In re Marriage of Pfennigs, 98-587.

• Decision Date: 21 October 1999
• Docket Number: No. 98-587.,98-587.
• Citation: 989 P.2d 327,1999 MT 250
• Parties: In re the MARRIAGE OF Janet Fern PFENNIGS, Petitioner, Respondent, and Cross-Appellant, and James Michael Pfennigs, Respondent, Appellant, and Cross-Respondent.
• Court: Montana Supreme Court

989 P.2d 327

1999 MT 250

In re the MARRIAGE OF Janet Fern PFENNIGS, Petitioner, Respondent, and Cross-Appellant, and

James Michael Pfennigs, Respondent, Appellant, and Cross-Respondent.

No. 98-587.

Supreme Court of Montana.

Submitted on Briefs April 29, 1999.

Decided October 21, 1999.

Richard L. Parish; Harlen, Thompson & Parish, Helena, Montana, for Appellant and Cross-Respondent.

K. Dale Schwanke; Jardine, Stephenson, Blewett & Weaver, Great Falls, Montana, for Respondent and Cross-Appellant.

Justice KARLA M. GRAY delivered the Opinion of the Court.

¶ 1 James M. Pfennigs (James) appeals and Janet Fern Pfennigs (Janet) cross-appeals from the Findings of Fact, Conclusions of Law and Order entered by the Eighth Judicial District Court, Cascade County, modifying James' child support and interpreting the parties' property settlement agreement (Agreement). We affirm.

¶ 2 We restate the issues on appeal and cross-appeal as follows:

¶ 3 1. Did the District Court err in concluding that the Agreement's retirement benefits provision clearly entitled Janet to 50% of James' retirement benefits at the time he retires?

¶ 4 2. Did the District Court abuse its discretion by awarding increased child support retroactive to January of 1997 rather than to November of 1995?

¶ 5 3. Did the District Court err in concluding that there was no sufficient basis to reform the Agreement to require James to provide life insurance?

¶ 6 4. Did the District Court err in concluding that neither party prevailed and in denying Janet attorney fees and costs?

¶ 7 5. Is Janet entitled to attorney fees and costs on appeal?

BACKGROUND

¶ 8 On January 8, 1992, the District Court entered a Decree of Dissolution of Marriage (Decree) dissolving James and Janet's marriage. The Decree incorporated the parties' Agreement which — among other things — divided their assets, including James' retirement benefits.

¶ 9 In November of 1995, Janet moved for modification of the amount of James' child support, contending that substantial and continuing changes in circumstances made the current level of child support unconscionable. Janet did not actively pursue that motion, however, until she requested a scheduling conference in December of 1996. In April of 1997, Janet filed an additional petition requesting reformation of the Agreement to include an alleged oral agreement that James would continue life insurance on himself with her as the designated beneficiary. She conceded that life insurance was not part of the Agreement, but argued it was a collateral arrangement which was part of the overall "transaction" of the marital dissolution. Janet also requested the District Court to interpret the retirement benefits provisions in the Agreement, contending she should receive 50% of James' retirement benefits calculated from his actual retirement date rather than from the time of the dissolution. Finally, she raised the issue of attorney fees in the proposed findings of fact she submitted to the court.

¶ 10 After a bench trial in May of 1997, the District Court entered its findings of fact, conclusions of law and order. It determined that: changed circumstances warranted an increase in child support, but made the increase retroactive to January of 1997 rather than to the time of Janet's motion to modify in November of 1995; no sufficient basis existed to reform the Agreement to require James to maintain a life insurance policy naming Janet as the beneficiary; the Agreement's retirement benefits provision clearly entitled Janet to 50% of James' retirement benefits calculated at the time of his retirement; and neither party could be considered the prevailing party and, as a result, both parties would pay their own attorney fees. James appeals and Janet cross-appeals.

DISCUSSION

¶ 11 1. Did the District Court err in concluding that the Agreement's retirement benefits provision clearly entitled Janet to 50% of James' retirement benefits at the time he retires?

¶ 12 The retirement benefits provision in the parties' Agreement provides:

Retirement Benefits. We agree we each should be awarded 50% of [James'] retirement benefits. Upon retirement, [James] agrees to effectuate a second warrant to be [sic] sent to [Janet].

In this regard, the District Court concluded that

[t]he provision of the Agreement relating to retirement benefits is clear. It says [Janet] is entitled to one-half of the benefits. It clearly contemplates separate warrants at retirement. It does not indicate it is based on the account balance at the time of the Agreement. There was no calculation of such balance. Accordingly, this division is based on all benefits accrued or to accrue.

Accordingly, the court ordered that "[James'] retirement benefits pursuant to the [retirement] plan in effect when the Marital Settlement Agreement was signed, or any successor plan, shall be divided such that [Janet] or her heirs shall be paid one-half of the benefits [James] or his heirs or estate qualify for." James contends that the District Court erred in concluding the retirement benefits provision was unambiguous in entitling Janet to 50% of his retirement benefits at the time he retires.

¶ 13 Montana courts interpret property settlement agreements associated with marital dissolutions in accordance with the law of contracts. Heath v. Heath (1995), 272 Mont. 522, 527, 901 P.2d 590, 593 (citations omitted); § 40-4-201(5), MCA. "Whether or not an ambiguity exists is a question of law for the court to decide. Only where an ambiguity exists may the court turn to extrinsic evidence ... to determine the intent of the parties." Doble v. Bernhard, 1998 MT 124, ¶ 19, 289 Mont. 80, ¶ 19, 959 P.2d 488, ¶ 19 (citation omitted). An "`ambiguity exists when the contract taken as a whole in its wording or phraseology is reasonably subject to two different interpretations.'" Doble, ¶ 19 (quoting Wray v. State Compensation Ins. Fund (1994), 266 Mont. 219, 223, 879 P.2d 725, 727). We review a district court's legal determinations to determine whether its interpretation of the law is correct. Stutzman v. Safeco Ins. Co. of America (1997), 284 Mont. 372, 376, 945 P.2d 32, 34 (citations omitted).

¶ 14 James argues that the retirement benefits provision is ambiguous because it is subject to two different interpretations. He agrees that it may be read as entitling Janet to 50% of all of his retirement benefits, but he contends that it also can be read as entitling her only to 50% of his retirement benefits at the time of the Agreement.

¶ 15 James focuses on the first sentence of the retirement benefits provision, which states "[w]e agree we each should be awarded 50% of [James'] retirement benefits." He contends that the sentence is "set in the present tense" and observes that the Agreement does not expressly provide that Janet will receive any future accumulations. As a result, according to James, the implication of the provision is that Janet's share of his retirement benefits was to be based on those benefits as of the time of the Agreement.

¶ 16 The language on which James relies is, indeed, in the present tense. It could hardly be otherwise, however, since it reflects that the parties were agreeing about the provision at the time they entered into the Agreement. Thus, the tense in which the initial phrase of the retirement benefits provision is set has no bearing on the substance or meaning of the provision.

¶ 17 James also relies on In re Marriage of Woodford (1992), 254 Mont. 501, 839 P.2d 574, in contending that the District Court erred in concluding the retirement benefits provision was not ambiguous. In Marriage of Woodford, 254 Mont. at 503, 839 P.2d at 575, we considered a similar provision which provided in part:

Upon the Husband taking full retirement, the monthly federal government retirement benefit paid to the Husband shall be split equally with the Wife for the balance of her life.

There, we determined the language clearly and unambiguously divided the husband's full retirement benefits equally at the time he receives them. Marriage of Woodford, 254 Mont. at 505, 839 P.2d at 576. James argues that, because the provision before us in the present case is not as clear as the provision in Marriage of Woodford, the retirement benefits provision at issue is ambiguous. However, nothing in Marriage of Woodford states or even suggests that the language at issue there is the only language which can clearly and unambiguously entitle a spouse to an equal share of retirement benefits to be paid at the time of retirement.

¶ 18 Finally, James contends the retirement benefits provision should be read by noting its placement in the Agreement as a whole. He points out that the retirement benefits provision is in the section dividing the marital assets and asserts that, as a result, it must be limited to his retirement benefits acquired during the marriage. This contention is simply incorrect.

¶ 19 First, the provision clearly states that Janet will receive 50% of James' retirement benefits. It does not limit the benefits which will be divided from the standpoint of either time or amount. Second, the retirement benefits provision is located in the same section of the Agreement as the real property provision which divides the proceeds of the family home equally at the time of sale in the future. Thus, both provisions contemplate a future division of a future — and as yet unascertained — amount. Moreover, Janet remains responsible for the mortgage payments of the real property until the property is sold, thereby building increasing equity in the home which will be divided equally upon sale. In the same way that Janet's continuing "contributions" to the marital estate via the mortgage payments will increase that estate over time with an equal division in the future, James' continuing "contributions" through accruing retirement benefits into the future will increase the marital estate with an equal division in the...