Court Opinion

ID: 5119669
Source: CourtListenerOpinion
Date Created: 2021-10-20 15:05:25.489202+00
Date Added: 2024-06-11T08:22:13.436935
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                    No. 20-0513
                              Filed October 20, 2021

IN RE THE MARRIAGE OF SHAWN AMAR RANA
AND LEANNE PATRICIA RANA

Upon the Petition of
SHAWN AMAR RANA,
      Petitioner-Appellee,

And Concerning
LEANNE PATRICIA RANA,
     Respondent-Appellant.
________________________________________________________________

       Appeal from the Iowa District Court for Des Moines County, Michael J.

Schilling, Judge.

       The ex-wife asked the court modify or change the property disposition in the

dissolution decree based upon an allegation her ex-husband fraudulently

concealed assets.    The district court dismissed her claim, and she appeals.

AFFIRMED.

       R. A. Bartolomei of Bartolomei & Lange, P.L.C., Des Moines, for appellant.

       Curtis Dial of the Law Office of Curtis Dial, Keokuk, for appellee.

       Considered by Tabor, P.J., and Greer, J., and Doyle, S.J.*

       *Senior judge assigned by order pursuant to Iowa Code section 602.9206

(2021).
                                         2

GREER, Judge.

       Shawn and Leanne Rana dissolved their marriage by stipulated decree,

which included division of their marital property. One year later, as part of her

petition to modify custody provisions, Leanne also raised a counterclaim asking

the court to modify the property division based on Shawn’s alleged fraudulent

concealment of certain assets.      The court dismissed Leanne’s counterclaim,

concluding (1) it was not properly brought under Iowa Rules of Civil Procedure

1.1012 and 1.1013 and (2) Leanne failed to prove her claim of fraud in equity.

Leanne appeals, challenging the court’s rulings in several respects. Shawn waived

his right to file an appellate brief pursuant to Iowa Rule of Appellate Procedure

6.903(3).

I. Background Facts and Proceedings.

       Leanne and Shawn dissolved their marriage by stipulated decree on

September 28, 2017. The stipulated decree included custody and physical care

provisions for the parties’ minor children, C.R. and S.R., as well as the division of

marital property.

       Less than a year later, Shawn filed a motion to modify some of the

provisions of the decree that related to the care and custody of C.R.

       On September 28, 2018—exactly one year after the decree was filed—

Leanne filed her answer and counterclaim, asking that she be given sole legal

custody of C.R. and that the court require Shawn to have supervised visitation with

the child. Leanne also asked the court to modify the property division, alleging

Shawn fraudulently failed to fully disclose a Ferrari worth $200,000 and a pension.
                                         3

       Shawn—though represented by counsel—did not respond to Leanne’s

counterclaim nor answer her request for admissions. Shawn also failed to attend

depositions or appear at the trial on the petitions in May 2019.1

       Without Shawn in attendance at the trial, his attorney informed the court she

had no other witnesses or evidence to offer in support of Shawn’s petition to modify

the decree. Ruling from the bench, the court announced it was dismissing Shawn’s

petition with prejudice for lack of proof. Leanne was then allowed to testify and

submit evidence to support her request for modification as to the child-custody and

visitation provisions of the decree. At trial, she made an oral request to amend her

petition for modification, clarifying that her claim of fraud and request for a

modification of the property division were based on Iowa Rule of Civil Procedure

1.1012(2) and (6) as well as common law fraud. Through his attorney, Shawn

resisted in part. The district court granted Leanne’s oral motion to amend the

petition. Leanne then proceeded to offer evidence to support her request for

modification of the property division in the decree, including a prior finding by the

court that Shawn failed to disclose his pension.2

       Within a couple weeks of the trial, the court filed orders dismissing Shawn’s

petition to modify the decree, granting Leanne’s petition to modify so as to give her

sole legal custody of C.R., and granting Leanne “reasonable fees and costs for

1  Counsel for Shawn participated in the deposition by telephone. And other
counsel appeared at trial and asked the court to allow Shawn to appear and testify
by telephone. Leanne resisted Shawn’s motion, and the court denied the request,
finding it was untimely made and there was not a showing of good cause “for
allowing [the] last-minute request.”
2 At the end of the trial, the court ruled orally from the bench, modifying the

visitation provisions to allow Shawn to have only supervised visits with C.R.
                                         4

attending the deposition” as a sanction for Shawn’s failure to attend. The court did

not issue a ruling on Leanne’s counterclaim of fraud.

       Then, on December 13, 2019, the court issued a “notice of intent to

dismiss,” stating:

       1. The counterclaim is really a petition for new trial filed under Iowa
       [Rules of Civil Procedure] 1.1012 and 1.1013. 2. As such, the
       petition must be filed and the opposing party must be served with an
       original notice within one year after the rendition of the judgment or
       order involved. Here, the record does not demonstrate that [Shawn]
       was served with original notice within one year after the rendition of
       the order at issue. 3. Absent compliance with the Rule, the court
       lacks subject matter jurisdiction. This is true even though [Shawn]
       failed to raise this issue at trial or before trial.

The order provided that the counterclaim would be dismissed “on December 30 at

8:00 a.m. unless otherwise ordered.”

       Leanne filed a resistance and, after receiving additional time to respond,

Shawn filed a response in support of the court’s intent to dismiss the claim.

       On January 17, 2020, the district court dismissed Leanne’s counterclaim for

lack of subject matter jurisdiction. The court concluded Leanne’s assertion—made

in her resistance to the court’s notice—that she properly served Shawn with

original notice “lack[s] merit. Personal service is required but was never achieved.”

Additionally, the court “rejected” Leanne’s “attempts to cast the Counterclaim as a

common law action for fraud or as a compulsory counterclaim” and concluded it

was “not a case of misjoinder as alleged by [Leanne’s] counsel.”

       Leanne filed a motion to reconsider, which the court denied in a February

23 order. The court ruled:

       The Motion lacks merit for several reasons. First, [Leanne’s] Rule
       1.1012 and 1.1013 Petition was filed within one year of the Decree
       but [she] failed to personally serve [Shawn] with original Notice and
                                          5

       this Petition. This failure deprives the court of subject matter
       jurisdiction, unless [Leanne] can show that the equitable exception
       for fraud exists. To the extent that [Leanne] asserts that her
       counterclaim for fraud can be filed beyond the 1 year time period
       established in Rules 1.1012 and 1.1013, the court believes this
       assertion is inaccurate because the grounds alleged for fraud were
       known to [her] on or before the expiration of the one year time limit.
       This is clear for two reasons. First, the counterclaim itself recognizes
       these alleged grounds for fraud are known to [Leanne] within a year
       of entry of the Decree. Next, [she] knew in May 2018 of the alleged
       fraud based upon [Shawn’s] failure to disclose his pension income.
       The grounds alleged for fraud associated with the Ferrari were
       known to [Leanne] in June 2018, as evidenced by the pleadings and
       Order filed June 14, 2018.

Leanne appeals.3

II. Standard of Review.

       “We review subject matter jurisdiction rulings for correction of errors at law.”

Schaefer v. Putnam, 841 N.W.2d 68, 74 (Iowa 2013). And “[a] proceeding for the

vacation of a judgment is on assigned errors and is not triable de novo.” Stoner v.

Klein, 528 N.W.2d 648, 650 (Iowa Ct. App. 1995) (considering action brought

under Iowa Rule of Civil Procedure 252, now renumbered 1.1012).

3 Leanne challenges the court’s denial of her motion to reconsider. Leanne filed a
motion to reconsider, and the court filed an order stating that the matter would be
submitted at 8:00 a.m. on February 24 but without oral argument. Shawn was
required to file “[a]ny resistance . . . at least three business days before the date
and time fixed for non-oral submission.” Shawn filed an untimely resistance on
February 21 at 2:54 p.m. and then, on February 23, before the matter was set for
submission, the court entered a ruling denying Leanne’s motion. Several hours
after the court issued its ruling, Leanne filed a reply to Shawn’s resistance. On
appeal, Leanne makes general assertions that the court ruled on her motion to
reconsider “impermissibly,” “preemptively,” and without authority. But she does
not cite to any authority for these claims. Her argument rests on the assumption
the court was required to allow her to file a written response to Shawn’s resistance,
but she also cites no authority for this proposition. We do not consider this issue.
See Iowa R. App. P. 6.903(2)(g)(3).
                                          6

       However, we consider Leanne’s claim of fraud in equity de novo. See

Johnson v. Mitchell, 489 N.W.2d 411, 415 (Iowa Ct. App. 1992); see also In re

Marriage of Fitzpatrick, No. 19-0033, 2020 WL 4497961, at *3 (Iowa Ct. App. Aug.

5, 2020).

III. Discussion.

       Here, as required by Iowa law, Leanne and Shawn’s property was divided

in the dissolution decree. See Iowa Code § 598.21(1) (2015). Neither party

appealed, so the property division is generally “not subject to modification.” Id.

§ 598.21(7).

       However, there are two exceptions to the general prohibition on modifying

property divisions. First, under Iowa Rule of Civil Procedure 1.1012(2), “the court

may correct, vacate or modify a final judgment or order” due to “[i]rregularity or

fraud practiced in obtaining it.” But there is a time limit and notice requirement to

avail oneself of rule 1.1012. See Iowa R. Civ. Pro. 1.1012 (“Upon timely petition

and notice under rule 1.1013 . . .”). Rule 1.1013 requires a petition for relief under

rule 1.1012 to “be filed and served in the original action within one year after the

entry of the judgment or order involved.” The adverse party must be served “with

an original notice and petition in the manner provided in rules 1.301 through 1.315.”

Iowa R. Civ. P. 1.1013(2). These requirements are jurisdictional. See, e.g., Kern

v. Woodbury Cnty., 14 N.W.2d 687, 688 (Iowa 1944) (concluding the trial court

“had no jurisdiction to consider” a petition under rule 252, now renumbered rule

1.1012, that was not filed and served within one year).

       The district court concluded it lacked jurisdiction to decide Leanne’s request

to vacate or modify the property division under rule 1.1012(2) because Leanne
                                           7

failed to serve Shawn with the original notice during the one-year window. See

Iowa R. Civ. P. 1.1013.       On appeal, Leanne disputes this ruling.     First, she

challenges the court’s ruling on subject matter jurisdiction, seemingly arguing it

was an improper ruling because Shawn never raised the issue. But “[t]he question

whether a court has subject matter jurisdiction may be raised at any time and is

not waived by consent.” In re Jorgensen, 627 N.W.2d 550, 554 (Iowa 2001). The

court must determine subject matter jurisdiction issues even when the parties have

not raised them. Id. at 555. Because if subject matter jurisdiction is lacking, “the

only appropriate disposition is to dismiss the . . . petition.” Id.

       Next, Leanne challenges the district court’s treatment of her counterclaim

as a petition for new trial under Iowa Rule of Civil Procedure 1.1012 and 1.1013.

At trial, Leanne asked to orally amend her petition to add that her claim of fraud

and request for a modification of the property division was based on Iowa Rule of

Civil Procedure 1.1012. So it is clear she meant to implicate rule 1.1012 when

raising the issue of fraud. And while she referred to her request as a counterclaim

of her petition to modify, “a label attached to a motion does not determine its legal

significance. . . . [Courts] look to the motion’s content to determine the motion’s

real nature.” Halverson v. Iowa Dist. Ct., 532 N.W.2d 794, 799 (Iowa 1995).

Because Leanne’s request to modify or vacate the property division of the decree

was (at least in part) actually a request under rule 1.1012, the court treated it as

such—requiring Leanne to comply with the other attendant rules of civil procedure

such as personal service and paying a filing fee. See Iowa Rs. Civ. P. 1.305;

1.1013(1), (2). This was not in error.
                                         8

       The district court found Leanne “failed to personally serve [Shawn] with

original Notice and this Petition,” which violated the jurisdictional requirements of

rule 1.1013. Rule 1.1013 states: “A petition for relief under rule 1.1012 requires

payment of the filing fee . . . and must be filed and served in the original action

within one year after the entry of the judgment or order involved.” Leanne argues

the district court was wrong to dismiss her rule 1.1012 claim of fraud because

Shawn was automatically served through EDMS.4            But rule 1.1013 requires

personal service of the original notice. See Iowa Rs. Civ. P. 1.1013(2) (requiring

the petitioner to serve the adverse party with an original notice and petition in the

manner provided in rules 1.301 through 1.315); 1.305(1) (providing how personal

service may be made). And the rule Leanne cites, Iowa Court Rule 16.315, relates

only to “electronic service of documents subsequent to original notice.” (Emphasis

added.) Rule 16.314 deals with original notices, and it requires them to “be served

upon the party against whom an action is brought in accordance with the Iowa

Code and the Iowa Rules of Civil Procedure.” Iowa Ct. R. 16.314(3). “Electronic

service cannot be used to serve an original notice or any other document that is

used to confer personal jurisdiction.”    Iowa Ct. R. 16.314(3) cmt. (emphasis

added); see also Bell v. 3E, No. 19-0310, 2019 WL 4298045, at *2 (Iowa Ct. App.

Sept. 11, 2019) (concluding personal service was not accomplished “by simply

filing petition through the EDMS system”). We agree with the district court that

Leanne’s filing of the counterclaim on EDMS did not accomplish personal service,

which is required for a rule 1.1012 fraud claim.

4EDMS “means the electronic document management system, the Iowa Judicial
Branch electronic filing and case management system.” Iowa Ct. R. 16.201(5).
                                           9

       Switching gears, Leanne argues the jurisdictional requirements that applied

to her rule 1.1012 fraud claim do not apply to her fraud in equity claim. We agree

in certain circumstances. See In re Marriage of Hutchinson, No. 20-0076, 2021

WL 3076299, at *3 (Iowa Ct. App. July 21, 2021) (“Even when an aggrieved

party . . . is time-barred from bringing an action at law under rule 1.1012, they may

still be able to pursue claims of fraud in equity.”). Here, we also note the district

court did dismiss her fraud in equity claim due to jurisdictional issues, rejecting

Leanne’s “attempts to cast the Counterclaim as a common law action for fraud.”

       “A party attempting to vacate a judgment in an equity suit has a heavy

burden.” Johnson v. Mitchell, 489 N.W.2d 411, 415 (Iowa Ct. App. 1992). “They

must clear three hurdles.” Hutchinson, 2021 WL 3076299, at *3. The party must

show that, “with reasonable diligence, he or she was not able to discover the

fraud . . . within one year after the judgment.” Johnson, 489 N.W.2d at 415. The

party also has to prove that the fraud is “extrinsic” rather than “intrinsic fraud.” See

id. (“It is . . . essential that the fraud be extrinsic and collateral to the proceedings

and issues in the original case. . . . Extrinsic fraud is some act or conduct of the

prevailing party which has prevented a fair submission of the controversy.”

(citations omitted)). And finally, the party must also prove the elements of fraud.

See Morton v. Underwriters Adjusting Co., 501 N.W.2d 72, 73–74 (Iowa Ct. App.

1993) (holding that equitable fraud may be proved without showing scienter and

pecuniary damages; the elements include only (1) representation, (2) falsity,

(3) materiality, (4) intent to deceive, and (5) reliance).
                                         10

       Here, the district court dismissed Leanne’s claim of fraud in equity after

concluding she could not prove she was not able to discover the fraud within one

year after the judgment. Specifically, the court ruled:

       To the extent that [Leanne] asserts that her counterclaim for fraud
       can be filed beyond the 1 year time period established in Rules
       1.1012 and 1.1013, the court believes this assertion is inaccurate
       because the grounds alleged for fraud were known to [her] on or
       before the expiration of the one year time limit. This is clear for two
       reasons. First, the counterclaim itself recognizes these alleged
       grounds for fraud are known to [Leanne] within a year of entry of the
       Decree. Next, [she] knew in May 2018 of the alleged fraud based
       upon [Shawn’s] failure to disclose his pension income. The grounds
       alleged for fraud associated with the Ferrari were known to [Leanne]
       in June 2018, as evidenced by the pleadings and Order[5] filed June
       14, 2018.

“It is a well established rule that if alleged fraud by use of reasonable diligence

might have been discovered within the one-year limitation then applicant should

not be allowed to prosecute the proceeding in equity.” Sorenson v. Sorenson, 119

N.W.2d 129, 134 (Iowa 1963). Here, like in Sorenson, the petitioning party’s own

evidence establishes they had “actual knowledge” of the fraud within the one-year

time frame. Id. at 134. So we agree with the district court that Leanne could not

show the fraud was undiscoverable during the one-year window provided by rule

1.1012. See In re Davidson, No. 14-0204, 2014 WL 6977276, at *6 (Iowa Ct. App.

Dec. 10, 2014) (holding a collateral civil fraud action cannot save an untimely

attack on the dissolution decree under rules 1.1012 and 1.1013).

5  In a contempt action and a motion for temporary restraining order and injunction
filed before this modification action, both the pension income and Ferrari were
topics of contention raised by Leanne.
                                         11

IV. Conclusion.

       Because Leanne failed to comply with the jurisdictional requirements for her

rule 1.1012 fraud claim and because she cannot obtain relief on her equitable fraud

claim, we agree with the district court’s ruling dismissing her request to modify the

property division in the dissolution decree.

       AFFIRMED.