IN RE THE MARRIAGE OF: KAREN E. JOHNSON, Petitioner and Appellant, and JEFFREY A. JOHNSON, Respondent and Appellee.
Submitted on Briefs: August 15, 2018
FROM: District Court of the Eighth Judicial District, In and
For the County of Cascade, Cause No. BDR-09-646 Honorable
Elizabeth Best, Presiding Judge
Appellant: Steven T. Potts, Steven T. Potts, PLLC, Great
Appellee: Barbara E. Bell, Marra, Evenson & Levine, PC,
Great Falls, Montana
Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
Internal Operating Rules, this case is decided by memorandum
opinion and shall not be cited and does not serve as
precedent. Its case title, cause number, and disposition
shall be included in this Court's quarterly list of
noncitable cases published in the Pacific Reporter and
Karen Johnson appeals from the Order Affirming Standing
Master issued October 12, 2017, by the Eighth Judicial
District, Cascade County, affirming the Standing Master's
"Order on Petitioner's Motion to Amend Findings of
Fact Conclusions of Law, and Order, and Stipulated Settlement
Agreement" issued August 14, 2017. We reverse and remand
for further action consistent with this opinion.
Karen and Jeffrey married in 1993. Karen filed for
dissolution and on January 17, 2012, the District Standing
Master issued his Findings of Fact, Conclusions of Law and
Order. Finding 32 provided for the parties to submit within
20 days "total valuations of the marital property and
present to the Court a proposal to equalize the marital
property." The parties did so by submitting their
Stipulated Settlement Agreement (Agreement) on February 7,
2012. The Agreement provided for an equal division of the
parties' marital estate with each party receiving a net
value of $173, 378. Pursuant to the Agreement, Karen received
the 2006 Subaru Tribeca as her sole and separate property.
The parties valued the Tribeca at $18, 000. The Agreement
also provided for Jeffrey to be solely responsible for
payment of the loan associated with the Tribeca at Montana
Federal Credit Union. The parties noted the loan liability at
that time to be $17, 033. Karen's $173, 378 net
distribution included the $18, 000 value of the car and
Jeffrey's $173, 378 net distribution included him making
full payment of the Montana Federal Credit Union loan of $17,
033. Despite the obvious intention of the parties for their
Agreement to meet their obligations pursuant to Finding 32
and the intention of the lower court to order an equalization
based on the parties' subsequent submittals, it does not
appear further order was issued. Nevertheless, the Agreement
is indisputably a binding contract between the parties which
comports with the intention of the standing master to
equalize the marital estate between the parties.
On December 23, 2012, Karen's Tribeca was destroyed by
fire. Although Karen insured the vehicle, the insurance
proceeds were not paid to her directly but rather $10, 500 of
the insurance proceeds were paid to Montana Federal Credit
Union to satisfy the loan obligation associated with the
vehicle (which Jeffrey alone was required to pay pursuant to
the parties' Agreement). Jeffrey did not reimburse Karen
the $10, 500 or continue to make monthly loan payments to her
to pay the obligation he alone was required to pay pursuant
to the parties' Agreement. The remaining $3, 800 in
insurance proceeds was paid jointly to Karen and Jeffrey.
Jeffrey signed this amount over to Karen. Prior to the
insurance company issuing these proceeds, Karen somewhat
unartfully sought to enforce the parties' settlement
agreement by filing a "Motion to Amend Findings of Fact,
Conclusions of Law, and Order, and Stipulated Settlement
Agreement" in which she sought to have Jeffrey pay the
loan with Montana Federal Credit Union (which he alone was
required to pay under the parties' Agreement) so that the
insurance proceeds would be paid to her and available to her
to purchase a replacement vehicle. Four and a half years
later, a different standing master considered Karen's
motion. Given the unartful way in which Karen sought to
enforce the parties' Agreement, the Standing Master
erroneously considered Karen's motion as a request to
reopen the property division.
A settlement agreement is a contract. Gamble v.
Sears, 2007 MT 131, ¶ 24, 337 Mont. 354, 160 P.3d
537. Interpretation of a settlement agreement is an issue of
law reviewed for correctness. Kruer v. Three Creeks Ranch
of Wyoming, L.L.C., 2008 MT 315, ¶ 16, 346 Mont.
66, 194 P.3d 634.
The parties' Agreement set over the Tribeca to Karen as
her sole and separate property. She had the right to do
whatever she desired with the vehicle including sell it, give
it away, or lend it to another. Karen insured the vehicle and
paid the insurance premiums. The fact that Karen insured the
vehicle did not eliminate Jeffrey's obligation to pay the
loan. Had Karen disposed of the vehicle in a manner that did
not provide insurance proceeds, such as gifting it to
another, Jeffrey would still be obligated to pay the loan.
The parties' Agreement requires Jeffrey alone to pay the
loan with Montana Federal Credit Union. Jeffrey is not
entitled to Karen's insurance proceeds to pay the loan.
Karen alone is entitled to receive any insurance proceeds
paid to compensate for her loss of the vehicle. Although the
insurance company issued Karen's insurance proceeds
directly to the credit union, this did not negate
Jeffrey's obligation to pay the full amount of the debt
assigned to him by the parties' Agreement. Jeffrey cannot
satisfy his obligation to pay the debt assigned to him by the
parties' Agreement by using Karen's insurance
The Settlement Master and the District Court erroneously
considered Karen's motion to involve a request to reopen
and modify the parties' property division rather than a
request to enforce the parties' Agreement and thus they
applied an incorrect standard in considering the issue. The
parties' Agreement is valid, binding, and should be
enforced. To effectuate and enforce the parties'
Agreement, this matter is reversed and remanded to the
District Court to require Jeffrey to reimburse Karen for the
$10, 500 she paid on the Montana Federal Credit Union debt
obligation which was his sole and separate debt obligation.
We have determined to decide this case pursuant to Section I,
Paragraph 3(c) of our Internal Operating Rules, which
provides for memorandum opinions. In the opinion of the
Court, the case presents a question controlled by settled ...