                                           No. 03-432

                IN THE SUPREME COURT OF THE STATE OF MONTANA

                                           2004 MT 241


IN RE THE MARRIAGE OF

GLENN N. KOLCZAK,

               Petitioner and Appellant,

         and

FAYE KOLCZAK,

               Respondent and Respondent.



APPEAL FROM:          District Court of the Sixteenth Judicial District,
                      In and for the County of Rosebud, Cause No. DR 90-78,
                      The Honorable Joe L. Hegel, Judge presiding.


COUNSEL OF RECORD:

               For Appellant:

                      John Hollow, Attorney at Law, Helena, Montana

               For Respondent:

                      Allen Beck, Attorney at Law, Zortman, Montana


                                                         Submitted on Briefs: November 13, 2003

                                                                   Decided: September 2, 2004
Filed:


                      __________________________________________
                                        Clerk
Justice Jim Regnier delivered the Opinion of the Court.

¶1     Glenn Kolczak sought a ruling from the District Court that he no longer had an

obligation to provide health insurance or to pay medical bills for his ex-wife, Faye Kolczak,

pursuant to their written Stipulation As to Medical Insurance. The District Court concluded

that the issue is res judicata. We affirm the District Court.

¶2     The sole issue we address on appeal is whether the District Court erred in concluding

that the 1994 determination that Glenn is obligated to provide medical insurance for Faye is

res judicata.

                                     BACKGROUND

¶3     The District Court dissolved Glenn and Faye’s marriage by Decree of Dissolution on

July 30, 1990. The Decree of Dissolution adopted the parties’ June 19, 1990, Property

Settlement, Child Custody, and Support Agreement (Agreement). Among other things, the

Agreement provided that Glenn “maintain coverage for the benefit of the wife under his

health insurance provided to him by his employer, and husband will be responsible for any

additional payment of premium necessary to maintain wife under the described insurance.”

The Agreement also provided that “It is agreed that no maintenance payment for wife is

required.”

¶4     Following the Decree of Dissolution, Glenn maintained health insurance coverage for

Faye through the policy provided to him as a benefit of his employment. COBRA limits the

amount of time an employee may keep a former spouse on his or her employer-provided

health insurance policy to three years. This meant that Faye could only be covered on

Glenn’s employer-provided policy until June 30, 1993. At some point in 1993, Faye went

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to see a doctor and discovered she no longer had health insurance coverage.

¶5     On March 7, 1994, Glenn filed a motion seeking to modify the Agreement so he no

longer would be required to maintain coverage for Faye under his health insurance provided

to him by his employer. Glenn characterized the requirement to provide health insurance as

a maintenance provision.      He claimed it should no longer apply due to changes in

circumstance. Before the District Court ruled on Glenn’s motion, the parties negotiated an

oral stipulation whereby Glenn agreed to obtain and continue separate health insurance

coverage for Faye. Pursuant to the oral stipulation, Faye submitted her proposed Findings

of Fact, Conclusions of Law and Order, which the District Court signed on May 26, 1994.

¶6     Glenn and Faye entered into a written Stipulation As to Medical Insurance

(Stipulation) on August 16, 1994, in which Glenn agreed to pay for Faye’s health insurance

under a new policy. The District Court subsequently adopted the stipulation. The relevant

portions of the Stipulation provide that (1) the District Court’s Findings of Fact, Conclusions

of Law and Order filed May 26, 1994, require Glenn to continue to provide medical

insurance coverage for Faye; and (2) that Faye would accept a Blue Cross policy with a

$2500 deductible and 100% medical coverage thereafter, but with no dental or optometric

coverage, in exchange for Glenn’s agreement to pick up the entire $2500 deductible. No

termination date was specified. Glenn then resumed his coverage of Faye’s health insurance

as provided for in the Stipulation. The District Court never had an opportunity to rule on

Glenn’s “changes in circumstance” argument. However, we note that in the Decree as well

as in the May 26, 1994 Order, Glenn’s obligation to pay for Faye’s medical coverage was

characterized as a property disposition rather than maintenance.

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¶7     Glenn retired from his employment in March of 2001. In July of that year he had an

attorney attempt to change the Blue Cross policy to a less expensive HMO. Glenn continued

to pay Faye’s medical insurance and bills for seven months after his retirement, until October

of 2001. On November 21, 2001, Faye received notice that her insurance coverage through

Blue Cross had been terminated as of November 2001. Thereafter Faye filed a Petition for

Contempt and Request for Hearing, asking the District Court to hold Glenn in contempt,

require him to pay her outstanding medical bills, and resume her health insurance coverage

pursuant to the Stipulation. Glenn sought a ruling from the District Court that he no longer

had an obligation to provide health insurance or to pay medical bills for Faye under the

parties’ Stipulation. Glenn argued that pursuant to the parties’ Decree of Dissolution, his

liability to provide Faye with medical insurance should have terminated when he could no

longer provide it through his employer, which, pursuant to COBRA, was limited to three

years from the date the marriage was dissolved.

¶8     The District Court disagreed with Glenn, finding that his effort to end coverage was

res judicata. The District Court ordered Glenn to continue to provide Faye with medical

insurance coverage and medical expense payments as provided in the Stipulation and to pay

all of Faye’s medical expenses not paid by insurance incurred on or after entry of the Decree

of Dissolution. Glenn appeals from the District Court’s Order.

                                STANDARD OF REVIEW

¶9     We review a District Court’s conclusions of law to determine whether the court’s

interpretation of the law was correct. Marriage of Kovash (1995), 270 Mont. 517, 521, 893

P. 2d 860, 863.

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                                        DISCUSSION

¶10    Did the District Court err in concluding that the 1994 determination that Glenn is

obligated to provide medical insurance for Faye is res judicata?

¶11    Res judicata bars a party from relitigating a matter that the party has already had the

opportunity to litigate. Watkins Trust v. Lacosta, 2004 MT 144, ¶ 26, 321 Mont. 432, ¶ 26,

92 P.3d 620, ¶ 26. The doctrine of res judicata applies if the following four elements have

been satisfied: (1) the parties or their privies are the same; (2) the subject matter of the

present and past actions is the same; (3) the issues are the same and relate to the same subject

matter; and (4) the capacities of the persons are the same in reference to the subject matter

and to the issues between them. Watkins Trust, ¶ 27.

¶12    Glenn argues that at the time the District Court entered its Findings, Conclusion and

Orders in 1994, Glenn had not yet retired from employment and therefore did not have the

right to terminate the insurance that was based on his employment. Because the issue of the

duration of Glenn’s obligation to pay Faye’s medical insurance was not addressed at that

time, Glenn argues it is not res judicata.

¶13    The District Court concluded that although Glenn did not raise the issue of the effect

of COBRA in 1994, he could have. In 1994, rather than argue that his obligation to pay for

Faye’s medical coverage be limited by COBRA or the Decree, he argued that the health

insurance provision was in the nature of maintenance and should be deleted in the face of

changed circumstances. The District Court stated that nothing prevented Glenn from arguing

COBRA at that time, and surmised that had he done so the outcome may have been different.

¶14     We agree with the District Court. The doctrine of res judicata bars not only issues

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that were actually litigated, but also those that could have been litigated in a prior

proceeding. Mills v. Lincoln County (1993), 262 Mont. 283, 286, 864 P.2d 1265, 1267. A

party should not be able to litigate a matter that the party already had the opportunity to

litigate. Sheffield Ins. v. Lighthouse Properties (1992), 252 Mont. 321, 324, 828 P.2d 1369,

1371. This notion arises from public policy designed to prevent endless piecemeal attacks

on previous judgments. Wellman v. Wellman (1982), 198 Mont. 42, 45-46, 643 P.2d 573,

575. Glenn could, and perhaps should, have raised the COBRA issue relating to the duration

of his obligation in 1994. He did not do so. Instead, he entered into a stipulation to continue

to provide insurance coverage with no termination date and the District Court entered an

order based on the stipulation. Glenn is barred by the doctrine of res judicata from raising

the COBRA issue now.

¶15    We affirm the District Court.


                                                          /S/ JIM REGNIER

We Concur:

/S/ KARLA M. GRAY
/S/ W. WILLIAM LEAPHART
/S/ JAMES C. NELSON
/S/ JOHN WARNER


Justice Patricia O. Cotter concurs.


¶16    I concur in the result of our Opinion, although not necessarily with the rationale

advanced by the Court.




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¶17    An order requiring one spouse to pay for health insurance for the benefit of the other

spouse could be considered an order of maintenance, or it could be construed to be part of

property disposition. Here, the court characterized it as property disposition in its 1994

Order, and Glen failed to object to this characterization. This being so, it was incumbent

upon Glenn, in seeking to modify the order of property disposition, to either secure Faye’s

agreement to the modification, or establish “. . . the existence of conditions that justify the

reopening of a judgment under the laws of this state.” Section 40-4-208(3)(b), MCA.

I would conclude that Glenn both failed to identify this as the appropriate test, and failed to

satisfy its stringent requirements, and would affirm on that basis. I would not reach the res

judicata analysis.


                                                   /S/ PATRICIA O. COTTER


Justice Jim Rice dissenting.

¶18    I dissent.

¶19    First, the Court confuses two of Glenn’s arguments. The Court concludes it is

unnecessary to reach the merits of Glenn’s claim because he “should[] have raised the

COBRA issue” in 1994 and he is “barred by the doctrine of res judicata from raising the

COBRA issue now.” See ¶ 15. However, that conclusion does not resolve the case. Glenn’s

COBRA issue was just one of several arguments raised by Glenn, both in the District Court

and before this Court. His primary argument is that the parties’ settlement agreement cannot

be interpreted–without regard to COBRA–as requiring him to provide health insurance to

Faye after cessation of his employment and for her lifetime.

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¶20    Res judicata should not preclude Glenn’s primary argument. The District Court

stated, erroneously, as follows:

              The Court agrees that the Court’s 1994 Findings, Conclusions and
       Orders are res judicata of the issue now before the Court. Although Glenn’s
       previous attorney, John Houtz, did not raise the issue of the effect of the
       federal COBRA law, the question [was] whether Glenn should have to
       continue to provide such medical coverage after the coverage was no longer
       available through his employer. [Emphasis added.]

However, this was not the issue in 1994. Rather, Glenn moved for modification of the

original agreement to eliminate the insurance requirement on the grounds of changed

circumstances: that Faye was living with another party who was supporting her and that the

parties’ child was no longer residing with Faye. His employment had nothing to do with his

motion for modification filed March 7, 1994.

¶21    The issue now is whether the agreement imposes a lifetime obligation upon Glenn to

provide insurance to Faye following the cessation of his employment. This issue was not

raised by either party or addressed by the District Court in 1994. Further, because Glenn

was employed at that time, the issue was arguably not then ripe, and I would not apply res

judicata to preclude Glenn’s raising of the issue now. Glenn’s retirement raises an important

issue regarding the original agreement’s meaning.

¶22    The parties’ original agreement required that Glenn “shall maintain coverage for the

benefit of the wife under his health insurance provided to him by his employer . . . .” The

orders entered by the District Court in 1994 did not address the employment issue, but

simply concluded that Glenn’s motion for modification, based upon changed circumstances,

was without merit, and affirmed the terms of the original agreement, stating: “[Glenn] shall


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obtain medical insurance for [Faye] as required by the Property Settlement, Child Custody

and Support Agreement . . . .” (Emphasis added.) The orders did not revise Glenn’s original

insurance obligation. They reaffirmed it against a requested modification.

¶23    In this matter, the District Court concluded that the unwritten “gist” of the 1994 orders

was to impose a continuing obligation upon Glenn to provide insurance to Faye that was not

limited to the time of his employment, holding that “[a]lthough not explicitly stated, it is

implicit that Glenn should continue to provide such medical coverage for her lifetime.” This

conclusion is incorrect in two respects. First, the 1994 orders imposed no new obligation

upon Glenn, but, rather, re-imposed the original obligation, which was to maintain insurance

for Faye as “provided to him from his employer.” Second, the agreement should not be

interpreted to implicitly impose a post-employment, lifetime obligation upon Glenn, when

such a far-reaching requirement was not mandated by the agreement, and when the obligation

as stated was linked to his employment.

¶24    I would not by implication impose an obligation upon Glenn and, following his death,

upon Glenn’s estate, to provide insurance for Faye for the remainder of her life. Therefore,

I would reverse.

                                                          /S/ JIM RICE




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