No., 94-465

IN THE SUPREME COURT OF THE STATE OF MONTANA

1995

IN RE THE MARRIAGE OF:

ANDREA KATHRYN MILLER,

Petitioner and Respondent,

and

JOHN STANLEY MILLER,

Respondent and Appellant.

APPEAL FROM: District Court of the Fourth Judicial District,

In and for the County of Missoula,

The Honorable John S. Henson, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Mark E. Jones, Missoula, Montana

For Respondent:

P. Mars Scott, Mulroney, Delaney & Scott, Missoula,

Montana

Filed:

Submitted on Briefs: May 25, 1995

Decided: September 21, 1995
Justice James C. Nelson delivered the Opinion of the Court.

Respondent, Andrea Miller (Andrea), filed a motion with the

District Court of the Fourth Judicial District, Missoula County, to

'modify the parties' Decree of Dissolution and to award her certain

property of the marital estate that had been awarded to Appellant,

John Miller (John). The District Court issued an-opinion and Order

modifying the Decree of Dissolution and re-allocating various debts

and property. John appeals. We affirm in part and reverse in

part.

We address the following issues on appeal:

1 . Did the District Court err when it modified the parties'

Decree of Dissolution and Marital Settlement Agreement?

2 . Did the District Court err by not awarding attorney fees

to either party?

The District Court dissolved the marriage of Andrea and John

on September 22, 1992. The parties had previously entered into a

Marital Settlement Agreement for Division of Property, Child

Custody, Support, Visitation and Maintenance. The District Court

found that this agreement was not unconscionable and incorporated

the agreement into the Decree of Dissolution.

The agreement set forth the division of property and debts of

the parties' marital estate, custody of the parties' minor

children, child support, visitation and maintenance. John

represented to the District Court that if he were awarded certain

income-producing property of the marital estate amounting to

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approximately $23,650.00, he would pay the $23,389.72 in jointly

held debts of the marital estate. The property was so awarded, but

John has failed to pay the debts or make arrangements to pay them.

Because these debts were joint, the parties' creditors sought, and

continue to seek, collection of these debts from Andrea.

On May 17, 1993, Andrea filed a motion with the District Court

for an order modifying the parties' Decree of Dissolution

containing the Marital Settlement Agreement. At the May 25, 1993

hearing on her motion, Andrea testified she would pay the joint

debts of the marital estate if she were awarded the incomeproducing property that had previously been awarded to John.

John did not appear at the hearing and on June 9, 1993, the

District Court awarded Andrea the property she requested and

ordered her to pay the joint debts of the marital estate. On July

16, 1993, John moved the District Court for a re-hearing on

Andrea's motion alleging that he had not received adequate notice

of the May 25th hearing. In addition, John filed a Chapter 13

bankruptcy petition on July 30, 1993, which imposed an automatic

stay on his property.

On September 1, 1993, the District Court set aside the June 9,

1993 Findings of Fact, Conclusions of Law and Order and on

September 13, 1993, John filed his response to Andrea's Motion to

Modify. On February 8, 1994, the Bankruptcy Court dismissed John's

Chapter I3 petition for bankruptcy. That same day John filed a

Chapter 11 petition in bankruptcy court, reimposing the automatic

stay. On February 23, 1994, Andrea filed a motion for the District

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Court to reissue or reconsider the Motion to Modify the Decree,

unaware that John had refiled under Chapter 11.

On May 4, 1994, the Bankruptcy Court lifted the automatic stay

on John's property, permitting Andrea to seek modification of the

Decree of Dissolution in District Court. On May 12, 1994, Andrea

again moved the District Court to renew her Motion to Modify the

Decree of Dissolution. A hearing regarding this motion was held on

July 12, 1994. Both Andrea and John were present and testified

regarding payment of the joint debts.

On July 26, 1994, the District Court issued an Opinion and

Order modifying the Decree of Dissolution and re-allocating various

debts and property. John appeals this Opinion and Order.

Issue 1

Did the District Court err when it modified the parties'

Decree of Dissolution and Marital Settlement Agreement?

The District Court concluded that John's representations that

he would pay certain joint debts of the marital estate if he were

awarded certain property of the marital estate and his subsequent

failure to pay those debts constituted extrinsic fraud. In

addition, the court concluded that if extrinsic fraud is committed

upon the court in violation of a marital settlement agreement, the

power of the court to set aside the agreement is not confined by

the terms of the agreement and the court may order such relief as

is equitable to the non-fraudulent party.

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--.,,
We review a district court's conclusions of law to determine

whether the court's interpretation of the law was correct. In re

Marriage of Barnard (1994), 264 Mont. 103, 106, 870 P.2d 91, 93.

John contends that the District Court erred when it allowed

Andrea's motion for modification to come before the court since it

was filed in excess of the 60-day time limit allowed by Rule

60(b) (3), M.R.Civ.P. Moreover, John argues that the District Court

erred in concluding that his actions constituted extrinsic fraud.

In order to modify or revoke a final property disposition, §

40-4-209, MCA, requires in pertinent part:

(3) The provisions as to property disposition may

not be revoked or modified by a court, except:

(a) upon written consent of the parties; or

(b) if the court finds the existence of conditions

that justify the reopening of a judgment under the laws

of this state. [Emphasis added. 1

Rule 60(b) (3), M.R.Civ.P., allows, upon motion, relief from a

final judgment, order, or proceeding for fraud, whether intrinsic

or extrinsic. However, the motion must be made not more than 60

days after the judgment, order or proceeding was entered. In this

case, Andrea's original motion to modify the decree was not made

until almost eight months after the judgment was entered.

Therefore, Andrea's motion was not timely filed to qualify for

relief under Rule 60(b) (3), M.R.Civ.P.

Nevertheless, the last sentence of Rule 60(b), M.R.Civ.P.,

provides several avenues of relief from a judgment whereby no such

time limitation is imposed. This residual clause of Rule 60(b),

M.R.Civ.P. provides:

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This rule does not limit the power of a court to

entertain an independent action to relieve a party from

a judgment, order, or proceeding, or to grant relief to

a ~defendant not actually personally notified as may be

required by law, or to set aside a judgment for fraud

upon the court.

Thus, the three separate avenues for relief from a judgment

under this clause are: lack of personal notification, fraud upon

the court, or an independent action for extrinsic fraud. See Rule

60(b), M.R.Civ.P.; Salway v. Arkava (1985), 215 Mont. 135, 140, 695

P.2d 1302, 1305. Lack of personal notification is inapplicable to

the present case and will not be addressed herein. Accordingly, we

examine the present case to determine whether sufficient grounds

for relief exist under the residual clause for fraud upon the court

or for an independent action for extrinsic fraud.

Fraud upon the court embraces only that species of fraud which

subverts or attempts to subvert the integrity of the court itself,

or fraud perpetrated by officers of the court so that the judicial

machinery cannot perform in an impartial manner. Filler v.

Richland County (1991), 247 Mont. 285, 289, 806 P.2d 537, 539

(citing Salwav, 695 P.2d at 1306). Fraud upon the court includes

only the most egregious conduct, such as bribery of a judge or

member of the jury; the fabrication of evidence in which an

attorney has been implicated; or the employment of counsel to

influence the court. Filler, 806 P.2d at 539; Salwav, 695 P.2d at

1306. We have repeatedly held that fraud between the parties or

perjury at trial is not fraud upon the court. Wise v. Nirider

(1993), 261 Mont. 310, 316, 862 P.2d 1128, 1132; Traders State Bank

of Poplar v. Mann (1993), 258 Mont. 226, 236, 852 P.2d 604, 610;

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Brown v. Small (1992), 251 Mont. 414, 421, 825 P.2d 1209, 1213;

Salwav, 695 P.2d at 1306. Thus, John's conduct does not rise to a

level which is egregious enough to be characterized as fraud upon

the court.

Courts of general jurisdiction have always possessed the power

to entertain independent, equitable actions to set aside judgments,

fraud being the chief, although not the exclusive, basis for such

an independent action. Salwav, 695 P.Zd at 1305. Montana adheres

to 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). Filler, 806 P.2d 537, 539.

Extrinsic fraud has been defined as some intentional act or

conduct by which the prevailing party has prevented the

unsuccessful party from having a fair submission of the

controversy. Salway, 695 P.2d at 1306 (citing Pilati v. Pilati

(1979), 181 Mont. 182, 193, 592 P.2d 1374, 1380). Extrinsic fraud

is collateral to the matters tried by the court, but does not

include fraud in the matters on which the judgment was rendered.

See Salway, 695 P.2d at 1306 (citing Hall v. Hall (19241, 70 Mont.

460, 467, 226 P. 469, 471.)

The District Court concluded that John had committed extrinsic

fraud by representing that he would pay certain joint debts of the

marital estate and then failing to pay those debts. However,

neither perjured testimony, nor false or fraudulent allegations

used in obtaining a judgment constitute extrinsic fraud. State

Compensation Ins. Fund v. Chapman (1994), 267 Mont. 484, 490, 885

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P.2d 407, 411 (citing Traders State Bank, 852 P.2d at 610). False

or fraudulent representations or concealments made during court

proceedings constitute intrinsic fraud and are not grounds for

reopening a decree or judgment by an independent action. State

Fund -! 885 P.2d at 411; Salwav, 695 P.2d at 1307.

In the past we have wrongfully characterized intrinsic fraud

in marital dissolution cases as either fraud upon the court or

extrinsic fraud and allowed a decree or judgment to be reopened on

that basis. See In re Marriage of Lyman I1988), 233 Mont. 283, 762

P.2d 203 (misrepresentations or concealment of assets); Witbart v.

Witbart (1985), 216 Mont. 178, 701 P.2d 339 (failure to disclose

certain debts owed by parties); In re Marriage of Madden (1984),

211 Mont. 237, 683 P.2d 493 (failure to disclose balloon payment

due on house and value of husband's pension); Pilati v. Pilati

(19791, 181 Mont. 182, 592 P.2d 1374 (failure to make a full and

accurate disclosure of all assets); In re Bad Yellow Hair (1973),

162 Mont. 107, 509 P.2d 9 (misrepresenting facts or concealment of

material facts). To the extent that these cases used this

proposition, they are overruled. Hereafter, marital dissolution

cases will be treated the same as all other cases under Rule 60(b),

M.R.Civ.P.

As a result, a decree or judgment in a marital dissolution

case, as with judgments in other types of cases, may not be set

aside based on a motion or petition claiming intrinsic fraud filed

more than 60 days after it was entered. Rule 60(b) (3); State Fund,

885 P.2d at 411. To allow a motion for intrinsic fraud under the

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residual clause of Rule 60(b), M.R.Civ.P., would negate the intent

of the 60-day time limit of subsection (3) of that rule.

It is evident that John's misrepresentations do not constitute

extrinsic fraud or fraud upon the court and are thus not grounds

for relief under the residual clause of Rule 60(b). Although

grounds may have existed for a motion pursuant to Rule 60(b) (3),

this does not mean that the judgment can now be set aside for the

same reason after the time for post-trial motions has expired.

Accordingly, we conclude that the allegations of fraud relied

upon by Andrea fall short of what is legally required to vacate a

final judgment pursuant to the residual clause of Rule 60(b),

M.R.Civ.P. Therefore, we hold that the District Court erred when

it modified the parties' Decree of Dissolution and Marital

Settlement Agreement and we reverse the District Court on this

issue.

Issue 2

Did the District Court err by not awarding attorney fees to

either party?

The parties' Marital Settlement Agreement, which was

incorporated into the dissolution decree, provided that in the

event either party instituted legal proceedings to enforce, modify

or interpret any provision of the agreement, "the court, as a cost

of suit, shall award reasonable attorney's fee [sic] to the

prevailing party." On the basis of this provision, both John and

Andrea contend that the prevailing party is entitled to reasonable

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attorney fees in this action and that the court erred when it

ordered each party to bear their own costs and attorney fees.

A review of the record reveals that Andrea did not request

attorney fees as a form of relief in her motion for modification.\

Neither did John request attorney fees in his response to Andrea's

motion to modify. The issue of attorney fees was raised for the

first time on appeal of the District Court's order. When the issue

of attorney fees is omitted from the pleadings, and no evidence is

presented on that issue at trial, the issue is outside the purview

of the District Court. In re Marriage of Hill (1994), 265 Mont.

52, 60, 874 P.2d 705, 710 (citing Naftco Leasing Ltd. v. Finalco,

Inc. (1992), 254 Mont. 89, 835 P.2d 728). Accordingly, the

District Court did not err in failing to award attorney fees to

either party and, instead, ordering each party to pay their own

costs and attorney fees.

Affirmed in part and reversed in part.
September 21, 1995

CERTIFICATE OF SERVICE

I hereby certify that the following certified order was sent by United States mail, prepaid, to the

following named:

MARK E. JONES

Attorney at Law

P.O. Box 8923

Missoula, MT 598074293

P. Mars Scott, P.C.

MULRONEY, DELANEY & SCOTT

P.O. Box 8228

Missoula, MT 59807

ED SMITH

CLERK OF THE SUPREME COURT

STATE OF MONTANA

BY: (AT

Deputy u