Marriage of Shiffman ( 2023 )

01/10/2023
DA 22-0104
Case Number: DA 22-0104
IN THE SUPREME COURT OF THE STATE OF MONTANA
2023 MT 5NIN RE THE MARRIAGE OF:
JUDY L. SHIFFMAN,
Petitioner and Appellee,
and
WILLIAM F. SHIFFMAN,
Respondent and Appellant.
and
SEAN CRUM,
Intervenor and Appellee.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and For the County of Flathead, Cause No. DR-20-701(A)
Honorable Amy Eddy, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Peter F. Carroll, Attorney at Law, Kalispell, Montana
For Appellee:
Paula M. Johnson-Gilchrist, Johnson-Gilchrist Law Firm, P.C., Whitefish,
Montana
For Intervenor:
Kai Groenke, Law Office of Kai Groenke Law, P.C., Kalispell, Montana
Submitted on Briefs: November 2, 2022
Decided: January 10, 2023
Filed:
V,„ 6A•-if
__________________________________________
Clerk
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Justice Ingrid Gustafson delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating
Rules, this case is decided by memorandum opinion, shall not be cited and does not serve
as precedent. Its case title, cause number, and disposition shall be included in this Court’s
quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports.
¶2 William F. Shiffman (William) appeals from the Findings of Fact, Conclusions of
Law, Decree of Dissolution and Order Re: Intervenor’s Claims by the Eleventh Judicial
District Court, finding an alleged premarital agreement unenforceable and dividing the
marital estate between William, Judy L. Shiffman (Judy), and Sean Crum (Sean). We
affirm.
¶3 William and Judy married on September 12, 1998 in Flathead County, Montana,
separated in 2020, and filed for dissolution in November 2020. There were no children of
their marriage, though both parties had prior marriages and adult children from those
marriages. One of Judy’s children, Sean, intervened in the case.
¶4 William owned real property at the time of the parties’ marriage, including one
parcel of approximately 15 acres (15-acre Parcel). After the marriage, the parties utilized
several family transfers and boundary line adjustments to subdivide and transfer various
parcels of real property, some of which were sold. Around the same time, the parties
allowed Sean to build a home on a 3.25-acre portion of the 15-acre Parcel (Sean’s Property)
and promised to subdivide the 15-acre Parcel to deed Sean’s Property to Sean under the
conditions that Sean pay all the costs of construction, taxes, and insurance, maintain the
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property, and live there to assist the parties as needed. Sean accepted this offer, and during
construction and after completion of his residence, performed and satisfied all of Judy and
William’s conditions related to their promised conveyance of Sean’s Property. William
and Judy never subdivided the 15-acre Parcel nor fulfilled their promise to convey Sean’s
Property to Sean.
¶5 In dissolution proceedings, William alleged he and Judy willingly and voluntarily
entered into a document titled “Pre-Marital Agreement” (PMA) on or about September 9,
1998. It is undisputed that Judy was not represented by independent counsel when the
alleged PMA was executed, and Judy denies signing said document. She testified she had
no recollection of reviewing or signing any premarital agreement, and that the alleged PMA
specifically describes property she did not acquire until years later (a sewing machine,
serger, a computer, and several pieces of office equipment) and references real property
that had not yet been built (Cabin C). Sean, who was involved with Judy’s personal affairs,
testified he had no knowledge or recollection of any premarital agreement. William was
the only person who could testify to any recollection of the drafting and execution of the
PMA. According to William’s testimony, the document was a form allegedly prepared by
attorney James Howard with input from both William and Judy, but Howard also testified
forms like the PMA can be obtained on the web. Judy testified she had no recollection of
a James Howard, and neither William nor Judy could attest to the original provenance of
the alleged PMA form. James Howard testified he recalls William, but did not recall Judy,
and further testified that while his signature appears on the document, he does not recall
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preparing it and certain aspects of the form do not follow his normal practices for such
forms.
¶6 The District Court determined the alleged PMA was unconscionable and
unenforceable due to Judy’s lack of counsel, lack of voluntary execution, and myriad
ambiguities and contradictions in the document. As such, the District Court used its broad
discretion to craft a fair and equitable distribution of the marital property, which included
an award to Judy of approximately 8.95 acres of the 15-acre Parcel and three cabins; to
William, approximately 3 acres on the north end of the 15-acre Parcel and other real
property located at 121 Patriot Trail, Lakeside, Montana already in his name (several acres,
his residence, and a rental unit); and to Sean, sole ownership of Sean’s Property1
(approximately 3.25 acres of the 15-acre Parcel and his residence).
¶7 As a district court’s division of marital property is an equitable proceeding, we
review the court’s findings of fact for clear error and its conclusions of law for correctness.
In re Marriage of Funk, 2012 MT 14, ¶ 6, 363 Mont. 352, 270 P.3d 39; Estes v. Estes, 2017
MT 67, ¶ 12, 387 Mont. 113, 391 P.2d 752. A finding of fact is clearly erroneous if it is
not supported by substantial evidence, if the court misapprehended the effect of evidence,
or if upon reviewing the record, the court is left with the definite and firm conviction that
the district court made a mistake. In re L.H., 2007 MT 70, ¶ 13, 336 Mont. 405, 154 P.3d
622.
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It is noted that, at trial, both parties advocated for and agreed to distribute Sean’s Property to
Sean as sole owner of the property.
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¶8 We review a district court’s conclusions of law for correctness. The district courts
have broad discretion to distribute the assets of a marital estate equitably. In re Marriage
of Shirilla, 2004 MT 28, ¶ 8, 319 Mont. 385, 89 P.3d 1. On appeal, each case must be
examined individually, with an eye to its unique circumstances, and absent clearly
erroneous findings, the district court’s property division must be affirmed. Estes, ¶¶ 12-13.
¶9 We may review the division of marital property and award of maintenance to
determine if there was an abuse of discretion. In re Marriage of Thorner, 2008 MT 270,
¶ 21, 345 Mont. 194, 190 P.3d 1063. The test for abuse of discretion is whether the district
court acted arbitrarily without employment of conscientious judgment or exceeded the
bounds of reason resulting in substantial injustice. Thorner, ¶ 21. The issue of
unconscionability of a premarital agreement must be decided as matter of law under
§ 40-2-608(3), MCA.
¶10 William contends the District Court’s determination that the parties’ alleged PMA
is unenforceable is clearly erroneous and an abuse of discretion. Judy argues the District
Court’s findings of fact regarding the PMA’s validity are supported by substantial evidence
and not clearly erroneous, and the District Court correctly determined, as a matter of law
under § 40-2-608(3), MCA, that the PMA was unconscionable when executed. We agree
with Judy.
¶11 Montana has generally adopted the Montana Uniform Premarital Agreement Act as
set forth in §§ 40-2-601 et seq., MCA. A premarital agreement must be in writing and
signed by both parties. Section 40-2-604, MCA. Montana law recognizes several defenses
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to the validity of a premarital agreement, and provides a premarital agreement is
unenforceable if the party against whom enforcement is sought proves that
(a) that party did not execute the agreement voluntarily; or
(b) the agreement was unconscionable when it was executed and, before
execution of the agreement, that party: (i) was not provided a fair and
reasonable disclosure of the property or financial obligations of the other
party; (ii) did not voluntarily and expressly waive, in writing, any right to
disclosure of the property or financial obligations of the other party beyond
the disclosure provided; and (iii) did not have or reasonably could not have
had adequate knowledge of the property or financial obligations of the other
party.
Section 40-2-608(1), MCA.
¶12 The record indicates either of the above defenses are applicable here. There is
substantial evidence and testimony to support Judy’s argument that she did not voluntarily
sign the alleged PMA. After a three-day trial and extensive testimony, the District Court
made the following relevant findings of fact: William alleged (and Judy denied) he and
Judy willingly and voluntarily entered into the PMA, Judy was not represented by
independent counsel and denied signing the document, the document referenced property
Judy did not acquire until years after the alleged signing of the PMA, and the attorney who
William alleged prepared the PMA could not testify to his recollection of Judy or of
preparing said document. Our review of the record shows these findings are not clearly
erroneous, which renders the premarital agreement unenforceable under § 40-2-608(1)(a),
MCA.
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¶13 The issue of unconscionability of a premarital agreement must be decided by the
court as a matter of law. Section 40-2-608(3), MCA. Determinations of unconscionability
are based on careful scrutiny of the underlying facts of each particular case, and because a
district court’s determinations regarding unconscionability are discretionary, we review
these determinations for abuse of discretion. In re Marriage of Pearson, 1998 MT 236,
291 Mont. 101, 965 P.2d 268.
¶14 The findings on which the District Court based its determination of
unconscionability are supported by substantial evidence presented at trial and are not
clearly erroneous, therefore we find the District Court did not abuse its discretion when it
determined the PMA was unconscionable. No witness could testify to the provenance of
the form used for the PMA, and James Howard could not recall preparing it. William is
the drafter of the PMA, as the sole party arguing for its validity and as the only person who
testified to the circumstances surrounding its alleged creation and execution. The District
Court’s findings of fact and conclusions of law are consistent with the rule in § 28-3-206,
MCA, construing ambiguous and inconsistent contract language against the drafter, as the
PMA contains ambiguities and inconsistencies which the District Court correctly construed
against William. For example, Section Five of the PMA allows for gifts to each other
which is inconsistent with Section Fifteen, which requires the return and reconveyance of
any gifts in the event of divorce, separation, or annulment.
¶15 We conclude the District Court properly analyzed the issues according to the
guidelines set forth in § 40-2-608, MCA, and was within its discretion in concluding, as a
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matter of law and as supported by substantial evidence in the record, that the PMA was
unconscionable and unenforceable.
¶16 William argues the District Court’s findings of fact regarding several issues in
equity are clearly erroneous or do not have support in the record. Judy contends the
credible evidence in the record supports the District Court’s findings on the equity issues
William raises, all of which concern valuation and distribution of the marital estate. Our
review of the record shows the District Court thoroughly examined the evidence presented
in issuing its findings of fact, which are not clearly erroneous, and it acted within its
discretion in reaching an equitable division of the martial estate based on its sound factual
findings. We will not disturb the District Court’s decision.
¶17 William contends the District Court’s conclusions of law based on many of the
above factual findings regarding issues of property division and maintenance are clearly
erroneous and an abuse of discretion. Judy argues the property division (which the record
shows includes considerations of maintenance) is based on sound findings of fact supported
by the record, and that it was reasonable and fair for the District Court to fashion an
equitable division by using its discretion to distribute the property between the parties in a
manner as to avoid awarding maintenance. We strongly prefer the division of property
over spousal maintenance when distributing marital estates: “Property and maintenance
awards are to be considered in tandem, with a clear preference for awarding property first.”
In re Marriage of Rolf, 2003 MT 194, ¶ 25, 316 Mont. 517, 75 P.3d 770. Moreover, based
upon its correct finding that Judy would be entitled to spousal support if the PMA were
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enforced to avoid having to access public benefits, the District Court exercised its
discretion wisely when it stopped short of awarding such support, choosing instead to order
an equitable division of the estate with each receiving sufficient assets to support
themselves. As such, we will not disturb the District Court’s careful findings regarding
maintenance nor its correct decision to utilize property division as an equitable result that
accounts for the parties’ debts and maintenance needs.
¶18 Finally, William contends the District Court erred in valuation of the marital estate
by averaging valuations of the parties’ experts. The valuation of the marital estate is a
discretionary ruling and “valuation need only be reasonable in light of the evidence
submitted.” In re Marriage of Dirnberger, 2007 MT 84, ¶ 23, 337 Mont. 56, 154 P.3d
1227.
We have recognized district courts face a considerable task in determining
property valuation. In the final analysis, it is not a question of whether we
would be persuaded to reach a different conclusion after considering the
same evidence. Rather, the test is whether the district court had adequate
evidence to support its conclusions.
Collins v. Collins, 2004 MT 365, ¶ 26, 324 Mont. 500, 104 P.3d 1059.
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¶19 Here, the District Court made extensive findings based on expert opinions offered
by both parties and was well within its discretionary limits to average the values presented
to accomplish a fair and equitable division of the property. Moreover, the District Court’s
property division, including the award to Sean of Sean’s property (which both parties
advocated for and agreed to at trial), accomplishes an equitable division given the unique
circumstances of this case.
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¶20 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our
Internal Operating Rules, which provides for memorandum opinions. In the opinion of the
Court, the case presents a question controlled by settled law or by the clear application of
applicable standards of review. The District Court’s interpretation and application of the
law were correct, its findings of fact are not clearly erroneous, and its ruling was not an
abuse of discretion.
¶21 Affirmed.
/S/ INGRID GUSTAFSON
We concur:
/S/ JAMES JEREMIAH SHEA
/S/ BETH BAKER
/S/ DIRK M. SANDEFUR
/S/ JIM RICE
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