Court Opinion

ID: 4703285
Source: CourtListenerOpinion
Date Created: 2021-07-13 23:09:38.962807+00
Date Added: 2024-06-11T08:06:30.789237
License: Public Domain

07/13/2021

                                            DA 20-0541
                                                                                            Case Number: DA 20-0541

               IN THE SUPREME COURT OF THE STATE OF MONTANA
                                            2021 MT 175

IN RE THE MARRIAGE OF:

BRADLEY D. FULLER,

                Petitioner and Appellant,

         and

MELISSA L. FULLER,

                Respondent and Appellee.

APPEAL FROM:            District Court of the Thirteenth Judicial District,
                        In and For the County of Yellowstone, Cause No. DR 16-0219
                        Honorable Michael G. Moses, Presiding Judge

COUNSEL OF RECORD:

                 For Appellant:

                        Mark D. Parker, Parker, Heitz & Cosgrove, PLLC, Billings, Montana

                 For Appellee:

                        Shannon R. Foley, Jason Armstrong, Cromwell Law, PLLC, Bozeman,
                        Montana

                                                    Submitted on Briefs: May 5, 2021

                                                               Decided: July 13, 2021

Filed:

                                  cir-641.—if
                        __________________________________________
                                          Clerk
Justice Beth Baker delivered the Opinion of the Court.

¶1     Bradley Dean Fuller appeals a Thirteenth Judicial District Court order granting

relief to Melissa Lynn Fuller from the 2016 final decree of dissolution of their marriage.

The District Court held that Bradley and Melissa’s failure to disclose their jointly owned

business to the court, which they separately determined they would settle after the divorce,

violated the law requiring full disclosure of assets, debts, income, and expenses. Because

the court did not know about or consider the value of the businesses at the time it entered

the decree, the court concluded that the decree must be reconsidered. We reverse.

                 FACTUAL AND PROCEDURAL BACKGROUND

¶2     Melissa and Bradley were married in 2003. Melissa, a nurse practitioner, and

Bradley, a physician, formed Fuller Family Medicine, PC (“FFM”), a medical practice, in

2011. They created at the same time B&M Investment Properties, LLC (“B&M”), to hold

the parties’ real property. The parties operated these businesses together, individually

establishing their own clientele and practices.

¶3     The parties separated in January 2016 and, both representing themselves, filed for

dissolution a month later. Along with their dissolution petition, they filed their Final

Declarations of Disclosure of Assets, Debts, Income, and Expenses (“Final Disclosures”)

and a joint parenting plan for their two minor children. Bradley disclosed the marital home,

two vehicles, a boat, and other miscellaneous items. Melissa did not disclose any additional

property.   Neither party disclosed FFM or B&M.           The District Court entered the

Final Decree of Dissolution in April 2016. The decree did not include any mention of FFM

or B&M.

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¶4     After their dissolution, the parties continued to operate FFM and B&M in the same

manner as they had while married. In April 2020, however, Melissa sought to transition

out of FFM to focus on her separate clinic. She requested from Bradley an equitable buyout

from her jointly owned interest in FFM. Bradley declined, asserting that he was FFM’s

sole owner. He denied Melissa access to the company finances, property, accounts, and

account information. Bradley also halved Melissa’s salary, alleging she violated her FFM

employment agreement’s non-compete clause, leading Melissa to file complaints with the

Department of Labor.

¶5     In July 2020, Melissa filed two motions with the District Court: an Emergency

Motion for Temporary Restraining Order, Preliminary Injunction, and Request for Show

Cause Hearing and a M. R. Civ. P. 60(b) motion for relief from the dissolution decree.

Melissa alleged in these motions that Bradley had committed fraud. She claimed that, at

the time of the dissolution, she and Bradley believed that FFM was a jointly and equally

owned asset, created with joint marital assets and funded equally by each of them. Melissa

sought temporary injunctive relief requiring Bradley to continue paying her full salary and

to maintain the status quo regarding FFM and B&M while the court considered her claim

for relief. She requested that the District Court set aside the final dissolution decree and

adjudicate the equitable distribution of the parties’ financial interests in FFM. She further

requested modification of the child support agreement, arguing that she stipulated to no

child support payments based on her understanding that she and Bradley jointly owned

FFM.

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¶6     The District Court held a hearing on October 5, 2020. Both parties testified that

they had discussed the businesses at the time of the dissolution proceedings and decided to

intentionally omit them from the Final Disclosures because they planned for the businesses

to remain unchanged after the dissolution. Melissa said she knew that all the assets the

parties were dividing were on an Excel spreadsheet and that “when [the businesses] sold

or when somebody leaves, [the parties] could deal with it at that point.” Melissa also stated

that she knew only Bradley’s name was listed on FFM’s incorporation documents.

¶7     At the conclusion of the hearing, the District Court denied Melissa’s motion to

modify custody, for injunction, and for payment of wages, deferring the latter to the

Department of Labor.         The District Court found additionally that Bradley had not

committed fraud. The court then explained:

       But we have a clear problem here where the parties actually did not
       understand, neither one of them understood the consequences of the [c]ourt
       being unable to address that [sic] equities of this property disposition in 2016
       when presented to me. This one that came on default law and motion
       morning in front of this [c]ourt.

       We do them a lot. Everybody is on the same page. But I had no clue that
       there was a medical business and an investment business on the outside. . .

       But, man, we were all suffering under mistake of fact and mistake of law
       because I was unable to address the Funk1 issues in this particular matter[.]

                                             .    .   .

       The problem with the business is that indeed as a professional corporation,
       Dr. Fuller is 100 percent owner of that professional corporation. And the

1
  In re Marriage of Funk, 2012 MT 14, ¶ 19, 363 Mont. 352, 270 P.3d 39 (requiring the trial court
to consider “all assets, including pre-acquired property and assets acquired by gift, bequest, devise
or descent[,]” in determining equitable apportionment of a marital estate).
                                                 4
       only way for the [c]ourt to figure out how to equitably divide that property is
       to take into consideration the other assets that the parties have.

¶8     The District Court ordered briefing on whether there were other remedies available

that would allow it to reconsider the equitable distribution of the marital assets. Melissa’s

brief argued, for the first time, that the District Court should grant relief based on the

property allocation being unconscionable or ambiguous.

¶9     On November 4, 2020, the District Court issued an order declining to rule on

Melissa’s M. R. Civ. P. 60(b) motion, noting that it “need not decide on the Rule 60(b)

Relief for Judgment motion at this time.” It instead granted Melissa’s requested relief by

raising sua sponte the issue of mutual perjury under § 40-4-253(5), MCA. Part of the

statutes governing marriage dissolution, that section provides: “In addition to any other

civil or criminal remedy available under law for the commission of perjury, the court may

set aside the judgment, or part of the judgment, if the court discovers, within 5 years from

the date of entry of judgment, that a party has committed perjury in the final declaration of

disclosure.” The court concluded that under this section, “[s]ignificant nondisclosures in

final declarations of marital assets are conditions that justify the [c]ourt to reopen the

Final Decree.” It found the omissions significant because they left the court “unequipped to

equitably apportion the marital property in 2016[.]”

                              STANDARDS OF REVIEW

¶10    We review a district court’s conclusions of law de novo and its findings of fact for

clear error. Rausch v. Hogan, 2001 MT 123, ¶ 11, 305 Mont. 382, 28 P.3d 460 (citations

omitted). A court’s interpretation or application of a statute is a question of law we review

                                             5
for correctness. Finn v. Dakota Fire Ins. Co., 2015 MT 253, ¶ 6, 380 Mont. 481,

356 P.3d 13 (citation omitted).

                                         DISCUSSION

¶11     Courts have the power and the duty to apportion marital estates equitably under the

circumstances of each case.          See In re Marriage of Funk, 2012 MT 14, ¶¶ 6, 19,

363 Mont. 352, 270 P.3d 39 (citing § 40-4-202, MCA, which vests the court with an

obligation and the “broad discretion to apportion the marital estate in a manner equitable

to each party under the circumstances”). To ensure equitable apportionment, “parties must

completely    disclose      money     and   assets    accumulated     during     the   marriage.”

In re Marriage of McFarland, 240 Mont. 209, 213, 783 P.2d 409, 411 (1989). To assist

the court in making an equitable apportionment of the property, parties must provide

“competent evidence . . . on the values of the property.” Marriage of Funk, ¶ 7 (citation

omitted).

¶12     When parties are informed of the assets and liabilities of a marriage, there is good

cause    to   enter   the    final    dissolution    decree.    See     §      40-4-254,   MCA;

In re Marriage of Anderson, 2013 MT 238, ¶¶ 23–27, 371 Mont. 321, 307 P.3d 313

(agreeing that property settlement agreement was valid without a final disclosure of assets

because wife was familiar with all marital property and its approximate value). Once a

court enters a final decree, neither the court nor the parties may retry the marital equities.

In re Marriage of Waters, 223 Mont. 183, 186, 724 P.2d 726, 729 (1986) (“There must be

some point at which litigation ends and the respective rights between the parties are forever

established. Under ordinary circumstances, once this point is reached a party will not be

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allowed to disturb that judgment.”); Rausch, ¶¶ 16–17; see § 40-4-202, MCA (providing

that the dissolution proceeding is where the court shall “finally equitably apportion

between the parties the property and assets”); § 40-4-134, MCA (providing that the entry

of judgment is the “final adjudication of the rights and obligations of the parties”).

¶13    Courts may reopen a judgment only in narrow circumstances. “[P]erjury in the final

declaration of disclosure” is one such circumstance. Section 40-4-253(5), MCA (providing

that the remedy for perjured testimony is to set aside the judgment or part of the judgment).

The District Court held in this case that Bradley and Melissa’s intentional omission of FFM

and B&M in the Final Disclosures justified reopening the decree because it could not

“consider[] all the marital assets for equitable distribution as required by Funk.”

(Emphasis original.)      The District Court concluded that the omission was obviously

intentional where the final disclosure form explicitly warned the parties that complete

disclosures must be made and that “[a]ny deliberately false statement . . . may subject you

to the penalty of perjury or other appropriate relief and may be considered fraud upon the

Court.”2 The court reasoned that, because the omissions were intentional and significant,

they constituted perjury under § 40-4-253(5), MCA.

2
  The District Court cited and relied on this Court’s reasoning in Castonguay v. Estate of Polson,
2005 MT 265, 329 Mont. 103, 122 P.3d 1208. In Castonguay, ¶¶ 1, 5, the wife brought an action
for actual and constructive fraud based upon the husband’s allegedly false testimony in the parties’
prior dissolution proceeding that he did not own real property. We upheld the dismissal of her
claim, reasoning in part that “the remedy for perjured testimony in a dissolution proceeding is an
award of the undisclosed asset to the opposing party and the setting aside of a judgment or part of
a judgment pursuant to § 40-4-253(4) and (5), MCA.” Castonguay, ¶ 12. Here, in contrast,
Melissa makes no allegation that she was unaware of Bradley’s property interests at the time the
disclosures were submitted, nor does she challenge the District Court’s finding that he did not act
fraudulently in the disclosures he submitted to the court.
                                                 7
¶14    Bradley argues that the District Court erred in concluding that § 40-4-253(5), MCA,

applies in the circumstances of this case. He contends that Montana’s disclosure statutes

“are not designed to procure a rehearing for a party fully informed of the asset” and that

the omissions in this case did not constitute perjury. Citing In re Marriage of Caras,

2012 MT 25, ¶¶ 20–22, 364 Mont. 32, 270 P.3d 48—in which this Court upheld a final

dissolution decree where the wife did not claim any prejudice from the lack of a final

disclosure and had agreed to the husband’s valuations—he argues that a party must show

that she was “deceived” in order to reopen a dissolution decree. Bradley additionally

argues that the District Court erred when it reopened the final decree to enforce its equitable

duty to apportion marital assets. He contends that, under Rausch, “[t]he [c]ourt has no

power to take property once owned in the marital estate and apply the equitable concepts

we apply in dissolution matters to subsequent squabbles over the property between ex-

spouses.”

¶15    We read language in the context of the statutory scheme as a whole to give effect to

its purpose. Sections 1-2-101, -102, MCA. The District Court reasoned that the purpose

of the disclosures “is to provide the [c]ourt with a [sic] competent evidence to paint a

complete picture of the marital assets to make an equitable apportion.” But the purpose

behind the disclosure statutes is to promote fairness between the parties by ensuring that

each has complete knowledge of marital assets; it is not to prevent parties from amicably

determining    between     themselves     how     their   property    should    be    divided.

See Miller v. Miller, 189 Mont. 356, 362–63, 616 P.2d 313, 318 (1980) (“The rule is well

reasoned that persons must be able to separate amicably and divide their property without

                                              8
interference where such division is feasible. It is not the province of this Court to alter

decisions and agreements made between husband and wife in the absence of compelling

injustice.”); S.B. 16 Preamble, 55th Leg., Reg. Sess., vol. II, ch. 326 (Mont. 1997)

(explaining that “sound public policy further favors the reduction of the adversarial nature

of marital dissolution and the attendant costs by fostering full disclosure and cooperative

discovery”). See also § 40-4-253(1)(a), MCA (requiring disclosure of assets only to the

other party, not to the court); § 40-4-252(2), MCA (preliminary disclosures “may not be

filed with the court, except on the court’s order”); § 40-4-254, MCA (requiring filing of

the certificate of service for the final declaration of assets, not the declaration itself).

¶16    The Legislature’s provision for separation agreements further demonstrates this

purpose. See § 40-4-201(1), MCA (allowing written separation agreements that, among

other things, provide for disposition of the parties’ property, “[t]o promote amicable

settlement of disputes between parties to a marriage attendant upon their separation or the

dissolution of their marriage”). Such agreements are binding on a court “unless it finds,

after considering the economic circumstances of the parties and any other relevant evidence

produced by the parties, on their own motion or on request of the court, that the separation

agreement is unconscionable.” Section 40-4-201(2), MCA; see Tanascu v. Tanascu, 2014

MT 293, ¶ 15, 377 Mont. 1, 338 P.3d 47 (“when the parties enter a property division

settlement in a marriage dissolution the district court is not required to identify and

ascertain the value of marital assets”); Miller, 189 Mont. at 362, 616 P.2d at 317 (noting

that the “presence of a valid separation agreement” negates the trial court’s obligation to

determine parties’ net worth).

                                                9
¶17    We agree with Bradley that the District Court erred when it found the parties’ mutual

decision to not disclose FFM or B&M to be perjury that demanded reopening the

dissolution decree under § 40-4-253(5), MCA. Melissa made no showing that either party

had knowingly made a false statement to the other party warranting relief under

§ 40-4-253(5), MCA. See Polson v. Polson, 2005 MT 185, ¶¶ 10-11, 328 Mont. 49,

121 P.3d 1004 (concluding that the wife had not shown the husband committed perjury

under § 40-4-253(5), MCA, where she presented no admissible facts demonstrating he had

intentionally excluded certain property from his financial disclosures). The disclosure

form’s warning to the parties was insufficient to show the omission rose to the level of

perjury requiring application of § 40-4-253(5), MCA, when both parties were fully aware

of the businesses. See Marriage of Caras, ¶ 22. Bradley and Melissa do not dispute that,

at the time they made their final disclosures, neither “contended that the marital estate

ha[d] an interest” in their businesses. Section 40-4-253(2)(b), MCA.

¶18    As Bradley notes, our reading of § 40-4-253(5), MCA, effectuates Montana law

recognizing the finality of judgments. In Rausch, ¶¶ 5–6, 9, the parties retained joint

ownership over a cabin in their property settlement agreement, but when the wife sued for

partition without regard to marital contributions, the husband argued he should be awarded

the cabin based on the fairness principles courts use in dissolution cases. This Court held

that under the doctrine of collateral estoppel the issue of fairness could not be relitigated

because the parties had the opportunity to address that question prior to the entry of the

final decree. Rausch, ¶ 18. Although the District Court in the present case was unaware

of FFM and B&M, the facts here present a similar scenario: both parties knew and agreed

                                             10
that the property would be unaffected by the dissolution. Rausch, ¶ 18. Melissa testified

that she made the decision not to have the court address this issue.

¶19    In sum, both parties testified that they were aware of the businesses and chose to

deal with the distribution of their interest in them at a later time and without the help of the

court. Bradley and Melissa may have been well-advised to identify the businesses in their

property settlement agreement and make clear that they would continue to be held and

operated jointly. But neither had counsel, and they chose to leave the businesses alone. It

was the parties’ prerogative to make this agreement, and it is not the role of the court to

step in and decide otherwise. The marriage dissolution statutes do not forbid parties from

choosing jointly to keep property or operate a business together after the dissolution. When

they do so with full knowledge and later disagree about the property’s management or

disposition, they may have other remedies, but their deliberate decision to omit that

property from the disclosures is not ground to reopen the decree. Here, because the parties

chose not to include FFM and B&M in their disclosures, the District Court erred by

reopening the judgment on that basis.

                                      CONCLUSION

¶20    The District Court erroneously set aside the final decree of dissolution on the ground

of perjury under § 40-4-253(5), MCA, when the parties deliberately agreed to leave their

jointly owned businesses undisturbed by the divorce. The court’s November 4, 2020 order

is reversed.

                                                           /S/ BETH BAKER

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We Concur:

/S/ MIKE McGRATH
/S/ LAURIE McKINNON
/S/ DIRK M. SANDEFUR
/S/ JIM RICE

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