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In re Marriage of Johnson

Supreme Court of Montana

September 25, 2018

IN RE THE MARRIAGE OF: KAREN E. JOHNSON, Petitioner and Appellant, and JEFFREY A. JOHNSON, Respondent and Appellee.

          Submitted on Briefs: August 15, 2018

          APPEAL 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

          For Appellant: Steven T. Potts, Steven T. Potts, PLLC, Great Falls, Montana

          For Appellee: Barbara E. Bell, Marra, Evenson & Levine, PC, Great Falls, Montana

          OPINION

          Ingrid Gustafson, Justice

         ¶1 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 Montana Reports.

         ¶2 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.

         ¶3 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.

         ¶4 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.

         ¶5 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.

         ¶6 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 proceeds.

         ¶7 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.

         ¶8 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 ...


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