Case Title: Dunwoody v. Dunwoody

Citation: 

Docket Number: 

State: maine

Court: Maine Supreme Court

Date: 2012-05-01T00:00:00Z

Document:
MAINE SUPREME JUDICIAL COURT 
 
 
 
     
    Reporter of Decisions 
Decision: 
2012 ME 58 
Docket: 
Cum-11-480 
Submitted 
  On Briefs: 
March 1, 2012 
Decided: 
May 1, 2012 
 
Panel: 
ALEXANDER, SILVER, MEAD, GORMAN, and JABAR, JJ. 
 
 
JANICE W. DUNWOODY 
 
v. 
 
STEVEN M. DUNWOODY 
 
 
 
JABAR, J. 
 
[¶1]  Steven M. Dunwoody appeals from the judgment of the District Court 
(Portland, J.D. Kennedy, J.) ordering the cash surrender value of his life insurance 
policy to be evenly split between himself and Janice W. Dunwoody after their 
youngest child reaches the age of twenty-three.  Steven argues that Janice ceased to 
have any interest in the cash surrender value of his life insurance policy as of the 
date of their divorce—November 13, 2001.  Steven also contends that the court 
committed reversible error in admitting Janice’s affidavit and failing to hold a 
conference of counsel.  Because we conclude that the court improperly disposed of 
omitted property—the cash surrender value of the life insurance policy—within the 
purview of a motion to clarify, we vacate and remand. 
 
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I.  BACKGROUND 
 
[¶2]  Janice and Steven were married on January 28, 1988.  During the 
course of their marriage, Janice and Steven had three children, born on 
December 11, 1988; August 21, 1990; and February 24, 1997.  Only the youngest 
child is currently a minor, and the oldest child is now twenty-three.  On 
November 13, 2001, thirteen years after they were married, Janice and Steven were 
divorced. 
 
The 
divorce 
judgment 
was 
entered 
in 
District 
Court 
(Portland, Bradley, J.) after a four-day hearing held in June 2001, where both 
parties were represented by counsel, and after a referee’s report was entered on 
July 11, 2001.  The divorce judgment addresses a variety of issues, including 
allocation of parental rights and responsibilities and division of real, personal, and 
intangible property.  The portion addressing parental rights and responsibilities 
awarded Janice primary physical residence of the three children and awarded 
Janice and Steven joint parental rights and responsibilities. 
 
[¶3]  At the time of the divorce, Steven had several life insurance policies.  
His two Navy Mutual Aid policies were fully distributed in the 2001 divorce 
judgment.  However, a trust was to be established as the beneficiary of his 
remaining life insurance policies.1 
                                         
1  The record does not establish the current value of any “remaining life insurance policies”; however, 
Steven asserts in his brief that he bought life insurance policies with a disability rider while working as a 
 
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[¶4]  The 2001 divorce judgment stated, in relation to the remaining life 
insurance policies and the trust, that 
[t]he remaining life insurance policies shall be maintained in full force 
and effect until all of the children turn 23.  The parties shall establish 
a trust, which shall designate Susan Hunter, Esq. as trustee.  The 
policies shall name the trust as primary beneficiary for the benefits of 
the policies.  The trust shall include whatever arrangements 
Ms. Hunter determines necessary, but must provide for the payment of 
the children’s reasonable needs, including college educational costs. 
 
The referee’s report, with John David Kennedy, now Judge Kennedy, acting as 
referee, stated: 
All other life insurance policies are to be maintained in full force and 
effect, and the parties are ordered to name Susan Hunter, Esq., as 
primary beneficiary, in her capacity as trustee for the benefit of the 
parties’ three minor children, and to establish whatever appropriate 
trust arrangements Ms. Hunter determines necessary.  Each party may 
name contingent beneficiaries for the policies covering each of them 
as they may wish. 
 
Both parties agree that a trust was never established. 
 
[¶5]  On July 29, 2010, Steven filed a motion to modify the 2001 divorce 
judgment, seeking to establish the life insurance trust as provided in the judgment.  
On December 29, 2010, the District Court (Portland, Beaudoin, J.) issued an order 
dismissing the motion without prejudice because a motion to modify is not the 
proper means to establish the terms of the trust ordered in the 2001 divorce 
                                                                                                                                   
pilot for Delta Airlines.  Because Steven suffered severe injuries in a 1999 skiing accident, and is now a 
paraplegic, Northwest Mutual pays the premiums on those policies. 
 
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judgment.  Again seeking to establish the trust and the terms of the trust document, 
Steven filed a motion to clarify the 2001 divorce judgment on February 7, 2011.  
The court issued its order on April 13, 2011, “clarifying” the original divorce 
judgment by ordering that the trust be established; that the trust proceeds be used 
for the children’s reasonable costs, including college expenses, if Steven died 
before the youngest child turned twenty-three; and that the trust would terminate 
on the youngest child’s twenty-third birthday and thereafter the cash surrender 
value of the trust would be divided between the parties equally.  Janice filed a 
motion for reconsideration on April 29, 2011, and Steven filed his objection to that 
motion on May 4, 2011.  On July 26, 2011, Janice filed an affidavit in support of 
her request that the court reconsider its initial clarifying order.  Steven responded 
on July 28, 2011, by submitting an objection to the affidavit and requesting a 
conference.  A conference was never held, and the court issued its revised 
clarifying order on September 13, 2011.  In the revised clarifying order, the court 
changed the above-referenced language in the 2001 divorce judgment: 
a. The remaining life insurance policies shall be maintained in full 
force and effect until all of the children turn 23.  The parties shall 
establish a trust, which shall designate James R. Murphy as the 
trustee.  The trust shall be the beneficiary of the remaining life 
insurance policies, and if [Steven] predeceases one or more of the 
children under age 23, then the life insurance proceeds shall be 
utilized for the payment of the children’s reasonable costs, 
including college educational costs, including costs advanced by 
either party prior to the establishment of the trust. 
 
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b. If there are remaining unexpended funds on the last child’s 23rd 
birthday, the balance shall be distributed among the surviving 
children, per capita.  However, if [Steven] does not predecease the 
children then the trust shall terminate on the last child’s 23rd 
birthday.  Any cash surrender value of the policies at that time 
shall be divided between the parties equally. 
 
 
[¶6]  The court added the last clause of paragraph “a”—“including costs 
advanced by either party prior to the establishment of the trust”—to the original 
clarifying order in its revised clarifying order.  In addition to this language change, 
the court concluded that the purpose of ordering the creation of the trust was to 
provide security for the three children, and therefore the life insurance policy 
should not be invaded before the youngest child reaches the age of twenty-three.  
The court also found that the cash surrender value of the policy was “simply not 
considered” in the original divorce judgment and concluded that it was omitted 
property.   
 
[¶7]  Steven timely appealed from the court’s judgment pursuant to 
14 M.R.S. § 1901(1) (2011), M.R. Civ. P. 123, and M.R. App. P. 2. 
II.  DISCUSSION 
 
[¶8]  Both parties agree that the cash surrender value of the life insurance 
policy is omitted property pursuant to 19-A M.R.S. § 953(9) (2011).  Because the 
cash surrender value is omitted property, the court erred by disposing of it as part 
of the court’s decision on the motion to clarify.  The court found that the cash 
 
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surrender value of the insurance policy was not considered in the original divorce 
judgment and concluded that it was omitted property.  Nevertheless, the court, 
without notifying the parties of its conclusion regarding the omitted property, 
divided the property as part of its decision on the motion to clarify. 
 
[¶9]  A motion for disposition of omitted property is properly presented 
pursuant to a motion brought before the court.  Section 953(9) provides: 
If a final divorce decree fails to set apart or divide marital property 
over which the court had jurisdiction, the omitted property is deemed 
held by both parties as tenants in common.  On the motion of either 
party, the court may set aside or divide the omitted property between 
the parties, as justice may require. 
 
 
[¶10]  Because the cash surrender value of the policy is omitted property, its 
disposition should have been litigated pursuant to a motion brought by one of the 
parties.  The court recognized the need to set aside or divide the cash surrender 
value when it reviewed Janice's motion for reconsideration.  It erred, however, 
when it divided the omitted property based on “facts” presented in Janice’s 
affidavit that were contested by Steven and had not been presented through 
testimony and cross-examination.  We hereby remand this case for a hearing on the 
omitted property claim.2  At that hearing, the parties will be free to present 
testimonial and other evidence. 
                                         
2  Although neither party filed a motion pursuant to 19-A M.R.S. § 953(9) (2011), we note that Steven 
filed the motion to clarify because that was the directive given to him by the District Court after his first 
failed motion.  To avoid further delay, we do not require the filing of yet another motion. 
 
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The entry is: 
Judgment vacated.  Remanded for a hearing to be 
held consistent with this opinion. 
 
 
 
 
 
 
 
 
On the briefs: 
 
Lawrence B. Goodglass, Esq., Robinson Kriger & McCallum, Portland, for 
appellant Steven M. Dunwoody  
 
Susan M. Schultz, Esq., Givertz, Scheffee & Lavoie, P.A., Portland, for 
appellee Janice W. Dunwoody 
 
 
 
Portland District Court docket number FM-2000-75 
FOR CLERK REFERENCE ONLY