In re Marriage of Holloway, No. 99-048.

• Docket Nº: No. 99-048.
• Citation: 999 P.2d 980, 2000 MT 104
• Case Date: April 27, 2000
• Court: United States State Supreme Court of Montana

999 P.2d 980
2000 MT 104

In re the MARRIAGE OF Cheryl HOLLOWAY, a/k/a Cheryl Woolsey, Petitioner and Respondent, and
David W. Holloway, Respondent and Appellant

No. 99-048.

Supreme Court of Montana.

Submitted on Briefs September 23, 1999.

Decided April 27, 2000.

999 P.2d 981

John K. Kurtz, Jr.; Werner, Epstein & Johnson, Cut Bank, Montana, For Appellant

Chris P. Christensen; Keil & Christensen, Conrad, Montana, For Respondent.

Justice W. WILLIAM LEAPHART delivered the Opinion of the Court.

¶ 1 David W. Holloway (David) appeals from the judgment and order of the Ninth Judicial District Court, Glacier County, ordering that Cheryl Holloway (Cheryl), a/k/a Cheryl Woolsey, pay David one-half of the date-of-dissolution value of the family home and property (the house) upon its sale. We affirm in part and reverse and remand in part.

Issues

We restate the issues on appeal as follows:

¶ 2 1. Did the District Court properly construe Cheryl's petition as a request to interpret the Agreement?

¶ 3 2. Did the District Court correctly interpret the Agreement?

¶ 4 3. Did the District Court err in entering judgment because Cheryl's petition was procedurally barred?

Standard of Review

¶ 5 The construction and interpretation of written agreements is a question of law. See, e.g., In re Estate of Hill (1997), 281 Mont. 142, 145, 931 P.2d 1320, 1323 (citations omitted). Whether a portion of a written agreement is ambiguous is also a question of law. See Estate of Hill, 281 Mont. at 146, 931 P.2d at 1323. We review questions of law de novo to determine whether they are correct. See Bruner v. Yellowstone County (1995), 272 Mont. 261, 265, 900 P.2d 901, 903.

Factual and Procedural Background

¶ 6 We note at the outset that the District Court judgment contains a number of inaccuracies: The judgment assumes that the house was burdened with debt at the date of dissolution, but David and Cheryl owned it free of debt. The court listed the sales price for the house as $74,500, but the buy-sell agreement lists the price as $75,000. Finally, the court ordered that David "shall be paid one-half of the value of the real property as of January 8, 1994 . . .," but the decree of dissolution is actually dated on January 5, 1994.

999 P.2d 982

¶ 7 Cheryl filed a petition for dissolution and the parties' marriage was dissolved by court order on January 5, 1994. A property settlement agreement (the Agreement), executed by Cheryl and David, was incorporated into the decree of dissolution. The Agreement provided in relevant part

The parties own a house located at 945 U.S. 89 North in Glacier County, State of Montana. Wife shall receive the family home subject to the debt owed thereon. Wife agrees to maintain the house and property in at least the condition it is now, and when sold, she will return to Husband one-half the proceeds of the sale of the house.

¶ 8 In November 1997, Cheryl entered into a buy-sell agreement with respect to the house and subsequently filed a "Petition to Modify Property Settlement Agreement and Child Support Agreement¹" in District Court. With regard to the property settlement, Cheryl's petition asserted that the Agreement failed to anticipate or address the division of proceeds from the sale of the house in light of Cheryl's substantial improvements to the house, which increased its value, as well as Cheryl's payment of all property taxes since the date of dissolution. Cheryl asked the court to allow her

to retain, in addition to an amount equaling one-half (½) of the proceeds realized from the sale of the family real property in Glacier County, Montana, an amount equaling the total of the amount expended by Petitioner for improvements to, and taxes upon, said real property since January 5, 1994.

¶ 9 Following a hearing, the District Court concluded that the Agreement's failure to address what would happen to the expenditures of one party which were neither for maintenance nor repairs created a latent ambiguity and construed Cheryl's petition as a request to interpret the Agreement in light of that ambiguity. The court concluded that the Agreement contemplated that Cheryl would maintain the value of the house at the time of dissolution and divide that value when the house was sold. The court found that both parties benefitted from this arrangement: Cheryl would not be obligated to immediately pay David his share of the equity and would not have to pay rent or buy another home. David would benefit from a reduction of debt on the house, increasing the equity to be divided upon its sale. The court held that the property taxes were an item of maintenance of the house that Cheryl was responsible for pursuant to the Agreement.

¶ 10 The court found that the value of the house on January 5, 1994, the date of dissolution, was $55,500. Cheryl had entered into a buy-sell agreement for $75,000. Cheryl claimed $21,029.35 in expenditures for items other than maintenance and repair—$3,716.59 thereof constituted payments for property taxes. The court ordered that David be paid one-half of the value of the house as of January 8, 1994—$27,750, less one-half...