No. 96-401 INTHESUPREME

COURTOFTHESTATEOFMONTANA 1996

IN RETHEMARRIAGEOF MICHAELJOSEPHDOYLE,

Petitioner andRespondent, and JANICE LOUISEDOYLE,

Respondent andAppellant.

APPEALFROM: District Court of the Twenty-first Judicial District,

In andfor the County of Ravalli, TheHonorable Jeffrey H. Lanyton, Judge presiding.

COUNSELOFRECORD:

For Appellant: Michael Sol; Sol &Wolfe, Missoula, Montana For Respondent: Dare1 Graves, Attorney at Law, Hamilton, Montana

Filed: Submitted onBriefs: November 14, 1996 Decided: December 31, 1996Justice W.William Leaphart delivered the Opinion of the Court.

Appellant, Janice Louise Doyle (Janice), appeals from the decision of the Twenty-first Judicial District Court denying her motion to set aside the property settlement agreement she entered into with Michael Joseph Doyle (Michael). Weaffirm in part,

reverse in part, andremand for rehearing. Werestate the issues asfollows: 1.) Did the District Court err in denying Janice's motion to set aside the parties' 1993Property Settlement Agreement because the motion was not filed within 60days of the final Decree? 2) Did the District Court err by awarding attorney fees without first conducting ahearing?

BACKGROUND Michael andJanice were married in 1964andtheir marriage was dissolved in 1993. During the marriage, Michael wasemployed asa rancher while Janice worked as a bank teller, housewife, cosmetologist, and helped onthe ranch onadaily basis. At the time of the dissolution, Michael andJanice were 50and 48years old, respectively. In 1993, Michael andJanice executed aProperty Settlement and Separation Agreement (Agreement). TheAgreement was drafted by Michael's attorney. Despite repeated suggestions by Michael's counsel, both orally andin writing, that sheobtain legal advice, Janice chose not to seek legal counsel or appear at the hearing to approve the Agreement. Under the Agreement Janice received 110

acres of bare land, her car, various personal belongings andwas 2assigned over $40,000 in debt. In return, Michael received atotal

of 560 acres of land, all of the machinery and equipment, the cattle heard, a $19,000 Treasury certificate and was assigned $35,000 in debt. TheAgreement expressly allows modification only upon written consent or upon a finding of unconscionability and requires the district court to award attorney fees, as a cost of suit, to the successful party in anyaction to "enforce, modify, or interpret" the Agreement. The District Court approved the Agreement, incorporated theAgreement into the decree, specifically ordered each party to perform the Agreement, and granted final dissolution of the marriage. Nearly two years after the District Court's 1993 Judgment, Janice filed a motion to set aside and vacate the decree of dissolution andrescind the Agreement ongrounds that Michael made misrepresentations as to values of the property, how much of Janice's property was under the flood plain, and whether his property wasencumbered byalife estate. Although the motion was vague regarding its procedural grounds, it was treated as an independent action pursuant to the residual clause of Rule 60(b), M.R.Civ.P. After Michael andJanice filed briefs andaffidavits in support of their arguments, the District Court entered its Opinion andOrder denying Janice's motion. In addition to denying Janice's motion, the District Court, without first conducting a hearing, awarded Michael attorney fees in excess of $4,400. Janice appeals both the District Court's decision denying her motion to set aside andvacate the decree of dissolution andrescind the Agreement, and

3the District Court's decision to award attorney fees without

conducting ahearing.

STANDARD OFREVIEW Both issues before this Court deal with the District Court's conclusions of law. Thestandard of review of adistrict court's conclusions of law is whether the court's interpretation of the law is correct. Carbon County v. Union Reserve Coal Co. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686; see also Kreger v. Francis (1995)I 271Mont. 444, 898P.2d 672.

DISCUSSION 1) Did the District Court err in denying Janice's motion to set aside the parties' 1993Property Settlement Agreement because the motion wasnot filed within 60days of the final Decree? Since Janice's motion wasfiled more than 60days after entry of the decree, grounds one through three of Rule 60(b) are precluded from consideration, andgrounds four through six donot pertain to her motion. Accordingly, the District Court analyzed the motion under the residual clause of Rule 60(b). Theresidual clause of Rule 60(b), M.R.Civ.P., provides: This rule does not limit the power of a court to entertain anindependent action to relieve aparty from ajudgment, order, or proceeding, or to grant relief to adefendant not actually personally notified as maybe required by law, or to set aside ajudgment for fraud upon the court. This residual clause allows for three separate avenues of relief including: lack of personal notification, fraud upon the court,

4and an independent action for extrinsic fraud. See Rule 60(b),

M.R.CiXJ.P.; In re Marriage of Miller (1995), 273Mont. 286, 291, 902P.2d 1019, 1022 (citing Salway v. Arkava (1985), 215Mont. 135, 140, 695P.2d 1302, 1305). TheDistrict Court held that Janice was not entitled to relief under the residual clause of Rule 60(b), M.R.Civ.P. Weagree. Janice argues that, under abroad application of Rule 60(b), M.R.Civ.P., misrepresentations on the part of Michael qualify Janice for relief under the residual clause. Since lack of personal notification was not raised by Janice, we will only address whether Michael's actions constituted a fraud upon the court or whether Janice has an independent action for extrinsic fraud.Fraud uponthe court only involves that species of fraud which subverts or attempts to subvert the integrity of the court itself,

or fraud perpetrated byofficers of the court sothat the judicial machinery cannot perform in an impartial manner. Filler v. Richland County (1991), 247 Mont. 285, 289, 806 P.2d 537, 539. Fraud uponthe court is limited to only the most egregious conduct, including bribery of ajudge or memberof the jury; fabrication of evidence in which an attorney has been implicated; or the employment of counsel to influence the court. Filler, 806P.2d at 539. This Court has repeatedly held that fraud between the parties is not fraud uponthe court. Marriage of Miller, 902P.2d at 1022; Wise v. Nirider (1993), 261Mont. 310, 316, 862 P.2d 1128, 1132; Traders State Bank of Poplar v. Mann (1993), 258 Mont. 226, 236,

5852 P.2d 604, 610. Even if Janice's claims that Michael

misrepresented resale values andfacts asto flood plains are true, that cannot be characterized asafraud upon the court. Finally, none of Michael's actions can be characterized as extrinsic fraud. Montana follows the general rule that the fraud must be extrinsic, as opposed to intrinsic, to support an independent action for fraud under the residual clause of Rule 60(b), M.R.Civ.P. Marriaae of Miller, 902 P.2d at 1022 (citing Filler, 806P.2d at 539). Extrinsic fraud hasbeendefined assome intentional act or conduct by which the prevailing party has prevented the unsuccessful party from having afair submission of the controversy. Marriase of Miller, 902 P.2d at 1022 (citing Salwav, 695P.2d at 1306). Extrinsic fraud is collateral to the matters tried by the court, but does not include fraud in the matters onwhich the judgment was rendered. SeeSalwav, 695 P.2d at 1306 (citing Hall v. Hall (1924), 70Mont. 460, 467, 226 P.2d 469, 471). In Ellis V. Schwank (Wash. 19501, 223 P.Zd 448, the Washington State Supreme Court found extrinsic fraud was present where asonof the plaintiff's alleged father haddestroyed written statements and wills acknowledging plaintiff was his daughter. Ellis, 223 P.2d at 449. The court explained that since the son destroyed evidence that the father's daughter (the plaintiff) was also entitled to part of the father's estate, the plaintiff had been denied anopportunity to present at trial all of the rights anddefenses to which shewas entitled. Ellis -I 223 P.2d at 449. The son's actions had prevented the plaintiff from having afair

6submission of the controversy andwere collateral to probating the

will. In the instant case, Janice's claims of fraud relate to assets set forth in the Agreement, which, in turn, was incorporated into the 1993Judgment. Although the asset values were not set forth in the Agreement, all assets were disclosed. Therefore, none of Janice's claims canbe characterized asextrinsic fraud. Accordingly, weconclude that noneof the claims set forth by Janice allow the 1993 Judgment 'to be set aside. weaffirm the District Court's decision denying Janice's motion to set aside the 1993Judgment.

2) Did the District Court err by awarding attorney fees without first conducting ahearing? Section 40-4-110, MCA,grants the district court discretion to award attorney fees andcosts in certain domestic relation cases. In re Marriage of Malquist (1994), 266 Mont. 447, 454, 880 P.2d 1357, 1361 (citing In re Marriage of Dzivi (1991), 247Mont. 165, 167-68, 805 P.2d 567, 569). Section 40-4-110, MCA,provides:

40-4-110. Costs -- attorney's fees. Thecourt from time to time, after considering the financial resources of both parties, mayorder aparty to pay areasonable amount for the cost to the other party of maintaining or defending any proceeding under chapters 1and4of this title andfor attorney's fees, including sumsfor legal services rendered and costs incurred prior to the commencement of the proceeding or after entry of judgment. The court mayorder that the amount be paid directly to the attorney, whomayenforce the order in his name. In interpreting this section, this Court has required that a petitioning party must make a showing of necessity before the

7district court awards attorney fees. In addition, the award must

be reasonable and based upon competent evidence. Marriacre of Malauist, 880 P.2d at 1362 (citing In re Marriage of Barnard (1990), 241Mont. 147, 154, 785P.2d 1387, 1391; In re Marriage of Laster (1982), 197 Mont. 470, 479, 643 P.2d 597, 602; Wilson v. Bean (1981), 192Mont. 426, 427-28, 628P.2d 287, 289). Before a court can determine reasonableness, it must conduct a hearing allowing for the introduction of exhibits, oral testimony andthe opportunity for cross-examination. Marriacre of Malauist, 880P.2d at 1362 (citing Marriage of Barnard, 785P.2d at 1391). Finally,

an award of attorney fees will not be reversed if supported by substantial evidence. Marriage of Barnard, 785P.2d at 1391-92. In the instant case, the District Court awarded Michael a total of $4,450.75 in attorney fees. In its opinion and orders dated October 19, 1995, and March 6, 1996, the District Court ordered Janice to pay Michael's reasonable attorney fees. The District Court ordered Michael to submit anaffidavit of attorney fees and costs. Based solely onaffidavits submitted by Michael, the District Court determined that a fee of $4,450.75 was reasonable. Theaward of attorney fees in this casewasnot madepursuant to § 40-4-110, MCA, but rather pursuant to a provision in the Agreement which provided:

Should anyaction becommencedto enforce, modify, or interpret anyprovisions contained herein, the Court, as acost of suit, shall award areasonable attorney's fee to the successful party.

8Nonetheless, we hold that an evidentiary hearing as to

reasonableness is aprerequisite to anaward of fees whether they be pursuant to statute or contract. Ahearing allowing for the introduction of exhibits, oral testimony and an opportunity for cross-examination affords parties an opportunity to present competent evidence in support of their claims. Marriase of Malauist, 880P.2d at 1362. Here, the District Court's failure to conduct such ahearing wasreversible error. Weremand this case to the District Court for a hearing on the issue of reasonable attorney fees. Accordingly, weaffirm the District Court's decision denying Janice's motion to set aside the Property Settlement andSeparation Agreement. Wereverse the District Court's award of attorney fees, and remand for ahearing onthat issue.