Hilton v. Hilton
| Decision Date | 27 September 2021 |
| Docket Number | Docket No. 47487 |
| Citation | 496 P.3d 839,169 Idaho 353 |
| Court | Idaho Supreme Court |
| Parties | Cynthia Ann HILTON, Petitioner-Appellant, v. Lance R. HILTON, Respondent. |
Derek A. Pica, PLLC, Boise, for Appellant. Derek Pica argued.
Leavitt Ryan, PLLC, Boise, for Respondent. W. Christopher Pooser argued.
This case arises out of divorce proceedings before the magistrate court. Cynthia Hilton appeals the decision denying her motion to divide an omitted asset—a company partially owned by her ex-husband, Lance Hilton. Cynthia alleges that because the stipulated divorce decree did not list the company as community or separate property, it is an omitted asset and she is entitled to half of its retained earnings allocable to Lance. The magistrate court denied Cynthia's motion on the basis that it had previously determined the company was Lance's separate property. On intermediate appeal, the district court affirmed. For the following reasons, we affirm the decision of the district court.
In July 2015, Cynthia filed a petition for divorce from her husband, Lance Hilton. Lance is a majority owner of DataBlaze, LLC, a software company that tracks assets and fleets for businesses that wish to track their employees via GPS. Lance owns 60% of the company while his partner owns the remaining 40%. Lance takes a base salary of $60,000, which does not include bonuses or distributions received from closing contracts.
Early in the divorce proceedings, Lance filed a motion for partial summary judgment asserting that DataBlaze was his separate property. The magistrate court ruled in Lance's favor and entered an order granting summary judgment in April 2016. Cynthia never moved for reconsideration or requested Rule 54(b) certification so she could appeal this order.
On June 24, 2016, the magistrate court entered a stipulated judgment and decree of divorce (hereinafter, "the Decree"), which (1) determined custody of the couple's three minor children, (2) set child support and spousal support payments, and (3) divided community property. While the Decree contained detailed lists of the parties’ community property, it did not mention any separate property, including DataBlaze. The stipulation and the Decree were drafted by Cynthia's lawyer, and included detailed lists of specific items constituting each party's equitable share of the community property. The lists included both large and small items, ranging from the retirement and investment accounts to "the Mickey Mouse apron and oven mitt." Neither the stipulation nor the decree mentioned any separate property.
Almost 3 months after the divorce became final, Lance filed a petition for modification of the custody schedule. Cynthia answered and counterclaimed for full custody. At this time, both Cynthia and Lance also sought modification of child support. Lance asserted his wages were between $55,366 and $78,168 annually, and Cynthia's annual earnings were $34,000. Cynthia, however, took the position that Lance's annual earnings were $300,000—based on his 60% ownership of DataBlaze—and that her income should be imputed at minimum wage.
The magistrate court held a four-day evidentiary hearing and entered findings of fact and conclusions of law. The magistrate court noted that the parties’ brief post-divorce life After addressing the status, preferences, and best interests of the minor children, the magistrate court turned to the parties’ financial situation. The magistrate court found Lance was evasive about his earnings, certain DataBlaze expenditures, and other personal expenses that DataBlaze had paid. After hearing from Cynthia's witness—an accountant for DataBlaze—the magistrate court found Lance's earnings to be $238,769.76 per year. The magistrate court then found Cynthia's earnings to be $25,334 per year based on her most recent full year of earnings. The magistrate court increased Lance's child support accordingly, made changes to the custody schedule, and entered a modification of the judgment. The magistrate court also denied Lance's motion to reconsider. Lance filed a notice of appeal of the magistrate court's decision to the district court, but it was ultimately dismissed.
Over two years after the Decree issued, and four months after the magistrate increased Lance's child support, in December 2018, Cynthia filed a petition with the magistrate court seeking to divide an allegedly omitted community asset: DataBlaze. She argued that although the magistrate court granted Lance's motion for summary judgment regarding DataBlaze's separate property status, it failed to enter an accompanying judgment and it did not mention the status of the business in the Decree. Therefore, she maintained that DataBlaze was an omitted community property asset, and she was entitled to half of its retained earnings as of June 24, 2016, the date of the Decree, as well as prejudgment interest accruing since June 24, 2016.
The magistrate court denied Cynthia's motion. It found that the court's earlier summary judgment order regarding DataBlaze was an interlocutory order subject to reconsideration, but Cynthia had never moved for reconsideration or otherwise objected to the order. Instead, the parties subsequently entered into a stipulated decree of divorce that did not mention the status of DataBlaze or any separate property, but divided their community property. Therefore, the magistrate court concluded that the summary judgment order merged into the Decree. DataBlaze, the court determined, was not an omitted asset because "both parties knew, or should have known, during the pendency of the initial divorce action, that DataBlaze maintained retained earnings." The magistrate court then entered a corresponding judgment on these conclusions, and Cynthia appealed to the district court.
The district court held that the magistrate court properly determined DataBlaze was Lance's separate property in its order on summary judgment. The district court recognized that the Decree specifically provided for the division of the community property, but did not allocate the separate property. It noted, however, that the magistrate court had no authority to award separate property: "Once the decision was made that Data[B]laze LLC was the separate property of [Lance], the same court that made that decision would understand that it had no authority to award any part of it to [Cynthia]." The district court further identified the cardinal rule that stipulated judgments are not subject to appellate review unless (1) a party did not consent to the judgment, (2) the trial court lacked jurisdiction, or (3) the judgment was obtained by fraud or adversely affects the public interest. Cynthia failed to plead any of the exceptions, so there was no jurisdiction to modify the property divisions of the Decree. The district court likewise found that Cynthia could not raise a belated objection to the summary judgment award under "the guise of an omitted asset petition."
The court acknowledged that Cynthia's position in her petition—that DataBlaze was community property—was inconsistent with her prior arguments concerning Lance's higher income from his pro rata share of DataBlaze, as his separate property. The district court agreed with the magistrate court that Cynthia was judicially estopped from taking this inconsistent position. Therefore, the district court affirmed the magistrate court. Cynthia timely appealed to this Court.
When this Court reviews a decision of a district court sitting in its appellate capacity, we apply the following standard of review:
The Supreme Court reviews the trial court (magistrate) record to determine whether there is substantial and competent evidence to support the magistrate's findings of fact and whether the magistrate's conclusions of law follow from those findings. If those findings are so supported and the conclusions follow therefrom and if the district court affirmed the magistrate's decision, we affirm the district court's decision as a matter of procedure.
Pelayo v. Pelayo , 154 Idaho 855, 858, 303 P.3d 214, 217 (2013) (quoting Bailey v. Bailey , 153 Idaho 526, 529, 284 P.3d 970, 973 (2012) ). Therefore, we do not review the magistrate court's decision; rather, we are "procedurally bound" to affirm or reverse the district court's decision and "determine whether it correctly addressed the issues raised on appeal." Papin v. Papin , 166 Idaho 9, 18, 454 P.3d 1092, 1101 (2019) ; Bailey , 153 Idaho at 529, 284 P.3d at 973.
Cynthia's contentions on appeal center on her argument that the magistrate court never entered a final judgment on DataBlaze's status as Lance's separate property. Thus, it was an omitted asset and its retained earnings were subject to division. We disagree.
Generally, a stipulated judgment, such as the Decree in this case, is not subject to appellate review. Visser v. Auto Alley, LLC , 162 Idaho 1, 3, 393 P.3d 1027, 1029 (2017). The exception to this general rule occurs " ‘where the appellant(s) did not actually consent to the judgment, or the trial court lacked subject matter jurisdiction, or the judgment was obtained by fraud, or the judgment adversely affects the public interest.’ " Id . (quoting Fagen, Inc. v. Rogerson Flats Wind Park, LLC , 159 Idaho 624, 627, 364 P.3d 1189, 1192 (2016) ). "In the absence of an appeal from an original decree of divorce the property division portions of that decree are final, res judicata, and no jurisdiction exists to modify property divisions of a divorce decree."...
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