Opinion
No. A05-1018.
Filed March 14, 2006.
Appeal from the District Court, Dakota County, File No. F1-02-13034.
Michael L. Perlman, Karin Gjerset, Perlman Law Office, (for appellant).
Eric S. Rehm, (for respondent).
Considered and decided by Minge, Presiding Judge; Toussaint, Chief Judge; and Randall, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
On appeal from the denial of her motion to reopen the judgment dissolving her marriage to respondent-husband Darrin Gerr for fraud on the court, appellant-wife Rachel Wexler argues that (a) the district court erred in determining that it lacked authority to reopen dissolution judgments for fraud; and (b) the record shows husband fraudulently misrepresented his retirement assets. We reverse and remand.
FACTS
The December 2002 stipulated judgment dissolving the parties' marriage stated, among other things, that husband did not have a retirement account. Wife subsequently learned that husband did have retirement assets and, in January 2004, moved to reopen the judgment for fraud on the court. Later, wife moved to compel husband to respond to certain discovery requests she had put to husband in support of her motion to reopen the judgment. After a hearing, the district court denied wife's motion to compel because it was made more than a year after the dissolution judgment was entered, and because of the weight accorded stipulated judgments entered with the assistance of counsel. Wife appeals.
DECISION I.
Initially, we consider the nature of the district court's action that preceded this appeal. The parties' briefs address the district court's "denial" of wife's motion to reopen their dissolution judgment. The district court's order, however, denied wife's motion to compel husband's production of information that was discoverable during the dissolution action. The district court apparently concluded that no discovery was in order because wife's motion to reopen for fraud on the court was made more than one year after judgment was entered. See Minn. Stat. § 518.145, subd. 2(3) (2004) (requiring motion to reopen for fraud to be made within a "reasonable time" and not later than one year after entry of judgment). On this record, we construe the district court's denial of wife's motion to compel production of discovery as denial of a motion to reopen the judgment.
II.
Next, we consider whether the district court abused its discretion in denying the motion to reopen the judgment. Generally, once the time to appeal a dissolution judgment has expired, the divisions of real and personal property in that judgment are final and may be revoked or modified only if a district court reopens the judgment. Minn. Stat. § 518.64, subd. 2(e) (2004); see Shirk v. Shirk, 561 N.W.2d 519, 522 (Minn. 1997) (stating "sole" relief from dissolution judgment "lies in meeting the requirements of Minn. Stat. § 518.145, subd. 2 [for reopening a judgment]"); see also Clark v. Clark, 642 N.W.2d 459, 465 (Minn.App. 2002) (reciting abuse of discretion standard of review for decisions rejecting whether to reopen a judgment).
The grounds for reopening a judgment include both ordinary fraud and fraud on the court. Minn. Stat. § 518.145, subd. 2(3) (fraud); id., subd. 2 (noting requirements of Minn. Stat. § 518.145, subd. 2, do not limit district court's ability "to set aside a judgment for fraud upon the court"). Although similar, ordinary fraud and fraud on the court are separate concepts. See Maranda v. Maranda, 449 N.W.2d 158, 165 (Minn. 1989) (distinguishing ordinary fraud from fraud on the court). The supreme court has "decline[d]" to articulate a precise definition of "fraud on the court," but has indicated that the difference between ordinary fraud and fraud on the court "is primarily a difference of degree rather than kind[,]" and that reopening a judgment for ordinary fraud requires satisfaction of a less-strenuous standard than that for reopening a judgment for fraud on the court. Id. at 165; see Doering v. Doering, 629 N.W.2d 124, 128-29 (Minn.App. 2001) (contrasting standards for ordinary fraud and fraud on the court), review denied (Minn. Sept. 11, 2001). Another difference between ordinary fraud and fraud on the court is that a motion to reopen a judgment for ordinary fraud must be made "within a reasonable time" and "not more than one year after the [entry of the judgment,]" while a motion to reopen for fraud on the court may be made more than one year after entry of the judgment. See Minn. Stat. § 518.145, subd. 2 (reciting one-year limit for ordinary fraud, but not for fraud on the court); Maranda, 449 N.W.2d at 166 (noting, "[i]n most cases, a year or two should suffice to discover the fraud[,]" but allowing a motion to reopen for fraud on the court made six years after entry of judgment, stating it was "an extreme example and probably reaches to the outer limits of reasonableness").
Here, wife sought to reopen the judgment for "fraud upon the court" and cited fraud-on-the-court authorities. The district court, however, denied wife's motion to reopen stating "[t]he motion [to reopen] must be made not more than one year after entry of the Judgment and Decree. [Wife's] motion was filed more than one year after entry of the Judgment and Decree." Thus, the district court denied wife's motion to reopen, in part, based on the timing requirement applicable to motions to reopen for ordinary fraud rather than fraud on the court. "An incorrect application of the law constitutes an abuse of the district court's discretion." Clark, 642 N.W.2d at 465. To the extent the district court denied wife's motion based on wife's failure to make her motion to reopen within one year of the entry of the judgment, the district court abused its discretion.
Another basis for the district court's denial of wife's motion to reopen the judgment was its belief that the finality of judgments "is favored in the law" and that, when entering their stipulation, the parties had the advice of counsel, participated in "extensive mediation and negotiations" and acknowledged on the record that the stipulation was fair and reasonable. The district court correctly stated the general rule, but, for two reasons, we reject the applicability of that general rule here.
First, dissolution case law is clear regarding a party's duty of disclosure:
[I]t is not necessary in a marital-dissolution context to show that the adverse party intentionally failed to disclose all of the marital assets. Because the confidential relationship between the parties creates an affirmative duty to disclose, nondisclosure is sufficient to establish a breach of that duty, without evidence of intent. Further, because the duty to make a full and fair disclosure is an affirmative duty, there is no requirement that the moving party show that he requested the information that was not disclosed; the duty to disclose exists in the absence of such a request.
Doering, 629 N.W.2d at 131 (emphasis in original). Doering continues, noting "[o]f course, a party to a marital dissolution could theoretically waive all rights to receive full disclosure from the adverse party." Id. Here, while it is undisputed that wife waived a trial on property issues, there is no allegation or finding that she waived her right to receive full disclosure of the marital assets held in husband's name. Indeed, before judgment was entered on the stipulation (in part based on husband's assertion that he had no retirement assets), wife asked husband to verify his lack of retirement assets. Husband did not respond to that request. In sum, not only did husband fail to honor his affirmative duty of disclosure without a request, but he also ignored a request for relevant information.
In this case, we reject the policy favoring finality of stipulated settlements for a second reason — the apparent deliberate character of husband's nondisclosure. Because of the extent of the parties' disagreements regarding their child, it appears that husband may have intended not to disclose any financial information. His April 9, 2004 affidavit states:
What the court needs to know is that my position has been consistent from the very moment of our separation, and that is that I will not deal with any assets, any income or financial issues until we totally resolve the issues regarding our daughter, [the child]. It was my position then and it is my position now that [the child] is the primary focus of any parents' relationship.
His affidavit also states that "[t]he discussions at that time between my attorney and [wife's] attorney were getting very difficult." The attitude suggested by husband's affidavit, as well as his refusal to respond to wife's inquiries about retirement assets are fundamentally contrary to his affirmative obligation, discussed in Doering, to disclose financial information.
We note, but because it was not considered by the district court, we do not address, case law allowing marital interests in property not considered by a dissolution judgment to be apportioned after the judgment has otherwise become final. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (stating that appellate courts generally address only issues and theories presented to and considered by the district court); Neubauer v. Neubauer, 433 N.W.2d 456, 461 n. 1 (Minn.App. 1988) (stating that pension benefits omitted from property division in otherwise final dissolution judgment could be divided as "omitted property"), review denied (Minn. Mar. 17, 1989); see also Searles v. Searles, 420 N.W.2d 581, 583 (Minn. 1988) (stating that "where a decree makes no division of any real estate and, indeed makes no mention of real estate, it would seem the matter of ownership rights remains to be determined" (footnote omitted)); cf. Brink v. Brink, 396 N.W.2d 95, 97 (Minn.App. 1986) (stating that "[w]e are aware of no legal theory under which a party to a dissolution who unintentionally omits an asset from a property division is considered to have abandoned his or her rights to that asset").
III.
Because the district court based its denial of wife's motion on the motion's purported untimeliness and the weight to be given the judgment, the district court did not address whether fraud on the court existed. Whether fraud on the court exists is a finding of fact. See Maranda, 449 N.W.2d at 164 (stating "[a] finding of fraud on the court and the administration of justice must be made under the peculiar facts of each case"). This court does not find facts on appeal. Kucera v. Kucera, 275 Minn. 252, 254, 146 N.W.2d 181, 183 (1966); Clark, 642 N.W.2d at 467. Therefore, we remand for the district court to determine whether fraud on the court occurred and, if it did, to reopen the judgment and make any necessary adjustment in the distribution of the parties' marital property.