In RE MARRIAGE OF FRANKE v. Franke

2004 WI 8, 674 N.W.2d 832, 268 Wis. 2d 360, 2004 Wisc. LEXIS 7

• Court: Wisconsin Supreme Court
• Decided: February 6, 2004
• Docket: 01-3316
• Status: Published

Opinions

SHIRLEY S. ABRAHAMSON, C.J.

¶ 1. This case comes before the court on certification by the court of appeals, pursuant to Wis. Stat. § (Rule) 809.61 (2001-2002).¹ The circuit court for Washington County, Leo F. Schlaefer and Patrick J. Faragher, Judges, entered orders opening the divorce judgment under Wis. Stat. § 806.07 and modifying provisions of the divorce judgment relating to property division and child support. The circuit court awarded an increase in the amount Mr. Franke was to contribute toward Ms. Franke's attorney fees, but not as much as Ms. Franke wanted. The circuit court refused to change the provision in the divorce judgment setting each party's share of the 1995 income tax liability.²

¶ 2. Four issues of law are presented:

(1) May a circuit court open the property division provisions of a divorce judgment under Wis. Stat. § 806.07 even though the divorce judgment incorporated an arbitral award that had been confirmed by the circuit court?

(2) Assuming that a circuit court may relieve a party from property division provisions of such a divorce judgment under Wis. Stat. § 806.07, did the circuit court erroneously exercise its discretion in opening this judgment?

(3) When Wis. Stat. § 806.07 is used to relieve a party from property division provisions of such a divorce judgment, is the relevant date of valuation of assets the date of the closing of the arbitration record or the date of the divorce?

(4) If a circuit court may relieve a party from property division provisions of such a judgment, did the circuit court erroneously exercise its discretion in modifying the judgment to increase Ms. Franke's share of the property division, to increase the Mr. Franke's child support payments, and to increase Mr. Franke's contribution toward his former wife's attorney fees incurred after the divorce judgment; in refusing to modify the allocation of the 1995 income tax liability; and in refusing to require Mr. Franke to contribute additional sums toward his former wife's attorney fees incurred after the divorce judgment?

¶ 3. We answer the questions posed as follows:

(1) A circuit court may relieve a party from property division provisions of a divorce judgment under Wis. Stat. § 806.07 even though the divorce judgment incorporates a confirmed arbitral award.

(2) The circuit court did not erroneously exercise its discretion under § 806.07 in opening the property division provisions of the divorce judgment.

(3) Arbitration may constitute, but does not as a matter of law constitute, a special exception requiring property to be valued as of the date of the closing of the arbitration record instead of the date of divorce.

(4) The circuit court did not erroneously exercise its discretion in modifying the divorce judgment to increase Ms. Franke's share of the property division and Mr. Franke's contribution toward his former wife's attorney fees incurred after the divorce judgment. The circuit court did not erroneously exercise its discretion in refusing to modify the divorce judgment to reallocate the 1995 income tax liability between the parties. The circuit court (Judge Faragher) did not erroneously exercise its discretion in refusing to require Mr. Franke to contribute additional sums toward his former wife's postjudgment attorney fees. The circuit court erroneously exercised its discretion in increasing Mr. Franke's child support payments.

¶ 4. Accordingly, we affirm the orders of the circuit court revising the divorce judgment to increase Ms. Franke's share of the property division and Mr. Franke's contribution toward his former wife's post-judgment attorney fees. The orders of the circuit court refusing to award Ms. Franke additional postjudgment attorney fees and refusing to modify the allocation of the 1995 income tax liability are also affirmed. The circuit court's order modifying child support is reversed and remanded to the circuit court for further consideration not inconsistent with this opinion.

I

¶ 5. This divorce proceeding occupied the attention of the courts and an arbitrator for several years. We set forth an abbreviated version of those facts relevant to deciding the issues presented. Additional facts appear later in the opinion.

¶ 6. The Frankes married on December 29, 1989. Less than four years later, on July 26,1993, Ms. Franke filed a petition for divorce. During the divorce proceedings the circuit court ordered the parties to mediate their disputes, but these efforts were unsuccessful and broke down in October of 1994.

¶ 7. From 1994 to 1996, various attempts to complete the proceedings were made, culminating in the parties' decision in April 1996 to agree to have all disputes in their divorce resolved by binding arbitration.

¶ 8. Between July and October of 1996, the parties participated in several arbitration hearings. After the last hearing in October 1996, the arbitrator requested additional documents, the homestead was being sold, and various "housekeeping details" needed attention. In the summer of 1997 Mr. Franke filed an updated financial disclosure statement with the arbitrator that ostensibly reflected the value of his assets as of October 1996. Mr. Franke's work involved the buying, selling, and consolidation of communication assets, making financial calculations particularly complex.

¶ 9. The arbitrator issued a final award on April 16, 1998. On June 9, 1998, on Ms. Franke's motion, the circuit court confirmed the arbitrator's award and ordered that a divorce judgment be entered in conformity with the award. In accordance with the confirmation order, the arbitral award was incorporated by reference into the final judgment of divorce filed and dated July 13, 1998 and made the judgment of the court. The arbitral award determined property division, child support, each party's liability for 1995 income taxes, and the sum Mr. Franke was to contribute toward Ms. Franke's attorney fees incurred during the divorce proceedings.

¶ 10. Just over nine months later, on April 15, 1999, Mr. Franke filed a motion seeking to hold Ms. Franke in contempt for failing to sign and return the parties' joint income tax return as required by the arbitral award and judgment. On May 26, 1999, Ms. Franke responded with a motion to open the June 9, 1998 divorce judgment pursuant to Wis. Stat. §§ 806.07(l)(a), (b), (c), and (h), and 767.32 (relating to modification of child support), alleging, in part, that Mr. Franke had failed to disclose certain assets and provided erroneous valuations of other assets. Ms. Franke requested that the circuit court revise portions of the divorce judgment relating to property division and child support to reflect what she asserted was the true value of the assets. She also requested that the circuit court reconsider her share of income tax liability for 1995 qnd award her additional attorney fees.

¶ 11. The circuit court opened the divorce judgment and, after hearings, entered a decision and order dated July 27, 2000. The order increased Mr. Franke's child support payments from $2,300 to $3,000 per month and increased by $5,000 Mr. Franke's payment toward his former wife's attorney fees incurred after the divorce judgment.

¶ 12. The order refused to modify each party's share of the 1995 income tax liability.

¶ 13. The order increased Ms. Franke's share of the property, requiring Mr. Franke to pay Ms. Franke $25,000 as a one-half share of a $50,000 loan Mr. Franke made to All City Communication Company, Inc., and an additional $28,457.22 as her share of Mr. Franke's revalued interest in the stock of All City.

¶ 14. Further, on the basis of the circuit court's conclusion that Mr. Franke had not been forthcoming about his various assets, the circuit court ordered additional discovery of Mr. Franke's financial records covering the period of time between the close of the arbitration record and the entry of the divorce judgment.

¶ 15. After Judge Schlaefer's retirement, the circuit court issued an order stating that the relevant valuation date of the Frankes' property was the close of the arbitration record, that it would not award Ms. Franke additional attorney fees for postjudgment proceedings, and that it would not revisit any of the earlier orders of the circuit court.

¶ 16. The parties appealed and cross-appealed, and the court of appeals certified the case to this court.

II

¶ 17. The first question presented is whether a circuit court may open the property division provisions of a divorce judgment under Wis. Stat. § 806.07 when the divorce judgment incorporated a confirmed arbitral award.³

¶ 18. To answer this question, we must examine the interplay among the following:

A. Wis. Stat. § 806.07, governing opening judgments;

B. Wis. Stat. § (Rule) 802.12(3)(c), governing binding arbitration in certain family law actions, along with chapter 788 governing arbitration; and

C. Wis. Stat. § 767.255(3)(L), imposing responsibilities on a circuit court in determining property division in a divorce judgment.

A

¶ 19. Wisconsin Stat. § 806.07 allows a circuit court, on motion, to relieve a party from a judgment, order, or stipulation upon such terms as are just and for one of the eight reasons enumerated in § 806.07.⁴

¶ 20. The purpose of Wis. Stat. § 806.07 is to "achieve a balance between fairness in the resolution of disputes and the policy favoring the finality of judgments. The statute enhances fairness in the administration of justice by authorizing a circuit court to vacate judgments on various equitable grounds."⁵

¶ 21. Section 806.07 applies to all civil actions and special proceedings, including family actions, unless contrary rules are to be found.⁶ Section 806.07 has often been applied in family actions, and the courts have upheld the authority of circuit courts to use § 806.07 to open a divorce judgment upon such terms as are just. The court has stated that "a family court has authority to modify a property division under sec. 806.07, Stats. Although a property division in a divorce is not subject to the court's continuing jurisdiction and may not be modified based on a change of circumstances under sec. 767.32(1), Stats., sec. 806.07 gives the court discretionary authority to grant relief from the judgment."⁷

¶ 22. The court has not, however, been faced with the issue of using Wis. Stat. § 806.07 to open a divorce judgment incorporating a confirmed arbitral award.

¶ 23. Mr. Franke argues, in effect, that our cases applying Wis. Stat. § 806.07 to divorce judgments are not applicable here to open a property division of a divorce judgment incorporating a confirmed arbitral award. He correctly contends that the general rule is that courts are more limited in the scope of review of the substance of arbitral awards than in the scope of review of the substance of judgments not based on arbitral awards.

¶ 24. A court will, with some exceptions, confirm an arbitral award regardless of whether the award is correct or incorrect as a matter of fact or law because public policy favors arbitration as promoting the efficient resolution of disputes, and as giving the parties what they bargained for, that is, an arbitrator's, not a court's decision. Our cases and secondary authority support the principle that judicial review of an arbitral award is narrow.⁸

¶ 25. Mr. Franke asserts that these policies girding arbitration would he ill-served by allowing an attack under § 806.07 on a judgment of divorce incorporating a confirmed arbitral award. In other words, his argument is that § 806.07 conflicts with and must give way to ch. 788 and § (Rule) 802.12(3)(c). We note, however, that to some extent, Wis. Stat. §§ 806.07, 788.10, and 788.11 respectively set forth similar criteria for opening a judgment and vacating or modifying an arbitral award.

¶ 26. In contrast, Ms. Franke relies on Wis. Stat. § 788.14, which provides that a judgment incorporating an arbitral award has "the same force and effect, in all respects, as, and [is] subject to all provisions of law relating to, a judgment in an action" and argues that a judgment confirming an arbitral award is subject to § 806.07.⁹

¶ 27. We need not address the broader issue that the parties dispute, namely whether Wis. Stat. § 806.07 applies to all judgments incorporating a confirmed arbitral award.¹⁰ We need address only whether § 806.07 applies to the property division provisions of a divorce judgment incorporating a confirmed arbitral award. We are guided in this task by examining first Wis. Stat. § (Rule) 802.12(3)(c) and then Wis. Stat. § 767.255(3)(L).

B

¶ 28. This court adopted Wis. Stat. § (Rule) 802.12(3) in 1993.¹¹ Prior to the adoption of this Rule, no express provisions existed relating to arbitration in actions affecting the family. Rule 802.12(3) provides for binding arbitration as a mechanism to resolve certain familial disputes between a husband and wife.¹² Rule 802.12(3)(c) governs a circuit court's confirmation of an arbitral award addressing adult financial issues and incorporating an award into a divorce judgment. The Rule limits a court's powers to confirm an arbitral award and incorporate it into a divorce judgment. A court's powers are subject to Wis. Stat. §§ 788.10 and 788.11. Rule 802.12(3)(c) reads as follows:

802.12(3)(c). If the parties agree to binding arbitration, the court shall, subject to ss. 788.10 and 788.11, confirm the arbitrator's award and incorporate the award into the judgment or postjudgment modification order with respect to all of the following:

1. Property division under s. 767.255.

2. Maintenance under s. 767.26.

3. Attorney fees under s. 767.262.

4. Postjudgment orders modifying maintenance under s. 767.32.

Id. (emphasis added).

¶ 29. Wisconsin Stat. § 788.10 requires a circuit court to vacate an award when an award was procured by corruption, fraud, or undue means; when there is evident partiality, corruption, misconduct, or misbehavior of an arbitrator; or when an arbitrator exceeded or imperfectly executed his or her powers.¹³

¶ 30. Wisconsin Stat. § 788.11 requires a circuit court to modify an award when, generally speaking, there was an evident material miscalculation or mistake or when arbitrators have awarded upon a matter not submitted to them.¹⁴

¶ 31. Mr. Franke argues that Wis. Stat. §§ 788.10 and 788.11 are the sole means for challenging a judgment incorporating a confirmed arbitral award. The text of these provisions speaks to a circuit court's vacating, modifying, and confirming an arbitral award prior to a judgment. In the present case, the circuit court has already confirmed the arbitral award and incorporated it into the divorce judgment.¹⁵ The final divorce judgment does not incorporate the agreement to arbitrate; the judgment incorporates the arbitration award. Sections 788.10 and 788.11 are therefore not, on their face, determinative of this case.

¶ 32. Nevertheless, inferences may be drawn from Wis. Stat. §§ 788.10 and 788.11's limitations on a circuit court's powers to vacate and modify an arbitral award before confirmation and judgment. A reasonable inference is that a circuit court is not, upon entry of a divorce judgment, suddenly freed from the limitations of §§ 788.10 and 788.11 to change a divorce judgment incorporating a confirmed arbitral award on property division and treat such a divorce judgment just like any other divorce judgment. Judge Faragher expressed this view as follows: "To permit one of the parties to binding arbitration, to relitigate an issue after the hearing would violate the arbitration agreement of the parties, hut would also be inconsistent with procedures found in sec. 788.10 . . . regarding vacation of an arbitration award and would make meaningless sec. 788.13... providing that notice of motion to vacate, modify or correct an award must be served upon the adverse party within three months after the award is filed or delivered."

¶ 33. We therefore examine Wis. Stat. § 767.255(3)(L), governing a circuit court's responsibility in dividing property, for guidance in determining whether a circuit court has authority to open, under Wis. Stat. § 806.07, property division provisions in a divorce judgment incorporating a confirmed arbitral award regardless of the limitations expressed in § 802.12(3)(c).

c

¶ 34. Wisconsin Stat. § 767.255 requires that a circuit court divide property¹⁶ and authorizes a circuit court to deviate from an equal division of property after considering the applicable statutory factors set forth in Wis. Stat. § 767.255(3).¹⁷

¶ 35. One of the factors a circuit court considers in deviating from an equal division of property is the terms of an agreement between the parties. Wisconsin Stat. § 767.255(3)(L)¹⁸ provides that an agreement between the parties is binding and creates a presumption that the agreement is equitable as to both parties. The provision contains a critical caveat, however, in that no agreement between the parties regarding a property division shall be binding upon the court when the terms of the agreement are inequitable as to either party.¹⁹

¶ 36. The legislature intended a circuit court to give effect to the parties' agreement, thus safeguarding the important public policy of freedom to contract. The legislature also expressed, however, a competing public policy found in the common law and then codified in the family law code that promises relating to marriage cannot contravene public policy.²⁰

¶ 37. The agreement to marry and the agreement to dissolve a marriage are by their nature private decisions between the parties, but the institution of marriage, as well as the authority to dissolve that institution, are extensively governed by the laws of the state. In contrast with most commercial contracts, society has rétained an interest in the substantive terms of contracts relating to marriage and divorce.

If the marriage contract were no different from a contract to sell an automobile, the parties thereto might well be permitted to bargain away all interests involved, in or out of court. But the State has an interest in the family relations of its citizens vastly different from the interest it has in an ordinary commercial transaction....

As a contract, the marriage contract is unique in the law.... The parties to a marriage do not comprehend between them all the interests that the relation contains. Society sanctions the institution and creates and enforces its benefits and duties.²¹

¶ 38. As regards property division in a divorce, an agreement between the parties must be equitable to protect the parties' partnership status during marriage,²² as well as their economic welfare after divorce.²³ A court protects the parties' and public interests by reviewing the substantive provisions of any agreement affecting the division of property.²⁴

¶ 39. While "the parties [to a divorce] are free to contract, . . . they contract in the shadow of the court's obligation to review the agreement on divorce to protect the spouses' financial interests on divorce."²⁵ Further, "[w]hen a court follows and adopts an agreement of the parties making it a part of its judgment, the court does so on its own responsibility, and the provisions become its own judgment."²⁶ It is the terms of the arbitration award, not the terms of the agreement to arbitrate, that a circuit court reviews and may incorporate within its judgment.

¶ 40. Thus a court has under Wis. Stat. § 767.255(3)(L) an important oversight function regarding private agreements made between parties to ensure that the terms are equitable. In contrast, judicial review of arbitral awards and proceedings is, by statute, very limited.

¶ 41. Our decision today merely clarifies that when a circuit court enters a judgment confirming an arbitration award in a property division, the same public policy considerations are implicated as would arise if the parties had stipulated to a particular division of property. The text of Wis. Stat. § 767.255(3)(L) does not differentiate among various types of agreements between the parties. Thus it does not differentiate between an agreement for binding arbitration and any other agreement between the parties. The apparent practice prior to the adoption of Rule 802.12(3)(c) was that when the parties voluntarily entered into arbitration and completed the arbitration proceedings, the parties reduced the terms of the award to a stipulation. The circuit court then reviewed the stipulation as it did any other stipulation under § 767.255(3)(L).²⁷

¶ 42. Implicit in Ms. Franke's argument that Wis. Stat. § 806.07 allows the circuit court to open the property division in the present case, regardless of the existence of binding arbitration, is that Rule 802.12(3) (c) cannot limit a circuit court's power in confirming an arbitral award on property division to consider the equity of such agreements because of Wis. Stat. § 767.255(3)(L). Section 767.255(3)(L) requires a circuit court to divide the property of the parties upon the parties' full disclosure of their finances and provides that no agreement between the parties about property division "shall be binding where the terms of the agreement are inequitable as to either party."

¶ 43. We agree with Ms. Franke that the circuit court's statutory responsibility to review agreements under Wis. Stat. § 767.255(3)(L) does not comfortably mesh with our Rule 802.12(3)(c), which limits the circuit court's responsibilities in reviewing, modifying, and incorporating arbitral awards regarding property division in a divorce judgment.

¶ 44. One attorney raised this concern at the hearings on the petition to adopt Rule § 802.12. Counsel urged that the then-existing law be retained, namely that a circuit court retain the obligation to review the fairness of any agreement or stipulation and that appellate courts retain their powers to review a circuit court's judgment on appeal. Such review of the substance of an arbitral award by both a circuit court and the court of appeals is, counsel asserted, necessary for the protection of the parties and the public.²⁸

¶ 45. The record of the rule hearing does not reflect the court's discussion of counsel's argument, and the court adopted Rule 802.12(3)(c) as proposed pursuant to its rulemaking powers under § 751.12. Section 751.12 authorizes this court, in pertinent part, to adopt rules "regulat[ing] pleading, practice, and procedure in judicial proceedings in all courts," but the rules "shall not abridge, enlarge, or modify the substantive rights of any litigant."²⁹

¶ 46. The litigants in this dispute do not challenge Rule 802.12(3)(c) on the ground that it broaches Wis. Stat. § 751.12's divide between substance and procedure.³⁰ We need not determine whether Rule 802.12(3)(c) merely provides a new, alternative procedure for dividing property or fundamentally changes substantive rights available to parties in a divorce. Suffice it to say that a tension appears to exist between Rule 802.12(3)(c) and Wis. Stat. § 767.255(3)(L), and we should interpret the Rule and the statute in a way that harmonizes the two provisions.

¶ 47. To harmonize the two and effectuate the purposes of both, we conclude that a circuit court must treat a divorce judgment incorporating a confirmed arbitral award on property division in a similar fashion to, but not in exactly the same way as, its treatment of other divorce judgments under § 767.255(3)(L) over which the circuit court may exercise its jurisdiction as necessary. Circuit courts must give greater deference to an arbiter's award of 'a property division under Rule 802.13(3)(c) than they would to other types of agreements between parties.

¶ 48. Several reasons support this conclusion. The state has, as we have stated previously, a longstanding policy favoring arbitration as an alternative method of dispute resolution.³¹ The court has encouraged in Wis. Stat. § (Rule) 802.12(3) court-annexed alternative dispute resolution, including binding arbitration, as a supplement to litigation. The arbitrator is a third-party independent decision maker who can decide property division considering the parties' and the public's interests. In contrast, when the parties reach their own agreement, they tend to view property division as a matter of their economic bargain only and not to be motivated by a sense of the public policy underlying divorce law.³²

¶ 49. This harmonization of Rule 802.12(3)(c), Wis. Stat. § 767.255(3)(L), and Wis. Stat. § 806.07 protects the public's interest in preserving the integrity of arbitration without sacrificing the litigants' and the public's interest in judicial review of property divisions in divorce.

¶ 50. We reiterate the narrow scope of our holding today. We limit our holding to property divisions in divorce judgments incorporating a confirmed arbitral award. We do not determine whether Wis. Stat. vests power in circuit courts to open all final judgments incorporating arbitral awards. Divorce judgments are different. A circuit court is statutorily required to perform an independent, substantive review of the parties' agreement before incorporating it in the divorce judgment.

¶ 51. In sum, after considering Wis. Stat. § 806.07, § 767.255(3)(L), and Rule 802.12(3)(c), we conclude that a circuit court may properly invoke § 806.07 to open the property division provisions of a divorce judgment incorporating a confirmed arbitral award.

Ill

¶ 52. Having resolved that a circuit court may use Wis. Stat. § 806.07 to open a judgment incorporating a confirmed arbitral award on the division of property, we turn to the second question, namely whether the circuit court properly exercised its discretion under § 806.07 in the present case to open the divorce judgment.

¶ 53. Ms. Franke asserts that the present case falls within § 806.07(l)(a), (b), (c), and (h), providing that a court may relieve a party from a judgment, order or stipulation for the following reasons: Mistake, inadvertence, surprise, or excusable neglect (§ 806.07(l)(a)); newly discovered evidence entitling a party to a new trial under § 805.15(3) (§ 806.07(l)(b)); fraud, misrepresentation, or other misconduct of an adverse party (§ 806.07(l)(c)); or any other reasons justifying relief from the operation of the judgment (§ 806.07(l)(h)).³³

¶ 54. Granting relief under Wis. Stat. § 806.07 is within the discretion of the circuit court.³⁴ We review a circuit court's exercise of discretion to grant relief from a judgment under § 806.07 for an erroneous exercise of discretion. "[A] discretionary determination must be the product of a rational mental process by which the facts of record and law relied upon are stated and are considered together for the purpose of achieving a reasoned and reasonable determination."³⁵ An appellate court will affirm a circuit court's discretionary decision as long as the circuit court "examined the relevant facts, applied a proper standard of law, and, using a demonstrated rational process, reached a conclusion that a reasonable judge could reach."³⁶ Therefore, the record on appeal must "reflect the circuit court's reasoned application of the appropriate legal standard to the relevant facts of the case."³⁷

¶ 55. The function of this court is not to exercise discretion in the first instance but to review the circuit court's exercise of discretion. The record is clear that the circuit court exercised its discretion, concluding that it should grant Ms. Franke's motion to open the judgment under Wis. Stat. § 806.07(l)(a), (b), (c), and (h), but the circuit court did not explicitly state the subsection upon which it relied or fully explain its rationale. When a circuit court fails to provide an adequate reason for its discretionary decision, this court will uphold the circuit court's determination if upon examination of the record the facts support the circuit court's exercise of discretion.³⁸

¶ 56. Ms. Franke contends, and apparently the circuit court agreed, that opening the judgment was appropriate because Mr. Franke failed to make full financial disclosures to the arbitrator, the court, and Ms. Franke. Presumably the circuit court reasoned that this nondisclosure constituted a mistake, misrepresentation, or other misconduct justifying relief under § 806.07.

¶ 57. On this point, the parties do not disagree about the relevant law. Mr. Franke's brief agrees that "if a judgment confirming an arbitration award has been infected by a material failure to disclose assets or liabilities, § 806.07 may permit reopening."³⁹ His point of contention with opining the divorce judgment is factual. He claims that he disclosed his financial interests to the arbitrator and that the arbitrator considered them in preparing the award.

¶ 58. Mr. Franke's position is not substantiated by the record, which supports the circuit court's finding that a material change in the value of the company in issue should have been, but was not, disclosed to the arbitrator. Further, the record suggests a lack of cooperation on Mr. Franke's part in making his financial status known to his wife, the arbitrator, and the court over the years that this case has been in litigation. The record is sufficient to support the circuit court's ruling that the alleged nondisclosure justified opening the divorce judgment.

¶ 59. Accordingly, we conclude that the circuit court did not erroneously exercise its discretion in opening the divorce judgment under § 806.07.

IV

¶ 60. The third issue we address is whether the relevant date of valuation of the parties' property is the date of the closing of the arbitration record or the date of the divorce. No case that we are aware of has dealt with the date-of-valuation issue when an arbitration award is disputed.

¶ 61. Wisconsin Stat. § 767.27 governs the disclosure and valuation of assets in a divorce proceeding.⁴⁰ Section 767.27(1) requires that parties to a divorce complete forms fully disclosing all assets owned in full or in part by either party. Wisconsin Stat. § 767.27(2) further provides that financial disclosure forms are to be "updated on the record to the date of hearing."⁴¹ The cases have interpreted this statute to mean that the property is usually "valued and divided as of the date of divorce," except where "special circumstances" exist.⁴²

¶ 62. The circuit court (Judge Faragher) ruled that binding arbitration, by its very nature, constituted a special circumstance justifying an alternative valuation date as a matter of law. The circuit court also ruled that the language of § 767.27(2) referring to updating the financial disclosure forms at the conclusion of a hearing refers to the close of the arbitration hearing rather than the date on which the circuit court confirms the arbitral award.

¶ 63. We agree with the circuit court to the extent it concluded that an arbitral award regarding property division might very well be a "special circumstance" justifying deviation from valuation as of the date of divorce. As we have stated previously, a circuit court should consider more deferentially, under § 767.255(3)(L), an arbitral award resulting from the parties' binding arbitration agreement than other types of agreements between the parties. But it does not follow that a circuit court's heightened deference to an arbitral award requires, as a matter of law, that the closing of the arbitration record must always be the date on which the property is valued.

¶ 64. Although the closing of the arbitration record is a meaningful date and could serve as the date of valuation, we conclude that the closing of the arbitration record does not create a categorical exception under § 767.27(2) to alter the general rule of valuing property at the date of divorce. A circuit court considers what constitutes special circumstances in selecting a valuation date other than the date of divorce on a case-by-case basis.⁴³

¶ 65. We conclude that the circuit court incorrectly stated the law in holding that the closing of the arbitration record constitutes a blanket exception to the date-of-divorce rule. We are satisfied that the general rule that property is to be valued at the date of divorce, coupled with the requirement that courts deviate from the general rule when special circumstances so require, provides a workable and flexible standard for circuit courts to apply in cases involving an arbitral award.

¶ 66. We need not determine the appropriate date of valuation in this case, and we need not remand the matter to the circuit court for such a determination because, as we explain below, Ms. Franke apparently is not asking this court to modify the circuit court's revision of the circuit court order increasing her share of the property.

V

¶ 67. Having resolved these questions of law, we address briefly the fourth issue raised on this appeal: Did the circuit court erroneously exercise its discretion in (A) modifying the judgment to increase the wife's share of the property division; (B) increasing child support payments; (C) increasing Mr. Franke's contribution toward Ms. Franke's attorney fees during the divorce proceedings and not awarding Ms. Franke attorney fees during the postjudgment proceedings; and (D) refusing to modify its allocation between the parties of the 1995 income tax liability?

¶ 68. As to the revision of the property division, Mr. Franke argues that the circuit court erroneously exercised its discretion in valuing the property and in increasing the wife's share of the property division. Mr. Franke's primary argument is that the circuit court erred in concluding that he withheld relevant information from the arbitrator and in assessing the value of certain assets. We are not persuaded by this argument.

¶ 69. We conclude that the record well supports the circuit court's determination that Mr. Franke attempted to shift his assets to evade accurate valuation and refused to provide appropriate documentation to both the arbitrator and the court.⁴⁴ Furthermore, the circuit court reviewed the financial documents provided it and rationally explained why it revised the property division as to All City and the $50,000 loan, consistent with a 50/50 division of the property.

¶ 70. Ms. Franke cross-appealed from the circuit court's (Judge Faragher's) conclusion of law that the date of valuation was the date of the closing of the arbitration record. She wins on this point, but it is not entirely clear whether Ms. Franke is requesting this court to remand the property division to the circuit court for a determination of the value of the properties in issue as of the date of the divorce. From the proceedings as a whole, we conclude that Ms. Franke is not seeking a remand to the circuit court for further proceedings on the property division.

¶ 71. Accordingly, we affirm the order of the circuit court awarding Ms. Franke additional property as part of the property division.

B

¶ 72. Both Mr. and Ms. Franke assert that the circuit court erred when it increased his monthly child support payments by $700 per month.⁴⁵ We review a circuit court order regarding child support for an erroneous exercise of discretion.⁴⁶

¶ 73. Wisconsin Stat. § 767.32(1) provides that modification of a child support order may be made only if there has been a substantial change in circumstances affecting the parties. Mr. Franke contends that no substantial change in circumstances occurred that would justify an increase in child support. Ms. Franke responds that the circuit court did not sufficiently increase the child support payments.

¶ 74. We first address Mr. Franke's claim that a substantial change in circumstances did not occur between the termination of arbitration and the circuit court's order to modify support.

¶ 75. Section 767.32(l)(b) lists four circumstances that raise a rebuttable presumption of a substantial change in circumstances, one of which occurs if the moving party can demonstrate "[a] difference between the amount of child support ordered by the court to be paid by the payer and the amount that the payer would have been required to pay based on the percentage standard established by the department. . . ." Wis. Stat. § 767.32(1)(b)4.

¶ 76. The circuit court found that a substantial change in circumstances occurred in this case because new information the circuit court obtained suggested Mr. Franke's income to be significantly higher than he originally reported and because a wide disparity existed between the parties' incomes. The record supports the circuit court's assessment that the additional information, coupled with the apparent disparity between the income levels of the parties, constituted a substantial change in circumstances.⁴⁷ Accordingly the circuit court did not erroneously exercise its discretion in modifying child support upward.

¶ 77. We now turn to Ms. Franke's contention that the circuit court erred in not awarding her a larger child support payment. We begin by noting that child support payments are determined by the circuit court in accordance with Wis. Stat. § 767.25. Subsection (lj) of § 767.25 provides that, except as provided in subsection (lm), the court is to use the percentage of income standard established by the Department of Workforce Development (DWD).⁴⁸ Deviation from this percentage standard is appropriate when a circuit court finds that the use of the percentage standard is unfair to the child or any of the parties.⁴⁹

¶ 78. The circuit court found that Mr. Franke earned $348,798.00 in 1999, although Mr. Franke disputes this figure. According to the DWD calculations, the percentage standard for two children is 25%.⁵⁰ Twenty-five percent of $348,798, divided by 12, amounts to child support of $7,266.62 monthly.

¶ 79. Ms. Franke argues that inasmuch as the circuit court found that Mr. Franke had income of $348,798 in 1999, the circuit court should have required Mr. Franke to pay $7,266.62 each month under the percentage standard. Instead, the circuit court increased the monthly payments from $2,300 per month to only $3,000 each month.

¶ 80. As noted, § 767.25(lm) allows a court to depart from the percentage standard when its use would be unfair to the children or the parties. When a circuit court order departs from the percentage standard, however, Wis. Stat. § 767.25(ln) requires that the circuit court "state in writing or on the record the amount of support that would be required by using the percentage standard, the amount by which the court's order deviates from that amount, its reasons for finding that use of the percentage standard is unfair to the child or the party, its reasons for the amount of the modification and the basis for the modification."

¶ 81. Although the circuit court exercised its discretion in setting child support, the circuit court failed to articulate, as Wis. Stat. § 767.25(ln) requires, any reasons why it deviated from the 25% standard and why it increased the child support by only $700. The record does not contain sufficient facts for us to conclude why the circuit court deviated from the percentage standard, and we therefore conclude that the circuit court erroneously exercised its discretion in setting child support.⁵¹

¶ 82. Ms. Franke requests this court to increase her child support award to $7,266.62 per month pursuant to the percentage standard. We decline to do so. Determining child support and deviation from the percentage standard is a task better handled by the circuit court. We therefore reverse the circuit court's order increasing child support and remand the issue to the circuit court.

C

¶ 83. The parties disagree whether the circuit court erroneously exercised its discretion regarding Mr. Franke's contribution to payment of Ms. Franke's post-judgment attorney fees.⁵² The circuit court (Judge Schlaefer) increased Mr. Franke's contribution toward Ms. Franke's attorney fees incurred before the divorce judgment. Mr. Franke contends that the circuit court (Judge Schlaefer) erroneously exercised its discretion in awarding attorney fees. At a later hearing, the circuit court (Judge Faragher) refused to require Mr. Franke to contribute additional funds toward Ms. Franke's post-judgment attorney fees. Ms. Franke argues that the circuit court erroneously exercised its discretion in not awarding her additional attorney fees.

¶ 84. We review a circuit court's decision regarding attorney fees for an erroneous exercise of discretion.⁵³ We conclude that the circuit court did not erroneously exercise its discretion in awarding or refusing to award additional attorney fees. A circuit court may consider a variety of factors, including the financial resources of the parties, additional fees incurred, and the opposing party's refusal to provide information promptly to avoid unnecessary delays.⁵⁴

¶ 85. The increase in Mr. Franke's contribution toward Ms. Franke's attorney fees was justified given the evidence of Mr. Franke's elusive behavior in disclosing financial information during the arbitration proceedings. Although the circuit court (Judge Faragher) did not explain its refusal to award Ms. Franke additional attorney fees beyond that which had already been awarded by Judge Schlaefer, the record supports this exercise of discretion. Judge Faragher apparently recognized that Judge Schlaefer had already taken into account Mr. Franke's dilatory behavior in setting attorney fees. As such Judge Faragher did not erroneously exercise his discretion by refusing to increase further Mr. Franke's contribution toward Ms. Franke's attorney fees.

D

¶ 86. Ms. Franke's final claim is that the circuit court erroneously exercised its discretion in refusing to open the judgment requiring her to incur tax liability for the year 1995.⁵⁵ After carefully considering the arbitral award, the circuit court concluded that Ms. Franke was making the same arguments to the court that she had to the arbitrator and that the arbitrator's consideration of the merits of the issue did not warrant the circuit court's revisiting the issue. On the basis of this record, we conclude that the circuit court did not erroneously exercise its discretion in refusing to change the arbiter's award regarding allocation of liability for 1995 income taxes.

¶ 87. For the reasons set forth, we affirm the orders of the circuit court revising the judgment to increase Ms. Franke's share of the property division and Mr. Franke's contribution toward the Ms. Franke's attorney fees incurred after the divorce. The orders of the circuit court refusing to award Ms. Franke additional attorney fees and refusing to modify the allocation of the 1995 income tax liability are also affirmed. The circuit court's orders modifying child support are reversed and remanded to the circuit court for further consideration not inconsistent with this opinion.

By the Court. — The orders of the circuit court are affirmed in part and reversed and remanded in part.

1 All subsequent references to the Wisconsin Statutes are to the 2001-2002 version unless otherwise indicated.

2 Judge Schlaefer issued orders opening the divorce judgment on July 27 and July 30, 2000. Upon his retirement, the case was assigned to Judge Faragher. Judge Faragher generally disagreed with Judge Schlaefer's conclusions of law. The order dated September 11, 2001, (Judge Faragher) stated (1) that Wis. Stat. § 806.07 may not be used to review a final and binding arbitration award; (2) that final and binding arbitration is a "special circumstance" exception to the general rule that property is valued as of the date of the divorce; (3) that the circuit court will not rule on prior attorney fees or award additional attorney fees to either party; and (4) that the parties must submit any other issues for consideration to the court. Although Judge Faragher's conclusions of law were at odds with Judge Schlaefer's earlier rulings, Judge Faragher declined to review Judge Schlaefer's prior orders. Mr. Franke appealed and Ms. Franke cross-appealed.

3 Interpretation of rules and statutes presents questions of law that we determine independently of the circuit court but benefiting from its analysis.

4 Wisconsin Stat. § 806.07(1) was adopted by court rule and provides as follows:

806.07 Relief from judgment or order. (1) On motion and upon such terms as are just, the court.. . may relieve a party . .. from a judgment, order or stipulation for the following reasons:

(a) Mistake, inadvertence, surprise, or excusable neglect;

(b) Newly-discovered evidence which entitles a party to a new trial under s. 805.15(3);

(c) Fraud, misrepresentation, or other misconduct of an adverse party;

(d) The judgment is void;

(e) The judgment has been satisfied, released or discharged;

(f) A prior judgment upon which the judgment is based has been reversed or otherwise vacated;

(g) It is no longer equitable that the judgment should have prospective application; or

(h) Any other reasons justifying relief from the operation of the judgment.

5 Edland v. Wis. Physicians Serv. Ins. Corp., 210 Wis. 2d 638, 644, 563 N.W.2d 519 (1997) (citation omitted).

6 Wis. Stat. § 801.01(2).

7 Spankowski v. Spankowski, 172 Wis. 2d 285, 290, 493 N.W.2d 737 (1992) (citing Thorpe v. Thorpe, 123 Wis. 2d 424, 426, 367 N.W.2d 233 (1985)).

See also Tozer v. Tozer, 121 Wis. 2d 187, 189, 358 N.W.2d 537, 539 (1984) (recognizing the power of a court to use § 806.07 to open a divorce judgment as to property division while noting that a reviewing court will reverse a circuit court's refusal to do so only for abuse of discretion); Conrad v. Conrad, 92 Wis. 2d 407, 413, 284 N.W.2d 674 (1979) (noting that when a stipulation failed to address certain property in wife's name, circuit court's refusal to open judgment under § 806.07 constituted erroneous exercise of discretion).

8 As this court expounded in Joint School District No. 10 v. Jefferson Educational Association, 78 Wis. 2d 94, 116-18, 253 N.W.2d 536 (1977):

The court will not relitigate issues submitted to arbitration. The parties contracted for the arbitrator's decision, not the court's.

... The decision of an arbitrator cannot be interfered with for mere errors of judgment as to law or fact. Courts will overturn an arbitrator's award if there is a perverse misconstruction or if there is positive misconduct plainly established, or if there is a manifest disregard of the law, or if the award itself is illegal or violates strong public policy.

See also Lutkowski v. Dankert, 178 Wis. 2d 110, 113, 503 N.W.2d 15 (Ct. App. 1993). Secondary authority supports the proposition that the scope of judicial review of an arbitration award "is among the narrowest known to the law." Laird E. Lawrence & Christopher R. Ward, The Availability and Scope of Arbitration Awards under the Federal, Uniform, and State Acts, 29 The Brief 32, 32 (2000).

9 While the parties rely on the statutes, not on the terms of the arbitration agreement, to buttress their arguments, the arbitration agreement could arguably be interpreted to allow the parties to seek relief from a judgment confirming the arbitral award under Wis. Stat. § 806.07. The arbitration agreement states that an arbitration award "shall not be modified or re-litigated in the circuit court except as provided in Secs. 788.10 and 788.12 [sic], or as required by Rule 802.12(3)(e) Stats." This provision does not come into play in the present case because we are dealing with the judgment, not the award. The arbitration agreement goes on to address a circuit court's power over the judgment confirming an award, stating: "However, after an order confirming the award is entered in the circuit court as a judgment pursuant to Sec. 788.09, and 802.12 Stats., the parties expressly agree that the circuit court has continuing jurisdiction of the matter, and either party may bring a motion to modify the judgment in the circuit court pursuant to Sec. 767.32 [relating to support] and Sec. 767.325 [relating to legal custody and physical placement]." (emphasis added). The words emphasized are superfluous unless they mean something other than that the circuit court may modify the judgment relating to support, legal custody, and physical placement. The dissent relies heavily on the very existence of the terms of the arbitration agreement but reads the emphasized words out of the agreement. See Justice Prosser's dissent, ¶ 100.

10 Our research indicates that very few courts have addressed the question of under what conditions may a judgment confirming an arbitral award may be opened.

Courts have concluded that Federal Rule of Civil Procedure 60(b), the analogue of Wis. Stat. § 806.07, can be used to open a judgment that confirms an arbitral award. In Baltia Air Lines, Inc. v. Transaction Management, Inc., 98 F.3d 640, 642 (D.C. Cir. 1996), the court concluded that "[a]lthough Rule 60(b) is an appropriate vehicle by which to challenge a judgment confirming an arbitration award, Baltia has not met the standards for relief under the rule." The Seventh Circuit has implicitly authorized the use of Rule 60(b) to modify judgments confirming arbitral awards. See Merit Ins. Co. v. Leatherby Ins. Co., 714 F.2d 673, 682-83 (7th Cir. 1983) (failing to provide relief from the judgment without suggesting that Rule 60(b) was not available). In Clarendon Nat'l Ins. Co. v. TIG Reinsurance Co., 183 F.R.D. 112, 117-18 (S.D.N.Y. 1998), Judge Robert Sweet concluded that Rule 60(b) may be used to modify the judgment of a circuit court's confirmation of an arbitral award, relying on the federal analogue to Wis. Stat. § 788.14(3), which provides that a judgment entered in conformity with an arbitral award has the "same force and effect, in all respects, as and be subject to all the provisions of law relating to, a judgment in an action."

In contrast, Federal Rule of Civil Procedure 60(b) has been viewed as not being available to modify an arbitral award, as distinguished from a judgment confirming an arbitral award. See, e.g., Washington-Baltimore Newspaper Guild v. Washington Post Co., 442 F.2d 1234, 1238-39 (D.C. Cir. 1971) (neither Rule 60(b) nor any of the other Federal Rules of Civil Procedure was designed to apply to arbitration awards); Hough v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 757 F. Supp. 283, 289-90 (S.D.N.Y. 1991) (courts may not use Rule 60(b) to overturn an arbitration award); Cook Chocolate Co. v. Salomon Inc., 748 F.Supp. 122, 125 (S.D.N.Y. 1990) (Judge Robert Sweet held that Rule 60(b) is unavailable to use to contest an arbitrator's decision).

11 prior to the adoption of this rule, parties had the option of using arbitration in family disputes as a means of arriving at an agreement. See Record of Supreme Court Public Hearing 93-13, Letter from Attorney Leonard Loeb to the Supreme Court (Oct. 28, 1993):

Arbitration may well already be available in Wisconsin under the existing common law, but the Bar and the litigants in the family law area are simply unaccustomed to considering it. A statute/judicial determination that clearly identifies arbitration as an available alternative, and describes the process for its use, would be of great help to the public and the Bar.

Id. at 1-2.

12 In this section, we address only that part of Wis. Stat. § (Rule) 802.12(3)(c) governing property division. We discuss the application of § (Rule) 802.13(3)(c) to attorney fees and allocation of income tax liability and the application of § (Rule) 802.12(3)(d) and (e) to arbitration of children's issues later in the opinion.

13 Wisconsin Stat. § 788.10 provides as follows:

(1). . . [T]he court in and for the county wherein the award was made must make an order vacating the award upon the application of any party to the arbitration:

(a) Where the award was procured by corruption, fraud or undue means;

(b) Where there was evident partiality or corruption on the part of the arbitrators, or either of them;

(c) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced;

(d) Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made.

14 Wisconsin Stat. § 788.11 provides:

(1) . .. [TJhe court in and for the county -wherein the award was made must make an order modifying or correcting the award upon the application of any party to the arbitration:

(a) Where there was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing or property referred to in the award;

(b) Where the arbitrators have awarded upon a matter not submitted to them unless it is a matter not affecting the merits of the decision upon the matters submitted;

(c) Where the award is imperfect in matter of form not affecting the merits of the controversy

15 The arbitration agreement provides that when an order confirming the award is entered the parties could seek appellate review and upon such an appeal the appellate court would not be limited to the grounds set forth in Wis. Stat. §§ 788.10 and 788.11. The parties did not seek appellate review of the order confirming the award, and this provision of the arbitration agreement is not relevant to this case.

16 See Wis. Stat. § 767.255(1).

17 LeMere v. LeMere, 2003 WI 67, ¶ 25, 262 Wis. 2d 426, 663 N.W.2d 789.

The arbitrator in the present case divided all known property and explicitly stated that he considered the applicable factors set forth in Wis. Stat. § 767.255 to determine whether any division other than an equal division should apply.

18 Section 767.255(3)(L) states in relevant part that:

(3)(L)... [a court may alter an equal division of property after considering] [a]ny written agreement made by the parties before or during the marriage concerning any arrangement for property distribution; such agreements shall be binding upon the court except that no such agreement shall be binding where the terms of the agreement are inequitable as to either party. The court shall presume any such agreement to be equitable as to both parties.

19 See also Wis. Stat. § 767.10 (authorizing parties to an annulment, divorce, or legal separation to stipulate to a division of property subject to the approval of the court). In Van Boxtel v. Van Boxtel, 2001 WI 40, ¶ 21-28, 242 Wis. 2d 474, 625 N.W.2d 284, the court ruled that separation agreements that are made after separation or in contemplation of separation are governed by § 767.10, not § 767.255(3)(L), and constitute a recommendation jointly made by the parties to the court regarding what the judgment should provide.

20 6A Corbin on Contracts § 1474 at 610 (1951).

21 Sherrer v. Sherrer, 334 U.S. 343, 358-60 (1948) (Frankfurter, J., dissenting). See also Shiffman v. Askew, 359 F. Supp. 1225, 1229-31 (M.D. Fla. 1973); American Law Institute, Principles of the Law of Family Dissolution § 7.02, Comment c (2002) ("Enforcement of agreements about the consequences of family dissolution therefore present a different policy question than enforcement of commercial agreements between persons who otherwise have no claims on one another's property or income.").

22 Perrenoud v. Perrenoud, 82 Wis. 2d 36, 39, 260 N.W.2d 658 (1978).

23 Van Boxtel, 242 Wis. 2d 474, ¶ 23; Button v. Button, 131 Wis. 2d 84, 94, 388 N.W.2d 546 (1986).

24 See, e.g., Van Boxtel, 242 Wis. 2d 474, ¶¶ 20-21; Rintelman v. Rintelman, 118 Wis. 2d 587, 599, 348 N.W.2d 498 (1984); Bergevin v. Bergevin, 168 Wis. 466, 470, 170 N.W 820 (1919); Polakowski v. Polakowski, 2003 WI App 20, ¶¶ 9-10, 259 Wis. 2d 765, 657 N.W.2d 102; Patrickus v. Patrickus, 2000 WI App 255, ¶¶ 10-11, 239 Wis. 2d 340, 620 N.W.2d 205; Ross v. Ross, 149 Wis. 2d 713, 718, 439 N.W.2d 639 (Ct. App. 1989).

25 Button, 131 Wis. 2d at 94 (concluding that a court must review an agreement under precursor to § 767.255(3)(L) for substantive fairness); Abitz v. Abitz, 155 Wis. 2d 161, 177, 455 N.W.2d 609 (1990) (noting that the court takes an active role in reviewing divorce stipulations to promote the stability and best interests of the family).

26 Miner v. Miner, 10 Wis. 2d 438, 443, 103 N.W.2d 4 (1960) (decided prior to adoption of § 767.255(3)(L)).

27 In the Supreme Court hearing on the adoption of Rule 802.12, Attorney Linda Balisle noted that the adoption of the rule would supplant the then-existing practice that the "divorcing parties may arbitrate any or all issues in their divorce. If, upon completion of the arbitration, they reduce the terms to a stipulation, the trial court reviews the stipulation as it does any other and affirms or modifies the stipulation." Record of Wisconsin Supreme Court Public Hearing 93-13, Linda S. Balisle, Remarks Regarding Petition for Alternative Dispute Resolution in Family Law Cases at 1 (on file with the Clerk of the Wisconsin Supreme Court, Madison, WI).

28 In the supreme court hearing on the adoption of Rule 802.12, Attorney Linda Balisle argued that circuit court review of an arbitral award would be limited by the adoption of the proposed rule:

The petition that is before this court would require the trial court to give deference to the arbitrator's award and would limit the trial court's ability to modify or vacate the award consistent with the provisions of Wis. Stat. secs. 788.10 and 788.11. Further, it would limit the Court of Appeals and the Supreme Court's review of these family law cases to the narrow issues of whether the trial court properly applied Secs. 788.10 and 788.11 in affirming or modifying an arbitrator's award.

This court's standard of review should not be restricted in family law cases to the application of the provisions of Secs. 788.10 and 788.11 when the arbitrator may have no special expertise in this area of the law, when there is no written record of the proceeding and when the law is still developing in all aspects of domestic relations.

Record of Wisconsin Supreme Court Public Hearing 93-13, Linda S. Balisle, Remarks Regarding Petition for Alternative Dispute Resolution in Family Law Cases at 1-2 (on file with the Clerk of the Supreme Court, Madison, WI).

29 Section 751.12 provides, inter alia, as follows:

751.12 Rules of pleading and practice. (1) The state supreme court shall, hy rules ... regulate pleading, practice, and procedure in judicial proceedings in all courts, for the purposes of simplifying the same and of promoting the speedy determination of litigation upon its merits. The rules shall not abridge, enlarge, or modify the substantive rights of any litigant.

30 In State v. Holmes, 106 Wis. 2d 31, 45 n.11, 315 N.W.2d 703 (1982), the Court was made aware of the possibility that use of its rulemaking power could have produced a substantive change in judge substitution requests. Because that question was not before the court in that case, we declined to consider it. Id.

31 DeBaker v. Shah, 194 Wis. 2d 104, 111, 533 N.W.2d 464 (1995) (the policy of this state favors arbitration).

32 Miner, 10 Wis. 2d at 442.

33 Ms. Franke properly filed her motion for relief from judgment within the one-year period prescribed by Wis. Stat. § 806.07(2).

34 State ex rel. M.L.B. v. D.G.H., 122 Wis. 2d 536, 541, 363 N.W.2d 419 (1985).

35 Hartung v. Hartung, 102 Wis. 2d 58, 66, 306 N.W.2d 16 (1981).

36 Long v. Long, 196 Wis. 2d 691, 695, 539 N.W.2d 462 (Ct. App. 1995). See also M.L.B., 122 Wis. 2d at 541; Shuput v. Lauer, 109 Wis. 2d 164, 177-78, 325 N.W.2d 321 (1982).

37 State v. Delgado, 223 Wis. 2d 270, 281, 588 N.W.2d 1 (1999).

38 Hedtke v. Sentry Ins. Co., 109 Wis. 2d 461, 471-72, 326 N.W.2d 727 (1982); Christensen v. Econ. Fire & Cas. Co., 77 Wis. 2d 50, 55-56, 252 N.W.2d 81 (1977).

A circuit court's decision in the exercise of discretion will not be disturbed by an appellate court unless an abuse of discretion is shown. If the record indicates that the circuit court failed to exercise its discretion, the circuit court has abused its discretion. When a circuit court exercises discretion, the record on appeal must reflect the circuit court's reasoned application of the appropriate legal standard to the relevant facts in the case. If this court's review of the record indicates that the circuit court applied the wrong legal standard in the exercise of its discretion or that the facts of record fail to support the circuit court's decision, the circuit court has abused its discretion. An appellate court may engage in its own examination of the record to determine whether the facts provide support for the circuit court's decision.

State v. DeSantis, 155 Wis. 2d 774, 777 n.1, 456 N.W.2d 600 (1990).

39 Combined Reply Brief and Response Brief of Respondent-Appellant and Cross-Respondent Martin T. Franke at 4.

40 Section 767.27(1) provides as follows:

767.27(1) Disclosure of assets required. In any action affecting the family, except an action to affirm marriage under s. 767.02(l)(a), the court shall require each party to furnish, on such standard forms as the court may require, full disclosure of all assets owned in full or in part by either party separately or by the parties jointly. Such disclosure may be made by each party individually or by the parties jointly. Assets required to be disclosed shall include, but shall not be limited to, real estate, savings accounts, stocks and bonds, mortgages and notes, fife insurance, interest in a partnership, limited liability company or corporation, tangible personal property, income from employment, future interests whether vested or nonvested, and any other financial interest or source. The court shall also require each party to furnish, on the same standard form, information pertaining to all debts and liabilities of the parties. The form used shall contain a statement in conspicuous print that complete disclosure of assets and debts is required by law and deliberate failure to provide complete disclosure constitutes perjury. The court may on its own initiative and shall at the request of either party require the parties to furnish copies of all state and federal income tax returns filed by them for the past 2 years, and may require copies of such returns for prior years.

41 The full text of § 767.27(2) provides:

Disclosure forms required under this section shall he filed within 90 days after the service of summons or the filing of a joint petition or at such other time as ordered by the court or circuit court commissioner. Information contained on such forms shall be updated on the record to the date of hearing.

42 Schinner v. Schinner, 143 Wis. 2d 81, 98, 420 N.W.2d 381 (Ct. App. 1988). See also Sommerfield v. Sommerfield, 154 Wis. 2d 840, 851, 454 N.W.2d 55 (Ct. App. 1990).

For special circumstances, see, e.g., Long v. Long, 196 Wis. 2d 691, 698, 539 N.W.2d 462 (Ct. App. 1995); Brandt v. Brandt, 145 Wis. 2d 394, 421-22, 427 N.W.2d 126 (Ct. App. 1988); (holding that "special circumstances" existed where a husband significantly depleted a checking account between the separation and the final divorce and that the separation date was a "meaningful date" for valuing the marital assets).

43 For discussions of "special circumstances," see, e.g., Finley v. Finley, 2002 WI App 144, ¶ 48, 256 Wis. 2d 508, 648 N.W.2d 536; Preiss v. Preiss, 2000 WI App 185, ¶¶ 20-22, 238 Wis. 2d 368, 617 N.W.2d 514; Long, 196 Wis. 2d at 698; Wikel v. Wikel, 168 Wis. 2d 278, 287, 483 N.W.2d 292 (Ct. App. 1992); Brandt, 145 Wis. 2d at 421-22.

44 Our previous decisions in Rintelman v. Rintelman, 118 Wis. 2d 587, 596 348 N.W.2d 498 (1984), and Nichols v. Nichols, 162 Wis. 2d 96, 100-101, 469 N.W.2d 619 (1991), support our conclusion that Ms. Franke is not estopped from seeking a change in the property division. The third of the four conditions elucidated in Rintelman, namely that the overall settlement be fair, equitable, and not against public policy at the time of the divorce judgment, is not satisfied in this case. The circuit court opened the property division in the divorce judgment, apparently concluding that the arbitration award was not fair and equitable.

45 The parties do not dispute that the circuit court has the power to open a divorce judgment incorporating a confirmed arbitral award on child support. See Wis. Stat. §§ 767.32, (Rule) 802.12(3)(d), (e) (treating awards relating to children differently from Rule 802.12(3)(c) regarding adult financial matters). Judicial Council Note, 1993, § (Rule) 802.12, Stats., comments as follows:

Subsection (3) sets forth several special considerations for family actions. Even when the parties consent to binding arbitration, the court retains the responsibility of ensuring that the arbitration award in custody, placement, visitation and support matters conforms to the applicable law. The court is not bound to confirm the arbitrator's award. Rather, it must review the arbitrator's decision in light of the best interest of the child. If following this review the court finds that the arbitration process and its outcome satisfy the requirements of all applicable statutes, the court may adopt the decision as its own.

The arbitration agreement also provided that the parties may seek to modify the divorce judgment pursuant to § 767.32.

46 "The division of marital property and the calculation of child support are matters generally left to the sound discretion of the circuit court. That discretion, however, must be exercised by applying correct legal standards." Cook v. Cook, 208 Wis. 2d 166, 171, 560 N.W.2d 246 (1997) (citations omitted); see also LeMere v. LeMere, 2003 WI 67, 262 Wis. 2d 426, 663 N.W.2d 789.

47 Luciani v. Montemurro-Luciani, 199 Wis. 2d 280, 309, 544 N.W.2d 561 (1996) (income disparity plays a role in determining whether a substantial change has occurred, but is not sufficient in itself); Raz v. Brown, 213 Wis. 2d 296, 305, 570 N.W.2d 605 (Ct. App. 1997) (although numbers themselves are not enough, disparity in discretionary income speaks to unfair division of amounts necessary for child care).

48 Pursuant to Wis. Stat. § 49.22(9), the DWD adopted the percentage standard of the payor's income to be used to determine child support. See Wis. Admin. Code § DWD 40.03(1) (Dec. 2003).

49 Wis. Stat. § 767.25(1m).

50 The Administrative Code provides:

[T]he payer's base shall be determined by adding together the payer's gross income available for child support under sub. (2), if appropriate, and the payer's imputed income for child support and dividing by 12. ... The percentage of the payer's base or adjusted base that constitutes the child support obligation shall be: (a) 17% for one child; (b) 25% for 2 children ....

Wis. Admin. Code § DWD 40.03(1) (Jan. 2003).

51 See Richmond v. Richmond, 2002 WI App 25, ¶ 12-13, 250 Wis. 2d 647, 640 N.W.2d 220 (circuit court's decision to modify child support payments was reversed and remanded because the record did not show that the circuit court considered the factors set forth in § 767.25(1m), or state its basis for adjusting payments and its reasons for the amount of modification).

52 Because all disputed attorney fees in this case arose after the divorce judgment, judicial review is governed by Wis. Stat. § 767.262(2) and not Rule 802.12(3)(c)(3).

53 Attorney fees rest primarily in the discretion of the circuit court. Martin v. Martin, 46 Wis. 2d 218, 221, 174 N.W.2d 468 (1970).

54 Modrow v. Modrow, 2001 WI App 200, 247 Wis. 2d 889, 903-04, 634 N.W.2d 852.

55 We treat the income tax liability as a debt to be considered in the property division. Accordingly, as we explained previously, the circuit court has authority to open the divorce judgment and determine the income tax liability.