Opinion
No. C6-01-1314.
Filed March 26, 2002.
Appeal from the District Court, Scott County, File No. 1998-20067.
Barry L. Wittenkeller, Grannis Hauge, P.A., (for respondent)
Marcia S. Rowland, Standke, Greene Greenstein, Ltd., (for appellant)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
In this consolidated appeal, appellant-husband argues (a) the district court misinterpreted the portion of the parties' stipulated judgment regarding the property division; (b) the judgment should have been reopened under Minn. Stat. § 518.145, subd. 2(1) (2000), for mistake; (c) respondent-wife's attorney-fee award is not supported because the district court failed to identify the authority for the award, the award was improperly based on husband's refusal to accept wife's proposed settlement agreement, and husband did not adopt his litigation position in bad faith because it is consistent with the wording of the parties' stipulation. We affirm the district court's property division but reverse the attorney-fee award to wife.
FACTS
In December 1998, respondent Rosemary J. Buetow petitioned the district court to dissolve her marriage to appellant Walter H. Buetow. The parties' main asset is approximately 32 acres of farmland located in Carver County. The land is divided by Inwood Road. Approximately seven acres lie north of Inwood Road and the remaining 25 acres lie south of the road. The dissolution proceeding was scheduled for trial in February 2000. By that time the parties reached an agreement regarding the terms of their dissolution and appeared before the district court to read a stipulation into the record. Respondent's attorney drafted the judgment and decree at the court's direction, but appellant did not agree to the document's terms. Consequently, the parties appeared before the district court a second time in June 2000. The stipulation was again read into the record, which essentially was the same as the stipulation in February 2000. At that time, the land had not been surveyed. According to the parties' agreement, respondent was to receive approximately 18 acres of the parties' property, all of which was located south of Inwood Road, if she met three conditions. First, she had to get the parcel released from the underlying first mortgage. Second, she had to get released from personal liability on that mortgage. Third, she had to obtain approval for a conditional use permit (CUP) to build a dwelling on the parcel she had been awarded. The difference between the February 2000 stipulation and the June 2000 stipulation was, under the former, if respondent could not obtain a CUP, the parties were required to go back to court so that the court could divide the property or order its sale. According to the June 2000 stipulation, if respondent could not obtain a CUP, she would receive all 25 acres located south of Inwood Road.
Respondent's attorney drafted the second judgment and decree, again at the court's direction. The attorney submitted the document to the court and the court signed the document without first giving appellant an opportunity to approve it. As a result, appellant submitted an ex parte motion requesting the court to vacate the judgment and to amend the findings based on appellant's proposed changes to the judgment. One of appellant's objections centered on the court's language that described the property respondent was to be awarded. On the record, respondent's attorney described the parcel that respondent was to receive as a portion of the parties' property "lying south of Inwood Road consisting of approximately eighteen acres, commencing from the east boundary line working west." The court's judgment, however, described the parcel as:
[T]hat part of the parties' real property which lies south of Inwood Road and East of the East boundary line of the parties' property lying North of Inwood Road when said East boundary line is extended to the South boundary line of the parties' property, containing approximately 18 acres, more or less.
At the February 2000 hearing respondent submitted a document (exhibit A) that depicts the boundaries of respondent's property award according to the language in the court's judgment. The court also had a copy of Exhibit A at the June 2000 hearing. Exhibit A contains "hash marks" to indicate the parcel of land respondent was to receive. In addition, the court incorporated Exhibit A into the judgment and referenced the exhibit as follows:
Attached hereto and marked as Exhibit "A" is a section map of the North 1/2 Section 28, Township 115 Range 24 which is made a part hereof and which identifies the property described herein and intended to be awarded to the Wife. Said property consists of all the property covered by "X's" as shown on the said Exhibit "A", all of which property shall hereafter be referred to as, the "Wife's Property".
The parties appeared before the court in August 2000 to discuss appellant's proposed changes. According to the transcript, the court addressed each of appellant's proposed changes, but the court did not reduce any changes to writing. In the meantime, respondent sought approval of her CUP application. The county rejected her application for the 18-acre parcel but approved a CUP for the 25-acre parcel. Respondent then asked appellant to agree to allow the court to amend the judgment to award respondent all 25 acres per their stipulation, but appellant refused. Consequently, in February 2001, respondent moved the district court to award her the entire 25-acre parcel. Respondent also moved for $3,000 in attorney fees. In respondent's affidavit that she submitted in conjunction with her motions, she informed the court that she had offered to settle the matter by agreeing to take only the land that was depicted by exhibit A and that appellant did not respond to her offer. In response to respondent's motions, appellant argued that respondent had not accurately drawn the west boundary line of the 18-acre parcel in her CUP application so appellant moved the court to direct respondent to submit a new application for the 18-acre parcel with a west boundary line that would conform to the county's requirements. Appellant asserted that respondent's property award was governed by the "approximately 18 acres" language in the court's judgment rather than the boundaries description or exhibit A.
The hearing on these matters was held in March 2001 before a judge different from the one who presided over the February and June 2000 hearings. The court did not have transcripts of the previous hearings so the court reviewed the original judgment and determined that it accurately reflected the parties' stipulation, the award was governed by exhibit A rather than any reference to an approximate acreage amount, and respondent was entitled to the parcel as depicted by exhibit A. The court directed respondent's attorney to draft an amended judgment to clarify these changes and awarded respondent $1,500 in attorney fees.
Appellant moved for reconsideration, and the court denied his request. By this time, the parties' property was surveyed resulting in legal descriptions for the various parcels. Because the parties could not agree on the terms of the amended judgment, they appeared before the court in June 2001. Following the hearing, the court amended the original judgment. The court added a legal description of respondent's property award that described the award as depicted by exhibit A. As a result, respondent received 21 acres of the parties' property, and appellant received the seven acres north of Inwood Road and the remaining property south of the road.
Appellant now challenges the district court's amended judgment and the attorney-fee award to respondent. On the initial appeal, this court questioned whether the original judgment was final and appealable and whether judgment was entered for the attorney-fee award. After the parties submitted additional arguments, this court dismissed appellant's appeal from the attorney-fee award and ordered that the balance of the appeal could proceed. After judgment was entered for the attorney-fee award, appellant resubmitted his appeal and moved this court to consolidate. This court granted appellant's request.
DECISION I. Interpretation of Original Judgment
At the February 2000 hearing, respondent's attorney informed the district court that "the agreement here is that [respondent] will receive approximately 18 of the acres." Respondent's attorney simultaneously submitted exhibit A, which depicts land encompassed by the eastern boundary line of the parties' property south of Inwood road and by the western boundary line created by extending south the eastern boundary line of the property north of Inwood Road to the parties' boundary line south of Inwood Road. Respondent's attorney informed the court that he ran the document by appellant's attorney and that the document was submitted just to give the Court an idea of what we are talking about. The property is divided by Inwood Road. The 18 acres that we are talking about that [respondent] would receive is south of the road, and to the right — to the west.
At the June 2000 hearing, respondent's attorney informed the district court that the parties had stipulated that respondent would receive a portion of the parties' property "lying south of Inwood Road consisting of approximately eighteen acres, commencing from the east boundary line working west."
Respondent maintains that she is entitled to the land depicted by exhibit A while appellant argues that respondent is entitled to 18 acres as measured from the eastern boundary line located south of Inwood Road. Although appellant asserts that the parties agreed that respondent would receive exactly 18 acres (or slightly more if needed to satisfy the CUP application), the record supports respondent's position that the 18-acre figure was an approximation. At oral argument, appellant claimed that the stipulation read into the record during the February 2000 hearing was the "binding" stipulation. Even accepting appellant's argument, we cannot agree with appellant's assertion that respondent is entitled to exactly 18 acres. Although respondent may have at times referred to the parcel as 18 acres without using a qualifier such as "more or less," "approximately," or "roughly," respondent also submitted exhibit A to the district court, which depicts the boundary lines of the parcel she believed she would be awarded. Appellant was aware of exhibit A. The exhibit was a reasonable means of describing respondent's parcel since the parties' property had not been surveyed at the time of the hearings. Thus, the issue here is whether there is an ambiguity between respondent's statement to the district court coupled with exhibit A and the district court's language concerning respondent's property award.
Courts favor stipulations in marital dissolution cases in order to simplify and expedite litigation; therefore stipulations are "accorded the sanctity of binding contracts." Shirk v. Shirk, 561 N.W.2d 519, 521 (Minn. 1997). Accordingly, the rules of contract construction are applied "when construing a stipulated provision in a dissolution judgment." Blonigen v. Blonigen, 621 N.W.2d 276, 281 (Minn.App. 2001) (citation omitted), review denied (Minn. Mar. 13, 2001). " reviewing court "must consider the stipulation as a whole to determine whether an ambiguity exists." Id. (citation omitted). "If no ambiguity exists, interpretation is a question of law subject to de novo review." Id. (citation omitted).
The court's judgment described respondent's property award as follows:
Subject to the contingency provisions contained below, the Wife is awarded all the parties' right, title, interest and equity in and to that part of the parties' real property which lies south of Inwood Road and East of the East boundary line of the parties' property lying North of Inwood Road when said East boundary line is extended to the South boundary line of the parties' property, containing approximately 18 acres, more or less. Attached hereto and marked as Exhibit "A" is a section map of the North 1/2 of Section 28, Township 115 Range 24 which is made a part hereof and which identifies the property described herein and intended to be awarded to the Wife. Said property consists of all the property covered by "X's" as shown on the said Exhibit "A", all of which property shall hereafter be referred to as, the "Wife's Property".
(Emphasis added.) The court's language indicates that respondent should receive the land encompassed by extending the east boundary line of the property north of Inwood Road south to the edge of the parties' boundary line south of Inwood Road. The exhibit attached to the court's judgment, which is the same exhibit submitted by respondent, also depicts this award. The court's language coincides with exhibit A, but it does not coincide with respondent's attorney's statement that respondent should receive a parcel "lying south of Inwood Road consisting of approximately eighteen acres, commencing from the east boundary line working west." But reading that statement in conjunction with respondent's submission of exhibit A indicates that an ambiguity does not exist between the language stated on the record and the language drafted by the district court.
This conclusion is further supported by appellant's actions following the court's judgment. Appellant moved the court to vacate the original judgment and requested the court to issue a new judgment "with the terms as indicated on Exhibit C to the Affidavit of Marcia S. Rowland." Appellant's proposed changes, however, did not address the claimed ambiguity between respondent's attorney's statement to the court and the court's property-award language in the judgment. In fact, appellant's proposed changes were (additions are indicated by an underscore; deletions are indicated by a strikethrough):
Subject to the contingency provisions contained below, the Wife is awarded all the parties' right, title, interest and equity in and to that part of 18 acres of the parties' real property which lies south of Inwood Road and East of the East boundary line of the parties' property lying North of Inwood Road when said East boundary line is extended to the South boundary line of the parties' property, containing approximately 18 acres, more or less. Attached hereto and marked as Exhibit "A" is a section map of the North 1/2 of Section 28, Township 115 Range 24 which is made a part hereof and which roughly identifies the property described herein and intended to be awarded to the Wife. Said property consists of all the property covered by "X's" as shown on the said Exhibit "A", all of which property shall hereafter be referred to as, the "Wife's Property".
If appellant's intention was to give respondent exactly 18 acres (or a "little more" if respondent could not obtain a CUP for exactly 18 acres) and if the acreage was supposed to be calculated by starting from the east boundary line of the parties' property south of Inwood Road and working west, we surmise that appellant would have suggested these changes. Appellant did not suggest changes to exhibit A or to the court's language that identified the boundary lines for respondent's property award.
At the August 2000 hearing on appellant's motion to amend the original judgment, the court discussed each of appellant's proposed changes. When discussing the proposed changes listed above, the court asked appellant's attorney, "So Ms. Rowland, would you agree those condition changes don't make a whole lot of difference whether they are made or not?" Appellant's attorney replied, "Yes." Although appellant points out that the court made a number of changes "that were not reduced to writing," a review of the transcript, as demonstrated above, reveals that appellant's proposed changes were more of form than substance. Given these facts, we conclude that no ambiguity exists and that appellant acquiesced to the court's original language that described respondent's property award.
In February 2001, respondent moved to amend the original judgment to award her all 25 acres because her CUP application for the 18-acre parcel was denied. Appellant moved the court to deny respondent's motion. Appellant also requested that the court require respondent to resubmit her CUP application for the 18 acres with the western boundary line drawn in a fashion that would meet the county's eligibility requirements. A different judge than the one who signed the original judgment heard these matters.
Appellant maintains that respondent "deliberately withheld from appellant and [the district court] all portions of the June 20, 2000 transcript relating to the property division." Appellant suggested to the court that he challenged the property description in August 2000, when, as demonstrated above, his challenge did not address either exhibit A or the court's language describing the boundaries of respondent's property award. The dialogue between appellant's attorney and the court was as follows:
MS. ROWLAND: That written Judgment and Decree that's in the file actually was amended by an Order dated August 29, 2000. There is an Order referencing that but the Order does not say what the amendments were, and there was no amended Judgment and Decree drafted by any parties, so that the language that is in the tile in what's called the Judgment and Decree actually has been changed.
THE COURT: It doesn't conform to the verbal agreement that was placed on the record?
MS. ROWLAND: Well, what happened — to go back — what happened was we placed the agreement on the record. Then Mr. Wittenkeller drafted a proposed Findings which I — I disagreed with some of the terms, and instead of getting my signature on it he submitted it to [the previous judge] before even the time period that [were] allowed by the rule to comment on it had expired.
So I wrote onto — I wrote in to the Judge, we had an ex parte motion asking that that Judgment and Decree be vacated because of our concerns that what was submitted was not what the parties had agreed to.
Judge Young then indicated, well, put it on, formal most [sic]. We came back in for a hearing, and at that hearing the Judge verbally asked the parties whether they agreed to specific additional terms, and to changes in that Judgment and Decree, and that's referenced in that August 29th Order. But the August 29th Order doesn't state the changes. But that's by way of background.
THE COURT: Okay. But those changes were ultimately incorporated in the J and D.
MS. ROWLAND: No. They are by the Order dated August 29th, but nowhere in writing are those changes reflected.
THE COURT: Anybody obtain — am I going to need a transcript?
MS. ROWLAND: I tend to think not. However, there were changes, there were disputes with reference to what the * * * agreement as to the division of the property was.
Even if the court had the June 2000 transcript, however, it is unclear how the outcome would have changed. If the court had read the transcript, it would have been aware that respondent's attorney described the property award as "lying south of Inwood Road consisting of approximately eighteen acres, commencing from the east boundary line working west," and the court would have been aware that respondent previously submitted exhibit A as a depiction of the verbal description.
After reviewing the dialogue between the parties and the court along with all documents submitted by the parties to the court, we conclude that the district court's original judgment correctly describes the parties' stipulation regarding the property award to respondent. It is worth noting that appellant states in his brief to this court that if respondent could not get a CUP on the 18 acres, then respondent "was to see if there was an eligible lot on the entire property south of the road." (Emphasis added). In other words, if respondent did not get a CUP for the 18-acre parcel, appellant agreed that respondent could have the entire 25-acre parcel south of Inwood Road. Thus, it was to appellant's advantage that the court interpreted the original judgment to award respondent what was depicted in exhibit A, which is only 21 acres. Otherwise, based on appellant's concession, the court could have awarded respondent the entire 25-acre parcel because the county denied respondent's CUP application for the 18-acre parcel. At oral argument, we asked appellant's attorney why appellant would agree to allow respondent to receive all 25 acres south of Inwood Road if she could not get a CUP for the 18 acres. Appellant's attorney responded that appellant thought he would not qualify for an access road to any of his property south of Inwood Road, and therefore felt that although respondent should only receive exactly 18 acres, that if the court was going to give her 21 acres, she might as well get the other four as they would be worthless to him. Respondent's attorney conceded that appellant legally could not be landlocked from his remaining acreage if his client prevailed and agreed it was implicit that under any property award he was seeking for his client, she would have to cooperate with appellant and guarantee his access to the remaining acreage. Thus, we modify the affirmance on the merits to include respondent's concession on the record that appellant cannot be denied access by respondent to his remaining property.
II. Reopening the Original Judgment
Upon a party's motion, the district court may relieve a party from a judgment, order a new trial, or grant other relief as may be just based on 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 the rules of civil procedure, rule 59.03;
(3) fraud, whether denominated intrinsic or extrinsic, misrepresentation, or other misconduct of an adverse party;
(4) the judgment and decree or order is void; or
(5) the judgment has been satisfied, released, or discharged, or a prior judgment and decree or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment and decree or order should have prospective application.
Minn. Stat. § 518.145, subd. 2 (2000).
Appellant argues that the judgment should be reopened, alleging that respondent's attorney made a mistake when he reduced the parties' stipulation to writing in the original judgment entered by the court.
The record is unclear whether appellant properly raised this issue. In appellant's final motions to the district court, appellant asked the court to reform the original judgment, but he never requested the court to reopen the judgment. Appellant did, however, reference Minn. Stat. § 518.145, subd. 2, in his supporting memorandum to the district court. Generally, issues are waived if they are not raised in district court. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (stating reviewing court generally considers only those issues presented to and considered by district court).
Even addressing the issue on its merits, we conclude that appellant's argument is moot because we have already concluded that the district court properly entered the parties' stipulation into the judgment.
III. Attorney Fees
In February 2001, respondent moved the district court for $3,000 in attorney fees. Following the March 2001 hearing, the district court awarded respondent $1,500 in attorney fees. In reaching its decision, the court explained that "[Respondent] offered to settle the present dispute * * *. [Appellant] should have accepted her offer. That he didn't results in a $1,500 award of attorney's fees."
Appellant argues that the district court erred in awarding attorney fees to respondent because respondent wrongfully disclosed her settlement offer to the district court. In making this argument, appellant relies on Minn.R.Evid. 408, which provides, in pertinent part:
Evidence of * * * offering * * * a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible.
The rule, however, also provides:
This rule * * * does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.
Id.
In a supplemental affidavit respondent submitted to the district court in February 2001, respondent stated:
Given the extraordinary length of time this matter has taken to complete, and in an effort to reach a resolution, on February 9, 2001, I authorized my attorney to propose to [appellant] that I be given the property as originally described in the Initial Award and depicted in the Exhibit "A" attached to the Judgment and Decree, with the understanding that the property in question is slightly over 20 acres in size. To date I have had no response to this offer.
(Emphasis added.)
At the March 2001 hearing, appellant alleged that respondent was trying to acquire 25 acres of the parties' land in order to create three separate lots rather than using the "approximate" 18 acres they originally agreed upon to build one homestead. In response, respondent's attorney told the court:
This issue about this scam to build three lots on this south twenty-five acres is just frankly silly, because as you can see there's only so much buildable property, and a month ago, and it's still an open offer today, we offered to accept the property as initially described in the award. He can have his building on the other property to be done with this thing. So this business about [respondent] conspiring with the surveyor is frankly just ridiculous.
[Respondent has] never made any kind of discussion with him on that point. All we want is the property that has the building site on it. Yet we are made to jump through hoops. This is the thanks she gets for deferring to his plea to keep his family home, and Judge Young was threatening to sell the darn thing. I think it's only reasonable to give us the building site, which is what was intended to begin with.
(Emphasis added.)
By the time of the hearing in March 2001, the dissolution proceeding had yet to be resolved, despite more than two years of litigation, because the parties could not agree on the division of property. After the parties entered their stipulation into the record regarding how the property should be divided and respondent could not acquire county approval for a CUP on an 18-acre parcel, appellant argued (as discussed above) that respondent was entitled to exactly 18 acres rather than the "approximate" 18 acres to which they seemingly had already agreed. Appellant asserted this argument while agreeing that respondent could have all the property south of Inwood Road (a 25-acre parcel) if respondent could not get approval for a CUP on the 18-acre parcel. Respondent offered to settle for an even 20 acres to avoid further litigation over the matter. As referenced by exhibit A attached to the court's order, and as noted above, the 21-acre parcel actually awarded appears to be the amount of land respondent originally was awarded if the east boundary line of the parcel north of Inwood Road was extended straight south to create the west boundary line of the parcel south of Inwood Road. Thus, respondent's settlement offer is basically an expression of her willingness to accept what the court originally awarded to her. Given the types of situations referenced by rule 408 regarding when a settlement offer can be disclosed, respondent's disclosure was allowed because respondent was attempting to demonstrate that she was making a good-faith attempt to settle the parties' property dispute.
Appellant next asserts that, even if respondent properly disclosed her settlement offer, the district court failed to indicate under what authority it awarded attorney fees to respondent.
Under Minn.R.Civ.P. 11, the district court can award monetary sanctions if a party moves for sanctions by separate motion or request and if the party describes the specific alleged violations of the rule. Minn.R.Civ.P. 11.03(a)(1). Further, the party alleged to have violated rule 11 must be given 21 days to correct its action. Id. The district court, when imposing sanctions, must describe the party's conduct determined to be a violation of the rule and "explain the basis for the sanction imposed." Minn.R.Civ.P. 11.03(c).
The court was not authorized to award attorney fees to respondent under Minn.R.Civ.P. 11 for three reasons. First, although respondent moved for attorney fees, she did not file a separate motion in compliance with the rule and she did not describe how appellant violated the rule. Second, appellant was not allowed an opportunity to correct his actions. Third, the district court failed to describe how appellant's conduct violated rule 11.
The court may also award monetary sanctions under Minn. Stat. § 549.211 (2000). This statute contains the same requirements for imposing sanctions as rule 11. As discussed above, neither respondent's motion nor the court's order complied with these requirements.
Finally, the district court "shall award attorney fees, costs, and disbursements in an amount necessary to enable a party to carry on or contest the proceeding" if it finds (a) the fees are necessary for a good-faith assertion of rights, (b) the payor has the ability to pay the award, and (c) the recipient cannot pay his or her own fees. Minn. Stat. § 518.14, subd. 1 (2000). The statute also directs that the court has discretion to award "additional fees, costs, and disbursements against a party who unreasonably contributes" to the proceeding's length or expense. Id.
After the district court awarded attorney fees to respondent, appellant moved for reconsideration of the amendments to the judgment and challenged the attorney-fee award. The court denied his request but allowed the parties to bring the matter before the court if they could not agree on the amendments to the court's original judgment and decree. The parties appeared before the court in June 2001. In the court's memorandum attached to its order following the hearing, the court addressed the attorney fee issue:
I don't believe this matter has been approached by [appellant] and his attorney in good faith. They can read English. [Respondent] asked this Court to award 25 acres but the Court chose not to do this and held the parties to the agreement they made last June. Therefore, the award of attorney's fees in the March Order will stand.
Although the court did not state its reasoning explicitly, this language, along with the court's language when it originally awarded attorney fees to respondent, indicates that the district court determined that appellant acted in bad faith. We have examined the record and conclude that appellant did not act in bad faith. Appellant tried to enforce his interpretation of the stipulation. His position was not without merit. The case contained well-argued conflicting legal theories. We do not find in appellant's favor on the merits but conclude that his conduct was in good faith and we reverse the attorney-fee award granted to respondent against appellant.