Court Opinion

ID: 9789908
Source: CourtListenerOpinion
Date Created: 2023-08-31 01:43:50.067203+00
Date Added: 2024-06-11T07:37:25.158833
License: Public Domain

SHEPARD, Justice,
dissenting.
The district judge in the instant case on March 29,1980 was somewhat omniscient in *479anticipating this Court’s opinion in Compton v. Compton, 101 Idaho 328, 612 P.2d 1175 (1980). There, as here, a divorce decree was entered, and two and a half years later the former wife filed an action seeking to set aside the decree and property settlement agreement on the grounds they had been procured by misrepresentation and fraud on the part of the husband. Following discovery, the court granted the former husband’s motion for summary judgment. The former wife appealed and this Court affirmed. In Compton, as in the instant case, the former wife stated that “during the marriage she had little or nothing to do with decisions regarding investment or management of the community and that in forming the property settlement agreement she relied entirely upon the representations of husband.” Id., 101 Idaho at 332, 612 P.2d at 1179.
In Compton, prior to the formation of the property settlement agreement, there were numerous occasions when husband and wife discussed the property issues.
The Court in Compton held: “It is, of course, the general rule that once a judgment issues it is res judicata with respect to all issues which were or could have been litigated.” Id., 101 Idaho at 328, 612 P.2d at 1180. The Court then went on to discuss various means of attacking a judgment which is otherwise res judicata and settled upon the issue of fraud as one of the means of obtaining modification of the judgment. The Court in Compton then stated:
“The term ‘fraud upon the court’ contemplates more than interparty misconduct, and, in Idaho, has been held to require more than perjury or misrepresentation by a party or witness, even where the misrepresentation was made to establish the court’s jurisdiction. [Citation.] Apparently such fraud will be found only in the presence of such ‘tampering with the administration of justice’ as to suggest ‘a wrong against the institutions set up to protect and safeguard the public.’ [Citations.]” Compton, supra, 101 Idaho at 334, 612 P.2d at 1181.
The Court in Compton then went on to discuss the distinction, if any, between extrinsic and intrinsic fraud and the fiduciary duty existing between husband and wife, and stated:
“This fiduciary duty extends to the parties’ negotiations leading to the formation of the property settlement agreement during marriage, and requires, at least, a disclosure by both parties of all information within their knowledge regarding the existence of community property and of pertinent facts necessary to arrive at a reasonable valuation of the property. Like a business partner, each spouse is free to adopt a position favorable to himself or herself regarding the property’s valuation, its inclusion in the community, or other such issues. They are not free, however, to resolve such issues unilaterally by concealing the very existence of particular items or amounts of property.” Id., 101 Idaho at 336, 612 P.2d at 1183.
In Compton, the argument was made that the husband had both concealed the existence of property and misrepresented the value of certain property. The Court held that the husband had disclosed the existence of property and that the wife was responsible for a determination of the value, stating:
“She was thus on notice and free to challenge husband’s valuation by coming forward with her own experts, or otherwise attempting to convince the trier of fact that husband’s valuation was incorrect. Her inadvertence or mis judgment in failing to do so when the opportunity was ripe is an excellent example of the type of conduct which the independent action to relieve a party from judgment will not lie to correct.” Id., 101 Idaho at 337, 612 P.2d at 1184.
In contrast with Compton, the following proceedings and facts are revealed in the instant case. Husband and wife separated in May of 1975, and according to the deposition of the wife, no communications took place between the parties between May of *4801975 and the time of the divorce decree in March of 1976, i.e.:
“Q. Did you talk to Mr. Bodine regularly after May of ’75?
“A. No.
“Q. How often did you talk to him after May of ’75 until March of ’76?
“A. I don’t think I did.
* * * * * *
“Q. Did he say anything to you about the property after May of ’75?
“A. No.
“Q. Did you go through your attorney then?
“A. Yes.
“Q. All communications that were communicated were from you to your attorney and through the attorney to your husband?
“A. Yes.”
In May of 1975, plaintiff-wife filed a complaint for a divorce, praying for an equitable division of the property. On September 3, 1975, plaintiff’s counsel took the deposition of the defendant-husband. In that deposition, counsel for the plaintiff thoroughly explored the income of the husband, cheeking and savings accounts, securities, insurance policies, and ownership in partnerships and corporations. Plaintiff’s counsel was furnished income tax returns for the previous five years. Sitting in on the deposition and answering some of the questions was an accountant who maintained the books of the partnerships and corporations. Among other items explored were the financial institutions in which each of the entities had done business. Undistributed income and retained earnings were explored.
Aside from properties allocated to the wife, the majority of the community property (approximately $334,000) lay in T & C Development ($59,000), H & B Realty ($44,-000), H & B Farms (16,000), and T & C Investment ($213,000). At the September 1975 deposition of defendant, each of those properties was thoroughly explored as to their location, acquisition cost, indebtedness and equity therein. As to the T & C Investments, which constituted the great majority of the property, the defendant was queried as to the payment for the buildings, land and other assets being $397,017.07. The colloquy as to value was as follows:
“Q. BY MR. REDFORD: You have listed present value of $625,000. Who made that estimate?
“A. Mr. Creswell [the accountant].
“Q. Is that estimate to the best of your knowledge, based on potential resale? “A. That estimate is based upon a 1 per cent earnings.
MR. CRESWELL: We capitalized the operating income at 1 per cent a month, which is fairly typical for commercial income property, and that figure comes to $600,000.
“Q. BY MR. REDFORD: Possibly you have listed on here, and I can’t find it, do you recall what your present equity in that property is?
MR. CRESWELL: First the hundred thousand dollar retained earnings plus the $30,000 original capitalization would be the equity in the entire corporation. That would be the difference in the assets and liabilities. And 90 or 95 per cent of that is the real estate itself, so that is approximately the equity at book value. This equity at market value would be something else.
“Q. BY MR. REDFORD: Have you made any determination as to what the market value of the property is?
“A. Yes. That is what he was telling you a minute ago, $625,000. And that is based upon your 1 per cent per month.” (Material in brackets supplied.)
Counsel for both parties initiated an attempt to arrive at a settlement of the property distribution issue. Counsel for husband wrote to counsel for wife:
“Pursuant to our last conversation concerning the Bodine case, I asked Mr. Bodine and his accountant to make a complete recapitulation of the asset picture and to formulate an offer.
*481“They have done so, and I am enclosing a copy of that effort.
* * * * * *
“On the summary on the front page, he has jotted down items he thinks she might want in her Vi He is not limiting her to those items, nor suggesting that she even take them, but would rather predicate his offer on this: That she take her choice of the assets listed at the prices given and any deficiency between the total of such items selected by her and the VV value cited above would be paid by him at $1,000 per month, including interest.” (Emphasis supplied.)
At a later time, counsel for the husband wrote counsel for the wife:
“Rather than attempt to explain Mr. Bodine’s response to your recent inquiry I felt a letter with supporting documentation might be more satisfactory and am accordingly enclosing some sheets which I think will support what is essentially an acceptance of your proposal at least in so far as the philosophy thereof is concerned. The first two items of the first page of the enclosed recapitulation under the items marked ‘Business Equities’ and ‘Personal Equities’ comprise the same list of assets that you have used in arriving at an over-all valuation of the community assets of the parties but with one difference. You have a total of $483,420.00 which total has been diminished to $475,-420.00 ...” (Emphasis supplied.)
On the 9th day of March 1976, plaintiff appeared before the court and introduced evidence. The .defendant was not before the court and produced no evidence. The property settlement agreement entered into by the parties on the advice of their respective counsel was by the plaintiff tendered to the court and testified to as being fair and equitable. The court made a specific finding that the agreement was fair and equitable and ratified, confirmed and approved it.
■That agreement awarded the wife separate property of stocks, bonds and bank deposits, and awarded her the dwelling house, a rental property, household furnishings, automobiles and promissory notes. The husband was required to additionally pay the wife approximately $131,000, together with eight per cent interest thereon over a period of years.
In 1979, plaintiff commenced the instant action, seeking to set aside the decree of divorce by which the property of the parties was divided. Essentially, the theory of the plaintiff is that the consent given by the wife to the property settlement agreement, which the wife tendered to the court as being a just and equitable division of the property, was procured by fraud and misrepresentation as to the value of certain of the properties. Upon motion for summary judgment, the district judge held that there was no genuine controversy, but that prior to the divorce the wife’s then attorney took the defendant’s deposition and submitted interrogatories, in both of which the question of identity and value of property owned by the parties was pursued and that the two attorneys exchanged correspondence dealing with the valuation of the property. There is no question but that all property owned by the parties was disclosed by the defendant prior to the property settlement agreement, and plaintiff makes no claim to the contrary.
The trial court held that, under the circumstances, a claim by the wife that the property values provided by the husband were not accurate does not justify setting aside the property settlement agreement, thus anticipating our decision in Compton, and further held that the allegations in plaintiff’s complaint and her affidavits were not material. Summary judgment was therefore granted.
Even assuming that the learned district judge was in error in so ruling on the law (which I do not believe), nevertheless, summary judgment was still proper in the instant matter.
Summary judgment is, of course, improper if there remain for resolution disputed issues of material fact. At the summary judgment juncture, the accepted rule is that all disputed facts and any legitimate infer*482enees arising therefrom are construed most favorably toward the party resisting summary judgment. It is also a tenet of summary judgment proceedings, however, that a litigant must tender detailed evidence squarely raising legitimate issues of material fact and cannot rest upon mere allegations and pleadings, remote possibilities, or statements that such evidence will be tendered at trial. Viewing the entire record in this matter, I would hold that the plaintiff has not made out a case substantiating the existence of controverted material facts.
It is established in Compton v. Compton, supra, that the only method by which the cause can be reopened and the res judicata effect of the judgment destroyed is an allegation of fraud and proof thereof by clear and convincing evidence. Plaintiff’s non-verified complaint does contain an allegation of fraud, i.e., that defendant, at the time of the divorce, misrepresented the value of the community property. This Court has clearly and consistently held that a party alleging a cause of action based on fraudulent misrepresentation must prove the following nine elements: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted on by the person and in the manner reasonably contemplated; (6) the hearer’s ignorance of its falsity; (7) the hearer’s reliance on its truth; (8) his right to rely thereon; and (9) his consequent and proximate injury. Faw v. Greenwood, 101 Idaho 387, 613 P.2d 1338 (1980); Smith v. King, 100 Idaho 331, 597 P.2d 217 (1979); Mitchell v. Siqueiros, 99 Idaho 396, 582 P.2d 1074 (1978).
To fit the facts of the instant case into the above established law regarding the elements necessary for proof of fraud by misrepresentation, I offer the following. It is admitted that no representation was made by the defendant to the plaintiff. The representation, if so it be deemed, was made by defendant’s counsel in response to and basically in acceptance of settlement tendered by plaintiff’s counsel. The only statements of value were made by the defendant in the course of a deposition taken from him on information furnished him by his accountant and with an explanation of how the value was established. Assuming that plaintiff trusted her then husband and also assuming that she could not think clearly because of the influence of drugs, nevertheless, I believe that statements made to an attorney during the course of deposition testimony, or statements made in response to offers of settlement exchange between attorneys, do not constitute compliance with factor number five, i.e., do not demonstrate an intent that such statements should be acted upon by the person (plaintiff). I believe there is no compliance with factor number six, that the hearer, i.e., plaintiff’s counsel, be ignorant of the falsity of the statement, if indeed it was false. I believe there is no showing of compliance with factors seven and eight, i.e., that the plaintiff’s counsel rightfully rely upon such statement, and indeed I cannot believe that an attorney representing a litigant has the right to rely on statements of opposing party or opposing counsel on the question of such an abstract and tenuous concept as value.
Finally, I would note that the question presented is whether the statements of defendant or his counsel regarding the value of the community property prior to the time of the execution of the agreement were fraudulent and false. What were the values of the property prior to the execution of the agreement? Even putting aside all of the missing but required elements of fraud, what does plaintiff offer by way of an indication of value of the property in 1975 which is different than that contained in the agreement?
The deposition of the plaintiff was taken October 25, 1979. The substance of plaintiff’s testimony is that she personally has no idea of the value of the property, but that rather some of her neighbors, friends and family suggested to her that she did not come out of her divorce with sufficient money. She indicated that the properties had not been appraised as of the date of the agreement or divorce, or at any time. She was given the following line of questioning:
*483“Q. Now, you say that in November of ’78 you discovered the fair market value of the real property from the divorce was, in truth, in excess of $1,650,000.00. Of that $1,650,-000.00, what was the value of Hedrick & Bodine Realty as of the date of the divorce?
“A. I don’t know.
“Q. You have no idea.
“A. No, not as of the date of the divorce.
“Q-What was the value of Hedrick & Bodine Farms as of the date of the divorce?
“A. I haven’t the slightest idea.
“Q-What was the value of town & country investments?
“A. It was never discussed. I wouldn’t have any way of knowing.
******
“Q-You say that he was trying to deceive and defraud in 1976 when he said the property was worth $446,-000.
“A. Yes.
“Q. Okay. What facts do you have to support that? What makes you think that he knew the property was worth any more than that?
******
“Q-So you, then, believe that because he was in the business, that he should have know it was worth more.
“A. I would think that, yes.
“Q-Well, as of this date, you don’t know what it was worth on that date, do you?
“A. In ’76, no.
“Q-You don’t know if it was worth more than $446,000, do you?
“A. I do not.
“Q. So as far as you know at this date right now, it could have been the correct value?
“A. You mean it could have been? You mean did I think — I’m confused.
I’m not used to this. Say that again.
“Q. What I’m saying is, you don’t know that it was worth any more than that in 1976, do you?
“A. I do not.
“Q. So you don’t know that he deceived you in ’76 right now, do you?
“A. No.”
In sum, I suggest that the summary judgment was properly entered, even assuming that the district judge erred in the legal theory upon which he based his decision. The Court commits major error in permitting the finality of the judgment to be destroyed under circumstances such as are presented here and overruling Compton without specifically so stating in its majority-
I would affirm the decision of the district court.