Court Opinion

ID: 4709080
Source: CourtListenerOpinion
Date Created: 2021-08-04 17:04:06.876211+00
Date Added: 2024-06-11T08:06:54.224809
License: Public Domain

The summaries of the Colorado Court of Appeals published opinions
 constitute no part of the opinion of the division but have been prepared by
 the division for the convenience of the reader. The summaries may not be
   cited or relied upon as they are not the official language of the division.
 Any discrepancy between the language in the summary and in the opinion
          should be resolved in favor of the language in the opinion.

                                                                  SUMMARY
                                                               July 22, 2021

                         2021COA101

No. 20CA0835, Marriage of Martin — Civil Procedure — Court-
Facilitated Management of Domestic Relations Cases —
Disclosures

     A division of the court of appeals considers whether C.R.C.P.

16.2(e)(10) allows for the reallocation of marital property where

there is no allegation that either party failed to satisfy the

disclosure requirements of C.R.C.P. 16.2 before entering into a

separation agreement that was incorporated into their dissolution

decree. The division concludes that it does not. Because a failure

to disclose under the rule was not established regarding the

challenged assets, the district court erred by applying the rule to

reopen the property division and reallocate the omitted assets.

     The division affirms the order in part, reverses it in part, and

remands the case for reconsideration of attorney fees and for
determination of husband’s request for his appellate fees under

section 14-10-119, C.R.S. 2020.
COLORADO COURT OF APPEALS                                   2021COA101

Court of Appeals No. 20CA0835
Routt County District Court No. 14DR51
Honorable Shelley A. Hill, Judge

In re the Marriage of

James Arthur Martin,

Appellee,

and

Sharon Rose Dumas, f/k/a Sharon Martin,

Appellant.

              ORDER AFFIRMED IN PART, REVERSED IN PART,
                AND CASE REMANDED WITH DIRECTIONS

                                Division VII
                          Opinion by JUDGE FOX
                        Dunn and Pawar, JJ., concur

                         Announced July 22, 2021

Drew Johnroe, P.C., Drew Johnroe, Steamboat Springs, Colorado, for Appellee

Feldman Nagel Cantafio & Song PLLC, Ralph A. Cantafio, Miles C. Nowak,
Denver, Colorado, for Appellant
¶1    Sharon Rose Dumas (wife), formerly known as Sharon Martin,

 appeals the district court’s order reopening the dissolution decree’s

 property division under C.R.C.P. 16.2(e)(10) to allocate two omitted

 assets and awarding James Arthur Martin (husband) attorney fees.

 We affirm the order in part, reverse it in part, and remand the case

 for reconsideration of attorney fees and for determination of

 husband’s request for his appellate fees under section 14-10-119,

 C.R.S. 2020.

                           I.      Background

¶2    The parties’ twenty-two-year marriage ended in 2014. The

 district court approved their separation agreement — which divided

 their marital property and waived maintenance — and incorporated

 it into the dissolution decree.

¶3    In 2016, husband moved for postjudgment relief, alleging in

 relevant part that he was entitled to a share of the proceeds from a

 post-decree sale of a property known as the Stagecoach property.

¶4    Wife responded and also moved to dismiss husband’s motion,

 asserting that the parties did not own the Stagecoach property at

 dissolution, therefore the sale proceeds were not a marital asset,

 and C.R.C.P. 16.2(e)(10), which allows a court to allocate

                                     1
 undisclosed marital assets for up to five years post-decree, did not

 apply.

¶5    The district court denied wife’s motion to dismiss and, after a

 hearing, found that the Stagecoach proceeds were a marital asset.

 It also found that certain retirement assets, which were not

 mentioned in husband’s postjudgment motion but were raised at

 the hearing, had been overlooked at dissolution. Therefore, the

 court invoked C.R.C.P. 16.2(e)(10) to reopen the property division

 and address these omitted assets.1

¶6    After another hearing, the court divided the omitted assets

 equally and awarded husband prejudgment interest because of

 wife’s wrongful withholding of the Stagecoach sale proceeds. The

 court also awarded husband his attorney fees — partially under

 section 14-10-119, based on the parties’ disparate financial

 resources, and partially under section 13-17-102, C.R.S. 2020,

 based on its finding that wife’s argument concerning her individual

 retirement account (IRA) lacked substantial justification. The court

 1 In the district court, husband also challenged the division of a
 boat and motor home. Because he does not challenge the court’s
 order regarding those assets on appeal, we deem any claims
 regarding them waived.

                                   2
  ordered husband to submit an attorney fees affidavit and gave wife

  time to object. Before attorney fees were resolved, however, wife

  filed a notice of appeal. A division of this court dismissed the

  appeal for lack of a final order. In re Marriage of Martin, (Colo. App.

  No. 18CA1419, Aug. 29, 2019) (not published pursuant to C.A.R.

  35(e)).

¶7      Thereafter, the district court held a hearing on attorney fees

  and awarded husband $75,000 in fees and costs, including fees and

  costs incurred in responding to the appeal, plus an additional

  $6,500 on reconsideration.

¶8      Wife again appeals.

                         II.   C.R.C.P. 16.2(e)(10)

¶9      Because wife’s fourth contention, concerning the application of

  C.R.C.P. 16.2(e)(10), is partially dispositive of her other contentions,

  we address it first.

¶ 10    Wife contends that the district court erred by applying

  C.R.C.P. 16.2(e)(10) to reopen the property division and allocate the

  Stagecoach property and the IRA. We agree.

                                     3
                            A.     Preservation

¶ 11   We first reject husband’s argument that wife stipulated that

  $200,000 of the Stagecoach proceeds was marital and should be

  divided equally between the parties and thus she cannot challenge

  that disposition by the court.

¶ 12   The record reflects that it was only after the district court

  denied wife’s motion to dismiss husband’s claim to the Stagecoach

  proceeds that wife stipulated that $200,000 of the proceeds had

  been deposited in her bank account and argued for an equitable

  division of that amount. By doing so, wife did not waive her

  argument from her motion to dismiss that “C.R.C.P. 16.2(e)(10) does

  not apply under these circumstances” to allow a post-decree

  allocation of the proceeds.

¶ 13   Accordingly, the issue is preserved, and we address it. See

  Berra v. Springer & Steinberg, P.C., 251 P.3d 567, 570 (Colo. App.

  2010) (all that is required to preserve an issue for appeal is that the

  issue be brought to the district court’s attention, so the court has

  an opportunity to rule on it).

                                     4
                           B.    Relevant Facts

                      1.   The Stagecoach Property

¶ 14   In 2007, husband and wife purchased the Stagecoach

  property, intending to build a house on it. After they ran into

  serious financial difficulties, they quitclaimed the property to wife’s

  parents in 2011.

¶ 15   Husband, who worked as a contractor, later built a house on

  the property with wife’s help. Wife’s parents paid all of the

  expenses to build the house and paid the parties’ living expenses

  during the year-long construction process. Husband and wife

  moved into the house in 2012 when it was nearly complete.

¶ 16   In 2013, wife’s parents transferred ownership of the

  Stagecoach property to a living trust they created. Wife testified

  that she did not know anything about the transfer or her parents’

  trust.

¶ 17   A year later, the parties petitioned to dissolve their marriage.

  During the dissolution proceedings, neither party disclosed an

  interest in the Stagecoach property, which was still owned by wife’s

  parents’ trust. The property was not addressed or distributed in

  the parties’ 2014 separation agreement.

                                     5
¶ 18   Husband argued during the proceedings on his postjudgment

  motion that C.R.C.P. 16.2(e)(10) allowed the court to allocate the

  Stagecoach sale proceeds post-decree.2 He asserted that he, wife,

  and wife’s parents had entered into a joint venture regarding the

  property, that he performed significant work building the house,

  and that because he did not have counsel during the dissolution

  proceedings, he mistakenly failed to include his claimed interest in

  the property in the separation agreement.

¶ 19   The district court found that an implied joint venture existed

  during the marriage and, therefore, the proceeds from wife’s

  parents’ post-decree sale of the Stagecoach property were a marital

  asset that could be divided under C.R.C.P. 16.2(e)(10).

                            2.    Wife’s IRA

¶ 20   Wife testified that she mistakenly believed that an IRA that her

  parents had opened for her during the marriage was in her mother’s

  name, not hers, and that she was only a beneficiary of it.

  2 Husband did not bring his motion under C.R.C.P. 16.2(e)(10).
  Rather, he cited C.R.C.P. 60 as the basis for his request for relief
  from the permanent orders property division. Rule 16.2(e)(10) was
  raised at some point during the proceedings, however, and husband
  then argued it as the basis for the relief he sought.

                                    6
  Therefore, she did not list the IRA on her sworn financial statement

  filed during the dissolution proceedings. She argued that, in any

  case, the IRA was intended as a gift from her mother to her alone

  and thus was not a marital asset.

¶ 21   Husband acknowledged that he knew about the IRA during

  the marriage and testified that both parties were equally at fault for

  not listing that asset in their financial statements at dissolution.

  However, he did not allege in the district court, nor does he argue

  on appeal, that wife violated a C.R.C.P. 16.2(e) disclosure obligation

  regarding the IRA or related documents. His original motion to

  reopen the property division does not mention the IRA. Then, when

  the IRA came up at the hearing, he testified that both parties had

  failed to disclose it — they just “missed it.”

¶ 22   Nonetheless, husband argued at the post-decree hearing that

  the IRA was marital property under section 14-10-113(2), C.R.S.

  2020, because wife acquired it during the marriage, and he

  requested one-half of the IRA’s value as of the post-dissolution

  proceedings.

                                      7
¶ 23   The district court found that wife did not meet her burden to

  establish that the IRA was her separate property and invoked

  C.R.C.P. 16.2(e)(10) to divide the asset equally between the parties.

                           C.   Legal Standards

¶ 24   We review de novo the district court’s interpretation of

  C.R.C.P. 16.2(e)(10) in determining the sufficiency of husband’s

  allegations and granting him relief under the rule. See In re

  Marriage of Runge, 2018 COA 23M, ¶ 22; see also In re Marriage of

  Durie, 2020 CO 7, ¶ 13 (interpreting C.R.C.P. 16.2 de novo).

¶ 25   C.R.C.P. 16.2 establishes heightened disclosure rules for

  domestic relations cases, recognizing that the parties in such cases

  stand in a special relationship to each other. See C.R.C.P. 16.2(a),

  (e); In re Marriage of Hunt, 2015 COA 58, ¶ 9. Under the rule, the

  parties “owe each other and the court a duty of full and honest

  disclosure of all facts that materially affect their rights and

  interests.” C.R.C.P. 16.2(e)(1); see In re Marriage of Schelp, 228

  P.3d 151, 156 (Colo. 2010); Runge, ¶ 12. In discharging this duty,

  a party must affirmatively disclose certain specific items, and

  generally all information that is material to the resolution of the

                                      8
  case, without awaiting inquiry from the other party. C.R.C.P.

  16.2(e)(1)-(4); Runge, ¶ 12; Hunt, ¶¶ 13-14.

¶ 26   Regarding undisclosed assets, the rule provides as follows:

             As set forth in this section, it is the duty of
             parties to an action for decree of dissolution of
             marriage . . . to provide full disclosure of all
             material assets and liabilities. If a disclosure
             contains a misstatement or omission
             materially affecting the division of assets or
             liabilities, any party may file and the court
             shall consider and rule on a motion seeking to
             reallocate assets and liabilities based on such
             a misstatement or omission, provided that the
             motion is filed within 5 years of the final
             decree or judgment.

  C.R.C.P. 16.2(e)(10).3

                              D.    Analysis

¶ 27   Wife did not fail to disclose a Stagecoach joint venture.

  Rather, according to husband’s own allegations, he was a

  participant in the alleged venture with her and her parents to

  purchase, transfer ownership of, improve, and ultimately sell the

  Stagecoach property. Thus, if there was a joint venture, husband

  3The 2020 amendments to this rule do not affect the issues we
  decide. See Rule Change 2020(01), Colorado Rules of Civil
  Procedure (Amended and Adopted by the Court En Banc, Mar. 5,
  2020), https://perma.cc/8MCL-72EW.

                                     9
  was an “owner” of any alleged asset at the time he and wife entered

  into the separation agreement. Husband admitted that there was

  no written agreement or terms regarding a joint venture. See

  Sleeping Indian Ranch, Inc. v. W. Ridge Grp., LLC, 119 P.3d 1062,

  1069 (Colo. 2005) (identifying the elements of a joint venture). In

  other words, he knew all of the information supporting his joint

  venture claim at the time of the dissolution, and he made no claim

  that wife failed to disclose any relevant documents.

¶ 28   Regarding wife’s IRA, husband also did not allege any specific

  C.R.C.P. 16.2(e) disclosure violation as to any documents. Instead,

  he recognized that both parties were equally at fault for omitting the

  asset from their disclosures and separation agreement. Moreover,

  husband failed to allege in the district court that the omission of

  the IRA “materially affect[ed] the division of assets or liabilities,”

  which is also required for the omission of an asset to be redressable

  under the rule. See C.R.C.P. 16.2(e)(10).

¶ 29   Rule 16.2(e)(10) does not provide husband a post-decree

  allocation remedy under these circumstances. Accordingly, the

  district court erred by invoking the rule to reopen the property

  division to allocate the Stagecoach proceeds and IRA. See § 14-10-

                                      10
  122(1)(a), C.R.S. 2020 (a dissolution decree’s property division

  provisions may not be modified absent conditions justifying

  reopening a judgment).

¶ 30   Our supreme court, in its first case interpreting Rule

  16.2(e)(10), concluded that the rule’s property reallocation remedy

  “does not operate independently” but rather “works in tandem” with

  Rule 16.2(e)’s disclosure requirements. Schelp, 228 P.3d at 157.

  Thus, the reallocation remedy applies only “if either party failed to

  comply with his or her affirmative duties to disclose financial

  information” under the rule’s heightened disclosure requirements.

  Id. at 156 (emphasis added). The court further noted that the rule’s

  post-decree property allocation provision is expressly prefaced by

  and thus “operate[s] in conjunction with” the parties’ special

  disclosure obligations under the rule. Id. at 157 (The text of the

  post-decree property allocation provision “explicitly refers to the

  new affirmative disclosure requirements.”); see C.R.C.P. 16.2(e)(10).

¶ 31   A division of this court then held in Runge that Rule

  16.2(e)(10)’s five-year, post-decree asset reallocation remedy did not

  apply when a spouse was given extensive information about the

  other spouse’s assets but chose to enter into a separation

                                    11
  agreement without taking the time to review that information.

  Runge, ¶¶ 30-31. The division described the rule’s reallocation

  remedy as “extraordinary” and “narrow” and unavailable to

  “rescue[]” the spouse “from the consequences of her own decision to

  settle her dissolution case” without reviewing the information

  disclosed to her. Id. at ¶ 34; see also id. at ¶ 39 (concluding that

  facts the spouse was told before the dissolution were not

  “undisclosed or misrepresented” so as to “trigger” the rule’s

  reallocation remedy); cf. Hunt, ¶¶ 18-19 (applying the rule when a

  spouse indisputably failed to disclose specific required documents,

  but noting that “[w]ithout” that disclosure violation, the other

  spouse “would have been bound by her decision to enter into” a

  separation agreement acknowledging the uncertain value of the

  asset at issue).

¶ 32   More recently in Durie, ¶¶ 36-38, the supreme court cited

  Runge with approval and reiterated these principles. In Durie, the

  court affirmed this court’s decision that the nondisclosure

  allegations in that case, including those made upon information

  and belief, were sufficient under Rule 16.2(e)(10) to trigger

  discovery. See Durie, ¶¶ 41-43. But the court “stress[ed] the

                                    12
  importance of finality” in applying the rule, particularly given the

  “compelling need for finality” in domestic relations cases. Id. at ¶

  36. The court echoed the Runge division’s statement that Rule

  16.2(e)(10)’s post-decree property reallocation remedy is

  “extraordinary” and “very narrow,” Durie, ¶ 36 (quoting Runge, ¶

  34), and said the rule does not entitle an ex-spouse to “the legal

  equivalent of a mulligan.” Id. at ¶ 38; see also Runge, ¶¶ 31-32.

¶ 33   Like the ex-spouse in Runge, husband here sought, and the

  district court allowed, the “legal equivalent of a mulligan.” See

  Durie, ¶ 38. Husband effectively asked for a redo of the separation

  agreement to include his claims to the Stagecoach proceeds and

  wife’s IRA, not because wife failed to disclose or misrepresented

  these assets but because the assets should have been included in,

  but were mistakenly left out of, their separation agreement. Rule

  16.2(e)(10) is not intended for this purpose.4 See Durie, ¶¶ 36-38;

  4 Husband’s allegation of a mutual mistake by the parties, for which
  neither was at fault, in not including the omitted assets in the
  separation agreement potentially falls under C.R.C.P. 60(b)(1),
  which allows a court to relieve a party from a final judgment
  because of a mistake. Indeed, husband cited C.R.C.P. 60(b), and
  not C.R.C.P. 16.2(e)(10), in his initial motion as the authority for the
  relief he sought. But a motion under Rule 60(b)(1) must be filed
  within 182 days after a judgment is entered, and husband’s motion

                                    13
  Runge, ¶¶ 31-32, 39; Hunt, ¶ 19; see also Schelp, 228 P.3d at 156-

  57 (rule’s reallocation remedy applies only when its heightened

  disclosure requirements were violated).

¶ 34      Accordingly, the district court erred by applying the rule to

  reopen the property division and allocate the Stagecoach sale

  proceeds and the IRA, and we reverse the order in that respect,

  including the prejudgment interest the court awarded.

¶ 35      Because we conclude based on Durie, Schelp, Runge, and Hunt

  that Rule 16.2(e)(10)’s property reallocation remedy does not apply

  under the parties’ circumstances, we do not address wife’s

  additional argument that husband is barred from invoking the rule

  because of the equitable doctrine of unclean hands.

       III.   Wife’s Other Contentions Involving the Property Allocation

¶ 36      Our disposition reversing the post-decree property allocation

  means we need not address wife’s additional contentions. Wife

  was filed more than a year after the decree was entered. Thus, he is
  also not entitled to relief under Rule 60(b). See In re Marriage of
  Seely, 689 P.2d 1154, 1159 (Colo. App. 1984) (“[W]here the only
  grounds for relief established are those covered by either C.R.C.P.
  60(b)(1) or (2), the six-month time limitation applicable to these
  clauses may not be circumvented by reliance on other provisions of
  the rule.”); cf. In re Marriage of Durie, 2020 CO 7, ¶ 36 (emphasizing
  the importance of finality in dissolution cases).

                                       14
  claims that in allocating the Stagecoach sale proceeds and the IRA,

  the court erred by considering the parties’ financial circumstances

  at the time of the post-decree proceedings rather than at the time of

  the decree. She also claims that the court erred in characterizing

  the IRA as a gift from her mother to the marriage rather than to her

  alone.

                  IV.    Attorney Fees in District Court

¶ 37   Wife contends that the district court erred by awarding

  husband attorney fees under section 14-10-119 based on the

  parties’ relative financial circumstances at the time of the post-

  decree proceedings rather than at the time of the decree and by

  awarding husband fees under section 13-17-102 for responding to

  her IRA argument. We disagree regarding the section 14-10-119

  portion of the attorney fees award but agree regarding the section

  13-17-102 portion.

                        A.   Section 14-10-119 Fees

¶ 38   We reject wife’s argument that In re Marriage of de Koning,

  2016 CO 2, requires the court to consider the parties’

  circumstances as they were when the decree was entered. In de

  Koning, the section 14-10-119 fee proceedings of the permanent

                                    15
  orders were postponed, and fees were not determined until five

  months after the decree was entered. Id. at ¶¶ 9-14.

¶ 39   The supreme court held in that “rare” circumstance that the

  court must consider the parties’ economic circumstances as they

  existed at the time the decree was entered. Id. at ¶¶ 28, 31-33; see

  also In re Marriage of Hill, 166 P.3d 269, 272 (Colo. App. 2007)

  (When a court determines permanent orders in a dissolution case, it

  “must address several intertwined issues, including parental

  responsibilities, child support, spousal support, and disposition of

  property,” as well as attorney fees under section 14-10-119.).

¶ 40   Here, however, the permanent orders were finally entered in

  2014, and section 14-10-119 fees were requested only for

  husband’s post-decree motion. Therefore, de Koning does not apply,

  and the court properly considered the parties’ economic

  circumstances as of the post-decree proceedings. See In re Marriage

  of Connerton, 260 P.3d 62, 67 (Colo. App. 2010) (a request for

  section 14-10-119 fees should be heard at the time of the hearing

  on the motion for which they are requested); see also § 14-10-119

  (providing that the court may “from time to time, after considering

  the financial resources of both parties,” order a party to pay a

                                    16
  reasonable amount for the other party’s attorney fees); cf. In re

  Marriage of Wells, 850 P.2d 694, 696 (Colo. 1993) (concluding that

  section 14-10-113(1) requires a trial court to consider the economic

  circumstances of the respective spouses at the time any hearing

  relating to marital property division is held, including a hearing

  following a remand for purposes of re-dividing the property between

  the parties).

                           B.     Section 13-17-102

¶ 41   The district court did not specify what amount of the fee award

  was made under section 14-10-119 and what amount was made

  under section 13-17-102 after its finding that wife’s IRA argument

  lacked substantial justification. However, in light of our disposition

  reversing the portion of the post-decree order allocating the omitted

  assets, including the IRA, we also reverse the portion of the fee

  award made under section 13-17-102, and we direct the court on

  remand to reconsider the fee award and eliminate the portion of the

  award that is based on section 13-17-102.

                      V.        Appellate Attorney Fees

¶ 42   Husband requests his attorney fees incurred on appeal under

  section 14-10-119, asserting that the parties’ financial

                                       17
  circumstances are disparate, and under section 13-17-102 and

  C.A.R. 38(b), arguing that wife’s arguments are substantially

  frivolous. In light of our disposition, we do not agree that the

  appeal is frivolous and thus deny husband’s section 13-17-102 and

  C.A.R. 38(b) request. We direct the court to determine his section

  14-10-119 request on remand based on the parties’ relative

  financial circumstances at that time. See In re Marriage of Alvis,

  2019 COA 97, ¶ 30; see also C.A.R. 39.1.

¶ 43   We deny wife’s request for appellate attorney fees because she

  did not state a legal or factual basis for the request. See C.A.R.

  39.1; In re Marriage of Roddy, 2014 COA 96, ¶ 32.

                             VI.   Conclusion

¶ 44   The portion of the order reopening the dissolution decree’s

  property division and allocating the omitted Stagecoach sale

  proceeds and IRA is reversed. The portion of the order awarding

  attorney fees to husband is affirmed in part and reversed in part,

  and the case is remanded for the district court to reconsider the fee

  award as directed herein and to determine husband’s request for

  his appellate fees under section 14-10-119.

       JUDGE DUNN and JUDGE PAWAR concur.

                                    18