Case Name: LeRoy J. NEUBAUER, Plaintiff and Appellant, v. Mary M. NEUBAUER, Defendant and Appellee
Court: North Dakota Supreme Court
Jurisdiction: North Dakota
Decision Date: 1994-12-02
Citations: 524 N.W.2d 593
Docket Number: Civ. No. 940127
Parties: LeRoy J. NEUBAUER, Plaintiff and Appellant, v. Mary M. NEUBAUER, Defendant and Appellee.
Judges: SANDSTROM and MESCHKE, JJ., concur.
Reporter: North Western Reporter 2d
Volume: 524
Pages: 593–598

Head Matter:
LeRoy J. NEUBAUER, Plaintiff and Appellant, v. Mary M. NEUBAUER, Defendant and Appellee.
Civ. No. 940127.
Supreme Court of North Dakota.
Dec. 2, 1994.
Dwight C.H. Kautzmann, Bair, Kautzmann and Bair, Mandan, for plaintiff and appellant.
James R. Brothers, Wold Johnson, P.C., Fargo, for defendant and appellee.

Opinion:
VANDE WALLE, Chief Justice.
LeRoy J. Neubauer appealed from the order denying his motion requesting correction of a divorce judgment. We reverse.
LeRoy Neubauer and Mary Neubauer were divorced in May of 1993. This appeal continues LeRoy's effort to require the trial court to explain one paragraph of the original divorce judgment, which says:
"XII.
In order to equalize the division of the assets and liabilities of the parties and recognizing the Defendant's disadvantaged condition, and because of the Plaintiffs better education, ability to earn a living, and ability to manage property, and because of the health conditions of the Defendant, the Plaintiff is ordered to pay the sum of $1,000.00 per month, commencing April 1, 1993, as and for spousal support and property settlement payments."
Following entry of the judgment, LeRoy requested and received a thirty-day extension to file an appeal. In October of 1993, several months after the expiration of the thirty-day extension, LeRoy filed a motion requesting that the trial court "correct" the judgment. LeRoy argued that it was unclear whether the $1,000 monthly award to Mary was spousal support or property division. LeRoy contended that it was legally impermissible to lump spousal support and property together, and that the judgment did not "comport with the laws of alimony."
The trial court treated the motion as one brought for clarification and relief from judgment pursuant to Rule 60(a) and Rule 60(b), NDRCivP, and denied the motion on the ground that LeRoy's sole motivation for requesting the clarification was to ascertain the tax consequences of the monthly payment. The trial court also concluded that LeRoy's motion was a collateral attack on the substance of the judgment that should have been raised on direct appeal.
On appeal, LeRoy argues that the trial court erred in refusing to clarify the judgment because the award of $1,000 monthly to Mary as property and spousal support is ambiguous and does not comport with North Dakota law. LeRoy does not seek to change the amount of the award, only to have clarified the allocation between support and property division.
Mary relies on our rules of procedure to argue against entertaining the motion to clarify. She notes that both Rule 52(b) and Rule 59, NDRCivP, which allow an effort to amend, respectively, the factual findings or legal conclusions and judgment have a ten-day time limit from entry of judgment. We agree that insofar as LeRoy's motion to clarify was not filed within ten days of the entry of judgment, it did not qualify for relief under these rules.
However, the trial court treated LeRoy's motion as a request for relief under Rule 60(a) or Rule 60(b), NDRCivP. There is considerable overlap between Rule 59(e) and Rule 60. Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure, § 2817 (1973). There has not been much difficulty in construing or applying Rule 60(b)(vi) in cases in which a motion is made mthin a year of judgment. Thfcse prompt motions for relief are granted injustice requires it. Id. at § 2864. Although the rule ordinarily is not to be used to-remedy a failure to take an appeal, this 'is not an inflexible rule and in unusual cases a party who has not taken an appeal may obtain relief on a 60(b) motion. Id.
We have recognized a motion for clarification without reference to any particular rule of procedure, if there is an ámbiguous provision in the judgment that creates an actual controversy between the parties. Anderson v. Anderson, 522 N.W.2d 476 (N.D.1994); Sullivan v. Quist, 506 N.W.2d 394 (N.D.1993); Conitz v. Conitz, 467 N.W.2d 93 (N.D.1991); Gross v. Gross, 466 N.W.2d 154 (N.D.1991); Wastvedt v. Wastvedt, 371 N.W.2d 142 (N.D.1985).
Other jurisdictions have reached a similar result. See, e.g., Nelson v. Quade, 413 N.W.2d 824 (Minn.App.1987) [Trial court may issue a declaratory judgment to clarify ambiguous order. Order is ambiguous because it gave only one dollar figure for property division and maintenance and it was not clear from face of order how to allocate between them]. See also Anderson, supra, at 478 [citing other Minnesota cases].
The obvious ambiguity in this judgment is one we would remand for clarification on direct appeal. Urlaub v. Urlaub, 325 N.W.2d 234 (N.D.1982) [before Supreme Court can determine whether or not distribution of property and award of alimony were clearly erroneous, it must understand trial court's rationale for its decision]; Williams v. Williams, 302 N.W.2d 754 (N.D.1981) [spousal support distinguished from property division].
Although this is not a direct appeal, neither is the contested provision a meaningless ambiguity of no material importance other than the basis for a dispute between contentious parties. If the amount awarded is property division, it is not subject to modification upon a change of circumstances. If it is spousal support, the amount is subject to modification upon a change of circumstances justifying such a modification. E.g., Eberhart v. Eberhart, 301 N.W.2d 137 (N.D.1981). Because spousal support is subject to modification upon a material change of circumstances justifying such modification, it is not final. The purpose behind the ten-day limitation in Rule 52(b) and Rule 59(j), NDRCivP is finality. E.g., Conerly v. Flower, 410 F.2d 941 (8th Cir.1969) [purpose of Rule 59 time limit to award judgment to provide finality for purpose of appeal]. A Rule 60(b) motion does not affect finality of the judgment. Id. Only if the monetary award is a property award is it final. Eberhart, supra.
Additionally, this Court has previously noted the problem of whether or not an award is property division or spousal support because "... deferred-property payments are dis-chargeable in bankruptcy, unlike spousal-support payments." Redlin v. Redlin, 436 N.W.2d 5, 8 (N.D.1989). See also Martian v. Martian, 399 N.W.2d 849 (N.D.1987). Parties and this Court have struggled with the issue where bankruptcy or potential bankruptcy is involved. See, e.g., Seablom v. Seablom, 348 N.W.2d 920 (N.D.1984).
The parties need not await a change in either party's circumstances to request the court to clarify whether the award is spousal support, subject to modification, or property distribution, which is not.
Furthermore, notwithstanding some reservation about "commingling of tax issues, whether they be entitled benefits, breaks, exclusions, or taxability, with the equitable division of property in a divorce action," Fraase v. Fraase, 315 N.W.2d 271, 278 (N.D.1982) [Sand, J., concurring specially], Briese v. Briese, 325 N.W.2d 245 (N.D.1982), this court has come to recognize that matters of taxation are part of the pragmatic effects of the division of property and the award of spousal support and are to be considered in making those determinations. Fraase, supra, [remanded for determination of whether joint tax return may still be filed]; Kaiser v. Kaiser, 474 N.W.2d 63 (N.D.1991) [trial court should amend its property division if it con- eludes that adverse tax consequence would result which could be avoided by a different equitable allocation of property]; Gronneberg v. Gronneberg, 412 N.W.2d 84 (N.D.1987) [remand necessary to determine whether husband would suffer adverse federal tax consequences resulting from assignment of property to wife]. See also Bagan v. Bagan, 382 N.W.2d 645 (N.D.1986).
Significantly, in Stoelting v. Stoelting, 412 N.W.2d 861, 865 (N.D.1987), we observed that "[p]arties to a divorce must necessarily consider tax consequences of divorce transactions. So also, a trial court, when.it is properly informed, must take tax effects into account when it determines divorce transactions." See also Dick v. Dick, 414 N.W.2d 288 (N.D.1987); Gorsuch v. Gorsuch, 392 N.W.2d 392 ( D.1986). See generally, Tracy A. Bateman, Annotation, Divorce and Separation: Consideration of Tax Consequences in Distribution of Marital Property, 9 A.L.R.5th 568 (1993).
Although Stoelting held that a trial court may not modify an obvious property settlement into spousal support because of a tax consultant's concerns the payments may not be deductible, that is not what LeRoy is asking here. As the Court noted in Kaiser, supra, 474 N.W.2d at 68, "[w]hen property is divided in a divorce, it is often insufficient to maintain each of the parties at the same standard of living as they enjoyed during the marriage." In such instance, the trial court should attempt to avoid reducing available assets through tax consequences so that the parties may preserve, as much as possible, their previous standard of living.
Rule 60(b)(vi), permits the court to review a final judgment for "any other reason justifying relief from the operation of the judgment." The motion under 60(b)(vi) must be made within a reasonable time. Here the motion was made beyond the time to appeal, but well within the one year time specified from Rule 60(b)(i)(ii)(iii) motions. We believe the motion was made within a reasonable time.
The tax consequences are significant and the judgment creates an actual controversy between the parties. This is reason for justifying relief from the operation of the judgment. To the extent that LeRoy's motion requests clarification as to whether the amount awarded, or a portion thereof, is spousal support or property division, we reverse the order denying relief and remand for clarification.
SANDSTROM and MESCHKE, JJ., concur.