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In re Henderson

The Court of Appeals of Washington, Division Two
Aug 21, 2007
140 Wn. App. 1015 (Wash. Ct. App. 2007)

Opinion

No. 35109-9-II.

August 21, 2007.

Appeal from a judgment of the Superior Court for Clark County, No. 04-3-00270-0, Roger A. Bennett, J., entered June 16, 2006.


Reversed by unpublished opinion per Hunt, J., concurred in by Bridgewater and Quinn-Brintnall, JJ.


Randy Henderson ("Randy") appeals the trial court's (1) refusal to vacate explicitly the distribution of assets in a divorce decree and (2) modification of the decree's award to Randy based on a 2004 value of the marital home. Janell Henderson ("Janell") cross-appeals the trial court's re-allocation of assets distributed in a seven-month old divorce decree. In the alternative, she argues that the trial court correctly valued the marital home at the time of dissolution decree (2004) rather than the time of Randy's motion to vacate the distribution of assets (2006). Randy argues that the default dissolution decree is void as a matter of law because the divorce petition sought a "fair and equitable" distribution of assets but the decree awarded the entire family home equity to Janell. Janell argues that the trial court acted without authority in modifying the decree, which was not void. Agreeing with Janell, we reverse.

We use the parties' first names for clarity. We intend no disrespect.

FACTS I. Dissolution

On February 18, 2004, Janell petitioned to dissolve her marriage to Randy. Under the petition's "Property" subheading, Janell stated: "There is community or separate property owned by the parties. The court should make a fair and equitable division of all the property." Clerk's Papers (CP) at 4 (emphasis added). The petition further stated that the trial court should divide the property at a later date. Janell did not refer to the family home in the information under the Property subheading; nor did she request relief related to the family home.

Janell properly served Randy with a summons and the petition for dissolution. Randy did not answer the petition. After 20 days had passed, Janell sought a default judgment. Randy failed to appear for the May 28 hearing on the default judgment. The court commissioner issued a decree of dissolution and divided the couple's community property, awarding Randy 38 items of personal property, including two motor vehicles; and Janell, 25 items of personal property and the marital home. Janell remained in the home, providing the primary residence for the couple's 14 year-old son.

II. Motion to Vacate Distribution of Assets

Eight months later, on January 19, 2005, Randy moved to vacate the decree's distribution of assets, based on "CR 59, CR 60(b)(1), (b)(4), (b)(11), [and] promissory estoppel." CP at 50. Randy's motion did not specify CR 60(b)(5) as a ground for relief. The trial court denied the motion.

Randy moved for reconsideration, arguing that a court must vacate a default decree that deviates from the relief requested in the dissolution petition. The trial court granted Randy's motion, ruling:

I grant reconsideration, but on grounds slightly different from those urged by Respondent. Rather than holding that a general prayer cannot result in a specific decree, I hold that under the particular facts of this case, Respondent has made a prima facie showing that the award of the entire equity in the home to Petitioner was not a "fair and equitable division" of the assets of the marriage, and that therefore the decree deviated from the prayer. . . . Respondent must prove that no reasonable judge would have made such a distribution.

CP at 118-19.

A. Trial

In April 2006, the trial court held a hearing to determine whether the dissolution decree's allocation of the entire marital home to Janell was a fair and equitable division of the marital property. Janell and Randy presented testimony from real estate appraisers. Randy's appraiser testified that the home was worth $350,000 at the time of trial, creating equity of $116,000 in the home at the time of trial. Janell's appraiser focused on the property's value at the time of the couple's March 2004 separation and opined that the home was worth $219,000 at that time, leaving $24,000 in equity at the time of separation.

In addition, Janell testified that she had paid $1,300 in property taxes and incurred a $4000 loan from her parents to pay off part of the mortgage, to which Randy had not contributed. Janell also proved that Randy had failed to make numerous child support payments since the dissolution decree.

B. Award of Lien on Home to Randy

After hearing testimony and argument, the trial court ruled that allocating all of the equity in the marital home to Janell was not "fair and equitable" as contemplated by her dissolution petition. Taking the evidence in the light most favorable to Janell, the trial court calculated the equity in the marital home to be $24,000, based on the home's value at the time of the couple's separation. The trial court further found that although Janell had incurred $6,646 in liabilities from the home, awarding the entire equity to her was too great a windfall. Finding that this "disproportionality [was] not fair and equitable," the trial court awarded Randy a $9,000 marital lien against the family home, and offset this amount against Randy's post-dissolution outstanding child support obligation of $11,776.80, which left Randy with a remaining child support debt of $2,776.80.

More specifically, the trial court reasoned:

In short, a reasonable judge could have considered, at the time of the default, that the equity was $24,000.00, and that each party's share, to be equal, would be $12,000.00. That hypothetical reasonable judge could also have concluded that Respondent owed Petitioner one-half the property taxes plus one-half the loan from parents ($650.00 + $ 2,000.00) plus $946.00 for child support. Therefore, a judge could have concluded that Petitioner's award was not $12,000.00 more than she was entitled to, but rather $9,004.00 ($12,000.00-$2,986.00). . . .

Given all the circumstances, I believe that the disposition cannot be justified, to the extent that given all inferences in favor of Petitioner, she still ended up with $9,000.00, which could have gone to Respondent.

That disproportionality is not fair and equitable. Respondent will be entitled to a $9,000.00 marital lien against the home.

CP at 130-131.

In its findings of fact and conclusions of law, the trial court did not conclude that the original dissolution decree was void or vacated. Nor did the trial court articulate a legal basis for modifying the decree.

C. Motions for Reconsideration

Randy moved for reconsideration and clarification of the trial court's ruling. He specifically inquired whether the trial court was vacating the original decree. The trial court refused to vacate the original decree, reasoning:

Mr. Henderson chose to default. Therefore, he had no right to have input into what that distribution was other than the fact that he was promised a fair and equitable distribution.

A fair and equitable decision is a range, actually, there's a range of fair and equitable distributions. On the one end, that which would be most favorable to Ms. Henderson; on the other, that which would be favorable to Mr.

Since he vacated [sic] and gave up any right to participate in the proceeding, since he defaulted and gave up any right to be present, he certainly can't complain if the fair and equitable distribution was one which was most favorable to his wife. Okay?

. . . .

After the hearing the evidence, I determined that the distribution exceeded the upper range which could be most favorable to her by a certain amount, and that's how — and so I adjusted that amount. That was my methodology.

Now, whether it was — should be characterized as vacating the decree and starting over or not, that is not what I did, obviously, it isn't what I did.

Report of Proceedings (RP) 294-95.

Randy persisted in asking the trial court to clarify and to distinguish this case from Johnson v. Johnson, 107 Wn. App. 500, 27 P.3d 1203 (2001). The trial court responded:

What I was doing here was making a fair and equitable distribution of the property. That's what the — that's what the prayer was, to make a fair and equitable distribution. There was no prayer in Johnson for this deed or trust or whatever it was. That's — that's how I see they're different.

RP at 298-99.

Randy appeals and Janell cross appeals.

ANALYSIS I. Modification of default Decree

Randy argues that the trial court could have vacated the dissolution decree under CR 60(b)(5), especially those portions relating to the marital home, because the original decree was void. As he did below, he attempts to analogize to Johnson.

Janell cross-appeals the trial court's ruling, which essentially vacated the dissolution decree's award to her of the family home. She argues that Randy met no criteria for vacating the default dissolution decree and, thus, the trial court erred in partially vacating the decree and then reallocating part of the family home equity to Randy. We agree with Janell.

A. Standard of Review

As a general matter, we defer to the trial court's sound discretion in deciding whether to vacate or to modify a judgment. State v. Scott, 92 Wn.2d 209, 212, 595 P.2d 549 (1979). Abuse of discretion occurs when the trial court's discretion is "manifestly unreasonable, or exercised on untenable grounds, or for untenable reasons." State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971).

In addition, the trial court's exercise of discretion must be balanced with a principal dissolution tenet — judgments must carry some degree of finality. As we stated in Peste v. Peste:

When the divorce decree is entered . . . there must be some finality to the divorce settlement upon which both can reasonably rely. To permit collateral attacks upon divorce proceedings without any more than a showing of a disparity in the award, would open a Pandora's Box, affecting subsequent marriages, real property titles and future business endeavors of both spouses. The uncertainties which would result would be devastating.

1 Wn. App. 19, 25 459 P.2d 70 (1969).

We have recently reaffirmed this principle in a similar case, holding that "[a] 'compelling policy interest favoring finality in property settlements' militates against setting aside dissolution decrees, except in situations involving 'extraordinary circumstance[s].'" Wagers v. Goodwin, 92 Wn. App. 876, 882, 964 P.2d 1214 (1998) ( citing In re Marriage of Jennings, 91 Wn. App. 543, 958 P.2d 358 (1998)); see also In re Marriage of Curtis, 106 Wn. App. 191, 197-98, 23 P.3d 13, review denied, 145 Wn.2d 1008 (2001).

B. No Justification for Modifying Default Decree

CR 55(c)(1) provides: "For good cause shown and upon such terms as the court deems just, the court may set aside an entry of default and, if a judgment by default has been entered, may likewise set it aside in accordance with rule 60(b)." Contrary to CR 55(c)(1), here, there was no supportable basis for the trial court's 2006 setting aside of its 2004 default decree's award of the family home to Janell.

First, there has been no showing that the 2004 decree was void under CR 60(b)(5). Second, Randy did not show any CR 60(b)(1) mistake or irregularity in Janell's obtaining the 2004 default decree at a hearing he chose not to attend. And third, Johnson is distinguishable. Unlike Johnson, Janell's petition for dissolution never stated that the marital home would be divided in equal shares. Rather, she petitioned the court to divide all property generally, in a "fair and equitable" manner. When Randy defaulted, the court commissioner entered a decree dividing the couple's community property and allotting the family home to Janell. This distribution did not substantially deviate from the petition's phrase "fair and equitable" so as to render the default decree void.

CR 60(b) provides, in pertinent 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) Mistakes, inadvertence, surprise, excusable neglect or irregularity in obtaining a judgment or order;

. . . .

(5) The judgment is void;

. . . .

The motion shall be made within a reasonable time . . . .

The dissolution petition in Johnson explicitly provided for an equal division of the couple's $280,000 home. 107 Wn. App. at 502. When the husband defaulted, the wife obtained a dissolution decree making her a judgment creditor in the amount of $140,000 and the husband a judgment debtor in the amount of $140,000, based on the value of the home, at a 12 per cent interest rate. But the petition had not alleged that the husband would owe a debt, that the court would enter a judgment on such debt, that the husband would pay interest on the debt (the interest alone was $1,400 a month), or that the husband should secure the debt by issuing a deed of trust on the marital home. Johnson, 107 Wn. App. at 504. These significant discrepancies triggered our holding that the default decree substantially varied from the petition and, therefore, the decree was void. Johnson, 107 Wn. App. at 504-05.

Finding no valid ground for upholding the trial court's post-decree award to Randy of equity in the family home, we reverse.

Accordingly, we need not address Randy's argument that the trial court should have used his 2006 appraisal value rather than Janell's 2004 appraisal.

II. ATTORNEY FEES

Both parties make blanket requests for awarding attorney fees based on financial need. RAP 18.1. Upon compliance with the rule, we grant attorney fees to Janell as the prevailing party, assuming she establishes the requisite financial need.

We reverse the trial court's 2006 order, which, in essence, modified the 2004 default decree.

A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.

BRIDGEWATER, P.J., QUINN-BRINTNALL, J., concur.


Summaries of

In re Henderson

The Court of Appeals of Washington, Division Two
Aug 21, 2007
140 Wn. App. 1015 (Wash. Ct. App. 2007)
Case details for

In re Henderson

Case Details

Full title:In the Matter of the Marriage of JANELL KAY HENDERSON, Respondent, and…

Court:The Court of Appeals of Washington, Division Two

Date published: Aug 21, 2007

Citations

140 Wn. App. 1015 (Wash. Ct. App. 2007)
140 Wash. App. 1015