Volk v. Goeser

March 8 2016
DA 14-0747
Case Number: DA 14-0747
IN THE SUPREME COURT OF THE STATE OF MONTANA
2016 MT 61PAMELA DEE VOLK, individually and in her
capacity as Conservator for RBV, a minor child,
Plaintiff and Appellant,
v.
VALERIE GOESER; ROY DONALD VOLK, DIANE
NILSON VOLK and SARAYA ROBERSON, as
Co-Personal Representatives of the Estate of Roy
Craig Volk, and Does 1 through 10,
Defendants and Appellees,
v.
SARAYA ROBERSON,
Defendant and Appellant.
APPEAL FROM: District Court of the Eighth Judicial District,
In and For the County of Cascade, Cause No. DDV 13-340
Honorable Kenneth R. Neill, Presiding Judge
COUNSEL OF RECORD:
For Appellant Pamela Dee Volk:
Jason T. Holden, Dana A. Henkel, Faure Holden Attorneys at Law, P.C.,
Great Falls, Montana
For Appellee Valerie Goeser:
Roberta Anner-Hughes, Anner-Hughes Law Firm; Billings, Montana
For Appellee and Cross-Appellant Saraya Roberson:
Gregory J. Hatley, James A. Donahue, Derek J. Oestreicher, Davis,
Hatley, Haffeman & Tighe, P.C.; Great Falls, Montana
Submitted on Briefs: October 21, 2015
Decided: March 8, 2016
Filed:
__________________________________________
Clerk
2
Justice Michael E Wheat delivered the Opinion of the Court.
¶1 Pamela Dee Volk appeals from the Summary Judgment Order of the Montana
Eighth Judicial District Court granting summary judgment for Valerie Goeser. The
District Court determined that a constructive trust should not be imposed on
$2,306,103.13 of Roy Volk’s life insurance proceeds for the benefit of his minor son,
RBV, because Valerie Goeser was not unjustly enriched when she received Roy Volk’s
life insurance proceeds. We reverse the summary judgment and remand for further
proceedings in accordance with this opinion.
ISSUE
¶2 Appellant raises one issue on appeal, which we address as follows:
¶3 Whether the District Court erred when it granted summary judgment to Valerie,
and denied the imposition of a constructive trust on life insurance proceeds in favor of
RBV, a minor child?
FACTUAL AND PROCEDURAL BACKGROUND
¶4 Roy Volk was married to Pamela Dee Volk in April 1996. The couple had a son,
RBV, in the fall of 2000. On June 25, 2010, Roy filed a Petition for Dissolution of
Marriage in the Montana Eighth Judicial District Court. On the same day, as part of the
dissolution proceeding, the District Court issued the statutorily-mandated Summons and
Temporary Restraining Order. The divorce proceedings lasted over a year and a half,
ending with the court’s hearing and dissolution of the marriage on December 21, 2011.
¶5 Roy and Pamela entered into a Marital Settlement Agreement (“MSA”) on
December 20, 2011. Several agreements were included as part of the MSA including a
“Future Instruments” clause where Roy agreed “[h]usband shall execute a will naming
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his son as beneficiary of his estate, giving all of his assets to his son.” This clause
included Roy’s agreement to leave all of his assets to RBV through a will that would be
executed as a “future document.” Attached to the MSA as exhibit A, was a list of assets
and liabilities for each party where Roy indicated that “[h]usband’s New York Life
insurance policy” (Policy 936) was an asset. The MSA further provided that if either
husband or wife failed to disclose an asset, “that finding is presented to be grounds for
the Court, without taking into account the equitable division of the marital estate, to
award the undisclosed asset to the opposing party . . . .”
¶6 At the time of the divorce, Roy owned two term life insurance policies. The
policies are New York Life Policy No. 46689799 (“Policy 799”) with a benefit of
$1,500,000; and New York Life Policy No. 76098936 (“Policy 936”) with a benefit of
$1,000,000. Policy 799 was not disclosed in the divorce; Pamela was the sole
beneficiary, but she was not aware the policy existed. Roy disclosed Policy 936 in the
divorce, and Pamela and Volk Sand and Gravel (Roy’s business) were equal beneficiaries
(50 percent to each) with a $200,000 collateral assignment to Stockman Bank. On
July 15, 2010, while the restraining order was in effect, Roy changed the beneficiary
designations on both policies and designated his sister, Valerie Goeser, as the new
beneficiary.
¶7 Roy also had a daughter, Saraya Roberson. In June of 2005, Roy and Saraya’s
mother, Serena C. Roberson, entered into a Child Support Agreement pertaining to
Saraya. That agreement contained a provision requiring Roy, within 30 days of the
court’s Order approving the agreement, to purchase a life insurance policy of $100,000
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naming Saraya as the owner and sole beneficiary. The Child Support Agreement was
approved and adopted by the Montana Eighth Judicial District Court on July 28, 2005.
Roy never purchased the life insurance policy required by this Agreement, nor did Roy
name Saraya as a beneficiary on any life insurance policy.
¶8 On April 30, 2012, just over four months after the divorce was final, Roy died
unexpectedly at age 45. Roy did not have a will in place. Because Roy had changed his
life insurance beneficiary designations in violation of the restraining order, Valerie
received the life insurance proceeds from both policies in the total amount of
$2,306,103.13. Valerie was shocked to learn upon Roy’s death that she was the recipient
of the two life insurance policies. Valerie invested the proceeds in a home and real
property in Newport Beach, California.
¶9 After Roy’s death, Pamela discovered that Valerie received the life insurance
proceeds from Policy 936, due to Roy’s change of beneficiary during the divorce.
Pamela wrote Valerie to inquire about the policy and notify her of RBV’s equitable
claim. Valerie did not respond to the inquiry and Pamela subsequently sent a subpoena
duces tecum to New York Life to determine how the policy benefit was dispersed. At
that time she discovered the existence of the second life insurance policy, Policy 799,
with the $1,500,000 benefit. Pamela also determined through discovery that she was the
beneficiary on Policy 799 until Roy changed it to Valerie on July 15, 2010, while the
restraining order was in effect. The New York Life records confirmed that both policies
were paid to Valerie.
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¶10 A probate was opened to settle Roy’s estate. Pamela filed two creditor’s claims in
the probate on October 23, 2012. The first claim was on her behalf for payment Roy had
agreed upon, and the second was on behalf of RBV for child support and health insurance
costs totaling about $77,500. Roy’s estate did not have sufficient funds to pay RBV’s
child support claim. On April 29, 2013, Pamela, on behalf of RBV, filed this action
against Valerie and Roy Craig Volk’s estate seeking a constructive trust over the
insurance policy payouts for the benefit of RBV. The complaint named Saraya, as
co-personal representative of Roy’s estate, as a defendant. Pamela also filed two
additional actions in April 2013 that are not part of this appeal: an action to reopen the
dissolution for award of the policy proceeds due to violation of the restraining order, and
another similar action to seek policy proceeds through the probate. While Valerie was
notified of Pamela’s equitable claim on RBV’s behalf, she was not served in the
dissolution or probate actions.
¶11 Judge Neill of the Montana Eighth Judicial District presided over all three of the
actions tied to this case: Roy and Pamela’s dissolution, the probate of Roy’s estate, and
here, Pamela’s claims requesting a constructive trust for RBV. The three actions have
significant overlap regarding parties, claims, and the equities of the case. This appeal
arises out of the District Court’s grant of summary judgment in Valerie’s favor regarding
Pamela’s constructive trust claims for RBV.
¶12 Saraya filed a cross-appeal seeking imposition of a constructive trust for her
benefit to fulfill the $100,000 liability. Subsequently, and by admission of both parties,
Saraya and Pamela entered an agreement (“October Agreement”) under which Pamela
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would pay Saraya’s claim from RBV’s constructive trust if RBV prevails on his claims
against Valerie.
District Court Opinion
¶13 By May 2014, both parties moved for summary judgment. On May 16, 2014,
Saraya sought leave from the District Court to file an Amended Answer and to assert
cross-claims against Valerie. Several additional motions were made in the case, which
were held in abeyance while the District Court considered the pending summary
judgment motions. The District Court held hearings on both summary judgment motions.
The court entered summary judgment in favor of Valerie on October 30, 2014. At that
time the court also denied Saraya’s motion for leave to amend. Pamela and RBV timely
appealed on November 19, 2014. Saraya timely appealed on December 8, 2014.
¶14 The District Court granted summary judgment to Valerie on all claims. The court
concluded that even though Roy had changed the beneficiary designation on both policies
while the court’s restraining order was still in effect, the case was different from
this Court’s decision in Briese v. Mont. Pub. Employees Ret. Bd., 2012 MT 192,
366 Mont. 148, 285 P.3d 550, because Roy died after the divorce was final and the
restraining order was lifted. The District Court reasoned the purpose of the restraining
order is to maintain the status quo in regard to the parties’ property so long as the
dissolution action is pending—a purpose that terminates once the dissolution action is
complete. The court further reasoned that once the restraining order was lifted, Roy
would have been free to change the beneficiary at any time. The court found had he not
changed the beneficiaries, Pamela still would have been removed as a beneficiary by
7
operation of law under § 72-2-814, MCA. Under this analysis, the court concluded that
equity did not require voiding Roy’s changes to the beneficiaries because Roy made no
further changes after the dissolution.
¶15 The court rejected Pamela’s argument that because Roy disclosed Policy 936 as an
asset in the MSA he considered his insurance policies to be assets and therefore intended
RBV to be the beneficiary. The court found, however, that neither the MSA nor the
stipulated final parenting plan made any mention of life insurance policies and the MSA
only required that Roy create a will and name RBV as the beneficiary of his estate (which
Roy failed to do during the four months following the MSA). The court concluded that
an insurance policy is a non-probate transfer and would pass outside of any will Roy had
executed; thus, Roy’s will would not have affected the insurance policies. Considering
the intent of the parties and the language of the MSA, the court then concluded that the
term “assets” clearly refers to Roy’s testamentary estate, not specifically including the
life insurance policies.
¶16 The District Court also rejected Pamela’s argument that she should be awarded the
proceeds of the second, undisclosed policy. The court agreed with Pamela that Roy
should have disclosed the policy as an asset in the marital estate. Still, the court did not
award the proceeds to Pamela on the basis that the term life policy does not receive any
value until the holder’s death. The court reasoned that marital property is valued at the
time of the divorce proceedings, and thus the court could not take into account the
policy’s $1.5 million proceeds because they materialized only after Roy died, months
after the divorce was finalized. Therefore, Roy’s nondisclosure of the second policy,
8
even if a violation of the MSA, had no monetary effect on the value of the marital estate.
The court concluded that the parties did not discuss insurance specifically in the MSA so
it would be speculative for the court to say what effect the disclosure of the policy might
have had on the parties’ negotiations.
¶17 Finally, the District Court rejected Pamela’s contention that Valerie had been
unjustly enriched and that a constructive trust must be imposed. Accordingly, the District
Court declined to award summary judgment and equitable relief to Pamela.
STANDARD OF REVIEW
¶18 We review the grant of summary judgment de novo, using the same
M. R. Civ. P. 56 criteria used by the district court. Albert v. City of Billings,
2012 MT 159, ¶ 15, 365 Mont. 454, 282 P.3d 704. Summary judgment is appropriate
when the moving party demonstrates both the absence of any genuine issues of material
fact and entitlement to judgment as a matter of law. Albert, ¶ 15. Once the moving party
has met its burden, the non-moving party must present substantial evidence essential to
one or more elements of the case to raise a genuine issue of material fact. Styren Farms,
Inc. v. Roos, 2011 MT 299, ¶ 10, 363 Mont. 41, 265 P.3d 1230. We further review a
question of law to determine if the district court’s legal conclusions are correct. Palmer
v. Bahm, 2006 MT 29, ¶ 11, 331 Mont. 105, 128 P.3d 1031.
¶19 The standard of review governing proceedings in equity is codified at
§ 3-2-204(5), MCA, which directs the appellate court to review and determine questions
of fact as well as questions of law. Gitto v. Gitto, 239 Mont. 47, 50, 778 P.2d 906, 908
(1989). We review a district court’s findings of fact to ascertain whether they are clearly
9
erroneous. Daines v. Knight, 269 Mont. 320, 324, 888 P.2d 904, 906 (1995). A finding is
clearly erroneous if it is not supported by substantial evidence, if the trial court
misapprehended the effect of the evidence, or if our review of the record convinces us
that the district court made a mistake. Kovarik v. Kovarik, 1998 MT 33, ¶ 20,
287 Mont. 350, 954 P.2d 1147.
DISCUSSION
¶20 Section 40-4-101, MCA, provides that Montana’s law concerning separation and
dissolution of marriage:
shall be liberally construed and applied to promote its underlying purposes,
which are to:
(1) strengthen and preserve the integrity of marriage and safeguard family
relationships;
(2) promote the amicable settlement of disputes that have arisen between
parties to a marriage;
(3) mitigate the potential harm to the spouses and their children caused by
the process of legal dissolution of marriage; and
(4) make reasonable provision for spouse and minor children during and
after litigation . . . .
Section 40-4-101, MCA (emphases added.)
¶21 In an effort to support these goals and promote a proper and amicable settlement,
the District Court entered the statutorily-mandated restraining order in the dissolution
proceeding, stating:
Petitioner and Respondent are both hereby restrained as follows under the
authority of § 40-4-121(3), MCA, 2009:
3. Petitioner and Respondent are hereby restrained from cashing, borrowing
against, canceling, transferring, disposing of, or changing the beneficiaries
of any insurance or other coverage, including life, health, automobile, and
disability coverage held for the benefit of a party or a child of a party for
whom support may be ordered.
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¶22 This Court previously addressed the issue of changing beneficiaries under a
restraining order in our decision in Briese. The dispute in Briese surrounded a retirement
benefit beneficiary change made by a Yellowstone County deputy sheriff after a
§ 40-4-121(3), MCA, restraining order had been issued in conjunction with his petition
for dissolution of marriage. While the marital dissolution proceedings were still pending
with the restraining order in place, and without consent of his wife or the court, Briese
changed his retirement beneficiary designation from his wife Erene, to his two minor
children. The change of beneficiary was discovered after Briese died in the line of duty,
while the dissolution proceedings were pending. We determined the change of
beneficiary was invalid because it was made in violation of the statutorily-mandated
restraining order.
¶23 We reasoned that “[t]he purpose of the law requiring a temporary restraining order
is clearly to maintain the status quo with respect to all property of the parties.”
Briese, ¶ 25. We stated that this policy is in place to “[mitigate] the potential harm to
spouses and children caused by the dissolution process itself and ensure that reasonable
provision is made for the spouse and children during the litigation.” Briese, ¶ 25.
Further, we determined that “[t]he plain language of subsection (b) is quite broad,
restraining both parties from unilaterally ‘changing the beneficiaries of any . . . coverage .
. . held for the benefit of a party.’” Briese ¶ 25 (quoting § 40-4-121(3)(b), MCA)
(emphasis added). In plain terms, the restraining order serves as a protective umbrella
over all marital assets while the parties negotiate an MSA or proceed with litigation. If
agreement is reached on division of property, the parties’ agreements are incorporated in
11
the MSA, the new contract between the parties. Then, with the MSA in place, the
restraining order can be dissolved upon entry of the decree, and the MSA guides any
further asset divisions and responsibilities of the parties.
¶24 As we determined in Briese, the remedy for restraining order violations in most
cases is a “civil or criminal contempt action against the violator.” Briese, ¶ 38. This
remedy was not available in Briese because, similar to this case, the violator was
deceased. In Briese, we reviewed the approaches used by other jurisdictions to solve this
problem. Of note was our recognition of the Michigan Supreme Court position:
It needs no citation that for violation of an injunction, a court, under its
general powers, may order a return to the status quo . . . . Transfers of
property in violation of an injunction are invalid and may be set aside . . .
and subsequent death of the injunction violator does not prevent the court
from exercising such power.
Briese, ¶ 39 (citing Webb v. Webb, 375 Mich. 624, 134 N.W.2d 673, 674-75 (Mich.
1965)).
¶25 In Briese, we determined that violation of a dissolution proceeding restraining
order does not automatically void the beneficiary change. Briese, ¶ 40. Nonetheless, we
found that the courts, at a minimum, possess “equitable power to order a return to the
status quo when a party violating a temporary restraining order has died.” Briese, ¶ 41.
We look to our precedent in Briese and to the statutes as we turn to the facts in this case.
Roy’s Improper Change of Beneficiary on Policy 936
¶26 On appeal, Pamela argues that the District Court erred in this case and abused its
discretion when it determined that the violation of the restraining order had no actual
effect on the beneficiary change and that the equities were not in favor of a constructive
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trust for RBV. She further argues that equity requires the proceeds received by Valerie
must be placed in a constructive trust for RBV. Pamela also asserts that Roy’s June 25,
2010, violation of the restraining order cannot be excused by the District Court. She
further contends that even though Roy changed the beneficiary designation to his sister
Valerie, he did not intend his violation to control the ultimate disposition of his life
insurance. Instead, she argues that the evidence demonstrates that Pamela and Roy
always thought of Roy’s life insurance as an asset and Roy intended to leave it, with all
of his assets, to RBV. Pamela implies that Roy simply did not have his affairs in the
order he would choose when he unexpectedly died and that if he had the opportunity, he
would have set the affairs according to their MSA.
¶27 Valerie defends the District Court’s equitable determination. She argues that
because life insurance proceeds pass outside the testamentary estate, the life insurance
contract was properly executed. She also contends that the MSA and Final Parenting
Plan fail to mention any agreement or intention to name a particular beneficiary. She
notes that Roy, during the four months before his death after the divorce, could have
changed the beneficiary to any person of his choosing. Instead, he retained Valerie as the
beneficiary on Policy 936, which should be considered his final intention.
¶28 Roy purchased Policy 936 on May 16, 2002, with a $665 down payment. The
policy originally listed Volk Sand & Gravel as the beneficiary. On August 9, 2002, Roy
changed the original beneficiary with fifty-percent to Pamela and with the other
fifty-percent to Volk Sand & Gravel. Roy also included a “second beneficiary” of
“Estate of Roy C. Volk.” On August 22, 2002, Roy made a collateral assignment on the
13
policy with Stockman Bank, “up to $500,000” which apparently, based upon the record,
was valued at approximately $200,000 at the time of his death. During the dissolution,
with the statutorily-mandated restraining order in place, Roy changed the beneficiary on
this policy to his sister Valerie, as sole beneficiary.
¶29 Roy’s beneficiary change resulted, upon his death, in the payment of this life
insurance policy, less the Stockman Bank assignment, to his sister Valerie. If Roy had
not changed the policy, his wife Pamela would have remained on the policy throughout
the pendency of the divorce. As the District Court pointed out, upon finalizing the
dissolution, Pamela would have been removed from the policy by operation of law
pursuant to Montana’s Uniform Probate Code, § 72-2-814(2)(a)(i), MCA, which states:
(2) Except as to a retirement system established in Title 19 or as provided
by the express terms of a governing instrument, a court order, or a contract
relating to the division of the marital estate made between the divorced
individuals before or after the marriage, divorce, or annulment, the divorce
or annulment of a marriage:
(a) revokes any revocable:
(i) disposition or appointment of property made by a divorced
individual to the individual’s former spouse in a governing instrument and
any disposition or appointment created by law or in a governing instrument
to a relative of the divorced individual’s former spouse;
Under the statute “revocable” is defined as:
“Revocable,” with respect to a disposition, appointment, provision, or
nomination, means one under which the divorced individual, at the time of
the divorce or annulment, was alone empowered, by law or under the
governing instrument, to cancel the designation in favor of the individual’s
former spouse or former spouse’s relative, whether or not the divorced
individual was then empowered to designate the divorced individual in
place of the individual’s former spouse or in place of the former spouse’s
relative and whether or not the divorced individual then had the capacity to
exercise the power.
14
Section 72-2-814(1)(f), MCA.
The Official Comments to the statute provide further specificity regarding the types of
revocable instruments:
The revisions expand the section to cover “will substitutes” such as
revocable inter-vivos trusts, life-insurance, and retirement-plan beneficiary
designations, transfer-on-death accounts, and other revocable dispositions
to the former spouse that the divorced individual established before the
divorce (or annulment).
Tit. 72, Ch. 2, Mont. Code Ann., Annotations, Official Comments at 635 (2012) (see also
Thrivent Fin. v. Andronescu, 2013 MT 13, 368 Mont. 256, 300 P.3d 117).
¶30 We determined in Thrivent that this revocation-upon-divorce statute operates at
the time the “governing instrument is given effect” and the provision is to be treated as if
the “divorced individual’s former spouse (and relatives of the former spouse) disclaimed
the revoked provisions[.]” Thrivent, ¶ 8. Or, more simply, when the divorce is final
between the parties, any designation (such as a life insurance beneficiary) by the divorced
individuals of their former spouse is automatically revoked upon divorce.
¶31 Turning to Roy’s Policy 936, the effect of not removing Pamela as the beneficiary,
or retaining the status quo, would have caused her share of the policy proceeds to pass to
Roy’s estate under § 72-2-814, MCA. Because Roy had no will, after the proceeds
passed to the estate they subsequently would have passed to Roy’s children in the probate
by way of the intestacy statutes. Section 72-2-113, MCA. We note that in the MSA, the
parties list Policy 936 as an asset. The MSA also indicates Roy’s intent to name RBV as
the beneficiary of his estate specifically indicating Roy will leave RBV all of his assets.
15
The status quo prior to Roy’s improper change—had the restraining order not been
violated—would have accomplished that end.
¶32 Here, Valerie argues the status quo was unaffected because the restraining order
had already been lifted by the time Roy died, so there is no harm. The argument
however, overlooks the statute’s purpose to protect the status quo at the time the
statutorily-mandated restraining order is entered. It is misdirected, in addition to being
speculative, to say that Roy could or would have changed the beneficiary after the
dissolution anyway, because the policy of the law is to preserve the status quo, protect the
spouse and the children, and to promote an amicable settlement. In addition, the
evidence indicated that Roy—not anticipating that he would die within months—did not
have his affairs in order. Roy’s disheveled affairs include failures to execute documents
required in his parenting actions with both Pamela and his former partner, Serena.
Ultimately, it is speculative of Valerie to argue that Roy would have changed the
beneficiary to Valerie after the divorce—when it would have been legal to do so—
particularly where both of his parenting agreements required him to ensure support for
his children and he failed to do so.
Roy’s Failure to Disclose Policy 799 and Improper Change of Beneficiary
¶33 Roy purchased Policy 799 on February 14, 2000, with a $924 down payment.
Pamela Volk was the sole beneficiary from the inception of this policy until the couple’s
dissolution proceeding. During the dissolution, with the statutorily-mandated restraining
order in place, Roy changed the beneficiary on this policy to his sister Valerie, as sole
16
beneficiary. Pamela was never aware of the policy and he did not disclose the policy
during the dissolution proceeding.
¶34 In its determination regarding Policy 799, the District Court found that Roy failed
to disclose the existence of the policy in the MSA, but determined this failure had no
effect on the value of the marital estate because, as a term policy, it had no value until
Roy died. The parties make numerous arguments regarding Roy’s failure to disclose the
policy. Pamela argues the District Court improperly relied on “value” in its equitable
determination because she and Roy considered Roy’s life insurance an asset. She argues
that Roy violated Paragraph 20 of their MSA by not disclosing the policy, which is
grounds for the court to award it to her, and that it should be placed in trust for RBV.
Pamela claims that the failure to disclose the policy unfairly affected negotiations in the
dissolution. Valerie argues that any failure to disclose property under § 40-4-253, MCA,
provides only a presumption that the property can be awarded to the other party. She
contends that the District Court properly exercised discretion in declining to re-open and
change the settlement. Valerie also argues that the policy was never part of the estate,
because the insurance passes outside the estate, and that resolution of the policy is solely
a contract issue.
¶35 The District Court concluded that Roy “likely should have disclosed Policy 799 as
an asset in the marital estate.” The court noted that the restraining order statute,
§ 40-4-121, MCA, prohibiting beneficiary changes, bolsters this argument. The District
Court found that the failure to disclose analysis is properly raised in a dissolution
proceeding; nonetheless, the District Court possesses further authority under the
17
contractual terms of the MSA to determine whether failure to disclose is grounds for
award of the property or benefit to the other party. In the Order, the District Court
determined that the policy had zero value at the time of the dissolution and, because there
was no value in the policy, the court could not determine what impact disclosure might
have had on the MSA. The court concluded, under this analysis, that any remedy would
only be based on speculation of how proper disclosure may have changed the MSA.
¶36 However, we determine that whether the failure to disclose the policy is material
to the settlement agreement is not the dispositive issue regarding Policy 799. The
dispositive issue on Policy 799 is the improper change of beneficiary while the
§ 40-4-121(3), MCA, dissolution restraining order was in place. The point is not whether
disclosure of the policy would have affected the parties’ negotiations in the MSA; rather,
the point is that had Roy not changed the beneficiary in violation of the restraining order,
the status quo on the policy would have allowed the benefit to be passed to the existing
beneficiary, Pamela, or—by operation of law—into Roy’s estate under the same analysis
as we have made in Policy 936.
¶37 When Roy purchased these policies, and any time thereafter until he filed the
dissolution, he was free to designate the beneficiary as he chose. When Roy filed the
dissolution and the statutorily-mandated restraining order applied, Roy was no longer free
to make those changes without the consent of the court and Pamela. Under
§ 40-4-121(3)(b), MCA, Roy was prohibited from changing his life insurance beneficiary
during the marriage dissolution proceedings. When we made similar findings in Briese,
we invalidated Briese’s change of designation from his wife to his children, even though
18
it did not affect the value or how the benefits were distributed, because § 40-4-121(3)(b),
MCA, “does not include any exceptions for changes to beneficiaries from spouse to
protected child or vice versa.” Briese, ¶ 31. The statute operates the same in this case and
there are clearly no exceptions in the statute allowing for a change of beneficiary from
wife to sister or vice versa, or otherwise.
¶38 In Briese, we determined that the courts possess “equitable power to order a return
to the status quo when a party violating a temporary restraining order has died.”
Briese, ¶ 41. There is no dispute that Roy’s changes of beneficiary were made while the
statutorily-mandated restraining order was in place. Because Roy made improper
changes to Policy 936 and Policy 799, those changes, in violation of the statute, are
invalid and must be set aside. We conclude, as we did in Briese, that the District Court
improperly interpreted the law regarding Roy’s improper change of beneficiary. The
statute supports a conclusion that transfers of property in violation of an injunction, like
that in Briese and in this case, are invalid and should be set aside. Death of the
restraining order violator does not prevent this Court from exercising that power.
Accordingly, we conclude that Roy’s improper changes to his beneficiary designations
must be set aside and the designations returned to the status quo, as they were prior to the
dissolution, in order to promote both the fairness and equity the statute is intended to
provide and the agreements that Roy made to support his children.
Unjust Enrichment and Constructive Trust
¶39 Returning the parties to the status quo in this case would require return of the life
insurance proceeds to the estate, a task that is complicated because the funds have been
19
dispersed and invested in real property. Because Valerie received the proceeds under the
express terms of the policies, the question arises whether she was unjustly enriched. If
so, fashioning a remedy or return to the status quo by setting the judgment aside requires
further action by the District Court.
¶40 Pamela brings her claim in this case, on behalf of RBV, under the theory of an
alleged constructive trust. She argues that Valerie was unjustly enriched when she
received the benefit of Roy’s insurance policies, a result of the improper beneficiary
changes. Pamela argues that the District Court erred in this case and abused its discretion
when it determined that the restraining order violation had no actual effect on the
beneficiary change and that the equities were not in favor of a constructive trust for RBV.
Pamela argues that Roy’s June 25, 2010 violation of the restraining order cannot be
affirmed and excused by the District Court.
¶41 Valerie argues that the elements of unjust enrichment were not met and a
constructive trust is improper in this case. Valerie contends that the violation of the
restraining order is not relevant because after the dissolution, Roy could have changed the
beneficiary to any person of his choice. Valerie also argues that the written agreements
in the underlying divorce action, and life insurance contracts, control all of the issues in
this case and that therefore, there is no equitable remedy because the issues are settled by
contracts, where equity cannot apply.
¶42 In its Order, the District Court analyzed the three elements of unjust enrichment
and sought to balance the equities. The District Court correctly concluded that the first
two elements of unjust enrichment are met according to the facts of the case. First, a
20
benefit was conferred on Valerie by her brother Roy when she received the life insurance
proceeds as a result of the improper designation. Second, the facts demonstrate that
Valerie, as the conferee, appreciated and possessed knowledge of the conferred benefit as
she acknowledged receipt of both policies, and she acknowledged she used the money
from her brother to set up a trust, TVG trust, to hold the funds and invest in real estate,
specifically, the house where she resides. The central dispute in this case surrounds the
third element, where the district court was required to weigh the facts and evidence to
determine whether the retention of the benefit Valerie incurred created an inequitable and
unjust result.
¶43 In addressing this third element, the District Court weighed three separate
arguments, and concluded: 1) Equity does not require voiding the beneficiary changes
made by Roy in violation of the restraining order; 2) Roy’s failure to execute a will and
properly execute his part of the MSA does not support a finding that Valerie was unjustly
enriched; and 3) the “October Agreement” between Pamela and Saraya had no bearing on
Valerie’s receipt of the insurance proceeds and does not bind Valerie to an unjust
enrichment finding nor a constructive trust. After weighing the equities of these issues,
the District Court refused to impose a constructive trust on the insurance proceeds.
¶44 This Court previously considered the law of unjust enrichment in the context of a
constructive trust in N. Cheyenne Tribe v. Roman Catholic Church, 2013 MT 24,
368 Mont. 330, 296 P.3d 450. There, we concluded a constructive trust, “serves as a
possible remedy to rectify the unjust enrichment of a party.” N. Cheyenne Tribe, ¶ 39.
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¶45 A constructive trust serves as a proper remedy to unjust enrichment. “A
constructive trust arises when a person holding title to property is subject to an equitable
duty to convey it to another on the ground that the person holding title would be unjustly
enriched if he were permitted to retain it.” Section 72-38-123, MCA; (see also
N. Cheyenne Tribe, ¶ 30, (citing In re Estate of McDermott, 2002 MT 164, ¶ 25,
310 Mont. 435, 51 P.3d 486)) (see generally 1 Dan B. Dobbs, Dobbs Law of Remedies:
Damages-Equity-Restitution § 4.3(1), 587, § 4.3(2) (Pract. Treatise Series, 2d ed.,
West 1993)) [hereinafter Law of Remedies]. This Court has broad discretion afforded by
the principles of equity to impose a constructive trust despite lack of any wrongdoing by
the person holding the property. N. Cheyenne Tribe, ¶ 29, (citing McDermott, ¶¶ 25-26).
The Court may simply declare a constructive trust to exist, “[n]othing else is required.”
N. Cheyenne Tribe, ¶ 32 (citing Eckart v. Hubbard, 184 Mont. 320, 325, 602 P.2d 988,
991 (1979)). A claim for unjust enrichment, in the context of a constructive trust,
requires proof of three elements:
(1) a benefit conferred upon a defendant by another; (2) an appreciation
or knowledge of the benefit by the defendant; and (3) the acceptance or
retention of the benefit by the defendant under such circumstances that
would make it inequitable for the defendant to retain the benefit without
payment of its value.
N. Cheyenne Tribe, ¶ 39.
Unjust Enrichment
¶46 Here, Roy’s actions set in motion the series of events changing the status quo in
regard to his life insurance and the ultimate receipt of the benefit by his sister Valerie.
Because this benefit went to Valerie, we apply the unjust enrichment factors to determine
22
whether she was unjustly enriched. It is clear from the facts of the case that the first two
elements of the test have been met: 1) a benefit has clearly been conferred upon Valerie
through Roy’s improper insurance beneficiary change; and 2) Valerie has knowledge of
the benefit, acknowledging receipt of the funds and investing them in a home and real
property.
¶47 The third element of unjust enrichment and the circumstances created by Roy’s
actions during and after the dissolution proceeding require further analysis. Thus, we
consider whether Valerie’s acceptance and retention of the benefit from Roy, under these
circumstances, makes it inequitable for Valerie to retain the benefit without payment of
its value. The “circumstances” in this case are a result of Roy’s improper change of the
beneficiary while the statutorily-mandated restraining order was in place. The final result
of the circumstances is that Roy’s estate is unable to pay claims to his children or provide
for their future as was intended and promised under the MSA and the parenting
agreement providing for Saraya. If Roy had not made this improper change, the
circumstances would be much different. Pamela would have been removed as the
beneficiary upon the dissolution of their marriage, and the life insurance proceeds, under
§ 72-2-814, MCA, would have diverted into the estate upon Roy’s death, where it would
have been distributed to Roy’s children under the intestacy statutes.
¶48 While we did not consider unjust enrichment in the Briese case, we did conclude
that the remedy for the improper beneficiary designation was to set aside the change. In
Briese, even when the effect of changing the benefit did not alter the final beneficiary
upon whom the benefit was bestowed, we set the change aside because violation of the
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statute invalidated Briese’s change. Here, similarly, the violation requires the Court to
set aside the improper change and restore the status quo. Because the improper change
must be set aside, we view the subsequent circumstances created by the change—
Valerie’s receipt of the insurance proceeds—to be similarly improper because the
benefits went to Valerie as a result of Roy’s mistakes. Accordingly, we conclude that the
third element of unjust enrichment has been met because Valerie is holding the life
insurance proceeds, which she received as a result of Roy’s improper change, “under
such circumstances that in equity and good conscience [s]he ought not to retain it.”
N. Cheyenne Tribe, ¶ 33.
Constructive Trust
¶49 Because we conclude that Pamela, on RBV’s behalf, has established a claim
showing that Valerie was unjustly enriched, we now consider the ramifications of the
imposition of a constructive trust as a remedy for the unjust enrichment. “A party’s proof
of unjust enrichment entitles it to restitution from the other party—regardless of any
wrongdoing on the part of the unjustly enriched party.” N. Cheyenne Tribe, ¶ 37 (citing
Lawrence v. Clepper, 263 Mont. 45, 53, 865 P.2d 1150, 1156 (1993)). As we stated in
N. Cheyenne Tribe, “[u]njust enrichment serves as a unifying principle for a wide variety
of equitable claims and . . . a court may order restitution to vindicate these types of
equitable claims.” N. Cheyenne Tribe, ¶ 38, (citing Dobbs, Law of Remedies § 4.1(3),
564). The Court measures restitution for unjust enrichment “by the defendant’s gain.”
N. Cheyenne Tribe, ¶ 38, (citing Dobbs, Law of Remedies § 4.1(1), 555). In the context
of a constructive trust the plaintiff does not need to show deprivation of something to
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recover, “it is sufficient that the defendant gained something that it should not be allowed
to retain.” N. Cheyenne Tribe, ¶ 38 (citing McDermott, ¶¶ 25-26).
¶50 “A constructive trust arises when a person holding title to property is subject to an
equitable duty to convey it to another on the ground that the person holding title would be
unjustly enriched if he were permitted to retain it.” N. Cheyenne Tribe, ¶ 30 (citing
McDermott, ¶ 25 (quoting § 72-33-219, MCA)). In this instance, the elements of unjust
enrichment have been met and we conclude that Valerie has been unjustly enriched. In
turn, in order to work an equitable result, we find that though Valerie has done nothing
wrong, she is holding title to property and subject to an equitable duty to convey it, or a
portion thereof, to another on the ground that she would be unjustly enriched if she were
permitted to retain it. N. Cheyenne Tribe, ¶ 30. Accordingly, we determine that
imposing a constructive trust on the proceeds of Roy’s two life insurance policies, Policy
799 and Policy 936, in favor of RBV is the proper remedy in this case.
¶51 As we noted, a significant issue emerges from this determination because Valerie
has accepted the life insurance proceeds and spent or invested them on real property.
This is not a case where the asset or money is being held in trust while a determination is
made. We recently reviewed a similar circumstance in LeMond v. Yellowstone Dev.,
LLC, 2014 MT 181A, 375 Mont. 402, 336 P.3d 345, a case in which we imposed a
constructive trust in LeMond’s favor because he lost title to lands promised to him in
business dealings with Yellowstone Development.
¶52 In LeMond, LeMond entered an agreement to trade his work promoting sales for
Yellowstone Development for a particular land parcel owned by Yellowstone
25
Development. Prior to completing the agreement, Yellowstone Development traded the
promised parcel to a third party and it was unavailable to LeMond when he completed his
part of the contract. LeMond asked for the traded parcels to replace the conveyed parcels
as part of a constructive trust, and the District Court agreed. We concluded that, because
the traded parcels had more acreage and likely a higher value, the District Court had to
determine the extent of the remedy. LeMond was granted a constructive trust under an
implied contract legal theory, unlike the unjust enrichment theory in this case.
Nonetheless, the resulting constructive trusts are similar because LeMond, like RBV, did
not have direct access to the property subject to the constructive trust; in other words, the
property was not set aside awaiting the Court’s determination. In LeMond, we remanded
to the District Court for a determination of value regarding other lands owned by
Yellowstone Development to replace the lost parcels. There, as here, the District Court
needed to determine the proper amount of the constructive trust to make a determination
“if, in equity and conscience, it belongs to [the plaintiff].” LeMond, ¶ 51 (citation
omitted). We explained that the “equity of the transaction must shape the measure of
relief.” LeMond, ¶ 52 (citation omitted).
¶53 A court sitting in equity is empowered to determine all questions involved in the
case, and to fashion an equitable result that will accomplish complete justice. Blaine
Bank of Montana v. Haugen, 260 Mont. 29, 35, 858 P.2d 14, 18 (1993);
Kauffman-Harmon v. Kauffman, 2001 MT 238, ¶ 11, 307 Mont. 45, 36 P.3d 408. As in
LeMond, the measure of relief must be shaped by the circumstances of the affected
parties and the equity of the transaction. We conclude it is necessary to remand this
26
matter to the District Court so that, acting in equity, it may fashion a result that will
accomplish justice in light of the present circumstances of all affected parties. Among
other matters, because we are directing that Roy’s changes of beneficiary designations be
set aside and the designations returned to the previous status quo, the court must take
account of any claim that may be asserted by Volk Sand & Gravel as co-beneficiary
under Policy 936. The court may in addition consider any other factors it deems pertinent
to its obligation to work an equitable result, and will be free to direct the nature and
course of further proceedings on remand.
Saraya Roberson and the “October Agreement”
¶54 Because we have determined that a constructive trust must be imposed on Roy’s
insurance proceeds we conclude that we do not need to reach the arguments made on
cross-appeal by Saraya Roberson. Pamela agreed on RBV’s behalf in her Amended
Complaint of June 11, 2013, to pay Saraya’s creditor’s claim against Roy’s estate if a
constructive trust was created in favor of RBV. Thus, we determine that this issue is
moot as it is properly resolved under the parties’ agreement.
CONCLUSION
¶55 We conclude that Valerie Goeser has been unjustly enriched because she has
received a benefit that rightfully belongs to another. We make this determination in
equity and conclude that Roy Volk’s errors in changing the beneficiary of his life
insurance under the statutorily-mandated restraining order invalidates his designations on
Policy 799 and Policy 936. We hold that a constructive trust was created on RBV’s
behalf as a result of these errors, and that Valerie Goeser must return the insurance
27
proceeds or that portion of the proceeds by which she “would be unjustly enriched if
[she] were permitted to retain [them].” Section 72-38-123, MCA.
¶56 Reversed and remanded for further proceedings consistent with this Opinion.
/S/ MICHAEL E WHEAT
We Concur:
/S/ MIKE McGRATH
/S/ PATRICIA COTTER
/S/ BETH BAKER
Justice Jim Rice, concurring.
¶57 I concur with the Court’s decision to reverse and remand for further proceedings.
I would add the observation that the Court has not ordered that all of the contested life
insurance proceeds must necessarily be placed in trust for RBV. Rather, on remand, the
District Court will need to design equitable relief based upon all of the circumstances of
the affected parties. These factors could include the funds currently held for RBV’s
benefit; the reasonable future needs of RBV; the fact that, by agreement, Saraya’s
creditor’s claim would be paid from the proceeds of the constructive trust; Valerie’s
financial situation, including any indebtedness she incurred or other disadvantage she
assumed by virtue of receiving the insurance proceeds, and the costs of the disgorgement
process; any claim asserted by Volk Sand & Gravel as co-beneficiary under Policy 936 as
a result of our decision setting aside Roy’s final changes of beneficiary designations; and
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any other factor that the District Court would deem appropriate to consider in working an
equitable result in this matter.
/S/ JIM RICE
Justice Beth Baker joins in the concurring Opinion of Justice Rice.
/S/ BETH BAKER
Justice James Jeremiah Shea, concurring.
¶58 I concur with the Court’s analysis in this case and its ultimate conclusion that
Valerie was unjustly enriched and a constructive trust should be imposed. I submit,
however, that although the District Court should properly be afforded the discretion to
fashion an equitable resolution of this issue on remand, we can provide more precise
guidance as to what the equitable objective should be.
¶59 There is no dispute that Roy violated the District Court’s restraining order when
he changed the beneficiary of both life insurance policies to name Valerie as the sole
beneficiary. There is likewise no dispute that Valerie was not otherwise entitled to any of
the life insurance proceeds and, but for Roy’s violation of the restraining order, she
would not have received any of the proceeds. We also know the precise amount, down to
the penny, of the money that Valerie received and to which she was not entitled:
$2,306,103.13. So when we conclude “that Valerie Goeser must return the insurance
proceeds or that portion of the proceeds by which she ‘would be unjustly enriched if she
29
were permitted to retain [them],’” Opinion, ¶ 55, I have to ask: What do we mean by
“portion”?
¶60 Having determined that Valerie was not entitled to the life insurance proceeds, I
would conclude that the portion of the proceeds by which Valerie would be unjustly
enriched if she were entitled to retain it is anything above $0. That being noted, I
recognize the Court’s concern that there is a significant issue in the imposition of the
constructive trust because Valerie has spent or invested the life insurance proceeds on
real property in California. Opinion, ¶ 51. It seems to me, however, that the primary
significance of this issue is that it will likely require Valerie to sell the property if she is
otherwise unable to pay the $2,306,103.13 that should have gone to Roy’s estate. While
requiring Valerie to sell her home is indeed significant, it is certainly no more significant
of an issue than ensuring that Roy’s estate is able to pay claims to Roy’s children and
provide for their future as was intended and promised under the MSA and the parenting
agreement providing for Saraya.
¶61 I agree that achieving an equitable result in this case will require the resolution of
certain issues that are best left to the District Court on remand. For example, fluctuating
real estate market values may affect Valerie’s ability to recoup and disgorge the full
amount of the proceeds. A court sitting in equity is empowered to determine all
questions involved in the case, and to fashion an equitable result that will accomplish
complete justice. Kauffman-Harmon, ¶ 11. While the nuances of fashioning that
equitable result are properly within the purview of the District Court on remand, I believe
the facts of this case enable us to hold on appeal that the objective should be the
30
recoupment, to the fullest extent possible, of the entire life insurance proceeds. I would
so instruct the District Court.
/S/ JAMES JEREMIAH SHEA
Chief Justice Mike McGrath joins the concurrence.
/S/ MIKE McGRATH
Justice Laurie McKinnon, dissenting.
¶62 I disagree with the Court’s decision on multiple grounds.
¶63 Preliminarily, the Court has not accorded proper deference to a trial court’s
decision in matters of equity where there is no dispute of fact and the trial court has
correctly applied the law. Although the District Court’s decision was rendered pursuant
to summary judgment in a case of equity, see § 3-2-204, MCA, the decision of whether a
constructive trust should be created; what, if anything, should be done for violation of an
economic restraining order in a dissolution proceeding; and the remedy for failing to
disclose a marital asset are all firmly committed to the discretion of the trial court for
which an abuse of discretion must be found. Here, there were no disputed facts and the
law—specifically § 40-4-252(4), MCA, and Briese, ¶ 39—allowed the trial court
discretion in fashioning an appropriate remedy. In Briese, we specifically rejected a per
se rule that automatically voids changes made in violation of an economic restraining
order, holding that equitable principles should govern rather than a bright-line rule that
beneficiary changes, as a matter of law, are void. Briese, ¶ 40 (“Other courts, while
31
holding that the violation does not serve to automatically void the beneficiary change,
generally have found that courts have the authority to grant some form of relief through
use of their powers of equity.”). Pursuant to § 40-4-202, MCA, a district court has broad
discretion to distribute a marital estate equitably according to the circumstances of the
case and, absent clearly erroneous findings, “we will affirm a trial court’s property
distribution unless the court abused its discretion.” Marriage of Gebhart, 2003 MT 292,
¶ 16, 318 Mont. 94, 78 P.3d 1219. In my view, we have failed to account for the
discretion of the trial court in our standard of review. The District Court presided over
the dissolution, the probate, and claims of unjust enrichment and creation of a
constructive trust. I would accord the trial court considerable latitude and discretion in
applying and formulating an equitable remedy, and the trial court’s decision should not
be overturned in the absence of an abuse of discretion. See Rawlings v. Rawlings, 2010
UT 52, ¶ 21, 240 P.3d 754 (2010).
¶64 The decision reached by the Court reforms the Marital Settlement Agreement,
ignores the Final Parenting Plan, and invalidates life insurance contracts. The principal
issue before the Court is whether a constructive trust should be imposed on
$2,306,103.13 for the benefit of RBV, because Valerie was unjustly enriched when she
received Roy’s life insurance proceeds due to the fact that: (1) Roy violated the TRO by
changing beneficiaries of two life insurance policies; (2) Roy failed to execute a will
giving all of his assets to RBV; and, alternatively, (3) Roy failed to disclose Policy 799 as
an asset during their divorce.
32
¶65 It is undisputed that Roy violated the economic TRO by changing his beneficiary
designations in two term life insurance policies during the pendency of his dissolution
proceeding and while the economic TRO was in effect. The issue, however, is whether
Valerie—who was not a party to the dissolution proceeding—has been unjustly enriched.
It is the third element of the test for unjust enrichment set forth in N. Cheyenne Tribe
which is at issue in these proceedings: whether “the acceptance or retention by the
conferee of the benefit under such circumstances as to make it inequitable for the
conferee to retain the benefit without payment of its value.” N. Cheyenne Tribe, ¶ 36.
The imposition of a constructive trust serves as a possible remedy to rectify the unjust
enrichment of a party. Accordingly, it must be inequitable for Valerie to retain the
benefit of Roy’s life insurance proceeds.
¶66 In Briese, the husband died while the divorce was pending and the economic TRO
was in effect. We stated in Briese that the purpose of an economic restraining order in a
dissolution proceeding is to “maintain the status quo” of the parties “so long as a
dissolution action is pending.” Briese, ¶ 25. An economic restraining order “mitigates
the potential harm to spouses and children caused by the dissolution process itself and
ensures that reasonable provision is made for the spouse and children during the
litigation.” Briese, ¶ 25. In fashioning an appropriate equitable remedy for a violation, a
trial court must be cognizant of these principles and considerations.
¶67 We revisited the issue in In re Estate of Corrigan, 2014 MT 337, 337 Mont. 364,
341 P.3d 623, when the husband died prior to the dismissal of the dissolution proceeding.
We held that the husband’s failure to serve his wife with the dissolution petition and
33
accompanying economic TRO within the three-year deadline for service of pleadings set
forth in M. R. Civ. P. 4(t)(1) rendered the economic TRO ineffective after the three-year
deadline lapsed. In re Estate of Corrigan, ¶ 21. Because the TRO was no longer
effective, we refused to void the husband’s change in beneficiary designation to his adult
children from his wife, finding Briese distinguishable because it involved “an active and
ongoing divorce proceeding.” In re Estate of Corrigan, ¶ 21. We explained that “in
Briese we declined to adopt a rule that would automatically void any change of
beneficiary made by a decedent in violation of a divorce TRO. Rather, we gave the
district court the discretionary authority to void such a change if equitable principles
demanded it.” In re Estate of Corrigan, ¶ 20 (internal citation omitted).
¶68 Here, Roy’s death occurred after the divorce was finalized and the economic TRO
had been dissolved. Once the TRO was dissolved, the District Court recognized that Roy
would have been free to change his beneficiaries at any time. Pursuant to
§ 72-2-814 (2)(a)(i), MCA, Pamela, as an ex-spouse, would have been removed as a
beneficiary of any of Roy’s life insurance policies as a matter of law. Therefore, while a
change of beneficiary may have been voidable up until the dissolution was final, upon the
economic TRO being dissolved there were no restraints on Roy’s ability to change the
beneficiary. The District Court properly factored these considerations into its decision to
deny Pamela equitable relief, finding that Roy’s change of beneficiary was evidence of
his intent to make Valerie the beneficiary of his life insurance. Contrary to the Court’s
conclusion, the fact that Roy actually did change his beneficiary requires no speculation
about Roy’s intent and that he would have effectuated that intent subsequently through
34
executing a valid change of beneficiary. The District Court, unlike this Court, refused to
speculate that Roy would not have followed through with a change when it concluded
that Roy obviously intended Valerie to be the beneficiary having made no further
changes after dissolution or the lifting of the economic TRO. The District Court
observed that Valerie was not a party to the dissolution proceeding and, therefore, it was
not “inequitable” for her to receive the proceeds which Roy obviously intended her to
have and which had been memorialized in an insurance contract. This Court has not
found the District Court’s refusal to speculate or its findings regarding Roy’s actions
clearly erroneous.
¶69 Unjust enrichment is “the receipt of a benefit whose retention without payment
would result in the unjust enrichment of the defendant at the expense of the claimant.”
Restatement (Third) of Restitution and Unjust Enrichment § 1 cmt. a (2011); see also
§ 72-38-123, MCA. We relied upon 66 American Jurisprudence 2d Restitution and
Implied Contracts § 11 (1973) in N. Cheyenne Tribe to establish the elements of unjust
enrichment. N. Cheyenne Tribe, ¶ 39. “The doctrine of unjust enrichment or recovery in
quasi contract applies to situations where there is no legal contract but where the person
sought to be charged is in possession of money or property which in good conscience and
justice he should not retain but should deliver to another.” 66 Am. Jur. 2d Restitution
and Implied Contracts § 11 (emphasis added). Thus, to permit recovery on a theory of
quasi contract where a written agreement exists would constitute a reformation of the
contract and subversion of principles of law relating to contracts. A life insurance policy
is issued pursuant to a contract. Moreover, “[a] life insurance policy owner, like a
35
testator, may alter or revoke designations at any time until death; thus, either
instrument—whether will or insurance policy—must be interpreted and applied at death
in order to effectuate the transferor’s final intent.” Thrivent Fin. For Lutherans v.
Andronescu, 2013 MT 13, ¶ 7, 368 Mont. 256, 300 P.3d 117. The District Court
determined that Valerie had not been unjustly enriched when she received proceeds
pursuant to a valid insurance contract. The District Court did not make an incorrect
conclusion of law or clearly erroneous factual finding in doing so.
¶70 The MSA, by its plain terms, provides that Roy was to execute a will making his
son the beneficiary of his estate, not his life insurance. Life insurance proceeds are
non-testamentary in nature and pass outside of the estate in accordance with the wishes of
the insured. Section 72-6-111, MCA. Neither the MSA nor the Parenting Plan include
any provision that states either party agreed to procure or maintain a life insurance policy
for the benefit of anyone. Although it is common for marital settlement agreements or
parenting plans to contain agreements requiring the procurement and maintenance of a
life insurance policy with minor children, as an aspect of child support, designated as
beneficiaries, neither the MSA nor Parenting Plan here mention anything about life
insurance. In fact, although Pamela was aware of at least one of Roy’s life insurance
policies she chose not to pursue Roy’s life insurance in the MSA. The District Court
recognized that although Roy was required to make a will naming RBV as the beneficiary
of his estate, Roy failed to do so prior to his untimely death. The District Court
attempted to ascertain the intent of the parties when entering into the MSA and
determined that it was not the parties’ intention to include Roy’s insurance policies in the
36
MSA or the Parenting Plan. Given the provisions of § 72-6-111, MCA, and that the
policy that was disclosed was given to Roy in the MSA, I agree with the District Court
that Roy’s failure to make a will does not support a finding that Valerie has been unjustly
enriched. The Court thus incorrectly concludes that Valerie was unjustly enriched
because “Roy’s estate is unable to pay claims to his children or provide for their future as
was intended and promised under the MSA and the parenting agreement providing for
Saraya.” Opinion, ¶ 47. Such a conclusion confuses principles of contract, the District
Court’s findings of fact, and relevant statutory provisions.
¶71 As the Court appears to restrict its analysis only to Roy’s violation of the
economic TRO, I will not address whether a term life insurance policy is an “asset” with
a cash value and whether it was required to be disclosed or whether it would have been
significant to the parties in negotiating their marital property settlement. I would affirm
the District Court’s decision by applying a correct standard of review and the principle
that the District Court be afforded latitude in fashioning an appropriate equitable remedy
for violation of one of its orders.
¶72 I dissent.
/S/ LAURIE McKINNON
37