Opinion
No. A04-367.
Filed December 7, 2004.
Appeal from the District Court, McLeod County, File No. F5-99-349.
Robert H. Wenner, Reichert, Wenner, Koch Provinzino, P.A., (for appellant)
Benjamin J. King, Gavin, Olson Winters, Ltd., (for respondent)
Considered and decided by Schumacher, Presiding Judge; Stoneburner, Judge; and Parker, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Appellant and respondent were married on August 1, 1987. The parties filed a marital termination agreement, and on March 16, 2000, the district court issued findings of fact, conclusions of law, order for judgment, and judgment and decree. On March 1, 2002, the district court vacated the portions of the March 16, 2000, judgment that dealt with division of the parties' real and personal property. On January 12, 2004, the district court issued the findings of fact, conclusions of law, order for judgment, and amended judgment and decree that is the basis for this appeal. We reverse and remand.
DECISION
Whether to reopen a dissolution judgment under Minn. Stat. § 518.145, subd. 2 (2002), lies within the discretion of the district court. Kornberg v. Kornberg, 542 N.W.2d 379, 386 (Minn. 1996) (reviewing refusal to reopen for abuse of discretion); Haefele v. Haefele, 621 N.W.2d 758, 761 (Minn.App. 2001), review denied (Minn. Feb. 21, 2001). The district court's decision regarding whether to reopen a judgment will be upheld unless the district court abused discretion and the district court's findings as to whether the judgment was prompted by mistake or fraud will not be set aside unless clearly erroneous. Hestekin v. Hestekin, 587 N.W.2d 308, 310 (Minn.App. 1998).
The district court may reopen a dissolution matter upon the motion of one of the parties. Minn. Stat. § 518.145, subd. 2. The district court maintains the authority to order a new trial or grant other just relief following, among other reasons, mistake or fraud. Id. But upon a finding of mistake or fraud, the district court is not required to vacate the entire judgment and decree or order. Steel v. Steel, 305 Minn. 504, 505, 232 N.W.2d 104, 105 (1975) ("[A] property settlement stipulation may be modified on proof of fraud or mistake."); see Hafner v. Hafner, 237 Minn. 424, 430-31, 54 N.W.2d 854, 858 (1952) (holding the portion of the decree related to fraud or mistake should be modified in order to bring it into accord with the intent of the parties at the time the decree was entered). Furthermore, when interpreting the application of Minn. Stat. § 518.145, subd. 2(5), this court held a single issue may be addressed by the district court when reopening a divorce decree. Harding v. Harding, 620 N.W.2d 920, 924 (Minn.App. 2001) ("We reverse and remand to permit the reopening of the divorce judgment solely to determine a fair and equitable distribution of the corporate stock." (emphasis added)), review denied (Minn. Apr. 17, 2001). But when the district court considers reopening a matter, the district court must always consider that once a stipulation merges into a judgment, "finality becomes of central importance." Shirk v. Shirk, 561 N.W.2d 519, 522 (Minn. 1997).
Appellant argues that the district court abused discretion by reopening all of the property division portions of the dissolution decree dated March 16, 2000. Instead, appellant maintains, the district court should have addressed only the allocation of the unpaid taxes and not disturbed any other portion of the dissolution decree.
While Minn. Stat. § 518.145, subd. 2, authorizes the district court to reopen a judgment and decree or order, this is not the sole remedy available upon a finding of fraud or mistake. Minn. Stat. § 518.145, subd. 2 (stating the district court "may order a new trial or grant other relief as may be just" (emphasis added)). Although the unpaid withholding taxes in this case amount to approximately $40,000, the general issue of unpaid taxes is relatively simple. Instead of reopening the personal and real property portions of the dissolution decree, the district court should simply have apportioned the liability for the unpaid taxes to the parties. Taking such an approach would have better assured the central concern of finality. See Shirk, 561 N.W.2d at 522 (stating that once a stipulation merges into a judgment, "finality becomes of central importance"). The district court abused discretion when it addressed extraneous property issues unrelated to the unpaid taxes.
Because the district court abused discretion by reopening all issues related to the distribution of real and personal property, except for the unpaid taxes, it is unnecessary for this court to review the valuations made by the district court, and the order vacating the division of the parties' real and personal property is reversed. Additionally, we reverse the district court's apportionment of the liability for the unpaid taxes and related penalties and interest because they are significantly intertwined with the district court's distribution of assets. Consequently, the March 16, 2000, order is reinstated in its entirety, and the matter is remanded to the district court for the purposes of reevaluating and distributing the tax liabilities in a manner not inconsistent with this opinion.