Marriage of Franks ( 1996 )

No. 95-082
IN THE SUPREMECOURT OF THE STATE OF MONTANA
1996
IN RE THE MARRIAGE OF:
GEORGEG. FRANKS,
Petitioner and Respondent
and Cross Appellant,
and $J$ '1f-j ]i]$
BONNIE J. FRANKS,
Respondent and Appellant.
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable John W. Larson, Judge presiding.
COUNSELOF RECORD:
For Appellant:
Kerry N. Newcomer, Geiszler & Newcomer, Missoula,
Montana
For Respondent:
Paul T. Ryan, Datsopoulos, MacDonald & Lind,
Missoula, Montana
Submitted on Briefs: November 14, 1995
Decided: January 18, 1996
Filed:
Justice James C. Nelson delivered the Opinion of the Court
Bonnie J. Franks (Bonnie) appeals and George G. Franks
(George) cross appeals from the denial of Bonnie's Motion to Vacate
Settlement Agreement and subsequent rulings of the District Court
for the Fourth Judicial District, Missoula County. We affirm in
part, reverse in part and remand.
Bonnie raises the following issues on appeal:
1. Did the District Court abuse its discretion when it
refused to allow Bonnie to withdraw from the March 18, 1994
settlement agreement?
2. Did the District Court abuse its discretion when it found
the March 18, 1994 settlement agreement not unconscionable over
Bonnie's objection?
3. Did the District Court abuse its discretion when it
failed to award child support retroactive to the date the parties
separated, subject to the statute of limitations?
George raises two additional issues in his cross appeal:
4. Did the District Court abuse its discretion when it
awarded child support to Bonnie contrary to the parties' March 18,
1994 settlement agreement?
5. Did the District Court abuse its discretion when it
reformed a valuation of an asset in the March 18, 1994 settlement
agreement without a finding of unconscionability?
BACKGROUND
FACTS
Bonnie and George separated in January 1982 after 21 years of
marriage. Although their eldest child had reached the age of
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majority by the time of their separation, Bonnie and George also
had one minor child and were expecting another child.
When Bonnie and George separated, Bonnie was employed as an
elementary school teacher in Lo10 and George was employed as a
millwright at what is now the Stone Container Corporation paper
mill near Frenchtown. Bonnie retired from her employment at the
Lo10 school in 1991. She subsequently taught for a time at St.
Joseph Elementary School in Missoula, but she is unable to continue
teaching due to health problems.
Prior to their separation, Bonnie and George had acquired a
motel and two trailer parks in addition to their residence. At the
time of their separation, Bonnie and George entered into an oral
property settlement agreement whereby Bonnie was to retain the
residence, the motel and the trailer parks. In addition to paying
the marital debt, Bonnie managed, maintained and improved the
properties over the next few years. George did not contribute
toward the development or maintenance of the properties. Neither
did he pay child support for the parties' two minor children.
Bonnie sold the motel in June 1982 and retained the proceeds.
In September 1993, more than eleven and one-half years after
Bonnie and George separated, George filed a petition for
dissolution. George sought a determination of current child
support and his interest in the residence and trailer parks.
Bonnie requested current child support for the parties' one
remaining minor child, as well as child support retroactive to the
date of the parties' separation. She also requested ratification
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of the parties' 1982 oral property settlement agreement.
At a pre-hearing settlement conference on March 18, 1994, the
parties signed a hand-written agreement containing provisions for
the final disposition of the parties' property and debt. The
agreement stipulated that Bonnie was to receive the majority of the
parties' assets and, in return, George would receive $50,000 in
cash from Bonnie and he would not be required to pay child support.
The next business day following the settlement conference,
Bonnie attempted to withdraw from the agreement claiming that the
settlement master and both attorneys were overbearing and
intimidating and that she had been confused and overwhelmed by the
process. Bonnie discharged her attorney claiming that he failed to
provide her with various documents including discovery responses
and that he failed to inform her of the court's scheduling order.
At a June 1, 1994 hearing before the District Court, Bonnie's
new counsel moved to withdraw from the settlement agreement,
reinstitute a discovery schedule and proceed to trial. The
District Court issued an order on June 7, 1994, denying the motion.
On July 6, 1994, the District Court conducted a hearing on
Bonnie's allegations that the settlement agreement is
unconscionable. Each party was allowed one hour to present
testimony and conduct cross examination. Both Bonnie and George
testified at the hearing.
The District Court issued its Findings of Fact, Conclusions of
Law and Decree on August 17, 1994, whereby the court implemented
the parties' settlement agreement after finding that it was not
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unconscionable. However, in its decree, the court modified the
agreement to include child support, to revalue stock held by
George, and to include a Lord Abbott U.S. Government Fund that had
not previously been disclosed by George. The District Court
subsequently amended its findings, conclusions and decree to
correct certain mathematical and other errors.
On October 6, 1994, George moved the court to alter or amend
its decree to exclude the Lord Abbott fund and deny child support.
The court did amend the decree with respect to the Lord Abbott
fund, but left the award of child support unchanged.
Bonnie appeals the District Court's denial of her motion to
vacate the settlement agreement. She also appeals the District
Court's determination that the agreement is not unconscionable.
George cross appeals on the District Court's modification of the
agreement to include child support and to revalue the stock.
SETTLEMENTAGREEMENT
Bonnie moved to vacate the settlement agreement contending
that she felt intimidated at the settlement conference and that
George failed to disclose all of his assets. She argued that these
and other factors made the agreement unconscionable. The District
Court denied Bonnie's motion and accepted the written agreement
determining that, with the inclusion of certain "adjustments for
undisclosed and undervalued property," the agreement was not
unconscionable.
The terms of a separation agreement, except those providing
for the support, custody and visitation of children, are binding
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upon the court unless the court finds the agreement to be
unconscionable. Section 40-4-201(2), MCA. If the separation
agreement is found to be unconscionable, then the court may request
that the parties submit a revised separation agreement or the court
may order the disposition of property. Section 40-4-201(3), MCA.
Consequently, it was reversible error for the District Court to
modify the parties' agreement without finding the agreement
unconscionable. In re Marriage of Blankenship (1984), 210 Mont.
31, 35, 682 P.2d 1354, 1356.
Bonnie also contends that the District Court erred in failing
to enforce the parties' 1982 oral property settlement agreement.
However, this Court has already held that oral marital settlement
agreements are unenforceable as property settlement agreements. In
re Marriage of Simms (19941, 264 Mont. 317, 321, 871 P.2d 899, 901-
2.
Accordingly, we hold that the District Court erred by
modifying the parties' settlement agreement without finding it to
be unconscionable and we remand to the District Court for a
determination of whether or not the agreement is unconscionable.
If the District Court finds that the agreement is conscionable,
then it must be enforced as written, excluding provisions for
support, custody and visitation of the parties' children. If the
District Court finds that the agreement is unconscionable, then the
court may proceed pursuant to § 40-4-201(3), MCA, and either
request that the parties submit a revised separation agreement or
the court may order the disposition of property.
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CHILD SUPPORT
In the March 18, 1994 settlement agreement, the parties
stipulated that George would not be required to pay child support
for the parties' minor child. However, the District Court ordered
George to pay $435 per month in child support to Bonnie effective
September 2, 1993.
George contends it was error to award child support to Bonnie
contrary to the parties' settlement agreement since Bonnie received
a majority of the parties' assets. Nevertheless, the terms of a
separation agreement providing for the support, custody, and
visitation of children are not binding upon the court. Section 40-
4-201(2), MCA. Moreover, our statutory and case law provide that
the Uniform Child Support Guidelines must be used in all cases.
Section 40-4-204(3) (a); Brandon v. Brandon (Mont. 1995), 894 P.2d
951, 953, 52 St.Rep. 381, 382.
In her response to the petition for dissolution, Bonnie
requested child support retroactive to the parties' separation in
1982. However, the District Court awarded child support effective
September 2, 1993, the date of the petition for dissolution.
Bonnie contends that the District Court abused its discretion in
failing to award retroactive child support.
"In determining child support retroactivity, we will not
disturb the award made by the District Court unless a clear abuse
of discretion resulting in substantial prejudice is shown." In re
Marriage of Nash (1992), 254 Mont. 231, 236, 836 P.2d 598, 602
(citing In re Marriage of DiPasquale (1986), 220 Mont. 497, 499,
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716 P.2d 223, 224)
Bonnie has failed to show that she has been substantially
prejudiced by the District Court's determination not to award child
support retroactive to 1982. Bonnie had the benefit of the
parties' income-producing property during the eleven years that she
and George were separated.
Accordingly, we hold that the District Court did not abuse its
discretion by awarding child support to Bonnie contrary to the
parties' settlement agreement and by awarding child support
effective September 1993.
Affirmed in part, reversed in part and re
We Concu
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