In re Marriage of Holloway, 99-048.

• Citation: 999 P.2d 980,2000 MT 104
• Decision Date: 27 April 2000
• Docket Number: No. 99-048.,99-048.
• Parties: In re the MARRIAGE OF Cheryl HOLLOWAY, a/k/a Cheryl Woolsey, Petitioner and Respondent, and David W. Holloway, Respondent and Appellant.
• Court: Montana Supreme Court

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.

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. ¶ 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 of the closing costs, real estate agent's commissions and expenses associated with the sale of the house.

Discussion

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

¶ 12 Cheryl's petition stated that the Agreement "does not anticipate or address the issue of equitable division of the proceeds resulting from the sale of the family property, in light of Petitioner having provided, since January 5, 1994, substantial improvements to the property which materially increased the value of the real property. . . ." The District Court held that "[a]lthough Petitioner's request to the Court is styled as a petition to modify, the request in substance asks this Court to interpret the written contract between the parties in the face of the ambiguity concerning the division of the increase in value of the real property due to non-maintenance, non-repair expenditures."

¶ 13 Rule 8(e)(1), M.R.Civ.P., states in relevant part that "[n]o technical form of pleading or motion are required." This Court has held that it will "look to the substance of a motion, not just its title, to identify what motion has been presented." Miller v. Herbert (1995), 272 Mont. 132, 136, 900 P.2d 273, 275. Cheryl's petition gave sufficient notice to the court and David that Cheryl wanted the court to interpret the Agreement in light of the improvements she had made to the house. David was not prejudiced by Cheryl's failure to use the term "interpret" with regard to the Agreement.

¶ 14 David's argument that Cheryl must have asked the court to modify the Agreement because she asked the court to modify the child support obligation in the same petition is not persuasive. Although Cheryl raised these issues in the same petition, they are separate matters. The hearing and the judgment on which this appeal is based only concern the Agreement. We do not agree with David that logic dictates that Cheryl must have wanted the Agreement modified if she wanted the child support obligation modified.

¶ 15 David further argues that the court erred in construing Cheryl's petition as a request to interpret the Agreement because she asked the court to compensate her for property taxes although she knew such payments constituted maintenance when she signed the Agreement. Even if Cheryl asked the court to modify the Agreement with respect to the property taxes, the issue is moot because the court did not modify the Agreement with respect to the property taxes, but found that "[r]eal property taxes are an item of expense necessary to maintain ownership of property."

¶ 16 The District Court correctly determined that "[t]he failure of the Settlement Agreement to address the division of value caused by expenditures of one party which are not for maintenance or repairs is a latent ambiguity in the agreement." Black's Law Dictionary defines "latent ambiguity" as "[a] defect which does not appear on the face of language used or an instrument being considered. It arises when language is clear and intelligible and suggests but a single meaning, but some extrinsic fact or some extraneous evidence creates a necessity for interpretation or a choice between two or more possible meanings." Black's Law Dictionary 80 (7th ed.1999). David's contention that...