Dickson v. Fletcher

• Citation: 206 S.W.3d 229
• Decision Date: 31 March 2005
• Docket Number: No. 04-741.,04-741.
• Parties: Dickie Bud DICKSON, Appellant, v. Martha Sue (Dickson) FLETCHER, Appellee.
• Court: Supreme Court of Arkansas

206 S.W.3d 229

Dickie Bud DICKSON, Appellant, v. Martha Sue (Dickson) FLETCHER, Appellee.

No. 04-741.

Supreme Court of Arkansas.

March 31, 2005.

COPYRIGHT MATERIAL OMITTED

Bell Law Firm, P.A., by: Karen Talbot Gean and Ronny J. Bell, Magnolia, for appellant.

Mitchell, Blackstock, Barnes, Wagoner, Ivers & Sneddon, by: Jack Wagoner, III, Little Rock, for appellee.

TOM GLAZE, Justice.

The parties in this case, Dickie "Bud" Dickson and Martha Sue Dickson Fletcher, were divorced on September 2, 1994. The divorce decree purportedly set forth all of the parties' properties and indebtedness and divided these properties and debts between Dickie and Martha. Martha was also awarded an amount of monies in lieu of her rights in Dickie's medical practice, and, in addition, Dickie was directed to pay Martha $5,000 per month as alimony until further order of the court. In its decree, the trial court specifically detailed what was understood to be all of the Dicksons' real and personal properties and provided how these marital holdings, interests, and various debts would be divided between the couple. The court concluded the decree by retaining jurisdiction of the parties and the subject matter for appropriate future orders.

The Dicksons later found themselves in a post-decree dispute during which Martha's attorney deposed Dickie's accountant, Stephen B. Humphries. At that deposition, on December 16, 1998, Humphries produced a statement reflecting Dickie's net worth, which included shares of Exxon stock valued at about $102,766. Though Dickie owned the Exxon stock at the time of the parties' divorce, Martha charged that Dickie never disclosed this stock, even though Martha requested in her discovery that he identify all of the stocks he owned. Upon learning that Dickie had failed to reveal the Exxon shares at the time of their divorce, Martha filed a motion, using the same docket number from the parties' 1994 divorce case, in which she alleged Dickie had committed fraud during their divorce proceeding by presenting a false and misleading financial statement to the court. In her motion, she asked the court to divide the Exxon stock equally or order Dickie to pay her one-half of the value of the stock.

In response, Dickie claimed that Martha's action was barred by the statute of limitations under Ark.Code Ann. § 16-56-105 (1987). Dickie also relied on the defenses of lack of jurisdiction over his person and insufficiency of process. Dickie subsequently filed a motion to dismiss Martha's motion to divide the Exxon stock, arguing that Martha's motion asserted an additional or new claim for relief against him. Accordingly, he argued, she was required to serve a summons and complaint under Ark. R. Civ. P. 4(d)(8)(A), as provided by Ark. R. Civ. P. 5. Dickie contends that Martha never properly served him under Rule 4.

Although Rule 5(a) provides that pleadings asserting new or additional claims for relief shall be served in the manner provided for service of summons in Rule 4, Martha pointed the judge to Rule 5(b)(3), which reads, "If a final judgment or decree has been entered and the court has continuing jurisdiction, service upon a party by mail or commercial delivery company shall comply with the requirements of Rule 4(d)(8)(A) and (C), respectively." (Emphasis added.) Martha argued to the trial judge that Rule 4(d)(8)(A) refers to a summons and complaint, but her situation involved a post-decree motion in a case in which the trial court had specifically retained jurisdiction of the matter; therefore, she argued, a new complaint and summons were not required to be served.

The trial court agreed with Martha's argument, and added that the intent of these rules with respect to a post-decree motion is to assure that such a motion is sent to the party, rather than to the party's attorney, and that the motion to modify or vacate a decree is served on the party in compliance with the methods set out in Rule 4. We agree with the trial judge's findings and ruling. Accordingly, we conclude that the purpose of Rule 5(b)(3) is not to require that a party must serve summonses with motions to modify a final decree when the court has reserved continuing jurisdiction. Instead, Rule 5 simply directs that such motions are required to be served in the same manner or method required for a summons and complaint, that is, served by mail with a return receipt requested and delivery restricted to the addressee or his or her agent. See Rule 4(d)(8)(A)(i); see also In re: Arkansas Rules of Civil Procedure 4, et seq., 336 Ark. Appx. 588 (1999).

In affirming the trial judge on this point, we are mindful of Dickie's reliance on the case of Office of Child Support Enforcement v. Ragland, 330 Ark. 280, 954 S.W.2d 218 (1997). In so doing, he submits that the Ragland court looked to case law addressing the trial court's continuing personal jurisdiction over the parties in a divorce action. The Ragland court, Dickie argues, held that a trial court has continuing personal jurisdiction over parties to a divorce with respect to support and alimony matters. However, Dickie argues, the trial court is not deemed to have continuing jurisdiction over every dispute that may arise between the former parties to a divorce action. Citing Jones v. Jones, 26 Ark.App. 1, 759 S.W.2d 42 (1988), Dickie adds that "a general reservation of jurisdiction will permit modification of a decree after ninety days only with respect to issues [that] were before the trial court in the original action." Dickie concludes that a trial court's recitation in the divorce decree that it retained jurisdiction for all future proceedings does not, absent grounds for so doing, allow it to divide marital property not mentioned in the decree after ninety days. See Rule 60(c).

We point out that the parties' decree before us shows that Dickie is required to pay Martha $5,000 per month as alimony "until further order of the court"; therefore, this language clearly reflects that the order to make alimony payments is not final and could require further proceedings. Nonetheless, having made that declaration, the trial court also found it necessary to provide at the end of the decree that it was retaining jurisdiction of the parties and the subject matter for appropriate future orders. Considering the substantial amount of properties and debts divided and distributed between the parties in the decree, it is reasonable to conclude that the trial judge foresaw that she might be asked to address more issues than those involving alimony in the future. Of course, that is exactly what happened.

Dickie also takes issue with the trial court's grant of Martha's summary-judgment motion. In so doing, the trial court modified the parties' divorce decree under Rule 60(c)(4) because Dickie had committed a misrepresentation or fraud. In this respect, the trial court determined that, at the time of the divorce, Dickie introduced into evidence a statement of net worth which failed to disclose his ownership of the shares of Exxon stock now in issue.

On appeal, Dickie argues that the trial court erred on this point because Martha could have taken depositions of Dickie's stock brokers and financial advisors to ascertain whether Dickie had knowledge of the Exxon stock at the time of the parties' divorce. Dickie suggests that, because Martha offered no evidence that he actually knew the Exxon shares existed, she failed to show either intentional or constructive fraud.

Despite Dickie's arguments, the trial judge held that Martha was not required to show a subjective intent to engage in fraud on Dickie's part, and that her proof of constructive fraud was sufficient to reopen a divorce under Rule 60(c)(4). The judge specifically found that Martha proved constructive fraud by showing Dickie had a legal and equitable duty to be truthful in his discovery responses and in his testimony at trial. The trial judge concluded that, even if Dickie's misrepresentation was unintentional when he omitted his Exxon stock, valued in excess of $100,000.00, such an unintentional misrepresentation constituted constructive fraud.

Again, the trial court is correct. This court has held that constructive fraud or the breach of a legal or equitable duty to another warrants setting aside or modifying a judgment. See RLI Ins. Co. v. Coe, 306 Ark. 337, 347, 813 S.W.2d 783, 788 (1991); see also Davis v. Davis, 291 Ark. 473, 725 S.W.2d 845 (1987). A party to a legal proceeding owes a duty to answer discovery requests under oath, Ark. R. Civ. P. 33(b), and is under a further duty to reasonably amend a prior response to discovery when he knows that the response, though correct when made, is no longer true, and the circumstances are such that a failure to amend the response is in substance a knowing concealment. Phillips v. McAuley, 297 Ark. 563, 764 S.W.2d 424 (1989) (citing Ark. R. Civ. P. 26(e)(2)).

In the instant case, Dickie never denied that his responses to Martha's discovery requests omitted his Exxon stock and that he failed to supplement his discovery responses. In addition, Dickie neither denied that his statement of net worth at the time of the parties' divorce omitted the disputed stock, nor did he deny that he presented false testimony by stating his statement of worth was complete. Thus, the trial court did not err in ruling that Dickie had committed fraud.

Finally, we address Dickie's argument that, even if Martha's proof is sufficient to show constructive fraud, such fraud was intrinsic, which was not a ground in 1994 for setting aside or modifying the parties' decree under Rule 60(c)(4). At the time of the Dicksons' divorce, Rule 60(c)(4) provided that only extrinsic fraud was a ground for reopening a judgment or decree ninety days after the judgment or decree was filed. Our court has described extrinsic fraud as that practiced upon the court in the procurement of the judgment itself, and not merely in the original cause of...