In re Hutchinson

• Decision Date: 20 May 2022
• Docket Number: 20-0076
• Citation: 974 N.W.2d 466
• Parties: IN RE the MARRIAGE OF Susan Gayle HUTCHINSON and Robert Gregory Hutchinson. Upon the Petition of Susan Gayle Hutchinson, Appellee, and Concerning Robert Gregory Hutchinson, Appellant.
• Court: Iowa Supreme Court

974 N.W.2d 466

IN RE the MARRIAGE OF Susan Gayle HUTCHINSON and Robert Gregory Hutchinson.

Upon the Petition of Susan Gayle Hutchinson, Appellee,

and Concerning Robert Gregory Hutchinson, Appellant.

No. 20-0076

Supreme Court of Iowa.

Submitted January 19, 2022

Filed May 20, 2022

Webb L. Wassmer (argued) of Wassmer Law Office, PLC, Marion, for appellant.

Richard F. Mitvalsky (argued) and Thomas F. Ochs of Gray, Stefani & Mitvalsky, P.L.C., Cedar Rapids, for appellee.

Christensen, C.J., delivered the opinion of the court, in which Waterman, Mansfield, Oxley, and McDermott, JJ., joined. Waterman, J., filed a concurrence, in which Christensen, C.J., joined. McDonald, J., filed a dissent, in which Appel, J., joined.

CHRISTENSEN, Chief Justice.

It is well established in Iowa law that in every dissolution of marriage proceeding, the court shall equitably divide all marital property. In order for the court to conduct a proper analysis of the property subject to an equitable division, it is imperative for the parties to fully and fairly disclose their financial status as required by Iowa Code section 598.13. If the dissolution decree is not appealed, its property division is not subject to modification unless it falls under one of two exceptions: (1) a petition for relief at law is commenced within one year after entry of decree ( Iowa Rules of Civil Procedure 1.1012 – .1013 ); or (2) a petition is commenced for relief with an independent action in equity based on extrinsic fraud. Mauer v. Rohde , 257 N.W.2d 489, 496 (Iowa 1977). Susan concedes she is precluded from pursuing an action at law under the first exception, leaving only the second exception at issue in this case.

Throughout months of negotiation within the dissolution of marriage proceeding, Robert (Greg) failed to disclose his GE retirement pension. Susan did not discover this omission until nearly five years later. Alleging extrinsic fraud by Greg, Susan seeks to modify the dissolution decree by awarding her part of Greg's GE pension. Greg argues that the alleged fraud was intrinsic. Furthermore, he argues that reasonable diligence on Susan's part would have led to the discovery of his GE pension within one year after the entry of the order. The district court determined Susan met her burden for relief as the nondisclosure of the GE pension was extrinsic and that Susan would not have been able to find the GE pension within one year through the use of reasonable diligence. On appeal, the court of appeals opinion agreed that the fraud was extrinsic but reversed the district court's determination that Susan would have found the GE pension with reasonable diligence. The court of appeals also determined various attorney fees issues were unwarranted or required a remand to the district court for further consideration.

On further review, we hold that Greg's concealment of the GE pension was intrinsic fraud. We further hold that Susan would have discovered the omitted pension within one year after the decree was entered with reasonable diligence because it was referred to in a document she received before she signed the stipulation that led to the entry of a dissolution decree. Therefore, we vacate the court of appeals determination that the alleged fraud was extrinsic. All other determinations by the court of appeals are affirmed with remand to district court as outlined in its opinion.

I. Background Facts and Proceedings.

Susan and Robert (Greg) Hutchinson were married in 1990. Susan primarily worked as a broker-dealer at Berthel Fisher and as a financial assistant at F&M Bank. Greg worked as a salesperson at Ingersoll Rand and General Electric (GE). During his employment at GE between 2000 and 2014, Greg participated in a 401(k) retirement plan and a defined benefit pension. The GE pension vested in 2007. Susan filed a Petition for Dissolution on April 22, 2010. Throughout the legal proceeding, Susan was represented by counsel and Greg elected to represent himself.

A standard family law case requirements order was soon entered, which required the parties to file an affidavit of financial status and exchange financial information (i.e. "[c]opies of IRA accounts, retirement plans, 401k's, deferred compensation, savings plans and any other similar plan documents"). Greg never filed a financial affidavit. On July 12, Susan filed a financial affidavit, which included a "GE Retirement" security valued at $126,000 and was solely in Greg's name. Greg had provided a document regarding the existence and evaluation of the "GE Retirement" security. According to Susan's attorney, this document solely referenced the GE 401(k).

Between July 12 and October 28, several drafts of a proposed property settlement or stipulation were circulated between Susan's attorney and Greg. Each draft contained a general disclosure provision providing, "Each party states that they have fully disclosed all of their assets, income and liabilities to the other and that each party has had full and fair opportunity to make inquiry as to the same or has waived such right." Under the securities/retirement plans portion of the stipulation, each draft contained a specific disclosure provision that stated, "The parties have provided updated information to each other for the values of these accounts/plans as of June 2010, or the closest date for which financial information is available." Each draft listed "GE retirement fund" as an asset to remain with Greg at a value of $126,000.

Greg made several detailed and organized requests and counteroffers throughout the negotiations for a satisfactory stipulation including asset evaluation, alimony, and life insurance. With regard to the securities/retirement plans portion of the stipulation, the parties did negotiate that Susan would remain a 50% beneficiary of Greg's Pacific Life annuity until his spousal support obligation ceased. However, neither party made requests or counteroffers regarding the GE retirement fund during the negotiations.

On October 28, Greg emailed Susan's attorney agreeing to the terms of the final draft of the stipulation and decree. In the same email, Greg asked Susan to sign and notarize a GE consent form in order to waive "her right to GE death benefits and allow[ ] me to redirect them to my children." Susan's attorney responded that she would notify Susan of the consent form. The next day, Greg delivered a blank copy of the GE consent form to the office of Susan's attorney and signed the final draft of the proposed stipulation. At no point did Greg discuss the GE consent form directly with Susan.

The GE consent form delivered to Susan's attorney contained a section as follows:

Section 2- Spouse's Consent to Waive Rights to Benefits ( To be completed by your spouse )

PLEASE CHECK EACH BOX THAT APPLIES AND PROVIDE THE REQUIRED SIGNATURES IN INK.

? I waive my spousal rights to pre-retirement death benefits from the GE Pension Plan (including the Pre-Retirement Spouse Benefit) that would otherwise be payable to me at my spouse's death, having reviewed an explanation of my surviving spouse benefits.

? I waive my spousal rights to benefits from my spouse's GE Savings & Security Program account balance. I acknowledge that I have reviewed the beneficiary designation form and understand the consequences of this consent.

I understand that it is my responsibility to carefully review the beneficiary confirmation, when it is received by mail, to confirm that the beneficiary designation form fully represents my intentions.

Greg did not provide Susan with the GE beneficiary designation form as referred to in the second check box. This additional form required Greg to supply his personal information and fill out four sections. The first section required the GE employee to "Check [the boxes of] only those plans for which you want this beneficiary designation to apply. " Those plans included the GE Pension Plan, GE Savings & Security Program, and four other plans. The second section required the GE employee to select a primary beneficiary, while the third section provided the GE employee with an optional contingent beneficiary. The final section required a signature and date to validate the designation. The final signature section also required a spouse's signature if the primary beneficiary for any death benefits under the GE pension plan or the GE Savings and Security Plan was not the spouse.

Greg and Susan signed a final draft of the proposed stipulation respectively on October 29 and November 1. The final stipulation divided the disclosed marital assets evenly. Greg received the entirety of the "GE retirement fund." Susan received $1,200 of spousal support over four years. Greg and Susan signed the stipulation under oath, indicating that they had read the stipulation and that all "the statements are true as I verily believe."

The parties agreed upon a proposed decree that incorporated their signed stipulation. The proposed decree contained a provision that "each party has fully disclosed all of their assets, income and liabilities to the other either in the form of financial affidavits or through sharing information. Each party has had a full and fair opportunity to make inquiry as to assets, income and liabilities of the other or waives same." The court approved and filed the proposed order on November 2.

Ten days later, Greg emailed Susan's attorney and indicated that he had not received the signed and notarized GE consent form. That same day, Susan's attorney replied that she would mail the signed form to him. Shortly after her first email, Susan's attorney sent another email stating, "[W]e had a question about which box to check on the form. Susan signed it [on November 1] but we were reviewing. My legal assistant may have decided to just send it to you and let you identify the relevant plan (check the box). She would have flagged it for your attention."

The legal assistant mailed the signed GE consent form to Greg that same day, November 12, with a letter asking...