Opinion
14-P-647
08-24-2015
MARYSUE SPILHAUS v. ATHELSTAN F. SPILHAUS, THIRD.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its rule 1:28, as amended by 73 Mass. App. Ct. 1001 (2009), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Athelstan Spilhaus (husband), the former husband of Marysue Spilhaus (wife), appeals from a modification judgment by a judge of the Probate and Family Court which awards the wife 30.88% of the husband's "disposable military retirement/pension pay . . . if, as, and when it is received." The husband argues, among other things, that the judge's stated findings and rationale do not support the conclusion that the divorce judgment is modifiable on the basis of mutual mistake. He also argues that even if there were sufficient grounds for modification, the division of the military pension must be set aside as the judge failed to consider the mandatory factors set out in G. L. c. 208, § 34. On the specific arguments raised, and the theory on which the case has been presented to this court for review, we fail to discern error in the judge's application of the doctrine of mutual mistake. We agree with the husband, however, that the judgment must be vacated and the matter remanded to the Probate and Family Court so that the judge, on the evidence presented, can make findings of fact concerning the § 34 factors.
1. Background. The parties were married in 1982 and have three children. In December, 1988, the husband began service in the Air Force National Guard (and later served in the Army National Guard). He also started work as a civilian firefighter for the Air Force in July, 1991. By 2001, the parties' relationship had deteriorated and they consulted a mediator who prepared a separation agreement (agreement) for them. Each party then sought the advice of independent counsel who reviewed the agreement prior to its being submitted to the court for approval.
By a judgment of divorce nisi dated February 14, 2002, a judge of the Probate and Family Court (not the judge in the present action) ordered that the parties be "bound" by their agreement dated December 13, 2001, and further ordered that the agreement be incorporated and merged into the divorce judgment and have no independent legal significance. The judge found that the agreement was fair and reasonable and was not the product of fraud or coercion. The agreement, as incorporated and merged in the judgment, provides that the parties "wish to settle their respective property rights, and all other rights and obligations arising from their marital relationship." In furtherance of this objective, the parties divided their real property and other assets, including the husband's Federal Retirement Thrift Savings Plan (which was divided equally between them).
The agreement also provides that each party had fully disclosed all assets owned by him or her and that each party "renounce[d] all interest in any real or personal property of any and every nature that either may now have or acquire in the future."
The parties later stipulated that under the terms of their agreement the wife received marital assets worth $264,000 and the husband received marital assets worth $220,000.
In July, 2013, the wife filed an "Amended Complaint for Further M.G.L. Chapter 208, Section 34 Division of Marital Assets" in which she alleged "fraud and misrepresentation" arising from the husband's wilful failure to disclose to the mediator or to her during the divorce proceedings the husband's interest in his unvested military pension. The wife requested that the judge grant her fifty percent of the husband's military pension earned by him during the marital coverture period once the retirement pay commenced (or on or about the husband's sixtieth birthday).
The husband was fifty years of age when the wife filed her amended complaint. The parties later stipulated that if the husband did not live to the age of sixty his military pension will not vest and neither he nor his estate will receive any benefit from it.
At the trial on her complaint, the wife took the position that the husband withheld information concerning his military pension during the mediation proceedings, that the military pension was never discussed by the parties even before mediation, and that the only retirement plan of which she was aware was the husband's Federal Retirement Thrift Savings Plan (which the judge described as the Federal equivalent of a matching 401[k] plan). It was the husband's contention at trial that he had disclosed to the wife and to the mediator the information about his pensions and that the parties had decided not to divide them because, as unvested pensions, they could not be cashed out. The husband also testified that the wife did not pursue the military pension because she wanted nothing further to do with him. The mediator testified, as the judge noted, that he had no recollection of discussing the husband's pension during the mediation sessions and that he could find no records relating to a discussion of the pension during the mediation process.
The husband also had an unvested civil service pension.
The theme of the military pension's "zero value" appears at various points in the proceedings. The husband stated, as an affirmative defense, that his potential military pension had "zero value" and was fully disclosed to the wife and to the mediator. The husband also testified that he disclosed the military pension to the wife and to the mediator but that he did not list it on his financial statement because the mediator stated that it had "a zero asset value, and it was worth nothing." See note 7, infra.
In response to the question put to him at trial, "[I]s an unvested pension, in your practice, a significant asset that you would ordinarily put in a separation agreement and have the parties waive," the mediator answered, "Back then, no."
In his rationale for decision, the judge stated that despite the wife's arguments that the husband had fraudulently withheld information from her, and the husband's assertion that the wife waited twelve years to seek an eleventh-hour asset division, "there is a much simpler explanation -- mutual mistake." The judge found that both the parties and the mediator appeared to have focused on the Federal Retirement Thrift Savings Plan, which had a cash value, as though it was the only retirement plan of value. The judge noted that "[n]ot only was the Thrift Savings Plan divided between the parties, an explicit waiver [by the wife] of the husband's remaining share of the plan was included in the separation agreement." In light of this, the judge stated, "it simply makes no sense that the pensions also would not have been waived had they been fully discussed."
Continuing, the judge found that "[t]he evidence and testimony concerning the unvested pensions' 'zero value' indicate the parties may have viewed them more like term life insurance policies than pensions." As for the husband's reference to Carpenter v. Carpenter, 73 Mass. App. Ct. 732 (2009), for the assertion that the wife's modification request was subject to claim preclusion, the judge stated that "unlike here, the wife in Carpenter was aware of her husband's pension at the time of the divorce." The judge stated that equity dictates that he not penalize one party for the mistakes of both.
The judge pointed out that G. L. c. 208, § 34, provides that the judge may assign to either the husband or the wife all or any part of the estate of the other, including "all vested and nonvested benefits, rights and funds accrued during the marriage" and that "[t]he addition of an 'if and when' clause to handle the division of unvested pensions was met with approval in Dewan v. Dewan, 399 Mass. 754 (1987)."
The judge's findings with respect to the wife's knowledge of the husband's military pension are not a model of clarity but, taken together, suggest that although the wife may have been aware in a general sense of the military pension, she did not understand it to be a true pension or asset of value.
The judge divided the husband's military pension as we have previously described.
2. Discussion. The husband argues that the judgment awarding the wife a portion of his military pension must be vacated because the probate judge had no authority "to modify" the judgment of divorce as it pertains to the division of assets. The husband states, inter alia, that "judgments relating to property division are not subject to modification, so if the probate court has previously ordered division -- as happened here . . . -- then no further division may be ordered except in certain recognized circumstances, for example, where the original judgment or settlement agreement does not purport to effect a comprehensive division of marital assets, or when the original judgment is permeated by fraud or other recognized inequities." He points to several cases in support of his position. See, e.g., Taverna v. Pizzi, 430 Mass. 882, 886-887 (2000); Cappello v. Cappello, 23 Mass. App. Ct. 941, 942-943 (1986); Bottiggi v. Wall, 54 Mass. App. Ct. 430, 433-434 (2002). The husband seems to assert that the divorce judgment was not "tainted by fraud or other inequitable circumstances" as the judge concluded implicitly that the wife failed to prove that the husband fraudulently concealed his military pension and the judge's "stated findings and rationale do not support the conclusion that the original judgment is modifiable on the basis of mutual mistake."
Put another way, the husband states that the divorce judgment cannot be "modified unless the prior division, including the parties' broad and unequivocal waiver to any assets not specified in the separation agreement, was tainted by fraud or other inequitable circumstances."
In fashioning his challenge to the judge's determination of mutual mistake, and in setting out in his brief "the law of mutual mistake," the husband invokes cases in which a party seeks essentially to reform or rescind an agreement. See LaFleur v. C.C. Pierce Co., 398 Mass. 254, 257-258 (1986); Covich v. Chambers, 8 Mass. App. Ct. 740, 749-751 (1979). Among the principles underlying the doctrine of mutual mistake upon which the husband relies is the principle (as described by the husband) that "both parties must be mistaken about the same fact." See LaFleur v. C.C. Pierce Co., 398 Mass. at 258 ("The mistake must be shared by both parties, and must relate to an essential element of the agreement").
We agree with the husband that the judge, by concluding there was mutual mistake, appears to have implicitly concluded that the wife had failed to demonstrate that the husband fraudulently concealed his military pension.
As to the reformation of an agreement when there has been a mutual mistake, we have stated that "[i]t is of no critical importance whether the mutual mistake is one of fact or law." McGovern v. McGovern, 77 Mass. App. Ct. 688, 699 (2010), quoting from Beach Assocs. v. Fauser, 9 Mass. App. Ct. 386, 394-395 (1980). See Mickelson v. Barnet, 390 Mass. 786, 791-792 (1984).
At oral argument, the panel questioned counsel for the husband concerning the possible significance of the merger of the parties' separation agreement into the divorce judgment. See Bercume v. Bercume, 428 Mass. 635, 641 (1999) ("[T]he merger of an agreement in a judgment is a substitution of the rights and duties under the agreement for those established by the judgment or decree"). Counsel suggested that the "standard" for seeking to revise a judgment is Mass.R.Dom.Rel.P. 60. However, the parties did not proceed under rule 60 in the proceedings below, the judge did not conduct a rule 60(b) analysis, and the husband makes no argument concerning rule 60(b) in his appellate brief.
Even were we to assume for purposes of the present appeal the applicability of the principles proffered by the husband in his brief, we do not perceive error in the judge's determination of mutual mistake. Here, the husband asserts that while the judge found that the wife did not know that the husband's military pension was not included in the Federal Retirement Thrift Savings Plan account, there is no evidence that he shared that mistaken assumption. However, the mistaken assumption to which the judge referred, and which apparently formed the basis for his decision, was that the parties did not understand that the husband's military pension was a true pension, much less an asset of potentially significant value. To the extent the husband also argues that application of the mutual mistake doctrine was inappropriate because the wife "was aware at the time the contract was signed that [s]he had limited knowledge as to essential facts, but nonetheless assumed the risk that circumstances would prove to be other than as expected," LaFleur v. C.C. Pierce Co., 398 Mass. at 258, we fail to discern error.
The husband also argues briefly that the wife failed to plead the doctrine of mutual mistake. See Mass.R.Dom.Rel.P. 8(a)(1) (requiring "a short and plain statement of the claim"). That argument, standing alone, is not sufficient in this case to cause us to vacate the judgment. That a particular theory is not pleaded does not necessarily preclude a judge from basing his decision on the unpleaded theory, see Mass.R.Dom.Rel.P. 15(b), a point that the husband does not address in any meaningful way in his brief.
We are also unable to say, as the husband asserts, that to the extent there was any mistake in this case, it did not result in an inequitable distribution of property.
Lastly, the husband argues that even if there were sufficient grounds for modification of the divorce judgment, the order for division of his military pension must be set aside as the judge failed to make findings concerning the G. L. c. 208, § 34, factors. In making a property division, a judge must make findings indicating that he has considered all factors relevant under § 34, and has not considered any irrelevant factors. Bowring v. Reid, 399 Mass. 265, 267 (1987). See Hassey v. Hassey, 85 Mass. App. Ct. 518, 531 (2014).
The husband also states the general rule that when a division of property takes place after the divorce, the judge should apply the § 34 factors as of the time of the divorce. See Pare v. Pare, 409 Mass. 292, 296 n.4 (1991); Johnson v. Johnson, 53 Mass. App. Ct. 416, 421 (2001). Cf. Carpenter v. Carpenter, 73 Mass. App. Ct. at 735-737.
As the parties here entered into a separation agreement, and as there was no appeal from the divorce judgment, the probate judge did not prepare § 34 findings at the time of the divorce. See Carpenter v. Carpenter, 73 Mass. App. Ct. at 733-734 & n.2. We agree with the husband that the judge should have made findings concerning the § 34 factors (at least as to those factors on which evidence was presented) in dividing the military pension.
We recognize that the evidence presented at trial bearing on the § 34 factors was not exhaustive. See and compare Carpenter v. Carpenter, 73 Mass. App. Ct. at 736.
3. Summary. So much of the modification judgment entered December 11, 2013, as pertains to the division of the husband's military pension is vacated, and the matter is remanded to the Probate and Family Court with instructions that the judge prepare findings of fact pursuant to § 34, and a rationale for decision, and order the entry of judgment with respect to the military pension.
By our decision, we do not intimate that a different division of the husband's military pension is required.
So ordered.
By the Court (Vuono, Wolohojian & Sullivan, JJ.),
The panelists are listed in order of seniority. --------
Clerk Entered: August 24, 2015.