IN RE THE MARRIAGE OF: MICHELE R. HUTCHINS, Petitioner and Appellant,
MICHAEL J. HUTCHINS, Respondent and Appellee.
Submitted on Briefs: August 22, 2018
FROM: District Court of the Fourth Judicial District, In and
For the County of Missoula, Cause No. DR 15-96 Honorable
Leslie Halligan, Presiding Judge
Appellant: Richard A. Reep, Reep, Bell, Laird & Jasper,
P.C., Missoula, Montana
Appellee: Evonne Smith Wells, Wells & McKittrick, P.C.,
Michele Hutchins (Michele) appeals from orders of the Fourth
Judicial District Court, Missoula County, dissolving her
marriage to Michael Hutchins (Michael). We affirm and restate
the issues on appeal as:
1. Is the parties' premarital agreement
2. Did the District Court equitably apportion the marital
3. Did the District Court abuse its discretion by valuing
some of the parties' assets at the time of
AND PROCEDURAL BACKGROUND
Michael graduated from medical school in 1985 and later that
year met Michele. Michael and Michele lived in Nevada and
dated on-and-off for a few years. Michael worked as a
physician for the State of Nevada and Michele worked as a
graphic designer. The couple eventually moved in together. In
1990, Michael proposed to Michele and she accepted. During
the parties' engagement, Michele left her job to
undertake homemaker duties and oversee construction of the
couple's new home.
On August 9, 1991, the parties executed a document entitled
"Pre-Nuptial Agreement" (Premarital Agreement).
Michael and Michele married on August 16, 1991, one week
after they executed the Premarital Agreement. The couple
lived in Las Vegas, where Michael worked as a physician and
Michele as a homemaker. Michele earned her bachelor's
degree in fine arts, became a certified Pilates instructor,
and took photography classes.
In 2006, the parties moved to Montana. At that time, Michael
retired from his position with the State of Nevada and began
receiving monthly retirement distributions from his Nevada
Public Employees Retirement System (Nevada PERS) account.
Michael and Michele purchased land outside of Missoula,
Michele oversaw construction of a new home, and Michael
obtained new employment as a physician. Throughout their
marriage, Michael worked as a physician earning substantial
income, which allowed the parties to accumulate significant
assets and enjoy an above-average standard of living. Michele
worked as a homemaker and briefly as a Pilates instructor.
In April 2014, Michele announced she wanted a separation and
eventually moved out of the marital home. In January 2015,
Michele filed a petition for dissolution of marriage. As the
dissolution proceeding progressed, Michele sought a
declaratory ruling that the Premarital Agreement was
unenforceable. The District Court denied Michele's
request, ultimately concluding the agreement was enforceable.
The case proceeded to a bench trial in January 2017, at which
both parties presented evidence and proposed apportionments
of the marital estate. The District Court issued its
findings, conclusions, and order of dissolution in August
2017. Michele appeals the District Court's orders
regarding the Premarital Agreement and the division of
marital assets. Additional facts are supplied throughout the
opinion as needed.
The determination of which state's law to apply in a
particular situation is a question of law that we review de
novo. Masters Group Int'l, Inc. v. Comerica
Bank, 2015 MT 192, ¶ 33, 380 Mont. 1, 352 P.3d
1101. Nevada courts review the validity of a premarital
agreement de novo. Gonzales-Alpizar v. Griffith, 317
P.3d 820, 827 (Nev. 2014).
Section 40-4-202, MCA, governs the distribution of a marital
estate. A district court has broad discretion to apportion
the marital estate in a manner equitable to each party under
the circumstances. In re Marriage of Spawn, 2011 MT
284, ¶ 9, 362 Mont. 457, 269 P.3d 887. In making its
findings and conclusions, the district court must consider
the factors listed in § 40-4-202, MCA. In re
Marriage of Hollamon, 2018 MT 37, ¶ 8, 390 Mont.
320, 413 P.3d 460. We review a district court's division
of marital property to determine whether the court's
findings of fact are clearly erroneous and whether its
conclusions of law are correct. Deschamps v.
Deschamps, 2009 MT 431, ¶ 11, 354 Mont. 94, 223
P.3d 324. A finding is clearly erroneous if it is not
supported by substantial credible evidence, if the court
misapprehended the effect of the evidence, or if a review of
the record leaves us with the definite and firm conviction
that the court committed a mistake. In re Marriage of
Edwards, 2015 MT 9, ¶ 9, 378 Mont. 45, 340 P.3d
1237. A district court's apportionment of the marital
estate will stand unless there was a clear abuse of
discretion as manifested by a substantially inequitable
division of the marital assets resulting in substantial
injustice. Richards v. Trusler, 2015 MT 314, ¶
11, 381 Mont. 357, 360 P.3d 1126. We examine each case
individually, with an eye to its unique circumstances.
Spawn, ¶ 9.
A district court's valuation of a marital estate is a
discretionary ruling that we review for an abuse of
discretion. In re Marriage of Thorner, 2008 MT 270,
¶ 21, 345 Mont. 194, 190 P.3d 1063. The test for an
abuse of discretion is whether the district court acted
arbitrarily without employment of conscientious judgment or
exceeded the bounds of reason resulting in substantial
injustice. Thorner, ¶ 21.
1. Is the parties' premarital agreement
Michele asked the District Court to declare the Premarital
Agreement unenforceable, while Michael sought to enforce the
agreement. The District Court considered the parties'
briefs, held a hearing at which both Michele and Michael
testified, and ultimately enforced the Premarital Agreement.
The Premarital Agreement contained a choice-of-law provision,
so we must first determine which state's law governs.
Choice of Law
The Premarital Agreement's choice-of-law provision
provided, "This agreement shall be interpreted and
enforced in accordance with the laws of the State of Nevada
in effect at the time of its execution." The District
Court quoted the choice-of-law provision and concluded the
Premarital Agreement "should be construed according to
Nevada law, as provided in the document." However, the
court further concluded Montana law also applied to the
agreement's enforceability because the dissolution and
division of assets was occurring in Montana. The court
proceeded to apply Montana's statutes and case law to its
analysis of the Premarital Agreement's enforceability.
Pursuant to the Uniform Premarital Agreement Act (UPAA),
which both Montana and Nevada have adopted, parties to a
premarital agreement may contract with respect to the
"choice of law governing the construction of the
agreement." Section 40-2-605(1)(g), MCA; Nev. Rev. Stat.
§ 123A.050(1)(g). As a general rule, Montana courts
enforce choice-of-law provisions and apply the law of the
state the parties chose. Tenas v. Progressive Preferred
Ins. Co., 2008 MT 393, ¶ 32, 347 Mont. 133, 197
P.3d 990 (citing Restatement (Second) of Conflict of Laws
§ 187(2)). A court will not apply a choice-of-law
provision if either (1) "the chosen state has no
substantial relationship to the parties or the transaction
and there is no other reasonable basis for the parties'
choice" or (2) "application of the law of the
chosen state would be contrary to a fundamental policy of a
state which has a materially greater interest than the chosen
state in the determination of the particular issue and which
. . . would be the state of the applicable law in the absence
of an effective choice of law by the parties."
Tenas, ¶ 32 (quoting Restatement (Second) of
Conflict of Laws § 187(2)).
We determine the District Court erred by analyzing the
Premarital Agreement under Montana law. Neither exception to
the general rule that Montana courts enforce choice-of-law
provisions applies in this case. We accordingly apply the
Premarital Agreement's choice-of-law provision and
conclude Nevada law controls our interpretation of the
Premarital Agreement's enforceability. We note, however,
that the choice-of-law provision relates only to the
parties' Premarital Agreement. It does not relate to the
dissolution proceeding as a whole; Montana law governs the
remainder of the proceeding, including the equitable division
of the marital estate. See Procter v. Mavis, 125
P.3d 801, 803 (Ore. Ct. App. 2005) (concluding, under the
UPAA, a premarital agreement's choice-of-law provision
applied only to the agreement's enforceability, not to
the division of assets). While the District Court erred in
applying Montana law, the factual findings upon which it
based its decision permit us to apply Nevada law to determine
whether the Premarital Agreement is enforceable.
Enforceability of the Premarital Agreement under Nevada
Michael and Michele executed the Premarital Agreement on
August 9, 1991, and married one week later on August 16,
1991. The agreement stated that the parties "agreed to
retain a single attorney to draft this agreement and to
advise them of their respective rights and obligations under
law and the ways and manner in which this agreement might
alter such rights and obligations." The agreement
further provided that each party "understands that said
counsel does not represent either of them individually."
The agreement listed each party's separate property.
Michael's list included sixteen investment accounts, an
undeveloped parcel of real property, an antique vehicle, and
personal items. Michele's list only included personal
items; she did not own any investments or real estate. The
agreement also provided that each party waived spousal
maintenance claims in the event of divorce.
Michele and Michael recalled different versions of the events
surrounding the compilation and execution of the Premarital
Agreement, but the District Court resolved the factual
dispute in favor of Michele's memory. Michele recalled
that, on August 9, 1991, one week before their wedding date,
Michael took her to a law office in Las Vegas where the
couple met with attorneys she had never encountered before.
The attorneys presented the fully prepared Premarital
Agreement and read the agreement to the parties. Michele
stated she was surprised, embarrassed, and sad about the
agreement, but she signed it anyway because the wedding was
set to occur the following week. The District Court found
"Michele provided credible testimony that she and
Michael went to an attorney's office [one
week] before the date which had been scheduled
for their wedding; that she had not had an opportunity to
review the agreement prior to going to this attorney's
office; that she had no part in drawing up the agreement; and
that she did not consult with her own attorney prior to the
date that she signed the agreement." Based on those
facts, the District Court, applying Montana law, enforced the
Premarital Agreement. While we affirm its conclusion, we
instead apply Nevada law to the court's factual findings.
Nevada's UPAA governs any premarital agreement executed
after October 1, 1989. 1989 Nev. Stat., ch. 472, § 22,
at 1009; Kantor v. Kantor, 8 P.3d 825, 829 (Nev.
2000). Michael and Michele executed the Premarital Agreement
in 1991, and, accordingly, the UPAA governs the Premarital
Agreement. See Fick v. Fick, 851 P.2d 445, 449 (Nev.
1993). Under the UPAA, a premarital agreement is
enforceable without consideration if it is in writing and
signed by both parties. Fick, 851 P.2d at 449
(citing Nev. Rev. Stat. § 123A.040). A premarital
agreement may, among other things, eliminate spousal
maintenance in the event of a divorce. Nev. Rev. Stat. §
123A.050(1)(d). The burden of proving the unenforceability of
a premarital agreement is on the party challenging the
agreement. Kantor, 8 P.3d at 830 (citing Nev. Rev.
Stat. § 123A.080). "A premarital agreement is not
enforceable if the party against whom enforcement is sought
(a) That party did not execute the agreement voluntarily;
(b) The agreement was unconscionable when it was executed; or
(c) Before execution of the agreement, that party:
(1) Was not provided a fair and reasonable disclosure of the
property or financial obligations of the other party;
(2) Did not voluntarily and expressly waive, in writing, any
right to disclosure of the property or financial obligations
of the other party beyond the disclosure provided; and
(3) Did not have, or reasonably could not have had, an
adequate knowledge of the property or financial ...