In re the Marriage of Scott L. Hart
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Petitioner ("husband") and respondent ("wife") divorced in May 1993 and entered into a Marital and Property Settlement Agreement ("settlement agreement") where, pursuant to the settlement agreement, husband and wife's two children would live primarily with wife and husband would pay wife child support payments each month plus half the cost of the children's uninsured medical expenses. At issue was whether the district court erred when it concluded that wife's statements filed with the court indicating that husband was current on his child support obligations as of September 2001 constituted judicial admissions and thus precluded an award of back child support; when it determined that wife had filed inconsistent pleadings and imposed sanctions against her; and when it held that husband did not owe wife for back child support. Also at issue was whether the district court erred by failing to award husband his attorney fees pursuant to a "prevailing party" contractual provision when the sanctions imposed on wife covered only a portion of husband's attorney fees. The court held that the district court did not err when it assumed that wife's written statements were true and concluded that the statements were judicial admissions where both documents that contained wife's statements were signed by her attorney at the time and neither were superseded or withdrawn at any point. The court also held that, without knowing the legal basis for sanctions, it was impossible to ascertain whether the award constituted an abuse of discretion and concluded that it was unnecessary to remand in light of the court's disposition of the last issue. The court further held that the district court did not err in concluding that husband did not owe wife back child support where the record established that wife was overpaid child support. The court finally held that the district court erred when it granted husband only a portion of his attorney fees and costs as sanctions against wife where, by the terms of the settlement, husband should have been awarded all of his costs and attorney fees expended in defense of wife's claims because husband was the prevailing party.
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May 12 2011
DA 10-0192
IN THE SUPREME COURT OF THE STATE OF MONTANA
2011 MT 102
IN RE THE MARRIAGE OF
SCOTT L. HART,
Petitioner, Appellee and
Cross-Appellant,
and
MARGOT LUCKMAN HART,
Respondent and Appellant.
APPEAL FROM:
District Court of the Fourth Judicial District,
In and For the County of Missoula, Cause No. DR-93-77700
Honorable Ed McLean, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Thorin A. Geist, P. Mars Scott Law Offices, Missoula, Montana
For Appellee:
Kenneth R. Dyrud, Dyrud Law Offices, P.C., Missoula, Montana
Submitted on Briefs: March 23, 2011
Decided: May 12, 2011
Filed:
__________________________________________
Clerk
Justice Patricia O. Cotter delivered the Opinion of the Court.
¶1
Margot Luckman Hart (Margot) appeals the June 2009 order of the Fourth Judicial
District Court, Missoula County, denying her motion for determination of back child
support and imposing sanctions for inconsistent pleadings. Margot also appeals the
March 2010 order of the District Court concluding that her ex-spouse, Scott L. Hart
(Scott), did not owe her for back child support. Scott cross-appeals the District Court’s
2010 order arguing it failed to award his attorney fees pursuant to the terms of the Marital
and Property Settlement Agreement. Both Margot and Scott pray for attorney fees on
appeal. We affirm in part, reverse in part, and remand for further proceedings consistent
with this Opinion.
ISSUES
¶2
A restatement of Margot’s issues on appeal is:
1. Did the District Court err when it concluded Margot’s statements filed with the
court indicating that Scott was current on his child support obligations as of
September 2001 constitute judicial admissions and thus preclude an award of
back child support?
2. Did the District Court err when it determined that Margot had filed inconsistent
pleadings and imposed sanctions against her?
3. Did the District Court err when it held that Scott did not owe Margot for back
child support?
¶3
Scott raises the following issue on cross-appeal: did the District Court err by
failing to award Scott his attorney fees pursuant to a “prevailing party” contractual
2
provision, when the sanctions imposed on Margot covered only a portion of Scott’s
attorney fees?
FACTUAL AND PROCEDURAL BACKGROUND
¶4
Scott and Margot divorced in May 1993 and entered into a Marital and Property
Settlement Agreement (hereinafter “Settlement Agreement”) before the District Court.
Pursuant to the Settlement Agreement, Margot and Scott’s two children would live
primarily with Margot and Scott would pay Margot child support payments of $150 (later
$200) per month plus half the cost of the children’s uninsured medical expenses.
¶5
In October 2000, Scott filed a Motion to Amend the Parenting Plan to reflect
changes in the children’s residency arrangements.
In her response brief to Scott’s
motion, Margot set forth the statutory criteria to determine the best interests of the child
and, in doing so, made the statement that “[t]here is no issue of Scott’s having failed to
pay child support.”
Following a contested hearing, each party submitted proposed
findings of fact and conclusions of law. Margot again made the statement in Proposed
Finding No. 40 that Scott was current with his child support obligations, but the court did
not ultimately adopt this finding. In December 2001, the District Court granted Scott’s
motion as to the residency arrangement of the children; it did not modify child or medical
support obligations.
¶6
In March 2003, Scott suffered a catastrophic injury for which he received social
security disability benefits.
In February 2008, as a result of Scott’s injury, Margot
received a lump-sum social security payment of $8,097 for each child, and she began
receiving dependent’s benefits of $274 per month for each child.
3
¶7
On June 9, 2008, Margot filed a Motion for Determination of Back Child and
Medical Support Amount Due, in which she requested a determination of the child and
medical support amounts due to her from Scott. Margot claimed Scott owed her over
$34,000 in back child and medical support dating back to 1993. On July 31, 2008, Scott
filed his response, disputing Margot’s claims and arguing that Margot’s statements
regarding back child support were contradictory to earlier statements made under oath
and otherwise. On October 1, 2009, the court held a hearing in which it received
testimony from Margot and Nicholas L. Bordeau, an expert in child support
determination hired by Scott. Mr. Bordeau opined that Margot was overpaid by at least
$3,230.12 for the child support, accrued interest, and medical expenses obligations of
Scott for the period of September 25, 2001, to March 26, 2003, regardless of whether the
payments were applied first to principal and then to interest, or vice versa. The parties
agreed that the lump-sum payment should be applied to Scott’s outstanding child and
medical support obligations; however, the parties disagreed as to whether the lump-sum
should be applied first to principal or to interest. At that hearing, the court ordered that
the lump-sum social security payment be applied first to principal and then to interest.
¶8
Ultimately, the District Court found that Scott was current on child support
obligations through September 25, 2001, because Margot admitted as much in what the
District Court concluded were judicial admissions. Further, the court found that the
lump-sum social security payment was an overpayment, regardless of whether it was
applied first to principal or to interest, and therefore concluded that Scott was not in
4
arrearage for past due child or medical support. Finally, the court awarded Scott attorney
fees and costs as a sanction, because it concluded Margot’s pleadings were inconsistent.
¶9
Margot timely appeals these orders and prays for attorney fees.
Scott
cross-appeals the District Court’s March 23, 2010 order and prays for attorney fees.
Additional facts are included below as necessary.
STANDARDS OF REVIEW
¶10
We review a district court’s findings of fact to determine whether they are clearly
erroneous. In re Szafryk, 2010 MT 90, ¶ 18, 356 Mont. 141, 232 P.3d 361 (internal
citations omitted). A finding is clearly erroneous if it is not supported by substantial
evidence, if the trial court has misapprehends the evidence, or if a review of the record
leaves us with the definite and firm conviction that a mistake has been committed. Id.
We review a district court’s conclusions of law for correctness. Id.
¶11
We review a district court’s grant or denial of attorney fees for abuse of discretion.
In re Marriage of Gorton, 2008 MT 123, ¶ 45, 342 Mont. 537, 182 P.3d 746 (citing In re
Marriage of Mease, 2004 MT 59, ¶ 57, 320 Mont. 229, 92 P.3d 1148).
DISCUSSION
¶12
Issue One: Did the District Court err when it concluded Margot’s statements filed
with the court indicating that Scott was current on his child support obligations as
of September 2001 constitute judicial admissions and thus preclude an award of
back child support?
¶13
Margot acknowledges that she stated “[t]here is no issue of Scott’s having failed to
pay child support” in her November 2000 response to Scott’s Motion to Amend Parenting
Plan, and again asserted that “Scott is current with his child support obligations” in her
5
September 2001 Proposed Findings of Fact and Conclusions of Law filed with the
District Court. She argues, however, that these statements do not constitute judicial
admissions for two reasons. First, she asserts the statements are not judicial admissions
because the issue of the children’s residential arrangements, not child and medical
support, were before the court when she made these statements. Second, she argues that
her proposed finding cannot be a judicial admission because it was not ultimately adopted
by the District Court in its December 21, 2001 order. However, Margot does not dispute
either that she made these statements during the litigation surrounding interpretation of
the Settlement Agreement or that they are statements of fact.
¶14
A judicial admission is “an express waiver made in court by a party or its counsel
conceding the truth of an alleged fact,” Bitterroot Intl. Sys. v. Western Star Trucks, Inc.,
2007 MT 48, ¶ 41, 336 Mont. 145, 153 P.3d 627. “A judicial admission has a conclusive
effect upon the party who makes it, and prevents that party from introducing further
evidence to prove, disprove, or contradict the admitted fact.”
Id. (internal citation
omitted). To be binding, a judicial admission must be “an unequivocal statement of
fact.” Denke v. Shoemaker, 2008 MT 418, ¶ 84, 347 Mont. 322, 198 P.3d 284 (internal
citation omitted). A judicial admission “may occur at any point in the litigation process.”
Kohne v. Yost, 250 Mont. 109, 112, 818 P.2d 360, 362 (1991).
¶15
Margot asserts that our review of judicial admissions must be guided by the
five-part test set forth in Conagra, Inc. v. Neirenberg, 2000 MT 213, ¶ 45, 301 Mont. 55,
7 P.3d 369. However, Conagra is inapposite because the plain language of the five-part
test and our analysis in that case clearly applies to testimonial declarations, not to
6
pleadings and other documents filed with the court. See Conagra, ¶¶ 44-45. Here, we
are not concerned with testimonial declarations, but instead with the two separate
occasions on which Margot filed written statements with the district court unequivocally
stating that Scott was current with his child support obligations through at least
September 2001. We have not extended—and do not extend today—the five-part test set
forth in Conagra to pleadings and documents filed with the district court. The policy
concerns surrounding testimonial declarations—that declarants may be easily swayed by
aggressive cross-examination—simply do not exist when statements are written.
¶16
A written document, filed with a district court and signed by either the party or the
party’s attorney, is assumed to be, “to the best of the signer’s knowledge, information,
and belief formed after reasonable inquiry . . . well-grounded in fact and is warranted by
existing law or a good faith argument for the extension, modification, or reversal of
existing law,” as required by M. R. Civ. P. 11 (Rule 11). Both documents that contained
Margot’s statements above were signed by her attorney at the time and neither were
superseded or withdrawn at any point. Thus, it was not error for the District Court to
assume Margot’s written statements were true and to conclude that the statements were
judicial admissions.
¶17
Margot’s alternative argument—that her September 2001 proposed finding of fact
is not a judicial admission because the District Court did not adopt that finding—is
likewise unsupported in law. On appeal Margot states that “the Montana Supreme Court
has never examined whether judicial admissions may occur in proposed findings of fact
and there is a split between how judicial admissions are treated at the Federal and State
7
levels.” She then cites two federal cases for the proposition that “proposed findings of
fact cannot constitute judicial admissions as they are ‘no more than informal suggestions
for the assistance of the court.’ ” However, even a cursory reading of the federal cases
cited by Margot reveals that neither stands for such a bold proposition. Moreover, both
cases are factually inapposite: City of Cleveland v. Cleveland Elec. Illuminating Co., 538
F. Supp. 1257, 1280 (N.D. Ohio 1980), which is a pretrial order on numerous issues
presented prior to a retrial, refers to the evidentiary admissibility of proposed findings
that had been withdrawn by the party; and Parker v. Stern Bros. & Co., 499 S.W.2d 397,
411 (Mo. 1973), is a Missouri Supreme Court case that discusses proposed findings of
fact from a related federal court case that were submitted as a basis for a pretrial order
that was never signed. Margot cites no authority, nor do we find any, prohibiting district
courts—which exercise independent judgment in reviewing proposed findings of fact—
from ruling that statements made in proposed findings may constitute judicial admissions.
¶18
It is undisputed that Margot’s statements were statements of fact.
It is also
undisputed that Margot made these unambiguous statements in filings with the District
Court during the course of this case.
We therefore conclude that these statements
constitute judicial admissions and the District Court did not err in concluding that Scott
was current with his child support payments through September 2001.
We further
conclude that the District Court did not err in concluding that these judicial admissions
precluded Margot from now arguing the diametrically opposite position—that Scott owes
her back child support from May 1993 until November 2001.
8
¶19
Issue Two: Did the District Court err when it determined that Margot had filed
inconsistent pleadings and imposed sanctions against her?
¶20
In its June 2009 order, the District Court granted Scott’s motion for attorney fees
“to the extent that any time [Scott’s] attorney spent on the question of back child support
. . . [shall be] awarded as sanctions for inconsistent pleadings of [Margot] as described [in
this Order].” In its March 2010 order, the District Court awarded Scott partial attorney
fees “attributable to the child support dispute in the amount of $18,962.75 as of July 13,
2009.” The court order indicates that the amount of fees and costs is not contested, but
the awarding of fees and costs is contested.
¶21
Though the parties presume in their arguments on appeal that the District Court
awarded fees as sanctions pursuant to Rule 11, nowhere in its orders does the court
clearly state under what authority it did so—Rule 11, M. R. Civ. P. 26(g) (discovery
sanctions), § 37-61-421, MCA, its inherent authority, or otherwise. Without knowing the
legal basis for the sanction, it is impossible to ascertain whether the award constituted an
abuse of discretion.
However, we conclude it is unnecessary to remand for a
determination of the legal authority supporting the imposition of fees as sanctions, in
light of our disposition of Issue Four (¶¶ 26-29), which resolves all outstanding questions
regarding attorney fees. We therefore vacate the order of fees as a sanction.
¶22
Issue Three: Did the District Court err when it held that Scott did not owe Margot
for back child support?
¶23
Margot argues, without citation to the record or much in the way of legal
authority, that the District Court erred by relying on the testimony of Scott’s expert
witness, Nicholas Bordeau, at the hearing. She complains that Bordeau’s analysis was
9
erroneous because it presumed that Scott’s excess social security disability payments
should be applied first to the principal balance of child support arrearage and then to
interest. Margot’s cursory argument seems to be that such an application of social
security payments misapplies Montana law because unpaid child support becomes a
judgment debt similar to any other money judgment, and that payments thereon must first
be applied to interest, rather than principal. Scott argues that the court did not err, and
even if it did, the error was harmless because the bottom line was that regardless of
whether the social security payment was applied first to principal or interest, the end
result was that Margot was overpaid by roughly $3,230.
¶24
Margot again cites to inapplicable case law as authority for her position in her
opening brief.
“We have consistently held that, absent contrary provisions in a
dissolution decree, interest on child support arrearage is automatically collectable by [the]
judgment creditor spouse,” and interpreted this to mean that district courts have latitude
to calculate an award of child support payments and determine whether or not interest is
available. In re Marriage of Gingerich, 269 Mont. 161, 167, 887 P.2d 714, 717-18
(1994). Further, we have held that a lump-sum social security payment should be applied
to a parent’s arrearage from the time the parent was eligible for social security until the
children’s monthly benefits commence. In re Marriage of Cowan, 279 Mont. 491,
503-04,
928
P.2d
214,
222
(1996)
(relying
on
the
plain
language
of
Admin. R. M. 46.30.1542(1)(d), which was repealed in 1998 and transferred to
Admin. R. M. 37.62.144(1)(d)).
10
¶25
Here, the District Court heard testimony from Bordeau, a CPA and expert witness
on child support calculations. The record is replete with testimony, explanations, and
exhibits of how Bordeau calculated the amount of child support owed to Margot and how
he applied the lump-sum social security payment to the arrearage from the date Scott was
eligible for social security benefits until the date the children began receiving monthly
social security payments. The record also establishes that Bordeau offered numerous
different methods for calculating Scott’s child support obligations (including payment of
interest first then principal), and concluded that in every scenario Margot was overpaid.
Based on the record, we hold that the District Court did not err in concluding that Scott
did not owe Margot for back child support.
¶26
Issue Four: Did the District Court err by failing to award Scott his attorney fees
pursuant to a “prevailing party” contractual provision when the sanctions
imposed on Margot covered only a portion of Scott’s attorney fees?
¶27
Scott argues on cross-appeal that he is clearly the prevailing party and is entitled to
recover all his attorney fees and costs, including those on appeal, pursuant to the attorney
fees provision in the Settlement Agreement. Margot argues that Scott is not clearly the
prevailing party because a reversal of any of the issues has a profound effect on the
parties and their obligations.
¶28
Attorney fees provisions contained in marital settlement agreements are
enforceable agreements and the district court is bound by the agreement’s terms if they
are clear. In re Marriage of Caras, 263 Mont. 377, 385, 868 P.2d 615, 619-20 (1994). In
determining who is the prevailing party for purposes of attorney fees, no one factor is
dispositive. Doig v. Cascaddan, 282 Mont. 105, 112-13, 935 P.2d 268, 272 (1997)
11
(citing E.C.A. Env. Mgt., Inc. v. Toenyes, 208 Mont. 336, 345, 679 P.2d 213, 217-18
(1984)). The party who is awarded a money judgment is not necessarily the successful or
prevailing party; however, it is an important item to consider when deciding who, in fact,
prevails. Doig, 282 Mont. at 112-13, 935 P.2d at 272.
¶29
The language of the Settlement Agreement is clear—Section VII states “in any
action to enforce or interpret any provision of this agreement, the prevailing party shall
receive costs and attorney’s fees.” Scott is clearly the prevailing party since the District
Court determined not only that he was not in arrears on his child support obligation, but
also that he had overpaid. Therefore, we conclude the District Court erred when it
granted Scott only a portion of his attorney fees and costs as sanctions against Margot.
By the terms of the Settlement Agreement, Scott should have been awarded all of his
costs and attorney fees expended in defense of Margot’s claims, as the prevailing party.
CONCLUSION
¶30
For the foregoing reasons, we affirm in part and reverse in part and remand for
further proceedings consistent with this Opinion.
We affirm the District Court’s
conclusions that Margot’s statements constituted judicial admissions and that Scott did
not owe Margot back child support. We vacate the District Court’s imposition of fees as
sanctions. We deny Margot’s request for fees and grant Scott’s cross-appeal. We reverse
and remand for a hearing to determine all fees incurred by Scott in response to Margot’s
June 9, 2008 motion to determine back child and medical support both in the District
Court and on appeal. Scott shall not, however, recover those fees incurred in connection
with his cross-motion to revise child support and for a new parenting plan.
12
¶31
Reversed and Remanded.
/S/ PATRICIA COTTER
We concur:
/S/ JAMES C. NELSON
/S/ BETH BAKER
/S/ BRIAN MORRIS
/S/ JIM RICE
13
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