Marriage of Tanascu , 377 Mont. 1 ( 2014 )

November 12 2014
DA 14-0221
IN THE SUPREME COURT OF THE STATE OF MONTANA
2014 MT 293
IN RE THE MARRIAGE OF
LINDA TANASCU, n/k/a
LINDA LUDWIG,
Petitioner and Appellant,
v.
GARY TANASCU,
Respondent and Appellee.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and For the County of Gallatin, Cause No. DR 12-358A
Honorable Holly Brown, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Kevin S. Brown, Paoli & Brown, PC, Livingston, Montana
For Appellee:
Karl Knuchel, Attorney at Law, Livingston, Montana
Submitted on Briefs: October 1, 2014
Decided: November 12, 2014
Filed:
Clerk
Chief Justice Mike McGrath delivered the Opinion of the Court.
¶1 Linda Tanascu (Ludwig) appeals from the District Court’s order denying her
motion for relief from the dissolution decree and property distribution, which was filed
April 1, 2014. We affirm.
¶2 The issue on appeal is whether the District Court erred in denying Linda’s motion
to modify the dissolution decree and property distribution.
BACKGROUND
¶3 The parties were married in 1980 and separated in 2012. Gary worked in law
enforcement during most of the marriage and was entitled to a pension from his
employer. Linda filed a petition for dissolution of the marriage and they exchanged
preliminary financial disclosures. Both parties were represented by counsel and
participated in a mediated settlement conference in November 2012. The District Court
described the mediator as “an experienced long-time family law practitioner who also
regularly serves as a mediator in family law and other types of cases.” After an exchange
of settlement drafts the parties entered a written property settlement agreement in
November 2012 and waived the exchange of final financial disclosures.
¶4 The final settlement agreement acknowledges that each party provided
declarations of income and expenses and that those documents complied with statutory
requirements for preliminary and final financial disclosures. The settlement specified
that Gary had a “defined benefit in a sheriff’s retirement account” and that he was
currently drawing benefits. The settlement provided that each party would assume
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various debts, and that Gary would retain his law enforcement pension. Linda expressly
“waive[d] all claim” to Gary’s retirement account except that the parties agreed that she
would continue as the designated beneficiary of the retirement account for survivor
benefits. The parties agreed that Linda would remain in the family home but that it
would be sold and that Linda would receive the equity, estimated to be worth about
$80,000. Other than the estimated value of the home, the settlement agreement did not
set out any valuations of assets or debts. The settlement recited that “[i]nsofar as is
legally permissible, the provisions of this agreement may not be modified by any court.”
¶5 Linda notified the District Court that she and Gary had reached a full settlement,
submitted the signed settlement agreement, and requested a hearing. On March 13, 2013,
the District Court convened a hearing on the dissolution petition. Linda appeared at the
hearing with her attorney, and while Gary did not appear personally or through counsel,
he consented to entry of a decree of dissolution. Linda testified she was satisfied that
there had been a full disclosure of “assets, liabilities, incomes and expenses” and that the
property settlement agreement was fair and equitable. The District Court concluded the
hearing with the oral finding that there was a settlement agreement reached by both
parties with the assistance of counsel, and that all agreed that the agreement “is fair and
equitable; it is not unconscionable.”
¶6 The District Court entered the decree of dissolution on March 8, 2013, finding that
the parties had represented that they had disclosed all assets, liabilities, incomes and
expenses, and that pursuant to § 40-4-254, MCA, there was good cause to waive the
exchange of final disclosures. The District Court further found that the parties had
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entered a settlement agreement “which deals with the issues of property, debt distribution
and all other related issues,” and that the agreement was fair, equitable and “acceptable to
both parties.” The District Court found that the settlement agreement was not
unconscionable and incorporated the settlement agreement as part of the decree. On
March 8, 2013, Linda filed a notice of entry of the decree.
¶7 Almost a year later, in February 2014, Linda appeared with new counsel and
sought relief from the final decree under § 40-4-208, MCA, and M. R. Civ. P. 60(b).
Linda claimed that the property settlement she and Gary previously entered was
unconscionable and that the District Court should modify the dissolution decree. Her
contention, which she continues in this appeal, is that the District Court wrongfully failed
to make findings as to the net value of the marital estate and consequently awarded Gary
$1,721,641 while awarding her only $96,112. Linda’s petition also complained of her
inability to sell the parties’ home and that she was going to receive much less from its
equity than she had anticipated. Linda arrived at $1.7 million figure by multiplying
Gary’s life expectancy by the monthly payout he receives from his pension. She
contended that upon considering that figure, the settlement agreement is unconscionable
and is therefore not binding on the District Court. Gary argued that Linda had voluntarily
entered the settlement and had failed to show any changed circumstances making the
settlement unconscionable, as required by § 40-4-208(2)(b)(i), MCA. Gary also noted
that Linda did not allege that she failed to understand the settlement, that she was
unaware of the value of the pension, or that Gary had exercised any undue influence or
fraud.
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¶8 After briefing the District Court denied Linda’s request to re-open the decree,
finding that Linda had not made any claim that she was unaware of the value of the
parties’ assets and debts, including the home and Gary’s pension, when she entered the
settlement. The District Court found no basis in fact or law to re-open the decree and
denied Linda’s request.
STANDARD OF REVIEW
¶9 This Court reviews a district court’s ruling under M. R. Civ. P 60(b) for an abuse
of discretion, in cases not involving a default judgment. In re Marriage of Anderson,
2013 MT 238, ¶ 13, 371 Mont. 321, 307 P.3d 313. A district court’s determination of
whether a property settlement agreement is unconscionable is presumed to be correct and
will not be overturned unless there was an abuse of discretion. Marriage of Anderson,
¶ 17.
DISCUSSION
¶10 Whether the District Court erred in denying Linda’s motion to re-open and modify
the dissolution decree and property distribution.
¶11 Linda’s motion to re-open and modify the decree of dissolution relies upon
§ 40-4-208(3)(b), MCA. That section provides that “provisions as to property
distribution” in a dissolution of marriage may only be modified by a court “if the court
finds the existence of conditions that justify the reopening of a judgment under the laws
of this state.” Linda in turn cites M. R. Civ. P. 60(b) which provides, in part, that a court
may grant relief from a final judgment or order upon “any other reason that justifies
relief.” M. R. Civ. P. 60(b)(6). She contends that relief is justified here because the
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underlying property settlement that she and Gary entered was unconscionable and that the
District Court erred in approving it without making an independent determination of the
nature and value of all assets of the marriage.
¶12 In this situation—proposed modification of a property settlement previously
incorporated into a decree of dissolution—the catch-all “any other reason” ground for
modification in M. R. Civ. P. 60(b)(6) necessarily requires application of the relevant
statutes on marriage dissolution and property division. Section 40-4-201, MCA. Rule
60(b) therefore provides no alternate or independent ground for a court to consider a
request to modify a prior property settlement. Anderson, ¶¶ 23-29 (motion under
M. R. Civ. P. 60 to reopen a property settlement is analyzed under the marriage
dissolution statutes).
¶13 While Linda contends that the decree of dissolution “awarded” $1.7 million to
Gary and less than $100,000 to her, the District Court made no such actual award and
neither did the parties’ property settlement. The settlement only recites that Gary is
“currently drawing” his retirement benefits and that Linda “waives all claim” to those
benefits. While not stated in the settlement agreement, Gary disclosed the value of his
retirement benefit as approximately $4000 per month. The financial disclosures that the
parties exchanged prior to settlement and the settlement agreement itself leave no doubt
that Linda was aware of Gary’s retirement benefit and aware of the amount he received
each month. Significantly, one of the benefits that Linda obtained in the settlement,
expressed in the settlement agreement, was that she will continue as the contingent
beneficiary to Gary’s retirement account and will therefore receive the benefits herself if
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Gary predeceases her. Linda does not contend that there was any fraud or failure to
disclose the financial situation regarding Gary’s retirement benefits. Linda does not
contend that at the time of the settlement she lacked any information necessary to
calculate the total potential payout from Gary’s retirement. She only contends that she
should have sought a different deal during the settlement.
¶14 The public policy of the State of Montana is to “promote the amicable settlement
of disputes that have arisen between parties to a marriage.” Section 40-4-101(2), MCA;
In re Marriage of Miller, 189 Mont. 356, 362-63, 616 P.2d 313, 318 (1980). Further,
Montana law promotes the use of written settlement agreements “for the disposition of
any property” upon separation or dissolution of a marriage. Section 40-4-201(1), MCA.
Except for terms providing for support, parenting and parental contact with children, the
terms of a separation agreement are “binding upon the court unless it finds” that the
separation agreement is unconscionable. Section 40-4-201(2), MCA. If an agreement
between the parties limits modification, a district court “must adhere to the
non-modification clause and cannot later modify the agreement.” In re Marriage of
Cortese, 2008 MT 28, ¶ 9, 341 Mont. 287, 176 P.3d 1064. Where a property settlement
provides that it “may not be modified by any court,” as does the agreement in this case,
the agreement may not be modified by a court. In re Marriage of Bolstad, 203 Mont.
131, 135, 660 P.2d 95, 97 (1983).
¶15 Accordingly, when the parties have signed and executed a property settlement
agreement and conscionability is not raised as an issue, the court need not determine the
net worth and “must conclude” that the parties have determined the value of their assets.
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Marriage of Miller, 189 Mont. at 363, 616 P.2d at 318. When the parties have entered a
separation agreement and neither party presents any dispute as to the valuation or
distribution of any asset, the district court is not required to make a determination of the
worth of the marital estate. In re Marriage of Caras, 263 Mont. 377, 382, 868 P.2d 615,
618 (1994). We reaffirm the holdings in Marriage of Miller and Marriage of Caras, that
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.
¶16 Therefore, when the District Court entered the decree of dissolution incorporating
the parties’ settlement agreement, it was not required to determine the value of any assets
covered by the settlement agreement. The parties presented a signed written agreement
containing the provisions described above, and Linda herself appeared with counsel
before the District Court and testified that the terms of the settlement were fair and
equitable and that both parties had fully disclosed their assets, liabilities, incomes and
expenses. A district court will not be held in error when, as here, the party now objecting
consented and failed to lodge any objection. Marriage of Anderson, ¶ 28. Linda not only
failed to enter any objection to the settlement agreement, she actively endorsed it to the
District Court.
¶17 In conclusion, Linda entered a property settlement agreement with full knowledge
of the relevant facts. Linda did not present any substantial reason that her agreement to
the settlement should be overturned or that the dissolution decree should be modified.
The decision of the District Court denying Linda’s motion to re-open and modify the
decree was not an abuse of discretion and is affirmed.
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/S/ MIKE McGRATH
We Concur:
/S/ LAURIE McKINNON
/S/ PATRICIA COTTER
/S/ JAMES JEREMIAH SHEA
/S/ JIM RICE
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