In re the Marriage of: Bonnie Lynn Bauman, petitioner, Respondent, vs. Alan Bruce Bauman, Appellant.

In re the Marriage of: Bonnie Lynn Bauman, petitioner, Respondent, vs. Alan Bruce Bauman, Appellant. A05-2396, Court of Appeals Unpublished, August 8, 2006.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A05-2396

 

In re the Marriage of:

Bonnie Lynn Bauman, petitioner,

Respondent,

 

vs.

 

Alan Bruce Bauman,

Appellant.

 

Filed August 8, 2006

Reversed and remanded

Halbrooks, Judge

 

 

Cass County District Court

File No. 11-F6-03-000624

 

R. Daniel Rasmus, Gregory D. Luce, Christensen, Laue & Rasmus, 5101 Vernon Avenue South, Suite 400, Minneapolis, MN 55436 (for appellant)

 

John E. Valen, Valen Law Office, P.O. Box 1105, Walker, MN 56484 (for respondent)

 

 

            Considered and decided by Toussaint, Presiding Judge; Halbrooks, Judge; and Minge, Judge.

U N P U B L I S H E D   O P I N I O N

HALBROOKS, Judge

            Appellant challenges the district court's denial of his motion to reopen the dissolution judgment, arguing that the district court erred by applying the wrong standard for fraud on the court and by summarily dismissing appellant's motion without holding an evidentiary hearing on appellant's motion.  We conclude that the district court applied the correct standard for fraud.  But because appellant presented sufficient evidence to avoid summary judgment and because the district court impermissibly weighed the evidence in summarily denying appellant's motion, we reverse and remand for an evidentiary hearing.

FACTS

            Appellant Alan Bauman and respondent Bonnie Bauman married in 1981 and resided in Pine River, where they ran Al's Repair, an auto-repair business.  During their marriage, respondent handled the family's financial affairs.  She worked between 20 and 40 hours per week at Al's Repair, keeping the books for the business.  Respondent alone was in control of the family's finances.  Appellant testified that he never worked with the family checkbook and did not work with the business books until sometime in 2002. 

            The parties reached a marital termination agreement and divorced in 2003.  The marital estate was divided; respondent was awarded the homestead, while appellant received Al's Repair.  Among other aspects of the settlement, appellant was ordered to assume all of the parties' joint debts, including the homestead mortgage and various obligations from Al's Repair. 

            Nearly two years after entry of the dissolution judgment, appellant moved the district court for relief from the dissolution decree, alleging that respondent failed to disclose assets and income at the time of the dissolution.  Appellant alleged that respondent had skimmed tens of thousands of dollars from the auto-repair business and that she had hidden those assets from appellant during the dissolution proceedings.  Appellant moved the district court for an evidentiary hearing to determine whether respondent had hidden assets and for a modification of the property settlement based thereon.  Respondent opposed the request.

            Ruling that appellant's allegations, if taken to be true, do not amount to fraud on the court, the district court denied appellant's motion in its entirety.  This appeal follows.  The district court denied respondent's subsequent motion to find appellant in contempt of court, denied appellant's motion to proceed in forma pauperis on appeal, and stayed certain portions of the dissolution judgment and decree pending appeal. 

D E C I S I O N

I.

            Appellant argues that the district court erred by applying the wrong standard for fraud on the court, arguing that this court's decision in Doering v. Doering, 629 N.W.2d 124 (Minn. App. 2001), review denied (Minn. Sept. 11, 2001), eliminated the intent requirement for fraud on the court in the marital-dissolution context.  A reviewing court is not bound by and need not give deference to a district court's decision on a purely legal issue.  Modrow v. JP Foodservice, Inc., 656 N.W.2d 389, 393 (Minn. 2003).

            A judgment is generally final after the time to appeal has expired; in that case, the judgment may be modified only if it is reopened by the district court.  Minn. Stat. § 518.64, subd. 2(e) (2004); see Shirk v. Shirk, 561 N.W.2d 519, 522 (Minn. 1997) (stating that the "sole" relief from a dissolution judgment "lies in meeting the requirements of Minn. Stat. § 518.145, subd. 2 [for reopening a judgment]").  A judgment may be reopened for ordinary fraud or fraud on the court.  Minn. Stat. § 518.145, subd. 2(3) (2004) (ordinary fraud); id, subd. 2 (2004) (noting that the statute's requirements do not limit the district court's ability "to set aside a judgment for fraud upon the court").  A motion to reopen a judgment for ordinary fraud must be made within one year of judgment entry, while a motion to reopen a judgment for fraud on the court may be made more than one year after entry of the judgment.  See Minn. Stat. § 518.145, subd. 2 (establishing one-year limit for ordinary fraud, but not for fraud on the court); Maranda v. Maranda, 449 N.W.2d 158, 166 (Minn. 1989) (noting that "[i]n most cases, a year or two should suffice to discover the fraud").  The difference between the two types of fraud "is primarily a difference of degree," and the standard for reopening a judgment for ordinary fraud is less strenuous than that for fraud on the court.  Maranda, 449 N.W.2d at 165 (noting "difference of degree"); Doering, 629 N.W.2d at 128-29 (contrasting standards for fraud on the court and ordinary fraud).

            Because appellant brought his motion to reopen the dissolution judgment for fraud more than one year after entry of that judgment, the appropriate standard to apply here is that for fraud on the court.  See Minn. Stat. § 518.145, subd. 2.  The district court correctly noted its inherent power to reopen a dissolution decree when there has been a fraud on the court, citing to the description of fraud on the court set forth by the Minnesota Supreme Court in Maranda, 449 N.W.2d at 165:  "[F]raud on the court must be an intentional course of material misrepresentation or non-disclosure, having the result of misleading the court and opposing counsel and making the property settlement grossly unfair."  Appellant contends that the district court erred by applying the Maranda fraud standard, arguing that this court's decision in Doering eliminated the intent requirement for fraud on the court in the marital-dissolution context. 

            Doering involved a district court's denial of a motion to reopen a dissolution judgment that was made within one year of the entry of that judgment.  629 N.W.2d at 130.  There, the district court applied the standard for fraud on the court set forth in Kornberg v. Kornberg, 542 N.W.2d 379, 387 (Minn. 1996), and derived from Maranda, requiring "an intentional course of material misrepresentation."  Doering, 629 N.W.2d at 128 (quotation omitted).  Determining that the standard for ordinary fraud was applicable because the motion to reopen was brought within one year of the judgment's entry, this court held that "a motion to reopen a judgment for fraud requires the moving party to meet a lesser threshold than that required to reopen a judgment for fraud on the court."  Id.at 129.  We also held that "[o]rdinary fraud . . . does not require an affirmative misrepresentation or an intentional course of concealment because parties to a marriage dissolution have a duty to disclose all assets and liabilities completely and accurately."  Id.at 130.  Concluding that the district court had inappropriately employed the fraud-on-the-court standard, this court went on to state:

As noted above, it is not necessary in a marital-dissolution context to show that the adverse party intentionally failed to disclose all of the marital assets.  Because the confidential relationship between the parties creates an affirmative duty to disclose, nondisclosure is sufficient to establish a breach of that duty, without evidence of intent.

 

Id. at 131. 

            While appellant contends that, under Doering,fraud on the court in the marital-dissolution context does not require a showing of intent, that interpretation pits Doering in direct conflict with the definition of fraud on the court set forth by the Minnesota Supreme Court in Maranda.  Doering simply clarifies the standard for ordinary fraud and does not abdicate the intent requirement for fraud on the court.  See id. at 130.  Doering holds that, in the marital-dissolution context, intent is not a necessary element of ordinary fraud; itdoes not hold that intent is not a necessary element of fraud on the court.  Id.  The distinction is supported by Doering's express holding explaining that ordinary fraud has a less strenuous standard than fraud on the court.  Id.  This conclusion is also supported by the limited authority and role of this intermediate appellate court.  See, e.g., Lake George Park, L.L.C. v. IBM Mid-America Employees Fed. Credit Union, 576 N.W.2d 463, 466 (Minn. App. 1998) ("This court, as an error correcting court, is without authority to change the law."), review denied (Minn. June 17, 1998). 

            We, therefore, reject appellant's argument that Doering eliminated the intent requirement for fraud on the court and conclude thatthe district court correctly determined that fraud on the court requires a showing of intent.  See, e.g., Kornberg, 542 N.W.2d at 387 (citing Maranda, 449 N.W.2d at 165). 

II.

            While most motions in family law cases are decided without an evidentiary hearing, motions to reopen brought under Minn. Stat. § 518.145, subd. 2, may not be disposed of summarily unless they meet the criteria for summary judgment.  Doering, 629 N.W.2d at 130.  Thus, "[a] district court may summarily dispose of a fraud claim (i.e., grant summary judgment) only where there is no genuine issue of material fact in dispute and where a determination of the applicable law will resolve the controversy."  Id. (quotation omitted).  The district court "may not weigh the evidence" when determining the appropriateness of summary judgment, but "must view the evidence in the light most favorable to the nonmoving party."  Id.

            Appellant presented to the district court evidence that respondent may have "skimmed" money from Al's Repair during the marriage, including business records showing money missing from cash deposits and respondent's deposition testimony that she destroyed certain financial records so that appellant would not know where money had gone and that she falsified business records to hide certain transactions she did not want appellant to know about.  Appellant alleges that respondent hid that money during the dissolution proceedings, resulting in a "lopsided property settlement."  But the district court determined that

taking [appellant's] allegations as true, [appellant] has not shown that [respondent] committed fraud on the Court.  Although the Court strongly disapproves of a less than full disclosure of income, considering that the business records of Al's Repair were available to both parties and that the income generated by the business was duly recorded in its business records, the allegations do not rise beyond ordinary fraud to the level of fraud on the court.

 

            In deciding whether a claim should be summarily dismissed, the district court "may not weigh the evidence."  Doering, 629 N.W.2d at 130.  Here, the district court's determination clearly shows that the court impermissibly weighed the evidence, particularly the availability of the business records and the recordation of business income.  Appellant presented a genuine issue of material fact as to whether respondent engaged in an intentional course of non-disclosure concerning the parties' financial situation, and the district court should have held an evidentiary hearing to determine the merits of that claim.  We therefore reverse and remand to the district court for an evidentiary hearing on appellant's motion.

III.

            Respondent seeks attorney fees on appeal.  A motion for attorney fees must be made in a separate motion to this court, and respondent has not made such a motion.  See Minn. R. Civ. App. P. 139.06, subd. 1.  Because respondent did not file a proper motion for fees, the request for fees on appeal is not properly before this court.

            Reversed and remanded.