Lewis v. Smart

• Decision Date: 29 August 2017
• Docket Number: No. 20160341,20160341
• Citation: 900 N.W.2d 812
• Parties: Nina Maureen Gabrielle LEWIS, Plaintiff and Appellee v. John Gordon SMART, Defendant and Appellant and Dashiell J. Lewis Smart, Intervenor
• Court: North Dakota Supreme Court

900 N.W.2d 812

Nina Maureen Gabrielle LEWIS, Plaintiff and Appellee

v. John Gordon SMART, Defendant and AppellantandDashiell J. Lewis Smart, Intervenor

No. 20160341

Supreme Court of North Dakota.

Filed August 29, 2017

Rehearing Denied October 17, 2017

Patti J. Jensen, East Grand Forks, Minnesota, for plaintiff and appellee.

DeWayne A. Johnston (argued) and Jacey L. Johnston (appeared), Grand Forks, North Dakota, for defendant and appellant.

Tufte, Justice.

[¶ 1] John Smart appeals from an amended divorce judgment and from an order and judgment denying his motion for relief under N.D.R.Civ.P. 60. We conclude that the district court's equitable redistribution of the marital property was not clearly erroneous and that the court did not abuse its discretion in entering the amended judgment, denying Smart's subsequent post-judgment motions, and awarding attorney's fees. We affirm.

I

[¶ 2] In 1999, Smart and Nina Lewis were married. In 2012, Lewis sued Smart for divorce, seeking custody of their minor son and equitable division of their assets and allocation of their debts. Smart answered and counterclaimed. In late August 2013, Lewis's father died. In September 2013, after the first day of trial, the parties entered into a stipulated settlement agreement, and a divorce judgment was entered. The court did not address any issues about Lewis's potential inheritance at that time. In December 2013, Smart moved the district court for relief from the judgment, which the court denied.

[¶ 3] In September 2014, Smart again moved the district court for relief from the judgment under N.D.R.Civ.P. 60, seeking an equitable distribution of Lewis's inheritance. In November 2014, Lewis applied for an order to show cause seeking to find Smart in contempt for not complying with the divorce judgment's terms and conditions. In December 2014, the court granted Smart's N.D.R.Civ.P. 60 motion, reopening the divorce case for the purpose of considering additional marital property from Lewis's inheritance from her father's estate. The court found that the unusual circumstance justified granting Smart's motion and that the prior judge had reserved the issue of inheritance when the stipulated judgment was entered. In December 2014, the court also entered an order requiring Smart to show cause why he should not be held in contempt for failing to comply with the original judgment.

[¶ 4] In February 2015, the district court denied Smart's request for an ex parte order to have Lewis pay a joint debt owed to a storage company in Grand Forks, which was storing items of personal and trust property addressed in the divorce judgment. The court held that no emergency existed to justify Lewis having to pay the debt. On April 2, 2015, the court began an evidentiary hearing on the parties' respective motions. On April 7, 2015, the court entered an order suspending the evidentiary hearing and joining the parties' son as a party under N.D.R.Civ.P. 19(a)(1)(A). The court found that the son, Dashiell Lewis Smart, was a minor at the time of the divorce, but was over the age of eighteen years at that time, and is a named beneficiary of a personal property trust identified in the parties' divorce judgment.

[¶ 5] On April 21, 2015, the son filed a statement as an intervenor, stating a receiver should be appointed to take possession of trust property and seeking to protect his interest in the trust property addressed in the divorce judgment. In October 2015, the court granted Dashiell Lewis Smart's application for appointment of a receiver. An appointed receiver subsequently attempted to collect personal property in the parents' possession identified in the judgment as subject to the trust and also filed reports with the court. The hearing on the parties' motions was subsequently completed on March 8, 2016.

[¶ 6] On April 25, 2016, the district court entered an order for amended judgment, awarding Lewis the inheritance from her father's estate and finding she had paid debts that had been Smart's partial or full responsibility under the original divorce judgment. In explaining the award, the court found Smart had already received a direct monetary benefit of $164,000 as a result of the death of Lewis's father. The court also found that Smart's conduct after the divorce had resulted in the loss of marital and trust property worth approximately $267,000, had increased expenses to Lewis in the amount of $17,850, and had resulted in unanticipated expenses of about $15,000 to his son. The court ordered that Smart immediately relinquish all trust assets in his possession to Dashiell Lewis Smart or his designee, but allowed Smart to continue to use a 1967 Mercedes–Benz as long as he provided his son with proof of liability insurance. An amended judgment was entered in May 2016.

[¶ 7] In June 2016, Smart moved for relief from the amended judgment under N.D.R.Civ.P. 52, 59, and 60. Lewis moved to dismiss Smart's motion, alleging it was devoid of any factual or legal authority to support his claim. The court concluded his motion under Rules 52 and 59 was untimely and improperly served, denied his motion under Rule 60(b)(3) and (b)(6), and granted Lewis attorney's fees of $2,500 given Smart's escalating the fees and prolonging the case. In August 2016, the court entered a final judgment denying Smart's motion for relief.

II

[¶ 8] Smart argues the district court erred in distributing the marital estate by assessing him for alleged waste. He argues the court also erred by going beyond his motion, which sought only distribution of Lewis's inheritance, to amend the terms of the original stipulated divorce judgment.

[¶ 9] A district court's decision whether to grant relief under N.D.R.Civ.P. 60(b) will not be overturned on appeal absent an abuse of discretion. Knutson v. Knutson , 2002 ND 29, ¶ 7, 639 N.W.2d 495. "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." Id. A district court abuses its discretion when it 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." Id.

[¶ 10] Under N.D.C.C. § 14–05–24(1), a district court must equitably distribute the parties' marital property and debts. "After including all of the marital assets and debts, the district court must apply the Ruff – Fischer guidelines to divide the property." Wanttaja v. Wanttaja , 2016 ND 14, ¶ 8, 873 N.W.2d 911 (citation omitted). The Ruff – Fischer guidelines require the court to consider the following factors:

[T]he respective ages of the parties, their earning ability, the duration of the marriage and conduct of the parties during the marriage, their station in life, the circumstances and necessities of each, their health and physical condition, their financial circumstances as shown by the property owned at the time, its value at the time, its income-producing capacity, if any, whether accumulated before or after the marriage, and such other matters as may be material.

Rebel v. Rebel , 2013 ND 116, ¶ 7, 833 N.W.2d 442 (quoting Kosobud v. Kosobud , 2012 ND 122, ¶ 6, 817 N.W.2d 384 ). The court's distribution presents a finding of fact that will not be overturned unless clearly erroneous. Wanttaja , at ¶ 9. "[F]indings of fact are presumptively correct." Id. (citation omitted). "The party challenging a court's finding of fact on appeal has the burden of showing that a finding is clearly erroneous." Id. (citing Rebel , at ¶ 17 ). A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if no evidence exists to support it, or if, although there is some evidence to support it, on the entire record, we are left with a definite and firm conviction a mistake has been made. Id.

[¶ 11] "We have repeatedly held that property brought into the marriage by one party, and separate property acquired by gift, inheritance, or otherwise, must be included in the marital estate and is subject to distribution." Ulsaker v. White , 2006 ND 133, ¶ 12, 717 N.W.2d 567 (citation omitted). Generally, a district court does not retain continuing jurisdiction to modify a final property distribution. Keita v. Keita , 2012 ND 234, ¶ 28, 823 N.W.2d 726. Under N.D.C.C. § 14–05–24(3), however, a court may redistribute property and debts in a post-judgment proceeding when a party fails to comply with an order distributing property and debts. See Keita , at ¶ 30 ; see also N.D.C.C. § 14–05–25.1 (failure to comply with divorce decree distributing parties' property constitutes contempt of court).

[¶ 12] The district court's distribution of property and debts also includes recognizing valid settlement agreements. Eberle v. Eberle , 2009 ND 107, ¶ 15, 766 N.W.2d 477. We encourage "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." Knutson , 2002 ND 29, ¶ 8, 639 N.W.2d 495 ; see also Eberle , 2009 ND 107, ¶ 15, 766 N.W.2d 477. When the judgment to be set aside is entered on the basis of the parties' stipulation, "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." Knutson , at ¶ 8. In deciding whether to enforce a settlement agreement between divorcing parties, the district court should consider whether the agreement is free from mistake, duress, menace, fraud,...