No. 81-557 

IN THE SIJPREIIE COIJRT OF THE STATE OF MONTANA 

1953 

LYNN G . SHITLT Z , 

Plaintiff and Appellant, 

VS . 

BERTON N. SHULTZ, 

Defendant and Respondent. 

Appeal from: District Court of the Fourth Judicial District 

In and for the County of Missoula 

Honorable John S. Henson, Judge presiding. 

Counsel of Record: 

For Appellant : 

Milodragovich, Dale 6 Dye, Missoula, Montana 

M. J. Milodragovich, Argued 

For Respondent: 

Datsopoulos, Macnonald 4 Lind, Missoula, Montana 

Milton Datsopoulos, Argued 

Submitted: March 4, 1983 

Decided: July 27, 1983 

Filed: JuL 2 7 1983 F 

&r - Clerk 
Mr. Justice Fred J. Weber delivered the Opinion of The Court. 

This is an appeal from a Fourth Judicial District Court 

judgment terminating respondent's maintenance and insurance 

obligations under a marital and property settlement 

agreement, which was incorporated by reference into the 1973 

dissolution decree. The issue is whether the District Court 

erred as a matter of law in modifying maintenance and 

insurance terms under the agreement and decree. We affirm 

the judgment of the district court in part and remand for 

further proceedings. 

Appellant contends that the district court lacked the 

power to modify the maintenance and insurance terms because 

they were an integral part of an agreement negotiated by the 

parties' counsel and signed by the parties. It is 

appellant's position that such terms are not modifiable under 

section 40-4-208(2) (b), MCA, but can be altered only by 

consent of the parties, pursuant to subsection (3) (a) of the 

same statute. As support for this position, appellant relies 

on a line of cases following Washington v. Washington (1973), 

162 Mont. 349, 512 P.2d 1300. 

In Washington, this Court held that alimony payments 

were not subject to modification because they constituted an 

integral part of an agreement fully supported by 

consideration. Labels such as "alimony" or "maintenance" 

were found to be inconclusive indicators of the parties' 

intent under a marital and property settlement agreement. 

Factors which proved to be determinative included the 

recitation in the agreement that the wife had given up rights 

to future support, relinquished her interests in the 

husband's separate property, and agreed to be responsible for 

all her future obligations and a portion of her husband's 

existing obligations in return for monthly payments of 
$750.00 until her death, irrespective of remarriage. We 

concluded in Washington that the support provision could not 

be severed from the agreement and modified without destroying 

the parties' contract. 

Shortly thereafter, this Court had another opportunity 

to review a marital and property settlement agreement in 

light of a maintenance modification petition. In Movius v. 

Movius (1974), 163 Mont. 463, 517 P.2d 884, we held that 

modification of maintenance was permissible because the 

maintenance and property division provisions were not 

interrelated. Unlike Washington, the agreement in Movius 

provided that the wife's maintenance payments were 

automatically terminated upon her marriage and that the 

wife's receipt of maintenance was not conditioned upon her 

relinquishment of a more favorable property division or an 

assumption of pre-existing indebtedness. We concluded that 

absent mutual interdependence of provisions pertaining to 

alimony and property division, a maintenance award is subject 

to modification by a court on a proper showing of changed 

circumstances. 

The Shultz property settlement agreement was executed on 

August 6, 1973 and was incorporated into the court's 

dissolution decree that same date. The Uniform Marriage and 

Divorce Act (UMDA) was ena.cted in 1975. Both Washington and 

Movius were decided before Montana adopted the UMDA. Unlike 

Washington and Movius, the Shultz case placed the district 

court in the peculiar situation of interpreting a 1973 

agreement under uniform law enacted in 1975. For this 

reason, a comparison of the current and former divorce law 

pertaining to maintenance may be helpful. 

Under both the old and new law, parties can agree to a 

support provision in their separation agreement. In pre-UMDA 
cases where the parties did not so agree, the court could 

award support only if the divorce was granted "for an offense 

of the husband." Section 21-139, R.C.M. 1947. This 

condition having been met, the court had discretion to award 

"such suitable allowance to the wife for her support during 

her life or for a shorter period, as the court may deem just, 

having regard to the circumstances of the parties 

respectively." Section 21-139, R.C.M. 1947. Absent 

agreement of the parties, an award for support was thus 

dependent upon the court's determination of fault and what 

was just under the circumstances. The court had discretion 

to withhold allowance of support if the wife had a "separate 

estate sufficient to give her proper support." Section 

21-141, R.C.M. 1947. The court's discretion was not limited 

by any statutory definition of proper support. 

The standard for a court decree of maintenance under the 

UMDA is slightly different. The parties may still agree upon 

a support provision in their separation agreement. However, 

absent such provision, the court may order support only if 

the spouse seeking maintenance "(a) lacks sufficient property 

to provide for his reasonable needs; and (b) is unable to 

support himself through appropriate employment . . .". 

Section 40-4-203 (1) , MCA. Whereas support under the old law 

was determined on the basis of fault and what the court 

deemed just and proper, support under the UMDA is dependent 

upon a showing of need. 

The standard for modifying maintenance awa.rds also 

differs. Under UMDA, the court may modify its support decree 

only " (i) upon a showing of changed circumstances so 

substantial and continuing as to make the terms 

unconscionable; or (ii) upon written consent of the parties." 

Section 40-4-208 (2) (b) , MCA. The unconscionability test 
presents a stricter standard for modification than the broad 

discretion formerly afforded district courts. 

Former law gave the trial court power to modify its 

orders "from time to time," but specified that support must 

terminate upon the wife's remarriage. Section 21-139, R.C.M. 

1947. Unless otherwise expressly agreed by the parties, 

support terminates under present law upon the death of either 

party or the remarriage of the party receiving maintenance. 

Section 40-4-208 (4), MCA. The parties can preclude or limit 

modification of maintenance terms set forth in the decree if 

their separation agreement so provides. Section 40-4-201(6), 

MCA . No such option to extend support payments past 

remarriage existed under former law. Thus, a pre-1975 

provision for "support" after remarriage was stronger 

evidence that the parties intended to create a contractual 

obligation, than such a provision would be under post-UMDA 

law. In both instances provision for "maintenance" after 

remarriage is a factor in determining whether the parties 

intended to create a modifiable support provision or a 

non-modifiable contractual obligation. 

Provisions must be interpreted in historical 

perspective. In Washington, a pre-UMDA case, monthly 

payments were to continue irrespective of remarriage. In 

Movius, another pre-UMDA case, payments were automatically 

terminated upon the wife's remarriage. The 1973 Shultz 

agreement did not specify when the monthly payments would 

terminate. Neither the decree nor the separation agreement 

precluded or limited the court's power to modify the 

"support" provision. 

The marital and property settlement agreement executed 

by the Shultzes upon termination of their eighteen year 

marriage contained thirteen separate provisions regarding 
child custody, tax exemptions, special education expenses, 

existing indebtedness, moving costs, attorneys' fees, 

property distribution, support for the children and for 

appellant, medical and hospital care, and life insurance. By 

the terms of the latter three provisions, respondent agreed 

(1) to pay to appellant "the sum of $450.00 per month as and 

for alimony for her care, support and maintenance," such 

amount to be increased by ten percent on the fifth 

anniversary of the agreement; (2) to provide sufficient 

medical and hospital insurance coverage for appellant until 

she remarried or until further court order; and (3) to 

provide life insurance with appellant named as owner and 

beneficiary. 

It is not evident from the face of the agreement that 

the maintenance and medical insurance provisions were 

dependent upon or related to the property division or other 

sections of the agreement. The agreement specifies that the 

monthly payments were to provide for appellant's "care, 

support and maintenance." The parties recognized the court's 

power to retain jurisdiction and to modify the medical 

insurance term. The medical and hospital insurance provision 

specifically refers to continuation of benefits until 

appellant's remarriage or "further order of the Court." 

The life insurance provision differs from the medical 

and hospital insurance provision in two respects. No 

contingency for termination or modification by the court is 

specified in the life insurance provision. Secondly, the 

wife was to be named as the owner as well as the beneficiary 

of the life insurance policy. 

The fact that Mrs. Shultz was to be the policy owner is 

significant. Pursuant to the 1973 dissolution decree, she 

was to enjoy not only equitable rights to future proceeds as 
the policy's named beneficiary, but also vested ownership 

rights in the policy. Had Mrs. Shultz been named as the 

policy owner as directed by the 1973 decree, it is likely 

that the company would have given her the option to maintain 

the policy by paying the premiums herself once the court 

modified the husband's obligation to pay premiums. During 

oral argument before this Court, counsel indicated that the 

policy was still in force and that the partiest children had 

been named beneficiaries. There is no other evidence in the 

record explaining what happened to the policy. When asked at 

the 1981 modification hearing whether the life insurance 

policy was still in effect and whether she had received any 

notifications or correspondence about it, Mrs. Shultz 

answered, "Never, no. I don't know anything about that." 

There is no other evidence pertaining to the life insurance 

policy. Evidently the district court's modification order 

not only relieved Mr. Shultz of his obligation to pay 

insurance premiums, it also divested Mrs. Shultz of her 

property rights in the policy. 

Because of (1) the lack of evidence regarding management 

of the policy, (2) the fact that no purpose for the life 

insurance provision was stated in the 1973 separation 

agreement, (3) the absence of a finding of fact stating that 

purpose, and (4) the absence of a conclusion of law that the 

life insurance provision was severable from the property 

settlement contract, we hold that the husband's obligation to 

maintain a life insurance policy, naming his wife as owner 

and beneficiary, was improperly terminated. 

We reverse as to that part of the district court's 

judgment and remand for such further proceedings as are 

necessary to determine the ownership and status of the 

policy, the extent to which the life insurance provision is 
severable from the settlement agreement, and a determination 

consistent with this decision. 

Regarding the maintenance and medical insurance 

provisions, the undisputed testimony at the hearing was that 

appellant was unemployed in 1973 and unable to support 

herself. Though she had a teaching degree, she lacked 

current certification and was, therefore, unable to seek 

employment in her field. Both parties stated that it was 

their understanding that the maintenance provision was 

intended to address appellant's basic living expenses. 

Since the dissolution, appellant has received her 

teaching certification and has been employed in the Minnesota 

school system since 1976. As a teacher, appellant is 

provided with medical and dental insurance, although the 

coverage arguably is not as extensive as the policies 

maintained by respondent. Appellant also has held a job in 

private business. During the four years preceding the 

modification hearing, the combined total of her adjusted 

gross income, excluding maintenance payments, increased from 

$17,000 to $30,000. 

While appellant testified that she accepted maintenance 

in lieu of pursuing any interests she could assert to 

respondent's business properties, respondent testified that 

the maintenance and property division provisions were not 

reciprocal. 

We find substantial credible evidence in the record to 

support the district court's conclusion that the maintenance 

and medical insurance provisions are not integral to the 

parties' property settlement agreement and are, therefore, 

subject to modification upon a proper showing. The treatment 

by the district court of the new modification statute, 
section 40-4-208, MCA, in its findings of fact, conclusions 

of law and order was excellent. 

We affirm and ratify the severability principles of 

Washington, but we distinguish the terms of this agreement. 

Absent a clear and undisputed interrelationship between 

property distribution and "maintenance" provisions, 

modification is permissible upon a proper showing of changed 

circumstances and unconscionability. 

We remand for further proceedings with regard to the 

life insurance policy and with that exception affirm the 

We concur: h 

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