Court Opinion

ID: 6496247
Source: CourtListenerOpinion
Date Created: 2022-06-29 15:05:07.16373+00
Date Added: 2024-06-11T08:48:40.191996
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                  No. 21-1124
                              Filed June 29, 2022

DEENA ALISSA FRIES,
    Plaintiff-Appellee,

vs.

BROOKS SALOMON BARNEY,
     Defendant-Appellant.
________________________________________________________________

      Appeal from the Iowa District Court for Polk County, Sarah Crane, Judge.

      A father appeals the vacation of a right-of-first-refusal provision in a

stipulated custody order and the denial of his contempt application. AFFIRMED

AND REMANDED.

      David L. Leitner of Leitner Law Office, West Des Moines, for appellant.

      Elizabeth Kellner-Nelson of Kellner-Nelson Law Firm, P.C., West Des

Moines, for appellee.

      Considered by Vaitheswaran, P.J., and Tabor and Badding, JJ.
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TABOR, Judge.

       Brooks Barney and Deena Fries have a child in common, B.S.B. They

mediated a custody agreement that awarded physical care of B.S.B. to Fries and

visitation to Barney. But before signing and returning the custody stipulation,

Barney and his attorney, David Leitner, silently inserted a right-of-first-refusal

provision.1 Leitner advised Barney that “it would probably be read and may or may

not be accepted.”

       As it turned out, Fries and her attorney, Elizabeth Kellner-Nelson, did not

notice the addition, signed the stipulation, and filed it with the court. Months after

the court approved the parties’ stipulation, Barney sought to hold Fries in contempt

for not honoring “the right of first refusal when there is a need for babysitting” and

not consulting him on other matters. Meanwhile, Fries petitioned to vacate the

added provision under Iowa Rule of Civil Procedure 1.1012(2).

       The district court granted the motion to vacate, finding Barney and Leitner

perpetrated extrinsic fraud.     The court also dismissed Barney’s contempt

application. Finding the district court properly analyzed both the fraud and the

contempt actions, we affirm. We also find that Fries is entitled to an award of

appellate attorney fees and remand for a determination of a reasonable amount.

1 The phrase “right of first refusal” in our family law cases means the custodial
parent must offer the non-custodial parent the chance to care for the child when
the custodial parent is unavailable to provide supervision for a specified period
before seeking a third-party child care provider. See, e.g., In re Marriage of Taylor,
No. 14-1652, 2015 WL 4935795, at *4 (Iowa Ct. App. Aug. 19, 2015).
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I.     Facts and Prior Proceedings

       In April 2020, Fries petitioned to establish custody, visitation, and child

support for B.S.B., who was born in 2017. The next month, Barney was sentenced

for domestic abuse assault for strangling Fries. The criminal court entered a no-

contact order but carved out an exception for “phone, written or electronic

messaging” to address child custody and finances. Under that exception, Fries

and Barney mediated custody and presented their stipulation to the court.

       Attorney Kellner-Nelson drafted the stipulation based on the parties’

mediation agreement. She sent the stipulation to her client, Fries, for approval.

After Fries approved, Kellner-Nelson emailed it to attorney Leitner for Barney to

sign. The draft stipulation, attached as a PDF, reflected the parties’ agreement to

place B.S.B. in Fries’s physical care and set out this visitation schedule:

       In a series of emails between the attorneys about the need to move forward,

Leitner never mentioned the possibility of adding a right-of-first-refusal provision.

Yet the signed version of the document that he returned to Kellner-Nelson included

a new sentence at the end of the visitation paragraph:
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       Kellner-Nelson did not notice the addition. And assuming the stipulation

was unchanged, she sent just the signature page to her client. Fries signed the

stipulation, and Kellner-Nelson filed it the next day.       The court approved the

stipulation on August 28. It was not until January 2021 that Fries learned of the

right-of-first-refusal provision from Barney.

       Shortly after that, Fries moved to strike the first-refusal sentence, or in the

alternative to vacate the stipulation, alleging fraud under Iowa Rule of Civil

Procedure 1.1012(2). Barney resisted, calling Fries’s position “buyer’s remorse.”

The district court denied the motion to strike because the stipulation had been

approved as a final order. The court also ruled that the alternative request to

vacate the order must be raised in a petition under rule 1.1013.

       In March 2021, Barney sought a contempt finding. He alleged Fries failed

“to give [him] the right of first refusal when there is a need for babysitting.” He also

alleged Fries failed to consult him on the child’s daycare and religious training, as

required by the stipulated custody order.

       Before the contempt action was scheduled for hearing, Fries applied again

to vacate the custody order, asserting the right-of-first-refusal provision was not

part of the mediated agreement and was inappropriate given the no-contact order.

Fries alleged that Barney practiced fraud in obtaining that provision. See Iowa R.

Civ. P. 1.1012(2). Barney resisted, maintaining, “What we have here is a situation

in which the parties were still negotiating the terms of the stipulation.” He faulted

Fries and her counsel for not reading the document before executing it.

       The district court combined the contempt action and the application to

vacate in a June 2021 hearing. Both Fries and Barney testified. Barney also called
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two acquaintances who testified that they had seen Fries out at a bar on a Saturday

night and at a casino on New Year’s Eve without her son. He relied on their

testimony to prove that he had not been given a right of first refusal to care for

B.S.B. After the hearing, the court granted Fries’s petition to vacate the right-of-

first-refusal provision and dismissed Barney’s contempt action. Barney appeals.

II.    Scope and Standards of Review

       We review the modification of a final judgment for fraud under Iowa Rule of

Procedure 1.1012(2) for errors at law. In re Marriage of Hutchinson, ___ N.W.2d

___, ___, 2022 WL 1592166, at *5 (Iowa 2022).                The district court has

“considerable discretion” in deciding to vacate a judgment. In re Marriage of

Heneman, 396 N.W.2d 797, 799 (Iowa Ct. App. 1986). The district court’s finding

of fraud is binding on appeal if supported by substantial evidence. In re Marriage

of Cutler, 588 N.W.2d 425, 430 (Iowa 1999).

       We review the court’s refusal to hold Fries in contempt of the custody order

for an abuse of discretion. See In re Marriage of Swan, 526 N.W.2d 320, 327

(Iowa 1995). Unless the court “grossly abused” its discretion, the contempt denial

must stand. Id.

III.   Analysis

       A.     Vacating First-Refusal Provision

       Iowa Rule of Civil Procedure 1.1012(2) allows a court to “correct, vacate or

modify a final judgment or order” if the petitioning party can show “fraud practiced

in obtaining it.” This petition “must be filed and served in the original action within

one year after the entry of the judgment or order involved.”            Iowa R. Civ.

P. 1.1013(1). Fries applied to vacate the right-of-first-refusal provision in May
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2021, about eight months after the court approved the stipulation. Her burden was

to prove by clear and convincing evidence that Barney practiced fraud in obtaining

that provision.   See Cutler, 588 N.W.2d at 430.           Fraud has six elements:

(1) misrepresentation or failure to disclose when under a legal duty to do so,

(2) materiality, (3) scienter, (4) intent to deceive, (5) justifiable reliance, and (6)

resulting injury or damage. Id. “The first three elements of a fraud claim are often

treated as a single element and are referred to as fraudulent misrepresentation.”

Clark v. McDaniel, 546 N.W.2d 590, 592 (Iowa 1996).

       Fraud comes in two varieties: extrinsic and intrinsic.2 In re Adoption of

B.J.H., 564 N.W.2d 387, 391–92 (Iowa 1997).           Extrinsic fraud is conduct by

litigants that has “prevented a fair submission of the controversy.” In re Marriage

of Short, 263 N.W.2d 720, 723 (Iowa 1978). That conduct includes “lulling a party

into a false sense of security or preventing [that party] from making a defense.”

Stearns v. Stearns, 187 N.W.2d 733, 735 (Iowa 1971). “Examples of extrinsic

fraud are a bribed judge, [the] dishonest attorney representing the defrauded client,

or a false promise of compromise.” Mauer v. Rohde, 257 N.W.2d 489, 496 (Iowa

1977). By contrast, intrinsic fraud “inheres in the issues submitted to and decided

by the court.”    Stearns, 187 N.W.2d at 735.        Classic examples are perjury,

submission of false exhibits, and concealing or misrepresenting evidence. Mauer,

2 Critics bemoan the “unsound” distinction between the two fraud types, describing
them as “difficult to understand and apply.” Hutchinson, 2022 WL 1592166, at *16
n.10 (Iowa 2022) (McDonald, J., dissenting) (citing 11 Charles Alan Wright et al.,
Fed. Prac. & Proc. Civ. § 2861, at 426 (2012)). But because the parties have not
challenged the distinction, we do not consider a different framework.
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257 N.W.2d at 496. To vacate under rule 1.1012(2), the fraud must be extrinsic to

the judgment. B.J.H., 564 N.W.2d at 392.

       The district court found that Fries satisfied her burden to show extrinsic

fraud. On the element of fraudulent misrepresentation, the court decided:

       The actions of Leitner and Barney concealed and failed to disclose
       a material fact. Leitner and Barney added a right of first refusal, had
       Barney sign the Stipulation, and then returned it to Kellner-Nelson
       without noting that it had been revised. By returning the Stipulation
       already signed and failing to identify it was revised, their actions
       suggested Barney had accepted the Stipulation as drafted by
       Kellner-Nelson, instead of sending a revised version that still needed
       to be agreed to. The added provision had not been addressed or
       agreed to at mediation. Therefore, Barney and his counsel should
       have known that it would need to be considered. Meanwhile, Kellner-
       Nelson and Fries would not have known to be on the lookout for such
       provision.

The district court’s findings are legally sound and supported by substantial

evidence. So they are binding on our review.

       As for the remaining elements, the court found an intent to deceive “based

on the manner in which the provision was inserted and returned without any

suggestion that a revision had been made.” The court also found that Kellner-

Nelson and Fries justifiably relied on how Leitner returned the document. To that

end, “Fries wasn’t even sent the entire agreement by her counsel, as it was

assumed to be the same document circulated to her previously.” Finally, the court

determined that the right-of-first-refusal provision was material and its clandestine

injection damaged Fries. The court credited Fries’s testimony that she would not

have agreed to that provision given Barney’s history of domestic violence and the

existence of the no-contact order. The court noted: “Barney’s interpretation of the

right of first refusal would require Fries to alert him anytime she decided to leave
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the minor child in someone else’s care (such as at home with her older children),

even if it was only for an hour to go to the gym or the grocery store.”

       Again, the court makes no error of law and its findings on these elements

are supported by substantial evidence. So they too are binding on our review.

Thus, we reject Barney’s challenges to the elements of fraud.

       In the alternative, Barney argues that “[t]o the extent there was any fraud,

which is not conceded, it is most certainly of the intrinsic variety.” He downplays

the deviousness of adding the provision without disclosure, insisting: “All that

happened was, during negotiations, a slightly modified counterproposal was made

in response to a draft.” His insistence is disingenuous. The parties were not in

negotiations. The mediation was done. And their mediated agreement did not

include a right of first refusal.

       The deceptive actions of Barney and Leitner fall into the category of

extrinsic fraud because they occurred outside the trial framework. See Mauer, 257

N.W.2d at 496 (citing Auerbach v. Samuels, 349 P.2d 1112, 1114 (Utah 1960)

(explaining extrinsic fraud is “practiced outside the actual trial upon the opposing

party”)). Their signatures on the stipulation signaled acceptance of the mediated

agreement, lulling Fries and Kellner-Nelson into a false sense of security that the

document remained in its original form. True, it would have been a better practice

for Kellner-Nelson and Fries to read the final version of the stipulation returned by

Leitner. But signing the stipulation without re-reading it did not defeat Fries’s claim

of extrinsic fraud.    See In re Marriage of Stanbrough, No. 99-840, 2000 WL

1157844, at *4 (Iowa Ct. App. Aug. 16, 2000) (finding sufficient evidence of

extrinsic fraud to warrant vacation of the economic and child custody provisions of
                                           9

decree though wife signed stipulated decree prepared by husband “without really

looking at it”).

       Finally, Barney invokes the doctrine of res judicata to claim that Fries’s

second application to vacate the right-of-first-refusal provision was barred by the

court’s denial of her first motion. Res judicata requires a “final judgment on the

merits of an action.” In re Marriage of Erlandson, 973 N.W.2d 601, 607 n.5 (Iowa

Ct. App. 2022). But as the district court noted, its first order did not reach the merits

of the first motion. Instead, the court denied the request to vacate without prejudice

to Fries filing a petition under rule 1.1013. So Barney’s claim of preclusion fails.

       In sum, Fries offered clear and convincing proof of extrinsic fraud, requiring

the court to vacate the right-of-first-refusal provision.

       B.      Denying Contempt

       Barney next contends that the district court should have found Fries in

contempt for not consulting him about sending B.S.B. to vacation bible school or

changing daycares. He also argues that Fries should be held in contempt for

ignoring the right-of-first-refusal provision, at least after January 2021 when he

drew it to her attention.

       To prove contempt, Barney must show that Fries willfully failed to obey the

court order. See Ary v. Iowa Dist. Ct., 735 N.W.2d 621, 624 (Iowa 2007). If he

can show that violation, the burden shifts to Fries to produce evidence suggesting

her violation was not willful. Id. But because contempt is quasi-criminal, Barney

retains the burden to prove willfulness beyond a reasonable doubt. Id.

       The district court decided that Barney failed to meet his burden. On his

claim that she did not consult him before taking B.S.B. to a new daycare provider,
                                          10

the court explained: “Fries was forced to locate a new daycare for B.S.B. after his

daycare providers became ill with covid-19 (including one that passed away) and

were no longer able to provide care. Fries was faced with an urgent situation to

find replacement care so that she could work.” The record also shows that Fries

gave Barney the address and contact information for the new daycare before

B.S.B. started there. As for vacation bible school, the court noted, “Fries enrolled

B.S.B. in a week of [vacation bible school] at the church Barney, Fries, and B.S.B.

used to attend and at which both Barney and B.S.B. were baptized. Fries informed

Barney and indicated he could choose whether or not to take B.S.B. on his

parenting time.” According to Fries, Barney expressed no objection to that plan.

In neither instance did the district court grossly abuse its discretion in declining to

hold Fries in contempt of the consultation provision in the custody order. See

Swan, 526 N.W.2d at 327 (encouraging courts to consider “all the circumstances”

before punishing a party for contempt).

       The district court likewise declined to hold Fries in contempt for violating the

right-of-first-refusal provision. As shown above, that provision not only contained

a typographical error, but was ungrammatical, vague, and unclear. It stated:

“Respondent sha first right of refusal to have B.S.B. whenever Petitioner is

otherwise unable to care for him.”

       Still, Barney alleged three violations: “First, Fries went to the grocery store

and left B.S.B. with her significantly older children. Second and third, she went out

at night on two occasions—a weekend night and New Year’s Eve.” The district

court found that it was “untenable” to interpret the first-refusal provision to cover

errands or other short trips out of the home. We agree. See In re Marriage of
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Lauritsen, No. 13-1889, 2014 WL 3511899, at *3 (Iowa Ct. App. July 16, 2014)

(holding modification from twelve consecutive hours to eight hours was

unreasonable because custodial parent would have to check with the noncustodial

parent “every day to allow him the option (which he may refuse)” to keep the child

for the day while she worked). The added provision was too indefinite to enforce.

The court did not abuse its discretion in dismissing the contempt action.

       C.     Appellate Attorney Fees

       Finally, Fries seeks an award of appellate attorney fees. Such an award is

within our discretion.   See In re Marriage of Bacon, No. 11-0368, 2011 WL

4579601, at *5 (Iowa Ct. App. Oct. 5, 2011). But her appellee’s brief does not

identify the amount of fees she has incurred in defending the district court’s ruling.

And we do not see an attorney affidavit in the appellate record. We agree a fee

award is warranted on this record, but we remand to the district court to determine

a reasonable amount.

       AFFIRMED AND REMANDED.