April 14, 2008.
Appeal from a judgment of the Superior Court for King County, No. 03-3-06395-2, Suzanne M. Barnett, J., entered March 30, 2007.
Affirmed by unpublished opinion per Schindler, C.J., concurred in by Becker and Dwyer, JJ.
Brian Bosserman and Jennifer Bosserman were married from 1989 to 2003. In September 2003, the court entered a decree of dissolution of their marriage. The decree awards Brian "as his sole and separate property . . . [a]ll the rest and remainder of the parties' personal property not specifically distributed to the wife. . . ." In 2006, the Internal Revenue Service (IRS) issued a refund check for tax year 1995. Jennifer filed a motion to clarify, arguing Brian was not entitled to the tax refund. A court commissioner ruled that under the express terms of the decree, Brian was entitled to the tax refund. The superior court denied Jennifer's motion to revise the commissioner's decision. Jennifer then filed a motion to vacate the provision in the decree that awarded Brian all property that was not specifically awarded to Jennifer, arguing that Brian misrepresented the likelihood of a tax refund.
For clarity, we refer to Brian Bosserman and Jennifer Bosserman by their first names.
A court commissioner denied the motion to vacate and entered findings of fact and conclusions of law. The superior court denied Jennifer's motion to revise the decision and adopted the commissioner's findings of fact. We conclude that under the express terms of the decree, Brian is entitled to the tax refund. We also conclude that the superior court did not err in denying Jennifer's motion to revise the decision denying her motion to vacate the decree, and we affirm.
Jennifer and Brian were married in 1989 and have two children. In 2002, Brian and Jennifer filed a petition for bankruptcy. After they separated, Brian and Jennifer withdrew the bankruptcy petition. When the couple separated in 2003, Jennifer was a law student and Brian owned a consulting business, Business Systems International Inc.
During the dissolution proceedings Jennifer and Brian were both represented by counsel. Jennifer also retained a tax attorney and an accountant, and negotiated a tax settlement with the IRS. In the decree of dissolution, Brian and Jennifer each agreed that "this decree constitutes a full and complete settlement of all their property rights and obligations" and that they each had an "adequate opportunity independently to appraise and determine the value of all assets."
The decree addresses child support, the parenting plan, maintenance for Jennifer, and the division of property and liabilities. Exhibits A and B of the decree set forth the property awarded to Brian and Jennifer as their "sole and separate property." In Exhibit B, Brian agreed to pay Jennifer $10,500 and forgive the loans that he made to her. Exhibit B also awards Jennifer all rights, benefits, and property in connection with her employment; insurance policies; a car; jewelry; and personal effects. In Exhibit A, Brian is awarded "as his sole and separate property, free and clear of any claims by the wife[, a]ll the rest and remainder of the parties' personal property not specifically distributed to the wife herein." In addition, Exhibit A awards Brian his consulting business; insurance policies; a car; and any proceeds from an employment dispute. The decree of dissolution of their marriage was entered on September 12, 2003.
Approximately three years after entry of the decree, the IRS mailed Brian and Jennifer a tax refund of approximately $19,500 for tax year 1995. Jennifer and Brian could not agree on how to divide the refund.
On October 2, 2006, Jennifer filed a "Motion/Declaration for an Order to Show Cause re Contempt, and Clarification of Decree of Dissolution and Sanctions." In her motion, Jennifer claimed that Brian should be held in contempt because he failed to pay back child support and spousal maintenance and he had been voluntarily underemployed or unemployed in order to avoid paying his obligations. Jennifer also asked the court to clarify the terms of the decree. She argued that the "IRS refund check is property that was omitted from the Decree and is now jointly owned by both parties."
Brian denied that he owed back child support or maintenance and requested reimbursement for amounts he had paid for child care expenses, tuition, and health insurance. Brian also asserted that under the terms of the decree, he was entitled to the tax refund. In his declaration, Brian explained that the decree awarded him "[a]ll the rest and remainder of the parties' personal property not specifically distributed to" Jennifer because there was "a very real possibility of substantial income tax refunds."
This `catch-all' provision was placed in the decree particularly because there was uncertainty about our previous years of income taxes. We had not filed income taxes for many years when we divorced due to financial reverses of my previous consulting company. At the time we divorced, I do not believe that we had filed for the years 1997, 1998, 1999, 2001, and 2002. Due to the write-offs of our company, and due to the fact that I still paid my taxes, there was a very real possibility of substantial income tax refunds.
On November 27, a court commissioner entered an order denying Jennifer's motion for contempt, ruling that, as "the mother concedes," Brian was entitled to reimbursement for $3965 for child care expenses. The commissioner also ruled that the IRS check "is the property of the husband's pursuant to the terms of the decree," and awarded Brian $1500 in attorney fees. Jennifer filed a motion to revise the commissioner's order. On January 19, 2007, the superior court denied Jennifer's motion for revision, but ordered Brian to provide documentation for the attorney fees award.
Jennifer then filed a motion under CR 60 to vacate the provision of the decree that awarded Brian all the property not specifically awarded to her on the grounds of misrepresentation. On February 2, a superior court commissioner denied Jennifer's motion to vacate. The commissioner entered findings of fact and conclusions of law. The finding state in part that:
[T]he court find[s] that . . . there was insufficient evidence to meet the required standard of proof [for] fraud, misrepresentation or misconduct on the part of Respondent; that at most he knew there was a slim possibility of a tax refund; that the 1995 tax return was a joint return but no one provided a copy of the same; that the IRS letter said no refund and only a liability for the 1995 return; that the husband was not in a better position than wife to know of a tax refund. . . .
Jennifer filed a motion to revise the commissioner's decision denying the motion to vacate. On March 30, the superior court denied Jennifer's motion to revise the commissioner's decision on the motion to vacate and adopted the commissioner's findings.
On February 20, Jennifer filed a notice of appeal of the January 19 order on the revision that denied her motion for clarification. The notice of appeal was rejected because Jennifer submitted a filing fee of $200 instead of the statutorily required $250. The next day, Jennifer paid the correct amount and filed another notice of appeal. On March 6, the court clerk mailed the parties a letter stating, "[i]t appears the notice of appeal was not timely filed" under RAP 5.2, and directed Jennifer to file a motion to extend the time.
"[A] notice of appeal must be filed in the trial court within . . . 30 days after the entry of the decision of the trial court which the party filing the notice wants reviewed. . . ."
On April 2, Jennifer filed an amended notice of appeal seeking review of the March 30 order on revision denying the motion to vacate and the January 19 order on revision denying the motion to clarify the decree. There is no dispute that Jennifer's appeal of the March 30 order was timely filed and the order is appealable. But the parties dispute whether the January 19 order is appealable. Assuming without deciding that the January 19 order is appealable, we address the merits of Jennifer's arguments on appeal.
Jennifer filed a "Motion for Extension of Time to File Notice of Appeal" and a "Motion for Discretionary Review" of the January 19 order. On May 29, a commissioner of this court entered a notation ruling referring the issues of timeliness, appealability, and discretionary review to the panel.
Jennifer contends that the provision of the decree that awards Brian all the property not specifically awarded to Jennifer does not include the tax refund for 1995 because the language does not address after acquired property or tax refunds.
As a general rule, the provisions in a dissolution decree "as to property disposition may not be revoked or modified, unless the court finds the existence of conditions that justify the reopening of a judgment under the laws of this state." RCW 26.09.170(1). The interpretation of a dissolution decree is a question of law that we review de novo. Stokes v. Polley, 145 Wn.2d 341, 346, 37 P.3d 1211 (2001). To determine the intent of the decree, Washington court use the same rules of construction that apply to statutes and contracts. Stokes, 145 Wn.2d at 346. A decree must be construed as a whole to give meaning and effect to each word. Wagner v. Wagner, 95 Wn.2d 94, 101, 621 P.2d 1279 (1980).
Unlike the three cases Jennifer relies on, Yeats v. Estate of Yeats, 90 Wn.2d 201, 580 P.2d 617 (1978), Stephan v. Gallion, 5 Wn. App. 747, 491 P.2d 238 (1971), and In re Marriage of McKinney, 14 Wn. App. 921, 546 P.2d 456 (1976), the case Brian cites, Robinson v. Robinson, 37 Wn.2d 511, 225 P.2d 411 (1950), is directly on point and controls.
In Robinson, the dissolution decree included a provision that awarded the husband all property not specifically awarded to the wife. The decree distributed certain property to the wife, but provided that the husband was awarded "as his separate property, all other property acquired by the parties hereto prior to marriage, or during the years of their marriage. . . ." Robinson, 37 Wn.2d at 513. After entry of the decree, the IRS issued a refund for a tax year during the marriage. The Washington Supreme Court expressly held that the refund was not newly acquired and that the husband was entitled to the tax refund under the terms of the decree. Here, as in Robinson, the tax refund for 1995 was based on taxes paid during the marriage. Under the terms of the decree, Brian is entitled to the tax refund. And in her motion to clarify, Jennifer herself characterized the refund as "an overpayment of a debt paid by and on behalf of the community in 1995."
Jennifer's attempt to factually distinguish Robinson because the wife in that case "renounced her interest in any property not specifically awarded to her" is unpersuasive. Robinson, 37 Wn.2d at 515. Here, Jennifer expressly agreed that the decree "constitutes a full and complete settlement of all their property rights and obligations" and that Brian was entitled to all property that was not expressly awarded to her.
The three cases Jennifer relies on to argue that she is entitled to the tax refund check are distinguishable. In Yeats, the decree of dissolution required the husband to maintain "life insurance on the life of the Husband in the amount of $10,000 naming the Wife as sole beneficiary. . . ." Yeats, 90 Wn.2d at 204. When the decree was entered, the husband had nine different policies. After the decree was entered, Mr. Yeats remarried. When he died, his first wife sued the estate for a community share of the insurance proceeds. In determining whether the settlement agreement disposed of the nine insurance policies that were not specifically mentioned, the Yeats court held that the "boilerplate language" requiring the husband to maintain a life insurance policy was not adequate to dispose of the policies. Yeats, 90 Wn.2d at 205. Here, unlike in Yeats, the decree unambiguously states that Brian is entitled to all "of the parties' personal property not specifically distributed to" Jennifer. In addition, there is no dispute that Jennifer had an "adequate opportunity independently to appraise and determine the value of all assets," that she knew the taxes had been paid for 1995, that she had the independent advice of a tax attorney and an accountant, and that she negotiated a settlement with the IRS for tax liability.
Contrary to Jennifer's assertion, the response to "boilerplate language" in Yeats does not refer to the provision in the decree where the wife agreed to maintenance payments from the husband "in lieu of any interest in and to any and all property which Husband now owns or may hereafter acquire. . . ." Yeats, 90 Wn.2d at 204.
Relying on McKinney and Stephan, Jennifer also argues that the tax refund was an inchoate or unvested interest that was not addressed in the decree. In McKinney, although the trial court's oral decision awarded part of the husband's retirement benefit to the wife, that part of the decision was not incorporated into the written findings and conclusions. On appeal, the appellate court ruled that the trial court abused its discretion in failing to award some portion of the retirement benefit to the wife in the dissolution decree. McKinney, 14 Wn. App. at 923-24. In Stephan, because the decree "neither disposed of nor mentioned" the husband's life insurance policy, the policy proceeds were property of both spouses as tenants in common. Stephan, 5 Wn. App. at 750. Unlike in McKinney and Stephan, the tax refund is not an inchoate or unvested interest, and the decree expressly disposed of all property not specifically awarded to Jennifer. On this record, we conclude that under the terms of the dissolution decree, Brian is entitled to the tax refund check.
An inchoate right or interest is one that "has not fully developed, matured, or vested." Black's Law Dictionary 829 (8th ed. 2004).
Next, Jennifer contends that the superior court abused its discretion in denying her motion to revise the commissioner's decision to deny her motion under CR 60(b)(4) to reopen the decree. A party seeking relief from a judgment under CR 60(b)(4) has the burden of establishing fraud, misrepresentation, or other misconduct by clear and convincing evidence. Lindgren v. Lindgren, 58 Wn. App. 588, 596, 794 P.2d 526 (1990). CR 60(b) provides:
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:
. . .
(4) Fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party. . . . The motion shall be made within a reasonable time. . . .
A decision to grant or deny a motion to vacate or reopen a judgment under CR 60(b) is reviewed for abuse of discretion. In re Marriage of Tang, 57 Wn. App. 648, 653, 789 P.2d 118 (1990). Discretion is abused where it is exercised on untenable grounds or for untenable reasons. Tang, at 653.
In denying Jennifer's motion to vacate, the superior court adopted the commissioner's findings that Jennifer did not meet her burden to show fraud, misrepresentation, or other misconduct under CR 60(b)(4) and "that at most [Brian] knew there was a slim possibility of a tax refund; . . . that the IRS letter said no refund and only a liability for the 1995 return; [and] that the husband was not in a better position than wife to know of a tax refund. . . ."
Brian contends the superior court's findings should be considered verities on appeal because Jennifer failed to comply with RAP 10.3(g), which requires separate assignments of error for each challenged finding and further requires that each assignment include reference to the finding by number. But because Jennifer's opening brief made arguments concerning each challenged finding, we consider the merits of Jennifer's appeal.
The record supports the findings. Brian testified that at the time of the dissolution he was "not aware that a refund was coming." He stated, "I did not know the exact status of our income tax situation existing at the time of our dissolution other than the fact that we appeared to owe hundreds of thousands of dollars to the IRS — at least that was the IRS claim." And while Jennifer acknowledges that she had the advice of a tax lawyer and an accountant during the dissolution, Brian had no such advice.
Citing Seals v. Seals, 22 Wn. App. 652, 590 P.2d 1301 (1979), Jennifer contends that she is entitled to vacate the provision in the decree awarding Brian all the property not distributed to her under CR 60(b)(4) because Brian breached his fiduciary duty and misrepresented the likelihood of a tax refund.
Jennifer's argument rests entirely on the premise that Brian knew that the IRS would issue a tax refund for 1995. Jennifer makes much of Brian's statement that there was a "real possibility" and his later statement that there was a "slim possibility" that they would receive a tax refund, but does not explain how the two statements are contradictory or establish that he knew the IRS would issue a tax refund of $19,500 for 1995. Jennifer's assertions that Brian knew of the "write-offs of [his] company" and "continued to pay taxes" also do not show that he knew the IRS would issue a refund. Because the record supports the superior court's conclusion that Jennifer did not meet her burden of showing misrepresentation by clear, cogent, and convincing evidence, the trial court did not abuse its discretion in denying Jennifer's motion to vacate the dissolution decree.
Brian requests attorney fees for a frivolous appeal under RAP 18.9. An appeal is frivolous if there are no debatable issues upon which reasonable minds might differ and it is so devoid of merit that there was no reasonable possibility of reversal. In re Marriage of Penry, 119 Wn. App. 799, 82 P.3d 1231 (2004). Because the appeal is not meritless, we decline to award attorney fees under RAP 18.9.
We affirm the superior court decision denying Jennifer's motion to revise the commissioner's decision on her motion to clarify and motion to vacate the decree.