Doheny v. Kohler

• Court: Wisconsin Supreme Court
• Writing for the Court: ROBERT W. HANSEN
• Citation: Doheny v. Kohler, 254 N.W.2d 482, 78 Wis.2d 560 (Wis. 1977)
• Decision Date: 14 June 1977
• Docket Number: No. 75-380,75-380
• Parties: Sherry Kohler DOHENY, Appellant, v. Carl J. KOHLER, Respondent.

Page 482

254 N.W.2d 482

78 Wis.2d 560

Sherry Kohler DOHENY, Appellant, v. Carl J. KOHLER, Respondent.

No. 75-380.

Supreme Court of Wisconsin.

Submitted on Briefs May 4, 1977.

Decided June 14, 1977.

On March 30, 1967, the plaintiff, Sherry Kohler Doheny, secured a decree of absolute divorce from the defendant, Carl J. Kohler. In the trial of that action in the county court of Sheboygan county the parties submitted a stipulation as to the division of estate, based on an agreed-to valuation of the property involved, including 4,000 shares of Kohler Company common stock. The stipulation was approved by the court in the divorce action and made part of the record. Following the joint recommendations of the parties in their stipulation, the court in the divorce action awarded the plaintiff wife, Sherry Kohler (now Doheny), approximately $199,000, 43 percent of the net marital estate of the parties.

On March 16, 1972, plaintiff Sherry Kohler Doheny commenced this action for modification of the divorce judgment, alleging that defendant husband in the divorce action "wilfully, dishonestly and fraudulently" concealed the true market value of the 4,000 shares of Kohler Company common stock, and further alleging that her trial counsel in the divorce action did not make adequate investigation as to the market value of the Kohler stock and that her trial counsel advised her to sign the stipulation to avoid "financial consequences to her detriment."

Following trial to the court of the present action, the trial court found no proof of fraud, deceit, neglect or concealment by the defendant of any part of his estate; found that plaintiff had signed the stipulation with knowledge of the facts; found that her trial counsel in the divorce action made an independent investigation as to market value of the stock; and further found that the stipulated valuation of $100 per share of Kohler stock was consistent with the going market value of said stock considering the circumstances. Judgment was entered dismissing plaintiff's complaint and from that judgment plaintiff appeals.

Rabinovitz & Sonnenburg, Sheboygan, for appellant.

Jack H. Kalman, Sheboygan, for respondent.

ROBERT W. HANSEN, Justice.

The axiom "Hope springs eternal" is particularly true where there is a chance of gain and no risk of loss. So it is not unusual for a divorce litigant to stipulate to a proposed division of estate in a divorce action, and, subsequently, to repent of the bargain made. Given such change of heart and mind, it is not unusual for an action to be brought seeking a modification of the divorce judgment as to division of estate, even though such division was based on a joint stipulation of husband and wife in the divorce proceeding. That is the situation here. ¹ With new counsel engaged to seek and secure a more favorable result, it is also not unusual for the successor to target the recommendation of his client's trial counsel that the stipulation be agreed to. That is also the situation here. ² So, eight years after the decree of absolute divorce was entered, plaintiff here seeks to modify the judgment as to a property division that was based upon a stipulation of the parties.

In this state four avenues of relief are open to a party challenging a judgment in the trial court: ³

(1) Sec. 269.46(1), Stats., provides relief from a judgment on the grounds of mistake, inadvertence, surprise or excusable neglect at any time within one year after notice of the judgment. Clearly this time has passed in the case before us.

(2) Sec. 269.46(3), Stats., provides that a judgment may be reviewed "at any time within 60 days from service of notice of entry thereof, but not later than 60 days after the end of the term of entry thereof." As clearly, this time has also passed in this case.

(3) Sec. 274.36, Stats., provides for further proceedings in trial court where the supreme court orders further action or proceedings. Obviously this statute is not applicable to this case.

(4) The fourth avenue is an independent action in equity to restrain enforcement of the unconscionable judgment. Except for the power of the court to vacate a judgment that is void, or to correct the judgment so as to conform to the actual pronouncement of the court, this is the only road that avoids the time limits of the above three statutes. Of this authority of a court in equity to restrain enforcement of a judgment, our court has held that it should be exercised " '. . . sparingly, and only in cases where serious inequity, approaching at least the unconscionable, would result from carrying out the original judgment.' " ⁴ It is this relief on such equitable grounds that the plaintiff here seeks to secure, even though the judgment has been carried out.

As the basis for her claim to equitable relief in her complaint, the plaintiff alleged that her defendant husband, in the divorce action, ". . . did wilfully, falsely and fraudulently conceal from the plaintiff and the Court the true value of his assets particularly as to the value and amount of the stock of the Kohler Company." We see and draw a distinction between concealment as to amount and as to a representation as to value. Deliberate concealment of the existence of stock or property holdings would, almost ipso facto, constitute not only a fraud on the court, but also would render incomplete the division of estate in the divorce decree. However, as to statements of value, much as occurs in settling a claim for personal injuries, some measure of overstatement of value by one party and understatement of value by the other is to be anticipated in the bargaining or negotiations for a stipulation as to property division in a divorce action. Both parties have the opportunity not only to investigate but also to produce testimony as to value of stock or property holdings where such value is in dispute. It is true that this court in a 4-to-3 decision held that "proof as to value is at the very least germane to an inquiry into alleged fraud." ⁵ But in the dissenting opinion, three justices agreed that:

". . . where the parties enter into a stipulation providing for a division of estate and the stipulation has the approval of the court that in the absence of a showing of concealment of assets the complaining party cannot be relieved from the effects of the stipulation unless he acts within the year pursuant to sec. 269.46, Stats." ⁶

We find the dissent to be a proper statement of the law on the point involved accepting it and withdrawing any language in the majority opinion in Houston that conflicts. The reason for so doing should be clear: If, in negotiating a stipulation to be submitted to the court in a divorce action, a party litigant, husband or wife, elects not to check on a statement as to value of an asset made by the other party, that is, at the most, a "mistake" or "excusable neglect," covered by sec. 269.46(1), Stats., and remedy on such account must be sought within the one-year time limit set by such statute. In the case before us, the distinction here made between cases where there is a stipulation or shared recommendation of the parties as to division of estate and those cases where there is not is not crucial. Here the trial court found that at the time of the divorce proceedings there was "no proof that any representation (as to value of the stock) was made by the defendant." ⁷ Review of the record indicates that not only is that finding correct, but, in fact, on this appeal, plaintiff has largely abandoned her original claim that her defendant ex-husband fraudulently misrepresented the value of the Kohler stock at the time the stipulation was entered into. Instead, on this appeal, plaintiff relies for her right to equitable relief on the claim that her trial counsel made an inadequate investigation as to the value of the stock, ⁸ and that "any acts on the part of her counsel are not imputed to her and that she is not responsible for same and had a right to believe and rely upon them." ⁹

There are several weaknesses, each terminal, in this contention that inadequacy of trial counsel representation entitles plaintiff to a setting aside or modification of the divorce court judgment of 1967. The trial court in this action found that plaintiff's trial counsel did make his own independent and adequate investigation as to the value of the Kohler Company stock. ¹⁰ The record amply sustains and supports that finding. Moreover, plaintiff testified, as the trial court noted in its memorandum decision, that "she did not believe the figure used as the market value at the time of divorce was correct and that she did not rely on it. Nevertheless, she did enter into the stipulation." The responsibility for so doing was hers, not her counsel's. We agree with the trial court that there is no basis in this record for faulting or declaring inadequate the representation given plaintiff by her trial counsel at the time of the divorce trial.

Even if there could be located, somewhere in this record, evidence of inadequate representation of plaintiff by her trial court counsel at the time of the divorce, her right to seek in equity a modification of the divorce judgment, initiated beyond the one-year limit of sec. 269.46(1), Stats., is not, ipso facto, established. Our court has held that: "A mistake of law on the part of an attorney may give rise to a case of excusable neglect on the part of his client", ¹¹ and added: "We see no distinguishing difference between a mistake of law, ill advice, neglect, or other actions and omissions by an attorney in the application of sec. 269.46(1), Stats." ¹² While holding that the one-year limit did not apply where the trial court acted within the year and reversal resulted on appeal, this court repeated that: "It is true a trial court under sec. 269.46(1), Stats., must act upon the motion within the year of the notice of the judgment from which...