Source: http://mn.gov/law-library-stat/archive/ctapun/9702/1397.htm
Timestamp: 2017-10-20 07:06:18
Document Index: 716904329

Matched Legal Cases: ['§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518', '§ 518']

Sharon L. Bird, petitioner, Respondent, vs. Gary J. Bird, Appellant. C3-96-1397, Court of Appeals Unpublished, February 18, 1997.
C3-96-1397
Sharon L. Bird, petitioner
Gary J. Bird,
File No. F3-94-627
Paul H. Tanis, Jr. Michelle M. Zehnder, McKenzie & Gustafson, 424 South Minnesota Avenue, St. Peter, MN 56082 (for respondent).
Gary J. Bird, 14 Lakewood Knoll Road East, Cleveland, MN 56017 (Pro Se).
Appellant challenges the trial court's order amending the Judgment and Decree dissolving the parties' marriage, arguing that the trial court was without jurisdiction to do so, that respondent and her attorney committed fraud on the trial court, that there was insufficient evidence, and that the trial court abused its discretion. We affirm.
The parties were married on September 3, 1974. They were divorced on April 10, 1995, and the Judgment and Decree was based on a Marital Termination Agreement (MTA) signed by the parties on March 30 and 31, 1995. The MTA provided for the distribution of the parties' real estate, personal property, retirement accounts, and a $11,000 cash payment from appellant to respondent.
Pursuant to voluntary discovery regarding the parties' assets and liabilities, respondent asked for and received from appellant documentation of his retirement and deferred compensation assets from his employer, the State of Minnesota Security Hospital in St. Peter. Appellant submitted a document from the Minnesota State Retirement System, showing an account balance of $21,223.07 as of June 30, 1993. This figure was incorporated into the MTA and Judgment and Decree.
Respondent, after speaking with other employees at the security hospital, became suspicious that appellant had misstated the amount of his retirement account with the state. She contacted her attorney, who then asked his paralegal to contact the administrator of appellant's retirement account, the Minnesota State Retirement System (MSRS) to check on the true amount of appellant's retirement benefits. On November 14, 1995, the paralegal received a letter by facsimile from MSRS addressed to Gary Bird, dated April 3, 1995. This letter stated that appellant's retirement account had a value of $40,269 and that the interest on the account is compounded annually at a rate of 6% and continues until appellant applies for a refund.
During the motion hearing on February 22, 1996, appellant argued that he did not know of the accrued interest and the nondisclosure was not fraudulent, but rather a mistake. Appellant argued that the failure to include the accrued interest on his retirement account did not render the property division so unjust so as to justify opening the judgment. The trial court found that appellant made "material misrepresentations with respect to the marital holdings in his pension, profit sharing, retirement and deferred compensation accounts." According to the trial court, appellant understated the value of these accounts by approximately $16,269 and therefore, this amount was not taken into account during the settlement discussions between the parties, the discussions surrounding the MTA, and the court's Judgment and Decree. In its accompanying memorandum, the trial court noted that "[appellant's] actions are at best mistake or neglect, and most likely misrepresentations or even possibly fraud."
Noting its desire to adhere to the parties' original intent to achieve a cash settlement, rather than awarding respondent future benefits, the trial court awarded respondent $7,483.74, plus interest commencing from April 10, 1995, until the amount was paid in full. The trial court divided the undisclosed amount of $16,269 evenly and then subtracted $650.76 from respondent's share, or one-half the amount appellant would incur if he took out a two-year loan at eight percent interest to make the cash payment. The trial court concluded that the failure to structure the award in this way would result in an inequitable property distribution in light of the parties' attempt to divide the marital property equally.
On April 2, 1996, appellant filed a pro se motion to amend the trial court's findings on the issue of fraud. Appellant argued that respondent and her attorney intentionally tampered with the April 3, 1995, letter from the MSRS in an effort to cover up deceitful conduct. Appellant also argued newly discovered evidence. The trial court denied appellant's motion and awarded respondent $1,000 in attorney fees.
Appellant argued that the trial court did not have the authority to reopen and modify the division of his retirement benefits as part of the final Judgment and Decree. We are not persuaded.
Minn. Stat. § 518.145, subd. 2(1), (3) (1996), expressly provides that a final judgment and decree under Chapter 518 may be set aside for mistake or fraud. Kornberg v. Kornberg, 542 N.W.2d 379, 386 (Minn. 1996). This provision allows the trial court to relieve a party from a judgment and decree or to "grant other relief as may be just." Minn. Stat. § 518.145, subd. 2 (1996). Similarly, the trial court may modify a final judgment and decree without having to vacate the entire decree. See Hafner v. Hafner, 237 Minn. 424, 430-31, 54 N.W.2d 854, 858 (1952) (holding that the part of the decree and the stipulation occasioned by fraud or mistake should be modified to reflect the "true and fair intent of the parties at the time the decree was rendered"). Accordingly, the trial court had the express authority pursuant to Minn. Stat. § 518.145, subd. 2, and case law to reopen and modify the judgment and decree.
The trial court's decision to modify a decree because of fraud on the court will not be disturbed absent an abuse of discretion. See Sanborn v. Sanborn, 503 N.W.2d 499, 502 (Minn. App. 1993), review denied (Minn. Sept. 21, 1993) (holding that trial court has discretion to vacate a decree because of fraud on the court). "A trial court's findings concerning allegations of fraud on the court must be upheld unless clearly erroneous." Id.
Here, the trial court properly concluded that the accrued interest on appellant's retirement benefits was a marital asset subject to full disclosure by appellant.
Marital property is defined as:
property, real or personal, including vested public or private pension plan benefits or rights, acquired by the parties, or either of them, to a dissolution * * * at any time during the existence of the marriage relation between them * * * but prior to the date of valuation under section 518.58, subdivision 1.
Minn. Stat. § 518.54, subd. 5 (1996). Retirement or pension benefits do not have to be fully vested and/or matured to be included in the definition of marital property. See Janssen v. Janssen, 331 N.W.2d 752, 755-56 (Minn. 1983) (holding that nonvested, nonmatured pensions are included in the definition of marital property). Similarly, the accrued interest on a marital pension plan is marital property subject to division at the time of the dissolution. See Swick v. Swick, 467 N.W.2d 328, 331 (Minn. App. 1991), review denied (Minn. May 16, 1991) (holding that interest earned on husband's nonmarital certificate of deposit during marriage is income to be divided as marital asset upon dissolution); Wiegers v. Wiegers, 467 N.W.2d 342, 344 (Minn. App. 1991) (holding that income from a nonmarital asset is marital income). In the present case, the non-disclosed accrued interest was generated by the marital portion of appellant's retirement and pension benefits and therefore constitutes a divisible marital asset.
Because it is a divisible marital asset, appellant had a duty to disclose the amount of accrued interest generated by the marital portion of his retirement and pension benefits. The parties to a marital dissolution proceeding have a duty to make a full and accurate disclosure of all assets and liabilities to facilitate the trial court's division of property. Ronnkvist v. Ronnkvist, 331 N.W.2d 764, 765-66 (Minn. 1983). A breach of this duty constitutes a fraud sufficient to allow the trial court to amend the original judgment and decree. Id. at 766.
We note further that even if appellant did not act fraudulently, the additional pension amounts would have been "omitted" from the property distribution and therefore are divisible as "omitted property." See Neubauer v. Neubauer, 433 N.W.2d 456, 461 n.1 (Minn. App. 1988) (recognizing that pension omitted from initial property division could be divided as "omitted property"), review denied (Minn. Mar. 17, 1989).
Despite receiving the letter from the MSRS approximately seven days before the trial court issued its original Judgment and Decree, appellant failed to bring the letter to the attention of his counsel, opposing counsel, or the trial court. Appellant had a duty to disclose the existence of this letter to his counsel, respondent's counsel, and the trial court. See Hafner, 237 Minn. at 433, 54 N.W.2d at 860 (holding that "the husband was under a duty to disclose to the wife any facts the ignorance of which might mislead her.") (emphasis added). Appellant's failure to do so was sufficient for the court to make an equitable change.
Although appellant argues that respondent, while she was living at the homestead, intercepted the letter in the mail and that he never received it, the trial court was not required to accept his version. Not until the April 23, 1995, hearing did appellant introduce any evidence on the issue. This evidence was an affidavit from Dara Sandau in which she stated that she observed a woman known to her as respondent taking mail from the mailbox at appellant's residence. However, Sandau could not say in her affidavit that the letters taken from the mailbox included the letter from the MSRS regarding appellant's retirement benefits. The trial court had no evidence from which to find that respondent did, in fact, steal the letter from the MSRS from appellant's mailbox.
We find no merit to appellant's argument that the trial court did not have the authority to reopen the original Judgment and Decree because it utilized the present value method of distributing his retirement benefits.
Appellant argues that when a lump sum payment is made under the present value method, the trial court's jurisdiction should be divested. We disagree. As discussed previously, pursuant to Minn. Stat. § 518.145, subd. 2, and case law, a trial court has the express authority to vacate or modify an otherwise final judgment and decree on the ground of fraud or mistake. That the trial court used the present value method has no bearing on the trial court's authority to reopen a final judgment and decree on the ground of fraud or mistake.
Appellant argues that the trial court abused its discretion by placing an undue financial hardship on him when it ordered a cash payment to respondent for her one-half of his undisclosed retirement benefits. Appellant maintains that trial court's cash award was an attempt to compensate respondent's attorney.
The valuation and division of pension rights is within the trial court's discretion. Taylor v. Taylor, 329 N.W.2d 795, 798 (Minn. 1983). A pension may be valued by one of two ways: 1) the fixed percentage method, or 2) the present value method. Larson, 412 N.W.2d 773, 776 (Minn. App. 1989). The present value method is preferred
where there are sufficient assets available at the time of divorce to divide the present value of the retirement benefits without causing an undue hardship to either spouse and where testimony on valuation is not unduly speculative.
Taylor, 329 N.W.2d at 798-99. The fixed percentage method is to be used where the present value determinations are unduly speculative or there are not enough assets to equitably require the benefits due in the future to be split presently. Id. at 799.
The trial court did not err in choosing the present value method to value appellant's retirement benefits; the value of appellant's pension benefits is not speculative. Appellant has also offered no evidence that the trial court's decision will work an undue hardship on him. The trial court allowed appellant to pay respondent over time, giving him credit for the cost of securing a loan to pay respondent. Appellant merely rests on the allegation that the trial court's award was an attempt to compensate respondent's attorney. Where a party assigns error on mere assertion and does not support it by any argument or authorities in their brief, it will not be considered on appeal unless prejudicial error is obvious on mere inspection. Schoepke v. Alexander Smith & Sons Carpet Co., 290 Minn. 518, 519-20, 187 N.W.2d 133, 135 (1971). We have found no prejudicial error in this record.
We conclude that the trial court did not abuse its discretion when it utilized the present value method to distribute appellant's pension benefits.
Appellant claims that the trial court abused its discretion in awarding attorney fees. As a remedy, appellant argues that the amended Judgment and Decree should be vacated. We disagree.
Only in rare cases will a trial court's decision regarding attorney fees be overturned on appeal. Burns v. Burns, 466 N.W.2d 421, 424 (Minn. App. 1991). Attorney fees may be based on the impact a party's behavior has on the costs of the litigation regardless of the relative financial resources of the parties. Dabrowski v. Dabrowski, 477 N.W.2d 761, 766 (Minn. App. 1991). The trial court may abuse its discretion, however, where it fails to make specific findings on the issue of attorney fees, whether the award is need-based or conduct-based. Kronick v. Kronick 482 N.W.2d 533, 536 (Minn. App. 1992).
Here, the trial court specifically found that respondent's reasonable attorney fees amounted to "at least" $1,893.30 and that respondent's motion for modification was "brought about by the misrepresentations of respondent." To protect her right to an equitable division of the marital property, respondent was forced to bring suit to modify the original Judgment and Decree so that it reflected the true extent of the marital portion of respondent's retirement benefits. See Minn. Stat. § 518.14, subd. 1(1) (1996) (attorney fees may be awarded where such fees are necessary for the good-faith assertion of a party's rights). This unnecessarily contributed to the length and cost of the litigation in this matter. Minn. Stat. § 518.14, subd. 1(3) (1996) (trial court may award attorney fees where one party unnecessarily contributes to the length or expense of the proceedings). Further, appellant has presented no coherent argument or evidence that the trial court abused its discretion in awarding respondent reasonable attorney fees.
On these facts, the trial court properly exercised its discretion in awarding respondent reasonable attorney fees.
Lastly, appellant argues that respondent and her attorney committed a fraud on the court by failing to disclose the existence of her acquisition of a homestead just prior to the trial court's issuance of the original Judgment and Decree. We disagree.
Appellant argues that respondent's new residence is marital property because it was purchased before the entry of the original Judgment and Decree. Nonmarital property is defined, in part, as property real or personal acquired by either spouse before, during, or after the existence of their marriage, which "is acquired by a spouse after the valuation date." Minn. Stat. § 518.54, subd. 5(d). On established facts, the question of whether property is nonmarital or marital is a question of law this court reviews de novo. Wopata v. Wopata, 498 N.W.2d 478, 484 (Minn. App. 1993).
Here, the date of valuation of the parties' assets and liabilities was December 31, 1994. Hence, the new residence acquired by respondent on March 31, 1995, was purchased nearly four months after the date of valuation. Under the Minn. Stat. § 518.54, subd. 5(d), this renders the property "nonmarital." Because the new residence did not constitute "marital" property, neither respondent nor her attorney was required to disclose its existence. Further, by appellant's own affidavit dated February 14, 1996, he impliedly, if not expressly, admits that he had knowledge of respondent's purchase of her new residence. Appellant cannot say he did not know of respondent's purchase of her new homestead.
Respondent argues that she is entitled to attorney fees on appeal. Attorney fees may be awarded on appeal if the reviewing court finds "that a party has acted speciously and solely for the purpose of harassment" or if it is determined "that fees are necessary to enable a party carry on or contest the proceeding." Emerick on behalf of Howley v. Sanchez, 547 N.W.2d 109, 113 (Minn. App. 1996). Attorney fees may also be awarded on appeal in dissolution cases where the appeal was frivolous or brought in bad faith. Dabrowski, 477 N.W.2d at 766.
We conclude a modest award of attorney fees on appeal is warranted in this case. We grant respondent attorney fees in the amount of $300.
Respondent has brought motions to strike certain portions of appellant's brief, appendix, and reply brief and for attorney fees.
The record on appeal consists of the "papers filed in the trial court, the exhibits, and the transcript of the proceedings, if any." Minn. R. Civ. App. P. 110.01. As respondent argues, pages 87 and 263 of appellant's appendix were not submitted and received by the trial court. Accordingly, they are stricken from the record. Respondent argues that numerous pages from the appendix should also be stricken because they contain handwritten notations and underlining not present in the original documents submitted to the trial court. While the pages in appellant's appendix do contain writing and underlining not present in the original documents, the markings do not materially alter the documents and are not prejudicial to respondent's case. We deny that request.
Respondent also seeks to strike appellant's reply brief as it relates to issues other than the award of attorney fees and to strike portions of appellant's brief not supported by facts in the record. Minn. R. Civ. P. 128.02, subd. 3, provides that "[t]he reply brief must be confined to new matter raised in the brief of the respondent." As respondent notes, appellant's reply brief reiterates the arguments advanced in his principal brief. Thus, under Rule 128.02, subd. 3, these portions of appellant's reply are stricken from the record. Lastly, respondent argues that those portions of appellant's principal brief that are without factual support in the record should be stricken. Minn. R. Civ. App. P. 128.02, subd. 1(c), provides that the statement of facts must be stated fairly with complete candor and that each statement of material fact shall be accompanied by a reference to the record. Respondent's redacted version of the statement of the case is adopted by this court.