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In re Marriage of Fossen

Supreme Court of Montana

May 28, 2019

IN RE THE MARRIAGE OF: PAMELA GAIL FOSSEN, Petitioner and Appellant, and ALLAN R. FOSSEN, Respondent and Appellee.

          Submitted on Briefs: March 6, 2019

          APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. ADR-01-309 Honorable John W. Parker, Presiding Judge.

          For Appellant: Nathan J. Hoines, Zachary D. Kitchen, Hoines Law Office, P.C., Great Falls, Montana.

          For Appellee: Jason T. Holden, Katie R. Ranta, Faure Holden Attorneys at Law, P.C., Great Falls, Montana.

          OPINION

          BETH BAKER JUSTICE.

         ¶1 Pamela Fossen ("Pam") appeals an order from the Eighth Judicial District Court, Cascade County, awarding Allen Fossen ("Al") prejudgment interest on a $20, 000 sum Pam was directed to pay in the dissolution. Pursuant to a provision in the dissolution settlement agreement, the District Court also awarded Al's attorney fees incurred in a separate action. We address the following issues on appeal:

1. Whether the District Court erred in awarding Al attorney fees under terms of the parties' dissolution Settlement Agreement for defending Pam's third-party complaint against him in a separate action;
2. Whether the District Court abused its discretion in admitting certain evidence to support the calculation of attorney fees and costs; and
3. Whether the District Court erred in awarding prejudgment interest.

         ¶2 We affirm issues one and three and reverse and remand issue two for the District Court to determine the amount of attorney fees and costs upon properly admitted evidence.

         PROCEDURAL AND FACTUAL BACKGROUND

         ¶3 Pam and Al entered into a portable toilet business, Great Falls Portables, Inc., with Charles and Mary Lou Dees (the "Deeses") in 1996. Pam and Al separated in 2001, and Pam took control of the management of Great Falls Portables. Pam created a separate LLC, Rocky Mountain Portables, and transferred all Great Falls Portables assets and customers to Rocky Mountain Portables. The Deeses filed suit against Pam, Great Falls Portables, and Rocky Mountain Portables in October 2003, seeking recognition of their interest in Great Falls Portables.

         ¶4 Pam and Al entered into a Settlement Agreement a month later to divide their marital property between them in the marriage dissolution action. The Agreement called for Pam to receive Great Falls Portables and to pay Al $20, 000 from the sale or refinance of the real property used by Great Falls Portables. The Agreement provided that Pam would indemnify Al from certain debts, including Pam's agreement to "be responsible to the Dees for any obligation which may be owed them in connection with their interest, if any, in Great Falls Portables." The Agreement's attorney fee provision stated that, "In the event of future litigation between the parties to enforce, modify, or interpret any provision of this agreement, the prevailing party shall be entitled to all his or her court costs, including a reasonable attorney's fee."

         ¶5 Shortly after entry of the final dissolution decree incorporating Pam and Al's Agreement, Pam filed a third-party complaint against Al in the Deeses' suit against her.[1]Pam alleged that the Deeses' claim arose out of Al's fraudulent actions in his individual capacity and that Al had fraudulently induced Pam to enter the Agreement assigning responsibility for payment of the Deeses' interest. She demanded that Al remedy this fraud by indemnifying her against all liability to the Deeses. The district court in that case granted Al summary judgment on all three counts because Pam failed to plead fraud with sufficient particularity, and no material issue of fact demonstrated Pam's reliance on the alleged fraudulent representations. The court dismissed Pam's indemnity and contribution claim as relating back to the fraud alleged in the other two counts. This Court affirmed the district court's grant of summary judgment to Al on all issues. Fossen I, ¶ 21.

         ¶6 Following Fossen I, Al moved in the dissolution action to compel enforcement of the Agreement and for an award of attorney fees and costs. The request for attorney fees was based on Al's defense of the third-party complaint in the Dees case. In July 2014, the Standing Master held a hearing on Al's motions, together with Pam's motion to set aside the Agreement for fraud, her motion for attorney fees and costs or for a setoff, and her motion for contempt for failure to pay child support. The Standing Master granted Al's motion and ordered Pam to pay Al the $20, 000 awarded in the Decree. The Standing Master denied Pam's motions and set a hearing on the amount of fees. The Standing Master awarded Al fees from the third-party action because the Agreement's attorney fee provision did not limit recovery to only future litigation in the dissolution. The Standing Master interpreted the provision to apply to any litigation involving enforcement, modification, or interpretation of the Agreement. The Standing Master concluded that the substance of Pam's third-party complaint against Al was to modify the Agreement: Pam sought to avoid being solely liable for payment to the Deeses for ...


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