Fercho v. Fercho
| Decision Date | 08 December 2022 |
| Docket Number | 20220076 |
| Citation | 2022 ND 214 |
| Parties | William Frederick Fercho, Plaintiff and Appellee v. Sheri Lynn Fercho, Defendant and Appellant and State of North Dakota, Statutory Real Party in Interest |
| Court | North Dakota Supreme Court |
2022 ND 214
William Frederick Fercho, Plaintiff and Appellee
v.
Sheri Lynn Fercho, Defendant and Appellant
and State of North Dakota, Statutory Real Party in Interest
No. 20220076
Supreme Court of North Dakota
December 8, 2022
Appeal from the District Court of Cass County, East Central Judicial District, the Honorable John C. Irby, Judge.
Michael L. Gjesdahl (argued) and Kari A. Losee (appeared), Fargo, N.D., for plaintiff and appellee.
Rachel M. Hanson, Fargo, N.D., for defendant and appellant.
Opinion of the Court by Tufte, Justice, in which Chief Justice Jensen and Justices VandeWalle and Crothers joined. Justice McEvers filed an opinion concurring specially.
OPINION
Tufte, Justice.
[¶1] Sheri Fercho appeals from a divorce judgment enforcing the parties' premarital agreement, dividing the marital estate, and denying spousal support and attorney's fees. She also appeals an order denying her motion to compel discovery. William Fercho moved to dismiss the appeal on the basis of Sheri Fercho having accepted the benefits of judgment. We deny William Fercho's motion, affirm the judgment and order, and award Sheri Fercho attorney's fees on appeal.
I
[¶2] William Fercho and Sheri Fercho were married in May 2005. In March 2005, the parties executed a premarital agreement providing that in the event of a divorce, each party shall retain separate ownership of their own non-marital property. At the time, William Fercho had a net worth of $2.95 million and Sheri Fercho had a net worth of $5,359. In May 2020, the parties separated, and William Fercho commenced this divorce action.
[¶3] Prior to trial, Sheri Fercho moved to compel discovery from William Fercho regarding his family's business interests. After a hearing, the district court denied the motion to compel, but granted Sheri Fercho's motion to continue the trial date and awarded her attorney's fees to pay her attorney and expert. After trial, the court concluded the parties' premarital agreement was valid and enforceable, determined which assets were marital and non-marital and the values of each, awarded Sheri Fercho 70 percent of the marital estate, and denied spousal support and attorney's fees.
II
[¶4] After the briefs on the merits were submitted, William Fercho moved to dismiss this appeal. He argues Sheri Fercho waived her right to appeal the judgment by accepting its substantial benefits. He asserts all marital assets awarded in the judgment have been distributed to the respective parties.
[¶5] This Court has said that the "general rule" in this state "is that a party to a divorce action who accepts substantial benefits pursuant to a divorce judgment thereby waives the right to appeal from the judgment." Davis v. Davis, 458 N.W.2d 309, 311 (N.D. 1990). However, we have recognized numerous exceptions to this rule:
In Tyler v. Shea, 4 N.D. 377, 61 N.W. 468 (1894), we said:
"Where the reversal of the judgment cannot possibly affect the appellant's right to the benefit he has secured under the judgment, then an appeal may be taken, and will be sustained, despite the fact that the appellant has sought and secured such benefit." 4 N.D. at 381, 61 N.W at 469
This exception was further expounded in Boyle v. Boyle, 19 N.D. 522, 524, 126 N.W. 229, 230 (1910), wherein we held:
"If a provision of the judgment appears to have been fixed by consent, or is undisputed, or, for any reason, cannot be changed or reversed by the appeal, an acceptance of the benefit given by such provision is not a waiver of the appeal."
Moreover, in Grant v. Grant, [226 N.W.2d 358 (N.D. 1975)] we recognized that the rule which bars a subsequent appeal when substantial benefits of a divorce judgment are accepted is not absolute when we said:
"Before the waiver of the right to appeal can be found to exist, there must be an unconditional, voluntary, and conscious acceptance of a substantial benefit under the judgment." 226 N.W.2d at 361.
. . . .
In addition to the exceptions recognized above, this court has also held that:
"It is both practical and just that if one jointly or individually possesses an asset during the pendency of
a divorce action and is subsequently awarded that asset by the divorce judgment, he should not have to divest himself of that asset before appealing the judgment. This is most obvious when the asset is a necessity of life." Piper v. Piper, 234 N.W.2d [621] at 623 [(N.D. 1975)].
. . . .
[I]n Hoge v. Hoge, 281 N.W.2d 557 (N.D. 1979), we recognized . . . that a party is not estopped from an appeal of a divorce judgment by the acceptance of alimony and property "to which he or she was entitled as a matter of right." 281 N.W.2d at 563.
Davis, at 311-12 (quoting White v. White, 434 N.W.2d 361, 363 (N.D. 1989)) (cleaned up). We have also declined to dismiss the appeal where the appellant's right to the benefit was not disputed by the movant through cross-appeal. Spooner v. Spooner, 471 N.W.2d 487, 489 (N.D. 1991).
[¶6] In Spooner, we further limited the "general rule" to only those rare instances where the movant can demonstrate either prejudice or "very clear intent" of accepting the judgment and waiving the right to appeal, acknowledging the strong public policy of reaching the merits in divorce cases:
Over the years, we have sharply limited the rule . . . in an effort to promote a strong policy in favor of reaching the merits of an appeal. . . . . . . .
[W]e recognized that appeals from divorce judgments frequently involve the equitable distribution of property jointly or individually owned by the parties. Most of this property will be in the hands of one or the other of the parties before, during and after the trial on contested issues. And, much of this property is the stuff of daily lives: houses, cars, household furnishings. It should be an unusual set of circumstances, one demonstrating prejudice to the movant, or a very clear intent on the part of the appellant to accept the judgment and waive the right to appeal, that keeps us from reaching the merits of an action. Acceptance of benefits will seldom be prejudicial to the movant if either the benefits themselves or
the proceeds from their sale remain available for redistribution in subsequent proceedings. 471 N.W.2d at 489-90.
[¶7] To be sure, several of these exceptions apply in this case. William Fercho has not cross-appealed, and the benefits accepted by Sheri Fercho are not subject to change or reversal on appeal. Sheri Fercho's acceptance of the property in the judgment is not inconsistent with her claims on appeal that she should have been awarded more than she received in the judgment. William Fercho also has not been prejudiced in any significant way by her acceptance of the property.
[¶8] In Wetzel v. Wetzel, 1999 ND 29, ¶ 6, 589 N.W.2d 889, we made clear that "[generally, acceptance of a property award in a divorce case does not constitute waiver of the right to appeal from the divorce judgment where the accepting party is claiming a right to a larger share of the marital estate." With the latest round of exceptions, we developed a three-part test in Wetzel to aid in determining when the appellant has waived the right to appeal: 1) there must be an unconditional, voluntary, and conscious acceptance of a substantial benefit under the judgment by the appellant; 2) the appellee must show the benefit accepted is one which the appellant would not be entitled to without the divorce decree; and 3) there must be unusual circumstances, demonstrating prejudice to the movant, or a very clear intent on the part of the appellant to accept the judgment and waive the right to appeal, to keep the Court from reaching the merits of the appeal. Id. at ¶ 5.
[¶9] In DeMers v. DeMers, 2006 ND 142, ¶ 28, 717 N.W.2d 545, we concluded the appellant did not waive her right to appeal, because she did not consciously accept the benefits of the divorce judgment and the district court "made time of the essence by putting time limitations on the property distribution." Justice Crothers correctly noted in his concurrence in DeMers, at ¶ 41, that the third prong-requiring unusual circumstances demonstrating prejudice to the movant or a very clear intent on the part of the appellant to accept the judgment and waive the right to appeal-would seldom, if ever, be satisfied by the movant. See also Sateren v. Sateren, 2013 ND 12, ¶ 13, 826 N.W.2d 303
(denying motion to dismiss appeal, in part, because there was no signed satisfaction of judgment showing appellant's clear intent to accept judgment and waive right to appeal).
[¶10] Suffice to say, this once "general rule" has become anything but the general rule in our recent decisions. In fact, the more recent exception requiring prejudice or clear intent would almost always defeat the rule, except for the rare occasion where the appellant signs a satisfaction of judgment. Thus, the "general rule" has effectively been swallowed by its exceptions, leaving few if any circumstances in which the movant could show the appellant accepted the benefits of judgment and waived his right to appeal. However, this is not to say that we disagree with the exceptions that have been carved out of the general rule. To the contrary, we agree with the exceptions outlined above and the rationales underling those exceptions. Moreover, they promote our strong policy in favor of reaching the merits of an appeal in a divorce action. For these reasons, we conclude that a party to a divorce action who accepts benefits pursuant to a divorce judgment does not waive the right to appeal from the judgment, overruling Williams v. Williams, 69 N.W. 47 (N.D. 1896); Tuttle v. Tuttle, 124 N.W. 429 (N.D. 1909); Boyle v. Boyle, 126 N.W. 229 (N.D. 1910); Montgomery v. Montgomery, 88 N.W.2d 104 (N.D. 1958); Geier v. Geier, 332 N.W.2d 261 (N.D. 1983)...
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