Simpson v. Simpson

• Decision Date: 18 September 2018
• Docket Number: DA 18-0067
• Citation: 2018 MT 230
• Parties: IN RE THE MARRIAGE OF: LARISSA L. SIMPSON, Petitioner and Appellant, and DENNIS D. SIMPSON, Respondent and Appellee.
• Court: Montana Supreme Court

2018 MT 230

IN RE THE MARRIAGE OF: LARISSA L. SIMPSON, Petitioner and Appellant,
and
DENNIS D. SIMPSON, Respondent and Appellee.

DA 18-0067

SUPREME COURT OF THE STATE OF MONTANA

Submitted on Briefs: July 11, 2018
September 18, 2018

APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DR 06-1018 Honorable Ingrid G. Gustafson, Presiding Judge

COUNSEL OF RECORD:

For Appellant:

John M. Kauffman, Kasting, Kauffman & Mersen, P.C., Bozeman, Montana

For Appellee:

Dennis D. Simpson, Self-Represented, Scottsdale, Arizona

Filed:

/s/_________
Clerk

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Chief Justice Mike McGrath delivered the Opinion of the Court.

¶1 This is an appeal from a Thirteenth Judicial District Court order modifying Dennis Simpson's (Dennis) and Larissa Simpson's (Larissa) Property Settlement Agreement and subsequent order awarding attorney fees. We affirm.

¶2 We restate the issues on appeal as follows:

1. Whether the District Court abused its discretion when it modified the Agreement, terminating maintenance payments to Larissa.

2. Whether the District Court abused its discretion when it limited the amount of Larissa's attorney fees to those incurred during the contempt proceedings.

PROCEDURAL AND FACTUAL BACKGROUND

¶3 Dennis and Larissa were married in 1988 and divorced in 2006. In early November 2006, the District Court entered a Final Decree of Dissolution of Marriage which incorporated both a Property Settlement Agreement (Agreement) and a Stipulated Final Parenting Plan. Between 2006 and 2009, the parties were engaged in ongoing disputes and litigation, mainly involving the parenting plan. In 2013, this Court affirmed the District Court's decision to deny Dennis's motion to modify child support and Larissa's motion to invalidate a stipulation concerning delayed child support payments. Simpson v. Simpson, 2013 MT 22, 368 Mont. 315, 294 P.3d 1212.

¶4 Pursuant to the Agreement, Dennis retained the bulk of the marital assets and assumed responsibility for the marital debts. Larissa was to receive a $10,000 maintenance payment from Dennis each month for life, secured by a life insurance policy on Dennis's life with Larissa as the sole beneficiary. The Agreement also required

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Dennis to pay Larissa a lump sum of $500,000 and provide her with a lifetime gym membership. The Agreement included a non-modification clause, which stated that "Both parties agree that this Agreement and any Decree of Dissolution of their marriage incorporating this Agreement shall not be modified in any future legal proceeding under the authority of § 40-4-201(6), MCA." The parties also included a provision that the prevailing party in any future dispute will be entitled to attorney fees.

¶5 At or near the time of dissolution, the parties prepared financial statements, which indicated their net worth to be approximately $13,000,000. However, the District Court noted that these "statements exaggerated the parties' net worth and, in further complication, much of the value of these assets was completely lost with the economic disaster occurring in 2008-09." These assets included (1) a note receivable for $500,000; (2) a certificate of deposit with Mountain West Bank for $385,000; (3) Arrow Construction Inc. valued at $600,000; (4) Rainbow Subdivision valued at $4,000,000; (5) lots in Northstar Subdivision valued at $750,000; (6) eighty acres of property at Triple Creek Meadows valued at $1,900,000; (7) two lots at the Bozeman Hot Springs valued at $1,200,000; (8) the Bozeman Hot Springs valued at $5,000,000; (9) personal belongings valued at $600,000; and (10) $62,000 in cash. Dennis also noted multiple debts in his financial statement, including loans with Mountain West Bank and Yellowstone Bank and various tax obligations.

¶6 In May 2015, Dennis began to fall behind on the monthly $10,000 payments to Larissa. On May 7, 2015, Larissa filed a motion to hold Dennis in contempt for failure to make payments. Larissa also moved the District Court to find Dennis in breach of the

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Agreement for his failure to maintain life insurance. After a hearing, the District Court issued an order for an accounting and held the contempt in abeyance after Dennis advised that he was filing for bankruptcy in Arizona. Dennis was granted several continuances to file the new financial information, which he finally did on May 4, 2017. The District Court held another hearing on July 25, 2017. Following that hearing, Dennis filed a motion to modify the Agreement, arguing that changed circumstances made the Agreement unconscionable.

¶7 On October 31, 2017, the District Court found Dennis in contempt, ordered him to pay Larissa $253,475, and awarded Larissa court costs and reasonable attorney fees associated with her contempt motions. The District Court also modified the Agreement by terminating Dennis's obligation to pay Larissa $10,000 a month in maintenance as of September 30, 2017. The District Court concluded that the Agreement was unconscionable under the current circumstances because the valuation of the marital assets was "grossly inflated," a fire damaged the Bozeman Hot Springs, and an economic collapse in 2008 virtually halted development projects in Gallatin County. The modification order stated that Dennis could purge his contempt if he made monthly installments of $2,000 on or before the tenth day of each month until the $253,475 that he owed Larissa was paid in full. The District Court denied Larissa's claim for loss of investment benefit and ruled that Dennis's second wife, Michelle Simpson, was not required to divert payments she owed Dennis to Larissa.

¶8 On January 11, 2018, pursuant to the provision within the Agreement that awarded reasonable attorney fees and costs to the prevailing party, the District Court awarded

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Larissa $26,953 associated with her contempt action. The District Court awarded 75% of the $35,937.50 that Larissa originally requested because 25% of the proceedings involved issues where Dennis was the prevailing party. These included modification issues and issues related to Dennis assigning his interest in a note payable to Larissa. The District Court declined to award Larissa attorney fees related to the bankruptcy proceedings in Arizona. Larissa's request for an award of costs was denied because she failed to file a bill of costs pursuant to § 25-10-501, MCA.

¶9 Larissa appeals the District Court's decision to modify the Agreement and the District Court's limitation of attorney fees related to her contempt motions.

STANDARD OF REVIEW

¶10 The construction and interpretation of a written agreement are questions of law. Orr v. Orr, 2017 MT 291, ¶ 8, 389 Mont. 400, 410 P.3d 181. We review a district court's conclusions of law for correctness. In re Marriage of Pospisil, 2000 MT 132, ¶ 20, 299 Mont. 527, 1 P.3d 364. This Court reviews a district court's findings of fact for clear error. In re S.T., 2008 MT 19, ¶ 8, 341 Mont. 176, 176 P.3d 1054. We review a district court's determinations of unconscionability under § 40-4-208(2)(b)(i), MCA, for abuse of discretion. Toenjes v. Toenjes, 2018 MT 189, ¶ 9, 392 Mont. 230, ___ P.3d ___. An award of attorney fees is also reviewed under the abuse of discretion standard. In re Marriage of Cameron, 2009 MT 302, ¶ 10, 352 Mont. 375, 217 P.3d 78. In a dissolution proceeding, a district court abuses its discretion if it "acted arbitrarily without employment of conscientious judgment" or "exceeded the bounds of reason resulting in substantial injustice." In re Pospisil, ¶ 19.

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DISCUSSION

¶11 1. Whether the District Court abused its discretion when it modified the Agreement, terminating maintenance payments to Larissa.

¶12 As a general rule, terms of a separation agreement, except those providing for the support, parenting, and parental contact with children, are binding on a court unless, after considering the economic circumstances of the parties and any other relevant evidence, the separation agreement is "unconscionable." Section 40-4-201(2), MCA. Specifically, as to maintenance provisions within a decree, a district court may modify those "upon a showing of changed circumstances so substantial and continuing as to make the terms unconscionable." Section 40-4-208(2)(b)(i), MCA. Determinations of unconscionability are made "subject to the underlying facts on a case-by-case basis." Jackson v. Jackson, 2008 MT 25, ¶ 29, 341 Mont. 227, 177 P.3d 474. However, Montana law also provides that a "decree may expressly preclude or limit modification of terms set forth in the decree if provided for in the separation agreement." Section 40-4-201(6), MCA. We have held that if a decree limits modification, a district court "must adhere to the non-modification clause and cannot later modify the agreement." Tanascu v. Tanascu, 2014 MT 293, ¶ 14, 377 Mont. 1, 338 P.3d 47 (quoting In re Marriage of Cortese, 2008 MT 28, ¶ 9, 341 Mont. 287, 176 P.3d 1064).

¶13 In Tanascu, Linda Tanascu had petitioned the district court to modify her property settlement agreement for unconscionability because the district court "wrongfully...