THE LIMITS OF FINALITY: REOPENING PROPERTY DIVISION ORDERS IN POST-JUDGMENT PROCEEDINGS
© 1997 National Legal Research Group, Inc.
Life would be much simpler if parties to court cases would live their lives in accordance with basic rules of civil procedure. In particular, if litigants would universally respect the need to resolve all contested issues in a single, comprehensive court hearing, the trial of divorce cases would be substantially easier.
Unfortunately, as all domestic practitioners know only too well, real life is notorious for its lack of respect for the finality of court orders. In fact, it sometimes appears that the natural order of the world is directly opposed to any principle of finality of judgment. As soon as a divorce decree becomes final, forgotten assets spring suddenly to mind; hidden assets are revealed and sometimes even flaunted by a dishonest spouse. Language which seemed facially clear at the time of divorce suddenly seems woefully ambiguous; ambiguities which seemed minor and unimportant at the time of divorce develop into major issues, with thousands of dollars at stake. In short, the real world does not stop changing merely because a court has issued a final divorce decree. These changes can make a divorce decree appear incomplete, ambiguous, and sometimes even unfair.
The law's traditional response to the ever-changing nature of the real world is to impose finality by judicial fiat. If every change in circumstances were sufficient to overturn a court order, the courts have reasoned, the courts would be clogged by ceaseless litigation. In the specific instance of divorce cases, however, the traditional rule runs contrary to the basic fact that divorce courts are courts of equity. Where one spouse has concealed assets from the court and from the other spouse, the result of the traditional rule is to reward deliberate fraud. Moreover, in an action where the amount at issue includes literally every asset owned by two human beings, assets are sometimes misvalued or forgotten. These types of errors are regularly committed not only by the parties, but also by the court itself. To invoke the traditional rule against such errors would be to impose Draconian penalties for human misconduct.
Recognizing the powerful nature of the equitable argument for modifying some court orders, the law has never insisted that all final judgments must be absolutely beyond modification. There is, in fact, a well-developed body of law considering whether the result of the divorce decree is so unfair that it must be changed after the fact. That law works well in most fact situations. In the specific context of fraud, however, a majority of states impose strict time limits on the court's ability to grant a remedy, even for fraud which is deliberate and malicious. As a result, it is surprisingly easy in many states to abuse the property division process by concealing assets from the court. There has been a small move away from strict time limits in recent years, but the improvements have all too often come from either legislation or rulemaking. As a result, it is still far too easy to obtain an unjust windfall by concealing assets. If the courts are serious about preventing fraud in divorce cases, they must stop placing strict time limits on the power to reopen a judgment for intentional and malicious fraud.
II. FINAL DIVORCE DECREES IN GENERAL: THE RULE AGAINST MODIFICATION
The general rule on postjudgment modification of divorce decrees is simple: modification is not permitted. A New Hampshire court explained:
A property distribution in cases of divorce and separation creates vested rights upon which the parties are entitled to rely in starting and planning a new and different life. It is, in effect, an assignment of assets, however modest or extensive, reflective of the efforts of the parties and the considered judgment of the equity court in arriving at a degree of parity called fairness. Such judgments are made, as are judgments in the business world generally, upon reflection of the prevailing economic climate as well as the vicissitudes of economic times. Although, in appropriate cases, non-economic considerations may come into play . . . the great weight of considerations in most cases is economic. For this reason, in marital cases, as in the business world, modification of interests thought to be vested is not permitted[.]McSherry v. McSherry, 135 N.H. 451, 606 A.2d 311, 313 (1992). Thus, the purpose of property division is mainly to compensate the parties for their economic contributions to the marriage. While financial needs and other future-oriented factors are a consideration, property division orders are predominantly based upon existing facts. Since both parties had a full opportunity to bring the existing facts before the court at the time of the original divorce hearing, there should be in most cases no need for postjudgment modification.
Courts regularly invoke the general rule against modification to deny postdivorce modification of property division orders. For example, in Cyr v. Cyr, 469 A.2d 836 (Me. 1983), the trial court awarded each spouse an equal interest in antique furniture, with nonantique furniture and furnishings to go to the wife. Three years later, the husband filed a motion for clarification asking the court to determine how antique reproduction furniture was to be classified. In response, the court ordered the wife to be given as her share enough furniture (antique and otherwise) to furnish her home, with the remainder to be divided equally. On appeal, the court agreed with the husband's contention that this order was really a modification, since it reduced his share of the antique furniture. Such modification of a property division order was beyond the statutory authority of the court, and it had to be reversed.
In McMahon v. McMahon, 339 N.W.2d 898 (Minn. 1983), the wife sought maintenance 14 years after the divorce, which had awarded her the marital home. The trial court granted her maintenance but imposed a lien on the homestead to secure repayment. The appellate court found that the trial court order essentially gave the husband a share of the home and, therefore, improperly effected a redistribution of property. See also Leslie v. Leslie, 827 S.W.2d 180 (Mo. 1992) (after husband retired, error to reduce wife's alimony by the exact amount of her deferred award from husband's pension; reduction was tantamount to a modification of the property division).
For additional cases holding that property division orders cannot be modified, see Swords v. Swords, 578 So. 2d 1337 (Ala. Civ. App. 1991) (error to modify property division as remedy for nonpayment of alimony); Jones v. Jones, 26 Ark. App. 1, 759 S.W.2d 42 (1988); Passamano v. Passamano, 228 Conn. 85, 634 A.2d 891 (1993); Carroll v. Carroll, 545 So. 2d 338 (Fla. Dist. Ct. App. 1989); Meyer v. Meyer, 222 Ill. App. 3d 357, 583 N.E.2d 716 (1991); In re Bruns, 535 N.W.2d 157 (Iowa Ct. App. 1995); Potter v. Potter, 471 N.W.2d 113 (Minn. Ct. App. 1991); Mottel v. Mottel, 664 S.W.2d 25 (Mo. Ct. App. 1984); Inserra v. Inserra, 260 N.J. Super. 17, 615 A.2d 277 (App. Div. 1992); Boschee v. Boschee, 340 N.W.2d 685 (N.D. 1983); In re Rae, 107 Or. App. 726, 813 P.2d 1107 (1991) (court cannot postpone date of execution on monetary judgment); Romeo v. Romeo, 417 Pa. Super. 180, 611 A.2d 1325 (1992); Kelly v. Kelly, 310 S.C. 299, 423 S.E.2d 153 (Ct. App. 1992); Pearcy v. Pearcy, 884 S.W.2d 512 (Tex. App. 1994); Decker v. Decker, 22 Va. App. 486, 471 S.E.2d 775 (1996); In re Irwin, 64 Wash. App. 38, 822 P.2d 797 (1992); Sigel v. Beard, 181 W. Va. 92, 380 S.E.2d 444 (1989); and Bloom v. Bloom, 798 P.2d 1193 (Wyo. 1990). The general rule applies to any judgment which is actually a division of property, even if it is labeled as spousal support. SeeLipp v. Lipp, 355 N.W.2d 817 (N.D. 1984); In re Ash, 61 Or. App. 595, 658 P.2d 540 (1983).
The general rule against modification prevents the court from considering any equitable distribution issue after the property division order has become final, even if the court had considered that issue earlier in the case. See Meyer v. Meyer, 222 Ill. App. 3d 357, 583 N.E.2d 716 (1991) (error to order husband to pay rent for use of marital home); In re Irwin, 64 Wash. App. 38, 822 P.2d 797 (1992) (error to extend period for paying installment award); Boisselle v. Boisselle, 162 Vt. 240, 648 A.2d 388 (1994) (error to extend period of exclusive use of home; order was improper modification of property division); Decker v. Decker, 22 Va. App. 486, 471 S.E.2d 775 (1996) (error to award credits for postdivorce mortgage payments after divorce decree had become final, even though appeal on other issues had been pending at the time).
Likewise, the court cannot change its property division order in light of postdivorce changed circumstances. See Crowley v. Crowley, 838 S.W.2d 95 (Mo. Ct. App. 1992) (error to change coverture fraction for dividing pension to reflect husband's early retirement); Schrader v. Schrader, 108 Ohio App. 3d 25, 669 N.E.2d 878 (1995) (error to modify QDRO to deal with obligation to reimburse employer for disability benefits); In re Williams, 134 Or. App. 8, 894 P.2d 523 (1995) (order providing that wife's percentage of husband's pension would not apply to postdivorce increases was improper modification).
The court may, of course, exercise any jurisdiction to modify which was expressly retained in the divorce decree. E.g., In re McGowan, 54 Cal. App. 4th 80, 62 Cal. Rptr. 2d 453 (1997).
Enforcement. The court is not only permitted, but indeed required, to enforce its original decree in later actions. When the facts change in a manner not anticipated by the original decree, the distinction between enforcement and modification can be quite thin. The task of the court in such a situation is to construe the order to determine how the original court would have interpreted the existing order if it had known of the future change. Where the court stays within this limit, it can enforce and apply the prior order without modifying it.
Many of the cases permitting enforcement involve situations where the unforeseen circumstance arose from one spouse's unwillingness to follow the terms of the original decree. In this situation, enforcement is almost always permitted, even where it comes close to modification. The effective rationale is that no court could ever foresee the clever efforts a determined spouse will make to avoid an award, and that the rule against modification will not be used to frustrate effective enforcement of the decree. For instance, where the court orders a party to convey a specific asset or pay a specific debt, and the party in question fails to comply, the court can issue a money judgment against the party for the value of the asset or debt in question. Such a judgment is enforcement and not modification of the underlying property division. See Grayson v. Grayson, 628 So. 2d 918 (Ala. Civ. App. 1993); In re Ward, 267 Ill. App. 3d 35, 641 N.E.2d 879 (1994); Booth v. Booth, 640 A.2d 1063 (Me. 1994); see also Volk v. Volk, 435 N.W.2d 690 (N.D. 1989) (where property transferred to wife had substantial tax arrears, proper to reopen judgment for clerical error so that husband could be ordered to pay the taxes).
The court reached a contrary result in Settles v. Settles, 913 S.W.2d 101 (Mo. Ct. App. 1995), holding that an order to pay the value of the withheld assets was improper modification. The court's interpretation of the rule against modification seems hypertechnical and pointless, particularly because the enforcing spouse could probably have obtained the exact same relief by filing an action for common-law conversion. See Brooks v. Brooks, 863 S.W.2d 689 (Mo. Ct. App. 1993). Decisions such as Settles encourage noncompliance with court orders by permitting noncomplying parties to delay compliance by making trivial objections.
For additional cases permitting liberal enforcement of a decree which one spouse has violated, see Graff v. Graff, 472 N.W.2d 882 (Minn. Ct. App. 1991) (court can implement award without modifying it; where wife paid debt assigned to husband in order to prevent foreclosure on marital home, proper to reduce husband's equity by amount of wife's payment); Lewis v. Lewis, 194 A.D.2d 648, 599 N.Y.S.2d 606 (1993) (extending time period of wife's option to purchase home; also ordering husband to compensate wife for mortgage payments which she had made when he failed to comply with court order to pay them); and Echols v. Echols, 900 S.W.2d 160 (Tex. App. 1995) (where wife was awarded specific percentage of husband's monthly pension benefits, and husband took lump-sum early retirement benefits, application of wife's percentage to lump sum was enforcement and not modification).
A few courts have held that modification results when an order is changed in response to noncompliance by a spouse. These cases have tended to involve situations where the violation was minor, where a narrower remedy was available, or where the change was intended as a penalty. See DeBoer v. DeBoer, 669 N.E.2d 415 (Ind. Ct. App. 1996) (where original divorce decree awarded videotape to wife, error to modify decree to place tape in court custody); Erickson v. Erickson, 452 N.W.2d 253 (Minn. Ct. App. 1990) (error to award wife interest from date of decree until date of husband's compliance, where no such provision appeared in initial order); Viskup v. Viskup, 149 Vt. 89, 539 A.2d 554 (1987) (error to add acceleration clause to installment monetary award provision); Nicholas v Nicholas, 184 W. Va. 364, 400 S.E.2d 608 (1990) (order to pay marital debt).
Courts also tend to hold that enforcement is not modification when the unexpected circumstance is the failure of a court-ordered division method for reasons beyond either party's control. In this fact situation, the courts tend to construe the order in light of its substantive rights and not its procedural remedies. If the remedy set forth in the original order is not effective, the court may create a new remedy so long as the substantive rights of the parties remain unchanged. See Roberts v. Roberts, 32 Conn. App. 465, 629 A.2d 1160 (1993) (where judgment ordered a private sale of a home and sale proved difficult, proper to order auction sale); Romeo v. Romeo, 417 Pa. Super. 180, 611 A.2d 1325 (1992) (original order required sale of home and lot, with specified division of proceeds; when home and lot proved difficult to sell, proper to award home to wife and lot to husband; approximate division of value between the parties was unchanged).
Only one recent decision permitted the order to be changed to account for circumstances beyond the control of the parties which did not directly frustrate compliance with the court's order. See Garris v. Garris, 643 So. 2d 993 (Ala. Civ. App. 1994) (where unforeseen tax consequences arose after initial decree, order dividing those taxes was enforcement and not modification).
Use of already existing enforcement provisions, of course, does not constitute improper modification. E.g., Seng v. Seng, 590 So. 2d 1120 (Fla. Dist. Ct. App. 1991).
Consequences of Violation. An order which modifies a property division is always erroneous. If that order is not appealed and becomes final, does the second order itself become immune to attack? The recent trend is to hold that an order modifying a property division award is void for lack of subject-matter jurisdiction. See Williams v. Williams, 932 S.W.2d 904 (Mo. Ct. App. 1996) (attempted modification of property division portion of pre-equitable distribution judgment was void for lack of jurisdiction); Spicuzza v. Spicuzza, 886 S.W.2d 660, 661 (Mo. Ct. App. 1994) (rule against modification is jurisdictional, so that appellate court can reverse improper modification on its own initiative even though neither party raised the issue); Schrader v. Schrader, 108 Ohio App. 3d 25, 669 N.E.2d 878 (1995) (improper substantive modification can be raised for the first time on appeal). A contrary result was reached in Kleinsmith v. Northwestern Bank & Trust Co., 477 N.W.2d 388 (Iowa 1991), which held that the second order was immune to attack after it became final.
Minority Rule: Limited Modification Permitted. A few states depart from the general rule and permit limited modification of property division awards. SeeWagoner v. Wagoner, 538 Pa. 265, 648 A.2d 299 (1994) (husband was ordered to make deferred offset payments equal to the value of the wife's share of his pension, but then encountered substantial financial hardship; error to hold that award was not modifiable); Whitehouse v. Whitehouse, 790 P.2d 57, 61 (Utah Ct. App. 1990) (court can modify property division for changed circumstances "with great reluctance and upon compelling reasons"); see also In re Vargas, 20 Kan. App. 2d 480, 891 P.2d 462 (1994) (court in a divorce case can modify the property division in an earlier separate maintenance action, at least to the extent of adding new substantive terms); Rogers v. Rogers, 588 A.2d 1354 (R.I. 1991) (where court divided business with deferred distributive award, and business subsequently failed, proper to suspend future payments until business regained its health).
III. RECONSIDERING THE JUDGMENT
The general rule against modification is strong, and it is broadly applied by the courts. Nevertheless, the rule is subject to a number of different exceptions. Under some factual circumstances, these exceptions can be almost as broad as the rule itself.
The broadest exception to the rule against modification is based upon time. A divorce decree does not become final as soon as it is entered. Instead, the finality of the court's order is delayed for a short period. The precise period of time varies from state to state, but it is normally somewhere around three to four weeks. See, e.g., Va. Sup. Ct. R. 1:1 (21 days).
During this reconsideration period, the court has unlimited authority to reconsider or modify the judgment on any equitable basis. See Loupe v. Loupe, 594 So. 2d 155 (Ala. Civ. App. 1992) (reopening default judgment; husband's attorney had not appeared because of secretarial error); Barganier v. Barganier, 669 So. 2d 933 (Ala. Civ. App. 1995) (reopening judgment within prefinal judgment period to consider unforeseen tax consequences); Timbes v. Timbes, 553 So. 2d 624 (Ala. Civ. App. 1989); In re Romashko, 212 Ill. App. 3d 1018, 571 N.E.2d 995 (1991) (reopening default judgment; wife had failed to reveal substantial marital assets); Ringuette v. Ringuette, 594 A.2d 1076 (Me. 1991) (proper to grant motion to reconsider based on changes in value of asset since date of valuation); Kahn v. Kahn, 839 S.W.2d 327 (Mo. Ct. App. 1992).
While most of the case law arises from a motion for reconsideration filed by a party, the court is permitted to reconsider a judgment on its own initiative, even if no motion has been filed. Fox v. Fox, 103 N.C. App. 13, 404 S.E.2d 354 (1991). It may be error, however, to modify the judgment without giving the parties a chance to be heard on the question. See Kuehn v. Kuehn, 55 Ohio App. 3d 245, 564 N.E.2d 97 (1988). But see Kelly v. Kelly, 310 S.C. 299, 423 S.E.2d 153 (Ct. App. 1992) (trial court lacks subject-matter jurisdiction to modify property division).
The reconsideration period does not start to run until the trial court has resolved all outstanding issues in the case. In In re Petraitis, 263 Ill. App. 3d 1022, 636 N.E.2d 691 (1993), the court ordered preparation of a QDRO to divide a certain pension. More than 30 days after the order, the parties discovered that the state pension in question could not be divided by a QDRO. The trial judge then ordered the husband to make payments directly to the wife. The husband appealed on grounds that this was an improper substantive modification, but the appellate court disagreed. Because the court merely ordered preparationof a QDRO, without actually issuing any such order, the court had not yet completed its jurisdiction over the case. The judgment was therefore still prefinal, and it remained subject to substantive modification.
The reconsideration may be extended if there are postjudgment motions pending before the trial court. See Timbes v. Timbes, 553 So. 2d 624 (Ala. Civ. App. 1989); Reese v. Reese, 406 Pa. Super. 214, 593 A.2d 1312 (1991).
IV. CLARIFYING THE AMBIGUOUS JUDGMENT
The second exception to the general rule against modification of judgments applies when the language of the original judgment is unclear. The world would be simpler if all divorce decrees were clearly worded, but in reality some divorce decrees are woefully unclear on crucial issues. Moreover, the real world has a way of changing in a manner unanticipated by the decree, so that substantial financial consequences attach to issues which the decree addressed only in passing. The finality of judgments would actually be reduced if there were not some mechanism for determining the actual meaning of an ambiguous judgment.
In response to this need for clarification, the courts have held that an ambiguous judgment can always be clarified. As long as the court only determines the effect and meaning of the prior decree, and does not change that effect or meaning, the rule against modification does not apply. See Atchison v. Atchison, 646 So. 2d 72 (Ala. Civ. App. 1994) (where original court ordered sale of marital home but stated no specific time, subsequent order specifying time for sale was clarification and not modification); Graham v. Graham, 555 So. 2d 1126 (Ala. Civ. App. 1989); Jones v. Jones, 26 Ark. App. 1, 759 S.W.2d 42 (1988); In re Connell, 831 P.2d 913 (Colo. Ct. App. 1992) (decree required wife to reimburse husband for taxes he paid after certain date; proper to clarify as to taxes paid after the date but incurred before the date); MacDonald v. MacDonald, 582 A.2d 976 (Me. 1990) (judgment awarded husband 17 acres but description of land covered only 3 acres; proper to change description); Perrington v. Perrington, 447 N.W.2d 886 (Minn. 1989); Lockett v. Musterman, 854 S.W.2d 831 (Mo. Ct. App. 1993) (proper to add legal description of property conveyed); Berg v. Berg, 530 N.W.2d 341 (N.D. 1995) (noting that clarification is particularly appropriate where the nonmoving spouse created the ambiguity); Kostelecky v. Kostelecky, 537 N.W.2d 551 (N.D. 1995) (reopening judgment to address tax consequences not allocated in divorce decree); Wastvedt v. Wastvedt, 371 N.W.2d 142 (N.D. 1985); Davis v. Davis, 488 N.W.2d 425 (S.D. 1992); Bettinger v. Bettinger, 793 P.2d 389 (Utah Ct. App. 1990).
For similar reasons, the court can file an opinion explaining its judgment after the judgment has already become final. As long as the explanation is fully consistent with the judgment itself, no improper modification is involved. Emanuelson v. Emanuelson, 26 Conn. App. 527, 602 A.2d 609 (1992).
Ambiguous judgments are generally construed with reference to the law which existed at the time they were rendered. For instance, in Barnard v. Barnard, 863 S.W.2d 770 (Tex. App. 1993), the decree did not expressly state whether the wife's percentage interest attached to the husband's entire pension (including postdivorce increases) or only to that portion of it which was acquired before the divorce. Because Texas law at the time of the decree held that postdivorce increases could be divided, the court construed the decree to so provide, even though Texas law had subsequently changed so that most postdivorce increases could not be divided.
V. REOPENING THE JUDGMENT
The most substantial exception to the finality of divorce decrees is the general law on reopening of judgments. Divorce decrees are final orders, but they are no more final than judgments in any other field of law. In most states, a statute or court rule similar to Fed. R. Civ. P. 60(b) sets forth a series of grounds upon which final judgments can be reopened. A substantial body of case law holds that these statutes and rules apply to divorce decrees. See, e.g., Bachtle v. Bachtle, 494 A.2d 1253 (Del. 1985); Dusenberry v. Dusenberry, 625 N.E.2d 458 (Ind. Ct. App. 1993); Zeer v. Zeer, 179 Mich. App. 622, 446 N.W.2d 328 (1989); Born v. Born, 753 S.W.2d 121 (Mo. Ct. App. 1988); Anderson v. Somers, 455 N.W.2d 219 (S.D. 1990). The cases identify a number of different grounds upon which a judgment can be reopened.
A judgment can obviously be reopened if it is a product of duress. See Elliott v. Elliott, 667 So. 2d 116 (Ala. Civ. App. 1995) (where husband showed up at wife's house on multiple occasions, angry and aggressive, to interfere with her conduct of divorce settlement, reopening judgment for duress); Peterson v. Peterson, 555 N.W.2d 359 (N.D. 1996) (husband took wife to his lawyer to sign stipulation when she was in extreme emotional distress; husband threatened that wife would lose both her children and her life if she did not sign, and failed to reveal all of his assets; reopening judgment for duress); Foley v. Foley, 392 Pa. Super. 9, 572 A.2d 6 (1990) (husband intimidated wife into not defending divorce action; decree reopened); Brown v. Brown, 863 S.W.2d 432 (Tenn. Ct. App. 1993) (expressly stating that duress would have been sufficient grounds to reopen had it been present on the facts).
Motions to reopen for duress are subject to the time limit imposed by state rules modeled upon Fed. R. Civ. P. 60(b). Cerniglia v. Cerniglia, 679 So. 2d 1160 (Fla. 1996). To the extent that the duress stopped upon divorce and the innocent spouse could have filed the action within the time limit, this rule is not objectionable. If the duress continued until the time limit expired, the time limit suffers from the same serious problems set forth below in the discussion of time limits on motions to reopen for fraud.
A judgment can also be reopened if it is a product of mistake. The easiest mistake to correct is a clerical mistake. A clerical mistake occurs when the language of the divorce decree fails to reflect the intention of the court which issued it.
One particularly common clerical error is the inadvertent failure to divide an asset. As long as the asset was mentioned to the court, so that the failure of division was the court's fault, such inadvertent failure is generally a clerical error. See Antepenko v. Antepenko, 584 So. 2d 836 (Ala. Civ. App. 1991) (court properly corrected inadvertent failure to award farm equipment to husband); In re Getz, 57 Wash. App. 602, 789 P.2d 331 (1990) (proper to reopen decree to divide pension; clause dividing pension had been inadvertently omitted from original decree). But cf. Clingan v. Department of Labor & Industries, 71 Wash. App. 590, 860 P.2d 417 (1993) (omission of divisible asset from divorce decree was not per se a clerical error).
Another common source of clerical error is an inadvertent conflict within the judgment itself. See Maguire v. Maguire, 222 Conn. 32, 608 A.2d 79 (1992) (inadvertent overvaluation of stock; valuation inconsistent with court's stated intent to make an equal division); Thomas v. Thomas, 674 N.E.2d 23 (Ind. Ct. App. 1996) (decree stated at one point that husband would pay wife $23,500 for her interest in home and at another point that he would pay wife $15,500; discrepancy in amounts was a clerical error); Brooks v. Brooks, 864 S.W.2d 645 (Tex. App. 1993) (where docket sheet awarded husband one-half of wife's pension but judgment entry awarded pension entirely to wife, court properly corrected judgment entry to match docket sheet; judgment entry resulted from clerical error).
A clerical error is obviously present when the court signed the judgment only by accident. See In re Stufflebeam, 283 Ill. App. 3d 923, 671 N.E.2d 55 (1996) (proper to reopen judgment which judge had signed inadvertently and unintentionally).
When the court inadvertently confuses two commonly used words, a majority of cases find a clerical error. See In re Johnson, 237 Ill. App. 3d 381, 604 N.E.2d 378 (1992) (inadvertent statement that home would be sold upon husband's remarriage was corrected to reflect original intent that home be sold on wife's remarriage); Newsom v. Petrilli, 919 S.W.2d 481 (Tex. App. 1996) (order divided respondent's retirement benefits, but was actually intended to divide petitioner's benefits; respondent had no benefits to divide). A few cases, however, find that the error is substantive. See Johnson v. Johnson, 851 P.2d 4 (Wyo. 1993) (error to modify decree to award wife one-third of husband's net rather than gross pension; dissent would have permitted change as correction of clerical error).
One decision appeared to find a clerical error where the court neglected to include in the original order a provision for taxes on property to be transferred from the husband to the wife, and the property turned out to owe substantial tax arrears. Volk v. Volk, 435 N.W.2d 690 (N.D. 1989). As noted in Part II above, many courts in this situation would probably permit the court to order the taxes paid as a matter of enforcement, without any need to reopen the judgment.
To constitute a clerical error, the error must arise from a difference between the intention of the court and the language of the decree. Where the language correctly reflected the court's intention, but the court's intention was wrong, the error is not clerical. See In re Horrocks, 124 Or. App. 233, 862 P.2d 540 (1993) (erroneous valuation of husband's pension was substantive error, not clerical error). But see In re Petraitis, 263 Ill. App. 3d 1022, 636 N.E.2d 691 (1993) (where trial court erroneously assumed that a certain state pension could be divided by a QDRO, holding in dicta that assumption constituted a clerical error).
Where the error in the judgment arises from a mistake by one of the parties rather than a mistake by the court, a clerical error is not present. See Gagnon v. Fontaine, 36 Mass. App. Ct. 393, 631 N.E.2d 1029 (1994) (where wife inadvertently requested wrong parcel of real property, no clerical error occurred).
Mistake by the Parties
It may also be possible to reopen a judgment on grounds of a mistake by the parties. To reopen a judgment on grounds of a nonclerical mistake, the moving party must show (1) that a mistake was made; (2) that the mistake was a mistake of fact; (3) that the mistake was material; and (4) that the mistake could not reasonably have been discovered before the decree became final.
Definition of a Mistake. A mistake occurs when one or both parties believe that a fact involved with the case is different from the true state of affairs. The most common mistake is the inadvertent failure to mention a particular asset to the court. See, e.g., Hatten v. Hatten, 917 P.2d 667 (Alaska 1996) (where division of asset was actually litigated and husband in fact conceded that it was partly marital property, but court neglected to divide asset, granting motion to reopen on grounds of mutual mistake filed 47 days after the entry of the property division order); Schroeder v. Schroeder, 52 Ohio App. 3d 117, 557 N.E.2d 145 (1988).
Whether a given mistake actually occurred is of course an issue of fact, upon which the trial court has considerable discretion. See Rothe v. Rothe, 787 P.2d 534 (Utah Ct. App. 1990) (where evidence was conflicting on whether mistake occurred, trial court did not err by refusing to reopen decree); Bell v. Bell, 162 Vt. 192, 643 A.2d 846 (1994) (where home was valued in decree at $315,000 but sold for $310,000 with consent of both parties, trial court did not err by refusing to reopen).
Mutual vs. Unilateral Mistake. A mutual mistake is a mistake which was made by both parties to the divorce action. Where a mistake was mutual, there is a strong argument for reopening. See Schroeder v. Schroeder, 52 Ohio App. 3d 117, 557 N.E.2d 145 (1988) (court can reopen decree to divide asset neither party remembered to mention to the court); Barnett v. Barnett, 704 P.2d 1308 (Wyo. 1985) (both spouses agreed that their failure to mention joint debt in original proceedings was a mutual mistake; judgment reopened).
A mistake made by only one party to the action can be called a unilateral mistake. Some courts have been willing to reopen divorce decrees for unilateral mistakes. See Volk v. Volk, 435 N.W.2d 690 (N.D. 1989) (husband mistakenly failed to tell court that he had not paid back taxes on property awarded to wife; judgment reopened and husband ordered to pay all the taxes); Cameron v. Cameron, 150 Vt. 647, 549 A.2d 1043 (1988) (reopening judgment to correct mistake in valuation of marital property); Langdon v. Langdon, 182 W. Va. 714, 391 S.E.2d 627 (1990) (through innocent error, husband valued pension at $36,500 instead of its true value of $265,000; decree reopened). Other courts have refused to reopen the decree for a unilateral mistake. See Hoolapa v. Hoolapa, 105 N.C. App. 230, 412 S.E.2d 112 (1992) (if husband did not realize that unvested pension was not marital property, mistake was not a sufficient reason to reopen judgment).
In view of the above cases, it appears that a divorce decree can be reopened regardless of whether the mistake was mutual or unilateral. Reopening a decree for a unilateral mistake is harder, however, as the court is likely to apply the due diligence requirement with special force.
Mistake of Fact. Courts are willing to reopen divorce decrees only for mistakes of fact. A mistake of fact must be distinguished from two other types of mistakes which are not grounds for reopening a judgment: mistakes of law and mistakes of opinion.
A mistake of law by one party alone is never sufficient grounds to reopen a judgment. The remedy for such mistakes is to detect them before the judgment becomes final and raise them in an appeal. If the law permitted a judgment to be reopened for a mistake of law, the effect would be to extend the appeal time indefinitely. See Hatten v. Hatten, 917 P.2d 667 (Alaska 1996) (motion to reopen for mistake of law cannot be filed after time for appealing from order has expired; noting that rule does not apply to motions to reopen for mistake of fact); In re Baumgartner, 226 Ill. App. 3d 790, 590 N.E.2d 89 (1992); Hoolapa v. Hoolapa, 105 N.C. App. 230, 412 S.E.2d 112 (1992) (refusing to reopen judgment on basis that husband did not realize that unvested pension was not marital property).
Where a mistake of law is made by both parties, some courts have been willing to grant relief. See In re Petraitis, 263 Ill. App. 3d 1022, 636 N.E.2d 691 (1993) (holding in dicta that judgment could be reopened for mutual mistake of law in assuming that a state pension could be divided by a QDRO, when state law actually prohibited such division). It is probably significant that the mistake of law in Petraitis involved federal law on division of pensions, a relatively specialized field of which most domestic relations attorneys have only limited knowledge. It is questionable whether the court would have been as willing to reopen the judgment if the mistake of law had been in a less specialized area.
Due Diligence. The court will not reopen a judgment for mistake if the mistake was the fault of the moving party. Phrased conversely, the moving party must show that he or she used due diligence and was not able to avoid the mistake.
The easiest way for a party to meet the due diligence requirement is to prove that a mistake was made by his or her attorney. Courts are reluctant to penalize innocent parties for mistakes made by negligent attorneys. See Reynolds v. Reynolds, 595 A.2d 385 (Del. 1991) (complaint dismissed when counsel failed to file financial statement; proper to reopen, but husband was required to pay any extra costs and fees incurred by wife as a result of the error); Baker v. Baker, 115 N.C. App. 337, 444 S.E.2d 478 (1994) (reopening default judgment for excusable neglect of wife's counsel). Conversely, courts are especially reluctant to find the due diligence requirement met when the mistake was unilateral rather than mutual.
Mistakes in Agreements. Where a mistake occurred in connection with an unincorporated separation agreement, it is not grounds for reopening the decree. It may, of course, be grounds for an attack upon the contract. See Weber v. Allen, 574 A.2d 1362 (Me. 1990).
The most important basis upon which a divorce decree can be reopened is fraud. Fraud is particularly important because, like duress and unlike mistake, it arises from a deliberate, bad-faith attempt by one spouse to abuse the property division process. Unlike duress, however, fraud is difficult to detect, and it arises much more often in the reported case law. Fraud is an unfortunate reality in the real world, and it is important that the judicial system develop an appropriate response.
The reported decisions have generally developed and applied a reasonable definition of fraud. To reopen a divorce decree on grounds of fraud, the moving spouse must show (1) a misstatement by the defending spouse (or nondisclosure in the face of a duty to speak); (2) that the subject of the misrepresentation was material to the case; (3) that the misrepresentation involved a matter of fact; (4) that the defending party knew that the statement was inaccurate; (5) that the moving party reasonably relied upon the misrepresentation; and (6) that the moving party was unable through exercise of due diligence to discover the true facts.
Misrepresentation. The first element of fraud is clearly present when the defending spouse has misrepresented a material fact. See, e.g., In re Ridgway, 146 Ill. App. 3d 463, 497 N.E.2d 126 (1986) (husband stated that his net worth was $357, when he was actually worth close to $100,000; reopening for fraud); Von Pein v. Von Pein, 268 N.J. Super. 7, 632 A.2d 830 (App. Div. 1993) (husband persistently misrepresented the existence and value of marital assets; reopening judgment for fraud).
To prove a misrepresentation, the moving spouse must ordinarily introduce new evidence showing that the defending spouse's position on a material point was incorrect. In the absence of such evidence, there is insufficient proof that a misrepresentation was actually made. See Holmes v. Holmes, 578 So. 2d 323 (Fla. Dist. Ct. App. 1991) (where party claimed stipulated value was wrong but introduced no new evidence, court properly refused to reopen judgment).
Most of the reported cases involve misrepresentations as to the existence or value of divisible assets. Judgments have occasionally been reopened, however, for other types of false statements. See Essig v. Essig, 921 S.W.2d 664 (Mo. Ct. App. 1996) (husband told wife she had no need for counsel, as he would agree to divide property equally; promise was fraudulent when made; reopening an unequal division).
There is no minimum amount of fraud necessary to reopen a judgment, and even a single misrepresentation can be a sufficient basis for relief if the other elements of fraud are successfully proven. See Hewlett v. Hewlett, 845 S.W.2d 717 (Mo. Ct. App. 1993).
Nondisclosure. A much harder question is posed when the defending spouse has failed to make any disclosure at all of a material fact. The general rule is that divorce is an adversarial process, and the spouses have no duty to disclose material facts to each other. It is instead the duty of each spouse and his or her counsel to determine the facts and present the strongest possible arguments for their positions. See Selke v. Selke, 600 N.E.2d 100 (Ind. Ct. App. 1992) (husband disclosed existence of pension but did not disclose its value and did not misrepresent underlying facts; no fraud). Nondisclosure is particularly unlikely to constitute fraud when the nondisclosed event occurred before the marital breakdown. See Hendrix v. Jelusich, 679 So. 2d 1062 (Ala. Civ. App. 1995) (husband failed to disclose that he had declined option to receive civil service retirement benefits as lump sum five years before divorce; no fraud).
In limited circumstances, however, a duty to disclose arises despite the adversarial nature of the process. These cases have tended to involve situations where the undisclosed fact was so significant as to destroy the overall property division. See Allen v. Allen, 112 Nev. 149, 925 P.2d 503 (1996) (husband's failure to disclose his intention to thwart the award by filing a petition in bankruptcy as soon as the decree was rendered was a sufficient basis to reopen the entire judgment); In re Kinnard, 512 N.W.2d 821 (Iowa Ct. App. 1993) (where husband failed to disclose that he married wife only to avoid earlier unfavorable divorce decree between same parties, which wife had not seen before agreeing to remarriage, and where husband dissipated substantial assets during second marriage, second divorce decree reopened for extrinsic fraud).
Misrepresentation of Fact. To reopen a judgment for fraud, the moving party must normally show that the misrepresentation involved a matter of fact. Where the misrepresentation involved either a matter of law or a matter of opinion, fraud is not present. See Hewlett v. Hewlett, 845 S.W.2d 717 (Mo. Ct. App. 1993).
The most common misrepresentation of opinion is a statement as to the value of a marital asset. Value lies in the eye of the beholder, and it is rare that two persons will give the same value to the same asset. If normal differences in opinion as to value were sufficient to reopen a property division judgment, few divorce decrees would ever be final. See Selke v. Selke, 600 N.E.2d 100 (Ind. Ct. App. 1992) (husband disclosed existence of pension but did not disclose its value, and did not misrepresent underlying facts; no fraud); Mitchell v. Mitchell, 888 S.W.2d 393 (Mo. Ct. App. 1994) (husband's statement as to future value of pension plan was a statement of opinion, so that decree could not be reopened).
In limited circumstances, a statement of value can be a statement of fact. Value is an opinion, but it is an opinion based upon a necessary minimum of factual information. When the misrepresentation involves not merely the conclusion drawn from the underlying facts but rather the nature of the facts themselves, a misrepresentation of fact is present. See Sanborn v. Sanborn, 503 N.W.2d 499 (Minn. Ct. App. 1993) (reopening decree; husband told wife that business was worth $466,000, when he had letter of intent to sell it for $2 million). Courts also tend to assume that a statement of value is a statement of fact when it is made by a person who has special knowledge of the asset involved. This rule is most frequently applied to statements of value made by a spouse who owns a business. See Hewlett v. Hewlett, 845 S.W.2d 717 (Mo. Ct. App. 1993); Martin v. Martin, 840 S.W.2d 586 (Tex. App. 1992) (husband substantially misrepresented the health of his business).
Misstatements of law are also ordinarily not a sufficient basis for reopening a judgment. In DePalentino v. DePalentino, 139 N.H. 522, 658 A.2d 1207 (1995), the husband told the wife that his military pension could not be divided after a marriage of less than 10 years. This statement is completely false, see Brett R. Turner, Equitable Distribution of Property 6.04 n.61 (2d ed. 1984), but the wife relied upon it in declining to seek a share of the pension involved. When she learned the truth and sought to reopen the decree, she received little sympathy from the court. The law was equally available to both parties, the court explained, and parties to adversarial divorce actions are not permitted to blindly trust each other's statements on legal questions. The court therefore found that it was not a sufficient misstatement of fact to justify a finding of fraud.
The court did suggest that fraud might have been present if the husband had made the statement with the deliberate intent of misleading the wife. On the facts, however, the court found that the husband believed his statement a common misimpression among military members, see id. and thus found an additional basis for concluding that fraud was not present.
Knowing Misrepresentation. A judgment can be reopened for fraud only if the defending spouse actually knew that he or she was misrepresenting the facts. SeeIn re Broday, 256 Ill. App. 3d 699, 628 N.E.2d 790 (1993) (intent to deceive is an essential element of fraud). If the defending spouse misrepresented a material fact in the good-faith belief that the representation was correct, fraud is not present. There might, however, be a sufficient basis on which to reopen the judgment for mistake.
Many of the cases involving this point arise when a marital asset sells after divorce for a higher price than the value given to it by the owning spouse. The mere fact of a change in value, without some proof that the owning spouse knew that the value given at divorce was inaccurate, is not sufficient to show fraud. See Duncan v. Duncan, 789 S.W.2d 557 (Tenn. Ct. App. 1990) (husband substantially undervalued his business, but he did not know at the time that his valuation was inaccurate; no fraud); Mahaffey v. Mahaffey, 775 S.W.2d 618 (Tenn. Ct. App. 1989) (postjudgment sale for higher price is an insufficient reason to reopen the case and overturn parties' stipulation attaching lower value to asset); Bachtle v. Bachtle, 494 A.2d 1253 (Del. 1985) (not sufficient that marital residence increased in value by nearly 50% since the date of the divorce nine months earlier); Siegel v. Siegel, 132 A.D.2d 247, 523 N.Y.S.2d 517 (1987) (trial court cannot grant postjudgment motion to increase value of marital asset based on fact occurring after divorce); Blanchard v. Blanchard, 149 Vt. 534, 546 A.2d 1370 (1988). There may, however, be sufficient grounds to reopen the judgment for a mutual mistake. See Carlson v. Carlson, 108 Nev. 358, 832 P.2d 380 (1992) (husband's pension substantially undervalued; if husband's representation as to value was not fraud, then mutual mistake existed).
Actual Reliance. Fraud is present only where the moving spouse actually relied on the misrepresentations made by the defending spouse. Where the moving spouse had independent knowledge of the true state of affairs, that spouse may well not have been harmed by reliance on the misrepresentations. See Conner v. Conner, 666 N.E.2d 921 (Ind. Ct. App. 1996) (where wife knew of omitted assets at time of divorce, she could not later reopen the decree to divide them); In re Butterfield, 500 N.W.2d 95 (Iowa Ct. App. 1993) (wife had independent knowledge of assets and undertook substantial discovery; no fraud); Sargent v. Sargent, 691 A.2d 184 (Me. 1997) (wife knew husband's list of assets was inaccurate and took no immediate action; refusing to reopen for fraud); Summer v. Summer, ___ A.D.2d ___, 649 N.Y.S.2d 615 (1996) (where husband knew before trial started of family trust concealed by wife, no fraud was present); In re Auble, 125 Or. App. 554, 866 P.2d 1239 (1993) (where wife knew of husband's retirement plan, fraud was not present).
Due Diligence. Finally, the moving spouse must prove that he or she used due diligence to avoid being injured. Another way to phrase this point is to note that the moving spouse's reliance upon the defending spouse's conduct must be reasonable under the circumstances. If a reasonable person under the facts of the case would not have relied upon the statements in question, fraud is not present. The right to reopen divorce decrees for fraud is a remedy of last resort, not a blanket excuse to believe all statements made by an adverse party to a pending court action.
The requirements of due diligence vary greatly depending upon the precise facts involved. At a minimum, the innocent spouse must make some basic attempt to double-check the reliability of the statements involved. Divorce proceedings are adversarial in nature, and blind trust is ordinarily unreasonable. Thus, where the owning spouse discloses an asset and makes no statement as to its value, and the nonowning spouse deliberately fails to have the asset valued, fraud is not present. See In re Himmel, 285 Ill. App. 3d 145, 673 N.E.2d 1140 (1996) (wife knew of husband's pension but took no action to value it; trial court properly refused to reopen judgment for fraud); In re Broday, 256 Ill. App. 3d 699, 628 N.E.2d 790, 795 (1993) (wife's claim that she reasonably relied upon husband's false statements was "diminished," where she neither hired an attorney nor took steps to investigate the husband's financial situation); Cady v. Cady, 218 Neb. 582, 358 N.W.2d 184 (1984) (where wife knew that husband's retirement plan existed, husband's failure to disclose value was not fraud; wife had equal access to the underlying facts, and could have had the plan valued); Ratarsky v. Ratarsky, 383 Pa. Super. 445, 557 A.2d 23 (1988) (where wife knew of insurance policies owned by husband's trust, and could have had them valued, fraud was not present).
In addition to asking the right questions, the innocent spouse must make sure that the questions are given some form of answer. See Estate of Houston v. Houston, 31 Ark. App. 218, 792 S.W.2d 342 (1990) (wife refused to answer husband's interrogatories, but husband did not attempt to force a response; husband could not rely upon wife's later misstatements to reopen the decree, because he should have discovered the errors). Once the answer is received, the innocent spouse must pay reasonable attention to the matters disclosed. See In re Parker, 216 Ill. App. 3d 672, 575 N.E.2d 938 (1991) (suggesting in dicta that husband's disclosure of book value rather than fair market value of stock could not be fraud because amount disclosed was clearly identified as book value and wife should have known that book value and fair market value are substantially different).
The requirements of due diligence can sometimes be affected by the representations of the opposing party. In Shafmaster v. Shafmaster, 138 N.H. 460, 642 A.2d 1361 (1994), the husband convinced the wife not to hire an attorney until the case was well underway by promising to provide her with accurate financial information. The husband released an accurate initial financial statement, but he failed to disclose to the wife an updated statement reflecting significant growth. The husband argued that the wife's counsel should have discovered the new information, but the court disagreed, finding that the husband's pattern of conduct encouraged the wife and her counsel not to conduct extensive discovery. The judgment was therefore reopened for fraud. A dissenting opinion noted that the husband had expressly refused to warrant that his financial disclosure was accurate, and would have held that due diligence required substantially more discovery than the wife conducted. See also Essig v. Essig, 921 S.W.2d 664 (Mo. Ct. App. 1996) (husband told wife she had no need for counsel, as he would agree to divide property equally; wife was not negligent in failing to retain counsel; reopening an unequal division).
Shafmaster is a difficult case which reaches to the very limits of due diligence. It is hard to fault the court for deciding to grant a remedy for the husband's improper conduct, but it is likewise difficult to defend the wife's failure to conduct greater discovery. When the opposing party expressly refuses to agree that full financial disclosure has been made, the refusal is a "red flag" indicator of possible misrepresentation or nondisclosure. The wisest course of action is therefore to verify with discovery all financial statements submitted by the opposing party.
In recent years, some courts have attempted to lessen the duty of due diligence. The Connecticut Supreme Court has eliminated the requirement entirely in order to encourage full disclosure of assets in divorce cases. See Billington v. Billington, 220 Conn. 212, 595 A.2d 1377 (1991) (to encourage full disclosure in divorce actions, judgment can be reopened for fraud even if moving spouse did not use due diligence). This holding seems likely to burden the courts with motions to reopen, and it has not been adopted in any state.
A better option is to hold that the requirements of due diligence vary with the magnitude of the fraud involved. In In re Palacios, 275 Ill. App. 3d 561, 656 N.E.2d 107 (1995), the husband deliberately concealed a winning lottery ticket until after his divorce had become final. The court held that the duty of due diligence is lessened in cases of deliberate fraud, and that the wife had been as diligent as circumstances permitted. It therefore allowed the wife to reopen the divorce judgment for fraud. Palacios preserves the ability of the court to deal with major cases of intentional fraud, while still requiring the innocent spouse to take at least basic measures for self-protection. See also In re Armstrong, 255 Ill. App. 3d 844, 625 N.E.2d 1108, 1110 (1993) (due diligence "need not be rigidly enforced"); Von Pein v. Von Pein, 268 N.J. Super. 7, 632 A.2d 830 (App. Div. 1993).
Despite the above cases, the author's sense is that the due diligence requirement is not a major policy problem, and that it plays an important role in the overall process of reopening judgments for fraud. The law has recognized for centuries that if it is too easy to reopen a judgment for fraud, the courts will be burdened with large numbers of frivolous motions to reopen, and judgments will never be final. As discussed below, too many states avoid this problem by allowing liberal motions to reopen within a short period and very limited motions to reopen after the time period is over. The result of this dual scheme is to tolerate and even encourage intentional fraud, so long as the perpetrator is skilled enough to continue the fraud past the time limit. A much better way to avoid frivolous motions to reopen would be to apply a reasonable due diligence requirement, not as a matter of protecting the guilty party from justified motions to reopen, but rather as a matter of protecting the courts from frivolous motions to reopen.
The due diligence requirement need not be a strict one, particularly where the fraud is severe or the innocent spouse is uneducated. The divorce process is adversarial in nature, however, and surely it is not unreasonable for the courts to insist that the first line of defense against fraud be intelligent use of the discovery process by both parties to the case. Where the innocent spouse fails to take basic measures which any reasonable person would use to double-check the accuracy of statements made during adversarial litigation, the divorce decree should not be reopened for fraud.
Time Limits. Where the law of fraud breaks down is in the area of time limits. Under Fed. R. Civ. P. 60(b) and most similar rules, divorce decrees can be reopened for fraud only for a limited time period. The period is one year under the federal rules, and it is often shorter under state rules. Within this period, judgments can be reopened for either extrinsic or intrinsic fraud. See Schmeusser v. Schmeusser, 559 A.2d 1294 (Del. 1989); Hewlett v. Hewlett, 845 S.W.2d 717 (Mo. Ct. App. 1993).
When the time period in the Rule expires, the judgment can no longer be reopened for fraud under the Rule itself. Fortunately, the Rule is not exclusive it states only one possible basis upon which a judgment can be reopened. Thus, it is still possible to bring a common-law independent action to reopen a judgment on the basis of fraud. E.g., Harper v. Harper, 835 P.2d 1346 (Idaho Ct. App. 1992); Von Pein v. Von Pein, 268 N.J. Super. 7, 632 A.2d 830 (App. Div. 1993) (reopening judgment in independent action for fraud on court even though time period in relevant rule had expired); Giha v. Giha, 609 A.2d 945 (R.I. 1992). Such an action avoids the Rule 60(b) time limit, although it must still be brought within a reasonable time after the divorce. Harper v. Harper, 835 P.2d 1346 (Idaho Ct. App. 1992).
The problem with an independent action is that it can be brought only if the fraud is extrinsic, and not if the fraud is intrinsic. E.g., McKarnin v. McKarnin, 795 S.W.2d 436 (Mo. Ct. App. 1990). But see Giha v. Giha, 609 A.2d 945 (R.I. 1992) (ignoring the extrinsic/intrinsic distinction entirely). Extrinsic fraud is fraud on the court fraud which deprives a party of his right or ability to present his case to the judge. Intrinsic fraud, by contrast, is mere perjury or other fraud upon the opposing party and not upon the court. See, e.g., Maranda v. Maranda, 449 N.W.2d 158 (Minn. 1989). A majority of decisions have held that the concealment of assets is fraud only upon the other party, and thus not the type of fraud which can serve as the basis for an independent action. See Billington v. Billington, 220 Conn. 212, 595 A.2d 1377 (1991); DeClaire v. Yohanan, 453 So. 2d 375 (Fla. 1984); Hresko v. Hresko, 83 Md. App. 228, 574 A.2d 24 (1990); In re Miller, 273 Mont. 286, 902 P.2d 1019 (1995); Chapman v. Chapman, 692 P.2d 1369 (Okla. 1984); see also Lowe v. Lowe, 817 P.2d 453, 457 n.9 (Alaska 1991) (dicta); In re Melton, 28 Cal. App. 4th 931, 33 Cal. Rptr. 2d 761 (1994) (failure to reveal existence of asset is extrinsic fraud, but misstatement of its value is intrinsic fraud).
The majority rule reaches a terrible result, for it imposes very strict time limits upon the right to reopen a divorce decree for deliberate, bad-faith, malicious concealment of marital assets. If the defrauding spouse is skilled enough or lucky enough to conceal assets successfully until the Rule 60(b) time period has run, the victimized spouse is left powerless. The defrauding spouse can reveal the true state of affairs, enjoy his or her ill-gotten gains, and even brag about his or her success, secure in the knowledge that the court can do nothing.
Fortunately, a number of states have taken action to prevent this undesirable state of affairs from arising. To begin with, a number of states have held all along that the concealment of assets is extrinsic fraud, so that an independent action to reopen the judgment can be brought at any time. See In re Modnick, 33 Cal. 3d 897, 663 P.2d 187, 191 Cal. Rptr. 629 (1983); Maranda v. Maranda, 449 N.W.2d 158 (Minn. 1989); Sanborn v. Sanborn, 503 N.W.2d 499 (Minn. Ct. App. 1993) (noting that trial court sits as third party to ensure the fairness of all property divisions); Martin v. Martin, 840 S.W.2d 586 (Tex. App. 1992); Hill v. Steinberger, 827 S.W.2d 58 (Tex. App. 1992) (where husband fraudulently convinced wife not to hire attorney); see also In re Madden, 211 Mont. 237, 683 P.2d 493 (1984). This is the best course of action, as it prevents the problem from ever arising in the first place.
In addition, some states have amended their rules of civil procedure to weaken the harmful effect of the time limit upon a motion to reopen for intentional fraud. In Florida, for instance, the state supreme court amended Fla. R. Civ. P. 1.540(b), which provides for a one-year time limit on reopening judgments for fraud. Under the modified Rule, the one-year limit does not apply to motions based upon a fraudulent financial affidavit in divorce cases. The court unaccountably weakened the impact of the beneficial rule change by holding that it does not apply retroactively. Mendez-Perez v. Mendez-Perez, 656 So. 2d 458 (Fla. 1995). Nevertheless, the overall effect of the change is to provide a remedy for deliberate fraud which succeeds for longer than that statutory one-year period.
Still another option for addressing the problem is to hold that the time period under Rule 60(b) does not begin to run until the fraud has or reasonably should have been discovered. See In re Armstrong, 255 Ill. App. 3d 844, 625 N.E.2d 1108 (1993). Under this option, it is possible to reopen a judgment even for intrinsic fraud so long as the innocent spouse's failure to discover the fraud was reasonable. The problem with this option is that it is settled law in the federal courts and in many states that the one-year period begins to run as soon as the judgment is entered. See generally 11 Charles A. Wright et al., Federal Practice and Procedure 2866 (1995).
Finally, some courts have allowed a defrauded spouse to file a civil action for civil damages. Where such an action is allowed, it generally does not matter whether the Rule 60(b) requirement is met. An equal number of states, however, have held that the divorce decree prevents the defrauded spouse from bringing a civil action. Id.
Despite these options, in a majority of states the Rule 60(b) time limit is absolute, and a dishonest spouse can commit fraud without penalty if he or she continues the fraud until after the time limit has run. To the extent that any explanation can be given for this terrible rule of law, the explanation is that the law has traditionally imposed very strict limits upon the ability to reopen judgments for fraud, even deliberate and malicious fraud, after the judgments have been entered. When a court holds that the Rule 60(b) time limit must be strictly construed, it is essentially holding that divorce judgments should be governed by the same rule of law as judgments in other areas.
The implicit assumption behind all of these decisions is that for purposes of reopening judgments divorce decrees are not materially different from final judgments in other areas of law. No court has ever expressly stated why this assumption is true, and, when the assumption is considered expressly, there are many reasons why it is not true. First, the property at issue in a divorce case is literally every asset owned by the parties to the case. See generallyWoolridge v. Woolridge, 915 S.W.2d 372 (Mo. Ct. App. 1996) (noting great power of court when dividing property upon divorce). If spousal support is at issue, then the amount at issue can be said also to include every asset which the parties will acquire in at least the immediate future. Permitting motions to reopen judgment admittedly places a burden on the courts, and where the amount at issue is small perhaps the burden should outweigh the benefits. But the amount at issue in a modern divorce case is greater than the amount at issue in most other types of cases, and it is particularly large when viewed as a percentage of the parties' total assets. Simply put, in no other area of law does the case involve so large a percentage of the parties' present and future wealth. Given the amount at stake, the damage inflicted by successful fraud in a divorce case is absolutely devastating. This fact greatly increases the benefit of permitting motions to reopen for deliberate fraud regardless of time limits, and thus alters the cost-benefit analysis which underlies the traditional rule.
Second, there is a strong tradition that divorce cases are cases in equity, not cases in law. Marriage has always been a relationship in which the state has special interests, and over which the state has always claimed special authority to prevent abuse. When a spouse who has committed deliberate fraud escapes without penalty because the time limit has passed, that spouse has used the marital relationship to financially abuse the innocent spouse. Because of the state's strong interest in protecting the institution of marriage, there are policy reasons for reopening divorce judgments which do not apply in other areas of law.
Third, the relief requested in property division fraud cases is not overly burdensome. A spouse who seeks to reopen a divorce judgment should have an absolute obligation to prove that he or she used due diligence to avoid being injured. A motion to reopen is a measure of last resort, and it should not be used as an excuse for the spouse who failed to take reasonable measures for his or her own protection. Further, relief should be granted only where the innocent spouse alleges and proves deliberate and malicious fraud, and attorneys who file motions to reopen without reasonable proof of such fraud should be sanctioned. Given these strict limits of proof, allowing motions to reopen without a time limit would not inflict a significant burden upon the courts. Unjustified motions to reopen would no doubt be filed, but those motions could be disposed of quickly on grounds that the substantive requirements of fraud have not been met. The additional burden of rejecting these frivolous motions on substantive rather than procedural grounds is much smaller than the benefit of preventing deliberate financial fraud in divorce cases.
Finally, it should be noted that the above concerns are not in any sense appropriate only for legislative action. The fundamental cause of the time limit problems is the rule that common-law independent actions to reopen a judgment for fraud require proof of fraud which is extrinsic and not intrinsic. In almost every state, this rule is a matter of pure common law. Since the courts created the rule without legislative enactment, they surely have the power to modify it. The author of this article respectfully submits that there is no valid policy basis for denying a common-law independent action to reopen a divorce decree for deliberate and malicious fraud, merely because the fraud is intrinsic rather than extrinsic.
Consequences of Fraud. Where fraud is proven, the court should reopen the decree to the extent necessary to reach a just result. At a minimum, any assets tainted by the fraud should be redivided. See In re Gidlund, 244 Ill. App. 3d 675, 614 N.E.2d 315 (1993) (reopening to divide only assets concealed by husband; not required to reopen entire division). In addition, where the fraud is extensive, the court may redivide the entire marital estate. See Hewlett v. Hewlett, 845 S.W.2d 717 (Mo. Ct. App. 1993) (husband's extensive and purposeful fraud required that the entire division of assets be reconsidered).
In most states, the mere fact that an asset was omitted from division, without proof of fraud or mistake, is not sufficient to justify reopening the judgment. Accordingly, where the original divorce decree fails to divide a marital asset, it cannot normally be divided at a later time. See, e.g., Jones v. Jones, 26 Ark. App. 1, 759 S.W.2d 42 (1988); Castro v. Castro, 31 Conn. App. 761, 627 A.2d 452 (1993) (asset omitted because wife did not know it existed; asset could not be divided after divorce); Steinfeld v. Steinfeld, 553 So. 2d 774 (Fla. Dist. Ct. App. 1989); Labbe v. Labbe, 137 N.H. 53, 623 A.2d 1320 (1993) (where no fraud present, omitted asset could not later be divided); Boronow v. Boronow, 71 N.Y.2d 284, 519 N.E.2d 375, 525 N.Y.S.2d 179 (1988) (relying heavily upon res judicata principles); see also Brownsing v. Brownsing, 512 N.E.2d 878 (Ind. Ct. App. 1987); Bone v. Bone, 438 N.W.2d 448 (Minn. Ct. App. 1989). This rule is directly contrary to the rule in community property states, where a community asset which is not expressly divided in the divorce decree can be partitioned at any time thereafter. See In re Moore, 14 Cal. App. 4th 1472, 18 Cal. Rptr. 2d 543, 548 n.8 (1993) (noting the difference). The spouse who has legal title to that asset is entitled to retain full ownership.
In a minority of states, however, the mere fact that an asset was omitted is a sufficient basis for reopening the judgment. The strongest cases are from Missouri, which holds that the court's jurisdiction over marital property is not exhausted until all of the assets have been expressly divided. Thus, a decree which fails to divide all of the marital assets is not a final order. SeeHutchins v. Hutchins, 660 S.W.2d 403 (Mo. Ct. App. 1983); Ploch v. Ploch, 635 S.W.2d 70 (Mo. Ct. App. 1982); Schultz v. Schultz, 612 S.W.2d 380 (Mo. Ct. App. 1980); Anspach v. Anspach, 557 S.W.2d 3 (Mo. Ct. App. 1977). The order is final, of course, as to those assets which it did divide. State ex rel. McClintock v. Black, 608 S.W.2d 405 (Mo. 1980). The Missouri position has been followed in a few other states as well. See Tibbetts v. Tibbetts, 406 A.2d 70 (Me. 1979); see also Lowe v. Lowe, 817 P.2d 453 (Alaska 1991) (judgment can be reopened if (1) a fundamental assumption of the property division has been destroyed, (2) the division was poorly thought out, (3) the injured party lacked assistance of counsel, and (4) a major marital asset was omitted); In re Hiner, 710 P.2d 488 (Colo. 1985) (court will recognize a contract between the parties permitting division of omitted assets); Bell v. Bell, 162 Vt. 192, 643 A.2d 846 (1994) (where court ordered payment of certain debts from proceeds of certain receivable, and failed to account for possibility that funds might remain after debts were paid, excess was an omitted asset which the court had jurisdiction to divide).
In addition, several states have enacted specific statutes or rules permitting the division of omitted assets. See, e.g., Me. Rev. Stat. Ann. tit. 19, 722-A(6) (West Supp. 1993) (omitted property may be divided at any time); Pa. Cons. Stat. Ann. tit. 23, 3505(d) (West 1991) (assets not disclosed on official inventory are held in constructive trust for parties and their children).
These statutes are often not retroactive. See Salenius v. Salenius, 654 A.2d 426 (Me. 1995).
A few recent Missouri decisions seem to adopt the majority position that omitted assets cannot be divided unless fraud or mistake is shown. See Chrun v. Chrun, 751 S.W.2d 752 (Mo. 1988); Culp v. Culp, 858 S.W.2d 819 (Mo. Ct. App. 1993). Most of the decisions have effectively nullified this requirement, however, by holding that a mistake is present whenever an asset is omitted. E.g., Ellington v. Pinkston, 859 S.W.2d 798 (Mo. Ct. App. 1993). Thus, there is a split in authority over the degree of proof necessary to show a mistake; Culp seems to require considerably more than Ellington. In particular, one suspects from reading Culp that the court in that case would probably require some showing of due diligence on the part of the injured spouse, while Ellington seems to imply mistake from the mere existence of an omitted asset. Both cases relied on Chrun, which does not address the question of what constitutes a sufficient mistake to reopen the judgment. Until such time as the Missouri Supreme Court considers this question again, Missouri law will probably continue to be unsettled on this point.
Other Grounds for Reopening
Change in Law. Mere change in the law is not ordinarily a sufficient reason to reopen a decree. E.g., Schmidt v. Schmidt, 158 Ariz. 496, 763 P.2d 992 (Ct. App. 1988); Roth v. Roth, 201 Mich. App. 563, 506 N.W.2d 900 (1993) (decree cannot be reopened to divide survivor benefits merely because federal law changed to make them divisible upon divorce); Hayes v. Hayes, 312 S.C. 141, 439 S.E.2d 305 (Ct. App. 1993) (decree cannot be reopened merely because state law subsequently changed to make retirement benefits divisible upon divorce). Some courts have made a special exception for decrees which failed to divide a military pension in reliance upon the Supreme Court's ill-fated decision in McCarty v. McCarty, 453 U.S. 210 (1981). See generally Brett R. Turner, Equitable Distribution of Property 6.04 (2d ed. 1994).
Newly Discovered Evidence. Some states permit judgments to be reopened for newly discovered evidence. Reopening is not permitted, however, if the evidence could reasonably have been discovered before the judgment was rendered. See In re Travlos, 218 Ill. App. 3d 1030, 578 N.E.2d 1267 (1991); Elmore v. Elmore, 208 A.D.2d 1134, 617 N.Y.S.2d 966 (1994); Pullman v. Pullman, 200 A.D.2d 430, 606 N.Y.S.2d 618 (1994).
Bankruptcy. The divorce judgment cannot be reopened merely because part of it has been discharged in bankruptcy. See Coakley v. Coakley, 400 N.W.2d 436 (Minn. Ct. App. 1987); Spankowski v. Spankowski, 172 Wis. 2d 285, 493 N.W.2d 737 (Ct. App. 1992); Fitzgerald v. Fitzgerald, 144 Vt. 549, 481 A.2d 1044 (1984). The discharge might, however, be a sufficient change in circumstances to permit modification of alimony. See generally Laura W. Morgan, Modification of Spousal Support After Discharge in Bankruptcy of Property Settlement Obligations, 5 Divorce Litigation 32 (1993).
Changed Circumstances. Mere changed circumstances obviously do not constitute sufficient grounds to reopen a judgment. Otherwise, the law would indirectly permit modification of property divisions, a step which courts have uniformly refused to permit directly. See, e.g., In re Hamilton, 254 Mont. 31, 835 P.2d 702 (1992).
Consent. Several states hold that the court can always modify a property division decree if both parties consent to the modification. See In re Taylor, 191 Ill. App. 3d 648, 548 N.E.2d 106 (1989) (court can modify decree if parties agree to modify it, even if normal grounds for reopening judgments are not present); Kleinsmith v. Northwestern Bank & Trust Co., 477 N.W.2d 388 (Iowa 1991).
Miscellaneous. A limited number of cases have considered other grounds for reopening property division judgments. For cases reopening judgments on other grounds, see Lowe v. Lowe, 817 P.2d 453 (Alaska 1991) (reopen if (1) a fundamental assumption of the property division has been destroyed, (2) the division was poorly thought out, (3) the injured party lacked assistance of counsel, and (4) a major marital asset was omitted); Giles v. Giles, 652 N.E.2d 115 (Ind. Ct. App. 1995) (trial court did not err by reopening judgment which was based upon arguments of counsel, rather than upon evidence presented to the court); Fechtor v. Fechtor, 26 Mass. App. Ct. 859, 534 N.E.2d 1 (1989) (judgment can be reopened to consider tax consequences); Benitez v. Benitez, 179 A.D.2d 445, 577 N.Y.S.2d 862 (1992) (reopening 1984 default judgment which did not consider equitable distribution or alimony; husband's former counsel represented wife at trial); and Walker v. Walker, 925 P.2d 1305 (Wyo. 1996) (where husband failed to sign contract selling marital home in accordance with decree, court could directly convey property to buyer; any substantive modification was permitted under rule allowing judgment to be reopened on the basis of mistake or misconduct).
For cases refusing to reopen judgments for other reasons, see In re Himmel, 285 Ill. App. 3d 145, 673 N.E.2d 1140 (1996) (judgment cannot be reopened for unconscionability); In re Johnson, 499 N.W.2d 326 (Iowa Ct. App. 1993) (judgment cannot be reopened for ineffective assistance of counsel); Zeer v. Zeer, 179 Mich. App. 622, 446 N.W.2d 328 (1989) (judgment cannot be reopened for general equitable reasons where the rights of the nonmoving party would be prejudiced); and Kolmosky v. Kolmosky, 631 A.2d 419 (Me. 1993) (even though division was substantially unequal and only one party had counsel, these facts alone were not a sufficient basis for reopening the judgment).
VI. REOPENING THE JUDGMENT: PROCEDURAL ISSUES
It is important that motions to reopen a judgment be styled as such. In one recent case, the wife styled her motion to reopen as a motion for "modification." The trial court granted the motion, but the appellate court reversed on its own motion, finding the motion insufficient to invoke the court's power to reopen a judgment. Spicuzza v. Spicuzza, 886 S.W.2d 660, 661 (Mo. Ct. App. 1994).
The court cannot award greater relief on a motion to reopen than was requested in the pleadings. Townsley v. Townsley, 37 Conn. App. 100, 654 A.2d 1261 (1995); Carter v. Carter, 901 S.W.2d 906 (Mo. Ct. App. 1995).
If the spouse seeking postjudgment relief alleges a sufficient prima facie case, the court must permit discovery and grant an evidentiary hearing. See St. Surin v. St. Surin, 684 So. 2d 243 (Fla. Dist. Ct. App. 1996) (where husband pleaded fraud with required specificity, error to reject motion without holding evidentiary hearing); Conforti v. Guliadis, 128 N.J. 318, 608 A.2d 225 (1992) (error to deny motion to reopen for mutual mistake and fraud without a hearing); Kuehn v. Kuehn, 55 Ohio App. 3d 245, 564 N.E.2d 97 (1988) (error to modify without hearing); Longstreet v. Longstreet, 57 Ohio App. 3d 55, 566 N.E.2d 708 (1989) (where husband valued home at $50,000 but sold it 14 months later for $79,000, and wife's expert stated that she was incompetent at the time of the hearing, error to deny motion to reopen without holding a hearing); In re Frazier, 203 Ill. App. 3d 847, 561 N.E.2d 160 (1990) (where husband alleged that wife concealed burglary of marital assets, trial court properly refused to dismiss wife's motion to reopen).
If the allegations are not as a matter of law sufficient to reopen the judgment, the motion may be denied without a hearing. See Sargent v. Sargent, 691 A.2d 184 (Me. 1997) (where no material issues of fact existed, court could reject motion to reopen without hearing); Williams v. Williams, 214 Mich. App. 391, 542 N.W.2d 892 (1995); Salem v. Salem, 61 Ohio App. 3d 243, 572 N.E.2d 726 (1988) (wife made conclusory allegations of nondisclosed assets, citing a newspaper article as her only basis for suspecting fraud).
Time to File
Where a statute limits the time between the rendering of the divorce decree and the division of property, the statute does not prevent the court from reopening the property division after the period has passed. See Magoon v. Magoon, 70 Haw. 805, 780 P.2d 80 (1989).
Under state rules similar to Fed. R. Civ. P. 60(b), there is usually a time limit upon the court's power to reopen a judgment for a nonclerical mistake. After this period expires, the judgment cannot be reopened for such a mistake. SeeLowe v. Lowe, 817 P.2d 453 (Alaska 1991); Kremkow v. Kremkow, 7 Haw. App. 286, 758 P.2d 197 (1988); Dusenberry v. Dusenberry, 625 N.E.2d 458 (Ind. Ct. App. 1993); Salenius v. Salenius, 654 A.2d 426 (Me. 1995).
Issues involving the time limit imposed upon motions to reopen for fraud under state rules similar to Fed. R. Civ. P. 60(b) are discussed in Part V above.
The time period for a motion to reopen a judgment is tolled by the automatic stay imposed by federal law upon the filing of a petition in bankruptcy. In re Beardslee, 22 Kan. App. 2d 787, 922 P.2d 1128 (1996).
Laches. A party seeking to reopen a judgment has an obligation to act with reasonable diligence after learning the relevant facts. E.g., In re Gidlund, 244 Ill. App. 3d 675, 614 N.E.2d 315 (1993); In re Baumgartner, 226 Ill. App. 3d 790, 590 N.E.2d 89 (1992); see also Kennedy v. Kennedy, 616 N.E.2d 39 (Ind. Ct. App. 1993) (court can grant injunction against dissipation of assets in question). If the period of delay is unreasonable, the motion to reopen will be barred by laches.
The reasonableness of the delay, of course, will vary from case to case. For cases finding the time period unreasonable, see In re Delk, 281 Ill. App. 3d 303, 666 N.E.2d 683 (1996) (eight-month delay in filing motion to reopen for fraud was unreasonable, where wife clearly knew of the fraud during the period); In re Larson, 19 Kan. App. 2d 986, 880 P.2d 1279 (1994) (delay of nine months was too long, where opposing party suffered prejudice; specifically holding that laches could bar action even before statutory limitations period of one year); Roth v. Roth, 201 Mich. App. 563, 506 N.W.2d 900 (1993) (even if judgment could be reopened for mere change in law, laches applied where wife waited five years after change before filing motion); McElroy v. McElroy, 826 S.W.2d 105 (Mo. Ct. App. 1992) (barred after 14 years); Anderson v. Somers, 455 N.W.2d 219 (S.D. 1990) (motion to reopen barred after two and one-half years; wife had made several informal demands for relief from the husband during the period).
For cases finding the time period not unreasonable, see Maranda v. Maranda, 449 N.W.2d 158, 166 (Minn. 1989) (motion to reopen not barred after six years; time period "reaches to the outer limits of reasonableness").
A spouse who has relied upon the property division order may be estopped from attacking it. See Draughon v. Draughon, 94 N.C. App. 597, 380 S.E.2d 547 (1989) (error to reopen decree where moving party had previously relied on it by petitioning to enforce it, and where only reason to reopen was that husband had negligently lost his own right to appeal).
A trial court decision setting aside a judgment is immediately appealable. If the appeal time passes, the order becomes final, even if the court has not yet made a new division of the marital estate. See In re Parker, 216 Ill. App. 3d 672, 575 N.E.2d 938 (1991).
In most types of cases, the law on postjudgment relief works well. The courts have appropriately balanced the twin policies of equity and finality, so that the great majority of all final judgments remain final, but unusually unfair judgments can still be reopened.
In the specific context of motions to reopen for fraud, the courts have not done as well. Fraud is by its nature difficult to detect, and motions to reopen for fraud are not by their nature susceptible to strict time limits. By imposing such time limits, the law permits dishonest spouses to escape unscathed if they are skilled enough to continue their fraud until after the time limit has expired. However appropriate a strict time limit may be in other types of cases, where the amount at issue is smaller in comparison to the total assets of the parties, the strict time limit works horrible inequities in divorce cases. To the extent that a less rigid time limit would result in more motions to reopen, it may be more equitable to discourage frivolous motions with a strict due diligence requirement than with a strict time limit. The law of reopening judgments should be changed so that when one spouse commits deliberate and malicious fraud, and the other spouse was unable through due diligence to detect the fraud, there is no time limit on the court's power to grant effective relief.
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