In Re the Marriage of Pearson

No
No. 97-657
IN THE SUPREME COURT OF THE STATE OF MONTANA
1998 MT 236
IN RE THE MARRIAGE OF
THOMAS EDWARD PEARSON,
Petitioner and Respondent,
and
DEBRA KAY PEARSON,
Respondent and Appellant.
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APPEAL FROM: District Court of the Twenty-First Judicial
District,
In and for the County of Ravalli,
The Honorable Jeffrey H. Langton, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Richard A. Reep, Reep, Spoon & Gordon, Missoula, Montana
For Respondent:
Dexter L. Delaney, Brian L. Delaney, Mulroney, Delaney & Scott, Missoula, Montana
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Submitted on Briefs: April 13, 1998
Decided: September 29, 1998
Filed:
__________________________________________
Clerk
Justice William E. Hunt, Sr. delivered the Opinion of the Court.
¶ The marriage of Thomas Edward Pearson (Tom) and Debra Kay Pearson (Debra)
was dissolved on November 16, 1994, pursuant to the Findings of Fact, Conclusions
of Law, and Decree entered by the Twenty-First Judicial District Court, Ravalli
County. In entering the Decree, the court incorporated by reference a Marital and
Property Settlement Agreement (Agreement) entered into by the parties on October
17, 1994, and an addendum to the Agreement entered into on November 15, 1994.
¶ On April 16, 1996, Debra moved the court to modify the provisions of the Decree
relating to spousal maintenance and child support. While these motions were
pending, Tom moved the court to enforce and modify the provisions of the Decree
relating to visitation. On May 23, 1997, the District Court issued its Findings of Fact,
Conclusions of Law, and Decree deciding all motions in favor of Tom and awarding
Tom attorney’s fees and costs. Debra appealed. We affirm.
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¶ We restate the issues as follows:
¶ 1. Did the District Court err in denying Debra’s motion to modify the maintenance
provision of the dissolution decree?
¶ 2. Did the District Court err in denying Debra’s motion to modify child support?
¶ 3. Did the District Court err in granting Tom’s motion to enforce visitation?
¶ 4. Did the District Court err in granting Tom’s motion to modify visitation?
¶ 5. Did the District Court err in not addressing whether Tom violated the
Agreement by failing to maintain or provide proof of life insurance coverage for the
benefit of the children?
¶ 6. Did the District Court err in awarding Tom attorney’s fees and costs?
BACKGROUND
¶ Tom and Debra married in November 1980. They had two children, Jennifer and
Jonathan. Tom and Debra together built and operated Pearson Logging. Although
Tom was the principal financial provider and Debra was the principal caretaker of
the children, Debra was involved with Pearson Logging on a day-to-day basis. She
not only kept the books of the business, but also prepared financial statements for the
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purpose of securing loans. Aside from her work at Pearson Logging, Debra briefly
held jobs as a waitress and a fire-fighter.
¶ After fourteen years of marriage, Tom and Debra decided to divorce. To save time
and money, Tom and Debra themselves negotiated a settlement, rather than seek
independent counsel. They discussed the issues of property distribution and custody,
visitation, and support of the children, and made a "list" memorializing all to which
they had agreed.
¶ With list in hand, Tom and Debra hired an attorney to draft a settlement
agreement and file the petition for dissolution with the court. The attorney testified
that he represented Tom and Debra jointly. He testified that when Tom and Debra
consulted him, they did not seek legal advice in obtaining a different property
distribution, but simply asked him to draft a document reflecting their negotiated
settlement. At that time, some details, such as allocation of the children’s health
insurance costs and uncovered medical expenses, had not been decided. After
meeting with the attorney, the parties finally reached an agreement as to all issues
pertaining to the dissolution. The attorney drafted the Agreement and the parties
signed it on October 17, 1994. The attorney filed the petition for dissolution shortly
thereafter.
¶ The Agreement provides that each party has entered into it voluntarily, with full
knowledge and understanding of its consequences, and full disclosure of assets. The
Agreement provides that the parties have entered into it free from fraud, duress,
coercion, or unfair persuasion or domination of either party by the other or by any
other person. The Agreement provides that it shall fully and finally settle all rights,
duties, and obligations of the parties as set forth therein. The Agreement also
provides that each party releases and discharges the other from further obligations.
¶ Regarding the marital property, the Agreement provides that Tom receives
everything on "Exhibit A," including three parcels of real property; two mining
claims; and Lots 1 and 4 of the Lost Trail Cabins subdivision. Debra receives
everything on "Exhibit B" including the family home and real property in
Stevensville; Tom’s interest in a contract for deed for the sale of certain real
property; Lot 1 of the Sunny Estates subdivision; and Lots 2 and 3 of the Lost Trail
Cabins subdivision. Prior to consulting with the attorney, Tom and Debra negotiated
an equitable division of the remaining assets including their logging business,
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vehicles, camper, snowmobiles, and other personal property. The Agreement only
makes general reference to these items and provides that each party is the sole and
exclusive owner of those items presently in his or her possession. The Agreement also
provides that each party is responsible for the liabilities associated with the assets he
or she is awarded. Exhibits produced at trial showed that Tom received a total asset
distribution worth $305,500, and Debra received a total asset distribution worth
$385,710.
¶ Regarding spousal maintenance, the Agreement specifically provides that, having
considered the factors set forth in § 40-4-203, MCA, neither party shall be entitled to
maintenance.
¶ Regarding the children, the Agreement provides that Tom and Debra have joint
custody, that Debra is the primary residential custodian, and that Tom has "liberal"
visitation. The Agreement provides that the proceeds from the sale of lot 2 of the
Sunny Estates subdivision will fund child support for the children. Pursuant to the
contract for deed for the sale of this parcel, the buyer makes monthly payments of
$437.86 over 15 years into escrow. The Agreement requires the escrow agent to
deliver each monthly payment to Debra as primary residential custodian of the
children. In the event Tom is designated primary residential custodian, the escrow
agent is required to deliver the payment to Tom. If the parties eventually have split
custody of the children, the escrow agent is required to deliver half of the payment to
Tom and the other half to Debra. The Agreement acknowledges that payments are
scheduled to continue several years after the children reach the age of majority, and
provides that the monthly payments will be disbursed to the children even after the
age of majority.
¶ For purposes of comparison, the parties completed child support financial
affidavits and figured that pursuant to the Uniform Child Support Guidelines
(Guidelines), Tom’s child support obligation would be $82.50 per child per month
until the children reached the age of majority. This child support obligation was
based in part on Tom’s annual income reported as $16,000. Both Tom and Debra
thought that their proposal of funding child support with the contract receivable
payments was an "excellent idea" as it provided more money to the children for a
longer period of time than is required under the Guidelines. Further, the payments
would be a steady, reliable source of income, independent of Tom’s wage-earning
ability.
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¶ Initially, the Agreement provided that each party would alternate paying the
children’s monthly health insurance premiums, and that each party would be
responsible for half of the uncovered and deductible sums incurred on behalf of the
children. However, an addendum to the Agreement entered into November 15, 1994,
changed this provision. Now, Tom pays Jennifer’s health insurance coverage and
Debra pays Jonathan’s coverage. The provision regarding unpaid and deductible
sums remains unchanged. With respect to Tom’s life insurance, the Agreement
provides that Tom shall continue to name the children as primary beneficiaries.
¶ Regarding modification, the Agreement provides that, except as provided in § 40-4-
201(6), MCA, the provisions of the Agreement, and the Decree of Dissolution into
which the Agreement is incorporated, may not be modified or amended without the
parties’ express written consent. Lastly, regarding attorney’s fees, the Agreement
provides that should any action be commenced to enforce, modify, or interpret any of
its provisions, the court shall award a reasonable attorney’s fee to the prevailing
party.
¶ Soon after the dissolution became final, the parties experienced problems with
visitation and child support. Visitation between Tom and the children proved to be
troublesome. Debra testified that Tom spent less time with the children because he
did not have the time or the room for them. Debra testified that the children did not
want to visit their father because they did not like his new girlfriend. Debra testified
that Jennifer did not want to visit her father because she did not like going into the
woods, and that Jonathan often "came home unhappy" after visiting his father.
¶ Tom testified that Debra turned the children against him and was the real cause of
the visitation troubles. Tom testified that he made several attempts to see the
children, but that Debra refused to allow the children to see him. He testified that
Debra wrongfully advised school officials that he was not allowed to visit the children
in school.
¶ Because the "liberal visitation" provision of the Agreement proved not workable,
Tom filed a motion to modify the Agreement and requested the court to set a
visitation schedule with the children. After a hearing on the issue, the parties reached
an agreement concerning a visitation schedule. The court incorporated this
agreement into its Order dated August 1, 1995, which provided that Tom shall have
visitation with both the children on alternating weekends, but that the daughter,
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Jennifer, shall have the right to refuse visitation with her father if she so desires.
Further, the Order provided that the parties shall alternate holiday visitation and
shall divide visitation during the summer vacation period in half. The Order
provided that the non-custodial parent shall have reasonable telephone contact with
the children when they are in the custody of the other parent, and further required
the parties to follow the Child Visitation Guidelines of the Twenty-First Judicial
District.
¶ Despite this new agreement, the parties continued to have visitation troubles. Tom
testified that Debra unduly influenced the children so they would not want to see
him. Although Tom wanted to see Jennifer, she always exercised her "veto power"
and denied visitation. Tom testified that Debra monitored and often recorded his
telephone conversations with the children. He testified that at times, when he picked
up Jonathan for weekend visitation, Jonathan was ill-equipped with toys and
adequate clothing.
¶ Regarding child support, Debra testified that she had insufficient funds to properly
care for the children. After the dissolution, Debra was employed as a full-time meat
processor for two months. She quit this job so that she could spend more time with
her children. Debra then worked part-time driving a dump truck and a school bus.
Her job as a part-time dump truck driver later became unavailable, but Debra
continued working as a school bus driver.
¶ Debra works ten hours per week and earns $300 per month as a school bus driver.
This income was insufficient to cover her monthly home mortgage, three vehicle
payments, and a furniture payment. She also testified that the children are now
teenagers and have increased needs attendant to being a teenager. Debra testified
that due to her lack of credit, she could not take out a loan to make her required
payments and support herself and the children. She testified that her only option was
to liquidate her assets and pay her debts in full. She testified she applied at the local
job service but did not actively seek full-time employment because she liked spending
time with her children, notwithstanding the fact that her children attend school
much of the day. Debra sold all but two parcels of real property, and used part of the
proceeds to pay all of her outstanding debts totaling approximately $61,000. She
placed the remainder of the real estate proceeds in certificates of deposit (CDS). As
Debra drew income of $279 per month from her CDS to supplement her $300
monthly wages and $437 monthly child support payment, the balance of the CDS
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depleted.
¶ On April 16, 1996, Debra filed a motion for modification of the provisions of the
dissolution decree pertaining to child support; payment of the children’s health
insurance premiums and uncovered sums; and spousal maintenance. Regarding child
support, Debra requested that it be modified to amounts consistent with the
Guidelines. In her affidavit supporting her motion, Debra attached a new Guidelines
worksheet showing a much higher annual income for Tom, and a corresponding
monthly child support obligation of $1697. Regarding the children’s health
insurance, Debra requested that the arrangement be modified so that each parent
pays his or her proportionate share of the children’s health insurance premiums and
uncovered sums based on a ratio of the parents’ relative incomes. Regarding spousal
maintenance, Debra requested that she be granted sufficient maintenance to
adequately provide for her re-education and training. Debra also requested
attorney’s fees pursuant to the Agreement.
¶ On August 30, 1996, Tom filed motions to enforce and modify the court’s previous
orders and decrees, and a motion for court-ordered counseling. Regarding the
motion to enforce, Tom requested that the court require Debra to allow
unencumbered telephone contact with Jonathan while he is in Debra’s custody, and
send Jonathan to him for visitation periods with adequate toys and clothing.
Regarding the motion to modify, Tom requested that Jonathan’s visitation schedule
be expanded to include all Mondays following weekends during which he would
normally have visitation, and Wednesday evenings every other week.
¶ A hearing was held as to all motions on April 18, 1997. On May 23, 1997, the
District Court issued its Findings of Fact, Conclusions of Law, and Decree deciding
all motions in favor of Tom and awarding Tom attorney’s fees and costs. The court
directed the parties to file affidavits setting forth calculations of reasonable
attorney’s fees and costs. On August 28, 1997, the court issued its opinion and order
on the appropriate attorney’s fees and costs to be awarded Tom. Debra appeals both
the May 23, 1997 Decree and the August 28, 1997 Order of the District Court.
Additional facts will be provided as necessary to dispose of the issues raised.
STANDARD OF REVIEW
¶ Generally, in cases involving modification of child support and maintenance, we
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review a district court's findings of fact to determine whether they are clearly
erroneous. In re Marriage of Widhalm (1996), 279 Mont. 97, 100, 926 P.2d 748, 750
(child support); In re Marriage of Brown (1997), 283 Mont. 269, 272, 940 P.2d 122,
123-24 (maintenance). A district court's conclusions of law are reviewed to determine
whether the court's interpretation of the law was correct. Widhalm, 279 Mont. at
100, 926 P.2d at 750. We review a district court's overall decision on modification of
child support awards for abuse of discretion, keeping in mind the best interests of the
children. Widhalm, 279 Mont. at 100-01, 926 P.2d at 750.
¶ Section 40-4-208(2)(b)(i), MCA, provides that a decree containing provisions
relating to maintenance and support may be modified only "upon a showing of
changed circumstances so substantial and continuing as to make the terms
unconscionable[.]" There exists no set definition of unconscionability; rather,
determinations of unconscionability are made on a case-by-case scrutiny of the
underlying facts. Brown, 283 Mont. at 272, 940 P.2d at 123. Because a district court’s
determinations regarding changed circumstances and unconscionability are
discretionary, Brown, 283 Mont. at 272, 940 P.2d at 124, we review these
determinations for abuse of discretion. Brown, 283 Mont. at 272-73, 940 P.2d at 124.
We review a district court's award of attorney fees for abuse of discretion. In re
Marriage of Schnell (1995), 273 Mont. 466, 473, 905 P.2d 144, 148. In evaluating
abuse of discretion, we look to whether the court acted arbitrarily without
employment of conscientious judgment or exceeded the bounds of reason resulting in
substantial injustice. In re Marriage of Wessel (1986), 220 Mont. 326, 333, 715 P.2d
45, 50.
DISCUSSION
Issue 1
¶ Did the District Court err in denying Debra’s motion to modify the maintenance
provision of the dissolution decree?
¶ In analyzing Debra’s request for maintenance, the court made the following
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findings with respect to the parties’ Agreement: (1) that the parties intended the
Agreement to fully and finally settle all financial rights, duties, and obligations; (2)
that the parties released and discharged each other from further obligations; (3) that
neither party was entitled to maintenance; (4) that the Agreement was not subject to
modification except for matters relating to the custody, support, and visitation of the
children pursuant to § 40-4-201(6), MCA. The court concluded that as a matter of
contract and as a matter of law, the non-modification clause of the Agreement
precluded an award of maintenance. In reaching this conclusion, the court applied §
40-4-201(6), MCA (1995), which provides that modification as to maintenance is
prohibited if the decree of dissolution expressly precludes or limits modification of
terms set forth in the decree. The court reasoned that because the decree expressly
incorporated the parties’ Agreement, and because the Agreement contained an
express non-modification clause, modification as to maintenance was prohibited.
¶ Debra argues the above analysis is flawed in that the court misinterpreted § 40-4-
201(6), MCA. Debra argues that § 40-4-201(6), MCA, requires a non-modification
clause to be express as to maintenance in order to preclude modification of
maintenance. In essence, Debra asserts that a non-modification clause of a marital
property settlement agreement is ineffective if the parties do not state with
particularity those terms of the Agreement to which the clause applies. We cannot
agree with Debra’s assertion because it contravenes the plain meaning of the statute
and Montana case law interpreting the statute.
¶ Section 40-4-201(6), MCA (1995), states:
Except for terms concerning the support, custody, or visitation of children, the
decree may expressly preclude or limit modification of terms set forth in the
decree if the separation agreement so provides. Otherwise, terms of a
separation agreement set forth in the decree are automatically modified by
modification of the decree.
In construing this statute, we must give effect to all of its provisions and particulars, and
not insert what has been omitted or omit what has been inserted. Section 1-2-101, MCA.
Section 40-4-201(6), MCA, only requires a non-modification clause to be express; it does
not require a non-modification clause to be express as to the terms to which it applies.
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Additionally, we have held that where a marital and property settlement agreement
addresses maintenance and contains general release and non-modification clauses, as in
the instant case, any attempt to modify maintenance is prohibited. In re Marriage of
Johnson (1992), 252 Mont. 258, 261-62, 828 P.2d 388, 391. We hold that the court
correctly interpreted the law and did not err in denying Debra’s request for maintenance.
Issue 2
¶ Did the District Court err in denying Debra’s motion to modify child support?
¶ Before a child support obligation may be modified, the party seeking modification
must demonstrate the existence of "changed circumstances so substantial and
continuing as to make the terms unconscionable." Section 40-4-208(2)(b)(i), MCA. In
her affidavit to the District Court, Debra listed several factors as evidence that
modification of Tom’s child support obligation was warranted. These factors can be
grouped in two categories: those alleging changed circumstances which occurred
after entry of the dissolution decree, and those alleging unconscionability of the
parties’ Agreement. Debra identified the following changed circumstances in support
of modification: (1) Tom significantly decreased his visitation with the children such
that Debra now has sole responsibility for their care; (2) Debra was forced to
liquidate the bulk of the assets she received in the marital property distribution to
support and care for the children; (3) Debra is entitled to a larger support award
because Tom has earned more income; and (4) due to Debra’s financial hardship and
Tom’s increased annual income, the children’s health insurance premiums,
deductibles, and uncovered sums should be allocated proportionately, based on a
ratio of the parties’ annual incomes pursuant to In re Marriage of Weed (1992), 254
Mont. 162, 166-67, 836 P.2d 591, 594.
¶ Debra listed the following as evidence that the Agreement was unconscionable: (1)
the attorney who drafted the Agreement represented Tom’s interests but not Debra’s
interests; (2) Debra is actually paying half of Tom’s support obligation of $437
because she had a one-half ownership interest in the parcel that was sold to fund
child support; and (3) the attorney’s original child support calculation, which was
used to determine whether the contract receivable payment was consistent with
Tom’s support obligation under the Guidelines, grossly understated Tom’s income
and overstated Debra’s income.
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¶ The District Court made a specific finding with respect to each of Debra’s claims
pertaining to changed circumstances and unconscionability. The court ultimately
determined that "no credible evidence was submitted by Debra that there has been
some form of a continuing change in circumstances or to the effect that the current
child support arrangement is unconscionable."
¶ On appeal to this Court, Debra challenges the court’s determination regarding
changed circumstances and unconscionability. In response, Tom argues we need not
review Debra’s claims pertaining to unconscionability of the parties’ Agreement
because they are not properly before the Court. We agree with Tom. We decline to
review Debra’s claims of error regarding unconscionability of the Agreement for two
reasons.
¶ First, the information supporting Debra’s claims of unconscionability was known
by Debra, or should have been known by Debra, at the time the Agreement was
entered. If, for the above reasons, Debra thought the Agreement unconscionable, she
should have appealed the decree of dissolution within thirty days in accordance with
Rules 4 and 5, M.R.App.P. Having failed in this regard, Debra’s claims regarding
unconscionability of the Agreement are time-barred.
¶ Second, it appears the District Court misinterpreted the correct standard to be
applied in determining whether the child support provisions of the Agreement should
be modified. As previously stated, before a child support obligation may be modified,
the party seeking modification must demonstrate the existence of "changed
circumstances so substantial and continuing as to make the terms unconscionable."
Section 40-4-208(2)(b)(i), MCA. We have interpreted this standard to mean that a
finding of changed circumstances is a prerequisite to any inquiry into the
unconscionability of a prior support award. In re Marriage of Clyatt (1994), 267
Mont. 119, 123, 882 P.2d 503, 506 ("Absent a finding of changed circumstances, the
court’s analysis need go no further."). Here, the court found that Debra failed to
meet her burden of showing a substantial and continuing change in circumstances
"or that . . . the current child support arrangement is unconscionable." (Emphasis
added.) Pursuant to the rule in Clyatt, once the court determined that Debra did not
meet her burden of showing substantial and continuing changed circumstances, the
court’s analysis should have stopped.
¶ On appeal, Debra attempts to circumvent Clyatt by asserting that § 40-5-273,
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MCA, provides for administrative review and modification of district court child
support orders without making a threshold finding of changed circumstances. Based
on this statute, Debra argues that a finding of changed circumstances is unnecessary
in determining whether modification is warranted. Debra’s argument is without
merit. Debra did not seek modification through administrative review. Thus, § 40-5-
273, MCA, does not apply to this case.
¶ Although the court unnecessarily inquired into unconscionability of the
Agreement, doing so is not grounds for reversal of the decision. "We will uphold a
district court’s decision, if correct, regardless of the reasons given for the result." In
re Marriage of Barnard (1994), 264 Mont. 103, 109, 870 P.2d 91, 95. We turn then to
a discussion of whether the court correctly determined that Debra did not meet her
burden of showing substantial and continuing changed circumstances.
¶ We have held that in order to demonstrate changed circumstances, a party must
provide specific evidence about changed economic circumstances or actual increased
need. In re Marriage of Gingerich (1994), 269 Mont. 161, 165, 887 P.2d 714, 716. The
record must contain evidence concerning the children’s financial needs and
resources, as well as each parent’s financial needs and resources. Duffey v. Duffey
(1981), 193 Mont. 241, 244, 631 P.2d 697, 699.
¶ Debra identified four factors which she claims evidences changed circumstances
warranting modification of child support. The court dismissed each claimed factor as
not credible. First, Debra claimed that Tom significantly decreased his visitation with
the children such that she now has sole financial responsibility for their care.
Although Debra testified that Tom voluntarily decreased visitation, Tom testified
that Debra refused him visitation, wrongfully advised school officials that he was not
to see the children, and unduly influenced the children so they would not want to see
him. The court found Tom’s version of events more credible than Debra’s.
¶ Second, Debra claimed she was forced to liquidate the bulk of the assets she
received in the marital property distribution and, as a result, has insufficient funds to
care for the children. There is no evidence supporting Debra’s claims that she was
"forced" to sell a portion of her assets, that she sold "the bulk" of her assets, and
that she now has insufficient funds to care for the children. The record indicates
Debra has many job skills lending to her employability, yet Debra elects to be
underemployed. Thus, based on her employability, some amount of income can be
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imputed to Debra. See § 46.30.1513, ARM. The record also indicates that at the time
of the hearing, after paying her debts in full, Debra’s net worth was at least $272,268
and at most $306,200. Debra failed to present concrete evidence that the $437
monthly child support payment she received was not meeting the children’s needs.
Based on the record, the court did not believe any of Debra’s claims relating to
insufficient funds.
¶ Third, Debra asserted that she is entitled to a larger support award because Tom
earns more income than he reports. Debra claims that in calculating his annual
income for 1994, 1995, and 1996, Tom wrongfully deducted depreciation and
wrongfully omitted capital gains. Again, the court found that the facts do not support
these claims. Regarding depreciation, § 46.30.1508(1)(c), ARM, allows for purposes
of child support calculation a depreciation deduction "upon a showing of economic
necessity." Upon testimony from both Tom and his accountant that the depreciation
expense was legitimate, and represented a very real, out-of-pocket cost to Pearson
Logging, the court found that the logging business takes a real toll on Tom’s business
equipment, and upheld the depreciation deduction.
¶ Regarding capital gains, § 46.30.1508(1)(a), ARM, provides that capital gains are
included in determining gross income for purposes of calculating child support.
However, the District Court has discretion to depart from the Guidelines if it finds
that application of the Guidelines is inappropriate in a particular case. Section 40-4-
204(3)(a), MCA. The record indicates that both Tom and Debra agreed to omit
capital gains from Tom’s annual income for purposes of calculating child support.
Tom testified that the reason for this omission was that the capital gains derived
from the sale of certain lands used for logging stemmed from a "once in a lifetime
transaction," the likes of which Tom has never, and probably will never, experience
again. The court found that Tom’s child support calculation was consistent with
Debra’s testimony regarding treatment of capital gains. Based on these
considerations, the court upheld the omission of capital gains from Tom’s income
calculation for purposes of child support.
¶ The record reflects that with the omission of capital gains, Tom’s annual income
for 1994, 1995, and 1996 was $17,954, $10,500, and $4311, respectively. The court
found that these figures did not represent a substantial and continuing change in
Tom’s income compared to the $16,000 income figure that Tom utilized for child
support calculation purposes prior to entry of the decree of dissolution. The court
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also found that the parties’ arrangement to utilize the monthly $437 contract
receivable payment for child support was in the best interests of the children.
¶ Last, Debra asserted that due to her financial hardship and Tom’s increased
annual income, the children’s health insurance premiums, deductibles, and
uncovered sums must be allocated proportionately based on a ratio of the parties’
annual incomes pursuant to In re Marriage of Weed (1992), 254 Mont. 162, 166-67,
836 P.2d 591, 594. We need not decide whether Weed applies to this case because we
have already determined that the record does not support Debra’s assertion of
financial hardship nor her contention that Tom’s annual income has significantly
increased.
¶ The court dismissed each factor supporting Debra’s claim of changed
circumstances as not credible. We must give due regard to the opportunity of the
trial court to judge the credibility of witnesses. Rule 52(a), M.R.Civ.P. It is the duty
and function of the District Court to resolve conflicts in evidence, and we will not
substitute our judgment for that of the District Court on such matters. Brown, 283
Mont. at 274, 940 P.2d at 125. We hold that the court did not abuse its discretion in
determining that Debra failed to meet her burden of demonstrating substantial and
continuing changed circumstances. We hold that the court did not err in denying
Debra’s motion for modification of child support.
Issue 3
¶ Did the District Court err in granting Tom’s motion to enforce visitation?
¶ In granting Tom’s motion to enforce visitation privileges, the District Court made
the following finding:
The record supports Tom’s contention that he has been denied reasonable or
liberal visitation with his children, particularly Jonny, and that Debra has
substantially interfered with Tom’s visitation privileges. The court finds that
Tom continues to be entitled to liberal and reasonable visitation with his
children . . . .
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No
¶ Without citation to authority, Debra contends that this finding is clearly erroneous
because the court "ignored" certain evidence of Jonathan’s apparent refusal to visit
Tom. In particular, Debra assigns error to the court’s failure to interview Jonathan
and failure to reference a psychiatric report prepared by Dr. William Stratford (Dr.
Stratford) in which Dr. Stratford stated that Jonathan "perceives [Tom’s paramour,
Karen] as being very hostile to him and, in fact, alleges that she has performed some
cruel acts." Debra also asserts that at the time the court issued its findings, Tom was
no longer privileged to "liberal" visitation because the court had imposed a new
visitation schedule whereby Tom and Jonathan would have visitation on Wednesday
nights on condition that Jonathan not have contact with Karen.
¶ We are not persuaded by Debra’s contentions because they are clearly without
support in the record. Our examination of the record reveals that the court
recognized Jonathan’s concerns about Karen, considered Dr. Stratford’s
recommendations, and attempted to fashion a workable visitation schedule to be
followed until the court could issue its final rulings on the motions. The following
exchange occurred at the conclusion of the April 18, 1997 hearing on which the court
based its final rulings:
COURT: I will take this matter under advisement and have my opinion after
receipt of those proposed findings.
COUNSEL FOR DEBRA: Does the court have any sense of whether or not
you even wish to speak with Johnnie?
COURT: Well, now, as I understand, both parties appear to have some degree
of confidence in Dr. Stratford. And I think I would be inclined in this case at
least for the time being to follow Dr. Stratford’s recommendations for the
time being. And the arrangement he recommends would be through the end of
the school year. [I]t would make sense to me to have [counsel] review it this
summer, to have Dr. Stratford review it and make recommendations.
COUNSEL FOR TOM: I am really glad that you brought this up. We still
have a situation where Mr. Pearson is not having visitation.
COURT: That needs to be corrected immediately. I don’t think we should
wait for findings to do that. [T]here does appear to be some conflict . . .
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No
between [Jonathan] and the stepmother figure [Karen]. Could we have some
agreement that these visitations will be outside of her presence at least
through the end of the school year?
COUNSEL FOR TOM: [W]e would be willing to agree to that, pending the
court’s further determination on these issues. . . . But we did try and reach an
agreement that there would be [Wednesday] visitation . . . [a]nd it just didn’t
turn out workable because Mrs. Pearson insisted on being around during the
visitation period . . . .
After further negotiation, the parties reached an agreement whereby Tom would have
Wednesday night visitation with Jonathan from 5:00 p.m. until 9:00 p.m., without Karen
present, until final determination of the issues. Upon reaching this agreement, the court
asked whether there were any objections, to which Debra’s counsel responded, "That’s
acceptable, Your Honor."
¶ A complete examination of the record, much of which is set out in the beginning of
this opinion, reveals that substantial, credible evidence exists to support the court’s
finding that Tom was denied reasonable or liberal visitation. Both Tom and Debra
presented evidence to the court regarding Tom’s visitation with the children. The
District Court found Tom’s evidence more substantial and credible. Again, we defer
to the District Court’s ability to judge the credibility of witnesses. Rule 52(a), M.R.
Civ.P. It is the District Court’s function to resolve conflicts in evidence, and we will
not substitute our judgment for that of the District Court on such matters. Brown,
283 Mont. at 274, 940 P.2d at 125. We hold that the District Court’s finding
regarding visitation was adequately supported by substantial evidence and,
therefore, was not clearly erroneous. The court did not err in granting Tom’s motion
to enforce visitation privileges.
Issue 4
¶ Did the District Court err in granting Tom’s motion to modify visitation?
¶ Tom requested that his visitation with Jonathan be expanded to include Mondays
during the summer following normal visitation periods, and every other Wednesday
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No
evening. Pursuant to § 40-4-217(3), MCA, modification of visitation is allowed
whenever modification would serve the best interest of the child. In re Marriage of
Cox (1994), 266 Mont. 67, 71, 878 P.2d 903, 907. In granting Tom’s motion, the court
made the following finding:
Based on the record, there is not a good reason to deny [Tom’s motion]. The
evidence before the court is that Jonny loves his father very much and wants
to spend time with him, and the court finds that this would be in Jonny’s best
interest.
¶ Without citation to authority, Debra argues that this single finding is insufficient to
support expansion of Tom’s visitation. Debra also argues that the above finding was
insufficient to support expansion of Tom’s visitation in light of Dr. Stratford’s
recommendation that visitation be "restricted." We do not find Debra’s arguments
convincing.
¶ First, we note that although the above finding was the only one appearing under
the heading entitled "Tom’s Motion for Expanded Visitation," the numerous
findings made in other parts of the court’s opinion demonstrate that the court
considered all the evidence relating to visitation and the best interests of Jonny.
Second, we note that Dr. Stratford did not recommend that Tom’s visitation with
Jonathan be "restricted." Rather, Dr. Stratford recommended that overnight or
weekend visitation with Jonathan be "tabled at this point." Dr. Stratford suggested
that Tom have visitation with Jonathan one night a week through the end of school,
at which time a new visitation schedule could be decided. Dr. Stratford specifically
stated, "Jonny evidences a wish to see his father." We hold that the District Court’s
finding concerning expansion of Tom’s visitation with Jonathan was supported by
substantial evidence and was not clearly erroneous. The court did not err in granting
Tom’s motion to modify visitation.
Issue 5
¶ Did the District Court err in not addressing whether Tom violated the Agreement by
failing to maintain or provide proof of life insurance coverage for the benefit of the
children?
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No
¶ With respect to life insurance, the parties’ Agreement provides that "Husband
shall continue to name the two minor children as primary beneficiaries under his life
insurance policy." At the hearing, Debra testified that Tom violated the terms of the
Agreement by failing to maintain or provide proof of life insurance coverage for the
benefit of the children. Debra was cross-examined as to whether this issue was
properly before the court because no motion had been filed requesting proof that
Tom maintains life insurance for the benefit of the children. Debra was also cross-
examined as to what exactly the Agreement provides concerning life insurance.
Debra conceded that the Agreement did not require Tom to maintain life insurance;
it only required Tom to name the children as beneficiaries to any life insurance
policy he may have. Although Debra considered the life insurance issue "important,"
she failed to include any findings or conclusions pertaining to life insurance in her
proposed findings and conclusions submitted to the court. The court did not address
Debra’s claim relating to life insurance in its Findings of Fact, Conclusions of Law,
and Decree.
¶ Debra argues on appeal that the court’s failure to address life insurance constitutes
reversible error. We disagree. This Court will consider for review only those issues
raised in the pleadings or otherwise before the District Court. Matter of Estate of
Rogers (1986), 223 Mont. 78, 82, 725 P.2d 544, 546. The basis of this rule is that "it is
fundamentally unfair to fault the trial court for failing to rule correctly on an issue it
was never given an opportunity to consider." Day v. Payne (1996), 280 Mont. 273,
276-77, 929 P.2d 864, 866 (citation omitted).
¶ In this case, the District Court was not given an opportunity to rule on Debra’s
allegation regarding life insurance. Debra failed to include this allegation in her
initial pleadings to the court. Although she indirectly raised the issue in her direct
testimony, she failed to further address the issue or seek a remedy in her proposed
findings and conclusions submitted to the court. Upon hearing the exchange between
Debra and opposing counsel during cross-examination as to whether life insurance
was even an issue before the court, and having no proposed findings by either party
on the subject, the court was entitled to treat Debra’s life insurance allegation as a
non-issue. We determine the court did not err in failing to address life insurance in
its Findings of Fact, Conclusions of Law, and Decree.
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No
Issue 6
¶ Did the District Court err in awarding Tom attorney’s fees and costs?
¶ The parties’ Agreement specifically provides:
ATTORNEY’S FEES: Should any action be commenced to enforce, modify,
or interpret any provisions contained herein, the Court, as a cost of suit, shall
award a reasonable attorney’s fee to the prevailing party.
Based on this provision, the court awarded Tom, as the prevailing party on all motions
before the court, reasonable attorney’s fees and costs. Debra argues that this award of
attorney’s fees should be reversed because it is inequitable. Debra asserts financial
hardship and argues that requiring her to pay attorney’s fees and costs in an amount equal
to three years of her gross wages would adversely affect her ability to support the children.
We have already determined that Debra’s assertions of financial hardship are not credible.
We determine that Debra’s claim of inequity is without merit. Accordingly, we hold that
the District Court did not err in awarding Tom reasonable attorney’s fees and costs.
¶ Affirmed.
/S/ WILLIAM E. HUNT, SR.
We Concur:
/S/ J. A. TURNAGE
/S/ JAMES C. NELSON
/S/ KARLA M. GRAY
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No
/S/ JIM REGNIER
/S/ TERRY N. TRIEWEILER
/S/ W. WILLIAM LEAPHART
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