Court. See, In Re Bad Yellow Hair (1973), 162 

Mont. 107, 509 P.2d 9; Selway v. Burns (1967), 150 Mont. 1, 

429 P.2d 640. However, the fact situation here differs from 

that of Pilati. 

In Pilati the parties were married when the wife was 

sixteen years of age and the husband was thirty-eight. The 

marriage lasted thirteen years, and the parties had two 

children. The wife had a ninth grade education and had 

never been employed prior to the marriage. The husband held 

both a Bachelor's and a Plaster's degree, was working on a 

Ph.D. and, according to the briefs, he had a J.D. He not 

only was both a rancher and a high school teacher but had 

cor~siderable experience in real estate appraisals. The 

record in Pilati indicated the husband handled all the 

finances of the family to the extent of purchasing everything, including groceries and clothing. The wife knew 

nothing of the parties' financial status which, it was 

alleged, was deliberately kept secret from her. 

In the instant case the record does not indicate how 

much education the wife had. It would appear she did have a 
job of some status at the time the couple met and were 

married. The court in its Conclusion of Law VIII noted that 

the marital property settlement agreement was entered into 

by the wife with full knowledge of the property owned by the 

parties and its value. Conclusion of Law IX indicated that 

she was represented by competent counsel in negotiations of 

the property settlement agreement. Conclusion of Law X 

indicated that she consented to the property agreement, and 

the property agreement was given freely and voluntarily 

without fraud, overreaching or undue influence. 

In addition, at the two hearings there was considerable testimony indicating that both counsel who represented 

the wife, the attorney originally hired by her in 1974 and 

the attorney who drew up the property settlement agreement 

for her in 1976, advised her fully as to the fact that she 

probably could get more property if she went to trial. 

Clearly, we do not have a petitioner in the same status as 

the petitioner in Pilati v. Pilati, supra. 

At the hearings both counsel for husband and wife 

testified. Their testimony indicated that, during the time 

of drafting the property settlement agreement and the dissolution of the marriage, there were at least ten confereilces, either personal or by telephone, of some extended 

length, where counsel laid forth all of the facts concerning 

the property involved. There was nothing left under the 

table at the time the parties signed the agreement. In 

addition, it is to be remembered that the facts indicated 

that the wife brought the proposal for the property settlement to her counsel and directed him to put it into legal 

form and obtain the dissolution as soon as possible. At 
that time, counsel advised her as to her rights, as he had 

previously done, and indicated that he did not think it was 

a good agreement. However, the wife insisted on having it 

finalized and, at that time, indicated none of the pressures 

that have been called to attention in other cases where such 

agreements have been set aside. 

The wife urges this Court to adopt In Re Marriage of 

Gonzalez (1976), 57 Cal.App.3d 736, 129 Cal.Rptr. 566. 

Gorlzalez is unique in that the husband's mere threat to, 

inter alia, take illegal custody of the children constituted 

duress sufficient enough for rescission of the contract. 

But, Gonzalez is not applicable here for in this case the 

husband filed the petition alleging adultery, a fact that 

apparently the wife did not want to be made public by going 

to trial because it might prevent her from getting her 

children. In Gonzalez the wife, not the husband, filed the 

petition for apparently good reasons. In Gonzalez the wife 

testified that she was so "distraught and worried about the 

cl~ildren" that she did not remember signing the petition. 

That is not the case here. As previously noted, the wife 

brought the settlement she wanted to her attorney to put in 

legal form. Certainly she knew what it contained. In 

Gonzalez the court found that the wife was threatened that, 

if she did not sign when she did, she would lose everything. 

Here, the wife knew what she was getting and knew what her 

husband was getting. Further, she knew of her right to seek 

more in court. 

The wife argues that the separation agreement must 

contain a full inventory of all the assets owned by the 

parties in order for the court to pass upon its conscion- 
ability. Further, she contends the failure to include such 

inventory is a fraud upon the court under Pilati. Indeed, 

this Court has indicated that a full inventory of the assets 

should be made. However, we have not held that a lack of an 

inventory is fraud upon the court. We noted in Pilati that 

the fraud was the failure to disclose all the assets to the 

wife, not the failure to disclose all the assets to the 

court. Here, while the court may not have been fully 

advised as to all property owned by the parties, the record 

shows the court was not confused by the omission of a full 

inventory from the separation agreement. 

The wife cites Hamilton v. Hamilton (1980), - Mont. 

- , 607 P.2d 102, 37 St.Rep. 247, in support of her argument that the separation agreement must list all property 

owned by the parties. Hamilton is not applicable here. 

Hamilton involved a contested property distribution, and the 

problem in that case was that the trial court did not make 

findings sufficient to allow this Court to review its 

decision. 

Where, as here, the totality of the circumstances 

support the trial court's findings that there was no duress 

or coercion, this Court will not reverse the decision unless 

it is clearly erroneous. The facts of each case will vary 

substantially. We recognize it is a common practice to 

raise the issue of child custody in many, if not most, 

marriage dissolution actions. By this opinion we do not 

encourage a challenge of negotiated property settlement 

agreements where custody rights have been settled on an 

arm's length basis as here. It would only be an exceptional 

case where we would consider the factors considered by the 
California court in Gonzalez, supra. 

We note further that in the case of Winters v. 

Winters (1980), Ivlont . , 61fl P.2d 1165, 37 St.Rep. 

847, we held that a threat to reputation does not vitiate a 

party's consent. There, the wife discovered that her 

husband had engaged in adulterous relationships and demanded 

that he pay a certain sum of money per month as part of the 

property settlement agreement or she would drag her husband's lover's name through the mud. In a subsequent proceeding, the husband alleged that this was fraud and duress, 

but the court held it was not. While Winters is different 

from the present case because the threat was to a person who 

was not a party, that difference is not significant. In 

Winters the husband sought to avoid an embarrassing hearing, 

and that is a concern that exists whenever there is a threat 

to a reputation. 

The second issue for consideration is whether the 

separation agreement entered into by the parties is unconscionable. We think not. The wife notes that "unconscionability", as a term of art referring to unfair contracts, 

has a far broader reach than the classical circumstances 

which were sufficient to void contracts (lack of consideration, fraud, duress, and undue influence), though it, of 

course, includes them. Unconscionability, as used in the 

Uriiform Marriage and Divorce Act, is discussed in the Code 

Commissioner's comments on section 40-4-201, MCA. 

The wife argues that the agreement was unconscionable 

in a number of respects. First, without sufficient justification it established a grossly disproportionate division of 

marital assets, awarding only $50,000 of the property to the 
wife and $9,600 in alimony out of a $422,008 marital estate, 

The wife argues that the fact she received the advice of 

competent counsel before she signed the separation agreement 

did not in any manner dilute or mitigate the unfairness of 

the terms of the agreement or, as the testimony indicates, 

isolate her from the fear and anxiety created by her 

husband's threats and importunities. The wife would require 

that before the agreement was accepted by the court in 1976, 

the court should have been informed of all the circumstances 

and only then would it not be unconscionable. 

It is apparent from the above that the wife would 

have the court look only at the numbers and conclude without 

further analysis that the distribution of the estate was 

grossly disproportionate and therefore unconscionable. 

However, with respect to certain kinds of property, courts 

must exercise substantial discretion in determining value. 

This is especially true in the case of stock values. In In 

Re Marriage of Lippert (1981), - Mont. , 627 P.2d 1206, 

38 St.Rep. 625, this Court held: 

"The exercise of discretion by the District 

Court is necessary when determining the 

worth of marital assets which fluctuate in 

value. For example, the value of a particular common stock may change drastically 

during the course of a dissolution while the 

value of the family home or other personal 

property remains stable. Under such circumstances selection of a single evaluation 

point for determining net worth of the 

parties could create an inequitable disposition." 627 P.2d at 1208. 

Here, as previously noted, relying solely on the 

market value of the stock in early 1976 would be inappropriate. The husband's stock was restricted and greatly reduced 

in value. The corporation which issued the husband's stock 

was in serious financial difficulty which caused a sharp 
decline in the stock's value in 1976, As previously noted, 

the 1976 annual report showed a low figure of $.50 per share 

in the fourth quarter of 1976. The market of the corporation's main product had collapsed, and the corporation was 

virtually out of cash, In addition, the husband had personally extended himself to guaranteeing a $300,000 small 

business loan to keep the corporation operating and to pay 

the salaries due. The court must have considered these 

facts in arriving at the conscionability of the separation 

agreement. The husband had only 14.5 percent interest in 

the corporation. Had he given some of this up or liquidated 

a substantial portion of it and paid the proceeds to the 

wife his position in the corporation would have been reduced 

to such a point that his control would have been in serious 

jeopardy, Had that happened, it would have made no sense 

for him to guarantee the $300,000 loan to the Small Business 

Administration so that the corporation could have continued. 

In addition, had the company collapsed after he borrowed the 

$300,000, not only would his stock have been worthless but 

there would have been no sources to pay the debt other than 

his other assets, which were not sufficient. In early 1976 

it is unquestionable that the husband risked bankruptcy to 

save the corporation. 

Viewing these facts, the financial condition of the 

company and the risk that the husband took to maintain the 

cornpany, neither this Court nor the trial court is compelled 

to reach a conclusion that the property settlement was 

unconscionable. We noted in In Re Marriage of Jorgensen 

(1979) I - Mont. - , 590 P.2d 606, 36 St.Rep. 233, that 

where a husband received $692,701.84 (mostly in stock) and 
his wife received $83,167, the disposition was not unconscionable. 

The wife contends that all of the husband's actions 

amounted to undue influence, which would negate consent and 

make the agreement unconscionable. Under section 28-2-407, 

MCA, undue influence consists of: 

" (1) the use by one in whom a confidence is 

reposed by another or who holds a real or 

apparent authority over him of such confidence or authority for the purpose of 

obtaining an unfair advantage over him; 

"(2) taking an unfair advantage of another's 

weakness of mind; or 

"(3) taking a grossly oppressive and unfair 

advantage of another's necessities or 

distress." 

Here it is unlikely that the wife had any confidence 

or trust in the husband in the latter years of the marriage, 

particularly after 1974 when the first divorce was filed and 

in 1976 when the final decree was granted. The evidence is 

conclusive that the wife was not suffering from any weakness 

of mind. Her attorney testified that the final agreement 

was based on her proposal and she understood its terms when 

she signed it. Divorces are frequently traumatic and arise 

in stressful situations. This does not mean that there is 

undue influence, especially if each party is represented by 

competent counsel. When all the relevant facts are 

considered, the agreement, while it may be different from 

what the court would have decreed in a contested matter, 

does not become unconscionable under these circumstances. 

The next issue raised is whether the separation 

agreement is contrary to public policy. The wife would have 

this Court conclude that a separation is violative of public 

policy if one of the parties threatened a custody fight in 
order to gain in the property distribution. While the wife 

contends that only rarely would a separation agreement be 

subject to attack on this ground, the fact is that such a 

ruling would expose many separation agreements to attack and 

worse, would not be based on any kind of a realistic understanding of preagreement negotiations. 

The facts are that custody is frequently a bargaining 

chip in the settlement negotiations whether we like it or 

not. As noted in our discussion of the Gonzalez case, 

supra, we are not about to go as far as that court did in 

setting aside property settlements, such as we have here, as 

violative of public policy. 

We find it unnecessary, in view of our holding on the 

principal issues presented, to consider the quest ion of 

laches. 

The final issue is whether the trial court should 

have refused to enforce the decree of dissolution on the 

grounds that the husband came before the court with unclean 

hands. Stated another way, did the trial court properly 

order the execution of the quitclaim deeds by the wife. 

We have here several findings that have gone uncontested relevant to the issue for consideration. Neither 

party gave anything of value for the mining properties in 

question, It was never the intent of either to retain any 

kind of an interest in the mining properties. Further, it 

is the company, not the husband, which ultimately is 

entitled to receive the mining properties since it has paid 

for them. In view of these facts, the wife's argument loses 

much of its force, since the husband is not going to personally profit from the transfer of the quitclaim deeds. 
The husband is seeking to enforce the decree of dissolution, not a contract. By its terms, section 27-1-415, 

MCA, on which the wife relies in asserting her defense of 

unclean hands, is applicable only to contracts. Here, the 

settlement agreement was incorporated in the decree and, as 

such, is enforceable as a judgment under the provisions of 

section 40-4-201(5), MCA. The wife could have challenged 

the property disposition provided in the decree by not 

signing it. However, she chose not to do so and cannot now 

be heard to argue what she could have done in 1976. See, 

Hopper v. Hopper (1979), - Mont. - , 601 P.2d 29, 36 

St .Rep. 1695. 

The wife is collaterally attacking the decree. She 

is asserting that the decree is unenforceable because of 

circumstances under which it was entered into. This Court 

has previously held that a decree rendered free from 

extrinsic fraud may not be attacked collaterally or 

directly. Deich v. Deich (1958), 136 Mont. 566, 323 P.2d 

35. 

We find under the circumstances of this case the 

husband does not come before the court with unclean hands. 

Further, the unclean hands doctrine is not a defense to 

enforcement of a judgment, especially when the defense is 

based on acts occurring before the entry of judgment, and 

the judgment has not been set aside. 

The judgment of the District Court is affirmed. 
We concur: