Court Opinion

ID: 1038923
Source: CourtListenerOpinion
Date Created: 2013-08-28 22:17:01.110484+00
Date Added: 2024-06-11T12:47:35.956982
License: Public Domain

August 20 2013

                                           DA 12-0745

                   IN THE SUPREME COURT OF THE STATE OF MONTANA

                                           2013 MT 238

IN RE THE MARRIAGE OF:
VIOLA K. ANDERSON,

               Petitioner and Appellant,

         and

GARY L. ANDERSON,

               Respondent and Appellee.

APPEAL FROM:            District Court of the Eighth Judicial District,
                        In and For the County of Cascade, Cause No. DDR 10-772
                        Honorable Dirk M. Sandefur, Presiding Judge

COUNSEL OF RECORD:

                 For Appellant:

                        Daniel L. Falcon, Falcon, Lester & Schaff, P.C.; Great Falls, Montana

                 For Appellee:

                        Patrick R. Watt, Jardine, Stephenson, Blewett & Weaver, P.C.; Great Falls,
                        Montana

                                                     Submitted on Briefs: July 24, 2013

                                                                 Decided: August 20, 2013

Filed:

                        __________________________________________
                                          Clerk
Justice Brian Morris delivered the Opinion of the Court.

¶1     Viola Anderson (Viola) and Gary Anderson (Gary) entered into a mediated property

settlement agreement as part of their dissolution of marriage.          The District Court

(McKittrick, J.) approved the property settlement agreement and decree of dissolution. Viola

sought relief from judgment, on the grounds that the property settlement agreement was

unconscionable and failed to include a disclosure of assets, as required by § 40-4-254, MCA.

The District Court for the Eighth Judicial District, Cascade County (Sandefur, J.), denied

Viola’s claim for relief from judgment. Viola appeals. We affirm.

¶2     We address the following issues on appeal:

¶3     Whether the District Court (Sandefur, J.) abused its discretion when it denied Viola’s

Rule 59(e) and 60(b) motions based on the District Court’s (McKittrick, J.) failure to

consider whether the property settlement agreement was unconscionable?

¶4     Whether the District Court abused its discretion when it determined that the property

settlement agreement was valid without a disclosure of assets?

                   PROCEDURAL AND FACTUAL BACKGROUND

¶5     Viola and Gary sought the dissolution of their 35-year marriage. Viola and Gary

agreed to mediation to divide the marital property. Viola and Gary owned a trailer court in

Lewistown and a rental property in Ulm. Viola and Gary also owned property along the

scenic Smith River in Montana. The Smith River, popular for floating and fishing, rises in

the Castle Mountains in Meagher County and flows northwest between the Big Belt and

Little Belt Mountains, to its confluence with the Missouri River. Only one public put-in and

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one public take-out exists in this 59-mile stretch of river, and access is limited by a permit

lottery system.

¶6       Viola and Gary’s Smith River property included a ranch operation, a guest ranch, and

an outfitting business named the Heaven on Earth Ranch. Groups with a float permit can

stop overnight at the Heaven on Earth Ranch during their float, or groups can visit the guest

ranch to experience the scenic river without receiving a permit or participating in a multi-day

float.

¶7       The parties did not complete an assessment on the value of the ranch or guest ranch

business before the mediation. The parties stipulated that the final disclosure requirements

either had been met or had been waived. Viola had served as the bookkeeper for the ranch

and guest ranch business for a number of years.

¶8       Both Viola and Gary were represented by counsel at the mediation. Pursuant to the

property settlement agreement, Viola received a lump sum payment of $300,000, three

jointly owned CDs worth $300,000, 100 chute-counted cows or $100,000, the rental property

in Ulm worth $184,000, with a yearly rental income of $6,600, a monthly payment from

Gary of $2,000 for the rest of her life, and up to $2,500 in attorney fees. Viola also remained

the named beneficiary of Gary’s $150,000 life insurance policy.

¶9       Gary received the Smith River ranch, guest ranch, and outfitting business. Gary also

received the ranching and outfitting equipment and the livestock. The parties did not assign

a value to these assets. Gary accepted responsibility for the debt associated with these

businesses, which Gary estimated amounted to $500,000.
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¶10    Viola actively participated in the mediation. She added several terms to the property

settlement agreement. Viola required that the cattle be chute-counted to ensure that she did

not receive only culls in her 100 cows. Viola also requested, and received, the ability to

recreate on the Smith River property for the rest of her life. Viola’s counsel explained the

terms of the proposed settlement agreement to Viola. The mediator also explained the terms

of the proposed settlement agreement to Viola. Viola agreed to sign the settlement

agreement without reading it herself after her counsel and the mediator provided these

explanations of its terms.

¶11    The District Court (McKittrick, J.) held a dissolution hearing on August 22, 2012.

Gary appeared with his counsel. Viola and her counsel did not attend. The District Court

entered a decree that deemed the property and debts “equitably distributed.” Viola obtained

new counsel shortly after the mediation. She filed M. R. Civ. P. 59(e) and 60(b) motions on

September 18, 2012, through her new counsel. Viola claimed that she had expected to

receive a lump sum cash payment of $3,000,000, and had realized belatedly that the property

settlement agreement included a cash payment of only $300,000.

¶12    Viola alleged that the property settlement agreement was unconscionable. Viola

further alleged that the District Court had violated § 40-4-254, MCA, by accepting the

property settlement agreement even though the parties had failed to assess the value of the

property. The District Court (Sandefur, J.) denied Viola’s motions. Viola appeals.

                               STANDARD OF REVIEW

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¶13    This Court’s review of a district court’s ruling pursuant to M. R. Civ. P. 60(b)

depends on the nature of the final judgment. Puhto v. Smith Funeral Chapels, Inc., 2011 MT

279, ¶ 8, 362 Mont. 447, 264 P.3d 1142. In cases not involving relief from a default

judgment, the Court reviews the ruling of a district court for abuse of discretion. Puhto, ¶ 8.

We review a district court’s denial of a Rule 59(e) motion for abuse of discretion. In re

Marriage of Johnson, 2011 MT 255, ¶ 12, 362 Mont. 236, 262 P.3d 1105.

                                       DISCUSSION

¶14    Whether the District Court (Sandefur, J.) abused its discretion when it denied Viola’s

Rule 59(e) and 60(b) motions based on the District Court’s (McKittrick, J.) failure to

consider whether the property settlement agreement was unconscionable?

¶15    Viola did not appear during the dissolution and property division hearing before the

District Court (McKittrick, J.) on August 22, 2012. Viola did not argue at the hearing that

the property settlement agreement was unconscionable. Viola nevertheless contends that the

District Court (McKittrick, J.) abused its discretion when it failed to consider whether the

property settlement agreement was unconscionable pursuant to § 40-4-201, MCA.

¶16    The District Court (McKittrick, J.) stated that “the property and debts of the parties

are equitably distributed between the parties as set forth in the Property Settlement

Agreement.” This Court considered the relationship between a finding of “equitable” and a

finding of “not unconscionable” in In re Marriage of Miller, 238 Mont. 197, 201-02, 777

P.2d 319, 322-23 (1989). In In re Marriage of Miller, the district court determined that the

property division was “not unconscionable.” This determination did not meet the higher
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threshold of “equitable.” In re Marriage of Miller, 238 Mont. at 201-02, 777 P.2d at 322-

23. Here, the District Court (McKittrick, J.) determined that the property division was

“equitable.” This determination met the lower threshold that the property division was “not

unconscionable.”

¶17    A district court engages in discretionary action when it determines whether a marital

and property settlement agreement is not unconscionable. This type of discretionary action

cannot be categorized accurately as either a finding of fact or a conclusion of law. In re

Marriage of Rolf, 2000 MT 361, ¶ 20, 303 Mont. 349, 16 P.3d 345 (overruled on other

grounds). This Court presumes that these discretionary judgments are correct and will not

disturb them absent an abuse of discretion by the trial court. In re Marriage of Rolf, ¶ 20.

¶18    This Court considered in In re Marriage of Lawrence, 197 Mont. 262, 271, 642 P.2d

1043, 1048 (1982), the conscionability of a property settlement agreement in which the wife

received $50,000 and $9,600 in alimony, and the husband received the remainder of the

$422,000 marital estate. This Court noted that stock shares with fluctuating values

comprised the majority of the marital estate. In re Marriage of Lawrence, 197 Mont. at 271-

72, 642 P.2d at 1048. One of the companies was in serious financial trouble and the husband

personally had guaranteed a $300,000 small business loan for the company. In re Marriage

of Lawrence, 197 Mont. at 272, 642 P.2d at 1048. The Court recognized that the husband

had risked bankruptcy in order to save this company. Given these circumstances, the Court

determined that the distribution of the marital property was not unconscionable. In re

Marriage of Lawrence, 197 Mont. at 272, 642 P.2d at 1048.
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¶19    The District Court (Sandefur, J.) noted that although Gary received the majority of the

real property from the marital estate, Gary also took responsibility for all of the debt owed by

the marital estate. Gary estimated that this debt amounted to $500,000. Gary’s certified

public accountant submitted an affidavit stating that the Heaven on Earth Ranch and the

ranch business had suffered a net loss of $83,000 from 2006 to 2011, and an additional

$61,491 loss for bills that should have been paid in 2011 but were not paid until 2012, for a

total loss of almost $144,500.

¶20    Much like the spouse in In re Marriage of Lawrence, Viola received an upfront

payment of cash and assets, and a guaranteed income stream. Viola received almost

$900,000 in cash and assets and $24,000 each year for the rest of her life. Gary received

more assets than Viola, but he also accepted the risk associated with those assets and the

debts associated with those assets.

¶21    We cannot say that the District Court (McKittrick, J.) abused its discretion in

determining that the property settlement agreement met the not unconscionable threshold.

We also cannot say that the District Court (Sandefur, J.) abused its discretion in denying the

M. R. Civ. P. 59 and 60 motions in which Viola alleged that the property settlement

agreement was unconscionable.

¶22    Whether the District Court abused its discretion when it determined that the property

settlement agreement was valid without a disclosure of assets?

¶23    Section 40-4-254, MCA, provides that “[a]bsent good cause, the court may not enter a

judgment with respect to the parties’ property rights” unless the parties have provided a full
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disclosure of assets. Gary and Viola did not have an appraisal of the ranch, guest ranch, or

outfitting business properties conducted before the District Court (McKittrick, J.) entered its

Final Decree of Dissolution of Marriage. Viola argues that the District Court’s failure to

require disclosure represents reversible error, and the District Court’s (Sandefur, J.) failure to

grant her M. R. Civ. P. 59(e) and 60(b) motions represents an abuse of discretion.

¶24    The District Court (Sandefur, J.) considered whether the District Court (McKittrick,

J.) could have found “good cause” to not require a final disclosure of assets. The District

Court (Sandefur, J.) noted that “all of the marital assets in this case and liabilities were well-

known to both parties.” Viola had acted as the bookkeeper for the ranch and guest ranch

business for a number of years. Viola does not allege that Gary misled her about the

existence of an asset, or the value of any asset.

¶25    Viola nevertheless contends that she suffered prejudice from Gary’s failure to submit

a final disclosure of assets. Viola claims that she sought and expected to receive “half” of

the marital property in the property settlement agreement. Viola claims that if the parties had

valued all of the assets before the property settlement agreement, Viola would have known

what “half” was, and that she would have required the property settlement agreement to

provide her with “half.”

¶26    Viola admits, however, that she believed and continues to believe that the entire

marital property was worth about $8 million. Viola does not claim that Gary misled her

about the value of the marital estate. Viola further admits that she accepted a property

settlement agreement that provided her with less than $4 million.               This admission
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undermines Viola’s claim that she suffered prejudice from Gary’s failure to provide a final

disclosure of assets.

¶27    The District Court (Sandefur, J.) determined that no credible evidence existed to

suggest that compliance with § 40-4-254, MCA, “would have had any material effect on the

parties’ understandings of the valuation of the marital estate” during the mediation. As the

District Court noted, Viola served as the bookkeeper for the ranch and the outfitting business

for a number of years. Viola was familiar with all of the marital property and its

approximate value. We agree that Viola has failed to demonstrate that she suffered any

prejudice from the District Court’s (McKittrick, J.) entry of judgment without a final

disclosure of assets.

¶28    Further, “[w]e will not put a district court in error for a ruling or procedure in which

the appellant acquiesced, participated, or to which the appellant made no objection.” In re

Caras, 2012 MT 25, ¶ 22, 364 Mont. 32, 270 P.3d 48 (upholding division of marital assets

despite the parties’ failure to file a final disclosure of assets in compliance with § 40-4-254,

MCA). Viola failed to contest the entry of the dissolution of marriage and division of assets

before the District Court (McKittrick, J.).

¶29    We cannot say that the District Court (Sandefur, J.) abused its discretion for failing to

grant Viola’s M. R. Civ. P. 59 and 60 motions on the basis that the District Court

(McKittrick, J.) failed to require a full disclosure of assets.

¶30    Affirmed.

                                                    /S/ BRIAN MORRIS

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We concur:

/S/ MIKE McGRATH
/S/ MICHAEL E WHEAT
/S/ PATRICIA COTTER
/S/ LAURIE McKINNON

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