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Date: 04-27-2022
Case Style:
CAROLYN W. BEST -Y~ WILLIAM BEST
Case Number: 82-148
Judge: Laurie McKinnon
Court:
IN THE SUPREME COURT OF THE STATE OF MONTANA
On appeal from The District Court of the Fourth
Judicial District of the State of Montana
Plaintiff's Attorney:
Defendant's Attorney: CHARLES J. TORNABENE, ESQ.
Description:
Helena, MT – Divorce lawyer represented Respondent with arguing that the Court erred in setting aside the Property Settlement Agreement.
In June, 1978, DR. WILLIAM BEST and CAROLYN W. REST consulted MILTON DATSOPOULOS, a Missoula attorney, and dictated to
him an agreement entitled "Agreement in Anticipation of Divorce."
[Appendix, Exhibit A]. Pursuant to the wishes of both DR. BEST
and CAROLYN BEST, MR. DATSOPOULOS represented both parties and
considered himself the attorney for both of them. Transcript
[ h e r e i n a f t e r T r • ] , V o 1 • I I I , a t 3 6.4 •
Although DR. BEST and CAROLYN BEST pursued marital counseling, their marriage was dissolved on May 7, 1979, by a Decree of
Dissolution, which incorporated a Marital and Property Settlement
Agreement. [Appendix, Exhibit B]. At all times, MR. DATSOPOULOS
advised CAROLYN BEST to retain separate counsel and insisted that
he would not represent both parties unless there was total agreement between them. Tr., Vol. II, at 292, Vol. III, at 364,366.
MR. OATSOPOULOS felt so strongly about the matter that he made an
appointment with MR. DON MacDONALD, another Missoula attorney,
for CAROLYN BEST. TrO! Vol. III, at 367. CAROLYN BEST told MR.
DATSOPOULOS, as well as MR. MacDONALD, that she saw no need for
two attorneys, that she and DR. REST could reach an agreement,
and that she did not desire an attorney of her own. Tr., Vol.
III, at 368-69. Later, she cancelled another appointment with
MR. MacDONALD. Tr., Vol. I, at 148.
3
With the understanding that MR. DATSOPOULOS would represent
both of them only if there existed total agreement, DR. BEST and
CAROLYN BEST together discussed and arrived at a property settlement agreement, which they took to MR. DATSOPOULOS to be drafted
in a legal manner. Two property settlement agreements were
actually drafted--the one of June, 1978, which was drafted before
the divorce, and the one of May, 1979, which was the final agreement signed by both parties. [Appendix, Exhibits A and B.]
CAROLYN BEST fully participated not only in the negotiations
she had with DR. BEST concerning the property settlement, but
also in the discussions with MR. DATSOPOULOS concerning the final
draft of the agreement. Tr., Vol. II, at 295, 334, Vol. III, at
364, 366, 384. She was fully aware of the real estate involved,
Tr., Vol. I, at 47, Vol. II, at 280, conducted extensive research
into the economic situation and the desireability of investing in
gold and silver, Tr., Vol. I, at 50-1, and actually opened and
maintained a Swiss bank account. Tr., Vol. I, at 52, Vol. II, at
344-5. She read the agreement and realized that it made a division of the property. Tr., Vol. I, at 71-4. Before DISTRICT
JUDGE JACK L. GREEN~ CAROLYN BEST made no objection to the agreement, Tr., Vol. I, at 78. She stated that she understood the
Judge•s questions as to the binding nature of the agreement, Tr.,
Vol. I, at 77, Vol. II, at 296-7, and indicated on crossexamination that she knew the agreement was unfair at the time,
Tr., Vol. I, at 78-9. Although the care and education of the
4
BESTS' children were not mentioned in the agreement, these
aspects of the divorce figured prominently in CAROLYN BEST'S
reasoning for her decision to divide the property as she and DR.
BEST did. According to the agreement, DR. BEST was to receive_a
substantial amount of the marital assets. CAROLYN BEST stated
that DR. BEST, who was to maintain custody of the children,
should receive the bulk of the property to properly care for and
educate them. Tr., Vol. I, at 80, Vol. I I I, at 369. DR. BEST
believed he had a property settlement he could rely on and has
substantially complied with it. Tr., Vol. II, at 297.
MR. DATSOPOULOS stated that CAROLYN BEST is definitely a
person of above-average intelligence, Tr., Vol. III, at 378. She
graduated with honors from the University of Mississippi. Tr.,
Vol. I, at 43-4. Additionally, although she was naturally upset,
MR. DATSOPOULOS felt she was rational, understood what she was
doing, and was under no more stress than would be considered
normal under the circumstances. Tr., Vol. III, at 379. MR.
DATSOPOULOS al.so stated that more than once he advised CAROLYN
BEST that she could receive one-half (1/2) of the marital assets
if she pursued the matter. Tr., Vol. III, at 369. She maintained, however, that DR. BEST should keep the property to raise
and educate the children and that she wanted no more than that
stipulated in the agreement. Tr., Vol. III, at 369, 377.
5
Although she was advised by MR. MacDONALD that an accounting
of the total marital assets should be obtained before entering
into a property settlement agreement, CAROLYN BEST chose not to
demand such an appraisal. Tr., Vol. I, at 145, 147, 152. MR.
MacDONALD, echoing the advice of MR. OATSOPOULOS, insisted that
CAROLYN BEST seek her own independent counsel. Tr., Vol. II, at
152, 154. Yet, she chose not to seek legal advice on her own.
Tr., Vol. III, at 368.
By her actions and words, then, CAROLYN BEST decided that
MR. DATSOPOULOS could adequately represent her. At all times
during the negotiations, MR. DATSOPOULOS felt CAROLYN BEST knew
what she was doing and concluded that, under these circumstances,
t h e a g r e e m e n t i n q u e s t i o.n w a s a n 11 e q u i t a b 1 e 11 o n e • T r. , V o 1 • I I I ,
at 377-78.
6
STATEMENT OF THE CASE
The marriage of DR. WILLIAM and CAROLYN W. BEST was dissolved on May 7, 1979, before JUDGE JACK L. GREEN, by a Decree
of Dissolution, which incorporated a Marital and Property Settle- , '
ment Agreement. On November 15, 1979, CAROLYN BEST filed a
Motion to Set Aside the Property Settlement.
The case was set for a non-jury trial on August 25, 1981. A
substantial amount of testimony_ was submitted and the Motion to
Set Aside the Property Settlement was deemed submitted and taken
under advisement.
On October 23, 1981, DR. BEST filed a Motion for Temporary
. Custody of the children and the matter was later set for hearing.
On Novembe.r 30, 1981, the District Court's Findings of Fact,
Conclusions of Law, and Order were issued. On December 4, 1981,
DR. BEST filed a Motion to Amend the Findings of Fact, Conclusions of Law, and Order. On that same day, a Temporary Order was
issued granting DR. BEST custody of the children. Also·on
December 4, 1981, the Court ordered that, pending the entry of
the Final Decree, DR. BEST is not to transfer, convey, or mortgage the real property which is the subject of the Dissolution
Proceeding.
DR. BEST'S Motion to Amend was granted and the Amended Order
was entered on January 7, 1982, relating to the decision by the
District Court to void ab initi~ the Joint Decree granted by the
7
District Court dated May 7, 1979, and the Marital Property
Settlement Agreement of the same date.
DR. BEST filed a timely Notice of Appeal to the Montana
Supreme Court on February 1, 1982. On that same day, a Motion
for Stay of Discovery was filed and granted.
8
I. THE DISTRICT COURT ERRED IN SETTING ASIDE THIS PROPERTY
SETTLEMENT AGREEMENT.
The District Court erred in setting aside this property
settlement agreement because: there is no evidence in the record
to support the allegations of misrepresentation or concealment by
DR. BEST; CAROLYN BEST was at all times aware of the marital
property or in such a position to discover such information;
CAROLYN BEST was fully capable of understanding the legally
binding nature of the agreement.
A. THE RECORD LACKS SUFFICIENT EVIDENCE TO PROVE THAT
DR. WILLIAM BEST EITHER MATERIALLY MISREPRESENTED
OR CONCEALED ASSETS OR FINANCIAL CONDITION.
It is a general, well-understood rule that contractual·
agreements, when free from fraud and overreaching, fairly made,
and understandingly entered into, will be upheld. Luttmer v.
L u t t me r, 1 4 3 Ky. 8 4 4 , 8 4 7 , 1 3 7 S. W. 7 7 7 , 7 7 8 ( 1 911 ) • I n that
case, the wife understood as well as the husband the value and
the character of the property owned by each. The wife appealed
the property settlement agreement, but the coilrt held the agreement valid on the grounds that it was executed after a full and
fair consideration of the assets. Such a consideration, then,
represented a proper disposition of the property rights between
the parties. Luttmer, 143 Ky. at 847, 137 S.W. at 778.
9
Similarly, in the case at bar, DR. BEST has made a full and
fair disclosure of the marital assets. He has never attempted to
mislead CAROLYN BEST as to the extent of the property. Tr., Vol.
II, at 340. At all times during the property settlement negotiations, DR. BEST stated that he would ~ive CAROLYN BEST whatever
she asked for and wanted. Tr., Vol. II, at 293-94. CAROLYN
BEST•s position is that DR. BEST attempted to mislead her as to
the extent of the marital assets and as to his financial condition. It should be carefully noted, however, that there is no
concrete evidence in the record which points to specific material
misrepresentations made by DR. BEST concernin~ the marital
assets. MR. MIL TON DATSOPOULOS, the BESTs• attorney, stated that
he did not specifically know of any negotiations that might have
been held outside his presence concerning the property distribution. Tr., Vol. III, at 385. Both parties to this agreement
acted as though they knew what they were doin~ and what they
wanted. Both fully discussed the property settlement before
entering into the agreement. Tr., Vol. II, at 334. In line with
Luttmer, the property settlement agreement between DR. BEST and
CAROLYN BEST should stand, as no specific evidence points to
misrepresentation or concealment on the part of DR. BEST.
In a recent Montana case, Pi l at i v. Pi l at i , M t.
P.2d , 36 St. Rptr. 619, 620-21, {1979), the court set
aside a property settlement agreement on the grounds of misrepresentation of assets. That case, however, can be easily distin-
10
guished from the instant one. The particular facts of the Pilati
case would justify the court's setting aside that property
settlement. In that case, the wife was sixteen and the husband
was thirty-five when they married. They were married thirteen
years before the divorce. The wife had little formal education
and did not participate in the financial affairs of the marriage.
She did not know the financial status or property holdings of the
marriage at any time during the marriage or at the time of the
divorce. According to the facts, the wife and husband themselves
did not draft the property settlement. Rather, it was prepared
solely by the husband's attorney. There was not ample time for
the wife to investigate the marital assets, as the settlement was
prepared and signed within a very short time. By the terms of
the agreement, the husband received most of the property and the
wife received little, although she maintained custody of the
children. In its opinion, the court stated that fraud will
destroy an agreement and that the fraud alleged and proven by the
wife was not sufficiently rebutted by the husband. The husband
in the Pilati case so misrepresented the marital assets of which
he alone had knowledge that he prevented the court from accurately
and fairly dividing the property. Consequently, the court held
that such fraudulent misrepresentations constituted extrinsic or
collateral fraud, which prevented a fair submission of the
matter. Pilati, 36 St. Rptr. at 627. The court defined extrinsic or collateral fraud as 11 Some intentional act or conduct by
11
which the prevailing party has prevented the unsuccessful party
from having a fair submission of the controversy. 11 Pilati, 36
St. Rptr. at 627. A concealment of marital assets was held to
constitute such fraud and was grounds for reversing and remanding
the cause.
Just as the facts of the Pilati case suggest that that
property settlement should be set aside, so the facts of the
instant case compel the opposite conclusion. CAROLYN BEST'S age,
intelligence, and participation in the financial affairs of her
marriage are factors totally unlike those of the Pilati case.
CAROLYN BEST was aware of the marital assets, including all the
_real estate holdings. Tr., Vol. I, at 47, 49-50; Vol. II at 280-
281. Although she may not have known specific values, she had
ample time to demand a full investigation of those values.
Unlike the Pilati case, CAROLYN BEST did have adequate representation by counsel. MR. DATSOPOULOS considered himself the
attorney of both parties and represented fully the interests of
each. Tr., Vol. III, at 364. She was advised that she should
demand a total list and valuation of all marital assets and chose
not to do so. Tr., Vol. I, at 145, 147, 152; Vol. III, at 369.
Unlike Pilati, the agreement in the case at bar was drafted by
the BESTS themselves, CAROLYN BEST fully participating in the
negotiations with her husband. Tr., Vol. II, at 334; Vol. III,
at 364, 384. Between June, 1978, and May, 1979, she could easily
have questioned any aspect of the agreement as well as any con-
12
duct by her husband. She chose not to do so. Tr., Vol. I, at I
71-2,74,112, 114; Vol. II, at 296-97. In Pilati, the wife
maintained custody of the children. In the case at bar, DR. BEST
received custody of the children. Due to this arrangement,
CAROLYN BEST felt it wise that he should receive the bulk of the
property. Tr., Vol. I, at 80; Vol. III, at 369. The wife in the
Pilati case was able to prove the husband•s misrepresentations.
In the instant case, however, CAROLYN BEST is unable to prove
such misrepresentation or concealment by DR. BEST. The Pilati
court relied upon extrinsic or collateral fraud which warranted
vacating the agreement. In the case at bar, there is no specific
evidence to prove that DR. BEST intentionally acted to prevent a
fair submission of the controversy and an equitable distribution
of the property. Unlike Pilati, then, the property settlement in
the case at bar should stand because no evidence exists to conelusively prove that DR. BEST either materially misrepresented or
concealed assets or financial condition. The specific facts of
each individual case must control. The Pilati ruling cannot
control the instant litigation.
In a recent Montana Supreme Court decision, Hadford v.
Hadford, M t. , 633 P.2d 1181, 38 St. Rptr. 1308 (1981),
the court addressed a wife•s allegations that her husband concealed assets during property settlement negotiations. Without
supporting particulars, she alleged that her husband failed to
make a full and accurate disclosure of all assets. Hadford, 633
•
13
P.2d at 1183, 38 St. Rptr. at 1310. The ~1ontana Supreme Court
held that the wife produced no concrete evidence to support an
allegation of misrepresentation or concealment. Although the
trial court had set aside the property settlement, the Montana
Supreme Court reversed on the grounds that the trial court made
conclusory findings for which there was no evidentiary support.
Hadford, 633 P.2d at 1183, 38 St. Rptr. at 1310. The trial court
had not specified what property the husband did not disclose.
The record, therefore, did not support the finding that he had
concealed anything during the settlement negotiations. The court
cited Hopper v. Hopper, Mt. , 601 P.2d 29, 36 St. Rptr.
1695 (1979), and stated that in order to reopen a final judgment,
there must be a finding of extrinsic f.ra~d--such fraud that
literally prevents the unsuccessful party from fully presenting
his case. In Hadford, the wife failed to prove that the husband
prevented her from fully presenting her case.
In the case at bar, like Hadford, tnere is simply no evidentiary support for the allegations of misrepresentation or concealment. Not once does the record specifically point to factual
evidence that conclusively demonstrates that DR. BEST misrepresented or concealed assets from CAROLYN BEST. CAROLYN BEST would
only have the court draw inferences from the record--yet even
these inferences are weak. For example, counsel for CAROLYN BEST
questioned DR. BEST as to the necessity of having a post office
box in Huson, Montana, at which he received certain bank state-
14
ments, when he resided in Missoula. Tr., Vol. II, at 340.
Although a possible inference is that DR. BEST was attempting to
conceal financial assets from CAROLYN BEST, the inference is an
extremely weak one which holds no credibility. DR. BEST stated
that he had planned to move to his property near Huson, that his
plans changed, and that he notified the bank of the change. Tr.,
Vol. II, at 340. Additionally, DR. BEST brought all these bank
statements back to his Missoula home, where CAROLYN BEST had
total access to them. Tr., Vol. II, at 351-52. This one example
illustrates CAROLYN BEsT•s numerous futile attempts to show that
DR. BEST misrepresented or concealed assets.
The simple fact is that the record lacks concrete evidence
to support setting aside the agreement on the grounds of misrepresentation or concealment. Based on Hadford, CAROLYN BEST was
not prevented from fully presenting her case and the record does
not show DR. BEST practiced such fraud upon her so as to set
aside their property settlement agreement.
B. CAROLYN BEST WAS AT ALL TIMES EITHER FULLY AWARE
OF THE ASSETS AND FINANCIAL CONDITION OF THE
MARRIAGE OR WAS IN A POSITION TO DISCOVER THE
INFORMATION HAD SHE SO DESIRED.
If a party to an agreement is in a position to discover
information relating to that agreement and yet chooses not to
act, he cannot later complain about the terms of the agreement.
In an often-cited Ninth Circuit decision, Ferry v. Ferry, 9 Wash.
15
239, 243-44, 37 P. 431, 432 (1894), the court held that a wife
cannot attack a property settlement because of the husband•s
misrepresentation as to the value of the real estate when the
wife knew of the specific parcels before the settlement was
entered into. In that case, although the husband misrepresented'
the value of certain real estate, the property settlement was
valid because the wife chose not to take the opportunity of
having the property appraised before entering into the property
settlement.
In the case before us, there is no evidence to show that DR.
BEST misrepresented the value of the real estate. Even if there
had been any kind of misrepresentation, the property settlement
would still be valid since CAROLYN BEST knew what property
existed, did have the opportunity to have the value of all real
estate determined, and yet chose not to do so. Tr., Vol. I, at
23, 47, 49-50, 92, 95, 145, 147, 152; Vol. II, at 280. CAROLYN
BEST not only was aware of the real estate, but also the various
other assets in the marital estate. She opened the Swiss bank
accounts and made all the deposits. Tr., Vol. I, at 52; Vol. II,
at 344, 345. Additionally, she had access to all the statements
concerning the bank accounts. Tr., Vol. II, at 351-52. She
cannot now argue that the only thing she knew of the accounts was
what DR. BEST told her when she could have so easily checked the
statements on file in her own home. Along with DR. BEST,' CAROLYN
BEST made all the purchasing arrangements with MR. RICHARD
16
JOHNSON, a gold broker in Louisiana. Tr., Vol. I, at 123, 137,
140; Vol. II, at 345. She conducted extensive research into the
investment potential of gold and silver, Tr., Vol. I, at 50-1,
and knew very well the escalating value of gold, Tr., Vol. I, at
55. CAROLYN BEST is an intelligent woman, and handled the books
and accounting for much of the marital property. Tr., Vol II,. at
281. Relying on Ferry, the agreement in the case at bar should
stand.
CAROLYN BEsr•s extensive knowledge of the existence of the
real property and other assets undermines her argument that she
did not know of the extent and value of such property. She had
ample time in which to discover such value. A preliminary agreement was signed in ,June, 1978. Not until May, 1979, almost a
year later, was the final agreement signed. During that time,
CAROLYN BEST was constantly advised to seek a valuation of the
assets. She alone chose not to do so. She cannot be allowed to
complain at this late date that she did not know the extent and
value of any marital property.
The property settlement agreement need not contain a full
inventory of all assets owned by the parties. Lawrence v.
Lawrence, Mt. P.2d , 39 St. Rptr. 548, 553 (1982).
In this very recent Montana Supreme Court case, the court held
that a lack of such a full inventory is not deemed to be any kind
of fraud on the court. Applying this reasoning to the present
case, a full inventory is unnecessary, especially when CAROLYN
17
BEST was fully aware of the marital assets. Such facts compel
the conclusion that this agreement should stand.
C. THE STRESS UNDER WHICH CAROLYN BEST ENTERED INTO
THE AGREEMENT WAS NOT OF SUCH A MAGNITUOE THAT IT
DEPRIVED HER OF HER CAPACITY TO REASON AND FULLY
UNDERSTAND AND APPRECIATE THE LEGALLY BINDING
NATURE OF THE AGREEMENT.
It is understood that divorces are frequently traumatic and
arise in stressful situations. This does not mean that there is
undue influence or that the stress vitiates a person•s capacity
to comprehend the situation. Lawrence v. Lawrence, Mt.
P.2d 39 St. Rptr., 548, 556 (1982). A consideration of
the totality of the circumstances will determine the nature and
extent of the stress involved. Lawrence, 39 St. Rptr. at 553.
In.the case at bar, MR. DATSOPOULOS observed CAROLYN BEST during
the final negotiations for the settlement. He stated that
although she was under stress, she appeared totally rational,
intelligent, and aware of what she was doing. Tr., Vol III, at
379. Based on the totality of the circumstances rationale of
Lawrence, CAROLYN BEST, although naturally upset, was not under
such stress that she failed to understand the binding nature of
the agreement she signed.
Evidence proves that although CAROLYN BEST was under stress
at the time, it was of such a nature as is normal under the
circumstances. Tr., Vol. I, at 64; Vol. II, at 283, 284; Vol.
III, at 379. In Hadford v. Hadford, Mt. , 633 P.2d 1181, 38
18
St. Rptr. 1308 (1981), the wife testified that emotional problems
caused by the breakup of her marriage affected her ability to
think clearly when she signed the agreement. Although the trial
c o u r t h e 1 d t h a t t h e w i f e d i d. n o t h a v e t h e 11 m e n t a 1 c on d i t i o n 11 t o
comprehend the property settlement, the Montana Supreme Court
held that such a finding was merely a 11 general conclusion 11 with
no basis in the record. Hadford, 633 P.2d at 1183, 38 St. Rptr.
at 1310-1311. In the case at bar, the fact that CAROLYN BEST was
under stress does not render invalid the agreement she voluntarily signed. The record lacks substantive evidence to prove
CAROLYN BEST was under so much stress as to strip' her of her
capacity to fully understand and appreciate what she was doing.
In addition to the stress involved, CAROLYN BEST contends
that she was fraudulently induced into entering the property
settlement agreement and that she actually signed the agreement
under duress. There is no specific way to determine whether the
actions and words of one spouse in the circumstances surrounding
the execution of a property settlement agreement will be held to
constitute duress. Each case must be considered separately
according to its own facts. This was the reasoning used by the
court in Fleischman v. Fleischman, 285 A.2d 689 (1972). In holding that the property settlement should be upheld, the court
looked to such facts as: the wife was of at least average intelligence; she signed the agreement voluntarily; she understandingly and voluntarily entered into the agreement. According to
19 '
these facts, the court held that the agreement was not signed
under duress. Fleischman, 285 A.2d at 696. That court also
rejected the contention that an agreement unfair on its face is
therefore presumptively invalid. The facts of each case are
determinative of validity. Fleischman, 285 A.2d at 690.
Considering the facts of the case at bar, the property
settlement should be upheld. Evidence proves CAROLYN BEST is a
person of above-average intelligence. Tr., Vol. I, at 44; Vol.
III, at 378. She stated that she understood the essence of
divorce, property settlement, and child custody. Tr., Vol. I, at
62. She also stated that she knew the agreement was dividing the
property and understood the legal finality of such an agreement.
Tr., Vol. I, at 62, 79. Based on the reasoning in Flei·schman,
CAROLYN BEsr•s intelligence and level of understanding precludes
her contention that she signed the agreement under duress.
The issue of stress is easily resolved in this case.
Although a divorce naturally presents a stressful situation,
evidence proves CAROLYN BEST was under no more stress than is
considered normal under these circumstances. The issue of duress
is also easily resolved. There is simply no evidence to prove
that CAROLYN BEST was under any duress when she signed the agreement. With no more than a normal amount of stress and with no I
duress whatever, CAROLYN BEST 1
S v~luntary acceptance of the
agreement should stand.
20
II. THE PROPERTY SETTLEMENT AGREEMENT ENTERED INTO BY THE
PARTIES IS BOTH EQUITABLE AND CONSCIONABLE UNDER THE CIRCUt~STANCES.
The property settlement agreement entered into by the parties is both equitabTe and conscionable because: CAROLYN BEST
maintained that she did not desire separate legal assistance,
that she could reach an agreement with DR. BEST, and that she
wanted only the property listed in the agreement; this property
settlement carries out the intentions of both parties; mere
unequal distribution of marital assets does not render an
agreement invalid.
A. AT ALL TIMES CAROLYN BEST MAINTAINED THAT SHE DID
NOT DESIRE SEPARATE COUNSEL, THAT SHE AND DR. BEST
COULD REACH AN AGREEMENT, AND THAT SHE DID NOT
WANT MORE PROPERTY THAN THAT LISTED IN THE
AGREEMENT.
Although one attorney represented both DR. BEST and CAROLYN
BEST, it cannot be presumed that CAROLYN BEST was not adequately
advised or represented. In Reiner v. Miller, 478 S.W.2d 283
(1972), the husband•s attorney represented both the husband and
the wife. The attorney testified, however, that he recognized an
obligation to provide fairly for the wife in the agreement and
that he explained the agreeme~t fully to her and she indicated
that she understood. The wife made her own selection as to what
property she wanted. That court held that a property settlement
agreement should not be modified by the courts, where it was not
fraudulent or in violation of the confidential relationship of
21
the parties. Reiner, 478 S.W.2d at 287.
Like the Reiner case, the case before us involves one attorney representing both parties. The attorney in this case, MR.
MILTON DATSOPOULOS, stated that he represented both parties
fairly and adequately. Tr., Vol. III, at 364. Additionally, he
told both parties that he would represent them only if there
existed total agreement between them. Tr., Vol. II, at 292.
Several times, he advised CAROLYN BEST that she should seek
independent counsel. Tr., Vol. II, at 288; Vol. III, at 364.
MR. DATSOPOULOS felt so strongly about the matter that he made an
appointment with another attorney for CAROLYN BEST. Tr., Vol.
III, at 367. She refused the independent counsel, thereby indicating that she found MR. DATSOPOULOS 1 representation on her
behalf totally adequate. Evidence also shows that she participated in the discussions with the attorney and stated that she
understood the agreement before signing it. Tr., Vol. II, at
295; Vol. III, at 364. Applying the reasoning from Reiner, MR.
DATSOPOULOS 1 legal representation of both parties was not only
completely adequate, but was pursuant to the wishes of CAROLYN
BEST herself. Such competent representation cannot provide a
basis for setting aside the agreement.
The Montana Supreme Court echoes this rationale in
Hadford v. Hadford, which places great emphasis on the fact that
the wife was represented by competent counsel when everything was
signed. Hadford, 633 P.2d at 1183, 38 St. Rptr. at 1310. The
22
wife in Hadford was represented by separate counsel. Yet, her
representation by independent counsel should not be considered
that different from CAROLYN BEST 1
S representation by the same
attorney as DR. BEST, considering CAROLYN BEST had ample opportunity to get her own counsel, was encouraged to do so, and chose
not to so act. Under the circumstances, CAROLYN BEST 1
S legal
representation was totally adequate to protect her interests.
The Ninth Circuit has a substantial amount of case law that
affirmatively states that a husband and wife may, by valid agreement between themselves, settle and adjust all property rights
growing out of the marital relationship. Rinehart v. Rinehart,
52 Wyo. 363, 75 P.2d 390 (1938); Lee v. Lee, 27 Wash. 2d 389, 178
P.2d 296 (1947); Newey v. Newey, 161 Colo. 395, 421 P.2d 464
{1967). These cases demonstrate that a husband and a wife may
together agree on the distribution of their property.
In the present case, CAROLYN BEST at all times maintained
that she and DR. BEST could reach an agreement and that she
desired no more property than that listed in the agreement. Tr.,
Vol. I, at 80; Vol. II, at 294, 296-97; Vol. III, at 368-69.
Consistent with Ninth Circuit case law, the property settlement
entered into by both parties here should stand as a valid agreement between them.
B. PROPERTY SETTLEMENTS THAT ARE KNOWINGLY AND VOLUNTARILY MADE SHOULD BE LIBERALLY CONSTRUED TO CARRY
OUT THE INTENTIONS OF THE PARTIES TO THE AGREEMENT.
23
P~operty settlements that are knowingly and voluntarily made
should not be set aside. Such property settlements are to be
liberally construed to carry out the intentions of the parties to
the agreement. In Fincham v. Fincham, 160 Kan. 683, 165 P.2d 209
(1946), the Kansas Supreme Court cited with approval the general
rule that an agreement to fix property rights made between a
husband and a wife is to be liberally interpreted to carry out
the intentions of the makers, when that agreement has been fairly
and understandingly made. In order to uphold an agreement, the
court went on to say that the contract must also be just and
equitable in its provisions and not obtained by fraud. Fincham,
160 Kan. at 688, 165 P.2d at 212.
In the case at bar, the evidence proves that the property
settlement entered into by DR. BEST and CAROLYN BEST carries out
the intentions of both parties. Throughout the negotiations,
CAROLYN BEST fully participated in the discussions concerning the
marital assets. Tr., Vol II, at 282, 334; Vol. III, at 364. Not
only did she understand the legal finality of the agreement, but - ,
she never indicated in front of MR. DATSOPOULOS or JUDGE GREEN
that she wanted anything different, in spite of p~obing questions
to that effect. Tr., Vol. I, at 77, 79, 114; Vol. II, at 296-97;
Vol. III, at 369. According to Fincham, CAROLYN BEST'S intentions are honored in this property settlement agreement. She had
ample time and opportunity to question the agreement and yet did
nothing.
24
Following the same type of reasoning, the court in Sumner v.
~mner, 121 Ga. 1, 48 S.E. 727 (1904), held that if a settlement
is fair, although not as valuable as the wife might have been
legally entitled to, an.d no fra~d was practiced upon her to
induce her to accept it, considerations of sympathy for her will
not justify a court in setting aside an agreement into wrrich she
entered openly and voluntarily with full knowledge of its terms.
Sumner, 121 Ga. at 7, 48 S.E. at 729-30. Additionally, the wife
in that case was unable to provide sufficient evidence of fraud
or misrepresentation. In the instant case, CAROLYN BEST is
totally incapable of proving fraud. Although she could have
requested more property, she chose not to do so because DR. BEST
was to maintain custody of the children and therefore needed the
bulk of the assets. Tr., Vol. I, at 80; Vol. III, at 369. In
the case at bar, CAROLYN BEST'S intentions of providing for the
children prompted her to divide the property as she did. Based
on Sumner, then, the settlement is fair under the circumstances,
although the settlement was not as valuable to her personally as
it could have been.
A California court, in Barham v. Barham, 33 Cal. 2d 416, 202
P.2d 289 (1949), reached a similar conclusion. In that case, the
court cited with approval the general rule that, in considering
property settlement agreements, the court must seek the intention
of the parties at the time of execution of the agreement, for it
I is that particular intention that governs. Barham, 33 Cal. 2d at
25
, 202 P.2d at 295.
In the case before us, CAROLYN BEST'S interests are served
by the property settlement agreement which she helped to draft
and then voluntarily signed. At the time the agreement was
executed, it was CAROLYN BEST'S intention that the bulk of the
property ~emain with DR. BEST, since he would need it to properly
care for the children. Tr., Vol. I, at 80; Vol. III, at 369.
Several times, both by attorneys and by DR. BEST, she was
informed that she could indeed receive more property if she
desired. Each time the offer was made, she refused, stating that
she understood how the property was being divided and that it was
her intention that it be done in that manner. Tr., Vol. I, at
71-2, 112, 145, 147, 152; Vol. II, at 291, 293-94, 296-97; Vol.
III, at 364, 369. She should not now be permitted to attack as
invalid such an agreement, which she knowingly made and which
carries out her professed intentions.
C. MERE UNEQUAL DISTRIBUTION OF MARITAL ASSETS DOES
NOT RENDER A PROPERTY SETTLEMENT AGREEMENT
INEQUITABLE OR UNCONSCIONABLE.
Because'CAROLYN BEST received such a proportionately smaller
~hare of the property according to the agreement, the question of
fairness, equitabi 1 ity, or conscionabi 1 ity must nec_essari ly be
add res sed. In Davis v. Davis, 268 A.2d 515 (1970), neither
party was advised by counsel regarding the provisions of the
property settlement agreement. The attorney acting for both
•
•
26
merely reduced their negotiated agreement to writing.c The court
held that it was proper and correct for a husband and wife to
enter into a property settlement agreement and should even be
encouraged to do so, since they most often are in a better position than a court to determine what is fair and reasonable. The
court added that, in the absence of fraud, duress, concealment,
or overreaching, such an agreement will be upheld by the court.
Davis, 268 A.2d at 517. In that case, it was possible that the
wife could have secured an agreement more advantageous to her.
The court held, however, that such a possibility was not a sufficient reason. to later void the agreement. Citing LeBert-Francis
v. LeBert-Francis, 194 A.2d 662, 664 (1963), the Davis court
said:
"'In some instances, of course, a party
may enter into an agreement which in
retrospect seems foolish or ill-advised,
but the same is often said of the marriage
itself.' If the law were otherwise, it
would shake the foundations of separation . agreements." Davis, 268 A.2d at 517.
Another reason cited by the Davis court for upholding the property settlement agreement was the wife's failure to carry the
burden 6f proving the invalidity of the agreement. The burden of
proving fraud or duress is on the party asserting the invalidity.
Davis, 268 A.2d at 517.
Several parallels can be drawn between the Davis case and
the case at bar, all of which have been previously discussed in
this brief. Applying the facts and reasoning of the Davis case
27
to very similar facts before us, the conclusion is clear:
although, in retrospect, CAROLYN BEST feels the agreement was
foolish or ill-advised, she cannot attack the very agreement she
knowingly drafted and voluntarily signed.
Recent Montana Supreme Court decisions would uphold the
equitability and conscionability of this agreement. In
Hadford v. Hadford, Mt. , 633 P.2d 1181, 38 St. Rptr.
1308, the property settlement agreement was arranged and merged
into the divorce decree. The wife then filed a petition to set
aside the property settlement on the grounds of unconscionability. Hadford, 633 P.2d at 1183, 38 St. Rptr. at 1310.
Because unconscionability alone cannot set aside a property
agreement, the wife argued fraud. The Montana Supreme Court
held, however, that the record failed to support a ruling that
the husband was guilty of fraud. Hadford, 633 P.2d at 1183, 38
St. Rptr. at 1311. The decision continues by stating that the
trial court gave no basis for overturning the settlement, other
than its 11 bald conclusion .. that the settlement was .. unconscionable ... Hadford, 633 P.2d at 1183, 38 St. Rptr. at 1311. The
Hadford decision discusses at length the mandates of Montana Code
Annotated §40-4-201(2) (1981), which places a duty on either the
court or the parties before the court to inquire into the conscionability of a property settlement before it is approved and
incorporated into the decree and becomes final. In that case,
neither the parties nor the court on its own motion raised the
28.
issue and the Montana Supreme Court held this as controlling
evidence. Hadford, 633 P.2d at 1184, 38 St. Rptr. at 1311-12.
The statute's dual purpose is to promote property settlement
agreements and to give those agreements the quality of finality.
Hadford, 633 P.2d at 1184, 38 St. Rptr. at 1312. Since the
statute squarely places the issue of conscionability before the
court at the same time the parties present the agreement, the
wife cannot later attempt to attack the agreement she should have
questioned earlier. Hadford, 633 P.2d at 1185, 38 St. Rptr at
1313.
In the case at bar, CAROLYN BEST never questioned the agreement before JUDGE GREEN. Tr., Vol. I, at 77; Vol. II, at 296-97.
Based on Hadford, she cannot now question the conscionability of
the agreement. Additionally, MR. DATSOPOULOS, the BESTS' attorney, stated that 11 equitable 11 does not mean "equal, .. and that this
agreement was an equitable one under the circumstances, although
it was not an equal distribution of the property. Tr., Vol. III,
at 377-78.
Another recent Montana case, Martens v. Martens,
Mt. , 637 P.2d 523, 38 St. Rptr. 2135 (1981), lists factors
that are important to the court as reasons for an unequal distribution. The unequal distribution in favor of the wife found
ample support in the record where the wife accepted responsibility for the house months prior to trial, was able to continue
this responsibility, and expressed her desire to continue this
•
29
responsibility where the husband did not. Martens, 637 P.2d at
526, 38 St. Rptr. at 2138. Although the District Court may
equally divide the marital assets, such a distribution is not
mandated by Montana Code Annotated §40-4-202. Rather, each case
must be looked at individually, with an eye to its unique circumstances. Martens, 637 P.2d at 526, 38 St. Rptr. at 2138. The
unique circumstances of the instant case compel the conclusion
that the property settlement agreement should be upheld.
A very recent Montana case, Lawrence v. Lawrence,
_Mt._, _P.2d_, 39 St.' Rptr. 548 {1982), held conscionable a property settlement agreement giving the wife approximately $60,000.00 and the husband approximately $400,000.00
(depending on the value given the stock involved). The Montana
Supreme Court affirmed the trial court•s conclusion that ordinarily the agreement would be deemed unconscionable. Under the
circumstances, however, where the wife was represented by very
competent and knowledgeable counsel, entered the agreement with a
fairly complete knowledge of the assets, and refused to act
despite advice that she could receive more property if she
desired, the agreement was both equitable and conscionable.
Lawrence, 39 St. Rptr. at 550. Similarly, the case at bar
contains many of the same considerations that were so important
to the court in Lawrence. This agreement should also be held
equitable and conscionable under the circumstances.
Outcome: The Montana Supreme Court has often stated that each case
must be looked at according to its own particular circumstances.
The facts of the case at bar point to a situation in which the
wife as a party to a property settlement agreement either was
fully aware of the marital property or was in a position to
discover the info~m~tion had she so desired. In spite of her
knowledge of the assets and her level of intelligence~ she chose
to divide the property as she did, leaving custody of the children with the father. The record lacks evidence of fraud or
duress. It does, however, contain ample support for an agreement
that was knowingly and voluntarily made.
On the basis of the above authorities and the aforementioned
factual evidence, it is respectfully· requested that the District
Court•s judgment be reversed and that the property settlement
agreement be upheld.
Plaintiff's Experts:
Defendant's Experts:
Comments: