Case Name: IN RE the MARRIAGE OF Barbara RUNGE, Appellant, and David Allen Runge, Appellee.
Court: Colorado Court of Appeals, Div. I
Jurisdiction: Colorado
Decision Date: 2018-02-22
Citations: 415 P.3d 884
Docket Number: Court of Appeals No. 16CA1492
Parties: IN RE the MARRIAGE OF Barbara RUNGE, Appellant,
and
David Allen Runge, Appellee.
Judges: 
Reporter: Pacific Reporter 3d
Volume: 415
Pages: 884–896

Head Matter:
IN RE the MARRIAGE OF Barbara RUNGE, Appellant,
and
David Allen Runge, Appellee.
Court of Appeals No. 16CA1492
Colorado Court of Appeals, Div. I.
Announced February 22, 2018
Robert E. Lanham, P.C., Robert E. Lanham, Boulder, Colorado, for Appellant
Litvak Litvak Mehrtens and Carlton, P.C., Ronald D. Litvak, John C. Haas, Denver, Colorado, for Appellee

Opinion:
Opinion by JUDGE FURMAN
¶ 1 In this post-dissolution of marriage dispute between Barbara Runge (wife) and David Allen Runge (husband), wife moved under C.R.C.P. 16.2(e)(10) to discover and allocate assets that she alleged husband did not disclose or misrepresented in the proceedings surrounding their 2011 separation agreement. Husband moved to dismiss wife's motion. In a written order, the district court granted husband's motion to dismiss, ruling that wife's motion did not state sufficient grounds to trigger discovery and allocation of assets under the rule.
¶ 2 On appeal, wife challenges the district court's order. She contends that the district court erred by (1) not applying the "plausibility" standard, which was announced in Warne v. Hall , 2016 CO 50, 373 P.3d 588, when granting husband's motion to dismiss; and (2) ruling that she did not state sufficient grounds in her motion. She also contends that the court should have at least allowed her to conduct discovery to prove her allegations.
¶ 3 We conclude that the Warne "plausibility" standard does not apply to the dismissal of a motion under C.R.C.P. 16.2(e)(10). We also agree with the district court that wife's motion did not state sufficient grounds to trigger an allocation of assets or discovery under the rule. Accordingly, we affirm the district court's order.
¶ 4 As an initial matter, husband contends that the district court lacked subject matter jurisdiction under C.R.C.P. 16.2(e)(10) because the five-year period during which it may reallocate assets expired the day after wife moved for such relief. We disagree.
¶ 5 C.R.C.P. 16.2(e)(10) establishes a five-year period where the court retains jurisdiction to "allocate" material assets or liabilities that were not allocated as part of the original decree. It does not, however, limit the court's jurisdiction to rule on timely motions if the five-year period expires before the ruling. Therefore, the majority concludes that the district court had jurisdiction to rule on the motion because wife's motion was timely-it was filed within the five-year period under the rule. C.R.C.P. 16.2(e)(10).
¶ 6 Because we affirm the court's dismissal of wife's motion, this opinion does not decide whether the court would have had jurisdiction to allocate assets if it had granted wife's motion. The separate concurring opinion of Judge Richman concludes that the district court retained jurisdiction to both rule on the motion and allocate assets if necessary. The dissent of Judge Taubman concludes that the district court's jurisdiction to consider the motion was lost as soon as the five-year period expired.
I. The Separation Agreement
¶ 7 The parties, with assistance of counsel, entered into a separation agreement in 2011 to end their twenty-seven-year marriage. They requested that the district court find the agreement to be fair and not unconscionable, and incorporate it into the dissolution decree. The court did so.
¶ 8 Four years and 364 days later, wife moved to reopen the property division provisions of the agreement under C.R.C.P. 16.2(e)(10), contending that husband did not disclose and had misrepresented assets during the dissolution case.
¶ 9 In response, husband moved to dismiss wife's request, arguing that she had not sufficiently alleged facts showing either material omissions or misrepresentations. He also argued in his reply that the district court lacked subject matter jurisdiction under the rule because the five-year period during which it may reallocate assets expired the day after wife moved for such relief.
¶ 10 The district court rejected husband's jurisdictional argument, but it granted his motion to dismiss, ruling that wife had not made a sufficient showing under C.R.C.P. 16.2 that husband had failed to provide material information.
II. C.R.C.P. 16.2
¶ 11 The purpose of C.R.C.P. 16.2 is to provide uniform case management procedures and to reduce the negative impact of adversarial litigation in domestic relations cases. See C.R.C.P. 16.2(a) ; In re Marriage of Schelp , 228 P.3d 151, 155, 157 (Colo. 2010) ; In re Marriage of Hunt , 2015 COA 58, ¶ 9, 353 P.3d 911. The rule imposes heightened affirmative disclosure requirements for divorcing spouses and allows dissolution courts to reallocate assets in the event that material misstatements or omissions were made by a spouse. See Schelp , 228 P.3d at 155 ; Hunt , ¶ 9 ; see also C.R.C.P. 16.2(e).
¶ 12 Regarding disclosure, the rule imposes a special duty of candor on divorcing spouses, which includes "full and honest disclosure of all facts that materially affect their rights and interests." C.R.C.P. 16.2(e)(1) ; see Schelp , 228 P.3d at 156. In discharging this duty, "a party must affirmatively disclose all information that is material to the resolution of the case without awaiting inquiry from the other party." C.R.C.P. 16.2(e)(1) ; see Schelp , 228 P.3d at 156. The rule requires certain mandatory financial disclosures, which are specified in the appendix to the rule, and a sworn financial statement with supporting schedules. See C.R.C.P. 16.2(e)(2) & app. form 35.1; Hunt , ¶ 13-15. It further imposes a general duty on the parties "to provide full disclosure of all material assets and liabilities." C.R.C.P. 16.2(e)(10) ; see Hunt , ¶ 17.
¶ 13 And, as relevant here, C.R.C.P. 16.2(e)(10) provides that,
[i]f the disclosure contains misstatements or omissions, the court shall retain jurisdiction after the entry of a final decree or judgment for a period of 5 years to allocate material assets or liabilities, the omission or non-disclosure of which materially affects the division of assets and liabilities.
See Schelp , 228 P.3d at 156 ; Hunt , ¶ 17.
III. Warne Plausibility Standard
¶ 14 We first address wife's contention that the district court erred by not applying the "plausibility" standard, which was announced in Warne v. Hall , 2016 CO 50, 373 P.3d 588, when granting husband's motion to dismiss. We conclude that the Warne plausibility standard governing motions to dismiss under C.R.C.P. 12(b)(5) does not apply to wife's motion under C.R.C.P. 16.2.
¶ 15 We review de novo whether the district court applied the correct standard in dismissing wife's motion. See Ledroit Law v. Kim , 2015 COA 114, ¶ 47, 360 P.3d 247.
¶ 16 Under the "plausibility" standard from Warne , a complaint must "state a claim for relief that is plausible on its face" to avoid dismissal under C.R.C.P. 12(b)(5) for failure to state a claim. Warne , ¶ 1, 5 (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ). But, we conclude that C.R.C.P. 12(b)(5) does not apply here, and, thus, neither does the Warne standard. We reach this conclusion for two reasons.
¶ 17 First, husband did not cite C.R.C.P. 12(b)(5) as authority for his motion to dismiss, nor did the parties argue a C.R.C.P. 12(b)(5) standard to the district court.
¶ 18 Second, by its express terms, C.R.C.P. 12(b)(5) applies to a defense "to a claim for relief in any pleading " when that defense asserts a "failure to state a claim upon which relief can be granted." (Emphasis added.) "A motion is not a pleading." People v. Anderson , 828 P.2d 228, 231 (Colo. 1992) (quoting Capitol Indus. Bank v. Strain , 166 Colo. 55, 58, 442 P.2d 187, 188 (1968) ).
¶ 19 Indeed, C.R.C.P. 7(a) identifies the pleadings in an action as the complaint and answer, a reply to a counterclaim, an answer to a cross-claim, a third-party complaint and answer, and a reply to an affirmative defense. See In re Estate of Jones , 704 P.2d 845, 847 (Colo. 1985) (defining pleadings as "the formal allegations by the parties of their respective claims and defenses"). The rule distinguishes a pleading from a motion, defining a motion as an "application to the court for an order." C.R.C.P. 7(a), (b)(1) ; see Winterhawk Outfitters, Inc. v. Office of Outfitters Registration , 43 P.3d 745, 747-48 (Colo. App. 2002) (distinguishing under C.R.C.P. 7 a "motion," meaning a written or oral request for the court to make a particular ruling or order, from a "pleading," which includes the complaint, answer, and reply in a case); see also § 14-10-105(1), (3), C.R.S. 2017 (Colorado rules of civil procedure apply to dissolution proceedings and the pleadings in such cases shall be denominated as provided in those rules except that the initial pleading shall be denominated a petition and the responsive pleading shall be denominated a response); cf. In re Marriage of Plank , 881 P.2d 486, 487 (Colo. App. 1994) (noting that pleadings in a dissolution case include the petition and response and, therefore, spouse's post-dissolution motion for writ of garnishment was not a new "action" but rather a motion ancillary to the original dissolution action).
¶ 20 Accordingly, because wife's motion was not a pleading and husband's motion to dismiss was not pursuant to C.R.C.P. 12(b)(5), we conclude that the district court did not err by not applying the Warne standard.
IV. Wife's Allegations
¶ 21 We next address whether wife stated sufficient grounds in her motion to trigger an allocation of undisclosed or misstated assets under C.R.C.P. 16.2(e)(10). We conclude that she did not. Thus, we also conclude that further proceedings were not required.
¶ 22 We review de novo the district court's interpretation of C.R.C.P. 16.2 in determining the sufficiency of wife's allegations. See Hunt , ¶ 10.
¶ 23 Wife contends that husband omitted certain business entities and interests from his sworn financial statements and the separation agreement. She also contends that he misrepresented (1) the value of his primary business interest, Tax Law Solutions, by stating that the value was "unknown"; and (2) the amount of mortgage debt on the marital residence, which he asserted was $1.4 million.
¶ 24 But, the record reflects that before the parties entered into the separation agreement, husband advanced funds for wife to hire an accounting expert to investigate their financial circumstances; he gave the accountant and wife, through her attorney, voluminous documents, including personal and business bank statements, trust documents, records concerning his offshore interests, and his own accounting expert's report; and he and his expert testified and were cross-examined at length at the temporary orders hearing.
¶ 25 Nothing in C.R.C.P. 16.2(e) limits a court's consideration of the parties' sworn financial statements or their separation agreement when determining the adequacy of financial disclosures. To the contrary, the rule requires specific financial disclosures, with which husband certified compliance, and imposes a general duty to disclose "all facts that materially affect" the parties' rights and interests and "all material assets and liabilities." C.R.C.P. 16.2(e)(1)-(2), (10). Hence, as the district court did, we consider all forms of husband's pre-decree disclosure, including his retaining accounting experts, the documentation provided to wife and her expert, and the information testified to at the 2011 temporary orders hearing.
¶ 26 In doing so, we conclude that Hunt , on which wife relies, is materially distinguishable from the present case. In Hunt , it was undisputed that the husband had failed to disclose certain specific items that are listed for mandatory disclosure in the appendix to C.R.C.P. 16.2 -three years of personal and business financial statements, loan applications and agreements, and appraisals-before the parties entered into their memorandum of understanding (MOU) to resolve their dissolution case. See Hunt , ¶ 13-15 ; see also C.R.C.P. 16.2(e)(2) & app. form 35.1. A division of this court held that because the husband admittedly did not disclose the required items, the district court had erred in not granting the wife's C.R.C.P. 16.2(e)(10) motion to reopen the MOU's property division. Hunt , ¶ 15-18. But, the division further noted that but for the husband having violated the disclosure requirements of the rule, the wife "would have been bound by her decision to enter into the MOU, acknowledging the uncertain value" of his business interest. Id. at ¶ 19 ; see also id. at ¶ 31 -36 (Jones, J., specially concurring) (emphasizing the narrowness of Hunt 's holding).
¶ 27 Wife does not allege that husband failed to disclose any specific item mandated under the rule, and husband certified, as the rule requires, that he had provided all such items. See C.R.C.P. 16.2(e)(2), (7). Instead, as the district court noted, wife asserts her suspicions and speculations that husband "likely" failed to disclose and misrepresented material assets. For example, she argues in her opening brief that "[i]t is at least plausible, if not very likely, that Husband failed to provide . information that would presumably have given [her] the opportunity to make a more informed decision" when entering into the separation agreement. And, she describes the affidavits she obtained from husband's colleagues as "rais[ing] significant concerns" regarding his "assets and business practices." Such vague assertions are not sufficient to trigger an allocation of omitted or misstated assets under C.R.C.P. 16.2(e)(10) in light of the information wife had pre-decree.
¶ 28 For example, at the February 14, 2011, temporary orders hearing, wife's attorney admitted while cross-examining husband that they had received "an awful lot of documents" from him, as had their accounting expert. Wife further described two boxes of documents that had been produced at a meeting at husband's accounting expert's office with wife and her expert.
¶ 29 And, at the same 2011 hearing, wife's attorney acknowledged in opening statement that the parties' dissolution case was going to be complicated because there were between thirty and fifty entities that husband owns or in which he has an interest. The attorney further stated that he planned to schedule "a couple of depositions" in order to "look into [husband's offshore] trust in much greater detail," acknowledging that "I do have copies" of the trust documents. The attorney also stated, looking at husband's exhibit showing that Tax Law Solutions generated over $2 million in revenue in 2009 and $1.6 to $1.8 million in 2010, "[t]hat [it] is going to take a lot of time to value." He also noted that the exhibit listed fifty-six other entities to which husband had some connection, that this was "not a simple case," and that the case was "going to take a lot of time."
¶ 30 Yet, with the extensive documentation husband provided in hand and armed with her own accounting expert to analyze that extensive documentation, wife nonetheless chose to enter into the separation agreement only a month after the temporary orders hearing. She presumably did not wait to (1) value Tax Law Solutions as her attorney intended to do; (2) allow her expert to review husband's trust documents, which her attorney confirmed they received; or (3) investigate husband's other business entities or interests, including those offshore, which they knew existed and concerning which husband testified they had documents. She chose instead to sign the separation agreement that allocated the marital residence debt free plus $1,100,000 in cash to her and allocated all of husband's business interests to him.
¶ 31 We acknowledge that C.R.C.P. 16.2(e)(1)-(2) does not impose a duty on wife to conduct discovery to obtain required financial information from husband. See Schelp , 228 P.3d at 156 ; Hunt , ¶ 14. But, wife's own attorney stated at the hearing that a lot of documentation had been produced; that he planned to look into that information in greater detail, conduct discovery, and obtain a valuation of husband's primary business interest; and that the case was complicated and was going to take a lot of time to litigate. Nonetheless, wife instead chose to enter into the separation agreement shortly thereafter. We do not interpret C.R.C.P. 16.2(e)(10) as permitting a reallocation of assets under these circumstances.
¶ 32 Essentially, in her "motion regarding undisclosed assets," wife requested to conduct the discovery into and analysis of husband's financial and business interests that her attorney had planned to do and the analysis that could have been done by her attorney and accounting expert in 2011 before the separation agreement was signed. We agree with the district court that C.R.C.P. 16.2(e)(10) was not intended to create a right for an ex-spouse to conduct discovery into the other spouse's assets post-decree. Nothing in the plain language of the rule indicates such a result, which would contravene established public policy in family law cases. See Mockelmann v. Mockelmann , 121 P.3d 337, 340 (Colo. App. 2005) (noting that allowing divorced parties "to perpetuate disputes long after the entry of permanent orders" is "counter to the strong public policy favoring the finality of judgments" in family law actions). Nor does the rule permit a spouse to revalue assets that were disclosed pre-decree. See Hunt , ¶ 19.
¶ 33 We must interpret the rules of civil procedure consistent with principles of statutory construction, according to the plain and ordinary meanings of the words used. See § 2-4-101, C.R.S. 2017; Hiner v. Johnson , 2012 COA 164, ¶ 13, 310 P.3d 226. Hence, we may not "judicially legislate" by reading the rule "to accomplish something the plain language does not suggest, warrant or mandate." Scoggins v. Unigard Ins. Co. , 869 P.2d 202, 205 (Colo. 1994).
¶ 34 The remedy created by the C.R.C.P. 16.2(e)(10) is extraordinary and also very narrow. Under the rule, the court retains jurisdiction for a period of five years after a dissolution decree is entered "to allocate material assets or liabilities, the omission or non-disclosure of which materially affects the division of assets and liabilities." C.R.C.P. 16.2(e)(10). The rule says nothing about "reopening" a case for the purpose of allowing discovery, as wife requested in her motion. Thus, in our view, neither the language of the rule nor Hunt rescues wife from the consequences of her own decision to settle her dissolution case without fully evaluating the information that husband had provided to her pre-decree.
¶ 35 We are not persuaded by wife's arguments that husband's pre-decree disclosures of the value of Tax Law Solutions as "unknown" and of $1.4 million in mortgage debt on the marital home were misleading. Regarding the value of Tax Law Solutions, the rule requires disclosure of material "facts," "information," and "assets and liabilities." See C.R.C.P. 16.2(e)(1), (10). It does not mandate that husband provide his opinion of the value of a disclosed asset. See Shirley v. Merritt , 147 Colo. 301, 307, 364 P.2d 192, 196 (1961) ("Value is, of course, a matter of opinion and not of fact....").
¶ 36 Again, the present situation is unlike that in Hunt , where the spouse had failed to disclose existing pre-decree appraisals of his business and loan applications stating a value for his interest in the business. See Hunt , ¶ 12-15. Wife instead merely speculates here that husband "likely" misrepresented the value of Tax Law Solutions because an appraisal done two years after the decree indicated that the business was worth nearly $5 million.
¶ 37 C.R.C.P. 16.2 addresses pre-decree disclosures, omissions, and misrepresentations. Obviously, husband could not have disclosed or omitted a valuation opinion that did not exist pre-decree. Nor could he have misrepresented value based on such an opinion. A 2013 valuation is not relevant to determining the value of Tax Law Solutions for purposes of the 2011 dissolution. See § 14-10-113(5), C.R.S. 2017 (property shall be valued for purposes of disposition on dissolution at the time of the decree or the hearing on disposition, whichever is earlier); see also In re Marriage of Nevarez , 170 P.3d 808, 813 (Colo. App. 2007).
¶ 38 And, wife knew that the 2011 value of Tax Law Solutions was presented as "unknown" when she signed the separation agreement. At the temporary orders hearing just one month earlier, wife's own attorney had emphasized on the record the need to value that particular asset and the time it would take to do so. Thus, unlike the spouse in Hunt , wife is bound by her decision to enter into the separation agreement without ever obtaining a pre-decree valuation for husband's primary business. See Hunt , ¶ 19.
¶ 39 Regarding the mortgage on the marital home, the record reflects that wife was well aware before entering into the separation agreement that this mortgage was not an arm's length transaction because husband had an ownership interest in the mortgage company, Meridian Trust. Wife testified at the 2011 hearing that husband had told her that they "needed a mortgage deduction" so he had set up a trust to loan money to them. She described the mortgage as "not a real mortgage" because husband effectively makes the payments to himself. The circumstances of this mortgage were not undisclosed or misrepresented. Rather, according to wife's own testimony, husband told her about them. Thus, wife's allegations regarding these circumstances are not sufficient to trigger the undisclosed asset allocation remedy under C.R.C.P. 16.2(e)(10).
V. Conclusion
¶ 40 The district court correctly determined that wife did not allege a sufficient basis for it to allocate misstated or omitted assets under C.R.C.P. 16.2(e)(10). The rule was not intended to protect a party from choosing, perhaps unwisely, to settle a dissolution case after acknowledging the complexity of and before fully evaluating the information provided by the other party. Nor does it provide for post-decree discovery into an ex-spouse's assets. We will not extend the plain language of the rule or the disposition in Hunt to permit such discovery or to compel an allocation of assets under the circumstances here.
¶ 41 The order is affirmed.
JUDGE RICHMAN specially concurs.
JUDGE TAUBMAN dissents.