In re the Marriage of: Heather Santilli Gamble v. John Stebbins Gamble

• Court: Court of Appeals of Minnesota
• Decided: July 21, 2014
• Docket: A13-2182
• Status: Unpublished

Opinion

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2012).

STATE OF MINNESOTA IN COURT OF APPEALS A13-2182

In re the Marriage of: Heather Santilli Gamble, petitioner, Appellant,

vs.

John Stebbins Gamble, Respondent.

Filed July 21, 2014 Affirmed; motion granted Hudson, Judge

Olmsted County District Court File No. 55-FA-10-7298

Suzanne L. Peterson, Jenny L. Nelson, Swisher Law Firm, Rochester, Minnesota (for appellant)

Mary H. Dunlap, Dunlap & Seeger, P.A., Rochester, Minnesota (for respondent)

Considered and decided by Hudson, Presiding Judge; Halbrooks, Judge; and

Smith, Judge. UNPUBLISHED OPINION

HUDSON, Judge

In this post-dissolution dispute, appellant-wife argues that (a) the dissolution

judgment should be reopened based on fraud, fraud on the court, or duress and (b) the

award of maintenance to husband should be decreased because his needs have decreased

and his income and wife’s cost of living have increased. We affirm. We also grant

respondent’s motion to strike a portion of appellant’s supplemental addendum.

FACTS

The district court dissolved the eleven-year marriage of appellant Heather Santilli

Gamble and respondent John Stebbins Gamble in May 2012. The parties were granted

joint legal custody of their three minor children; respondent was granted sole physical

custody, subject to liberal parenting time for appellant. Appellant worked full time as a

business analyst at Mayo Clinic with an approximate gross monthly income of $5,600;

respondent worked overnight as a direct support specialist at Hiawatha Homes, with an

approximate gross monthly income of $1,408. Respondent also cared for the children

during the day.

The parties first separated in 2010, when appellant initially moved from the

homestead. At a hearing in March 2012, counsel read a settlement agreement into the

record; appellant’s attorney stated that the parties were attempting to reconcile, but if that

was unsuccessful, she would draft the agreement for their approval and submit it to the

district court. About a month later, appellant returned to the homestead. Her attorney

then requested to withdraw, based on appellant’s request to sign an agreement that

2 differed substantially from the original proposed settlement. At a hearing in early May

2012, the district court allowed appellant’s counsel to withdraw and granted appellant’s

request to proceed pro se. Appellant executed a waiver of her right to counsel.

About two weeks later, respondent’s attorney presented a revised stipulation,

which was approved by the district court at a default hearing. The resulting judgment

contained findings showing that, based on the parties’ respective gross incomes, appellant

was able to meet her needs while contributing to respondent’s support and that

respondent was in need of, and entitled to, maintenance of $2,100 per month until the

youngest child graduated from high school or further court order. No child support was

ordered, and the parties were to share the children’s expenses equally, including

household expenses. The district court awarded respondent the parties’ homestead and

its associated mortgage, subject to appellant’s sharing the mortgage payment. Appellant

was ordered to transfer $20,500 of her retirement plans to respondent and to pay a portion

of respondent’s attorney fees.

Within a year, appellant moved permanently from the homestead. In April 2013,

represented by a new attorney, she moved to reopen the judgment or to reduce

maintenance. She maintained that she had been without counsel when the final

stipulation was approved; that the property distribution was unequal; and that respondent

had a decreased need for maintenance because he was receiving monthly funds from his

mother and had not disclosed additional distributions from a family trust. She asserted

that she had once filed for an order for protection against respondent and that he had

acted in a directive and authoritarian manner toward her.

3 Respondent opposed the motion. He argued that appellant’s allegations of abuse

related to a period before the parties’ initial separation, that their disagreements over

parenting styles did not establish duress, and that appellant initiated the revision to their

agreement and allowed her attorney to withdraw. He asserted that appellant had depleted

her resources on family expenses during the dissolution. He maintained that, although

$20,000 from the trust was available for him to withdraw, he had not done so; that a

$100,000 inheritance from his father was a non-marital asset; and that his mother’s

monthly mortgage payments were not income, but payments on a loan against his future

inheritance.

The district court denied the motion to reopen the judgment. The district court

reasoned that the record lacked evidence of fraud or duress because appellant chose a

path contrary to her attorney’s advice, allowed counsel to withdraw, renewed settlement

negotiations, acknowledged a fair stipulation, and chose not to attend the default hearing.

The district court found that appellant’s emotional and chemical-dependency issues may

have affected her approach to negotiations, but that any duress was self-induced, and that

her fraud claim was based on respondent’s receipt of public assistance, which was

irrelevant. The district court also declined to modify maintenance, finding that, although

appellant asserted changed circumstances of her household expenses, other alleged events

occurred before the judgment and were previously known, and that the parties failed to

submit sufficient information on their resources and inability to meet needs

independently to allow consideration of that issue. This appeal follows.

4 DECISION

I

This court reviews a district court’s decision whether to vacate a dissolution

judgment for an abuse of discretion, which requires that the district court’s ruling be

against logic and the facts on record. Kornberg v. Kornberg, 542 N.W.2d 379, 386

(Minn. 1996); Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984). The district court

treats a motion to reopen a dissolution judgment as it would a complaint in a separate

action alleging fraud, and may not summarily dispose of the motion unless there is no

genuine issue of material fact in dispute. Doering v. Doering, 629 N.W.2d 124, 130

(Minn. App. 2001), review denied (Minn. Sept. 11, 2001).

“The legislature . . . has recognized the importance of finality in dissolution

proceedings by setting forth specific circumstances that must be present for a party to be

relieved of the terms of a judgment.” Shirk v. Shirk, 561 N.W.2d 519, 522 (Minn. 1997).

By statute, these circumstances include mistake, fraud, or “other misconduct of a party.”

Minn. Stat. § 518.145, subd. 2 (2012). Although a stipulation may be vacated before the

entry of judgment if it is improvidently made and ought not to stand in equity and good

conscience, once judgment has been entered, “different circumstances arise, as the

dissolution is now complete and the need for finality becomes of central importance.”

Shirk, 561 N.W.2d at 522. Thus, the sole way to seek relief from a stipulation after

judgment requires meeting the requirements of Minn. Stat. § 518.145. Id..

Appellant argues that the district court abused its discretion by declining to vacate

the judgment based on ordinary fraud. Ordinary fraud in a dissolution context relates to a

5 party’s failure to fully and accurately disclose assets and does not require an affirmative

misrepresentation or intentional course of concealment. Doering, 629 N.W.2d at 130.

Appellant argues that respondent had a higher income and more financial resources than

he initially disclosed to her and to Olmsted County Community Services in applying for

food assistance. She argues that he received continuing income of rent, mortgage, and

expense payments from his mother, as well as $120,000 within a three-year period from a

family trust, and that, by failing to disclose these payments, he was able to obtain a larger

property settlement and maintenance.

But the district court found appellant’s affidavit to be not credible. See Hestekin v.

Hestekin, 587 N.W.2d 308, 310 (Minn. App. 1998) (noting that appellate courts defer to

the district court’s resolution of factual issues presented by conflicting affidavits). The

district court appropriately determined that respondent’s application for and receipt of

food-assistance payments, which occurred during the parties’ separation, had no genuine

bearing on the issues in the dissolution. And the district court did not err by concluding

that appellant failed to establish a material factual issue on nondisclosure of income or

assets from respondent’s family. The rent payment from respondent’s mother related to a

homestead addition in 2009, when appellant was still living in the homestead.

Respondent furnished a written loan agreement to support his argument that the mortgage

payments made by his mother were a loan on his future inheritance. And he has asserted

that trust funds became available to him only in 2013, after the entry of judgment. Even

if a material issue existed on the timing of the trust distribution, appellant has failed to

raise a material factual issue on whether any such distribution was marital property,

6 rather than an inheritance to respondent alone. See Minn. Stat. § 518.003, subd. 3b(a)

(2012) (defining nonmarital property as property acquired during the marriage “as a gift,

bequest, devise or inheritance made by a third party to one but not to the other spouse”).

Appellant also argues that the judgment should be vacated based on fraud on the

court. Intrinsic fraud, or fraud on the court, relates to “matters involving the court

proceedings such as perjured testimony.” Doering, 629 N.W.2d at 129 n.1 (quotation

omitted). Fraud on the court requires a showing of intentional material misrepresentation

or nondisclosure, which misleads the court and the opposing party and “mak[es] the

property settlement grossly unfair.” Maranda v. Maranda, 449 N.W.2d 158, 165 (Minn.

1989). Appellant argues that, at the default hearing, respondent intentionally made

misleading statements to the court about settlement negotiations. At the hearing,

respondent’s attorney inquired, “up until recently, your wife had been represented so

[the] settlement discussions actually went through counsel, is that correct?” Respondent

replied, “Yes.” He also replied in the affirmative when his attorney asked whether the

parties had attended mediation and whether “[that was] reflected in this document that

both you and your wife have signed.” Appellant argues that respondent intentionally

misrepresented that appellant was represented by counsel during settlement discussions

and that the stipulation reflected a mediated agreement. The record shows that appellant

was in fact acting pro se and had waived the right to counsel. Although the district court

could have asked respondent additional questions to clarify the relevant timeframe of his

comments, respondent’s lack of specificity about the context of settlement negotiations

7 does not show that he intentionally misled the district court about the stipulation, which

also contained language stating that the parties agreed that it was fair, just, and equitable.

Appellant further argues that she agreed to the settlement under duress. Duress

may amount to “other misconduct of an adverse party,” which warrants reopening a

judgment under Minn. Stat. § 518.145, subd. 2(3). See Haefele v. Haefele, 621 N.W.2d

758, 762 (Minn. App. 2001) (listing duress as a basis for reopening a judgment), review

denied (Minn. Feb. 21, 2001). Duress implies taking advantage of a party’s mental or

emotional condition, see Lindsey v. Lindsey, 388 N.W.2d 713, 715–16 (Minn. 1986), or

“undue pressure” coupled with abusive behavior, see Hestekin, 587 N.W.2d at 310.

Appellant argues that respondent’s history of abuse and authoritarian control exerted

undue pressure on her to accept the revised stipulation, which was drafted by respondent

and his attorney without her input. The district court found that, because the alleged

intimidation by respondent occurred before the parties’ separation, it is irrelevant to the

settlement negotiations. On this record, that finding is not clearly erroneous. Similarly,

respondent’s conduct resulting in a domestic-abuse restraining order, which was obtained

several months after the judgment, is not relevant to the parties’ pre-judgment

negotiations.

In addition, appellant’s attorney withdrew from representation after advising the

district court that she disagreed with appellant’s decision to sign the stipulation.

Appellant signed a waiver of her right to counsel and proceeded without an attorney.

“[T]here is nothing inherently coercive or fraudulent about knowingly choosing to

proceed without counsel and, as a result, being somewhat intimidated by being forced to

8 deal directly with another party’s attorney.” Toughill v. Toughill, 609 N.W.2d 634, 640

(Minn. App. 2000). Although appellant alleges that she felt pressure to give in to

respondent’s terms, the district court found her version of events not credible, and we

defer to the district court’s ability to determine credibility based on the parties’ affidavits.

Hestekin, 587 N.W.2d at 310.

We recognize that, in a dissolution matter, the district court has a duty to protect

both parties’ interests and ensure that a stipulation is fair and reasonable. Kielley v.

Kielley, 674 N.W.2d 770, 777 (Minn. App. 2004). “But vacation is not an appropriate

remedy to deal with unanticipated consequences of a settlement or inexcusable mistake.”

Hestekin, 587 N.W.2d at 310. Appellant did not challenge the settlement agreement until

after judgment was entered and she had difficulty meeting her financial obligations under

that judgment. Because she did not demonstrate material facts tending to satisfy the

requirements of Minn. Stat. § 518.145, the district court did not abuse its discretion by

declining to vacate the judgment.

II

Appellant argues that the district court abused its discretion by denying her motion

to decrease maintenance. This court reviews a district court’s decision relating to

maintenance modification for an abuse of discretion. See Hecker v. Hecker, 568 N.W.2d

705, 709–10 (Minn. 1997). Before the district court may modify a spousal-maintenance

award, the moving party must provide clear proof that, since the spousal-maintenance

obligation was established or last modified, a substantial change of circumstances has

occurred that renders the award unreasonable and unfair. Minn. Stat. § 518A.39, subd. 2

9 (2012); Beck v. Kaplan, 566 N.W.2d 723, 726 (Minn. 1997). Factors supporting

maintenance modification include “substantially increased or decreased gross income of

an obligor or obligee” and “substantially increased or decreased need of an obligor or

obligee.” Minn. Stat. § 518A.39, subd. 2. The circumstances that existed when the

stipulated judgment was entered serve as “the baseline circumstances against which

claims of substantial change are evaluated.” Hecker, 568 N.W.2d at 709.

The district court denied the motion to reduce maintenance, finding that some of

the events appellant claims support her motion occurred before the entry of judgment and

that the parties failed to submit sufficient information about their respective resources and

ability to meet their needs. The record supports the district court’s denial of the motion.

Appellant had the burden to show both a substantial change in circumstances and

unfairness and unreasonableness because of that change. Id. Although she presented

information that, because she left the homestead, her rent and household expenses had

increased since the judgment, she furnished no information on how decreasing

maintenance would affect respondent’s ability to meet his household needs. In light of

the insufficient submissions on the issue of maintenance modification, the district court

did not abuse its discretion by denying the motion.

On appeal, respondent moved this court to strike an affidavit contained in

appellant’s supplemental addendum. This affidavit, which was submitted to the district

court in another action between the parties, is not a part of the record in this case. See

Minn. R. Civ. App. P. 110.01 (stating that the papers filed in the district court, the

exhibits, and the transcript of the proceedings shall constitute the record on appeal). “An

10 appellate court may not base its decision on matters outside the record on appeal, and

may not consider matters not produced and received in evidence below.” Thiele v. Stich,

425 N.W.2d 580, 582–83 (Minn. 1988). Because the affidavit is not contained in the

district court record, it is not properly before this court, and we grant respondent’s motion

to strike it.

Affirmed; motion granted.