NO. 93-038

IN THE SUPREME COURT OF THE STATE OF MONTANA

1993

MARIAN JOAN WISE,

Plaintiff and Respondent,

V .

EDWIN KEITH NIRIDER,

Defendant and Appellant.

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CLERMOFSUPAEMECOURT

53tAIE OF MONTANA

APPEAL FROM: District Court of the Eleventh Judicial District,

In and for the County of Flathead,

The Honorable Ted 0. Lympus, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

James C. Bartlett, Hash, O'Brien & Bartlett,

Kalispell, Montana

For Respondent:

Donald E. "Gene" Hedman, Hedman,

Hileman & LaCosta, Whitefish, Montana

Filed:

Submitted on Briefs: June 1, 1993

Decided: November 2, 1993

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Justice Terry N. Trieweiler delivered the opinion of the Court.

Marian Joan Wise filed a complaint in the District Court for

the Eleventh Judicial District in Flathead County to set aside the

property settlement agreement she entered into with Edwin Keith

Nirider, and to reopen their dissolution proceedings. After a

trial on the merits, the District Court entered judgment for Marian

granting the relief she sought. Edwin appeals from that judgment.

We reverse the District Court.

The issue on appeal is whether the District Court erred when

it set aside the property settlement agreement and reopened the

dissolution proceedings based on findings of extrinsic fraud upon

the court and unconscionability of the agreement.

The marriage of Marian Joan Wise and Edwin Keith Nirider was

dissolved on August 6, 1987, after 33 years. Judge Michael H.

Keedy, who presided over the dissolution proceedings, approved a

property settlement agreement entered into by the parties on

July 9, 1987, and amended on July 30, 1987. This agreement, which

was incorporated into the dissolution decree, purported to

distribute the parties' entire marital estate.

Marian and her attorney, Randy Ogle, drew up the property

settlement agreement. Edwin did not discuss the contents of the

agreement with Randy Ogle, and did not retain his own counsel.

Edwin voluntarily signed the agreement and concurred with the

amendments, but made no appearance in court during the proceedings.

The agreement, in part, provided for a distribution of the

marital estate. The parties' real property was to be sold and the

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proceeds divided equally. Marian was to receive certain tangible

items, and approximately $22,500 consisting of an IRA and an

inheritance from her mother. Edwin was to receive certain tangible

items, the "personal property in his possession," and cash and IRA

funds totalling $19,500. Additionally, Marian was to receive $50

per month as maintenance, and she reserved the right to petition

the court for a modification in the event of changed circumstances.

The addendum to the separation agreement provided that Marian

would receive $3,600 from Edwin's share of the proceeds from the

sale of the residence as compensation for her interest in a

windshield business which was retained by Edwin.

At the time of the dissolution, Edwin was retired from the

Atlantic Richfield Company (ARCO) Aluminum Plant at Columbia Falls

and was drawing retirement income of $1,120 per month. This would

continue until July 1, 1992, at which time he would become eligible

for Social Security benefits and the pension would be reduced to

$495 per month. Although Marian's knowledge of her right to share

in the pension plan as a marital asset is disputed, it is

undisputed that both parties knew of the existence of the ARC0

pension plan at the time they entered into the separation

agreement. Marian's attorney also testified that he knew of the

pension plan when he prepared the settlement agreement. However,

neither the agreement, nor the dissolution decree, mention the

pension plan specifically and no part of the pension was

distributed to Marian.

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Three months after the dissolution was finalized, Marian

petitioned for modification of the maintenance award. She sought

to increase maintenance to $800 per month because she was unable to

meet her living expenses. Edwin resisted this motion and it was

ultimately dismissed by stipulation on November 1, 1988.

On May 25, 1989, Marian filed this independent cause of action

against Edwin for fraud. She alleged that, while negotiating the

settlement agreement, Edwin represented to her that the retirement

program was personal in nature and was not a marital asset subject

to division between the parties. The complaint was later amended

to include claims of unconscionability and extrinsic fraud upon the

court. It was Marian's contention that Edwin's failure to disclose

the provisions of the pension plan, and her entitlement to a

portion of the pension, constituted a fraud upon the court which

rendered the property settlement agreement unconscionable, and that

it should, therefore, be set aside and the dissolution reopened.

A trial was held on April 27, 1992, before Judge Ted 0. Lympus

in which Marian, Edwin, and Marian's attorney, Randy Ogle,

presented contradictory testimony. In deposition testimony, Ogle

stated that he informed Marian that the pension was a marital asset

subject to division. However, Ogle testified that Marian told him

not to make the pension an issue because she did not want to delay

the divorce. She said that Edwin considered the pension to be his

asset that he had accumulated during his years of work at ARCO, and

would become upset if she sought a share in it.

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Ogle stated that he told Marian she was asking for too little

maintenance and that she ought to pursue a portion of the pension

as a marital asset. Marian had originally wanted $350 per month in

maintenance, but reduced her request to $50 per month when,

according to her, Edwin became angry. Edwin did admit that he told

Marian that if she sought more financial support from him, he would

retain a lawyer.

Ogle did not explain the failure to identify the ARC0 pension

fund in the settlement agreement, but stated that when he drafted

the agreement using the phrase "the personal property in his

possession, I' it was his intent, based on Marian's statements, that

the pension fund was to go entirely to Edwin.

Marian, however, testified that she had no idea of the value

of the pension plan, never asked her attorney about it, and never

believed she was entitled to share in the pension as a marital

asset. Although she acknowledges that she told Ogle of the

existence of the pension, she denies Ogle's claim that he told her

the pension was a marital asset and she had the right to share in

it. Marian said she did not discuss a possible division of the

pension with Edwin because she was intimidated by him and was

fearful of him. It is her contention that she never willingly

waived an interest in Edwin's pension benefits.

In contrast, Edwin testified that Marian told him she was

entitled to half of the pension plan but was not going to seek this

in the separation agreement. He admitted, however, that he may

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have told Marian, prior to the time she retained counsel, that the

pension was his and she had no right to any of it.

In its findings of fact, conclusions of law, and judgment

issued on October 30, 1992, the court set aside the property

settlement agreement and reopened the dissolution proceeding in

order to effect a "fair and equitable division of all marital

assets," including the ARC0 pension plan. This conclusion was

based on the court's finding that the separation agreement did not

provide for a division of the pension plan and that Marian had not

willingly, voluntarily, or knowingly waived her interest in this

marital asset. The court rejected Ogle's argument that the phrase

"all personal property in [Edwin's] possession" included the

pension plan. Although the court found that Marian was aware of

the existence of the pension plan benefits, it found that she was

not aware that she had a legal right to a portion of this until the

time that her action for fraud was commenced.

The court further found that there had been no disclosure of

the existence of the pension plan at the time Judge Keedy presided

over the dissolution proceedings, and it concluded that this

absence of evidence constituted "however unwittingly, the

commission of an extrinsic fraud upon that Court." The court did

not attribute fault to either Marian or her attorney, but found

that/because Marian was under stress due to her intimidation and

fear of Edwin's anger and wished to end the marriage without delay,

these factors resulted in a fraud upon the court. Finally, the

court concluded that because Marian had received none of the

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retirement benefits, the provisions of the separation agreement

were unconscionable.

Edwin filed a motion to alter or amend the judgment. This

motion was denied on December 30, 1992. In its order and

rationale, the court clarified its conclusion that Edwin had

committed a fraud on Marian which resulted in the commission of a

fraud upon the court.

From the court's judgment, and subsequent order denying the

motion to alter or amend the judgment, Edwin appeals.

Did the District Court err when it set aside the property

settlement agreement and reopened the division of property based on

findings of extrinsic fraud upon the court and unconscionability of

the agreement?

We note first that Marian did not file a timely appeal from

the dissolution decree but instead sought relief from the judgment

through an independent action as provided for in Rule 60(b),

M.R.Civ.P., which provides:

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.

Marian's independent action, filed nearly two years after the

dissolution decree was entered, was premised on allegations of

fraud by Edwin, unconscionability of the separation agreement, and

extrinsic fraud upon the court. However, the only allegation upon

which relief could be granted at the time she filed her action was

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her allegation of fraud upon the court. With regard to

unconscionability or fraud between the parties, Marian did not seek

timely relief through an appeal, or a Rule 60(b)(3) motion which

would allow for relief from a final judgment in instances of

"fraud, misrepresentation, or other misconduct."

Although the District Court discusses the resulting

unconscionability of the separation agreement, its judgment rests

on its conclusion that a fraud was committed upon the court which

justified setting aside the property settlement agreement and

reopening the dissolution decree. Therefore, our analysis must

focus on whether the court properly reached this conclusion.

This Court has made clear that fraud upon the court is "that

species of fraud which does or attempts to subvert the integrity of

the court itself." Brownv. hall (1992), 251 Mont. 414, 421, 825

P.2d 1209, 1213 (citing Salwayv.Arkava (1985), 215 Mont. 135, 695

P.2d 1302). Such fraud has been construed to include only the most

egregious conduct, such as bribery of a judge or member of the

jury, evidence fabrication, and improper attempts to influence the

court by counsel. Brown, 825 P.2d at 1213; Filler v. Richland County

(1991) I 247 Mont. 285, 289, 806 P.2d 537, 539. Generally, fraud

between the parties, without more, does not rise to the level of

fraud upon the court. Brown, 825 P.2d at 1213.

In this instance, the District Court found that there had been

no disclosure of the existence of the pension plan at the time of

the dissolution proceedings, and concluded that this absence of

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evidence constituted "however unwittingly, the commission of an

extrinsic fraud upon that Court." It concluded that the fraud

resulted not from an affirmative misrepresentation by either party,

but the fact that Marian was under stress and wished to end the

marriage without delay.

Although we recognize that the separation agreement was the

product of Marian's desire to quickly terminate the marriage and

may have resulted in an inequitable distribution of the marital

assets, we reiterate that the only basis upon which to set aside

this judgment, nearly two years after its entry, is the commission

of a fraud upon the court.

After reviewing the record, we conclude that the evidence is

insufficient to support the court's determination that there was

fraud upon the court. Neither Marian's nor Edwin's conduct rises

to a level which is egregious enough to be characterized.as fraud

upon the court. Even if we disregard the testimony of Edwin and

Marian's attorney, as did the District Court, and accept Marian's

assertion that she was not advised of the nature of the pension,

the record is void of such things as evidence fabrication, bribery,

or attempts to improperly influence the court.

The allegations that Edwin told Marian the pension was a

personal asset and that she was not advised otherwise by her

counsel, would, at most, amount to fraud between the parties. In

Salway, 695 P.2d 1306, we concluded that a party's fraudulent

conduct, "although reprehensible, is not the type of fraud that

furnishes grounds on which to vacate the judgment" under the

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residual clause in Rule 60(b), M.R.Civ.P. We reach the same

conclusion in this case. Although grounds may have existed for a

motion pursuant to Rule 60(b)(3), or for Marian to appeal from the

judgment in which the dissolution decree was entered, this does not

mean that the judgment can now be set aside for the same reason

after the time for post-trial motions and appeal has expired.

Marian relies on this Court's decision in InreMam’age of Madden

(1984), 211 Mont. 237, 683 P.2d 493, for the proposition that the

failure to inform the trial court of the value of a pension during

a dissolution proceeding constituted an extrinsic fraud on the

court, justifying the reopening of a dissolution decree. However,

the facts of that case are dissimilar from the situation presented

here. In Madden, we concluded that a property settlement agreement

incorporated into the decree was based on "extrinsic fraud" because

it failed to disclose the wife's interest in the husband's pension

and the fact that she would be liable for a balloon payment on a

mortgage. This holding, however, was based on the fact that the

wife took no part in the process of drafting the agreement, did not

have independent counsel because the husband assured her that the

attorney would represent both of their interests, and had no

knowledge of the pending liability for the balloon payment on the

mortgage. In this instance, however, Marian was the party

represented by counsel while Edwin was not, and she was the one who

drew up the separation agreement with knowledge of the existence of

the pension plan.

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We conclude that the allegations of fraud relied upon by

Marian fall short of what is legally required to vacate a final

judgment pursuant to the residual clause in Rule 60(b). Therefore,

we hold that the District Court erred when it set aside the

property settlement agreement and reopened the dissolution

proceedings.

Edwin contends that he is entitled to an award of attorney

fees for prevailing on appeal of the District Court's judgment.

This contention is based on the following language in the property

settlement agreement which was agreed upon by the parties:

In the event that either party brings legal action

to interpret or enforce any of the terms or provisions of

this Agreement, the prevailing party in said legal action

is entitled to recover, as a part of their costs and

disbursements, such sum as the Court may find reasonable

as attorney fees in said controversy.

Marian's cause of action, based on allegations of fraud upon the

court, was not an action to "interpret or enforcel' the provisions

of the agreement. Therefore, we conclude that the attorney fee

provision of the separation agreement is not applicable in this

proceeding, and hold that neither party is entitled to an award of

attorney fees based on that provision.

The October 30, 1992, judgment of the District Court is

reversed.

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c

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November 2, 1993

CERTIFICATE OF SERVICE

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

named:

James C. Bartlett

HASH, O’BRIEN & BARTLETT

P.O. Box 1178

Kalispell, MT 59903-l 178

Donald E. Hedman

HEDMAN, HILEMAN & LaCOSTA

433 Second Street

Whitefish, MT 59937

ED SMITH

CLERK OF THE SUPREME COURT

STATE&OF MONTANA