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Date: 04-28-2022
Case Style:
PHYLISS HAMMERMEISTER V WALTER HAMMERMEISTER
Case Number: 02-511
Judge: Laurie McKinnon
Court:
IN THE SUPREME COURT OF THE STATE OF MONTANA
On appeal from The District Court of the Ninth Judicial District
of the State of Montana
Plaintiff's Attorney:
Defendant's Attorney: JOAN E. COOK
Description:
Helena, MT – Divorce lawyer represented respondent in seeking a contempt charge.
In seeking reversal the district court’s decision not to
hold Phyliss in contempt, Walter has first argued that
this Court should reverse the district court and remand
the matter to it for a evidentiary hearing on the
contempt motion so the court can than properly make a
decision that can be and is reviewable by this Court. In
response to this argument, Phyliss says that Walter
alleges that he was “not allowed” to present any evidence
regarding the mortgage release. She then argues that the
record does not contain any indication that he requested
or was denied such an opportunity, (Respondent’s brief,
p. 5). The transcript of the contempt hearing, page 3
thereof, clearly indicates that Walter’s counsel disagreed
with a fair amount of what was represented to the court
by Phyliss’ counsel and the court was told that he was
prepared to present testimony on that, (TR, pp 2-3,
Exhibit A to Appellant’s Brief). Phyliss then says that an
1
offer of proof could have been made, in order to build
the record, but counsel did not do that. Counsel did not
have to make an offer of proof because the district court,
as can be seen by the transcript, was not allowing any
testimony to be presented. Without any testimony being
presented, it is unclear why the district court did not
hold Phyliss in contempt.
If the Court deems that the contempt matter is
reviewable, without any evidence having been presented
to the district court, on the issue of the mortgage release,
the district court’s ordering counsel for Walter to
prepare the mortgage release is an ancillary order under
$3-l-523(2), MCA, which makes this case reviewable on
direct appeal consistent with this Court’s decision in Lee
v. Lee, 2000 MT 67, ¶37, 299 Mont. 78, ‘j37, 996 P.2d 7 89,
137. Phyliss contends that the same his not reviewable
because the district court did not act in an arbitrary and
unlawful manner as to be tyrannical, (Respondent’s brief,
p. 5). This is not the standard under $3-l-523(2) or Lee v.
Lee, supru, $37. Requiring Walter to prepare the mortgage
release did effect his substantial rights, because, as
argued in his initial brief on appeal, under $7 l-l-2 12,
MCA, Walter is entitled to recover $500 and all actual
damages resulting from the neglect or refusal by Phyliss
to execute a mortgage release.
2
As for the placing the ReliaStar insurance policy in
trust, the district court, rather than holding Phyliss in
contempt, suggested that the trust agreement be
modified, by allowing the court to appoint a successor
trustee, if the trustees are at loggerheads, such as a
institutional trustee, (TR, p. 11). In response, Phyliss
argues that there is no ancillary order affecting the
substantial rights of the parties. Clearly, however, there
is an ancillary order with the court suggesting that the
parties modify the trust agreement, which does effect
the substantial rights of Walter because the insurance
policy, which under the Property Settlement Agreement
was to be placed in trust, has still not been placed in
trust since the divorce was finalized and the Property
Settlement Agreement approved in 1998.
As for the checks that Phyliss had written out of the
proceeds of the sale of grain and/or livestock, which
Walter was solely entitled to the proceeds thereof, the
district court said that the Property Settlement
Agreement, dated April of 1998, resolved the issue
because Walter had ample opportunity, prior to that
time, to raise the issues of the checks when the parties
divided their property. As argued in this appeal, the
court’s analysis is much like a lathes argument. This is
an ancillary order, which is then appealable, because it
3
does affect Walter’s substantial rights. Phyliss argues
there is no ancillary order making the same appealable.
Phyliss then argues that Walter had acknowledged that
Phyliss had written checks, which had not cleared the
account, but she predicates this argument on the Points
of Agreement, which were signed long before the
Property Settlement Agreement. In 1 4, 9 i, page 5 of the
Property Settlement Agreement, it does indicate that
Walter acknowledges that Phyliss wrote a check for $200
and a check for $35 on the joint account that they had at
Farmers State Bank on or before October 24, 1997 and he
agreed that this shall not be deemed a default of their
agreement even though such checks may clear said
account after October 24, 1997. This provision though
does not deal with Walter being entitled to all the
proceeds of the grain and livestock as set out in ¶4a, ¶4c
and ¶4d, page 4 of the Property Settlement Agreement,
(Exhibit C to the Brief on appeal), which indicates that
Walter was entitled to all proceeds received from the sale
of grain and livestock since the parties separation in
April of 1993. As is argued, in this appeal, the plain
language of the Property Settlement Agreement allows
him to claim all of the funds in those accounts which
were from the sale of grain and livestock since April of
1993. The property settlement agreement did not have to
4
say that Phyliss was required to reimburse Walter for all
checks written because the provisions in issue clearly
required her to do so, under the plain language thereof.
The district court’s failure to hold Phyliss in contempt,
on the foregoing issues, should be reversed and the case
remanded for an evidentiary hearing or, alternatively,
the court should be reversed and required to hold
Phyliss in contempt on these three issues.
REPLY ARGUMENT
THE DISTRICT COURT SHOULD BE REVERSED FOR
FAILING TO HOLD AN EVIDENTIARY HEARING AND
RECEIVING TESTIMONY AND EXHIBITS BEFORE DENYING
THE CONTEMPT MOTION
In this appeal, Walter has acknowledged that under § 3-
1-523(2), MCA, and Lee v. Lee, supra, there can only be an
appeal of a contempt judgment or order in a family law
proceeding when the judgment or order appealed from
includes an ancillary order that affects the substantial
rights of the parties involved. Walter has argued that
after Phyliss’ counsel set out her position on his affidavit
for contempt, (TR, pp 2-3), he indicated that he
disagreed with a lot of what had been said and was
prepared to present testimony on the issues involved in
the contempt matter, (TR, p. 3). The court, however, did
not allow for presentation of any testimony.
5
In response, Phyliss argues that Walter is arguing that
he was not allowed to present any of the evidence
regarding the mortgage release. She then says that the
record does not contain any indication that he requested
or was denied such an opportunity. The record though
speaks for itself and it clearly shows that, after Phyliss’
counsel made the court aware of their position on the
affidavit for contempt, counsel for Walter stated as
follows, after the court summarized what counsel for
Phyliss had stated:
“Well, Your Honor, we disagree with a fair amount
of that, and, I mean, that we’re prepared to present
testimony today on those issues”, (TR, p.3, Exhibit
A).
The court then asked if the issue regarding the coins
had been resolved, which counsel agreed had but there
were still three missing, (TR, p. 3 Exhibit A). Counsel then
told the court after he had asked about the mortgage
release, what the situation with the mortgage release was
and that Ms. Hammermeister, after being asked to send
Walter a mortgage release had never done so. The district
court then said:
“Of course not, why would anyone take the
initiative to do something that would save
attorney’s fees and hearing time. You will prepare
one, you will prepare the mortgage release and you
will send it to her so she can sign it”, (TR, p. 4,
Exhibit A).
6
It was the district court that brought this matter
around to the mortgage release and not counsel for
Walter. Counsel for Walter was wanting to present
evidence on all of the issues raised in the affidavit for
contempt, but, as shown by the transcript, he was not
allowed to do so.
Phyliss then argues that counsel could have made a
request to present an offer of proof, in order to build the
record but he did not. This is not an issue where an offer
of proof needs to be made, rather, this is an issue about
whether or not the district court should have held an
evidentiary hearing so it heard the facts before
arbitrarily, as the court did, deciding not to hold Phyliss
in contempt and then issuing ancillary orders affecting
the substantial rights of the parties as will hereafter be
argued.
This Court must and should reverse the district court
and remand the matter to it for the purpose of
conducting an evidentiary hearing so that it can issue
proper findings and conclusions on this motion for
contempt, which can then be properly reviewable.
THE DISTRICT COURT ERRED IN NOT HOLDING PHYLISS
IN CONTEMPT ON THE MORTGAGE RELEASE.
If this Court determines that it can review the district
court’s decision not to hold Phyliss in contempt, this
Court must first review the issue of the mortgage release.
The district court’s order requiring Walter’s counsel to
prepare the mortgage release and send it to Phyliss was an
ancillary order, under $3-l-523(2), MCA. This is because,
as argued on pages 12 and 13 of the initial brief o n
appeal, $71-1-212, MCA, provides that the mortgagee,
after full performance of the mortgage, who refuses or
neglects to execute, acknowledge, and deliver to the
mortgagor a certificate of discharge or release of the
mortgage within 90 days after a request for one is liable to
the mortgagor for the sum of $500 and all actual damages
resulting from the neglect or refusal. Under $7 l- 1-212,
MCA, Phyliss was required to prepare and execute a
mortgage release when requested to do so. The request
was made but the same was not prepared and executed.
In response, Phyliss argues that the record contains no
evidence that the district court acted in a matter which
would be considered so arbitrary~ and unlawful as to be
tyrannical citing State ex Rel. Zosel v. District Court, 56
Mont. 578, 185 P. 1112 (1919). Zosel, however, is no
longer the standard, as to what is an ancillary order. In
Lee v. Lee, supra, 138, this Court noted that, the district
court in that case, had held a person named Johnson in
contempt but it also issued an ancillary order fixing a
dollar amount to property that should have been
8
conveyed to Lee; required Johnson to compensate Lee for
credit card debt that had been discharged in bankruptcy;
and, offset a maintenance obligation. This was the
ancillary order that affected the substantial rights of the
parties. Here, the district court’s ancillary order, affecting
the substantial rights of the parties, when it did not hold
Phyliss in contempt, was ordering Walter to prepare and
issue the release even though $71-1-212, MCA, required
Phyliss to do that and authorized Walter to recover $500
in damages when she failed to so. The district court then
affected Walter’s substantial rights as the statutory law
required Phyliss to execute the mortgage release and
allowed Walter damages for her failure to do so.
Since the mortgage release has now been prepared, this
Court should remand this matter to the district court and
direct it to order Phyliss to pay the $500 in damages as
well as Walter’s attorney fees in having to prepare the
mortgage release, as provided by $71-1-212, MCA.
THE DISTRICT COURT SHOULD BE REVERSED ON THE
FAILURE TO HOLD PHYLISS IN CONTEMPT ON THE
PLACING OF THE INSURANCE POLICY IN TRUST.
With regard to the Reliastar policy being put into trust,
in his appeal, Walter wants this Court to reverse the
district court’s denial to hold Phyliss in contempt and has
argued that the district court issued an ancillary order,
9
under $3-l-.523(2), MCA, when it suggested the parties
modify their trust agreement which would allow the
court to appoint a successor trustee, if the parties where
at loggerheads, such as an institutional trustee, (TR, p.
11). In response, Phyliss has argued that 15 of the
Property Settlement Agreement provided that the
provisions of the trust were to be in a form satisfactory to
wife and her counsel. However, the language, with regard
to the provisions of the trust, is preceded by the
following:
“Wife presently owns an insurance policy 0 n
Husband’s life issued by Reliastar, being Policy No.
2091477. It is agreed that all her interest therein are
to be transferred to a trust, the co-trustees of which
shall be their son, Walter and wife. . ..“.
The issue that Phyliss was raising about being alienated
from her son, as again argued on page 6 and 7 of the brief,
does not pertain to the provisions of the trust. The
Property Settlement Agreement mandates that there are
to be two trustees, Walter, the son, and Phyliss.
The district court’s discussion about modifying, as
discussed above, is an ancillary order, because the matter
that substantially affects Walter’s rights are that Phyliss
was to put this insurance policy into trust, with the cotrustees being her son and herself. It does not matter that
they may be alienated. Pages 6 and 7 of the Property
10
Settlement Agreement also sets out certain terms and
conditions of any trust that are material to the Property
Settlement Agreement. It is those terms and conditions
that Phyliss, as shown by Exhibit D to the initial brief on
appeal, now wants to change it is those terms and
conditions which the district court was discussing being
modified by allowing it to appoint a successor trustee.
At the very least, the district court should have he1 d
Phyliss in contempt for not placing the policy, in trust, as
required by ¶5 of the Property Settlement Agreement.
THE DISTRICT COURT ERRED IN NOT HOLDING
PHYLISS IN CONTEMPT WITH REGARD TO WRITING
CHECKS OUT OF THE JOINT ACCOUNT FROM PROCEEDS OF
SALE OF GRAIN AND/OR LIVESTOCK FROM APRIL OF 1993
UNTIL OCTOBER OF 1997.
It is Walter’s position that the district court erred in
not holding Phyliss in contempt with regard to writing
checks out of the joint account from the proceeds of sale
of grain and/or livestock from April of 1993 until October
1997. The court, however, said that the property
settlement agreement, dated April of 1998, resolved the
issue because Walter had ample opportunity, prior to that
time, to raise the issue of the checks when the parties
divided their property. This is an ancillary order that
makes the issue appealable under $3-l-523(2), MCA. This
11
is because, as under Lee, the district court’s order
affected the substantial rights of the parties, due to the
language in the Property Settlement Agreement set out in
¶4(c) and 4(d), which provided that Walter was entitled
to the proceeds of all grain received since the parties
separation in April of 1993 and the proceeds received
from the sale of livestock since that time. In response,
Phyliss relies upon the points of agreement, Exhibit D to
the initial brief on appeal, where it is indicated that
Phyliss had represented that she had written two checks
on the account for $200 and $35, which may not have
cleared the account. The same language appears in the
Property Settlement Agreement on page 5, 14(i). This
argument, however, does not address the fact that the
Property Settlement Agreement provided that Walter was
entitled to all the proceeds from the sale of grain and the
sale of livestock. The court, before saying that this issue
should have been raised early, indicated that: “... If, in
fact, she withdrew something that taps into the proceeds
of the sale of grain or livestock, and I think the provisions
of the agreement have to control, then that money
belongs to Mr. Hammermeister.“, (TR, p. 14). This is
precisely Walter’s argument. It was after that the district
court said that Mr. Hammermeister’s execution of the
Property Settlement Agreement resolved the issue, (TR, p.
12
16). The district court, however, was correct in its first
analysis because the Property Settlement Agreement,
which was the final executed document between the
parties, controls over the Points of Agreement and this
was not an issue Walter had to bring up prior to 2002
when it was brought up.
As argued on page 17 of the initial brief on appeal,
Phyliss, in an argument which she does not even address
in her brief on appeal, bears the burden to show
extraordinary circumstances which require the
application of the doctrine of lathes. Marriage 0 f
HahnKladouhos, 263 Mont. 315, 319, 868 P.2d 599
(1994). Having not met that burden, it cannot be said that
it is too late for Walter to raise the issue now.
The district court should be reversed and directed to
hold an evidentiary hearing so Walter can present
evidence to the court that all of the sources of funds in
the account where from the sale of grain and livestock
and direct that Phyliss then reimburse Walter for all
checks written by her since the date of the separation of
the parties, as provided in the Property Settlement
Agreement.
13
PHYLISS’ REQUEST THAT THIS APPEAL IS WITHOUT
MERIT AND SHE SHOULD BE AWARDED HER COSTS AND
ATTORNEY FEES SHOULD BE DENIED.
In her brief, Phyliss has argued that Walter’s appeal was
taken “without substantial reasonable grounds”, citing
Rule 32, Montana Rules of Appellate Procedure. She then
argues that pursuant to that rule and Rule 33, Montana
Rules of Appellate Procedure, her costs and attorney fees
should be awarded to her. In making this argument,
Phyliss has ignored what this Court said in Lee v. Lee,
supra, ¶66. Therein, this Court summarized the
circumstances under which it would impose sanctions.
This Court said:
“As a general rule, this Court will not impose
sanctions pursuant to Rule 32, M.R.App. P., unless
the appeal is entirely unfounded and intended to
cause delay or unless counsel’ actions otherwise
constitute an abuse of the judicial system. See In re
Marriage of Moss, 1999 MT 62, 141, 293 Mont. 500,
¶41, 977 P.2d 322, 141. However, we have awarded
fees and costs in instances where one party has
“previously conceded the propriety of [al
dismissal” and then nevertheless proceeded to
appeal the dismissal as improper. See Buck v.
Billings Montana Chevrolet, Inc. (1991), 248 Mont.
276,287, 811 P.2d 537, 544. We have also awarded
fees and costs where a party demonstrates a
“significant disdain for the integrity of the judicial
process.” Tipp v. Skjelset, 1998 MT 263, ¶¶24,
29,291 Mont. 288, ¶¶24, 29, 967 P.2d 787, ‘I[m24, 29.
Likewise, we have awarded fees and costs where a
party proceeded on appeal based on inconsistent
14
and conflicting positions. Federated Mut. Ins. Co. v.
Anderson (1996), 277 Mont. 134, 145, 920 P.2d 97,
104. . ..“. Lee v. Lee, supra, ¶66.
Here, it cannot be said that counsel’s actions, in pursuing
this appeal, constituted an abuse of the judicial system;
nor has Walter conceded the propriety of denying the
contempt request and nevertheless proceeded to appeal
the denial as improper; Walter has not demonstrated a
significant disdain for the integrity of the judicial
process; and, he has not proceeded in appeal based on
inconsistent and conflicting positions. For all these
reasons, this Court must and should deny the requests
for sanctions and attorney fees and costs.
CONCLUSION
This Court should reverse the district court’s decision
not to hold Phyliss in contempt, on the three issues
argued above and remand the matter to the district court
and direct it to hold an evidentiary hearing. The district
court should then be directed to issue proper findings of
fact, conclusions of law and an order that can then be
reviewed by this Court if it decides to hold Phyliss in
contempt or to not hold her in contempt.
Alternatively, if this Court finds that the district court’s
horder is reviewable, without any evidence presented, this
Court should reverse the district court, with regard to the
mortgage release, and direct it to hold Phyliss in
15
contempt by ordering her to pay Walter $500 in damages
as provided by 571-l-212, MCA, for not executing a
release or a satisfaction of the mortgage after being
requested to do so and, ordering her to reimburse Walter
for his attorney fees for his attorney having to prepare
said mortgage release. On the insurance policy being
placed in trust, this Court should reverse the district
court and direct it to hold Phyliss in contempt and order
her to execute a trust agreement, conforming with the
Property Settlement Agreement, and giving her a time
limit to do so. On the checks written from the joint bank
account, which where from the sale of grain and
livestock, since the parties separation in April of 1993,
this Court should reverse the district court and remand
this matter to it to hold an evidentiary hearing allowing
Walter to present evidence that the only monies in the
account were from the sale of grain and livestock and
then requiring Phyliss reimburse Walter for all checks
written out of such proceeds, as provided by the plain
language of the Property Settlement Agreement, which
provided that Walter was and is entitled to all proceeds
from the sale of grain and livestock since April of 1993.
This Court must and should also deny Phyliss’ request
for sanctions for attorney fees and costs because, under
Lee v. Lee, supra, ¶66, there is nothing justifying an award
16
of the same to her because there has been no abuse of the
judicial system nor any significant disdain for the
integrity of the judicial process.
Outcome: The district court must then and should be reversed.
Plaintiff's Experts:
Defendant's Experts:
Comments: