Reaser v. Reaser

• Citation: 688 NW 2d 429,2004 SD 116
• Decision Date: 13 October 2004
• Docket Number: No. 23115,23115
• Parties: DAVID R. REASER, Plaintiff and Appellant, v. JAMI D. REASER, NEE TWISS, Defendant and Appellee.
• Court: Supreme Court of South Dakota

2004 SD 116

688 NW 2d 429

DAVID R. REASER, Plaintiff and Appellant, v. JAMI D. REASER, NEE TWISS, Defendant and Appellee.

No. 23115

Supreme Court of South Dakota.

Considered on Briefs on August 23, 2004

Opinion Filed October 13, 2004

THOMAS E. BRADY of Brady & Plumier Spearfish, South Dakota, Attorneys for plaintiff and appellant.

GREGORY J. BARNIER, Rapid City, South Dakota, Attorney for defendant and appellee.

ZINTER, Justice.

[¶1.] Former husband appeals an order setting aside the portions of his four-year-old divorce decree that dealt with child custody, child support, alimony, and property division. The decree was set aside because the trial court found that it had been obtained by a fraud upon the court. We affirm.

Facts and Procedural History

[¶2.] David and Jami Reaser were married in August 1985. From the fall of 1989, through the end of their marriage, the parties lived on David's parents' family ranch. David worked on the ranch, and Jami worked in the home taking care of the children. David was also involved in a ranching partnership arrangement with his father during this time.

[¶3.] The parties separated in the fall of 1998. Jami took the parties' two children with her to live at her grandmother's home, approximately four miles from the ranch. In December of 1999, David initiated divorce proceedings. David was represented by attorney Michael Ortner, and Jami was not represented.

[¶4.] The parties entered into a stipulation, prepared by Ortner, concerning child custody, child support, alimony, and property division. Under the stipulation, David was to have custody of the children. The stipulation further provided that Jami waived any claim to alimony and David relieved Jami of any obligation for child support. Ortner presented this stipulation and a proposed decree of divorce to Circuit Judge Janine Kern. However, Judge Kern refused to grant the divorce because the stipulation did not provide for child support for the children.

[¶5.] Consequently, the parties modified the stipulation to establish a child support obligation for Jami. However, prior to submitting this revised stipulation to the court, Ortner drafted a "document of private agreement" in which Jami "was to have no duty to pay ongoing [child] support despite the language of the Divorce Decree."¹ This "private agreement" was kept in Ortner's office and was not disclosed to Judge Kern when the revised stipulation and proposed decree were resubmitted six days later.²

[¶6.] Thus, the divorce decree was obtained despite the fact that it was known that Judge Kern would not have granted it without a child support obligation. Furthermore, the revised stipulation neither disclosed the underlying financial circumstances of the parties nor whether Jami had been advised of the size and value of the marital estate. Consequently, the court was also unaware of potential inequities in the division of property.³

[¶7.] In the fall of 2001, less than three years after the divorce, David's parents sold their ranch. From the proceeds, they gave David a gift of over $300,000. In November of that same year, David moved to Cody, Wyoming with his new wife and the children.

[¶8.] In May 2002, Jami moved for a change in custody. She also sought child support from David. The motions were heard by Circuit Judge Thomas Trimble. During the course of that hearing, the parties' private agreement first came to light. Following an evidentiary hearing, Judge Trimble denied Jami's motion for change of custody and told David that he was free to seek child support from Jami.

[¶9.] David then initiated a child support action against Jami. The child support matter was heard by a referee, who recommended that Jami pay current child support and arrearages. The referee's recommendation was adopted by the circuit court on March 31, 2003, and became an interim order for support. Jami subsequently filed motions to set aside the interim order for support, to approve a visitation agreement, and to eliminate the child support arrearages. Jami's supporting affidavit asserted that her agreement to make no claim to a portion of the marital assets, David's interest in the family ranch partnership, and alimony was based on David's private agreement to not seek child support.

[¶10.] Jami's motions were heard by Judge John J. Delaney, who expressed serious concern about the deception created by the private agreement. Because he ultimately concluded that the parties' decree of divorce was obtained by fraud upon Judge Kern, he went beyond the specific relief requested in Jami's motion, and he vacated those portions of the divorce decree that dealt with child custody, child support, alimony, and property division.

[¶11.] David then filed a motion asking Judge Delaney to reconsider. Among other things, the motion to reconsider pointed out that even if there had been a fraud upon the court, Judge Trimble determined the best interests of the children in a contested child custody hearing. The motion to reconsider also pointed out that there had been no showing of a change in circumstances sufficient to change the custody arrangement ordered by Judge Trimble.

[¶12.] A hearing on David's motion to reconsider was held on January 5, 2004. On January 22, Judge Delaney signed a written opinion granting the motion to reconsider and vacating that portion of his order that had vacated Judge Trimble's child custody determination. However, on January 23, 2004, before Judge Delaney's written decision was filed, David filed a notice of appeal from the original decision vacating the divorce decree. On January 27, 2004, four days after the notice of appeal was filed, Judge Delaney's Amended Order⁴ reinstating David's child custody was filed.

[¶13.] David appeals raising the following issues:

1. Whether the trial court erred in setting aside the parties' decree of divorce over four years after its entry.

2. Whether the trial court erred in vacating the original child custody provision, and, in the alternative, whether the trial court properly amended the child custody decision after the notice of appeal had been filed.

Analysis and Decision

Authority to Set Aside a Four Year Old Decree of Divorce Obtained by Fraud Upon the Court.

[¶14.] Judge Delaney originally set aside the child custody, child support, alimony, and property provisions of David and Jami Reaser's 1999 divorce decree. The trial court did so, essentially upon its own motion, because of the parties' private agreement and the court's finding of a fraud upon the court. Because of the seriousness of this matter, the trial court's relevant findings of fact are set forth verbatim. The trial court found:

11. That at the institution of these proceedings [David] was represented by Mr. Michael Ortner.

12. That at the institution of the divorce proceedings [Jami] was unrepresented.

13. That prior to the completion of the divorce action [David] transferred his interest in the family ranching operation back to his father and mother.

14. That a stipulated divorce, placing custody of the children with [David], waiving alimony claims by [Jami], and waiving any child support to be paid by [Jami] to [David], was presented to the [c]ourt.

15. The [c]ourt refused to issue a [d]ivorce [d]ecree based on the initial stipulated agreement because child support was not meaningfully addressed.

16. A second Stipulation was prepared and submitted to the [c]ourt which purported to establish a child support obligation from [Jami] to [David].

17. At the time the second Stipulation was prepared, unbeknownst [to the] [c]ourt there was a contemporaneous agreement between the parties [that] again waived any support obligation from [Jami] to [David].

18. Neither Stipulation disclosed to the [c]ourt the underlying financial circumstances of the parties, nor did it alert the [c]ourt to the fact that there may have been a gross inequity in the division of property between the parties.

19. There is no evidence upon which a [c]ourt can conclude that [Jami] was informed of her rights or of the size and value of the marital estate prior to the preparation of the Divorce Stipulation.

20. The [original trial court] executed the Divorce Decree ignorant of the fact that the parties had entered into a secret agreement drafted by counsel for [David] to bar the collection of any support by [David] from [Jami].

21. The secret agreement purports to do precisely what the [c]ourt had specifically refused to approve, and the execution of the Decree was predicated upon the express representation, through the Stipulation, that a meaningful support obligation was established.

22. The "secret" or undisclosed agreement entered into between the parties was contrary to the [c]ourt's previous direction to counsel after review of the first [S]tipulation.

23. That the [previous trial court] would not have executed the Decree of Divorce, based upon the second [S]tipulation presented to it, had it been specifically advised by counsel and had it known that in fact the contemporaneous agreement waiving child support had been made.

24. The waivers of support and alimony appear to the [c]ourt to be intended to preclude any property division in funds or ranch property of the parties' sizeable interest in the family ranching operation.

25. The purported transfer from [David] to his father, during these divorce proceedings, of his interest in the family ranch operation was not an arms length transaction when considered in light of the income tax records and other limited financial information made available to the [c]ourt.

26. That when [Jami] subsequently moved for custody of the children in 2002, [David] "reneged" upon the secret agreement and attempted to obtain several years of past due child support.

27. That the review of the issues of support and visitation[,] which gave rise to these proceedings[,] led to the [c]ourt's discovery of the fraud perpetrated upon it in the course of the initial

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