Title: WASHINGTON v WASHINGTON
Citation: N/A
Docket Number: 12413
State: Montana
Issuer: Montana Supreme Court
Date: July 12, 1973

No, 12413 I N T H E S U P R E M F , C O U R T O F T H E STATE O F M O N T A N A 1973 GEORGE M. WASHINGTON, P l a i n t i f f and Respondent, -vs - HESTER P. WASHINGTON, Defendant and Appellant. Appeal. from: D i s t r i c t Court of the Thirteenth J u d i c i a l D i s t r i c t , Honorable Jack D. Shanstrom, Judge presiding. Counsel of Record: For Appellant : Hutton, Schiltz and Sheehy, Billings, Montana John C. Sheehy argued, Billings, Montana For Respondent: Ryan and Beiswanger, Billings, Montana Robert P. Ryan argued, Billings, Montana Filed J U L 12 1 9 7 3 Submitted : June 20, 1973 Decided ;lUL 1 2 1973 Mr. Chief Justice James T. Harrison delivered the Opinion of the Court. T h i s is an appeal by the defendant,'Hester P. Washington from an order modifying and amending a decree of divorce which contained a property settlement agreement executed by the parties. The d i s t r i c t court of the thirteenth judicial d i s t r i c t i n Yellowstone County ruled that the plain- t i f f , George M. Washington, should no longer be obligated to pay "alimony" to the defendant as provided i n their property settlement agreement. From this ruling the defendant, Hester P. Washington, appeals . T h i s suit was previously argued before this Court on March 2, 1973, and i n the opinion of March 23, 1973, we stated i n Washington v. Washington, Mont. - - , 507 P.2d 1071, 30 St.Rep. 340, 343: "Therefore i t i s the opinion of this Court that upon the issues raised by the appellant (Hester P. Wash- ington), the record i s inadequate except as to the sole issue whether or not as a matter of law the alimony provision of the property agreement was integral to the agreement and not severable and as such was not subject to modification by the court. "As t o any and a l l other issues attempted to be raised by appellant, the motion to dismiss is granted." The present appeal thereforeis limited to this one issue. This action commenced on February 4, 1970, when George M. Washing- ton, as plaintiff (hereinafter called husband) filed a complaint i n the d i s t r i c t court seeking a divorce from the defendant wife. In his complaint, husband recited, in addition to the usual allegations as cause for divorce, that the parties had three grown children; that they were attending college and capable of deciding for themselves as t o their custody, and that i n any event plaintiff was willing to provide for their support. The complaint had no provision i n i t for support money for the wife, i t being alleged simply i n paragraph 6 of the complaint that: "The parties have acquired during their marriage certain real and personal property and plaintiff (husband) requests that said property to be partitioned and divided equitably between the parties. " To husband's complaint defendant wife filed her answer and cross claim for divorce. In her cross claim defendant wife did not ask for support moneys, b u t recited essentially what was stated i n plaintiff's complaint: "9. The parties have acquired during their marriage certain real and personal property and defendant requests that said property be partitioned and divided equitably between the parties. " During the pendency of the divorce action the parties, both rep- resented by counsel, reached a property settlement agreement on January 27, 1971. The agreement was signed by the parties and by their counsel. The salient features of the property settlement agreement are these: 1 . The parties were the parents of three grown boys, and no provision was made for their support or custody. 2. The parties were the owners of substantially a l l of the capital stock of Cherry Tree Inn, a Montana corporation, and the agreement provided for the transfer of shares of stock from the husband's name to the name of the wife so that after the agreement was consumated the wife owned 21,775 shares of such stock, and the husband one share less, 21,774 shares. The husband's stock was subject to a pledge for indebtedness to the Midland National Bank of Billings for $35,000, and the wife agreed to assume $10,000 of that indebtedness. 3. The wife received the sole ownership of the family home, formerly held i n joint tenancy, worth $73,000, b u t subject t o a mortgage in the sum of $26,100. 4. Insurance policies on the husband's l i f e were delivered to the wife. They had substantially no cash value because of loans. 5. The husband recognized that the wife had worked for the corpor- ation, Cherry Tree Inn, without a salary for three years and that she was entitled to receive back salary of $21,000 for her services to the corporation. This was done by increasing her monthly salary for the services she actually performed for the corporation for a period of three years. I t was agreed that the wife, while she continued as operating manager of Cherry Tree Inn, should receive a salary from that corporation of $600 a month and the right t o the use of an apartment in the Inn premises for residence purposes. 6. The husband agreed t o pay t o the wife, as alimony, the sum of $81,000 over a period o f nine years, beginning February 1, 1971, i n monthly payments o f $750 per month. The husband's o b l i g a t i o n continued if the w i f e remarried and was a charge upon h i s estate i f he died before the f u l l pay- ment was made. Her death terminated the r i g h t t o subsequent payments. 7. This provision required the husband t o pay for b i l l s and o b l i - gations incurred p r i o r t o the divorce. Each party thereafter paid h i s own obligations, including h i s costs and attorney's fees i n the divorce. 8. The w i f e accepted the provisions o f the agreement i n f u l l s a t i s f a c t i o n o f a l l r i g h t o f support from the husband and relinquished a l l i n t e r e s t which she might have i n the separate property o f the husband except f o r a s e c u r i t y l i e n on the Cherry Tree Inn corporate stock, and p a r t i c u l a r l y she released any i n t e r e s t i n the M & R Building owned by the husband before the property settlement agreement and a f t e r . 9. Each party agreed t o execute any necessary documents. 10. The parties agreed t h a t the agreement should be f i l e d d i t h the court and incorporated by reference i n t o the decree o f divorce. On December 31, 1971, divorce was granted t o the wife. I n the decree o f divorce the decree incorporated the property settlement agreement o f Jan- uary 27, 1971. I n the decree i t was ordered t h a t the judgment should n o t c o n s t i t u t e a 1 i e n on any property, real o r personal, owned by the p l a i n t i f f husband, except t h a t the w i f e had a l i e n on the stock o f the p a r t i e s owned i n Cherry Tree Inn, Inc. t o secure payments due from the husband t o the w i f e under the property settlement agreement. Following the divorce o f the parties t h e i r i n t e r e s t i n Cherry Tree Inn was sold. Subsequently the wife, alleging arrears i n the payments t o her by the husband, f i l e d her a f f i d a v i t and p e t i t i o n f o r security f o r prop- e r t y settlement payments, requesting the d i s t r i c t court t o make the proceeds from the sale o f Cherry Tree Inn which were being received by the husband sub- j e c t t o the indebtedness f o r the alimony provision i n the contract, which we set f o r t h i n f u l l , as follows: "The Husband agrees to pay t o the Wife, as alimony, the s u m of $750.00 per month, commencing February 1 , 1971, and payable on the f i r s t day of each month thereafter for a period of nine years from that date, making a total pay- ment of $81,000. The Husband's obligation to make said payments shall not be affected by the remarriage of the Wife, but will terminate immediately in the event of her death during said period. If the Husband dies during said period, the balance remaining due to the Wife hereunder shall be accelerated and shall be an obligation for which his estate shall be liable." T o the wife's petition, the husband responded with a petition for modification of the divorce decree alleging changes in conditions and asking the court to delete entirely the provisions of the property settlement agreement for the payment of alimony. In her answer to husband's petition for modification of decree of divorce, wife set forth a second defense to the effect that the property settlement agreement "is based upon a contractual agreement between the parties based on their property, and i s not subject to change because of a1 leged changes in conditions following the contractual agreement." A s before stated, the sole issue that this Court must decide i s whether or not as a matter of law the alimony provision of the property agree- ment was integral to the agreement and not severable, and as such was not subject to modification by the district court. W e hold that the district court erred in modifying and setting aside the "alimony" provision of the property settlement. The "alimony" was an integral part of the property settlement agreement and was not severable, and this settlement agreement was fully supported b y consideration from the wife and could not be changed without the consent of both parties. In the property settlement agreement, the payments to the wife for nine years were labeled as "alimony", b u t , as i s apparent from the agree- ment the payments were not i n fact alimony per se, and the use of the term "a1 imony" was only a label. One cannot sever the support provision from the property settlement agreement between the parties without destroying the contract. In considera- tion of the agreement, the wife gave up the right to any future support, agreed to pay all of her o w n obligations incurred by her after the agreement, and relinquished all claims against property owned by the husband except for a security interest i n the Cherry Tree Inn stock. Additionally she agreed to assume $10,000 of the husband's 1 iability. The provisions of paragraph 6 of the property settlement agreement alone, evidence the fact t h a t the payments were not "alimony" in the intent of the parties. The statutory definition of alimony (section 21-139, R.C.M. 1947) provides that upon proof of remarriage of a divorced wife, the court must order modification of the decree. The agreement between the parties in this case, however, provides that the alimony payments were to be made irres- pective of the remarriage of the wife. Moreover, i f the husband died, the unpaid balance of the alimony was a charge upon his estate, irrespective of her financial circumstances a t the time. The other contingency under the agree- ment terminating the alimony payments was the death of the wife before final payment . The problem facing the Court in this case with respect to the property settlement agreement i s precisely that faced by the California court in Helvern 139 ChA.2d 819, v. Helvern,/294 P.2d 482, 483 (Calif., 1956), as stated: "The main problem involved in this case i s whether a separation agreement entered into by husband and wife dividing their property and providing for the support of the wife was an integrated property settlement agree- ment which cannot be modified, or whether the support provisions are severable, and therefore subject to modi- fication. The trial court ruled, as a matter of law, that the agreement was an integrated property settle- ment agreement and not subject to modification. The husband appeals. W e agree with the interpretation of the trial court." In Helvern the husband and wife entered into an agreement settling their property rights, and the husband agreed to pay the wife $250 per month so long as she remained single. In the event of the death of the husband prior to that of the wife, the wife had a claim against the estate of the husband for unpaid a1 imony, computed in accordance with a mortal i ty table of expectancy. The payments to the wife were labeled in the agreement "'as a1 imony and for her maintenance and support'". The wife waived all rights of inheritance i n the husband's estate and each party agreed that the agree- ment was a f u l l , complete and final adjustment of their property rights and that neither party would a t any time make or attempt t o make any further or other claims against the other except arising out of the agreement. The events that occurred following the decree of divorce i n Helvern parallel the case a t bar. The divorce judgment i n Helvern was granted in 1949. In 1954, the husband filed a motion for an order to show cause why the decree of divorce should not be modified to reduce the "alimony" pay- ments on the grounds of changed conditions. There the material changes con- tended for were that a t the time of the agreement the husband was earning as a certified public accountant $14,000 a year, b u t that he was now earning b u t $3,500 a year. Further i t was alleged that a t the time of the agreement the husband was free from debt, b u t now he owed .in excess of $10,000, The t r i a l court sustained an objection to any evidence under the motion, saying that the property settlement agreement was a final determination between the parties, involving the rights of both parties, including the rights of plain- t i f f to support by the defendant, and the right to share in the community property of the plaintiff, and the court had no jurisdiction t o modify or amend the final decree of divorce. On this state of facts the California Court said: "The law i n this state is well settled that i f support provisions have been made an inseverable part of the agreement between husband and wife t o divide their prop- erty, and the court i n the divorce action approves the agreement, the provisions of such agreement cannot there- after be modified without the consent of both of the contracting parties. The leading case on the subject i s Adams v. Adams, 29 Cal.2d 621, 177 P.2d 265. * * *" "'The second category includes, among others,contracts i n which the "support and maintenance" provisions are not i n the nature of alimony but are part of the divi- sion of property. This category also includes contracts that provide solely for the payment of monthly or lump sums "in lieu of community property". Such contracts must be treated like other property settlement agreements dealing solely with divisions of property [citation] . If the contract was not fraudulent when made, and there was no violation of a confidential relationship, i t will be binding on the court and there can be no modification of the payments after the decree w i t h o u t the consent of the parties. [citation]. The court i n the divorce action m a y grant alimony to the wife and approve the agreement as well, since these agreements purport t o deal only w i t h the division of the property of the parties. * * * "'The third category includes contracts in which the wife waives all support and maintenance, or a1 1 support and maintenance except as provided in the agreement, in consideration of receiving a more favorable division of the community property. The court cannot add a provision for alimony t o such contracts without changing basically the agreement of the parties as t o the division of their property. ' I ' (Emphasis ours. ) We.find t h a t the order of the district court modified a contractual agreement between the parties and is in error for the reasons hereinbefore set forth. The order of modification is reversed and the cause remanded to the district court w i t h instructions t o dismiss the husband's petition for modification of the divorce decree, each party to bear his or her own costs on