No. 14612 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1979 

VOGA HOPPER, 

Plaintiff and Respondent, 

-vsEDWIN S. HOPPER, 

Defendant and Appellant. 

Appeal from: District Court of the Eighteenth Judicial District, 

Honorable Jack Shanstrom, Judge presiding. 

Counsel of Record: 

For Appellant: 

Hoyt and Lewis, Great Falls, Montana 

For Respondent: 

Lyman H. Bennett, 111, Bozeman, Montana 

Submitted on briefs: July 5, 1979 

Decided: SEF L ; 1979 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

 his is an appeal from a final judgment of the District 

Court of the Eighteenth Judicial District, dated September 

19, 1978. The District Court upheld its previous denial of 

appellant Edwin Hopper's alternative motions to vacate and 

set aside a property settlement and support agreement incorporated in the July 19, 1976 decree dissolving the marriage 

of Edwin and Voga Hopper. This Court ordered the matter 

submitted on the briefs and decides the case without oral 

argument. 

The parties to this appeal were married in the State of 

Idaho in 1969. In the fall of 1975 the parties, residing in 

Bozeman, Montana, decided to obtain a dissolution of the 

marriage and orally agreed between themselves to a division 

of their property. Out of total assets of a value of approximately $200,000, virtually all of which had been contributed 

to the marriage by Edwin, Voga was to receive $50,000 cash 

plus an automobile and certain furnishings from the house. 

At the time Edwin had been employed for some 14 years as the 

exclusive sales representative for Tony Lama Boot Company 

for a territory encompassing several western states, a job 

which required extensive traveling. Shortly after Christmas, Edwin left Bozeman in connection with his business, and 

Voga, who was not employed outside the family home, consulted an attorney regarding the dissolution. Edwin testified that after this consultation, Voga increased her settlement demands to $85,000 cash plus the other property, 

Subsequently, Edwin and Voga together met with her attorney 

at which time the parties were advised that if they could 

agree upon a property settlement and an uncontested dissolu- 
tion, they would save on expenses for attorney fees. It was 

decided that her attorney would represent both parties in 

the dissolution proceedings. 

Edwin and Voga thereafter negotiated the terms of a 

property agreement and consulted with Edwin's financial 

advisor, Mr. Terry Lynn, regarding the tax consequences of 

their proposed settlement. Their attorney drafted a written 

property settlement and support agreement to reflect the 

agreement reached by the parties. The agreement was reviewed 

and slightly modified by Terry Lynn and then returned to the 

attorney who prepared the final draft. Edwin signed this 

final draft without reading it. 

A petition for dissolution of marriage was filed by 

Voga in the District Court of the Eighteenth Judicial District on April 9, 1976, and a summons served on Edwin April 

16, 1976. Edwin failed to appear at trial, and his default 

was entered by the District Court in a July 19, 1976, decree 

granting the dissolution and incorporating the terms of the 

property settlement and support agreement. The District 

Court made the following finding of fact: 

"IX. That the parties to this action have reached 

a property settlement and support agreement and 

filed the same to be incorporated in this Decree, 

and the same is not unconscionable." 

Under the terms of this property settlement and support 

agreement, Voga was to receive various assets of the marriage. Furthermore, Edwin was obligated to pay her the sum 

of $64,632 amortized over a period of 121 months in monthly 

installments of $850, with interest at 10 percent annually. 

He was also required to provide security for the payment of 

this obligation. 

The District Court awarded the attorney $2500 as reasonable attorney fees and made a further finding of fact that: 
"IV. The plaintiff is unemployed and is not 

trained for any employment other than the keeping of the records of the parties with respect 

to property of the parties . . ." 

Somewhat at odds with this finding is the fact that Voga 

began work as a receptionist in a dentist's office at a 

salary of $450 per month the day following the date of the 

decree, a position she acknowledged she had obtained a short 

time prior to the dissolution of marriage. 

Edwin first obtained separate counsel in November 1976 

after the law firm that represented the parties in their 

dissolution attempted to execute on his property to collect 

attorney fees awarded in the decree. This dispute was 

settled out of court. Edwin regularly made the designated 

monthly payments to his former spouse and nothing further 

was done by either party in connection with the decree until 

September 1, 1977, when Voga filed an affidavit charging 

Edwin with contempt of court for failure to provide security 

for payment of the sum required to be paid to her under the 

property settlement agreement and decree. An order to show 

cause why he should not be held in contempt was issued by 

the Honorable W. W. Lessley on September 6, 1977. The 

Honorable Jack D. Shanstrom assumed jurisdiction on September 13, 1977, pursuant to an order granting Edwin's motion 

for disqualification. On November 7, 1977, Edwin filed an 

answer to the order to show cause and a motion for relief 

from the July 19, 1976 decree, together with an affidavit 

alleging that the terms of the property settlement and 

support agreement incorporated into the decree were unconscionable. 

Following several continuances, a hearing was held on 

the order to show cause on December 9, 1977. During the 
examination of Voga Hopper as an adverse witness, counsel 

for appellant initiated an inquiry touching upon elements of 

fraud allegedly committed upon the District Court at the 

time of the dissolution proceeding. This line of questioning was objected to by counsel for Voga on the grounds that 

no specific allegations of fraud had been previously alleged 

in any of the pleadings. Following oral argument by counsel, 

the District Court continued the hearing allowing Edwin to 

file additional pleadings setting forth specific allegations 

of fraud. 

On April 12, 1978, Edwin, appellant herein, filed 

alternative motions pursuant to Rule 60(b), M.R.Civ.P. 

These motions requested the District Court to set aside that 

portion of the decree of dissolution relating to the property 

settlement and support agreement on grounds of fraud on the 

court, fraud in the inducement, and change of circumstances 

rendering the provisions unconscionable. Respondent's 

attorney then filed a motion asking the District Court to 

overrule appellant's motions for the reason that appellant's 

motions were not filed within 60 days after judgment as 

required by Rule 60(b), M.R.Civ.P., and for the further 

reason that no hearing was held on appellant's motions 

within ten days after the filing of the alternative motions, 

as is required by Rule 60 (c) and Rule 59 (d) , M.R.Civ.P. 

Respondent's motion also requested a determination of the 

issues before the court. 

The District Court issued an order on July 15, 1978, 

denying appellant's alternative motions. On August 4, 1978, 

appellant's attorney filed a motion, supported by affidavit, 

to vacate the order or judgment as there had been no hearing 

on the matter. The motion to vacate was then set for a 
hearing on the merits and the hearing was held on August 31, 

1978. At the commencement of this hearing, counsel for 

respondent contended that the issue of fraud was not properly 

before the District Court because the court lacked jurisdiction to hear the issue by virtue of Rule 60(b), M.R.Civ.P. 

The District Court permitted the testimony, as witnesses had 

been brought in from outside the area, and counsel for 

respondent participated in the hearing, preserving his 

jurisdictional challenge. Thereafter, on September 19, 

1978, the District Court issued findings of fact and conclusions of law as proposed by counsel for respondent. Edwin 

Hopper appeals from these findings of fact and conclusions 

of law upholding the denial of his alternative motions to 

vacate the property settlement provisions of the decree of 

dissolution. 

The issues presented may be summarized as follows: 

1. Is paragraph I1 of the "property settlement and 

support agreement" a provision for the disposition of property or a provision for the payment of maintenance and 

support? 

2. Did the District Court have jurisdiction to consider whether fraud had been committed upon the court? 

3. Was the District Court's conclusion that no fraud 

had been committed upon the court supported by substantial 

evidence and the law? 

4. Did the District Court have jurisdiction to consider whether fraud had been committed upon the appellant? 

5. Did the ~istrict Court have jurisdiction to determine the conscionability of the provisions of the property 

settlement and support agreement? 
The parties executed a written separation agreement 

which was incorporated into the decree of dissolution. 

Appellant contends that paragraph I1 of this instrument, set 

forth below, is a provision for the maintenance of his 

former spouse. Respondent argues that the provision conternplates a distribution of property. The agreement provides 

in pertinent part: 

"Additionally, in full and final settlement of 

the Second Party's obligation to support and maintain the First Party, the Second Party shall pay 

to the First Party or her designated beneficiary, 

the sum of Sixty Four Thousand Six Hundred Thirty 

Two and no/100 Dollars ($64,632.00) to be amortized over a period of one hundred twenty one 

(121) months, bearing interest at the rate of ten 

percent (10%) per annum and payable in monthly 

installments of Eight Hundred Fifty and no/100 

Dollars ($850.00)." (Emphasis added.) 

Appellant argues that the language employed by the 

parties governs, so that the payments, as designated, are to 

be made "in full and final settlement of the Second Party's 

obligation to support -- and maintain the First Party . . ." 

Furthermore, appellant contends that if this language is 

ambiguous, it should be construed most strongly against 

respondent as the drafting party. 

While we agree that the language employed is ambiguous 

when read in light of the entire agreement, this language 

was drafted in final form by counsel for both parties. We 

agree with respondent that this language is in substance a 

provision for the distribution of property, notwithstanding 

the fact that it is couched in terms of support and maintenance. In a case decided prior to the enactment of the 

Uniform Marriage -and Divorce Act in this state, the wife 

gave up the right to any future support, relinquished claims 

against property owned by the husband, and agreed to assume 
some of the husband's liabilities as consideration for 

payments of $750 a month for nine years. We held that: 

"In the property settlement agreement, the payments to the wife for nine years were labeled as 

'alimonyt, but, as is apparent from the agreement, 

the payments were not in fact alimony per se, and 

the use of the term 'alimony' was only a label." 

Washington v. Washington (1973), 162 Mont. 349, 

354, 512 P.2d 1300. 

See also, blovius v. Movius (1974), 163 Mont. 463, 517 ~.2d 

Under the principles expressed in Washington, this 

Court will look past mere labels to the substance of the 

partiest agreement to determine whether particular provisions are maintenance payments to the former spouse or part 

of a property settlement. This rationale has been followed 

in a recent case decided under the Uniform Marriage and 

Divorce Act where the wife relinquished her right to the 

family residence in consideration for payments, labeled 

alimony, which were held to be part of the property settlement. In re Marriage of Reilly (1978), - Mont . , 577 

The present case involves a provision for the payment 

of a lump sum, bearing interest, over a period of time, 

payable to the wife or to her designated beneficiary. The 

husband is required to provide security for payment of the 

principal and the sum of the unpaid balance becomes immediately due and payable upon his death or permanent disability. 

The agreement was drafted with the purpose of making the 

payments qualify as periodic payments for income tax purposes. The wife released all claims to any other property 

of the parties. Under the foregoing circumstances, it is 

clear that the paragraph in question is a provision for the 

distribution of property, rather than a provision for maintenance or support. 
Turning to the second issue, we conclude that it was 

within the District Court's jurisdiction to determine whether fraud had been committed upon the court. The Uniform 

Marriage and Divorce Act, section 40-4-208(1) MCA, provides 

pertinent part : 

"(b) . . . The provisions as to property disposition may not be revoked or modified by a court, 

except: 

"(ii) if the court finds the existence of conditions that justify the reopening of a judgment 

under the laws of this state." 

Rule 60(b), M.R.Civ.P., states that fraud is adequate 

grounds for granting relief from a judgment or order: 

"On motion and upon such terms as are just, the 

court may relieve a party or his legal representative from a final judgment, order, or proceeding 

for the following reasons: . . . (3) fraud (whether heretofore denominated intrinsic or extrinsic), 

misrepresentation, or other misconduct of an adverse party . . . The motion shall be made within 

a reasonable time, and for reasons (1) , (2) and (3 1 

when a defendant has been personally served . . . not more than 60 days after the judgment, order 

or proceeding was entered or taken . . . 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 set 

aside a judgment for fraud upon the court." 

Respondent contends that the District Court lacked jurisdiction to rule on appellant's motion because he failed to 

comply with the 60-day time limitation set forth in Rule 

60 (b) , M.R.Civ. P. The last sentence of Rule 60 (b) forecloses any possibility that the time limitations for making 

a motion under the Rule have any application where fraud has 

been committed upon the court: "This rule does not limit 

the power of a court . . . to set aside a judgment for fraud 

upon the court. " 

The law in this state is settled: 
"The power of the court to set aside a judgment 

on the basis of fraud upon the court is inherent 

and independent of statute, and the timeliness 

of proceedings to set aside a prior judgment so 

obtained is not subject to the six months time 

limitation in Rule 60(b), M.R.Civ.P., but must 

ultimately depend upon equitable principles and 

the sound discretion of the court." In re Julia 

Ann Bad Yellow Hair (1973), 162 Mont. 107, 111, 

509 P.2d 9, 12. 

In Selway v. Burns (1967), 150 Mont. 1, 429 P.2d 640, 645, a 

case involving fraud committed upon the court, this Court 

stated: 

"It was also argued that Mrs. Suthard's motion was 

not timely. If this argument is based on the requirements of Rule 60(b), it cannot be accepted 

because the power invoked by the court in this 

matter does not depend on statute." 

The only limitation that has been placed upon the 

exercise of this power is that the investigating court must 

observe the usual safeguards of the adversary process by 

granting notice to affected persons and by conducting a fair 

hearing on the existence of the fraud. Selway v. Burns, 

supra, 429 P.2d at 644. See also Pilati v. Pilati (19791, 

Mont. , 592 P.2d 1374, 36 St.Rep. 619. In light 

of the foregoing, we hold that the question of whether fraud 

was practiced upon the court was properly before the District Court. 

We now turn to the question of whether the District 

' 

Court holding was supported by substantial evidence and by 

the law. The District Court reached a conclusion of law: 

"IV. That no fraud was committed on the Court 

during the plaintiff's presence before the Honorable W. It W. Lessley on the 19th day of July, 1976, ... 

This conclusion, coupled with the District Court's 

holding that appellant's alternative motions were properly 

denied for failure to comply with the time limitations of 

Rule 60(b), M.R.Civ.P., indicates that the District Court 
properly considered applicable law and that its ruling is 

supported by the law. Because the District Court heard 

testimony on the issue and reached the conclusion of law 

quoted above, we must assume that the District Court considered this issue on the merits. Having concluded that no 

fraud had been committed upon the court, the District Court 

properly denied appellant's motions as being untimely under 

Rule 60 (b) , M.R.Civ.P. 

Our standard for review has been stated as follows: 

"When reviewing findings of fact and conclusions 

of law of a district court, sitting without a 

jury, this Court has repeatedly held such findings and conclusions will not be disturbed if 

supported by substantial evidence and by the law." 

Arrowhead, Inc. v. Safeway, Inc. (1978), 

Mont . , 587 P.2d 411, 413, 35 St.Rep. 1830, 

1832. 

Appellant relies largely on the wife's failure to 

disclose that she had secured employment as establishing a 

fraud upon the court. Respondent began employment as a 

receptionist for a dentist at a salary of $450 per month on 

the day after the date of the decree of dissolution, having 

obtained that position some days prior to the dissolution. 

Yet the decree recited that she was "unemployed and not 

trained for any employment." Unfortunately, there is no 

transcript of the testimony taken at the dissolution proceedings of July 19, 1976, when this alleged fraud upon the 

court occurred. 

This Court has held that "[flraud upon the court . . . 

may consist of affirmatively misrepresenting facts to the 

court or of concealment of material facts by a person who is 

under a legal duty to make a full disclosure to the court." 

In re Julia Ann Bad Yellow Hair (1973), 162 Mont. 107, 111, 

509 P.2d 9, 12, citing Selway v. Burns, supra. 
The same issues were raised in a recent case where a 

former spouse petitioned to set aside a decree of dissolution and property settlement on grounds of fraud. Pilati v. 

Pilati (1979), Mon t . , 592 P.2d 1374, 36 St.Rep. 

619. ,Pilati involved a situation where the husband failed 

to make a full and accurate disclosure of all the assets of 

the parties to either his spouse or to the court, with the 

result that the wife received a grossly inadequate property 

settlement under the terms of a settlement agreement incorporated in the decree. We held that his nondisclosure 

constituted an extrinsic fraud and a fraud upon the court so 

as to justify relief. There was no intentional concealment 

of material assets from the court in the present case as 

there was in Pilati. Likewise, this case does not involve a 

misrepresentation to the court preventing a fair submission 

of the controversy, as was the case in Selway, where the 

testator's executor represented to the District Court that 

the testator's daughter had consented to a stipulated judgment against her mother's estate when in fact the daughter 

had not so consented and was not even aware of the suit. 

Furthermore, the District Court had before it and incorporated into its decree a property settlement agreement that 

had been reached by the parties; it was not adjudicating a 

property settlement nor determining a maintenance award that 

would be affected by the future employment or employability 

of the parties. 

The District Court could well have concluded that there 

was no affirmative misrepresentation or concealment by 

respondent or by counsel when he submitted the decree to the 

court and that any error as occurred when the court adopted 

the finding that Voga was unemployed and not trained for any 
employment was inadvertent. Alternatively, the District 

Court may have concluded that the wife's employment status 

was not a material fact in view of the parties' property 

settlement agreement and that it did not substantially 

affect the merits of the case. That being so, we are unable 

to say that the District Court's holding was not supported 

by substantial evidence and the law. 

There is no record of the dissolution proceedings of 

July 19, 1976, available to assist this Court in our review 

of the District Court's ruling. Furthermore, in balancing 

interests this Court has recognized a public interest in the 

finality of judgments. Although a different balance was 

struck under the differing facts of that case, the proper 

rule was stated in Selway: 

". . . Any time limitations that may be involved 

in this case require that a balance be struck 

between the public interest in putting an end to 

litigation at some point and the public interest 

in keeping its judicial system free of corruption. For this reason the timeliness of the motion to vacate must ultimately depend upon equitable principles and placed within the sound 

discretion of the court . . ." 429 P.2d at 645. 

Under all of the circumstances of the present case, we are 

constrained to uphold the ruling of the trial court. 

The next issue is whether the District Court had jurisdiction to consider whether appellant had been defrauded 

into executing the property settlement agreement which was 

incorporated in the decree of dissolution. 

Prior to the enactment of Rule 60(b), M.R.Civ.P., the 

now repealed predecessor statute, section 93-3905 R.C.M. 

1947, provided that: 

". . . [TI he court may . . . relieve a party or 

his legal representative from a judgment, order 

or other proceeding taken against him through 

his mistake, inadvertence, surprise, or excusable neglect; provided, that application therefor be made within a reasonable time, but in no 

case exceeding six months after such judgment, 

order, or proceeding was taken." 
Because this predecessor to Rule 60(b), M.R.Civ.P., did not 

provide for relieving from j udgment fraud, this 

Court in several cases arising prior to enactment of Rule 

60(b) relied on the inherent power of a court to grant 

relief from a judgment obtained by extrinsic fraud. 

"The power of a court of equity to grant relief 

from a judgment obtained by fraud is inherent; 

it does not depend upon statute." Bullard v. 

Zimmerman (1930), 88 Mont. 271, 277, 292 P. 730, 

732. 

The statutory time limitation the former statute did 

not apply to fraud: 

". . . a court of general jurisdiction has the 

right, entirely independent of statute, to grant 

relief against a judgment obtained by extrinsic 

fraud, and may grant that relief either on motion in the original cause or upon a separate 

equity suit, and after - the period proscribed & 

the statute . . ." Cure v. Southwick (1960), 

137 Mont. 1, 349 P.2d 575, 579, citing Gillen 

v. Gillen (1945), 117 Mont. 496, 159 P.2d 511. 

(Emphasis added.) 

This rule applied only to fraud which could be classified as 

"extrinsic fraud": 

"Not every fraud committed in the course of a 

judicial determination will furnish ground for 

such relief. The acts for which a judgment or 

decree may be set aside or annulled have reference only to fraud which is extrinsic or collateral to the matter tried by the court, and not 

to fraud in the matter on which judgment was 

rendered . . . [Fraud] is extrinsic or collateral 

within the meaning of the rule, when the effect 

of it is to prevent the unsuccessful party from 

having a trial or from presenting his case fully." 

Bullard v. Zimmerman, 88 Mont. at 277, 292 P. 

at 732, citing Clark v. Clark (1922), 64 Mont. 

386, 210 P. 93, 94. 

Rule 60(b), M.R.Civ.P., unlike its predecessor section 

93-3905, specifically enumerates fraud as a ground for 

relief from a judgment: 

"On motion and upon such terms as are just, the 

court may relieve a party or his legal representative from a final judgment, order, or proceeding 

for the following reasons: . . . (3) fraud (whether heretofore denominated intrinsic or extrinsic) II *. . 
Moreover, Rule 60(b) establishes a time limitation within 

which the motion must be made: 

"The motion shall be made within a reasonable 

time, and for reasons (I), (2) and (3) when a 

defendant has been personally served . . . not 

more than 60 days after the judgment, order or 

proceeding was entered or taken . . ." 

This time limitation, however, does not apply to an 

independent action for relief from a judgment, as distinguished from a motion for such relief. The last sentence of 

Rule 60 (b) , M.R.Civ.P., states that " [t] his rule does not 

limit the power of a court to entertain an independent 

action to relieve a party from a judgment. . ." 

In a recent case decided under Rule 60(b), we followed 

the established rule that the courts of this state have 

inherent power to set aside a judgment for extrinsic fraud, 

independent of statute and statutory time limitations, where 

one of the parties brought an independent action for relief. 

Pilati v. Pilati (1979), Mont . , 592 P.2d 1374, 

36 St.Rep. 619. Appellant in the present case attempted to 

raise the issue of extrinsic fraud - on motion after the 60- 

day time limitation of Rule 60tb) had expired, rather than 

by an independent action for relief from the judgment. He 

is barred from proceeding on motion under Rule 60(b), and 

the District Court properly denied his alternative motions 

in this regard. 

The final issue in this case is whether or not the 

District Court had jurisdiction to determine the conscionability of the property settlement agreement where the court 

had earlier, in the decree of dissolution, found the agreement to be not unconscionable. The District Court held that 

a determination of conscionability was prevented by the 

doctrine of - res judicata. We agree. 
"The doctrine of res judicata states that a final 

judgment on the merits by a court of competent 

jurisdiction is conclusive as to causes of action 

or issues thereby litigated, as to the parties 

and their privies, in all other actions in the 

same or any other judicial tribunal of concurrent 

jurisdiction." Meagher County Newlan Creek Water 

Dist. v. Walter (1976), 169 Mont. 358, 361, 547 

P.2d 850, 852. 

". . . [Flour criteria exist in Montana law 

which must be met before a plea of res judicata 

can be sustained. These criteria are: (1) the 

parties or their privies must be the same; (2) 

the subject matter of the action must be the 

same; (3) the issues must be the same, and must 

relate to the same subject matter; and (4) the 

capacities of the persons must be the same in 

reference to the subject matter and to the issues before them." Smith v. County of Musselshell (1970), 155 Mont. 376, 378, 472 P.2d 878, 

880. 

All these criteria are satisfied in the present case. 

In view of the foregoing, it is unnecessary for us to 

decide whether or not appellant's motions were also untimely 

for the reason that no hearing was held on the motions 

within ten days after filing, as is required by Rule 60(c) 

and Rule 59 (d) , M.R.Civ.P. 

The judgment of the District C0urt.s affirmed. 

We concur: 

A Chief Justice