In Re the Marriage of Anderson

August 20 2013
DA 12-0745
IN THE SUPREME COURT OF THE STATE OF MONTANA
2013 MT 238IN RE THE MARRIAGE OF:
VIOLA K. ANDERSON,
Petitioner and Appellant,
and
GARY L. ANDERSON,
Respondent and Appellee.
APPEAL FROM: District Court of the Eighth Judicial District,
In and For the County of Cascade, Cause No. DDR 10-772
Honorable Dirk M. Sandefur, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Daniel L. Falcon, Falcon, Lester & Schaff, P.C.; Great Falls, Montana
For Appellee:
Patrick R. Watt, Jardine, Stephenson, Blewett & Weaver, P.C.; Great Falls,
Montana
Submitted on Briefs: July 24, 2013
Decided: August 20, 2013
Filed:
__________________________________________
Clerk
Justice Brian Morris delivered the Opinion of the Court.
¶1 Viola Anderson (Viola) and Gary Anderson (Gary) entered into a mediated property
settlement agreement as part of their dissolution of marriage. The District Court
(McKittrick, J.) approved the property settlement agreement and decree of dissolution. Viola
sought relief from judgment, on the grounds that the property settlement agreement was
unconscionable and failed to include a disclosure of assets, as required by § 40-4-254, MCA.
The District Court for the Eighth Judicial District, Cascade County (Sandefur, J.), denied
Viola’s claim for relief from judgment. Viola appeals. We affirm.
¶2 We address the following issues on appeal:
¶3 Whether the District Court (Sandefur, J.) abused its discretion when it denied Viola’s
Rule 59(e) and 60(b) motions based on the District Court’s (McKittrick, J.) failure to
consider whether the property settlement agreement was unconscionable?
¶4 Whether the District Court abused its discretion when it determined that the property
settlement agreement was valid without a disclosure of assets?
PROCEDURAL AND FACTUAL BACKGROUND
¶5 Viola and Gary sought the dissolution of their 35-year marriage. Viola and Gary
agreed to mediation to divide the marital property. Viola and Gary owned a trailer court in
Lewistown and a rental property in Ulm. Viola and Gary also owned property along the
scenic Smith River in Montana. The Smith River, popular for floating and fishing, rises in
the Castle Mountains in Meagher County and flows northwest between the Big Belt and
Little Belt Mountains, to its confluence with the Missouri River. Only one public put-in and
2
one public take-out exists in this 59-mile stretch of river, and access is limited by a permit
lottery system.
¶6 Viola and Gary’s Smith River property included a ranch operation, a guest ranch, and
an outfitting business named the Heaven on Earth Ranch. Groups with a float permit can
stop overnight at the Heaven on Earth Ranch during their float, or groups can visit the guest
ranch to experience the scenic river without receiving a permit or participating in a multi-day
float.
¶7 The parties did not complete an assessment on the value of the ranch or guest ranch
business before the mediation. The parties stipulated that the final disclosure requirements
either had been met or had been waived. Viola had served as the bookkeeper for the ranch
and guest ranch business for a number of years.
¶8 Both Viola and Gary were represented by counsel at the mediation. Pursuant to the
property settlement agreement, Viola received a lump sum payment of $300,000, three
jointly owned CDs worth $300,000, 100 chute-counted cows or $100,000, the rental property
in Ulm worth $184,000, with a yearly rental income of $6,600, a monthly payment from
Gary of $2,000 for the rest of her life, and up to $2,500 in attorney fees. Viola also remained
the named beneficiary of Gary’s $150,000 life insurance policy.
¶9 Gary received the Smith River ranch, guest ranch, and outfitting business. Gary also
received the ranching and outfitting equipment and the livestock. The parties did not assign
a value to these assets. Gary accepted responsibility for the debt associated with these
businesses, which Gary estimated amounted to $500,000.
3
¶10 Viola actively participated in the mediation. She added several terms to the property
settlement agreement. Viola required that the cattle be chute-counted to ensure that she did
not receive only culls in her 100 cows. Viola also requested, and received, the ability to
recreate on the Smith River property for the rest of her life. Viola’s counsel explained the
terms of the proposed settlement agreement to Viola. The mediator also explained the terms
of the proposed settlement agreement to Viola. Viola agreed to sign the settlement
agreement without reading it herself after her counsel and the mediator provided these
explanations of its terms.
¶11 The District Court (McKittrick, J.) held a dissolution hearing on August 22, 2012.
Gary appeared with his counsel. Viola and her counsel did not attend. The District Court
entered a decree that deemed the property and debts “equitably distributed.” Viola obtained
new counsel shortly after the mediation. She filed M. R. Civ. P. 59(e) and 60(b) motions on
September 18, 2012, through her new counsel. Viola claimed that she had expected to
receive a lump sum cash payment of $3,000,000, and had realized belatedly that the property
settlement agreement included a cash payment of only $300,000.
¶12 Viola alleged that the property settlement agreement was unconscionable. Viola
further alleged that the District Court had violated § 40-4-254, MCA, by accepting the
property settlement agreement even though the parties had failed to assess the value of the
property. The District Court (Sandefur, J.) denied Viola’s motions. Viola appeals.
STANDARD OF REVIEW
4
¶13 This Court’s review of a district court’s ruling pursuant to M. R. Civ. P. 60(b)
depends on the nature of the final judgment. Puhto v. Smith Funeral Chapels, Inc., 2011 MT
279, ¶ 8, 362 Mont. 447, 264 P.3d 1142. In cases not involving relief from a default
judgment, the Court reviews the ruling of a district court for abuse of discretion. Puhto, ¶ 8.
We review a district court’s denial of a Rule 59(e) motion for abuse of discretion. In re
Marriage of Johnson, 2011 MT 255, ¶ 12, 362 Mont. 236, 262 P.3d 1105.
DISCUSSION
¶14 Whether the District Court (Sandefur, J.) abused its discretion when it denied Viola’s
Rule 59(e) and 60(b) motions based on the District Court’s (McKittrick, J.) failure to
consider whether the property settlement agreement was unconscionable?
¶15 Viola did not appear during the dissolution and property division hearing before the
District Court (McKittrick, J.) on August 22, 2012. Viola did not argue at the hearing that
the property settlement agreement was unconscionable. Viola nevertheless contends that the
District Court (McKittrick, J.) abused its discretion when it failed to consider whether the
property settlement agreement was unconscionable pursuant to § 40-4-201, MCA.
¶16 The District Court (McKittrick, J.) stated that “the property and debts of the parties
are equitably distributed between the parties as set forth in the Property Settlement
Agreement.” This Court considered the relationship between a finding of “equitable” and a
finding of “not unconscionable” in In re Marriage of Miller, 238 Mont. 197, 201-02, 777
P.2d 319, 322-23 (1989). In In re Marriage of Miller, the district court determined that the
property division was “not unconscionable.” This determination did not meet the higher
5
threshold of “equitable.” In re Marriage of Miller, 238 Mont. at 201-02, 777 P.2d at 322-
23. Here, the District Court (McKittrick, J.) determined that the property division was
“equitable.” This determination met the lower threshold that the property division was “not
unconscionable.”
¶17 A district court engages in discretionary action when it determines whether a marital
and property settlement agreement is not unconscionable. This type of discretionary action
cannot be categorized accurately as either a finding of fact or a conclusion of law. In re
Marriage of Rolf, 2000 MT 361, ¶ 20, 303 Mont. 349, 16 P.3d 345 (overruled on other
grounds). This Court presumes that these discretionary judgments are correct and will not
disturb them absent an abuse of discretion by the trial court. In re Marriage of Rolf, ¶ 20.
¶18 This Court considered in In re Marriage of Lawrence, 197 Mont. 262, 271, 642 P.2d
1043, 1048 (1982), the conscionability of a property settlement agreement in which the wife
received $50,000 and $9,600 in alimony, and the husband received the remainder of the
$422,000 marital estate. This Court noted that stock shares with fluctuating values
comprised the majority of the marital estate. In re Marriage of Lawrence, 197 Mont. at 271-
72, 642 P.2d at 1048. One of the companies was in serious financial trouble and the husband
personally had guaranteed a $300,000 small business loan for the company. In re Marriage
of Lawrence, 197 Mont. at 272, 642 P.2d at 1048. The Court recognized that the husband
had risked bankruptcy in order to save this company. Given these circumstances, the Court
determined that the distribution of the marital property was not unconscionable. In re
Marriage of Lawrence, 197 Mont. at 272, 642 P.2d at 1048.
6
¶19 The District Court (Sandefur, J.) noted that although Gary received the majority of the
real property from the marital estate, Gary also took responsibility for all of the debt owed by
the marital estate. Gary estimated that this debt amounted to $500,000. Gary’s certified
public accountant submitted an affidavit stating that the Heaven on Earth Ranch and the
ranch business had suffered a net loss of $83,000 from 2006 to 2011, and an additional
$61,491 loss for bills that should have been paid in 2011 but were not paid until 2012, for a
total loss of almost $144,500.
¶20 Much like the spouse in In re Marriage of Lawrence, Viola received an upfront
payment of cash and assets, and a guaranteed income stream. Viola received almost
$900,000 in cash and assets and $24,000 each year for the rest of her life. Gary received
more assets than Viola, but he also accepted the risk associated with those assets and the
debts associated with those assets.
¶21 We cannot say that the District Court (McKittrick, J.) abused its discretion in
determining that the property settlement agreement met the not unconscionable threshold.
We also cannot say that the District Court (Sandefur, J.) abused its discretion in denying the
M. R. Civ. P. 59 and 60 motions in which Viola alleged that the property settlement
agreement was unconscionable.
¶22 Whether the District Court abused its discretion when it determined that the property
settlement agreement was valid without a disclosure of assets?
¶23 Section 40-4-254, MCA, provides that “[a]bsent good cause, the court may not enter a
judgment with respect to the parties’ property rights” unless the parties have provided a full
7
disclosure of assets. Gary and Viola did not have an appraisal of the ranch, guest ranch, or
outfitting business properties conducted before the District Court (McKittrick, J.) entered its
Final Decree of Dissolution of Marriage. Viola argues that the District Court’s failure to
require disclosure represents reversible error, and the District Court’s (Sandefur, J.) failure to
grant her M. R. Civ. P. 59(e) and 60(b) motions represents an abuse of discretion.
¶24 The District Court (Sandefur, J.) considered whether the District Court (McKittrick,
J.) could have found “good cause” to not require a final disclosure of assets. The District
Court (Sandefur, J.) noted that “all of the marital assets in this case and liabilities were well-
known to both parties.” Viola had acted as the bookkeeper for the ranch and guest ranch
business for a number of years. Viola does not allege that Gary misled her about the
existence of an asset, or the value of any asset.
¶25 Viola nevertheless contends that she suffered prejudice from Gary’s failure to submit
a final disclosure of assets. Viola claims that she sought and expected to receive “half” of
the marital property in the property settlement agreement. Viola claims that if the parties had
valued all of the assets before the property settlement agreement, Viola would have known
what “half” was, and that she would have required the property settlement agreement to
provide her with “half.”
¶26 Viola admits, however, that she believed and continues to believe that the entire
marital property was worth about $8 million. Viola does not claim that Gary misled her
about the value of the marital estate. Viola further admits that she accepted a property
settlement agreement that provided her with less than $4 million. This admission
8
undermines Viola’s claim that she suffered prejudice from Gary’s failure to provide a final
disclosure of assets.
¶27 The District Court (Sandefur, J.) determined that no credible evidence existed to
suggest that compliance with § 40-4-254, MCA, “would have had any material effect on the
parties’ understandings of the valuation of the marital estate” during the mediation. As the
District Court noted, Viola served as the bookkeeper for the ranch and the outfitting business
for a number of years. Viola was familiar with all of the marital property and its
approximate value. We agree that Viola has failed to demonstrate that she suffered any
prejudice from the District Court’s (McKittrick, J.) entry of judgment without a final
disclosure of assets.
¶28 Further, “[w]e will not put a district court in error for a ruling or procedure in which
the appellant acquiesced, participated, or to which the appellant made no objection.” In re
Caras, 2012 MT 25, ¶ 22, 364 Mont. 32, 270 P.3d 48 (upholding division of marital assets
despite the parties’ failure to file a final disclosure of assets in compliance with § 40-4-254,
MCA). Viola failed to contest the entry of the dissolution of marriage and division of assets
before the District Court (McKittrick, J.).
¶29 We cannot say that the District Court (Sandefur, J.) abused its discretion for failing to
grant Viola’s M. R. Civ. P. 59 and 60 motions on the basis that the District Court
(McKittrick, J.) failed to require a full disclosure of assets.
¶30 Affirmed.
/S/ BRIAN MORRIS
9
We concur:
/S/ MIKE McGRATH
/S/ MICHAEL E WHEAT
/S/ PATRICIA COTTER
/S/ LAURIE McKINNON
10