Seals v. Seals, 2328-III
| Decision Date | 14 February 1979 |
| Docket Number | No. 2328-III,2328-III |
| Citation | 22 Wn.App. 652,590 P.2d 1301 |
| Parties | Doris P. SEALS, Respondent, v. Max SEALS, Appellant. |
| Court | Washington Court of Appeals |
Richard R. Greiner, Yakima, for appellant.
Perry J. Robinson, Yakima, for respondent.
Max Seals appeals a judgment awarding undistributed community property to Doris Seals, his former wife. In 1975, Doris Seals filed a petition for dissolution against Max Seals. In 1976, a decree of dissolution was entered. Within 4 months, Doris Seals filed a partition action, alleging that certain property had not been disclosed in the dissolution action.
The trial court in the partition action found that Max Seals had breached his fiduciary duty to his wife and had willfully and fraudulently failed to disclose to her and to the trial court the existence of community property in the dissolution action, namely: (1) Two contractors' escrow accounts totaling almost $28,000; (2) several hundred shares of stock in two corporations; (3) proceeds from a checking account with a balance of $22,420. Mrs. Seals was awarded approximately one-half of the above property at 6 percent interest from the date of the dissolution trial. The court also awarded her $9,000 in attorney's fees, plus her costs and expenses for the 2-week trial.
Mr. Seals counters the finding of deliberate concealment by arguing that if Mrs. Seals had used more diligence during discovery, E. g., subpoenas, the property would have been disclosed. Mr. Seals was specifically asked in continuing interrogatories prior to the dissolution trial if he owned any stock in any firm or corporation. He answered, no. No amendments to the interrogatories were ever made. CR 26(e)(2), governing answers to interrogatories, requires that a party is "under a duty seasonably to amend a prior response" if he knows the answer is incorrect or is no longer true; a "failure to amend the response is in substance a knowing concealment." Exhibits and testimony revealed the existence of building contracts, a checking account and the corporate stock during the marriage and prior to dissolution. Mrs. Seals was not required to resort to subpoenas to discover these assets. We find substantial evidence in the record to support the trial court's finding. Holland v. Boeing Co., 90 Wash.2d 384, 583 P.2d 621 (1978).
The husband next contends that the dissolution action barred the partition action under the principles of res judicata or collateral estoppel. We disagree. The purpose of the doctrines of res judicata and collateral estoppel is to prevent relitigation of the same subject matter by the same parties over the same cause of action. Meder v. CCME Corp., 7 Wash.App. 801, 803, 502 P.2d 1252 (1972). Property undisposed of by a dissolution action becomes property held by the former spouses as tenants in common. Yeats v. Estate of Yeats, 90 Wash.2d 201, 580 P.2d 617 (1978); Olsen v. Roberts,42 Wash.2d 862, 864, 259 P.2d 418 (1953). In an action to partition a tenancy in common, the subject matter is not identical to the prior dissolution action. Since the property here was undisclosed, the partition action was necessary for its disposition. Under circumstances such as these, the partition action is simply a continuation of the dissolution proceeding. CR 60(b)(4) and CR 60(e)(1).
Mr. Seals also argues that no fiduciary duty existed between the parties after their separation; thus, he had no duty to disclose. Parties prior to and during marriage have a fiduciary duty to one another in agreements which have been reached between them. In re Marriage of Hadley,88 Wash.2d 649, 565 P.2d 790 (1977); Friedlander v. Friedlander, 80 Wash.2d 293, 494 P.2d 208 (1972); Hamlin v. Merlino, 44 Wash.2d 851, 272 P.2d 125 (1954). A fiduciary duty does not cease upon contemplation of the dissolution of a marriage. Mrs. Seals had little knowledge of her husband's business. Her attorney testified he relied on the interrogatories; his examination of income tax returns and balance sheets did not reveal the existence of contracts or corporate stocks. The trend has been toward requiring a duty to disclose in commercial transactions, even though there is an absence of a fiduciary relationship, particularly if one of the parties has superior knowledge of business affairs. Sigman v. Stevens-Norton, Inc., 70 Wash.2d 915, 918, 425 P.2d 891 (1967); Boonstra v. Stevens-Norton, Inc., 64 Wash.2d 621, 625, 393 P.2d 287 (1964); Kaas v. Privette, 12 Wash.App. 142, 147-48, 529 P.2d 23 (1974). Where a party to a dissolution action, in clear and unambiguous terms, in response to interrogatories (CR 33) asserts the nonexistence of a fact, of which that party has or should have knowledge, the requesting party may rely on such statements. The exercise of reasonable diligence does not require a party to look behind the answers. See Kurtz v. Fels, 63 Wash.2d 871, 389 P.2d 659 (1964). Max Seals had a fiduciary duty to disclose all community assets as well as separate property prior to dissolution.
In the decree, the trial judge awarded to Max Seals "All assets used by respondent in conjunction with his business known as Seals Construction Company." Mr. Seals argues that the language of the decree indicates the trial judge intended to dispose of all the property since the undisclosed escrow accounts and the checking account were in the company's business name. However, the oral opinion of that judge, his subsequent findings of fact and an exhibit of his computation on division of the property reveal that he believed the business assets totaled only $5,000. This finding is supported by the record of that proceeding, which did not contain the property here in issue. We find no merit to Mr. Seals' contention.
The court awarded Mrs. Seals $9,000 attorney's fees. Mr. Seals maintains that since the partition action is independent of the dissolution action, the award of attorney's fees allowed under the dissolution statute, RCW 26.09.140, 1 is not permitted. This contention may be answered on several theories.
First, RCW 26.09.080 states in pertinent part:
In a proceeding for . . . disposition of property following dissolution of the marriage by a court which lacked . . . jurisdiction to dispose of the property, the court shall, . . . make such disposition of the property and the liabilities of the parties, . . .
The language of the statute is applicable here. A trial court has the duty to dispose of "all of the property of the parties Which is brought to its attention in the trial of a divorce case." (Italics ours.) Shaffer v. Shaffer, 43 Wash.2d 629, 630, 262 P.2d 763, 764 (1953). Mrs. Seals filed the partition action promptly after she inadvertently discovered the existence of corporate stock which had not been mentioned in the dissolution proceeding. The present action is a continuation of the original dissolution action. Her pleading and affidavit subsequent to the dissolution decree satisfied the requirements of CR 60(b)(4) and CR 60(e)(1) 2 permitting relief from a final judgment. To hold otherwise would be to penalize Mrs. Seals for the fraudulent conduct of Mr. Seals. See In re Marriage of Mahalingam, 21 Wash.App. 228, 231, 584 P.2d...
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