Marriage of Fuller

07/13/2021
DA 20-0541
Case Number: DA 20-0541
IN THE SUPREME COURT OF THE STATE OF MONTANA
2021 MT 175IN RE THE MARRIAGE OF:
BRADLEY D. FULLER,
Petitioner and Appellant,
and
MELISSA L. FULLER,
Respondent and Appellee.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and For the County of Yellowstone, Cause No. DR 16-0219
Honorable Michael G. Moses, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Mark D. Parker, Parker, Heitz & Cosgrove, PLLC, Billings, Montana
For Appellee:
Shannon R. Foley, Jason Armstrong, Cromwell Law, PLLC, Bozeman,
Montana
Submitted on Briefs: May 5, 2021
Decided: July 13, 2021
Filed:
cir-641.—if
__________________________________________
Clerk
Justice Beth Baker delivered the Opinion of the Court.
¶1 Bradley Dean Fuller appeals a Thirteenth Judicial District Court order granting
relief to Melissa Lynn Fuller from the 2016 final decree of dissolution of their marriage.
The District Court held that Bradley and Melissa’s failure to disclose their jointly owned
business to the court, which they separately determined they would settle after the divorce,
violated the law requiring full disclosure of assets, debts, income, and expenses. Because
the court did not know about or consider the value of the businesses at the time it entered
the decree, the court concluded that the decree must be reconsidered. We reverse.
FACTUAL AND PROCEDURAL BACKGROUND
¶2 Melissa and Bradley were married in 2003. Melissa, a nurse practitioner, and
Bradley, a physician, formed Fuller Family Medicine, PC (“FFM”), a medical practice, in
2011. They created at the same time B&M Investment Properties, LLC (“B&M”), to hold
the parties’ real property. The parties operated these businesses together, individually
establishing their own clientele and practices.
¶3 The parties separated in January 2016 and, both representing themselves, filed for
dissolution a month later. Along with their dissolution petition, they filed their Final
Declarations of Disclosure of Assets, Debts, Income, and Expenses (“Final Disclosures”)
and a joint parenting plan for their two minor children. Bradley disclosed the marital home,
two vehicles, a boat, and other miscellaneous items. Melissa did not disclose any additional
property. Neither party disclosed FFM or B&M. The District Court entered the
Final Decree of Dissolution in April 2016. The decree did not include any mention of FFM
or B&M.
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¶4 After their dissolution, the parties continued to operate FFM and B&M in the same
manner as they had while married. In April 2020, however, Melissa sought to transition
out of FFM to focus on her separate clinic. She requested from Bradley an equitable buyout
from her jointly owned interest in FFM. Bradley declined, asserting that he was FFM’s
sole owner. He denied Melissa access to the company finances, property, accounts, and
account information. Bradley also halved Melissa’s salary, alleging she violated her FFM
employment agreement’s non-compete clause, leading Melissa to file complaints with the
Department of Labor.
¶5 In July 2020, Melissa filed two motions with the District Court: an Emergency
Motion for Temporary Restraining Order, Preliminary Injunction, and Request for Show
Cause Hearing and a M. R. Civ. P. 60(b) motion for relief from the dissolution decree.
Melissa alleged in these motions that Bradley had committed fraud. She claimed that, at
the time of the dissolution, she and Bradley believed that FFM was a jointly and equally
owned asset, created with joint marital assets and funded equally by each of them. Melissa
sought temporary injunctive relief requiring Bradley to continue paying her full salary and
to maintain the status quo regarding FFM and B&M while the court considered her claim
for relief. She requested that the District Court set aside the final dissolution decree and
adjudicate the equitable distribution of the parties’ financial interests in FFM. She further
requested modification of the child support agreement, arguing that she stipulated to no
child support payments based on her understanding that she and Bradley jointly owned
FFM.
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¶6 The District Court held a hearing on October 5, 2020. Both parties testified that
they had discussed the businesses at the time of the dissolution proceedings and decided to
intentionally omit them from the Final Disclosures because they planned for the businesses
to remain unchanged after the dissolution. Melissa said she knew that all the assets the
parties were dividing were on an Excel spreadsheet and that “when [the businesses] sold
or when somebody leaves, [the parties] could deal with it at that point.” Melissa also stated
that she knew only Bradley’s name was listed on FFM’s incorporation documents.
¶7 At the conclusion of the hearing, the District Court denied Melissa’s motion to
modify custody, for injunction, and for payment of wages, deferring the latter to the
Department of Labor. The District Court found additionally that Bradley had not
committed fraud. The court then explained:
But we have a clear problem here where the parties actually did not
understand, neither one of them understood the consequences of the [c]ourt
being unable to address that [sic] equities of this property disposition in 2016
when presented to me. This one that came on default law and motion
morning in front of this [c]ourt.
We do them a lot. Everybody is on the same page. But I had no clue that
there was a medical business and an investment business on the outside. . .
But, man, we were all suffering under mistake of fact and mistake of law
because I was unable to address the Funk1 issues in this particular matter[.]
. . .
The problem with the business is that indeed as a professional corporation,
Dr. Fuller is 100 percent owner of that professional corporation. And the
1
In re Marriage of Funk, 2012 MT 14, ¶ 19, 363 Mont. 352, 270 P.3d 39 (requiring the trial court
to consider “all assets, including pre-acquired property and assets acquired by gift, bequest, devise
or descent[,]” in determining equitable apportionment of a marital estate).
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only way for the [c]ourt to figure out how to equitably divide that property is
to take into consideration the other assets that the parties have.
¶8 The District Court ordered briefing on whether there were other remedies available
that would allow it to reconsider the equitable distribution of the marital assets. Melissa’s
brief argued, for the first time, that the District Court should grant relief based on the
property allocation being unconscionable or ambiguous.
¶9 On November 4, 2020, the District Court issued an order declining to rule on
Melissa’s M. R. Civ. P. 60(b) motion, noting that it “need not decide on the Rule 60(b)
Relief for Judgment motion at this time.” It instead granted Melissa’s requested relief by
raising sua sponte the issue of mutual perjury under § 40-4-253(5), MCA. Part of the
statutes governing marriage dissolution, that section provides: “In addition to any other
civil or criminal remedy available under law for the commission of perjury, the court may
set aside the judgment, or part of the judgment, if the court discovers, within 5 years from
the date of entry of judgment, that a party has committed perjury in the final declaration of
disclosure.” The court concluded that under this section, “[s]ignificant nondisclosures in
final declarations of marital assets are conditions that justify the [c]ourt to reopen the
Final Decree.” It found the omissions significant because they left the court “unequipped to
equitably apportion the marital property in 2016[.]”
STANDARDS OF REVIEW
¶10 We review a district court’s conclusions of law de novo and its findings of fact for
clear error. Rausch v. Hogan, 2001 MT 123, ¶ 11, 305 Mont. 382, 28 P.3d 460 (citations
omitted). A court’s interpretation or application of a statute is a question of law we review
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for correctness. Finn v. Dakota Fire Ins. Co., 2015 MT 253, ¶ 6, 380 Mont. 481,
356 P.3d 13 (citation omitted).
DISCUSSION
¶11 Courts have the power and the duty to apportion marital estates equitably under the
circumstances of each case. See In re Marriage of Funk, 2012 MT 14, ¶¶ 6, 19,
363 Mont. 352, 270 P.3d 39 (citing § 40-4-202, MCA, which vests the court with an
obligation and the “broad discretion to apportion the marital estate in a manner equitable
to each party under the circumstances”). To ensure equitable apportionment, “parties must
completely disclose money and assets accumulated during the marriage.”
In re Marriage of McFarland, 240 Mont. 209, 213, 783 P.2d 409, 411 (1989). To assist
the court in making an equitable apportionment of the property, parties must provide
“competent evidence . . . on the values of the property.” Marriage of Funk, ¶ 7 (citation
omitted).
¶12 When parties are informed of the assets and liabilities of a marriage, there is good
cause to enter the final dissolution decree. See § 40-4-254, MCA;
In re Marriage of Anderson, 2013 MT 238, ¶¶ 23–27, 371 Mont. 321, 307 P.3d 313(agreeing that property settlement agreement was valid without a final disclosure of assets
because wife was familiar with all marital property and its approximate value). Once a
court enters a final decree, neither the court nor the parties may retry the marital equities.
In re Marriage of Waters, 223 Mont. 183, 186, 724 P.2d 726, 729 (1986) (“There must be
some point at which litigation ends and the respective rights between the parties are forever
established. Under ordinary circumstances, once this point is reached a party will not be
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allowed to disturb that judgment.”); Rausch, ¶¶ 16–17; see § 40-4-202, MCA (providing
that the dissolution proceeding is where the court shall “finally equitably apportion
between the parties the property and assets”); § 40-4-134, MCA (providing that the entry
of judgment is the “final adjudication of the rights and obligations of the parties”).
¶13 Courts may reopen a judgment only in narrow circumstances. “[P]erjury in the final
declaration of disclosure” is one such circumstance. Section 40-4-253(5), MCA (providing
that the remedy for perjured testimony is to set aside the judgment or part of the judgment).
The District Court held in this case that Bradley and Melissa’s intentional omission of FFM
and B&M in the Final Disclosures justified reopening the decree because it could not
“consider[] all the marital assets for equitable distribution as required by Funk.”
(Emphasis original.) The District Court concluded that the omission was obviously
intentional where the final disclosure form explicitly warned the parties that complete
disclosures must be made and that “[a]ny deliberately false statement . . . may subject you
to the penalty of perjury or other appropriate relief and may be considered fraud upon the
Court.”2 The court reasoned that, because the omissions were intentional and significant,
they constituted perjury under § 40-4-253(5), MCA.
2
The District Court cited and relied on this Court’s reasoning in Castonguay v. Estate of Polson,
2005 MT 265, 329 Mont. 103, 122 P.3d 1208. In Castonguay, ¶¶ 1, 5, the wife brought an action
for actual and constructive fraud based upon the husband’s allegedly false testimony in the parties’
prior dissolution proceeding that he did not own real property. We upheld the dismissal of her
claim, reasoning in part that “the remedy for perjured testimony in a dissolution proceeding is an
award of the undisclosed asset to the opposing party and the setting aside of a judgment or part of
a judgment pursuant to § 40-4-253(4) and (5), MCA.” Castonguay, ¶ 12. Here, in contrast,
Melissa makes no allegation that she was unaware of Bradley’s property interests at the time the
disclosures were submitted, nor does she challenge the District Court’s finding that he did not act
fraudulently in the disclosures he submitted to the court.
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¶14 Bradley argues that the District Court erred in concluding that § 40-4-253(5), MCA,
applies in the circumstances of this case. He contends that Montana’s disclosure statutes
“are not designed to procure a rehearing for a party fully informed of the asset” and that
the omissions in this case did not constitute perjury. Citing In re Marriage of Caras,
2012 MT 25, ¶¶ 20–22, 364 Mont. 32, 270 P.3d 48—in which this Court upheld a final
dissolution decree where the wife did not claim any prejudice from the lack of a final
disclosure and had agreed to the husband’s valuations—he argues that a party must show
that she was “deceived” in order to reopen a dissolution decree. Bradley additionally
argues that the District Court erred when it reopened the final decree to enforce its equitable
duty to apportion marital assets. He contends that, under Rausch, “[t]he [c]ourt has no
power to take property once owned in the marital estate and apply the equitable concepts
we apply in dissolution matters to subsequent squabbles over the property between ex-
spouses.”
¶15 We read language in the context of the statutory scheme as a whole to give effect to
its purpose. Sections 1-2-101, -102, MCA. The District Court reasoned that the purpose
of the disclosures “is to provide the [c]ourt with a [sic] competent evidence to paint a
complete picture of the marital assets to make an equitable apportion.” But the purpose
behind the disclosure statutes is to promote fairness between the parties by ensuring that
each has complete knowledge of marital assets; it is not to prevent parties from amicably
determining between themselves how their property should be divided.
See Miller v. Miller, 189 Mont. 356, 362–63, 616 P.2d 313, 318 (1980) (“The rule is well
reasoned that persons must be able to separate amicably and divide their property without
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interference where such division is feasible. It is not the province of this Court to alter
decisions and agreements made between husband and wife in the absence of compelling
injustice.”); S.B. 16 Preamble, 55th Leg., Reg. Sess., vol. II, ch. 326 (Mont. 1997)
(explaining that “sound public policy further favors the reduction of the adversarial nature
of marital dissolution and the attendant costs by fostering full disclosure and cooperative
discovery”). See also § 40-4-253(1)(a), MCA (requiring disclosure of assets only to the
other party, not to the court); § 40-4-252(2), MCA (preliminary disclosures “may not be
filed with the court, except on the court’s order”); § 40-4-254, MCA (requiring filing of
the certificate of service for the final declaration of assets, not the declaration itself).
¶16 The Legislature’s provision for separation agreements further demonstrates this
purpose. See § 40-4-201(1), MCA (allowing written separation agreements that, among
other things, provide for disposition of the parties’ property, “[t]o promote amicable
settlement of disputes between parties to a marriage attendant upon their separation or the
dissolution of their marriage”). Such agreements are binding on a court “unless it finds,
after considering the economic circumstances of the parties and any other relevant evidence
produced by the parties, on their own motion or on request of the court, that the separation
agreement is unconscionable.” Section 40-4-201(2), MCA; see Tanascu v. Tanascu, 2014
MT 293, ¶ 15, 377 Mont. 1, 338 P.3d 47 (“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”); Miller, 189 Mont. at 362, 616 P.2d at 317 (noting
that the “presence of a valid separation agreement” negates the trial court’s obligation to
determine parties’ net worth).
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¶17 We agree with Bradley that the District Court erred when it found the parties’ mutual
decision to not disclose FFM or B&M to be perjury that demanded reopening the
dissolution decree under § 40-4-253(5), MCA. Melissa made no showing that either party
had knowingly made a false statement to the other party warranting relief under
§ 40-4-253(5), MCA. See Polson v. Polson, 2005 MT 185, ¶¶ 10-11, 328 Mont. 49,
121 P.3d 1004 (concluding that the wife had not shown the husband committed perjury
under § 40-4-253(5), MCA, where she presented no admissible facts demonstrating he had
intentionally excluded certain property from his financial disclosures). The disclosure
form’s warning to the parties was insufficient to show the omission rose to the level of
perjury requiring application of § 40-4-253(5), MCA, when both parties were fully aware
of the businesses. See Marriage of Caras, ¶ 22. Bradley and Melissa do not dispute that,
at the time they made their final disclosures, neither “contended that the marital estate
ha[d] an interest” in their businesses. Section 40-4-253(2)(b), MCA.
¶18 As Bradley notes, our reading of § 40-4-253(5), MCA, effectuates Montana law
recognizing the finality of judgments. In Rausch, ¶¶ 5–6, 9, the parties retained joint
ownership over a cabin in their property settlement agreement, but when the wife sued for
partition without regard to marital contributions, the husband argued he should be awarded
the cabin based on the fairness principles courts use in dissolution cases. This Court held
that under the doctrine of collateral estoppel the issue of fairness could not be relitigated
because the parties had the opportunity to address that question prior to the entry of the
final decree. Rausch, ¶ 18. Although the District Court in the present case was unaware
of FFM and B&M, the facts here present a similar scenario: both parties knew and agreed
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that the property would be unaffected by the dissolution. Rausch, ¶ 18. Melissa testified
that she made the decision not to have the court address this issue.
¶19 In sum, both parties testified that they were aware of the businesses and chose to
deal with the distribution of their interest in them at a later time and without the help of the
court. Bradley and Melissa may have been well-advised to identify the businesses in their
property settlement agreement and make clear that they would continue to be held and
operated jointly. But neither had counsel, and they chose to leave the businesses alone. It
was the parties’ prerogative to make this agreement, and it is not the role of the court to
step in and decide otherwise. The marriage dissolution statutes do not forbid parties from
choosing jointly to keep property or operate a business together after the dissolution. When
they do so with full knowledge and later disagree about the property’s management or
disposition, they may have other remedies, but their deliberate decision to omit that
property from the disclosures is not ground to reopen the decree. Here, because the parties
chose not to include FFM and B&M in their disclosures, the District Court erred by
reopening the judgment on that basis.
CONCLUSION
¶20 The District Court erroneously set aside the final decree of dissolution on the ground
of perjury under § 40-4-253(5), MCA, when the parties deliberately agreed to leave their
jointly owned businesses undisturbed by the divorce. The court’s November 4, 2020 order
is reversed.
/S/ BETH BAKER
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We Concur:
/S/ MIKE McGRATH
/S/ LAURIE McKINNON
/S/ DIRK M. SANDEFUR
/S/ JIM RICE
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