Knutson v. Knutson, 20010238.

• Decision Date: 20 February 2002
• Docket Number: No. 20010238.,20010238.
• Citation: 2002 ND 29,639 N.W.2d 495
• Parties: Jacqueline KNUTSON, Plaintiff and Appellant, v. Richard D. KNUTSON, Defendant and Appellee.
• Court: North Dakota Supreme Court

639 N.W.2d 495

2002 ND 29

Jacqueline KNUTSON, Plaintiff and Appellant, v. Richard D. KNUTSON, Defendant and Appellee.

No. 20010238.

Supreme Court of North Dakota.

February 20, 2002.

Bruce A. Schoenwald, Stefanson, Plambeck, Foss & Fisher, Moorhead, MN, for plaintiff and appellant.

Robert J. Schultz, Conmy Feste, Ltd., Fargo, ND, for defendant and appellee.

SANDSTROM, Justice.

[¶ 1] Jacqueline Knutson appealed from an order denying her motion to vacate a divorce decree entered upon a stipulated settlement agreement. We hold the trial court did not abuse its discretion in ruling that sufficient grounds for disturbing the finality of the divorce decree were not established, and we therefore affirm the order denying the motion to vacate.

I

[¶ 2] Richard and Jacqueline Knutson were married in 1989. They have a daughter of their marriage, Ashley, who was born on March 26, 1990. Problems developed in the Knutson's marriage, and, after securing the services of a lawyer, Jacqueline Knutson filed a divorce action on August 7, 2000. The parties entered into a stipulated agreement in November 2000, dividing the marital property and providing for joint physical and legal custody of Ashley, with each party having custody of Ashley for an equal amount of time. The stipulation provided that neither party would receive spousal support or child support from the other party. After a hearing, attended by Richard Knutson but not by Jacqueline Knutson, the trial court entered a decree dissolving the marriage and setting the terms of the divorce in accordance with the parties' stipulation.

[¶ 3] On May 18, 2001, Jacqueline Knutson filed a motion with the trial court, under N.D.R.Civ.P. 60(b), seeking to vacate the divorce decree on the grounds that the stipulated agreement was unconscionable and that it was signed by her as a result of her husband's undue influence. The trial court denied the motion to vacate.

[¶ 4] The district court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 27-05-06. Jacqueline Knutson's appeal is timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, § 6, and N.D.C.C. § 28-27-01.

II

[¶ 5] On appeal, Jacqueline Knutson asserts the trial court abused its discretion in refusing to vacate the divorce decree. She claims the decree is unconscionable and the parties' stipulation, upon which the terms of the decree were based, was signed by her as a result of Richard Knutson's undue influence.

[¶ 6] Under N.D.R.Civ.P. 60(b)(iii), the court can set aside a judgment for fraud, misrepresentation, or other misconduct of an adverse party. Also, under N.D.R.Civ.P. 60(b)(vi), the court can set aside a judgment for any other reason justifying such relief. This rule provides the ultimate safety valve to avoid enforcement by vacating a judgment to accomplish justice. Kopp v. Kopp, 2001 ND 41, ¶ 10, 622 N.W.2d 726.

[¶ 7] A trial court's decision to deny relief under N.D.R.Civ.P. 60(b) will not be overturned on appeal absent an abuse of discretion. Krizan v. Krizan, 1998 ND 186, ¶ 13, 585 N.W.2d 576. We do not determine whether the court was substantively correct in entering the judgment from which relief is sought, but determine only whether the court abused its discretion in ruling that sufficient grounds for disturbing the finality of the judgment were not established. Terry v. Terry, 2002 ND 2, ¶ 4, 638 N.W.2d 11. An abuse of discretion occurs only when the trial court acts in an arbitrary, unconscionable, or unreasonable manner, or when its decision is not the product of a rational mental process leading to a reasoned determination. Id. Rule 60(b) attempts to strike a proper balance between the conflicting principles that litigation must be brought to an end and that justice should be done, and, accordingly, the rule should be invoked only when extraordinary circumstances are present. Kopp, 2001 ND 41, ¶ 9, 622 N.W.2d 726.

[¶ 8] This Court encourages peaceful settlements of disputes in divorce matters, and the strong public policy favoring prompt and peaceful resolution of divorce disputes generates judicial favor of the adoption of a stipulated agreement of the parties. Toni v. Toni, 2001 ND 193, ¶ 10, 636 N.W.2d 396. If the judgment sought to be set aside is entered based on a stipulation of the parties, the party challenging the judgment has the additional burden of showing that under the law of contracts there is justification for setting aside the stipulation. Terry, 2002 ND 2, ¶ 4,638 N.W.2d 11. A district court, in considering whether a settlement agreement between divorcing parties should be enforced, should make two inquiries: (1) whether the agreement is free from mistake, duress, menace, fraud, or undue influence; and (2) whether the agreement is unconscionable. Weber v. Weber, 1999 ND 11, ¶¶ 12-13, 589 N.W.2d 358.

III

[¶ 9] Jacqueline Knutson asserts the parties' stipulation was the product of Richard Knutson's undue influence upon her. More specifically, she asserts she was suffering from depression at the time these proceedings occurred, and her husband, taking advantage of her mental state, verbally pressured her to sign the stipulation. In its order denying the motion to vacate the original divorce decree, the trial court found:

[A]t all times during the dissolution proceedings, Jacqueline was represented by attorney Wayne Anderson who advised her against agreeing to joint custody and not to waive child support and spousal support.... [T]here is no evidence in the record to suggest that Anderson provided inadequate or inappropriate legal advice or should have done more with respect to his representation of Jacqueline. In addition, Jacqueline is intelligent and has financial acumen based on her bookkeeping and business experience. Thus, at a minimum, she was fully capable of understanding the financial ramifications of the settlement agreement.

In addition, the record also shows that Jacqueline and her attorney requested that the proposed settlement agreement be revised as to paragraphs 11 and 25. This fact shows that Jacqueline, through her attorney's assistance, was capable of expressing her dissatisfaction with certain terms of the settlement agreement.

[¶ 10] There is no evidence Jacqueline Knutson was so suffering from depression or stress during the proceedings that she was incapable of making rational decisions or of entering into a valid contractual agreement. She testified that she was not taking any medications in the year 2000 or when the stipulation was negotiated and signed. When she decided to end the marriage, she withdrew a considerable amount of cash from a joint account and purchased a new home for herself and Ashley, while her husband was out of town. Jacqueline Knutson then retained an attorney and filed for divorce. With the assistance of her attorney, she sought and obtained an interim court order awarding her spousal support of $2,000 per month and child support of $1,000 per month. Although Richard Knutson tried to persuade his wife that she should fire her attorney because he was charging too much money and was not needed to resolve the divorce, she retained her attorney throughout the entire proceedings. She also discussed the stipulated agreement with her attorney prior to signing it. He advised her that the property distribution provisions were reasonable but she should not sign, because the stipulation contained no provision for her to receive spousal support and because it included a provision for the parties to have joint physical custody of Ashley. Acting on her attorneys' advice, Jacqueline Knutson had two provisions of the stipulation amended to her liking. Acting against her attorney's advice, however, she decided to sign the agreement without changing the custody or support provisions. [¶ 11] Black's Law Dictionary 1529 (7th ed.1999) defines "undue influence" as "the improper use of power or trust in a way that deprives a person of free will and substitutes another's objective." In the similar context of a will contest, this Court has defined the term "undue influence" as "the substitution of the purpose and intent of the one exercising influence for the purpose and intent of the testator." In re Estate of Robinson, 2000 ND 90, ¶ 10, 609 N.W.2d 745. The evidence does not show Jacqueline Knutson's signing of the stipulation was the product of Richard Knutson's will or purpose rather than her own.

[¶ 12] Jacqueline Knutson concedes she has a college degree in business and has experience in maintaining records in accounting for business enterprises. Based partly on these factors, the district court concluded "Jacqueline is intelligent and has financial acumen" and is "fully capable of understanding the financial ramifications of the settlement agreement."

[¶ 13] In denying the request to vacate the divorce decree, the trial court concluded Jacqueline Knutson's signing of the stipulated agreement, although "not entirely free from duress or undue influence by Richard," was not the product or result of his influence or coercion. The trial court did not find that under the circumstances Richard Knutson's purpose and will had been substituted in place of Jacqueline Knutson's purpose and will. We conclude the trial court's findings on this issue are not clearly erroneous. N.D.R.Civ.P. 52(a). We further conclude the trial court's refusal to vacate the divorce decree under N.D.R.Civ.P. 60(b)(iii), on the ground the stipulation was the product of undue influence or coercion, was not an abuse of discretion.

IV

[¶ 14] Jacqueline Knutson asserts the trial court should have vacated the original divorce decree because it is unconscionable. Richard Knutson's financial statement shows total marital assets of $2,143,500. Under the decree, Jacqueline Knutson received property worth over $500,000, including a certificate of deposit valued at $350,000; a home free of debt, valued at $143,500; a 1997 Suburban free of...