No 

No. 98-071

293 Mont. 500

977 P. 2d 322

IN THE SUPREME COURT OF THE STATE OF MONTANA

1999 MT 62

IN RE THE MARRIAGE OF

STEVE MOSS,

Respondent and Appellant, 

and

JULIE MOSS, 

Petitioner and Respondent.

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APPEAL FROM: District Court of the Eighteenth Judicial District,

In and for the County of Gallatin,

The Honorable Thomas A. Olson, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Lynda S. White, Sedivy, Bennet & White, Bozeman, Montana

For Respondent:

Kent M. Kasting, Kasting, Combs & Kauffman, Bozeman, Montana

Submitted on Briefs: September 3, 1998

Decided: April 1, 1999

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Filed:

__________________________________________

Clerk

Justice James C. Nelson delivered the Opinion of the Court.

¶1. Steve Moss (Steve) appeals and Julie Moss (Julie) cross-appeals from the 

Findings of Fact and Conclusions of Law which the Eighteenth Judicial District 

Court, Gallatin County, issued on May 21, 1997, and from the Decree of Dissolution 

which the court issued on November 15, 1997. Julie also requests her attorney fees, 

mediation fees and costs for defending Steve's appeal. We reverse and remand for 

further proceedings consistent with this opinion.

¶2. We address the following issues on appeal:

¶3. 1. Did the District Court err in including one-half of the value of the Spaulding 

Bridge Property in the marital estate?

¶4. 2. Did the District Court err in not imposing a constructive trust on the 

Spaulding Bridge Property?

¶5. 3. Did the District Court err in not distributing an insurance check to either Steve 

or Julie?

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¶6. 4. Should this Court require Steve to pay Julie's attorney fees, mediation fees and 

costs for this appeal?

Factual and Procedural Background

¶7. Steve and Julie married on May 28, 1977. They separated on January 4, 1995. 

Nine months later, on September 14, 1995, Julie filed a petition for dissolution of 

marriage. On March 8, 1996, Julie moved the court to allow her to amend her 

petition for dissolution to add Don Moss (Don) and Shirley Moss (Shirley), Steve's 

parents, as additional parties to the case and to include a cause of action to quiet title 

in Steve and Julie's names to a 20 acre tract known as the Spaulding Bridge 

Property. The District Court granted Julie's motion on March 27, 1996.

¶8. On August 23, 1996, Julie filed an amended petition for dissolution wherein she 

alleged that Don and Shirley advanced her and Steve the money to pay for the 

Spaulding Bridge Property and that she and Steve repaid the advance. Thus, even 

though Don and Shirley held title to the Spaulding Bridge Property, Julie contended 

that she and Steve owned it and, consequently, that it should be included in the 

marital estate. 

¶9. On September 30, 1996, Don and Shirley filed a response to Julie's amended 

petition wherein they alleged that neither Steve nor Julie had an ownership interest 

in the Spaulding Bridge Property. Don and Shirley also requested the court to quiet 

title to the Spaulding Bridge Property in their names.

¶10. The District Court held a bench trial on November 14 and 15, 1996. On May 21, 

1997, the court issued its Findings of Fact, Conclusions of Law and Order wherein it 

found that Don and Shirley advanced Steve and Julie the money to buy the 

Spaulding Bridge Property and that Steve repaid Don and Shirley. Notwithstanding, 

the court found that Steve's interest in the Spaulding Bridge Property is equal to onehalf of its value. As a result, the court included one-half of the value of the Spaulding 

Bridge Property in the marital estate. 

¶11. The District Court also heard testimony at the trial on this matter regarding a 

$1,400 check which Julie's and Steve's homeowners insurance carrier paid them for 

damage to the siding of their garage which occurred when Julie and Steve were 

separated. The court, however, did not make any findings regarding the check nor 

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did the court apportion it to either Julie or Steve.

¶12. Steve appeals and Julie cross-appeals from the court's decision to include onehalf of the value of the Spaulding Bridge Property in the marital estate and from the 

court's failure to distribute the $1,400 insurance check. Julie also requests her 

attorney fees, mediation fees and costs for defending Steve's appeal.

Standard of Review

¶13. This Court reviews a district court's conclusions of law to determine whether 

they are correct. In re Marriage of Pfeifer, 1998 MT 228, ¶ 9, 965 P.2d 895, ¶ 9, 55 St.

Rep. 953, ¶ 9 (citing Ash Grove Cement Co. v. Jefferson County (1997), 283 Mont. 486, 

491-92, 943 P.2d 85, 89). 

¶14. This Court reviews a district court's findings of fact in a distribution of marital 

property case to determine whether the court's findings are clearly erroneous. 

Kovarik v. Kovarik, 1998 MT 33, ¶ 20, 954 P.2d 1147, ¶ 20, 55 St.Rep. 117, ¶ 20. See 

also Rule 52(a), M.R.Civ.P. A finding is clearly erroneous if it is not supported by 

substantial evidence, if the trial court misapprehended the effect of the evidence, or if 

our review of the record convinces us that the district court made a mistake. Kovarik, 

¶ 20 (citing In re Marriage of Stufft (1996), 276 Mont. 454, 459, 916 P.2d 767, 770). 

¶15. If a district court's findings are not clearly erroneous, we review the court's 

distribution of the marital estate to determine whether the court abused its 

discretion. Kovarik, ¶ 21 (citing Marriage of Stufft, 276 Mont. at 459, 916 P.2d at 770). 

To determine whether a district court abused its discretion, we review the case to 

ascertain whether the court "acted arbitrarily without employment of conscientious 

judgment or exceeded the bounds of reason resulting in substantial injustice."

Kovarik, ¶ 21 (quoting In re Marriage of Wessel (1986), 220 Mont. 326, 333, 715 P.2d 

45, 50).

Issue 1.

¶16. Did the District Court err in including one-half of the value of the Spaulding 

Bridge Property in the marital estate?

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¶17. Julie argues that the District Court's finding that Steve owned a one-half 

interest in the Spaulding Bridge Property is clearly erroneous because it is not 

supported by substantial evidence. Steve argues that the District Court erred in 

including one-half of the value of the Spaulding Bridge Property in the marital estate 

because Don and Shirley own it.

¶18. Although it is undisputed that Don and Shirley hold title to the Spaulding 

Bridge Property, the testimony at the bench trial on this matter was conflicting as to 

who paid for the property. Julie testified that Steve purchased the property for them 

in April 1985 with money that Don and Shirley loaned them. Julie explained that she 

and Steve, at that point in time, planned to build a house on the property. Julie 

testified that Steve told her that he had paid off the loan and that she remembered 

him "feeling good about that." Julie also remembered a conversation which occurred 

at the Taco Time restaurant in Belgrade wherein she said, "now that we have the 

property paid for, Steve, we should probably have it put in our name." Julie testified 

that Steve replied, "Yeah, I gotta do that one of these days."

¶19. Julie's parents also testified that Steve told them that he bought the Spaulding 

Bridge Property. Julie's parents also recalled that Steve stated at Taco Time that he 

agreed that title should be transferred into his and Julie's names. 

¶20. Steve, in contrast, testified that he told his parents about the property and that 

they purchased it. Steve stated that his parents owned the property and denied that 

he paid his parents for the property. Similarly, Don testified that he and Shirley own 

the property. Shirley, likewise, stated that she and Don bought the property as an 

investment and denied that the property was purchased for Julie and Steve. 

¶21. The District Court specifically found Julie's and her parent's testimony credible. 

In contrast, the court specifically found Steve's, Don's and Shirley's testimony not 

credible. Therefore, the court found that "Don and Shirley advanced the money to 

Steve and Julie for the purchase of an interest in the Spaulding Bridge property" and 

that "Steve repaid his parents in cash." The court then found that Steve had an 

interest in one-half of the value of the Spaulding Bridge Property and thus, in effect, 

that Steve jointly owned the property with Don and Shirley.

¶22. Having reviewed the record, however, we conclude that there is no evidence to 

support the District Court's finding that Steve had an ownership interest in only onefile:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/98-071_(04-01-99)_Opinion.htm (6 of 14)4/11/2007 9:08:44 AM
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half of the value of the property. The trial testimony left no room for the District 

Court to take the middle ground and find, in effect, that Steve jointly owned the 

property with Don and Shirley. Thus, since there is not substantial evidence to 

support the court's finding that Steve had an ownership interest in only one-half of 

the value of the Spaulding Bridge Property, the court's finding is clearly erroneous 

and we therefore reverse that finding. 

¶23. Consequently, since § 40-4-202, MCA, states that the court shall "equitably 

apportion between the parties the property and assets belonging to either or 

both . . . ," the District Court erred in including only one-half the value of the 

Spaulding Bridge Property in the marital estate on the grounds that Steve owned a 

one-half interest in the property. Accordingly, we reverse the District Court's 

decision to include only one-half of the value of the Spaulding Bridge Property in the 

marital estate on the grounds that Steve owned a one-half interest in the property. 

Issue 2.

¶24. Did the District Court err in not imposing a constructive trust on the Spaulding 

Bridge Property?

¶25. As noted above, it is undisputed that Don and Shirley hold title to the Spaulding 

Bridge Property. Julie, however, argues that the District Court should have imposed 

a constructive trust on the property, in favor of her and Steve, and, consequently, 

should have included the entire value of the property in the marital estate.(1) Steve 

argues that the District Court correctly concluded that a constructive trust should 

not be imposed in the instant case because there is no evidence of fraud or other 

wrongful acts to support such a remedy. 

¶26. Steve cites In re Marriage of Malquist (1988), 234 Mont. 419, 763 P.2d 1116 and 

In re Marriage of Owen (1990), 244 Mont. 306, 797 P.2d 226, in support of his 

argument that there is no basis to impose a constructive trust in the instant case 

because the record does not contain any evidence of fraud or wrongful acts. In 

Marriage of Malquist, the wife asserted that the family home was either part of a 

voluntary trust or that the district court should have imposed either a constructive 

trust or a resulting trust on the property. This Court refused to address her 

argument that a constructive trust should be imposed because the record was 

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"virtually silent as to any such fraudulent or wrongful acts which would justify the 

implication of a constructive trust." Marriage of Malquist, 234 Mont. at 422, 763 P.2d 

at 1118.

¶27. Similarly, in Marriage of Owen, the wife argued that a constructive trust should 

have been imposed on a house purchased by her husband's parents. The wife pointed 

out that she and her husband selected the house, handled the negotiations for its 

purchase and paid $1,000 of the $15,000 down payment. Even so, we rejected the 

wife's claim that she and her husband had an ownership interest in the house because 

her husband's parents not only held title to the property but also paid the mortgage, 

entered into a written lease agreement with their son and his wife, sent them an 

eviction notice for failing to pay rent, and discussed selling the house with a real 

estate agent. Marriage of Owen, 244 Mont. at 309, 797 P.2d at 228. Moreover, we 

stated that we would not address the wife's argument that a constructive trust should 

have been imposed because "the record [was] silent as to any wrongful or fraudulent 

acts requiring such a remedy." Marriage of Owen, 244 Mont. at 309, 797 P.2d at 228. 

¶28. The rule requiring fraud or other wrongful acts to impose a constructive trust 

on property can be traced to a longstanding statute which stated:

One who gains a thing by fraud, accident, mistake, undue influence, the violation of a 

trust, or other wrongful act is, unless he has some other or better right thereto, an 

involuntary trustee of the thing gained for the benefit of the person who would otherwise 

have had it.

Section 72-20-111, MCA (1987) (repealed 1989). See also Meagher v. Harrington (1927), 

78 Mont. 457, 470, 254 P. 432, 435 (citing § 7887, RCM (1921)) and Platts v. Platts

(1959), 134 Mont. 474, 480, 334 P.2d 722, 727 (citing § 86-210, RCM (1947)). 

¶29. However, the 1989 Montana Legislature repealed § 72-20-111, MCA (1987), 

along with several other statutes concerning trusts, and enacted the Trust Code, 

codified at Title 72, Chapters 33-36 of the Montana Code Annotated. Section 72-33-

104, MCA, provides:

Other than 72-33-216 through 72-33-220, nothing in chapters 33 through 36 affects the 

law relating to constructive or resulting trusts. Section 72-33-219, MCA, however, 

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provides:

A constructive trust arises when a person holding title to property is subject to an equitable 

duty to convey it to another on the ground that the person holding title would be unjustly 

enriched if he were permitted to retain it.

Hence, § 72-33-219, MCA, affected the law relating to constructive trusts by making 

constructive trusts dependent upon, and related to, the equitable principle of unjust 

enrichment. See Lawrence v. Clepper (1993), 263 Mont. 45, 53, 865 P.2d 1150, 1156. 

More to the point, § 72-33-219, MCA, by its plain language, does not require a party 

seeking to impose a constructive trust to prove that the party who holds title to the 

property obtained title by fraud or other wrongful acts. Rather, a person seeking to impose 

a constructive trust on property must only prove that the title holder would be unjustly 

enriched if they were permitted to retain title. Thus, as stated in the comments to the 

Restatement section from which § 72-33-219, MCA, was drawn:

A constructive trust is imposed not because of the intention of the parties but because the 

person holding the title to property would profit by a wrong or would be unjustly enriched 

if he were permitted to keep the property. 

Restatement of the Law of Restitution, § 160, Comment b (1937) (emphasis added). See 

also George T. Bogert, Trusts § 77 at 287 (6th ed. 1987) (stating "[w]henever equity finds 

that one has title to property, real or personal, originally acquired by any kind of 

wrongdoing or, although innocently obtained, now held under such circumstances that 

retention of the title will result in unjust enrichment, equity may declare such title-holder 

to be the trustee of a trust constructed by it for the purpose of working out justice, which is 

merely a convenient means of remedying a wrong.") (emphasis added). Therefore, 

although a constructive trust may be imposed because the title holder obtained title by 

fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, a 

constructive trust may also be imposed pursuant to § 72-33-219, MCA, in cases where a 

title holder innocently obtained title to property but would be unjustly enriched if they 

were allowed to retain the title. 

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¶30. Notwithstanding, we recognize that this Court has stated in cases decided after 

the effective date of the Trust Code that fraud, accident, mistake, undue influence, 

the violation of a trust, or other wrongful acts are the bases upon which a 

constructive trust is found. See, for example, Hilliard v. Hilliard (1992), 255 Mont. 

487, 489, 844 P.2d 54, 55 (citing Gitto v. Gitto (1989), 239 Mont. 47, 778 P.2d 906 and 

Howard v. Dalio (1991), 249 Mont. 316, 815 P.2d 1150). However, based on the 

foregoing, we conclude that, although fraud, accident, mistake, undue influence, the 

violation of a trust, or other wrongful acts may be the basis for imposing a 

constructive trust, these factors are not necessarily a prerequisite to imposing a 

constructive trust pursuant to § 72-33-219, MCA. Consequently, Hilliard, 255 Mont. 

487, 844 P.2d 54; Howard, 249 Mont. 316, 815 P.2d 1150; Marriage of Owen, 244 

Mont. 306, 797 P.2d 226; and any other Montana case decided after the effective date 

of the Trust Code which requires fraud, accident, mistake, undue influence, the 

violation of a trust, or other wrongful acts as the only basis on which to impose a 

constructive trust, are hereby clarified to that extent. Moreover, cases decided before 

the effective date of the Trust Code, such as Marriage of Malquist, are inapplicable to 

constructive trust cases under the Trust Code to the extent that they require fraud, 

accident, mistake, undue influence, the violation of a trust, or other wrongful acts as 

the only basis on which to impose a constructive trust.

¶31. In the instant case, Julie argues, and we agree, that Don and Shirley would be 

unjustly enriched if they retained title to the Spaulding Bridge Property even though 

they hold title to the property and have paid the taxes and insurance on the property. 

The District Court found that Don and Shirley advanced Steve and Julie the 

purchase price of the property and that Steve paid off this debt. Moreover, the court 

found that Steve spent more than $4,000 of marital funds to drill a well on the 

property and that Steve and Julie obtained the water rights to the property. The 

court also found that Steve and Julie built a barn on the property so that they would 

have a place to live while they built a house on the property and that Steve paid for 

the electrical and building permits necessary to construct the barn. Finally, the court 

found that Steve paid for the utility bills on the property and that he was the contact 

person for the property owner's association. Steve has not appealed from these 

findings of fact, and thus they constitute established facts. St. John v. Missoula Elec. 

Co-op., Inc. (1997), 282 Mont. 315, 320, 938 P.2d 586, 589.

¶32. Moreover, testimony which the District Court found credible shows that the 

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parties treated the property as though Steve and Julie owned it. For example, David 

Gannett (Gannett), who is not related to either Julie or Steve, testified that he called 

Don in an effort to set up a property owner's association. Gannett testified that Don 

stated that he was only the title holder for "convenience purposes," that Steve was 

handling the property, and, therefore, that Gannett should contact Steve regarding 

any meetings. Similarly, Jeannette Carlson (Carlson), who also is not related to 

either Julie or Steve, testified that she approached Don at his shop to talk about the 

property owner's association. Carlson testified that Don told her that his name was 

on the title "just to help [Steve and Julie] buy the property" and that she should talk 

to Steve about matters concerning the property. Carlson also recounted that she 

asked Steve if he was interested in selling the property and that Steve quoted her a 

price. Additionally, the court found that Julie's family helped build the barn on the 

property, planted trees on the property and that Julie's father helped Steve put up a 

fence on the property. The court noted that Julie's family testified that they helped 

with the improvements because they believed that the property belonged to Steve and 

Julie.

¶33. Consequently, based on the District Court's findings that Steve repaid his 

parents the purchase price of the property, that Steve paid for improvements on the 

property and that the parties acted as though Steve and Julie owned it, we hold that 

Don and Shirley would be unjustly enriched if they retained title to the Spaulding 

Bridge Property. Thus, the District Court erred in not imposing a constructive trust 

on the property pursuant to § 72-33-219, MCA. 

¶34. Finally, we must address Steve's arguments that the statute of frauds and the 

statute of limitations for agreements not in writing bar any claim that Julie has to the 

Spaulding Bridge Property. Section 70-20-101, MCA, provides:

No estate or interest in real property, other than an estate at will or for a term not 

exceeding 1 year can be created, granted, assigned, surrendered, or declared otherwise 

than by operation of law or a conveyance or other instrument in writing, subscribed by the 

party creating, granting, assigning, surrendering, or declaring it or by his lawful agent 

thereunto authorized by writing.

(Emphasis added.) Constructive trusts arise by operation of law, § 72-33-220, MCA, thus, 

§ 70-20-101, MCA, does not bar Julie's claim to the Spaulding Bridge Property. See also § 

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70-20-102(2), MCA (stating that § 70-20-101, MCA, must not be construed to "prevent 

any trust from arising . . . by . . . operation of law."). Moreover, since Julie is not 

attempting to directly enforce a verbal agreement, § 27-2-202(2), MCA, which requires 

that an action based upon a contract, account, or promise not founded on an instrument in 

writing be brought within five years, is not applicable in the instant case. 

¶35. Based on the foregoing, we reverse the District Court's decision not to impose a 

constructive trust on the Spaulding Bridge Property and remand the instant case 

with instructions to impose a constructive trust on the property in favor of Steve and 

Julie and, consequently, to impose an equitable duty on Don and Shirley to convey 

the property to Julie and Steve and, thereafter, to include it in the marital estate and 

equitably apportion the full value of the property pursuant to § 40-4-202, MCA.

Issue 3.

¶36. Did the District Court err in not distributing an insurance check to either Steve or 

Julie?

¶37. Steve and Julie agree that the District Court erred in failing to apportion a 

$1,400 insurance check which was issued to them jointly for damage to the siding on 

their garage which occurred after they separated. Steve argues that, since he 

repaired the siding, this Court should distribute the check to him as reimbursement 

for his labor and expenses. Julie requests that we remand this issue to the District 

Court with instructions to divide the check equally between Steve and Julie.

¶38. However, since the District Court made no findings or conclusions regarding the 

$1,400 check, we have no basis to instruct the District Court on how to apportion it. 

Cf. St. John, 282 Mont. at 321, 938 P.2d at 589 (citing Sacco v. High Country 

Independent Press (1995), 271 Mont. 209, 239, 896 P.2d 411, 429 and Bauer v. Cook

(1979), 182 Mont. 221, 228, 596 P.2d 200, 204) (ruling that this Court had no basis for 

determining whether a claim for severe emotional distress had merit because the trial 

court made no findings and conclusions regarding whether the evidence supported 

such a claim). Accordingly, we remand this case to the District Court with 

instructions to enter findings of fact regarding the $1,400 insurance check and to 

equitably apportion it pursuant to § 40-4-202, MCA.

Issue 4.

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¶39. Should this Court require Steve to pay Julie's attorney fees, mediation fees and 

costs for this appeal?

¶40. Julie argues that we should award her attorney fees, mediation fees and costs for 

defending this appeal pursuant to § 40-4-110(1), MCA, which provides:

The court from time to time, after considering the financial resources of both parties, may 

order a party to pay a reasonable amount for the cost to the other party of maintaining or 

defending any proceeding under chapters 1 and 4 and for professional fees, including sums 

for legal and professional services rendered and costs incurred prior to the commencement 

of the proceeding or after entry of judgment. The court may order that the amount be paid 

directly to the professional, who may enforce the order in the professional's name.

Pursuant to § 40-4-110, MCA, this Court may award attorney fees incurred in defending 

an appeal. In re Marriage of Dorsey (1997), 284 Mont. 392, 397, 945 P.2d 430, 433. See 

also In re Marriage of Conkey (1995), 270 Mont. 200, 207-08, 890 P.2d 1291, 1295. 

Section 40-4-110, MCA, requires the court to consider the financial resources of both 

parties. We cannot consider the financial resources of the parties at this stage of the instant 

case, however, because the complete marital estate has not been equitably apportioned by 

the District Court. Moreover, we note that the trial court is in a better position to rule on 

the matter of attorney fees and that Julie can raise her claim for attorney fees on remand. 

Accordingly, we decline to award Julie her attorney fees, mediation fees and costs 

pursuant to § 40-4-110, MCA.

¶41. Julie also argues that we should award her attorney fees, mediation fees and 

costs pursuant to Rule 32, M.R.App.P., on the grounds that Steve's appeal was taken 

without substantial or reasonable grounds. Rule 32, M.R.App.P., provides:

If the supreme court is satisfied from the record and the presentation of the appeal in a 

civil case that the same was taken without substantial or reasonable grounds, such 

damages may be assessed on determination thereof as under the circumstances are deemed 

proper. 

As a general rule, this Court will not impose sanctions pursuant to Rule 32, M.R.Civ.P., 

unless the appeal is entirely unfounded and intended to cause delay or unless counsel's 

actions otherwise constitute an abuse of the judicial system. Bi-Lo Foods, Inc. v. Alpine 

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Bank, Clifton, 1998 MT 40, ¶ 36, 287 Mont. 367, ¶ 36, 955 P.2d 154, ¶ 36 (citing CNA 

Ins. Companies v. Dunn (1995), 273 Mont. 295, 301, 902 P.2d 1014, 1018 and Bickler v. 

The Racquet Club Heights Assoc. (1993), 258 Mont. 19, 25, 850 P.2d 967, 971). Although 

we did not rule in Steve's favor nor grant him the relief he requested, the issues he raised 

had merit and were not unreasonable. Therefore, we deny Julie's request for attorney fees, 

mediation fees and costs pursuant to Rule 32, M.R.App.P.

¶42. Reversed and remanded for further proceedings consistent with this opinion.

/S/ JAMES C. NELSON

We Concur:

/S/ KARLA M. GRAY

/S/ JIM REGNIER 

/S/ TERRY N. TRIEWEILER

/S/ W. WILLIAM LEAPHART

1. 1 Julie also argues for the first time in her reply brief that, even if a constructive trust is not imposed in the 

instant case, a resulting trust should be imposed. This Court, however, will not address an issue raised for the first 

time on appeal. Unified Industries, Inc. v. Easley, 1998 MT 145, ¶ 28, 961 P.2d 100, ¶ 28, 55 St. Rep. 574, ¶ 28 

(citation omitted). Moreover, this Court will not address an issue raised for the first time in a reply brief. Unified 

Industries, ¶ 28 (citation omitted). Accordingly, we will not address this argument. 

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