Title: LORI ANN DOWLIN v. CHARLES DOUGLAS DOWLIN

State: wyoming

Issuer: Wyoming Supreme Court

Document:

LORI ANN DOWLIN v. CHARLES DOUGLAS DOWLIN2007 WY 114162 P.3d 1202Case Number: No. 06-245Decided: 07/23/2007
APRIL 
TERM, A.D. 2007

 
 
LORI ANN 
DOWLIN,

 
 
Appellant

(Plaintiff),

 
 
v.

 
 
CHARLES DOUGLAS 
DOWLIN,

 
 
Appellee

(Defendant).

 
 
Appeal 
from the DistrictCourtofCarbonCounty

The 
Honorable Wade E. Waldrip, Judge

 
 
Representing 
Appellant:

 
 
Steve C.M. Aron and Galen Bruce 
Woelk, of Aron and Hennig, LLP, Laramie, Wyoming.  
Argument by Mr. Aron.

 
 
Representing 
Appellee:

 
 
William L. Hiser, of Brown & 
Hiser, LLC, Laramie, 
Wyoming.

 
 
Before VOIGT, C.J., and GOLDEN, 
HILL, KITE, and BURKE, JJ.

 
 
BURKE, 
Justice.

 
 

Appellant 
Lori Ann Walker, (formerly Lori Ann Dowlin) filed a civil suit against her 
former husband Charles Douglas Dowlin, requesting damages for "Fraud on the 
Court (Wyo. Stat. Ann. § 1-16-401(a)(iv))," allegedly committed during divorce 
proceedings.  The district court 
granted Mr. Dowlin's motion to dismiss for failing to state a claim for 
relief pursuant to W.R.C.P. 12(b)(6).1  Ms. Walker contends the dismissal 
was in error.  We 
affirm.

 

 

Did the 
district court err in concluding that Wyo. Stat. Ann. § 1-16-401 (LexisNexis 
2007) and W.R.C.P. 60(b) do not create a tort duty that, if breached, gives rise 
to an independent cause of action for damages?

 

 

Ms. 
Walker initiated this civil tort action while her divorce from Mr. Dowlin was 
pending.  In her original complaint, 
she alleged several causes of action against Mr. Dowlin and several other 
parties.  Ms. Walker's claims included 
Conversion, Fraud and Deceit, Negligent Misrepresentation, Interference with 
Contract and Prospective Advantage, and Fraudulent Practice in the Sale of 
Securities.  The claims alleged 
misconduct not only on Mr. Dowlin's part, but also on the part of other 
individuals and companies involved in the sale of Hyland Enterprises, Inc., part 
of which Ms. Walker claimed as marital property.

 
 
The 
divorce trial was held on May 12, 2005.  
On June 7, 2005, the divorce court issued its decision letter 
distributing the marital assets and debts of the parties.  Thereafter, Ms. Walker amended her 
complaint in the district court to allege a new cause of action for both 
compensatory and exemplary damages.  
The new cause of action was entitled "Fraud on the Court (Wyo. Stat. Ann. 
§ 1-16-401(a)(iv))" against Mr. Dowlin and a codefendant, Mr. Howard.2  This new cause of action is the subject 
of this appeal.  In her new cause of 
action, Ms. Walker alleged the following:

 
 

77.             
By this 
reference Plaintiff incorporates herein the allegations of paragraphs 1 through 
67 of this Amended Complaint as though set forth in their 
entirety.

78.             
Plaintiff 
is informed and believes that Defendants [Messrs.] Dowlin and Howard were both 
responsible for the preparation and submission to the divorce court of Hyland's 
1991 business valuation and [Mr. Dowlin]'s personal financial 
statements.

79.             
Defendants 
[Messrs. Dowlin] and Howard were obligated to testify truthfully under oath at 
trial and to verify the truth and accuracy of those documents and exhibits 
provided to the Court; and they were further obligated to include, and not 
intentionally omit, all material information the Court would rely upon at 
trial.

80.             
[Ms. 
Walker] is informed and believes that prior to and during the divorce trial, 
[Messrs. Dowlin] and Howard made misrepresentations of material fact by 
testimony and through exhibits, and omitted providing material information to 
the divorce court, which statements and information were knowingly false and 
intentionally omitted.  These 
misrepresentations and omissions include, among others:

a.                  
The 
false representation that the value of Hyland [Enterprises, Inc.] on December 
31, 1991 was $6,173,509.93.

b.                  
The 
false representation that [Mr. Dowlin]'s net worth on April 30, 2005 was 
$2,663,494.44.

c.                  
The 
omission of material information which would have disproved those 
representations set forth in subparagraphs a and b above.

81.             
[Messrs. 
Dowlin] and Howard expected the Court to rely upon those false representations 
and omissions of material fact as true and correct representations made under 
oath, and on the basis thereof to determine the allocation of marital property 
awarded to [Ms. Walker].

82.             
As a 
direct and proximate result of the Court's reliance on the defendants [sic] 
fraud and intentional omissions, [Messrs. Dowlin] and Howard were successful in 
obtaining a judgment that substantially reduced [Ms. Walker]'s award of marital 
assets and interests.

 
 
Ms. 
Walker's prayer for relief apparently applies to all her claims, and is somewhat 
difficult to follow.  It is 
nevertheless clear from her arguments in the district court and this Court that 
she sought a jury trial, and compensatory and exemplary damages, on all counts, 
including the claim of fraud on the court.

 
 

In 
response to Ms. Walker's allegations, both Mr. Dowlin and Mr. Howard moved 
to dismiss the complaint pursuant to W.R.C.P. 12(b)(6), asserting that 
Ms. Walker had failed to state any claims for which relief could be 
granted.  The district court 
dismissed all of Ms. Walker's causes of action except for the claim of fraud 
alleged against Mr. Dowlin.  The 
district court certified its dismissal of the "Fraud on the Court (Wyo. Stat. 
Ann. § 1-16-401(a)(iv)) by Dowlin" claim as a final judgment under W.R.C.P. 
54(b).  Ms. Walker 
appealed.

 
 

 
The 
district court granted the motion to dismiss pursuant to W.R.C.P. 12(b)(6), 
finding that Ms. Walker had failed to state a claim upon which relief can 
be granted.

 
 
Our 
standard for review of [a 12(b)(6)] dismissal is well known: (1) we accept the 
facts stated in the complaint as true and view them in the light most favorable 
to the appellant; (2) we sustain the dismissal only if it is certain from the 
face of the complaint that the appellant cannot assert any facts that would 
entitle him to relief; (3) we employ the same standards and examine the same 
materials as did the district court; and (4) such review is de novo.

 
 

Becker 
v. Mason, 2006 
WY 143, ¶ 5, 145 P.3d 1268, 1270 (Wyo. 2006).

 
 

 

Ms. Walker's challenge to the 
dismissal of her cause of action is rooted in her contention that W.R.C.P. 60(b) 
and Wyo. Stat. Ann. § 1-16-401 "establish a tort duty that was breached by [Mr.] 
Dowlin.  [Mr.] Dowlin's breach of 
those duties permits [Ms.] Walker to assert a cause of action at law [for 
damages], to be determined by a jury of her peers.  [McCulloh] v. Drake 24 P.3d 1162 (Wyo. 2001)."  We disagree.  McCulloh is distinguishable and does not 
support creation of the new cause of action asserted by Ms. Walker.  W.R.C.P. 60(b) and  Wyo. Stat. Ann. 
§ 1-16-401 are remedial in nature.  They provide a mechanism to obtain 
relief from a judgment obtained by fraud. They do not create a duty that gives 
rise to an independent tort cause of action for damages to be determined by a 
jury.

  

Preliminarily, we begin with two 
comments relating to our standard of review and the cause of action at issue 
here. Although we are required to assume that all factual allegations contained 
in the complaint are true, we are not required to give that same deference to 
legal conclusions.  Paragraph 17 of the amended complaint contains legal 
conclusions to which we do not defer.  It states: 

 
 

17.             
In 
preparing and presenting evidence as to the amount of [Mr. Dowlin]'s increase in 
net worth during the marriage, [Ms. Walker] and her attorneys had no alternative 
except to rely on the truth of evidence presented under oath by the defendants 
named herein; [Ms. Walker]'s reliance was necessary as a matter of evidence in 
the divorce proceedings even where [Ms. Walker] personally did not believe in 
the truth of the evidence presented.

 
 

The complaint contains no factual 
underpinnings for the allegations contained in paragraph 17.  Nowhere in 
the complaint does Ms. Walker allege that she was prevented from conducting 
discovery, or limited in any way in her ability to present evidence or 
cross-examine witnesses. We are not aware of any legal principle, and Ms. Walker 
has offered none, that would require Ms. Walker and her attorneys "to rely on 
the truth" of testimony and other evidence provided by the opposing party.  
Although not pivotal to our decision, we wish to make clear that in conducting 
our review we do not assume the legal conclusions set forth in paragraph 17 are 
true.

 
 

Second, for the purposes of this 
opinion, we use the term "fraud" to refer to Ms. Walker's "Fraud" claim 
against Mr. Dowlin.  That claim is 
not predicated upon violation of the duties allegedly created by Wyo. Stat. Ann. 
§ 1-16-401 or W.R.C.P. 60(b), but appears to be analogous to common law 
fraud.  The fraud claim was not dismissed by the district court and remains 
pending.  Because her fraud claim is 
not before us, we make no comment as to whether it is viable under Wyoming law.  We use the term "fraud on the court" to 
refer to Ms. Walker's claim that a tort duty originates from W.R.C.P. 60(b) and 
Wyo. Stat. Ann. § 1-16-401.  We note 
that some courts in other contexts may mean something different in their use of 
the term.  E.g., Billington v. Billington, 595 A.2d 1377, 
1383 (Conn. 
1991) ("[T]he concept of fraud on the court in the marital litigation context is 
properly confined to situations where both parties join to conceal material 
information from the court.").  

 
 
We begin 
our examination by addressing McCulloh v. 
Drake, 2001 WY 56, 24 P.3d 1162 (Wyo. 2001), which is the primary Wyoming 
case Ms. Walker cites for support.  
McCulloh does not support her 
claim.  In McCulloh, the plaintiff presented a tort 
claim for intentional infliction of emotional distress against her husband in 
the divorce action.  ¶ 20, 24 P.3d  
at 1168-69.  We simply held that the 
tort claim should be heard separately from the divorce.  Id., ¶ 23, 24 P.3d  at 1169.  McCulloh does not suggest that we should 
recognize the new tort cause of action urged by Ms. 
Walker.

 
 
As mentioned previously, Ms. 
Walker's "fraud on the court" claim is predicated upon alleged duties created 
solely by W.R.C.P. 60(b) and Wyo. Stat. Ann. § 1-16-401. We must review the rule 
and statute to see if they support her position.   W.R.C.P. 60(b) provides relief from 
judgments under certain circumstances:  

 
 
On motion, and upon such terms as 
are just, the court may relieve a party or a party's legal representative from a 
final judgment, order, or proceeding for the following reasons: . . . 
(3) fraud (whether heretofore denominated intrinsic or extrinsic), 
misrepresentation, or other misconduct of an adverse party . . . . This rule 
does not limit the power of a court to entertain an independent action to 
relieve a party from a judgment, order, or proceeding as provided by 
statute. . . .  [T]he 
procedure for obtaining any relief from a judgment shall be by motion as 
prescribed in these rules or by an independent action.

 
 

This rule allows a party to obtain 
relief from a judgment by motion, but it also recognizes that a party may seek 
relief from a judgment by "independent 
action to relieve a party from a judgment . . . as provided by statute."  Id.  Ms. Walker has chosen to proceed by 
independent action.  As the 
statutory basis for her independent action, Ms. Walker relies solely upon 
Wyo. Stat. Ann. § 
1-16-401(a), which states as follows:

 
 
A district court may vacate or 
modify its own judgment or order after the term at which it was made: . . . (iv) 
[f]or fraud practiced by the successful party in obtaining a judgment or 
order[.]

 
 

The statute plainly provides that 
the available remedy is vacation or modification of a judgment 
or order.  Ms. Walker does not 
ask to vacate or modify the divorce court's judgment.  Instead, she seeks monetary damages, a 
remedy not available under either the statute or the rule.  Further, nothing in the language of the 
statute or the rule creates any tort duty that Mr. Dowlin owes to the court or 
to Ms. Walker.  Compare Hulse v. First Am. Title Co., 
2001 WY 95, ¶¶ 57, 58, 33 P.3d 122, 139-40 (Wyo. 2001) (statute explicitly 
creating "duties and obligations" for real estate agents adapted to impose 
tort-based duties on such agents).  
Having reviewed the statute upon which Ms. Walker relies, it becomes easy 
to endorse the district court's conclusion:

 
 
By the clear and unambiguous 
language of the statute, [Ms. Walker]'s claim must be dismissed. . . .  [T]he statute does not address imposing 
liability on another for any damages that [Ms. Walker] believes she suffered by 
way of what the divorce court awarded her and what she believes it would have 
awarded her had certain acts not occurred. 

 
 

We now turn our attention to cases 
from other jurisdictions that Ms. Walker claims support her fraud on the court 
claim.  There is 
a wealth of authority from other jurisdictions contradicting Ms. Walker's 
claim that there should be a new cause of action where a defendant's 
misrepresentations to a court result in a less favorable judgment for the 
plaintiff.  See, e.g., Patel v. OMH Med. Ctr., 987 P.2d 1185, 
1202 (Okla. 1999); Suffield Dev. Assocs., Ltd. v. Nat'l Loan 
Investors, L.P., 802 A.2d 44, 51 (Conn. 2002); Luttrell v. United States, 644 F.2d 1274, 1276 (9th Cir. 1980).  Additionally, all of the cases Ms. 
Walker cites demonstrate that the appropriate remedy for alleged fraudulent 
conduct is to set aside the judgment, whether in the same or a different 
proceeding.

 
 

MacArthur 
v. Miltich, 313 N.W.2d 297 (Mich. Ct. App. 1981), is a typical example.  In MacArthur, the relevant rule explicitly 
allowed an independent action to set aside a judgment after the time to file a 
motion had run.  313 N.W.2d  at 
390-91.  The MacArthur court held that once the time 
to file a motion had expired, the plaintiff was required to proceed in an 
independent action to set aside the judgment.  Id.; see also Harper v. Harper, 835 P.2d 1346, 1347 (Idaho Ct. App. 1992) (allowed suit to set aside divorce decree 
because plaintiff relied on defendant's statements to her when she decided not 
to contest the divorce); Bayles v. 
Bayles, 981 P.2d 403, 407 (Utah Ct. App. 1999) (husband who alleged wife's 
representations induced divorce settlement was required to begin independent 
action to set aside judgment).  The 
common thread through these cases is that the remedy provided was setting aside 
the judgment, not an award of damages.

 
 
In St. Pierre v. Edmonds, 645 P.2d 615, 617 
(Utah 1982), the wife initiated an action asserting that her former husband had 
threatened her with bodily harm and engaged in harassment, intimidation, and 
physical abuse to compel her to sign a property division stipulation that 
substantially reduced her share of the marital property.  She sought damages for the difference 
between the actual settlement and what she would have received at trial.  Id. She also asked in the alternative 
for the divorce decree to be set aside.  
Id.  The Utah Supreme Court allowed her 
claim.  After extensively analyzing 
the law on the topic of setting judgments 
aside, the court held that she was entitled to that relief.  Id. 
at 618-19.  Ms. Walker is mistaken 
when she relies on language that states that "the less drastic [than setting 
aside a judgment] remedy sought in this case does not preclude the action."  Id. 
at 620.  The less drastic remedy the 
St. Pierre court 
contemplated was, in effect, a modification of the judgment rather than allowing 
a new proceeding that would award tort damages.

 
 
In 
Cresswell v. Sullivan & Cromwell, 668 F. Supp. 166, 168 (S.D.N.Y. 
1987), the plaintiffs in an independent fraud suit alleged that the defendant 
failed to produce all documents requested during a prior suit's discovery 
process.  This failure to disclose allegedly induced the plaintiffs to 
settle for less of an award than they otherwise could have negotiated.  
Id.  The district court ruled that 
the plaintiffs could proceed on their fraud action.  Id. at 
172-73.  Ms. Walker argues that we 
should follow the Cresswell court's 
lead and allow her claim for damages.

 
 
Ms. 
Walker apparently overlooked Cresswell's subsequent history.  On 
appeal, the Court of Appeals for the Second Circuit held that the plaintiffs' 
action was not one at law, regardless of how it was pleaded, but was instead 
equitable in nature.  Cresswell v. Sullivan & Cromwell, 922 F.2d 60, 71 (2d Cir. 1990).  It held that the district court "had ancillary 
equitable jurisdiction to entertain an attack on the [original] 
judgment."  Id. at 70 (emphasis added).  On 
remand, the district court held that the plaintiffs had not presented a claim 
for "fraud on the court" as the federal courts recognize it, and that their 
attack on the prior judgment failed.  Cresswell v. Sullivan & 
Cromwell, 771 F. Supp. 580, 587 (S.D.N.Y. 1991).  Based on its ultimate disposition, Cresswell supports our conclusion that 
Ms. Walker's only appropriate remedy is relief from the original divorce 
court judgment.

 
 
In this 
case, we are particularly troubled by Ms. Walker's position that she is entitled 
to bring a tort claim to recover compensatory damages based on a property 
division in a divorce.  Her alleged 
compensatory damages are the difference between what she received in the divorce 
proceeding and the amount she believes she would have received absent the 
alleged fraud.  In other words, she 
wishes to have a jury in her tort proceeding decide the fundamentally equitable 
issue of dividing property in a divorce.  
This would improperly remove the question of equitable property division 
from the judge's handswhere it properly belongs.

 
 
As we 
have said before, "[a] civil action in tort is fundamentally different from a 
divorce proceeding.  The issues 
involved in each are entirely distinct."  
McCulloh, ¶ 28, 24 P.3d  at 
1170 (citation omitted).  The 
paramount concern of a divorce court is to make a "disposition of the property 
of the parties as appears just and equitable."  Wyo. Stat. Ann. § 20-2-114 (LexisNexis 2007). 
 No right to a jury exists in 
divorce proceedings.  See generally Wyo. Stat. Ann. §§ 
20-2-101 through -116 (LexisNexis 2007).  
In contrast, the plaintiff has a right to a jury trial on tort 
claims.  McCulloh, ¶ 29, 24 P.3d  at 1170.  To allow claims such as the one Ms. 
Walker asserts would allow a jury to become a de facto appellate court reviewing 
the divorce court's decision.  We 
are aware of no legal principle that would allow or justify such an 
approach.  From a policy 
perspective, it seems patently obvious that the best judge of the claim's 
measure of damage is the judge who granted the divorce.  The plain language of both W.R.C.P. 
60(b) and Wyo. Stat. Ann. § 1-16-401 implements that 
policy.

 
 
Our 
decision is also supported by our policy of finality of judgments.  We have previously 
recognized

 
 
the interest held by society in 
having differences conclusively resolved in a single action thereby avoiding the 
vexation and expense which are associated with piecemeal litigation.  The necessity for sustaining this social 
interest is the justification for the doctrines of res judicata and collateral 
estoppel. . . . These doctrines . . . promote the reliance by citizens of the 
state upon courts to settle their disputes and they conserve judicial 
resources.

 
 

Delgue v. Curutchet, 677 P.2d 208, 213-14 (Wyo. 1984).  Indeed, this policy is so compelling 
that we have described it as "a universal precept of common-law 
jurisprudence."  Id. at 213.  Just as important is the concept that a 
party must raise every issue in the original proceeding.  As the Second Circuit recognized in Cresswell, equity requires that a party 
who had an adequate remedy at law or in the original proceeding, or would have 
with proper diligence, be denied relief.  
922 F.2d  at 71.  Like the 
federal courts, we prefer not to encourage litigants to withhold relevant 
evidence while waiting for the next proceeding:

 
 
[T]rials are time-consuming and 
costly proceedings and while a litigant is entitled to a fair trial, certain it 
is that he has responsibilities to assist the trial court in bringing about such 
a result. It will not do to permit a 
litigant to remain mute and speculate on the outcome of a jury trial on the 
record made with knowledge of irregularities or improprieties therein that might 
readily and easily have been corrected during the trial and then, when 
misfortune comes his way, to attempt to set the invited result aside by way of a 
new trial because of such matters. It is not fitting for the trial court or this 
court knowingly to reward or condone such conduct. As so aptly stated by 
Judge Rossman in Fischer v. Howard, 201 Or. 426, 271 P.2d 1059, 1063, 49 
A.L.R.2d 1301, a loser should not by design get "two bites at the 
cherry."

 
 

DeWitty v. Decker, Wyo., 383 P.2d 734, 736 (1963) (affirming 
denial of relief under W.R.C.P. 59).

 
 
Ms. Walker obviously knew of some of 
the alleged fraudulent behaviors at the time of the divorce hearing because she 
filed her first complaint before the divorce trial.  Moreover, she filed her amended 
complaint alleging the remaining misconduct between the time the divorce court 
issued its decision letter and the final divorce decree.  We will not allow litigants to "sit on" 
useful information in one proceeding in order to collaterally attack the result 
in a subsequent action.  We do not 
now directly rely on res judicata, 
collateral estoppel, or Ms. Walker's failure to contest any improprieties in the 
divorce court.  Nevertheless, the 
very same policies behind these doctrines support today's 
result.

 
 

 
Both W.R.C.P. 60(b) and Wyo. Stat. 
Ann. § 1-16-401 provide a remedy to a litigant alleging that a judgment has been 
obtained fraudulently.  The litigant 
may seek relief from the judgment in the form of modification or revocation of 
that judgment.  For reasons that are 
not clear from the record, Ms. Walker has apparently chosen not to seek the 
relief authorized by W.R.C.P. 60(b) and Wyo. Stat. Ann. § 1-16-401(a).  Instead, she seeks an award of damages 
from a jury.  There is no language 
in the rule or the statute that establishes a duty giving rise to a tort cause 
of action for damages, nor do any cases from Wyoming or other jurisdictions support the 
result Ms. Walker desires.

 
 
Affirmed.

FOOTNOTES

 
 

1For the 
sake of convenience, we 
refer to the "district court" as the court from which this appeal is taken.  We refer to the district court entering 
the decree of divorce and dividing the parties' marital property as the "divorce 
court."

 
 

2Ms. Walker's claims against Mr. 
Howard were dismissed, and he is not a party to this 
appeal.