Orwig v. Orwig

• Citation: 955 N.W.2d 34
• Decision Date: 18 February 2021
• Docket Number: No. 20200123, No. 20200124,20200123
• Parties: Steven Mark ORWIG, Plaintiff, Appellee, and Cross-Appellant v. Mary Caroline ORWIG, Defendant, Appellant, and Cross-Appellee Orwig's Livestock Supplements, Inc., Orwig's Tubs International Inc., and MVP Transport, Inc., Plaintiffs and Appellees v. Mary C. "Marcy" Orwig, Defendant, Third-Party Plaintiff, Appellant, and Cross-Appellee v. Steven Orwig, Third-Party Defendant, Appellee, and Cross-Appellant
• Court: United States State Supreme Court of North Dakota

955 N.W.2d 34

Steven Mark ORWIG, Plaintiff, Appellee, and Cross-Appellant

v.Mary Caroline ORWIG, Defendant, Appellant, and Cross-Appellee

Orwig's Livestock Supplements, Inc., Orwig's Tubs International Inc., and MVP Transport, Inc., Plaintiffs and Appellees

v.Mary C. "Marcy" Orwig, Defendant, Third-Party Plaintiff, Appellant, and Cross-Appellee

v.Steven Orwig, Third-Party Defendant, Appellee, and Cross-Appellant

No. 20200123

No. 20200124

Supreme Court of North Dakota.

FILED FEBRUARY 18, 2021

Gregory W. Liebl (argued) and Alexis L. Doree (on brief), Fargo, ND, for plaintiff, appellee, and cross-appellant, and third-party defendant, appellee, and cross-apellant Steven Mark Orwig.

Michael T. Andrews (argued) and Ashley K. Champ (on brief), Fargo, ND, for plaintiffs and appellees Orwig's Livestock Supplements, Inc., Orwig's Tubs International Inc., and MVP Transport, Inc.

Jonathan T. Garaas, Fargo, ND, for defendant, appellant, and cross-appellee, and defendant, third-party plaintiff, appellant, and cross-appellee Mary Caroline Orwig.

VandeWalle, Justice.

[¶1] Mary Orwig appealed and Steven Orwig cross-appealed from a divorce judgment distributing the parties’ property and awarding Mary Orwig spousal support. Mary Orwig argues the district court erred in determining the value of certain property, distributing the parties’ assets, and failing to award her permanent spousal support. Steven Orwig argues the court erred by ordering him to pay Mary Orwig's attorney's fees. We affirm the district court's property division and spousal support award, reverse its attorney's fees award, and remand.

I

[¶2] In September 2016, Steven Orwig sued Mary Orwig for divorce. They co-owned Orwig's Livestock Supplements, Inc. ("OLS"); Orwigs Tubs International, Inc. ("OTI"); and MVP Transport, Inc. (collectively "Corporations"). Before the divorce action, the Corporations sued Mary Orwig, alleging she made unauthorized transactions on the Corporations’ behalf, including opening credit card accounts in the name of the Corporations and using the credit cards for personal use. The Corporations also alleged Mary Orwig wrongfully detained and controlled their property. The Corporations requested the district court enjoin Mary Orwig from transacting business on behalf of the Corporations and remove her as an officer and director of the Corporations.

[¶3] The district court consolidated both lawsuits. The court granted a preliminary injunction against Mary Orwig prohibiting her from transacting business on behalf of the Corporations, and later ordered her to return corporate property in her possession. Steven Orwig moved for an order to sell the parties’ Arizona real property. Mary Orwig opposed the sale. The court ordered the sale of the Arizona property.

The court later entered three contempt orders related to the orders to return corporate property and sale of the Arizona property. Mary Orwig appealed from the three contempt orders. This Court dismissed the appeals of the first two contempt orders, reversed the third contempt order, and remanded. See Orwig v. Orwig , 2019 ND 78, ¶ 1, 924 N.W.2d 421.

[¶4] After a court trial, the district court determined the Corporations’ monetary claims and Mary Orwig's counterclaims would be addressed through the divorce. The court determined the value of the parties’ assets and debts and distributed the marital estate. The court found Mary Orwig committed marital waste, wasted corporate funds, diverted corporate and marital assets, expressed an intention to deplete the Corporations and destroy Steven Orwig, and abused her discretion and authority with respect to the Corporations and Steven Orwig as a shareholder. The court determined the value of the Corporations and awarded the Corporations to Steven Orwig, including an industrial site and manufacturing facility. Steven Orwig was also awarded the farmland and residential site and pasture. Steven Orwig received a net property award of $1,137,719.53, and Mary Orwig received a net property award of $1,090,720.71. The court found its property distribution was equitable considering Mary Orwig's marital and corporate waste. The court awarded Mary Orwig $5,500 per month in spousal support starting in March 2020 and continuing until March 31, 2030. The court ordered Steven Orwig to pay $105,000 of Mary Orwig's attorney's fees. Judgment was entered.

II

[¶5] Mary Orwig claims the district court violated due process and tainted the proceedings by reviewing before the trial the file in this case and a file in a prior case that was dismissed. She contends the court cannot take judicial notice of the dismissed action, except for the act of dismissal.

[¶6] We review a district court's decision to take judicial notice of evidence under an abuse of discretion standard. State v. Soucy , 2020 ND 119, ¶ 4, 943 N.W.2d 755 ; Opp v. Matzke , 1997 ND 32, ¶ 9, 559 N.W.2d 837. A court abuses its discretion when it acts in an arbitrary, unreasonable, or unconscionable manner, it misinterprets or misapplies the law, or if its decision is not the product of a rational mental process leading to a reasoned determination. Soucy , at ¶ 4.

[¶7] Under N.D.R.Ev. 201, a court may take judicial notice of adjudicative facts that are not subject to reasonable dispute because they are generally known within the trial court's territorial jurisdiction or can be accurately determined from sources whose accuracy cannot reasonably be questioned. "On timely request, a party is entitled to be heard on the propriety of taking judicial notice and the nature of the fact to be noticed. If the court takes judicial notice before notifying a party, the party, on request, is still entitled to be heard." N.D.R.Ev. 201(e). "[A] district court may take judicial notice of evidence presented in a closely related case, particularly when the judge and parties are the same in both proceedings." Frisk v. Frisk , 2006 ND 165, ¶ 22, 719 N.W.2d 332.

[¶8] Prior to trial, the Corporations moved for the district court to take judicial notice of the Corporations’ prior action against Mary Orwig, which was dismissed without prejudice on the parties’ stipulation, and the Corporations’ current action against Mary Orwig that was consolidated with the divorce action. Mary Orwig had notice and an opportunity to respond to the motion. The court took judicial notice of what occurred in this case and the Corporations’ prior action against Mary Orwig.

[¶9] It was not error for the court to review the file in the current case before trial. See State v. Cook , 2020 ND 69, ¶ 12, 940 N.W.2d 605 (stating a court does not need to take judicial notice of matters that are already in the record in that case and N.D.R.Ev. 201 does not apply). We also conclude the court did not abuse its discretion by taking judicial notice of the prior case involving the same parties.

III

[¶10] Mary Orwig argues the district court's admission and consideration of the deposition of the Corporations’ general manager, Kathryn Petersen, was improper. She contends Petersen was available to testify at the time of trial and the deposition was not admissible under N.D.R.Civ.P. 32. She also claims the deposition was not used only for impeachment purposes, Petersen testified to irrelevant facts, and her deposition testimony contained hearsay statements.

[¶11] Steven Orwig testified Petersen is the Corporations’ general manager. Petersen's testimony was taken by deposition in anticipation of her not being available to testify during the trial. During a pre-trial hearing, Mary Orwig acknowledged Petersen's deposition was taken for use at trial. The trial was originally scheduled for August 19, 2019, but was continued to allow the parties to pursue settlement negotiations. On August 19, 2019, the district court stated it had not decided whether to allow the deposition, but indicated Petersen may be required to appear if she was available once the trial continued. The court ultimately allowed the deposition under N.D.R.Civ.P. 32(a)(3).

[¶12] The district court has discretion in admitting deposition testimony under N.D.R.Civ.P. 32, and the court's decision will be reversed on appeal only upon a clear showing that the court abused its discretion. Heng v. Rotech Med. Corp. , 2006 ND 176, ¶ 27, 720 N.W.2d 54.

[¶13] Under N.D.R.Civ.P. 32(a)(3), "An opposing party may use for any purpose the deposition of a party or anyone who, when deposed, was the party's officer, director, managing agent, or designee under Rule 30(b)(6) or 31(a)(4)." Rule 32(a)(3), N.D.R.Civ.P., authorizes an "opposing party" to use the deposition of a party's managing agent or designee.

[¶14] Petersen's deposition was offered by the Corporations and Petersen is the Corporations’ general manager. The Corporations asserted the deposition was taken for the purpose of marshalling the evidence supporting their claims. Steven Orwig also stated on the first day of trial that he was offering the deposition transcript to the extent he needed to offer it. The deposition was offered by the Corporations and was not offered by an "opposing party."

[¶15] The Corporations argue the deposition was also admissible under N.D.R.Civ.P. 32(a)(4)(B) because Petersen was going to be out of the country on the original trial date. Rule 32(a)(4)(B), N.D.R.Civ.P., allows the deposition of a witness to be used if the witness is unavailable because "the witness is more than 100 miles from the place of hearing or trial, or is outside the state, unless it appears that the witness's absence was procured by the party offering the deposition." Petersen was unavailable on the original trial date and her deposition was taken in anticipation of her being unavailable with the deposition being used to replace her trial testimony. However, the trial was continued to allow the parties to pursue settlement negotiations. There was no evidence Petersen was not available when the trial was actually held.

[¶16] Under N.D.R.Civ.P. 61, "At every stage of the...