Court Opinion

ID: 4502248
Source: CourtListenerOpinion
Date Created: 2020-01-28 18:03:22.01071+00
Date Added: 2024-06-11T15:04:10.093246
License: Public Domain

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                                                 ADVANCE SHEET HEADNOTE
                                                            January 27, 2020

                                    2020 CO 7

No. 18SC772, In Re Marriage of Durie— Post-Decree Motion to Allocate Assets
and Liabilities Under C.R.C.P. 16.2(e)(10)—Particularity—Allegations Based on
Information and Belief—Burden of Proof—Entitlement to Discovery—District
Court’s Discretion.

      In this domestic relations case, the supreme court considers the standards

and procedures that govern a C.R.C.P. 16.2(e)(10) post-decree motion to allocate

material assets or liabilities allegedly misstated or omitted in pre-decree

disclosures.

      The court holds that C.R.C.P. 12(b)(5) and the plausibility standard in Warne

v. Hall, 2016 CO 50, 373 P.3d 588, do not apply to Rule 16.2(e)(10) motions.

Rule 12(b)(5) and the plausibility standard apply to motions to dismiss a claim for

relief in a pleading, and a Rule 16.2(e)(10) motion is not a pleading. Instead, the

court holds that, consistent with C.R.C.P. 7(b), which controls motions practice in

civil cases, a Rule 16.2(e)(10) motion must “state with particularity” the grounds

on which it is premised (i.e., the reasons why relief is warranted). But the court
holds that this does not preclude allegations that are based on information and

belief when the moving party lacks direct knowledge about those allegations. So

long as the motion satisfies the particularity requirement in Rule 7(b)(1), it may

include such allegations. Lastly, the court holds that a party is not automatically

entitled to conduct discovery to support her Rule 16.2(e)(10) motion. Rather, the

district court, in its discretion, may allow discovery or schedule a hearing (or both)

if it concludes that the facts asserted in the motion are sufficient to justify doing

so. In making this determination, the district court should be mindful that the

moving party must satisfy Rule 7(b)(1)’s particularity requirement and ultimately

bears the burden of demonstrating by a preponderance of the evidence that she is

entitled to relief. In the event the district court finds that the facts asserted in the

motion are not sufficient to justify a hearing or even discovery, it may deny the

motion outright.
                 The Supreme Court of the State of Colorado
                 2 East 14th Avenue • Denver, Colorado 80203

                                   2020 CO 7

                      Supreme Court Case No. 18SC772
                    Certiorari to the Colorado Court of Appeals
                     Court of Appeals Case No. 17CA1295

                             In re the Marriage of

                                   Petitioner:

                                Steven R. Durie,

                                       and

                                  Respondent:

                   Kelly J. Durie n/k/a Kelly J. Simmerman.

                              Judgment Affirmed
                                    en banc
                                January 27, 2020

Attorneys for Petitioner:
Epstein Patierno, LLP
Steven B. Epstein
Courtney J. Leathers Allen
Wendy J. Smock
John H. Tatlock
      Denver, Colorado

Attorneys for Respondent:
Stevens, Littman, Biddison, Tharp & Weinberg LLC
Craig A. Weinberg
      Boulder, Colorado

JUSTICE SAMOUR delivered the Opinion of the Court.
¶1    Although adversarial in nature, domestic relations cases involve parties

who are family members and have “a special relationship to one another and to

the court system.” C.R.C.P. 16.2(a). In these unique cases, the law imposes a “duty

of candor.” C.R.C.P. 16.2(e)(1). In accord with this duty, the parties must make

“full and honest disclosure[s] of all facts that materially affect their rights and

interests.” Id. The required disclosures include each party’s material assets and

liabilities. C.R.C.P. 16.2(e)(10).   Following entry of a final decree, if a party

discovers that the other party’s disclosures contained misstatements or omissions,

she may seek relief pursuant to Rule 16.2(e)(10). Id. Under that rule, the court

retains jurisdiction over the case for a period of five years after the entry of a final

decree so that it may “allocate material assets or liabilities” that were misstated or

omitted when such misstatement or omission “materially affects” the division of

the couple’s assets and liabilities. Id.

¶2    But what standards and procedures govern a Rule 16.2(e)(10) motion?

Further, where, as here, a party responds to a Rule 16.2(e)(10) motion by filing a

motion to dismiss, does C.R.C.P. 12(b)(5) and the “plausibility” standard set forth

in Warne v. Hall, 2016 CO 50, 373 P.3d 588, apply? And, is a party entitled to rely

on allegations that are based on “information and belief” and to conduct discovery

to support her Rule 16.2(e)(10) motion? Today we endeavor to answer all of these

questions.

                                           2
¶3    We hold that Rule 12(b)(5) and the plausibility standard in Warne do not

apply to Rule 16.2(e)(10) motions. Rule 12(b)(5) and the plausibility standard

govern motions to dismiss a claim for relief in a pleading, and a Rule 16.2(e)(10)

motion is not a pleading. Instead, we hold that, consistent with C.R.C.P. 7(b),

which governs motions practice in civil cases, a Rule 16.2(e)(10) motion must “state

with particularity” the grounds on which it is premised (i.e., the reasons why relief

is warranted). C.R.C.P. 7(b)(1). But we hold that this does not preclude allegations

that are based on information and belief when the moving party lacks direct

knowledge about those allegations.            So long as the motion satisfies the

particularity requirement in Rule 7(b)(1), it may include such allegations. Lastly,

we hold that a party is not automatically entitled to conduct discovery to support

her Rule 16.2(e)(10) motion.     Rather, the court, in its discretion, may allow

discovery or schedule a hearing (or both) if it concludes that the facts asserted in

the motion are sufficient to justify doing so. In making this determination, the

court should be mindful that the moving party must satisfy Rule 7(b)(1)’s

particularity requirement and ultimately bears the burden of demonstrating by a

preponderance of the evidence that she is entitled to relief. In the event the court

finds that the facts asserted in the motion are not sufficient to justify a hearing or

even discovery, it may deny the motion outright.

                                          3
                       I. Facts and Procedural History

¶4    Steven R. Durie (“Husband”) commenced this dissolution of marriage

action in April 2014. Pursuant to C.R.C.P. 16.2(e)(2), (4), he and his then-wife,

Kelly J. Durie n/k/a Kelly J. Simmerman (“Wife”), subsequently exchanged sworn

financial statements, mandatory disclosures, and supplemental disclosures. In

line with C.R.C.P. 16.2(g), the parties jointly selected and retained an expert to

value their businesses: Coin Toss, LLC, a holding company, and the two

companies owned by Coin Toss—Rock Paper Scissors, Inc., d/b/a Secure Search

(“Secure Search”), and Sandbox Sharing, LLC, d/b/a Safeguard from Abuse

(“Safeguard from Abuse”).1     As part of his work, the joint expert reviewed

materials provided separately by Husband and Wife and considered discussions

he had with each of them. Based on his valuation, the joint expert estimated that

as of May 31, 2014, Coin Toss (including Secure Search and Safeguard from Abuse)

had an investment value of $855,000 and a fair market value of $770,000.

¶5    After receiving the joint expert’s report, Wife retained her own expert to

perform a complete review of that report. Wife’s expert eventually assigned a

similar value to Coin Toss: $919,616. Based on the two experts’ valuations, the

1Husband was the President and CEO of Secure Search, while Wife was the CEO
of Safeguard from Abuse.
                                        4
parties agreed to value Coin Toss at $878,589. The parties thereafter integrated

this value into the property division of the marital estate set forth in their

separation agreement. Pursuant to the separation agreement, Coin Toss was

allocated (at a value of $878,589) to Husband as his sole and separate property,

and that allocation, in turn, generated a financial payout to Wife in the amount of

$338,548.2    At the parties’ request, the district court then incorporated the

separation agreement into the decree of dissolution that entered in September

2014.

¶6      In October 2015, thirteen months after the court issued the decree of

dissolution, Husband sold a portion of Secure Search’s assets (“post-decree sale”)

to a Tennessee company, Ministry Brands, LLC, for $6,900,000, an amount more

than 685% higher than the value assigned to Coin Toss in the separation

agreement.3 After learning about this transaction, Wife recalled that Husband had

travelled to Tennessee around May 2014 while this dissolution proceeding was

2   The separation agreement also required Husband to pay Wife maintenance.
3 Our 685% calculation differs from Wife’s 850% calculation for two reasons:
(1) Wife asserts that the increase between the joint expert’s valuation amount
($855,000) and the post-decree sale amount ($6,900,000) is 850%, but our
calculation shows that the increase between those amounts is actually 707%; and
(2) we assess the increase between the valuation amount used in the separation
agreement ($878,589)—instead of the joint expert’s valuation amount ($855,000)—
and the post-decree sale amount ($6,900,000).
                                        5
pending and the joint expert was valuing the parties’ businesses. Believing she

smelled a rat, Wife filed a motion pursuant to Rule 16.2(e)(10) to set aside or reopen

the property division in order to reallocate the proceeds from the post-decree sale.

¶7    In addition to asserting that the post-decree sale amount was more than

850% higher than the joint expert’s valuation amount and that Husband had

travelled to Tennessee in May 2014, Wife alleged, based “on information and

belief,” that Husband had “engaged in negotiations to sell a portion” of Secure

Search’s assets before the separation agreement was executed and possibly before

the joint expert’s valuation was completed. Wife further alleged, again based

“[u]pon information and belief,” that Husband had “failed to disclose and

intentionally concealed material facts that impacted the value of the parties’

business[es] and the valuation” of the joint expert “and/or [had] failed to update

the information to [the joint expert] or Wife once those negotiations commenced.”

¶8    In response, Husband filed a motion to dismiss Wife’s motion. He admitted

that he had sold some of Secure Search’s assets in October 2015 to Ministry Brands

for $6,900,000, and that he had travelled to Tennessee around May 2014. But he

denied that he had engaged in any negotiations related to the post-decree sale

before 2015. Husband informed the court that he had received an out-of-the-blue

email from Ministry Brands in February 2015, four months after the dissolution

decree entered, expressing interest in acquiring “[b]ackground check services,” the

                                          6
type of services performed by Secure Search.4           To corroborate his position,

Husband produced an “out of the blue” email—the email literally referred to itself

as an “out of the blue” email—dated February 2015 from Jon Ellison, the vice

president of business development and a senior partner at Ministry Brands. In his

email, Ellison opened with an apology “for the out of the blue e-mail,” asked to be

placed “in the strategic buyer category,” and requested a call back to discuss

“100% ownership, all cash deals” related to “[b]ackground check services.” As for

the trip to Tennessee, Husband claimed that he had undertaken it to attend an

annual conference and that it had nothing to do with the post-decree sale.

¶9    Although Husband did not cite Rule 12(b)(5) in his motion to dismiss, Wife

urged the court to treat it as a Rule 12(b)(5) motion and to apply Warne’s

plausibility standard in evaluating her Rule 16.2(e)(10) motion. Since she believed

her motion had stated plausible grounds for relief, Wife asked the court to deny

Husband’s motion to dismiss. Wife also requested attorney fees pursuant to

section 13-17-102, C.R.S. (2019), or, in the alternative, pursuant to section 14-10-119,

C.R.S. (2019).

4 The assets ultimately acquired by Ministry Brands included the faith-based
customers of Secure Search’s online background screening services (the majority
of Secure Search’s sales revenue).
                                           7
¶10   The district court did as Wife suggested and treated Husband’s motion as a

Rule 12(b)(5) motion to dismiss. In applying Warne’s plausibility standard, it ruled

that the allegations in Wife’s Rule 16.2(e)(10) motion were insufficient “to nudge

her claim from conceivable to plausible.” Finding that Wife’s motion did not

satisfy Warne‘s standard, the court granted Husband’s motion to dismiss, which

rendered her request for attorney fees moot.

¶11   Wife appealed, and a division of the court of appeals reversed. The division

held that the district court erred in applying Rule 12(b)(5) and the plausibility

standard because they govern pleadings, not motions.           Relying instead on

C.R.C.P. 8(e)(1), the division found that a party filing a Rule 16.2(e)(10) motion

may make allegations based on information and belief. In so doing, the division

recognized that, like Rule 12(b)(5), Rule 8(e)(1) refers to pleadings. But because

Rule 8(e)(1) also provides that “[n]o technical forms of pleading or motions are

required,” the division felt that it permits a party to make allegations based on

information and belief in a Rule 16.2(e)(10) motion. (Emphasis added.) Next, in

the absence of any legal standard set forth in Rule 16.2(e)(10), the division

concluded that a court must decide whether the moving party’s allegations are

sufficient to meet her burden of showing by a preponderance of the evidence that

                                         8
she is entitled to relief. Finally, the division ruled that a party seeking relief under

Rule 16.2(e)(10) is automatically entitled to conduct discovery.5

¶12      Husband then petitioned for certiorari review, and we granted his petition

in part.6

5 The division’s last two determinations were somewhat unclear and inconsistent.
With respect to the burden of proof, the division implied that the moving party
must demonstrate in her motion by a preponderance of the evidence that she “is
entitled to relief.” But elsewhere the division said that a moving party need only
allege facts in her motion that are sufficient to warrant some type of discovery
(even if on a limited basis). On the discovery front, the division first stated that
various provisions within Rule 16.2 supported Wife’s “right” under Rule
16.2(e)(10) to conduct discovery. However, it then indicated that the reason Wife
is entitled to conduct discovery on remand is that her motion contains “sufficient
allegations to warrant discovery,” which suggests that the division didn’t view
discovery as a matter of right.
6   We granted certiorari to review four issues:
         1. Whether C.R.C.P. 12(b)(5) and the “plausibility” standard set forth
            in Warne v. Hall, 2016 CO 50, 373 P.3d 588, apply to a motion under
            C.R.C.P. 16.2(e)(10).
         2. Whether a moving party may make allegations on “information
            and belief” in a C.R.C.P. 16.2(e)(10) motion.
         3. Whether a moving party is entitled to conduct discovery to
            support a motion under C.R.C.P. 16.2(e)(10).
         4. What standards and procedures govern a motion under C.R.C.P.
            16.2(e)(10).

                                           9
                              II. Standard of Review

¶13   Our standard of review when we interpret the Colorado Rules of Civil

Procedure is de novo. Mason v. Farm Credit of S. Colo., ACA, 2018 CO 46, ¶ 7,

419 P.3d 975, 979. We also review de novo “a lower court’s application of a legal

standard.” Kutzly v. People, 2019 CO 55, ¶ 8, 442 P.3d 838, 841.

                                   III. Analysis

¶14   Our rules of civil procedure govern “all actions, suits and proceedings of a

civil nature,” including domestic relations cases. C.R.C.P. 1(a). Rule 16.2 creates

“a uniform procedure for resolution of all issues in domestic relations cases” in a

manner that “reduces the negative impact of adversarial litigation wherever

possible.” C.R.C.P. 16.2(a). The rule addresses the management and facilitation

of such cases by the court and includes provisions related to disclosure, discovery,

and hearings.    C.R.C.P. 16.2(c), (e), (f).   It expressly applies to “post decree

matters.” C.R.C.P. 16.2(a).

¶15   Paragraph (e)(1) of Rule 16.2 imposes on parties “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).   Each party is called upon to “affirmatively disclose all

information that is material to the resolution of the case without awaiting inquiry

from the other party.” Id. In paragraph (e)(10), the rule more specifically requires

parties “to provide full disclosure of all material assets and liabilities.”

                                          10
C.R.C.P. 16.2(e)(10). Under that paragraph, the court retains jurisdiction for a

period of five years after entry of a final decree in case a party’s disclosures turn

out to have contained “misstatements or omissions.” Id. In such a situation, the

court may “allocate [the] material assets or liabilities” that were misstated or

omitted if their misstatement or omission “materially affects the division of assets

and liabilities.” Id. However, Rule 16.2(e)(10) does not delineate the standards

and procedures that govern a post-decree motion to allocate misstated or omitted

material assets or liabilities. Desiring to shed light on the rule, we agreed to review

the issues raised in Husband’s petition.

¶16   We begin by analyzing whether the district court erred in applying

Rule 12(b)(5) and Warne’s plausibility standard to resolve Wife’s Rule 16.2(e)(10)

motion. After concluding that it did, we consider the standards and procedures

that should apply to a Rule 16.2(e)(10) motion. We hold that, consistent with

Rule 7(b)(1), a Rule 16.2(e)(10) motion must “state with particularity” the grounds

on which it is premised (i.e., the reasons why relief is warranted). C.R.C.P. 7(b)(1).

But we hold that this does not preclude allegations that are based on information

and belief when the moving party lacks direct knowledge about those allegations.

So long as the motion satisfies the particularity requirement in Rule 7(b)(1), it may

include such allegations. Lastly, we hold that a party is not automatically entitled

to conduct discovery to support her Rule 16.2(e)(10) motion. Rather, the court, in

                                           11
its discretion, may allow discovery or schedule a hearing (or both) if it concludes

that the facts asserted in the motion are sufficient to justify doing so. In making

this determination, the court should be mindful that the moving party must satisfy

Rule 7(b)(1)’s particularity requirement and ultimately bears the burden of

demonstrating by a preponderance of the evidence that she is entitled to relief. In

the event the court finds that the facts asserted in the motion are not sufficient to

justify a hearing or even discovery, it may deny the motion outright.

¶17   The division correctly concluded that the district court erred in dismissing

Wife’s motion outright based on Rule 12(b)(5) and Warne’s plausibility standard.

But because we don’t agree with all of the division’s other determinations, we

affirm its judgment, at least in part, on other grounds.

            A. Rule 12(b)(5) and Warne’s Plausibility Standard

¶18   Rule 12 lists “defenses and objections” a party may raise in a civil case.

While “[e]very defense . . . to a claim for relief in any pleading” must be “asserted

in the responsive pleading thereto if one is required,” a party has the option of

raising by separate motion the defense of “failure to state a claim upon which relief

can be granted.” C.R.C.P. 12(b)(5) (emphasis added).

¶19   Because Rule 12(b)(5) explicitly sets forth “failure to state a claim upon

which relief can be granted” as a defense “to a claim for relief in any pleading,” it

has no application here. In re Marriage of Runge, 2018 COA 23M, ¶ 18, 415 P.3d 884,

                                         12
887 (quoting C.R.C.P. 12(b)). As its title suggests, a Rule 16.2(e)(10) motion is a

motion, not a pleading. Id. at ¶¶ 18–19, 415 P.3d at 887–88. Compare C.R.C.P. 7(a)

(defining a “pleading” as “a complaint,” an “answer,” “a reply to a counterclaim,”

“an answer to a cross-claim,” “a third-party complaint,” “a third-party answer,”

and “a reply to an affirmative defense”), with C.R.C.P. 7(b)(1) (defining a “motion”

as an “application to the court for an order”). Therefore, a party may not file a

Rule 12(b)(5) motion to dismiss a Rule 16.2(e)(10) motion. And where, as here, a

party files a motion to dismiss a Rule 16.2(e)(10) motion, the court may not treat

the motion to dismiss as a Rule 12(b)(5) motion.

¶20   Nor is the plausibility standard in Warne applicable to a Rule 16.2(e)(10)

motion. In Warne, we held that a complaint must state “a plausible claim for relief”

or risk dismissal pursuant to Rule 12(b)(5) for failure to state a claim upon which

relief can be granted. Warne, ¶¶ 2, 5, 373 P.3d at 590–91. Inasmuch as Rule 12(b)(5)

does not apply to a Rule 16.2(e)(10) motion, neither does Warne’s plausibility

standard. Runge, ¶ 16, 415 P.3d at 887.

¶21   Accordingly, we agree with the division that the district court erred in

treating Husband’s motion to dismiss as a Rule 12(b)(5) motion and in applying

Warne’s plausibility standard. That Husband filed a motion to dismiss did not

render Wife’s Rule 16.2(e)(10) motion subject to Rule 12(b)(5) and Warne’s

plausibility standard.

                                          13
¶22     But if Rule 12(b)(5) and Warne’s plausibility standard are inapposite, then

what standards and procedures govern a Rule 16.2(e)(10) motion? To tackle this

question, we turn first to Rule 7(b).

                   B. Rule 7(b)(1)’s Particularity Requirement

¶23     Rule 7(b) controls motions practice in civil cases. Titled “Motions and Other

Papers,” Rule 7(b) provides that, except when made during a hearing or trial, a

motion “shall be made in writing, shall state with particularity the grounds

thereof, and shall set forth the relief or order sought.” C.R.C.P. 7(b)(1).7 We see

no reason to deviate from this particularity requirement in the context of a

Rule 16.2(e)(10) motion. In the absence of any provision in Rule 16.2(e)(10) or

elsewhere in Rule 16.2 setting forth a different standard, there is no basis to

immunize a Rule 16.2(e)(10) motion from Rule 7(b)(1)’s particularity requirement.

Therefore, we conclude that a Rule 16.2(e)(10) motion must comply with the

particularity requirement in Rule 7(b)(1)—that is, it must identify with specificity

the grounds in support of it or the reasons relief is warranted.

7   By contrast, Rule 7(a) addresses “Pleadings.”
                                          14
¶24   So, does this determination necessarily preclude allegations in a

Rule 16.2(e)(10) motion that are based on information and belief? As we discuss

next, we think not.

              C. Allegations Based on Information and Belief

¶25   The division appeared to view Rule 7(b)(1)’s particularity requirement, on

the one hand, and allegations based on information and belief, on the other, as

mutually exclusive. Because it concluded that a Rule 16.2(e)(10) motion may

contain allegations based on information and belief, it did not address the

applicability of Rule 7(b)(1)’s particularity requirement. We disagree with this

outlook. And, though the division correctly determined that a Rule 16.2(e)(10)

motion may include allegations based on information and belief, it relied on

C.R.C.P. 8(e)(1) for that proposition. We prefer to lean instead on C.R.C.P. 7(b)(2).

¶26   Like Rule 12(b)(5), Rule 8(e)(1) is a pleadings rule. Rule 8 is titled “General

Rules of Pleading,” and section (e) is titled “Pleading to be Concise and Direct;

Consistency.” In paragraph (1), Rule 8(e) provides that “[e]ach averment of a

pleading” must be “simple, concise, and direct,” and that a pleader “without direct

knowledge”     may    make     “allegations . . . upon   information   and   belief.”

C.R.C.P. 8(e)(1). Given that a Rule 16.2(e)(10) motion is not a pleading, this

language has no bearing on the analysis. The division appeared to recognize as

much, but it nevertheless relied on Rule 8(e)(1) because that rule later states that

                                         15
“[n]o technical forms of pleading or motions are required.” (Emphasis added.) We

view Rule 7(b)(2) as more directly on point.

¶27   Under Rule 7(b)(2), the rules that apply “to captions, signing and other

matters of form of pleadings apply to all motions . . . provided for by these rules.”

Advancing allegations that are based on information and belief in a pleading

pursuant to Rule 8(e)(1) is clearly a “matter[] of form.” Rule 7(b)(2) thus extends

to motions the provision in Rule 8(e)(1) permitting a pleading to contain

allegations based on information and belief. Because nothing in Rule 7(b)(1) or in

any other rule forbids allegations that are based on information and belief in

motions in general, and because no authority prohibits such allegations in a

Rule 16.2(e)(10) motion specifically, we conclude that Rule 7(b)(2) allowed Wife to

include those types of allegations in her motion if she lacked direct knowledge

about them.

¶28   We are sensitive to Husband’s concern that allowing a Rule 16.2(e)(10)

motion to include allegations based on information and belief may automatically

entitle the moving party to conduct discovery to support her motion. However,

we are confident that simultaneously requiring compliance with Rule 7(b)(1)’s

particularity requirement will avert this undesirable result.         Rule 7(b)(1)’s

particularity requirement will serve to ensure that a moving party doesn’t obtain,

post-decree, a new bite at the discovery apple by simply relying on vague or

                                         16
speculative assertions. Thus, under the standard we embrace today, while a

Rule 16.2(e)(10) motion may include allegations based on information and belief,

a motion that relies exclusively on such allegations runs a substantial risk of being

dismissed outright for failure to comply with Rule 7(b)(1)’s particularity

requirement.

¶29     Wife maintains, though, that a party seeking relief under Rule 16.2(e)(10) is

inherently entitled to conduct discovery, regardless of the nature of the allegations

advanced. For the reasons we articulate below, we disagree.

      D. No Inherent Right to Discovery to Support a Rule 16.2(e)(10) Motion

¶30     We read several provisions in Rule 16.2 as indirectly giving a district court

authority to allow discovery in relation to a Rule 16.2(e)(10) motion.           See

C.R.C.P. 16.2(a), (b), (f)(4).   But none of these provisions can be reasonably

construed as entitling a party, as a matter of right, to conduct discovery in order

to support her Rule 16.2(e)(10) motion. Rather, the cited provisions vest district

courts with considerable discretion in making decisions regarding discovery. For

example, Rule 16.2(a) explicitly envisions that the court will tailor “disclosure

requirements, discovery, and hearings” based on “the needs of the case.”

Similarly, Rule 16.2(b) directs the parties, counsel, and the court to “evaluate each

case at all stages to determine the . . . disclosures/discovery . . . necessary to

prepare the case for resolution or hearing.” And Rule 16.2(f)(4) instructs the court

                                          17
to “grant all reasonable requests for additional discovery for good cause as defined

in C.R.C.P. 26(b)(2)(F).”

¶31   Other provisions in Rule 16.2 underscore the abundant discretion district

courts generally enjoy in managing domestic relations cases.          For instance,

Rule 16.2(b) says that in actively managing cases, the court “shall consider the

needs of each case,” may adopt a “Standard Case Management Order” that “takes

into account the specific needs and resources of the judicial district,” and may

modify that standard order as needed.

¶32   The substantial discretion accorded to district courts in domestic relations

cases, both in managing the litigation in general and in establishing the parameters

of discovery specifically, informs our decision today.          Hence, instead of

concluding that a court is required to permit discovery whenever it receives a

Rule 16.2(e)(10) motion, we hold that the court, in its discretion, may allow

discovery or schedule a hearing (or both) if it concludes that the facts asserted in

the motion are sufficient to justify doing so.8 In making this determination, the

court should be mindful that the moving party must meet Rule 7(b)(1)’s

8 Of course, the court may hold off scheduling a hearing until whatever discovery
it allows has been completed. Thus, the court could schedule a status conference
or require further briefing after the authorized discovery has ended.
                                        18
particularity requirement, see supra, and ultimately bears the burden of

demonstrating by a preponderance of the evidence that she is entitled to relief, see

§ 13-25-127(1), C.R.S. (2019) (providing that “the burden of proof in any civil action

shall be by a preponderance of the evidence”). In the event the court finds that the

facts asserted in the motion are not sufficient to justify a hearing or even discovery,

it may deny the motion outright.

¶33   Citing Craig v. Rider, 651 P.2d 397 (Colo. 1982), Husband urges us to reject

the preponderance standard and to require “clear, strong and satisfactory proof”

in a Rule 16.2(e)(10) motion. 651 P.2d at 402 (quoting Riss v. Air Rental, Inc.,

315 P.2d 820, 821 (Colo. 1957)). But Craig dealt with the caselaw applicable to

motions to set aside default judgments and is thus distinguishable.            As we

explained in Borer v. Lewis, 91 P.3d 375 (Colo. 2004), our caselaw has “clearly

established,” pursuant to “the power reserved expressly to the judiciary for the

promulgation of rules governing procedural matters,” that “the burden of proof

necessary to win a motion to set aside a default judgment” is “clear, strong and

satisfactory proof” or “clear and convincing” evidence. 91 P.3d at 380–81. To

prevent an irreconcilable clash of constitutional authority, we held in Borer that the

legislature did not intend for section 13-25-127(1)’s preponderance standard to

“override the ‘clear and convincing’ burden of proof” that our caselaw has long

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applied in the context of a request to set aside a default judgment (a procedural

matter). Id.

¶34   In stark contrast to the situation we faced in Borer, here, there is no inter-

branch confrontation of a constitutional dimension because we have never

implemented (through one of our rules or our caselaw) a burden of proof for

Rule 16.2(e)(10) motions. We break new ground today. And because we choose

the preponderance standard approved by the legislature for all substantive civil

claims, instead of the clear and convincing standard we have applied to some

procedural matters, there is no potential for conflict. Therefore, even assuming, as

Husband asserts, that a Rule 16.2(e)(10) motion is a “procedural motion” subject

to our province, instead of a “substantive civil claim[]” subject to the legislature’s,

see Borer, 91 P.3d at 380–81, this opinion and section 13-25-127(1) coexist in perfect

harmony.

¶35   Alternatively, Husband contends that a Rule 16.2(e)(10) motion must

establish a prima facie case based on admissible evidence. In the same vein,

Husband advances a proposal that borrows from the procedural mechanisms of

two different rules: C.R.C.P. 56 (governing summary judgment motions) and

C.R.C.P. 59(d)(4) (governing motions for a new trial based on newly discovered

evidence). We are unmoved by Husband’s analytical framework. In our view, the

standards and procedures we adopt today are faithful to the bountiful discretion

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Rule 16.2 confers to district courts and strike the appropriate balance between

allowing a deserving party to avail herself of the post-decree remedy in paragraph

(e)(10) and the significant interest in finality.

¶36      We pause to stress the importance of finality in the standards and

procedures we usher in today. It is axiomatic that there is “a definite public

interest” in “the finality of civil judgments through which litigants acquire rights

in the judicial process.” In re Marriage of Wolford, 789 P.2d 459, 460 (Colo. App.

1989). The policy favoring finality is particularly pronounced in domestic relations

cases.    Id.   Considering the compelling need for finality, the Runge division

characterized     the   post-decree   remedy        created   by   Rule   16.2(e)(10)   as

“extraordinary” and “very narrow.” ¶ 34, 415 P.3d at 890. We echo that sentiment.

District courts must thus take care to reopen a final decree under Rule 16.2(e)(10)

only in those cases where it is truly justified.

¶37      The court of appeals’ decision in Runge illustrates the point. Because the

wife there never alleged that her husband had omitted any specific information he

was required to disclose but relied instead on her “suspicions and speculations,”

the division held that the “vague assertions” in her Rule 16.2(e)(10) motion were

insufficient. Id. at ¶ 27, 415 P.3d at 889. Though the wife claimed that her husband

had concealed information from her, the division noted that the record painted a

markedly different picture. Despite receiving voluminous documentation from

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her husband, retaining her own accounting expert to analyze that documentation,

enjoying legal representation, and stating through counsel at the temporary orders

hearing that she planned to schedule depositions, conduct further investigation,

and have her husband’s businesses valued, the wife inexplicably chose to enter

into the separation agreement a month later without doing her due diligence. Id.

at ¶¶ 28–30, 415 P.3d at 889.

¶38   The Runge division concluded that, rather than the husband omitting or

misstating information, the wife had neglected to analyze and investigate the

information he had disclosed to her. Id. at ¶¶ 35–39, 415 P.3d at 890–91. And,

continued the division, she was not entitled to the legal equivalent of a mulligan.

Id. at ¶¶ 31–32, 415 P.3d at 889–90. The division reasoned that Rule 16.2(e)(10) was

not intended to allow an ex-spouse to conduct, post-decree, the analysis and

investigation she consciously elected to forgo pre-decree. Id. at ¶ 32, 415 P.3d at

889–90. Therefore, ruled the division, the district court had sensibly denied the

wife’s Rule 16.2(e)(10) motion outright as not warranting discovery. Id. at ¶¶ 1, 3,
415 P.3d at 886.

¶39   What about the district court’s ruling in this case? Should the court have

granted Wife’s request to conduct discovery? We examine this question now.

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                                E. Application

¶40   Wife’s motion made the following pertinent allegations:

      • The parties’ joint expert estimated that, as of May 31, 2014, Coin Toss had
        an investment value of $855,000 and a fair market value of $770,000.

      • In performing his valuation, the joint expert considered materials
        provided by the parties separately and discussions he had with each
        party.

      • Wife entered into the separation agreement in reliance upon the joint
        expert’s valuation.

      • Pursuant to the separation agreement executed in September 2014, the
        couple’s businesses were allocated to Husband (at a value of $878,589) as
        his sole and separate property.

      • Thirteen months later, in October 2015, Husband sold a portion of Secure
        Search’s assets to Ministry Brands, a Tennessee company, for $6,900,000,
        which was “850% more than the valuation” by the joint expert of all three
        businesses.

      • Ministry Brands owns twenty-five brands, two of which Secure Search
        had done business with during the marriage.

      • “Upon information and belief, Husband travelled to Tennessee in or
        about May 2014,” just a few months before the separation agreement was
        executed.

      • During the marriage, Husband was the president and CEO of Secure
        Search and was working in those capacities forty to sixty-five hours per
        week. Consequently, he was “intimately familiar with the company, its
        finances, its operations, and its potential for sale or acquisition or
        merger.”

      • “Upon information and belief, Husband had been in negotiations . . .
        involving a deal or potential deal to sell Secure Search,” or a portion of
        it, before the separation agreement was executed “and/or possibly prior
        to the time that the joint expert . . . performed his valuation.”

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          • “Upon information and belief, Husband failed to disclose and
            intentionally concealed material facts that impacted” the businesses’
            value and the joint expert’s valuation “and/or failed to update the
            information” to the joint expert or Wife.

¶41       We recognize that a few of these allegations were based on information and

belief.     But we conclude that, as a whole, Wife’s motion met Rule 7(b)(1)’s

particularity requirement. We further rule that Wife alleged sufficient facts to

warrant, at a minimum, an opportunity to conduct discovery. The ocean of

difference between the joint expert’s valuation of Coin Toss and the post-decree

sale price for a portion of Secure Search, alone, raises red flags about Husband’s

pre-decree disclosures.      When that chasm is considered objectively and in

conjunction with the other circumstances present—including the temporal

proximity between the separation agreement and the post-decree sale, Husband’s

travel to Tennessee around May 2014, and Husband’s intimate familiarity with

Secure Search—it becomes clear that Wife’s allegations are sufficient under the

standards and procedures we endorse today to justify granting her request to

conduct discovery. We leave the determination of the scope and extent of such

discovery to the district court.9

9We do not pass judgment on whether Wife will ultimately be able to carry her
burden of proving by a preponderance of the evidence that she is entitled to relief.
We simply find that her motion is sufficient to allow her to conduct discovery.
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¶42      Because the district court denied Wife’s motion outright by applying Rule

12(b)(5) and Warne’s plausibility standard, it erred. We therefore affirm the

division’s judgment reversing the district court’s order.

                                    IV. Conclusion
¶43      We affirm the division’s judgment, though we do so at least in part on other

grounds. Further, we remand with instructions to return the case to the district

court for additional proceedings consistent with this opinion. On remand, the

district court should allow Wife to conduct whatever discovery it deems

appropriate and then determine whether to hold a hearing.10

10   We defer Wife’s request for appellate attorney fees to the district court.
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