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T. Lowe v. L. Lowe (7/26/91), 817 P 2d 453
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Notice: This is subject to formal correction before
publication in the Pacific Reporter. Readers are
required to bring typographical or other formal errors
to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, in order that
corrections may be made prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
TOMMY R. LOWE, )
)
Appellant, ) Supreme Court File
) No. S-3869
v. ) Superior Court No.
) 3AN-84-7148 CI
LINDA R. LOWE, )
) O P I N I O N
Appellee. )
) [No. 3726 - July 26, 1991]
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Anchorage,
Victor D. Carlson, Judge.
Appearances: J. Mitchell Joyner,
Anchorage, for Appellant. Charlene A.
Lichtmann, Anchorage, for Appellee.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton and Moore, Justices.
COMPTON, Justice.
Tommy R. Lowe and Linda R. Lowe obtained a Decree of
Dissolution of Marriage from the superior court on September 19,
1984. On May 26, 1989, over four and a half years later, Linda
filed a motion for relief from judgment pursuant to Alaska Rule
of Civil Procedure 60(b). She asked the superior court to set
aside the property division which was incorporated into the
dissolution decree and to award her a share of Tommy's military
retirement benefits. The superior court amended the decree and
awarded Linda one-half of Tommy's entitlement to military
retirement benefits that had accrued during the marriage. The
court also ordered Tommy to pay Linda $359.60 per month in child
support and awarded Linda costs and attorney's fees. We remand
for a determination of whether Linda's Rule 60(b) motion was
brought within a reasonable time.
I. FACTUAL AND PROCEDURAL BACKGROUND
Linda and Tommy were married on November 6, 1965, and
lived together until after the dissolution of their marriage on
September 19, 1984. They have two children: Tony, born August
8, 1969; and Tiffany, born November 11, 1974.
Linda and Tommy filed a Petition for Dissolution of
Marriage, signed by both of them, on August 2, 1984. At the time
they signed the petition, Tommy was unemployed and receiving
military retirement and disability benefits of $728 a month,
entitlement to most of which had accrued during the marriage.
Linda had a full-time job which netted $1,186 per month, with no
retirement benefits. They owned a house in Abilene, Texas, the
value of which they disputed.1 Tommy and his two brothers were
partners in several oil leases, the values of which they also
disputed.2 Linda and Tommy also owned a car and some household
furnishings.
Prior to petitioning for dissolution, Tommy sought
legal advice from the Judge Advocate General's (JAG) office on
Elmendorf Air Force Base. Linda did not obtain independent legal
advice, though she may have accompanied Tommy to the JAG office.
Tommy filled in most of the petition, but Linda filled in some
information about household furnishings. In the space for
listing marital assets, no mention was made of either Tommy's
retirement benefits or the house in Texas. However, in the space
provided for husband's income per month, $728.00 was written in.
The petition lists the value of the oil leases at $40,000, but
allegedly this figure was added in after Linda signed the
petition.
Linda signed a quitclaim deed for the Texas house when
she signed the dissolution petition. She testified that Tommy
told her they could not get a divorce unless she signed it and
that he needed her to sign it in order to sell the house. She
testified that she thought she still had a one-half interest in
the house in accordance with an alleged oral agreement between
the parties. The petition proposed that the oil leases,
the car, and some household furnishings be awarded to Tommy, and
some household furnishings to Linda. The oil leases and the car
were listed as Tommy's separate property. The petition provided
that Tommy would be responsible for over $7,000 in debts. It
also provided that Tommy would pay $4,000 to Linda as the down
payment on a mobile home. Finally, the petition provided that
Tommy would pay Linda $150 per month per child for child support
and that he could claim the children as dependents for income tax
purposes. Linda and Tommy agreed that they would have joint
legal custody of the children, with Tommy having physical custody
during the school year and Linda having physical custody during
the summer.
Tommy attended the dissolution hearing but Linda did
not, apparently because she had to work. Linda signed a waiver
of appearance stating that she agreed to all the terms of the
petition. Tommy told the Master that the petition listed all the
parties' property, debts, and financial agreements. He also
stated that his wife had no interest in the oil leases. The
superior court approved the petition on the Master's
recommendation and entered a decree of dissolution, effective
September 19, 1984. In July 1987 Linda retained counsel
and filed a motion to modify and enforce the decree of
dissolution. She sought modification of the child custody
agreement to give her legal custody of their daughter Tiffany3
during the school year. Despite the decree, Linda had retained
physical custody of the children during all school years since
the divorce; they lived with Tommy during only the summers.
Linda asked that she be allowed to claim Tiffany and Tony as
dependents for income tax purposes because she actually provided
more than half their support.4 Linda asserted that she and Tommy
had an oral agreement at the time of dissolution whereby Tommy
would sell the Texas home and give her half the profits, if any.
Since it appeared Tommy was not making any effort to sell the
house, she asked that he purchase her half for $18,000. Lastly,
she asked that the court increase Tommy's child support payments
for Tiffany.
Tommy opposed the modification and the case proceeded
for almost two years.5 On May 26, 1989, after the modification
and enforcement case was set for hearing, Linda filed a new
motion for relief from judgment pursuant to Alaska Civil Rule
60(b). She asked the court to set aside the property settlement
and to award her a share of Tommy's military retirement benefits.
Linda asserted that at the time of the dissolution she agreed to
give up the retirement benefits in exchange for half the proceeds
from the sale of the house, but that Tommy never intended to sell
the house and allowed it to deteriorate.
Trial on the issues of back child support and property
division was held September 18, 1989. Superior Court Judge
Victor D. Carlson found that the military retirement was not
disposed of in the dissolution, and that Linda was entitled to
half of the benefits accrued during the marriage. In his oral
ruling, he stated that the proceeding "comes within the
provisions of" Civil Rule 60(b)(6), although the rule is not
mentioned in his written decision. He found that the house had
been disposed of in the dissolution, finding that the $4,000 to
have been paid to Linda under the dissolution decree was in
exchange for her interest in the house. He also found that Tommy
never paid $3,500 of the $4,000. Judge Carlson further
determined that Linda was entitled to $359.60 per month in back
child support for Tiffany from the date Linda filed the petition
to increase support through the effective date of the order
(August 1987 through October 1988). Apparently the extent of
retroactive support was due in part to Tommy's delay in
submitting financial information to opposing counsel. Finally,
the superior court determined that Linda was the prevailing party
and thus entitled to attorney's fees and costs. Tommy appeals.
II. DISCUSSION
A. Did the Trial Court Err in Granting Relief
Under Civil Rule 60(b)?
Alaska Statute 25.24.160(a) provides the statutory
authority for a court to adjudicate property rights. However,
AS 25.24.160(a) does not authorize a court to dispose of assets
on a piecemeal basis where, as here, the parties' property rights
have been purportedly adjudicated and incorporated into a final
judgment. As this is not an initial adjudication of the parties'
property rights, relief may be granted only within the parameters
of Civil Rule 60(b).6
We will not disturb a trial court's grant of a Rule
60(b) motion except upon a showing of an abuse of discretion.
Gravel v. Alaskan Village, Inc., 423 P.2d 273, 277 (Alaska 1967).
"On the other hand, whether the trial court applied the
appropriate legal standard in exercising its broad discretion is
a question of law regarding which this court may substitute its
independent judgment on appeal." Laing v. Laing, 741 P.2d 649,
651 (Alaska 1987). Under Alaska Civil Rule 6(b), the
superior court lacks subject matter jurisdiction to set aside
judgments unless a motion is made within the Rule 60(b) time
limits. O'Link v. O'Link, 632 P.2d 225, 226-27 n.2 (Alaska
1981). If the motion is based on grounds listed under
subsections (1) through (3) of Rule 60(b), it must be brought
"not more than one year after"the final judgment.7 The
superior court granted Linda's motion based on subsection (6) of
Rule 60(b), which gives the court the power to set aside a
judgment for "any other reason justifying relief from the
operation of the judgment." A motion under subsection (6) is not
subject to the one year time limit, but still must be brought
within a "reasonable time." Id. at 229. We have previously
explained the circumstances under which subsection (6) may be
invoked:
Clause (6) and the first five
clauses of Rule 60(b) . . . are mutually
exclusive. Relief under clause (6) is not
available unless the other clauses are
inapplicable. Clause (6) is reserved for
extraordinary circumstances not covered by
the preceding clauses. The purpose of the
clause has been described as follows:
In general, relief is
given under clause (6) in cases in
which the judgment was obtained by
the improper conduct of the party
in whose favor it was rendered or
the judgment resulted from the
excusable default of the party
against whom it was directed under
circumstances going beyond the
earlier clauses of the rule. . . .
. . . The broad
power granted by clause (6) is not
for the purpose of relieving a
party from free, calculated, and
deliberate choices he has made. A
party remains under a duty to take
legal steps to protect his own
interests.
Id. at 229-30 (quoting 11 C. Wright & A. Miller, Federal Practice
and Procedure 2864, at 213-14 (1973)) (footnotes and citations
omitted).
Linda makes several arguments in support of her Rule
60(b)(6) motion. First, she argues that she did not know that
she was entitled to a portion of the retirement benefits and that
she did not know what they were worth. Even if true, these
assertions amount to a claim of mistake or inadvertence under
subsection (1), and are barred by the one year time limit.
Second, Linda argues that Tommy lied to the court at
the dissolution hearing by not disclosing the existence of the
retirement benefits or the marital home and by telling the court
that Linda had no interest in the oil leases, evidence of which
Linda allegedly had no knowledge until 1989 when she read a
transcript of the dissolution hearing. Even if true, these
assertions amount to a claim of fraud, misrepresentation, or
other misconduct under subsection (3), or a claim of newly
discovered evidence under subsection (2), and are barred by the
one year time limit.8
Third, Linda argues that she was pressured into
forgoing the retirement benefits because Tommy "threatened to
fight her with every dime he had." This does not amount to the
"extraordinary circumstances"justifying relief under subsection
(6) of Rule 60(b). Linda remained under a duty to take legal
steps to protect her interests. Tommy's alleged threat amounted
at most to a strong assertion that he intended to use every
available legal means to protect his interests. Linda offered no
excuse for her own neglect, except that she could not receive
free legal advice on Elmendorf Air Force Base because Tommy had
already consulted the JAG office there.9 The circumstances
complained of do not rise to the level of duress or coercion, a
possible basis for relief under subsection (6) of Rule 60(b).
See Gravel, 423 P.2d at 275-76 (record did not support
appellant's contention that he was deprived of his free will and
induced to settle his case under coercion and duress). But see
J.C. v. M.L.C., 668 P.2d 1351, 1352 (Alaska 1983) (alleged
threats are essentially a claim of duress, which fall within
subsection (3)).10
Lastly, Linda argues that initially she indicated Tommy
should have the retirement benefits because he was supposed to be
taking care of the children during the school year and would need
the money, but that such an underlying basis for any agreement
was undermined when Tommy did not take the children.11 There is
no dispute that the dissolution petition provided that Tommy
would have primary custody of the children and that Linda in fact
had primary custody after the dissolution. This provides a valid
basis for modifying the dissolution decree under subsection (6)
of Rule 60(b). In Schofield v. Schofield, 777 P.2d 197 (Alaska
1989), and Foster v. Foster, 684 P.2d 869 (Alaska 1984), we
enunciated four factors which constitute "extraordinary
circumstances" justifying relief under Rule 60(b)(6) from a
property division. Those factors were: (1) the fundamental,
underlying assumption of the dissolution agreement had been
destroyed; (2) the parties' property division was poorly thought
out; (3) the property division was reached without the benefit of
counsel; and (4) the marital residence was the parties' principal
asset. Schofield, 777 P.2d at 202.
In Foster, the parties had agreed to continue as co-
owners of the marital home and to split the equity upon sale.
684 P.2d at 871. The underlying assumption which was destroyed
was that the parties would continue to live together in the
marital home with their children after the dissolution. Id. In
Schofield, the dissolution decree awarded the marital home to the
husband. 777 P.2d at 198-99. The underlying assumption which
was destroyed was that the husband would have custody of the
Schofield children. Id. at 200-02.
In this case, Linda signed the dissolution petition
based on the assumption that Tommy would have primary physical
custody of their children. This assumption was destroyed from
the outset because Tommy never had primary physical custody of
the children.
The second and third factors listed in Schofield are
also present here because the property division was poorly
thought out and made without the assistance of counsel, at least
on Linda's part. Finally, the superior court found that the
military retirement benefits were a major asset of the parties'
marriage, thus satisfying the fourth requirement of Schofield.
Nevertheless, a motion under subsection (6) of Rule
60(b) must be made within a "reasonable time." Schofield, 777
P.2d at 202. We cannot say that a motion for relief made four
and a half years after entry of judgment is per se unreasonable.
See id. (Rule 60(b)(6) motion made eight years after judgment was
made within a reasonable time.). Since the superior court made
no reference to the timeliness of Linda's motion in either its
oral or written decision, we remand the case to the superior
court for a determination of whether Linda's motion was made
within a reasonable time. In determining what is a reasonable
time for purposes of Rule 60(b), the superior court should take
into account the purposes of the rule: "Rule 60(b), in its
entirety, attempts to preserve the delicate balance between the
conflicting principles that litigation be brought to an end and
that justice be done in light of all the facts." Livingston, 572
P.2d at 85. It is undisputed that the key fact justifying
relief, that the children did not go to live with Tommy as
contemplated, arose immediately after the dissolution.
B. Did the Trial Court Err in Calculating
Child Support?
We find merit to Tommy's argument that his child
support obligation under Alaska Civil Rule 90.3 should take into
account the qualified domestic relations order awarding Linda a
portion of his military retirement benefits. The order by its
terms took effect September 18, 1989, therefore any child support
calculation up until that date was correct. However, if the
order is allowed to stand on remand, the child support must be
recalculated.
Rule 90.3(a) provides in part:
A child support award in a case in which
one parent is awarded sole or primary
physical custody as defined by paragraph (f)
will be calculated as an amount equal to the
adjusted annual income of the non-custodial
parent multiplied by a percentage specified
in subparagraph (a)(2).
(1) Adjusted annual income as used in
this rule means the parent's total income
from all sources . . . .
Clearly any portion of Tommy's retirement which is paid to Linda
should not be considered and is not income to Tommy for purposes
of this rule.
In Bergstrom v. Lindback, 779 P.2d 1235, 1237 (Alaska
1989), we held that a prospective child support obligation
calculated under Rule 90.3 must include actual earnings:
[T]he superior court's determination of
prospective child support was based on the
erroneous assumption that Lindback would not
teach during the fall of 1987. . . . We
conclude that the superior court erred in
failing to include Lindback's actual 1987
earnings in her adjusted annual income to
determine the prospective child support
award.
A child support obligation under Rule 90.3 must be based on the
parent's actual adjusted annual income.
C. Did the Trial Court Err in Awarding
Linda Attorney's Fees?
Tommy asserts that the superior court erred in awarding
Linda $7,000 of her requested $9,171.06 in attorney's fees.
Linda argues that the award was proper given her prevailing party
status, their disparate incomes, and Tommy's wrongdoing. We
review a trial court's award of attorney's fees under Alaska
Civil Rule 82 for abuse of discretion. O'Link, 632 P.2d at 231.
The attorney's fees award must be vacated if Tommy
prevails on remand. The divorce judgment exception to Rule 82
does not apply to post-judgment modification and enforcement
motions. L.L.M. v. P.M., 754 P.2d 262, 264 (Alaska 1988). Fees
are appropriately awarded under the prevailing party standard of
Rule 82 for post-judgment money and property issues. Id. The
parties' relative economic positions are irrelevant under Rule
82.
Linda's attorney's itemized billing includes all work
done on the case, including the custody and visitation issues.
Work on those issues is not properly chargeable to Tommy under
Rule 82. If Linda prevails on remand, the court must accordingly
reconsider the attorney's fee award.
REVERSED and REMANDED for further proceedings
consistent with this opinion.
_______________________________
1 Linda and Tommy bought the house in 1978 by assuming a
mortgage of $36,600. At dissolution the balance of the mortgage
was about $34,000. Linda thought the house was worth $60,000
because it had been up for sale for that amount. Tommy testified
that it did not sell at that price or after he lowered the price
to the "high forties." The parties stipulated that it was
appraised for tax purposes at the time of dissolution at $51,000.
2 Tommy asserts that at the time of dissolution, the oil
business was $40,000 in debt, and that if he filled in the value
as $40,000 on the dissolution petition it was meant to be
negative. The leases have since been repossessed by the bank.
Linda testified that she had no idea what they were worth in
1984.
3 Tony was enrolled in college by this time and was about
to reach majority.
4 The parties settled the custody and visitation matters
before trial. Linda also withdrew her request to claim Tony as a
dependent.
5 In September 1987 Judge Michalski granted Linda's
emergency motion to allow Tiffany to stay with her in Anchorage
for the school year. In December 1987 Judge Michalski, on
Linda's motion, ordered Tommy to file a financial declaration.
In September 1988 Judge Carlson, on Linda's motion, ordered Tommy
to file a Child Support Guidelines Affidavit. On October 5,
1988, Judge Carlson ordered that Tommy pay $359.60 per month in
child support for Tiffany beginning October 1, 1988. On March
17, 1989, Linda moved for a hearing on her original motion to
modify the decree.
6 Consequently, we need not discuss Tommy's challenge to
the superior court's finding that there was no agreement
concerning the retirement benefits. It is irrelevant whether
there was any agreement because the court may not set aside the
judgment on that basis.
Civil Rule 60(b) authorizes a court on motion to set
aside a judgment which is unjust.6 6 The superior court
found that the dissolution petition on its face awarded Tommy a
substantial portion of the marital assets and that it did not
purport to dispose of the military retirement benefits, a major
asset of the marriage. Implicit in these findings is the
conclusion that the judgment was unjust. See Alaska Truck
Transport, Inc. v. Berman Packing Co., 469 P.2d 697, 699 (Alaska
l970). In granting Linda's Rule 60(b) motion, the superior court
relied heavily on the fact that the retirement benefits had not
been disposed of in the dissolution.
7 Linda sought relief under subsections (3), (4), and
(6) of Civil Rule 60(b), which provides in relevant part:
On motion and upon such terms as
are just, the court may relieve a party or
his legal representative from a final
judgment, order, or proceeding for the
following reasons:
(1) mistake, inadvertence,
surprise or excusable neglect;
(2) newly discovered evidence
which by due diligence could not have been
discovered in time to move for a new trial
under Rule 59(b);
(3) fraud (whether heretofore
denominated intrinsic or extrinsic),
misrepresentation, or other misconduct of an
adverse party;
(4) the judgment is void;
. . . .
(6) any other reason justifying
relief from the operation of the judgment.
The motion shall be made within a
reasonable time, and for reasons (1), (2),
and (3) not more than one year after the date
of notice of the judgment or order . . . .
This rule does not limit the power of the
court to entertain an independent action to
relieve a party from a judgment, order or
proceeding, or to grant relief to a defendant
not personally served, or to set aside a
judgment for fraud upon the court.
On appeal Linda does not claim a right to relief under subsection
(4).
8 The savings clause of Rule 60(b) provides a ground for
relief for a "fraud upon the court." O'Link, 632 P.2d at 230. A
fraud upon the court may only be found in the most egregious
circumstances, "involving a corruption of the judicial process
itself." Allen v. Bussell, 558 P.2d 496, 500 (Alaska 1976); see
also O'Link, 632 P.2d at 231 (Parties' failure to make "full and
fair disclosure"was not fraud upon the court for "the fraud, if
any, was only between the two parties and did not involve a
direct assault on the integrity of the judicial process."); Stone
v. Stone, 647 P.2d 582, 586 n.7 (Alaska 1982) (wife's motion to
modify property decree fifteen months after it was entered
because husband never intended to sell condominium at the time of
their agreement was within the ambit of Rule 60(b)(3), therefore
the court did not have jurisdiction to grant relief from the
original decree); Livingston v. Livingston, 572 P.2d 79, 84-85
(Alaska 1977) (failure of wife or her counsel to disclose that
child was physically located in another state and was living with
husband was not a "fraud on the superior court").
It is clear from the record that the parties did not
disclose to the court the existence of the Texas house, nor did
Tommy inform the Master that his $728.00 "income"was retirement
benefits. The superior court, however, did not find that there
was a fraud perpetuated upon the court, and we cannot say that
the circumstances complained of here rise to that level as a
matter of law.
9 Linda testified on cross examination that she did not
consider going to the other military base in Anchorage, Fort
Richardson, and that she was not aware that the JAG office at
Elmendorf frequently referred people to Fort Richardson. [Tr. 68-
69] She did not offer any reason for not having consulted
counsel outside the military.
10 Linda cites Crafts v. Morgan, 776 P.2d 1049 (Alaska
1989), because it "closely resembles"this case. It is true that
in Crafts the wife assisted the husband in filling out the
dissolution petition, she did not have the assistance of counsel,
the petition did not list their major assets, and the wife did
not attend the dissolution hearing, but her motion to vacate the
decree was brought just a few days after the decree was entered,
so no jurisdictional problems were presented. We vacated the
property division portion of the dissolution petition because the
moving party did not "understand fully the nature and
consequences of [her] action"as required by AS 25.24.230(a)(1).
Id. at 1054.
11 Linda's admission that she had discussed Tommy's
retirement benefits with him is not inconsistent with the
superior court's finding that the benefits were not disposed of
in the dissolution.
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