Opinion
No. C7-96-2570.
Filed August 5, 1997.
Appeal from the District Court, Ramsey County, File No. DM-F9-92-693.
Peter H. Watson, Peter H. Watson Associates, (for Respondent).
Brian J. Peterson, (for Appellant).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1994).
UNPUBLISHED OPINION
Appellant Eleanor M. Hall challenges the district court's findings of fact, conclusions of law, and order, arguing that it was an abuse of discretion for the district court to rule that she committed fraud on the court and to award attorney fees to her former husband. We affirm.
FACTS
A 1992 stipulated judgment dissolving the parties' marriage gave appellant Eleanor M. Hall (wife) authority to run the family distributorship, but required her to split its profits with respondent John P. Hall (husband) until one party died or until wife terminated the business. Wife legally terminated the business in January 1994. The manufacturer assigned the business to a third party, wife reapplied for a distributorship, the third party resigned, and the distributor assigned the distributorship to wife who operated it under a new name. When wife did not split profits from the "new" distributorship with husband, he alleged fraud on the court and moved to vacate the portion of the dissolution judgment dividing the business. A referee ruled that wife committed fraud on the court and awarded husband attorney fees. In May 1996, the district court affirmed, stating it deferred to the referee's rulings on witness credibility. Wife moved to vacate the May order because, among other things, no witnesses testified before the referee. In November 1996, the district court denied wife's motion. This appeal followed.
DECISION I. Motion to Vacate Orders
Wife challenges two orders: (1) the November 1996 order denying her motion to vacate the May 1996 order and (2) the May 1996 order itself. When deciding whether to reopen a judgment, the standard of review is whether the district court abused its discretion. Mesenbourg v. Mesenbourg , 538 N.W.2d 489, 493-94 (Minn.App. 1995).
In regard to the November 1996 order denying wife's motion to vacate the May 1996 order, an order to vacate a judgment is generally not appealable. See Carlson v. Panuska , 555 N.W.2d 745, 746 (Minn. 1996). The proper appeal from a final order is to appeal the underlying order itself. Id. Therefore, the district court's November 1996 order is not appealable.
Because this court does not have proof of service of a notice of filing of the May 1996 order, that order is still appealable. Minn.R.Civ.App.P. 104.01 (time to appeal an order is 30 days from service of notice of filing); Curtis v. Curtis , 442 N.W.2d 173, 176 (Minn.App. 1989) (order four- year-old reviewed where notice of filing not served). Therefore, we will review the May 1996 order.
II. Wife's Fraud
This court will not reverse a dissolution judgment for fraud on the court unless the district court abused its discretion. Maranda v. Maranda , 449 N.W.2d 158, 165 (Minn. 1989). Wife challenges several of the referee's findings that were adopted by the district court. To successfully challenge a finding of fact, wife must show the finding is clearly erroneous and that the error prejudiced her. Minn.R.Civ.P. 52.01 (findings not set aside unless clearly erroneous); Midway Ctr. Assocs. v. Midway Ctr., Inc. , 306 Minn. 352, 356, 237 N.W.2d 76, 78 (1975) (highlighting the necessity of showing prejudice). Having reviewed wife's claims, the relevant findings, and the record, we conclude that wife has failed to meet her burden to challenge any of the referee's findings.
Wife claims that the May 1996 order is defective because the district court's stated basis for affirming the referee was the referee's credibility determinations. When wife made this claim at the district court hearing on the motion to vacate, the district court rejected it, indicating it had considered the documentation provided by the parties and by the referee. Under these circumstances, any error in the statement of the court's basis for affirming the referee is harmless. See Minn.R.Civ.P. 61 (harmless error to be ignored).
Wife argues that because none of her allegedly inappropriate conduct occurred before judgment was entered, fraud on the court could not have occurred. To support her argument, she states that "[a] finding of fraud on the court is justified only by the most egregious misconduct directed to the court itself." To support this, wife relies on the definition of fraud on the court as established in Pfizer, Inc. v. International Rectifies Corp. , 538 F.2d 180 (8th Cir. (Minn.) 1976), cert. denied 429 U.S. 1040 (1977). Wife fails to address, however, the Maranda decision, which rejects the Pfizer standard in dissolution cases. See Maranda v. Maranda , 449 N.W.2d 158, 165 (Minn. 1989). Maranda makes clear that the court's status as a party to stipulated dissolution judgments is to ensure an equitable property division and that the defrauding of one spouse by the other is also considered a fraud on the court. Id. In the present case, the district court's conclusion that wife's conduct in "terminating" and restarting the business was a fraud on the court is consistent with the teaching of Maranda . Therefore, the fact that wife's conduct occurred after entry of judgment does not preclude a ruling that wife's conduct was a fraud on the court. This is particularly true where, as here, to rule otherwise would allow wife the opportunity to, by sleight-of-hand, unilaterally strip husband of his right (to which she stipulated) to share in the profits of a business they built during their marriage.
Wife also claims her conduct was justified because the dissolution judgment does not restrict her ability to terminate the distributorship. In the present case, wife's circumvention of the dissolution judgment and her current operation of what is essentially the same business the parties developed during their marriage shows that she neither "terminated" the business as contemplated in the dissolution judgment nor met her fiduciary obligation.
III. Attorney Fees
Generally, an award of attorney fees lies within the discretion of the district court and will not be reversed absent an abuse of discretion. Katz v. Katz , 408 N.W.2d 835, 840 (Minn. 1987). The court may award attorney fees in a marital dissolution proceeding provided the court finds:
(1) that the fees are necessary for the good-faith assertion of the party's rights in the proceeding and will not contribute unnecessarily to the length and expense of the proceeding;
(2) that the party from whom fees, costs, and disbursements are sought has the means to pay them; and
(3) that the party to whom fees, costs, and disbursements are awarded does not have the means to pay them.
Minn. Stat. § 518.14, subd. 1 (1996).
In the present case, because wife's attempt to finesse the judgment made the district court proceeding necessary, the district court's award of attorney fees was not an abuse of discretion.
IV. Attorney Fees for Appeal
Husband filed a motion for attorney fees and costs for this appeal. This court has discretion in awarding appellate attorney fees. Case v. Case , 516 N.W.2d 570, 574 (Minn.App. 1994). Attorney fees on appeal may be awarded in dissolution cases where the conditions of Minn. Stat. § 518.14, subd. 1 (1996), are satisfied. Appellate attorney fees may also be awarded where the appeal was frivolous or in bad faith. Dabrowski v. Dabrowski , 477 N.W.2d 761, 766 (Minn.App. 1991).
In the present case, although husband's assertion that the appeal was frivolous and wife acted in bad faith is not completely unfounded, this appeal does not warrant an award of attorney fees to husband. Therefore, husband's motion for attorney fees on appeal is denied.