Filed 7/22/20 by Clerk of Supreme Court

IN THE SUPREME COURT

STATE OF NORTH DAKOTA

2020 ND 165

Thomas D. Varty, Plaintiff and Appellant

v.

Kathleen A. Varty, Defendant and Appellee

No. 20190391

Appeal from the District Court of Williams County, Northwest Judicial 

District, the Honorable Joshua B. Rustad, Judge.

REVERSED AND REMANDED.

Opinion of the Court by Crothers, Justice, in which Chief Justice Jensen and 

Justices VandeWalle and Tufte joined. Justice McEvers filed a dissenting 

opinion.

Thomas J. Corcoran, Williston, ND, for plaintiff and appellant; submitted on 

brief. 

Harry M. Pippin, Williston, ND, for defendant and appellee.
1

Varty v. Varty

No. 20190391

Crothers, Justice.

[¶1] Thomas Varty appeals from the district court’s order granting Kathleen 

Varty relief from judgment and requiring him to pay her one-half of the net 

proceeds of a stock sale totaling $23,714.62. We reverse the order and remand 

to the district court for proceedings consistent with this opinion. 

I

[¶2] Kathleen and Thomas Varty divorced in 2011. In August 2017, Thomas 

Varty moved to terminate spousal support to Kathleen Varty. The district 

court reduced his obligation and Kathleen Varty appealed. See Varty v. Varty, 

2019 ND 49, 923 N.W.2d 131. We affirmed. Id. at ¶ 20. On December 14, 2018, 

Kathleen Varty moved under Rule 60(b) of the North Dakota Rules of Civil 

Procedure for relief from judgment. She alleged that during the marriage 

Thomas Varty obtained shares in a “phantom” stock plan from a former 

employer. She claimed she was entitled to half of the $72,400 sale proceeds

received by Thomas Varty in February 2016. Thomas Varty opposed the 

motion, arguing the stock had no value on the date of the divorce and did not 

become vested until after the divorce. After a hearing, the district court

granted Kathleen Varty relief from judgment and awarded her half of the net 

proceeds received by Thomas Varty. 

[¶3] On appeal, Thomas Varty argues the district court abused its discretion 

when considering Kathleen Varty’s untimely filed reply brief, when it granted 

Kathleen Varty’s untimely request for oral arguments, and when it found it 

was unconscionable for Thomas Varty to exclusively enjoy the benefits from 

the stock accrued during the marriage. Further, he claims it was clearly 

erroneous for the court to order Thomas Varty to pay Kathleen Varty one-half 

of the net proceeds from the stock, and the court erred as a matter of law and

abused its discretion when it did not set aside the entire 2011 judgment.
2

II

[¶4] The dispositive issue is whether the district court erred by finding it was 

unconscionable for Thomas Varty to exclusively enjoy the benefits from the

stock accrued during the marriage. 

[¶5] When one party does not disclose material assets or debts during a 

divorce, the other party has a choice of remedies. In Walstad v. Walstad, we 

explained N.D.C.C. § 14-05-24(3) and N.D.R.Civ.P. 60 “provide separate 

remedies for pursuing a former spouse’s failure to disclose marital assets or 

debts during a divorce.” 2012 ND 204, ¶ 13, 821 N.W. 2d 770. Under N.D.C.C. 

§ 14-05-24(3), “The court may redistribute property and debts in a 

postjudgment proceeding if a party has failed to disclose property and debts as 

required by rules adopted by the supreme court or the party fails to comply 

with the terms of a court order distributing property and debts.”

[¶6] Here, Kathleen Varty did not raise N.D.C.C. § 14-05-24(3), but moved 

the court under N.D.R.Civ.P. 60(b) for relief from the final judgment. Under 

N.D.R.Civ.P. 60(b)(6), her burden was to prove exceptional circumstances 

existed to obtain relief from the judgment. See Crawford v. Crawford, 524 

N.W.2d 833 (N.D. 1994); Vann v. Vann, 2009 ND 118, ¶¶ 10-11, 767 N.W.2d 

855.

[¶7] “In reviewing a trial court’s grant of a motion to vacate a judgment we 

determine only whether the trial court abused its discretion.” Peterson v. 

Peterson, 555 N.W.2d 359, 361 (N.D. 1996) (citing Soli v. Soli, 534 N.W.2d 21 

(N.D. 1995)). “A court abuses its discretion when it acts in an arbitrary, 

unreasonable, or unconscionable manner, when it misinterprets or misapplies 

the law, or when its decision is not the product of a rational mental process 

leading to a reasoned determination.” Meier v. Meier, 2014 ND 127, ¶ 7, 848 

N.W.2d 253 (citing Rebel v. Rebel, 2013 ND 164, ¶ 13, 837 N.W.2d 351).

[¶8] In pertinent part, Rule 60(b)(6) of the North Dakota Rules of Civil 

Procedure states:
3

“(b) Grounds for Relief From a Final Judgment or Order. On motion and 

just terms, the court may relieve a party or its legal representative from 

a final judgment, order, or proceeding for the following reasons:

. . . .

(6) any other reason that justifies relief.”1

[¶9] “Under N.D.R.Civ.P. 60(b)(vi), a district court may relieve a party from 

a final judgment for any other reason justifying relief.” Vann, 2009 ND 118, 

¶ 10, 767 N.W.2d 855. “Rule 60(b) attempts to strike a proper balance between 

the conflicting principles that litigation must be brought to an end and that 

justice should be done, and, accordingly, the rule should be invoked only when 

extraordinary circumstances are present.” Id. (citing Knutson v. Knutson, 2002 

ND 29, ¶ 7, 639 N.W.2d 495).

[¶10] In Crawford v. Crawford, 524 N.W.2d 833, 836 (N.D. 1994), we stated:

“Whether a party has agreed to the terms of a stipulation 

becomes irrelevant in light of the damage enforcement of an 

unconscionable decree would do to the duty and reputation of 

courts to do justice. Just as courts will not enforce an agreement 

that is illegal, so too courts should vacate judgments that are 

unconscionable. Rule 60(b)(vi), N.D.R.Civ.P., is available for just 

such a rare occasion and exceptional circumstance.” 

[¶11] In Vann v. Vann, 2009 ND 118, ¶ 11, 767 N.W.2d 855, we explained:

“If the judgment sought to be set aside is entered based on a 

stipulation of the parties, the party challenging the judgment has 

the additional burden of showing that under the law of contracts 

there is justification for setting aside the stipulation. A district 

 

1 “Rule 60 was amended and subdivisions (c), (d), and (e) were added, effective March 1, 2011, in 

response to the December 1, 2007, revision of the Federal Rules of Civil Procedure. The language and 

organization of the rule were changed to make the rule more easily understood and to make style and 

terminology consistent throughout the rules.” (N.D.R.Civ.P. 60, explanatory note.)
4

court, in considering whether a settlement agreement between 

divorcing parties should be enforced, should make two inquiries: 

(1) whether the agreement is free from mistake, duress, menace, 

fraud, or undue influence; and (2) whether the agreement is 

unconscionable. In a divorce, whether a property settlement 

agreement is unconscionable is a question of law, but ‘turns on 

factual findings related to the relative property values, the parties’ 

financial circumstances, and their ongoing need.’ On appeal, 

findings of fact will not be reversed unless they are clearly 

erroneous. A finding of fact is clearly erroneous if it has no support 

in the evidence, or even if there is some supporting evidence, the 

reviewing court is left with a definite and firm conviction a mistake 

has been made, or the decision was induced by an erroneous view 

of the law.” 

(Internal citations and quotations omitted.)

[¶12] In Eberle v. Eberle, 2009 ND 107, ¶ 18, 766 N.W.2d 477 (internal 

citations omitted), we explained unconscionable agreements:

“An agreement is unconscionable if it is one no rational, 

undeluded person would make, and no honest and fair person 

would accept, or is blatantly one-sided and rankly unfair. 

Unconscionability is a doctrine by which courts may deny 

enforcement of a contract ‘because of procedural abuses arising out 

of the contract formation, or because of substantive abuses relating 

to the terms of the contract.’ To determine a settlement agreement 

is unconscionable there must be some showing of both procedural 

and substantive unconscionability and courts must balance the 

various factors, viewed in totality, to make its determination. 

Procedural unconscionability focuses on the formation of the 

agreement and the fairness of the bargaining process. Substantive 

unconscionability focuses on the harshness or one-sidedness of the 

agreement’s provisions.”

[¶13] Here, the district court concluded “it would be unconscionable, under 

Rule 60(b)(6) of the North Dakota Rules of Civil Procedure, for the Plaintiff to 
5

exclusively enjoy the benefits from the phantom stock rights that accrued 

during the marriage of the parties[.]” At the hearing the district court stated:

“Obviously the Court has reviewed the briefs of each side and the 

issues in this case. I do find that there was an accrued interest that 

did occur during the course of the marriage and it wasn’t disclosed. 

I’m not finding any fraud. But I am going to find that 60(b)(6) does 

apply. I think it would be justified. I do find it would be 

unconscionable not to give her her 50 percent of that. 

“I’m not going to do it with interest. So I am going to direct 

the payment of $23,714.62. I am going to find that that is 

something that was vested at least with regard to what was paid 

out. At the time of the divorce he had already been qualified for 

that. I’ll direct Attorney Pippin to prepare a proposed Order.”

[¶14] The district court concluded the agreement was free from fraud and that 

it would be unconscionable not to give Kathleen Varty half of the stock. The 

district court did not explain the terms of the marital termination agreement 

and how not receiving 50% of the stock made the stipulation and resulting 

judgment as a whole so one-sided and created such hardship that it is 

unconscionable. See Crawford, 524 N.W.2d at 836 (N.D. 1994). Further, the 

district court did not make findings on whether the settlement agreement and

resulting judgment were procedurally and substantively unconscionable.

Eberle, 2009 ND 107, ¶ 18, 766 N.W.2d 477. Therefore, the district court 

abused its discretion by misinterpreting or misapplying the law, and this case 

is reversed and remanded for further proceedings.

III

[¶15] We have considered the remaining issues and arguments raised by the 

parties and find them to be either unnecessary to our decision or without merit.
6

IV

[¶16] We reverse the order and remand to the district court for proceedings

consistent with this opinion.

[¶17] Daniel J. Crothers

Gerald W. VandeWalle

Jerod E. Tufte

Jon J. Jensen, C.J.

McEvers, Justice, dissenting.

[¶18] Because I do not believe the district court abused its discretion, I 

respectfully dissent. The majority correctly points out the standard of review 

here is abuse of discretion. Majority, at ¶ 7. An abuse of discretion is never 

assumed and must be affirmatively established. Dvorak v. Dvorak, 329 

N.W.2d 868, 870 (N.D. 1983). “We will not overturn that court’s decision 

merely because it is not the one we may have made if we were deciding the 

motion.” Interest of D.J.H., 401 N.W.2d 694, 700 (N.D. 1987).

[¶19] Under the broad language of N.D.R.Civ.P. 60(b)(6), the district court is 

given ample power to vacate a judgment whenever such action is appropriate 

to accomplish justice. Kinsella v. Kinsella, 181 N.W.2d 764, 768 (N.D. 1970). 

This Court has also stated:

[Rule 60(b)(6), N.D.R.Civ.P.,] provides for relief when the movant 

demonstrates it would be manifestly unjust to enforce a court order 

or judgment and provides an escape from the judgment, 

unhampered by detailed restrictions. When it is disclosed that a 

judgment is so blatantly one-sided or so rankly unfair under the 

uncovered circumstances that courts should not enforce it, 

N.D.R.Civ.P. 60(b)[6] provides the ultimate safety valve to avoid 

enforcement by vacating the judgment to accomplish justice. 

Relief under N.D.R.Civ.P. 60(b)[6] “is, by its very nature, invoked 
7

to prevent hardship or injustice and thus is to be liberally 

construed and applied.”

Kopp v. Kopp, 2001 ND 41, ¶ 10, 622 N.W.2d 726 (citations omitted and 

emphasis added).

[¶20] I agree with the majority there is an alternative remedy under N.D.C.C. 

§ 14-05-24(3) for failing to disclose the marital asset during the divorce. 

Majority, at ¶ 5. I would anticipate a request for relief under the statute on 

remand, which would also give discretion to the district court to redistribute 

the property.

[¶21] I cannot say the district court acted arbitrarily, unreasonably, or 

unconscionably, nor do I believe the law was misapplied or was a product of an 

irrational mental process. Based on the standard of review, I would affirm.

[¶22] Lisa Fair McEvers