Opinion
No. CX-02-466.
Filed October 14, 2002.
Appeal from the District Court, Dakota County, File No. F99814586.
Howard J. Groves, (for respondent Shawn Marne McNab)
Peter John Horejsi, (for appellant Steven Edmund Schroeder)
Considered and decided by Schumacher, Presiding Judge, Harten, Judge, and Shumaker, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Appellant Steven Edmund Schroeder claims the district court erred in its interpretation and enforcement of a stipulation with respondent Shawn Marne McNab, f/k/a Shawn Marne Schroeder, in the dissolution of their marriage. We affirm.
FACTS
Schroeder had claimed he was wrongfully terminated by his former employer, Warneco. His attorney demanded severance pay of approximately $75,000; the former employer offered $27,500. The parties ultimately reached an agreement. Schroeder's attorney read the stipulation into the record:
Then, your honor, [Schroeder] has a claim for a wrongful termination claim against a former employer * * * and we're in agreement that [McNab] will receive 35% of whatever that settlement is, net of whatever attorney's fees have to be advanced and whatever income taxes are due on that settlement. That will not include what the company calls its holdback which are some separate monies for commissions or something. The holdback will go entirely to [Schroeder] and that will be in consideration for [McNab] receiving [a car] free and clear of any other claim.
Schroeder and McNab acknowledge their agreement on the record.
The district court issued findings of fact "based upon the oral stipulation of the parties," including the following:
That this court approves the oral stipulation of the parties and incorporates this stipulation into the Conclusions of Law, order for Judgment and Judgment and Decree to be entered herein.
The document included the following conclusion of law:
Warneco Severance Settlement. [McNab] is awarded 35% of the severance/separation agreement [Schroeder] receives from his former employer, Warneco, Inc. after subtraction of attorneys fees and costs [Schroeder] incurs and the income tax liability on said monies. This award does not include the "holdback" portion of the monies due [Schroeder] from Warneco. The remaining balance of this settlement is awarded to [Schroeder].
Approximately a month after judgment was entered, Schroeder retained a new attorney. Over the next several months, this attorney gathered additional facts supporting a variety of legal claims against Warneco. Ultimately, Schroeder's claim included many theories of recovery in addition to a severance pay claim. Schroeder demanded reimbursement and compensation not only for lost wages but also for past and future medical expenses, past and future emotional distress, assault and battery, and Family Medical Leave Act violations. Schroeder's demand increased to $500,000.
In November 2000, Schroeder settled with his former employer for $300,000, categorized by Schroeder as follows: $101,000 attorney fees; $47,500 past and future medical/psychological expenses; $50,000 physical assault and battery (actually a theory of recovery as opposed to a type of damages); $74,000 emotional distress; and $27,500 severance pay.
Subsequently, a dispute arose as to McNab's share of these proceeds. McNab contended she was entitled to 35% of the entire amount after attorney fees, costs, and taxes were deducted. Schroeder claimed that McNab was entitled to 35% of the severance pay amount only, with a pro rata deduction of the collection costs and the taxes applicable to this item of damages. McNab moved for an order requiring Schroeder to comply with the stipulation and resulting dissolution decree. Schroeder argued that compliance with the stipulation and decree required distributing to McNab 35% of only the severance pay.
The district court agreed with McNab, awarding her 35% of the net of the total settlement. The court cited the language Schroeder's first attorney used at the time of the stipulation. In particular, the district court focused on the "whatever that settlement is" language in deciding that the parties' intent was clear at the time of the stipulation. The court reasoned that both sides decided to share the risk that Warneco's settlement offer would change, for better or worse. Accordingly, the district court decided that McNab should receive 35% of the net of the total settlement paid: $300,000, less attorney fees ($101,000) = $199,000; less costs ($6,000) = $193,000; less tax liability ($23,786) = $169,214; x 35% = $59,224.90. Schroeder appeals.
DECISION
Whether a dissolution decree is ambiguous is a question of law subject to de novo review. Head v. Metro Life Ins. Co., 449 N.W.2d 449, 452 (Minn.App. 1989), review denied (Minn. Feb. 21, 1990). If a judgment is ambiguous, a district court may construe or clarify it. Stieler v. Stieler, 244 Minn. 312, 318-19, 70 N.W.2d 127, 131 (1955). Absent ambiguity, however, it is not proper for a court to interpret a stipulated judgment. Starr v. Starr, 312 Minn. 561, 562-63, 251 N.W.2d 341, 342 (1977). When determining whether the terms of a stipulation are clear and definite, the court gives the language used its plain and ordinary meaning. Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 394 (Minn. 1998). The meaning of an ambiguous judgment provision is a fact question reviewed on a clearly erroneous basis. Landwehr v. Landwehr, 380 N.W.2d 136, 139-40 (Minn.App. 1985).
Paragraph 11 of the judgment and decree states as follows:
Warneco Severance Settlement. [McNab] is awarded 35% of the severance/ separation settlement [Schroeder] receives from his former employer * * * after subtracting attorney's fees and costs * * * and the income tax liability on said monies. This award does not include the "hold back" portion of the monies due [Schroeder] from Warneco.
(Emphasis added.) Schroeder claims that this language is unambiguous, that it establishes that McNab is entitled to 35% of the net of the severance/separation settlement only, and that the court erred by not interpreting the clear language of this clause as per Schroeder's interpretation. Schroeder points to the bolded title of the paragraph as establishing that the parties contemplated only severance pay as subject to the distribution.
The district court disagreed, utilizing Schroeder's attorney's statement on the record, "whatever that settlement is," and determined that the entire amount was subject to the distribution. Schroeder also argues that the parties were not aware of any claims in addition to the severance pay claim at the time of the stipulation, which indicates that the parties contemplated and agreed to split only the severance pay.
The district court was correct in its ruling. Schroeder's position would be more persuasive if Paragraph 11 of the decree did not include the word separation in the clause severance/separation settlement. This term encompasses more than the word severance, referencing other possible damages arising from Schroeder's separating from the company and indicates an intent to refer to something more than severance pay alone. Supporting the district court's construction is the fact that Paragraph 11 specifies several items to be excluded from the distribution amount fees, costs, taxes, and the employer's "holdback." The exclusion Schroeder seeks is not referenced.
Schroeder asserts that the parties were unaware of the additional claims Schroeder could and did make against his former employer. Both Schroeder and McNab knew that the settlement offer in place at the time of the stipulation could change, for better or worse. The fact that the final settlement was more than the initial settlement offer benefits both parties. The language used could have included more restrictive language, accomplishing the exclusions Schroeder now urges. The stipulation does not include such language, however.
Schroeder contends that the district court erroneously determined that the language in Paragraph 11 is ambiguous. We need not address this issue, however, because we conclude that the language used in the judgment and decree is clear. The language clearly delineates the specific items subtracted from the settlement to arrive at the net amount, of which McNab is entitled to 35%.
Schroeder argues that the language is clear that McNab is entitled to 35% of that amount he unilaterally designated as severance. The language does not support his construction, however, and Schroeder himself resorts to extrinsic evidence what he claims the parties knew or did not know to arrive at his interpretation. He alleges that the additional claims did not exist at the time of the stipulation so the parties could not have intended for the agreement to cover these additional claims.
But the fact that Schroeder had not yet identified the claims does not mean that they did not exist. At a minimum, the facts and allegations upon which these claims could be made did exist at the time of the stipulation. The stipulation does not exclude unknown, future, or additional claims even though this language certainly could have been added. Schroeder could have limited the amount subject to the distribution to that amount designated as severance pay. Without this limiting language, McNab is entitled to 35% of the net settlement, inclusive of each category of damages. Additionally, although some of the claims involve allegations of conduct and occurrences during Schroeder's employment with Warneco, these events transpired in the final months of that employment, and they were definitely involved in Schroeder's departure from Warneco. As such, these claims are not clearly excluded from Schroeder's wrongful termination dispute, as Schroeder now claims.
Schroeder also argues case law indicating that certain categories or items of damages are not considered marital property subject to a property division. As such, Schroeder contends that the district court erred in subjecting the settlement amounts designated as paid for emotional distress and physical assault and battery to the 35% — 65% split. These distinctions, however, are not relevant given the unique circumstances involved in this case. The parties entered into a stipulation specifically designed to deal with the settlement proceeds from Schroeder's dispute with Warneco. Absent this stipulation, Schroeder is correct in arguing that the district court would have been required to separate which settlement proceeds fell into which category and that the majority of these proceeds arguably would be nonmarital property.
But in this case, the parties agreed on the record regarding this yet-to-be-quantified asset, and the court directly addressed the matter in the dissolution decree. In re Labelle's Trust, 302 Minn. 98, 115-16, 223 N.W.2d 400, 411 (1976) (noting parties may stipulate to something district court could not order). It is undisputed that Schroeder drafted the language submitted to the district court and used in the judgment and decree. The fact that the subject matter of the stipulation later took on significantly increased value does not change the interpretation of the stipulation.