Opinion
Nos. 32839-9-II; 35239-7-II.
June 10, 2008.
Appeals from a judgment of the Superior Court for Pierce County, No. 03-3-02859-1, Katherine M. Stolz, J., entered January 7, 2005.
Affirmed by unpublished opinion per Houghton, J., concurred in by Armstrong and Quinn-Brintnall, JJ.
In these consolidated cases, Joan Wright appeals from the decree dissolving her marriage to Robert Wright and the trial court's later denial of her motion to vacate the dissolution decree. We affirm.
FACTS
Joan and Robert married in 1980. On January 16, 2002, Joan suffered serious injuries in a motor vehicle accident. She and Robert separated on June 27, 2003. On August 19, 2004, the trial court mediated their dissolution and the parties entered a CR 2A stipulation disposing of their property. The same trial court that mediated also signed the settlement agreement.
For clarity, we refer to the parties by their first names, intending no disrespect.
CR 2A sets forth the circumstances under which a binding stipulation may be made, including as occurred here, an agreement on the record in open court.
On September 14, 2004, Joan moved to set aside the settlement agreement based on allegations of Robert's fraud and bad faith in negotiating the settlement. She claimed that Robert "knowingly and intentionally destroyed and/or disposed" of her personal and community property, including property from the catering business they had operated together, and that he had failed to disclose funds in an out-of-state bank account before their settlement. Clerk's Papers (CP) at 32.
On November 19, 2004, the trial court heard the motion. During the hearing on the motion, the trial court stated, "Absolutely everything was discussed at the [earlier] settlement." Report of Proceedings (RP) (Nov. 19, 2004) at 12. The trial court found that Robert was not in contempt and that Joan failed to establish fraud by clear, cogent, and convincing evidence. On January 7, 2005, the trial court signed a decree of dissolution incorporating the settlement agreement.
Joan appealed the dissolution decree on February 7, 2005. After filing the appeal, we stayed the matter while Joan's new counsel, in a separate proceeding, filed a petition for appointment of a limited guardian of estate. The petition asserted that Joan was "unable to handle her complete financial affairs and requires supervision" and that she needed assistance "pursuing domestic litigation and appeal." CP at 606. Joan herself declared, as part of the petition, that she wanted "a limited guardian appointed over my estate to assist me with my finances and ongoing litigation with my ex-husband." CP at 608.
On October 31, 2005, a Pierce County pro tempore court commissioner entered an order appointing a guardian of Joan's estate and limited guardian of her person. That order determined that Joan was "an incapacitated/client Person as defined by RCW 11.88.010 by reason of mental, emotional, and physical problems" and included a finding that Joan was "incapacitated as of the date of her closed-head injury due to a car accident in January 2002." CP at 670.
On June 22, 2006, relying on various provisions of CR 60(b), Joan moved to vacate the dissolution decree and incorporated settlement agreement in light of the commissioner's incapacity finding. On July 14, 2006, the trial court denied that motion, finding that Joan did not overcome the presumption of her competency at the August 2004 settlement proceeding by clear, cogent, and convincing evidence.
In its oral ruling, the trial court noted that it "found nothing to show that as of August 19, 2004, when [Joan] entered into a settlement agreement with competent counsel, that she was, indeed, unable to contract and was incompetent at that time." RP (July 14, 2006) at 19. The trial court determined that "the burden is on [Joan] to show that in August of 2004 or at the time she actually filed her divorce action . . . that she was not competent; and I haven't seen anything to that effect." RP (July 14, 2006) at 20.
Additionally, the trial court stated:
The divorce was filed by [Joan] in 2003 on her own initiative. . . . Both of the parties were represented by counsel at the time of the settlement conference in August. An agreement was reached. . . . [W]ithin a month, [Joan] . . . prepared documents for her attorney, herself, typed them out, apparently on a computer, as they were attached to numerous declarations that she was doing on her own behalf, asking that the Court set aside the settlement agreement based on fraud and some other allegations. . . . She then launched an appeal, retained [a different] attorney to do an appeal. . . . Whatever her status now, almost two years later, at the time she entered into this, she was doing so free and voluntarily. . . .
. . . .
. . . There's nothing in that to show that she did not know what was going on, and she had no understanding of the fact that they had settled the divorce and that she didn't remember what had been done back in August; so again, my ruling is that the Decree of Dissolution and the CR 2A Agreement and the Findings of Fact in this case are going to stand. Nothing has been demonstrated to me that she was not competent at the time that they settled this.
RP (July 14, 2006) at 18-19, 22.
On August 10, 2006, Joan appealed the trial court's denial of her motion to vacate the dissolution decree and settlement agreement due to her incapacity. We consolidated her appeals.
ANALYSIS
Joan contends that the trial court erred in denying her motions to vacate the dissolution decree or set aside the settlement agreement. Her arguments on appeal rely primarily on the 2005 guardianship order finding her incompetent dating back to her 2002 accident.
More specifically, with respect to the CR 60(b) motion regarding her alleged incapacity, she argues that her settlement agreement is void under statute and principles of contract law; that the trial court should have appointed a guardian ad litem under RCW 4.08.060 at the initial settlement proceeding; that Robert knowingly misrepresented his knowledge of her incapacity; and that the trial court should have recused itself and violated ER 605 and ER 201. With respect to the denial of the earlier motion to set aside the settlement agreement, Joan asserts that the trial court erred in denying her motion because Robert failed to disclose the extent of community property assets and acted in bad faith.
ER 605 precludes a judge presiding over a trial from testifying in the trial.
ER 201 relates to taking judicial notice of adjudicative facts.
CR 60(b) Motion
We do not overturn a trial court's decision on a CR 60(b) motion to vacate a judgment unless it plainly appears that the trial court abused its discretion. In the Matter of the Marriage of Tang, 57 Wn. App. 648, 653, 789 P.2d 118 (1990). A trial court abuses its discretion when it exercises its discretion on untenable grounds or for untenable reasons. Tang, 57 Wn. App. at 653. The appellant bears the burden of proving an abuse of discretion. In the Matter of the Parenting and Support of S.M.L., 142 Wn. App. 110, 118, 173 P.3d 967 (2007).
Washington courts presume mental competency unless shown otherwise by clear, cogent, and convincing evidence. Binder v. Binder, 50 Wn.2d 142, 148-49, 309 P.2d 1050 (1957). Although Joan contends that CR 60(b) entitles her to relief, most of her arguments on appeal ultimately depend on the commissioner's 2005 finding that Joan's incapacity extended back to 2002. Thus, if the trial court had tenable reasons to conclude that Joan had capacity to enter into the 2004 settlement agreement despite of the commissioner's findings, then her arguments lose their principal support.
Upon motion, a court may vacate a final judgment for several reasons. CR 60(b). Joan argues that CR 60(b)(1), (2), (4), (5), (9) and (11) apply in this case. According to CR 60(b), those reasons include:
(1) Mistakes, inadvertence, surprise, excusable neglect or irregularity in obtaining a judgment or order;
(2) For erroneous proceedings against a minor or person of unsound mind, when the condition of such defendant does not appear in the record, nor the error in the proceedings;
. . . .
(4) Fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (5) The judgment is void;. . . .
9) Unavoidable casualty or misfortune preventing the party from prosecuting or defending;
. . . .
(11) Any other reason justifying relief from the operation of the judgment.
Joan cites no authority that a commissioner's findings of fact in a later separate proceeding binds a superior court when considering a CR 60(b) motion regarding an earlier proceeding held before it. To the contrary, here, the trial court had first-hand experience mediating the 2004 settlement agreement with Joan's active, personal involvement and participation along with counsel. The trial court acted within its discretion in determining that Joan failed to rebut the presumption of her competency. Thus, Joan's various arguments for vacating the dissolution decree based on the commissioner's finding of incapacity fail, including her argument that she should have had a guardian ad litem appointed for the 2004 settlement proceeding.
Motion To Set Aside the CR 2A Stipulation
Two issues remain regarding Joan's first motion to set aside the settlement agreement: (1) whether the trial court improperly inserted itself as a witness into the November 19, 2004 hearing, improperly took judicial notice, or should have recused itself; and (2) whether the trial court erred in denying the motion to set aside the settlement agreement based on Robert's alleged fraud or bad faith.
In general, a party is bound by an agreement that complies with CR 2A. Baird v. Baird, 6 Wn. App. 587, 589, 494 P.2d 1387 (1972). To overturn such an agreement, a party must show fraud, mistake, or misunderstanding. Baird, 6 Wn. App. at 589. We review for abuse of discretion. In the Matter of Patterson, 93 Wn. App. 579, 586, 969 P.2d 1106 (1999).
We turn first to whether the trial court became a witness or otherwise itself introduced evidence into its November 19, 2004, CR 60(b) hearing. Joan argues that the trial court's statement, "[a]bsolutely everything was discussed at the [earlier] settlement," during the hearing on the initial motion to set aside the settlement agreement, violated ER 605 and ER 201, and thereby made the hearing "irregular" under CR 60(b)(1). RP (Nov. 19, 2004) at 12.
According to ER 605, "The judge presiding at the trial may not testify in that trial as a witness." And according to ER 201, a judge may not take judicial notice of a fact that is subject to reasonable dispute. Joan argues that the trial court's statement at the November 19, 2004 hearing regarding discussions that took place during the earlier settlement proceeding constitutes improper testimony by a judge or "off-the-record fact gathering" in violation of ER 605. Appellant's Br. at 36. She also argues that the trial court should have recused itself.
We disagree that the trial court's statement equated with testimony; it was merely part of the court's explanation of its reasons for denying the motion. For example, moments after the statement at issue, the trial court continued, as part of its further comments, "I've heard nothing to suggest that for whatever reason I should vacate the CR-2 agreement." RP (Nov. 19, 2004) at 12. Joan's ER 605 argument fails.
Relying on our decision in Vandercook v. Reece, 120 Wn. App. 647, 86 P.3d 206 (2004), Joan also argues that the statement was impermissible judicial notice and, "[a]lthough a judge may take judicial notice of court records [under ER 201], he or she may not take notice of facts based on his or her memory of oral testimony or discussion." Appellant's Br. at 35. Again, we disagree that the trial court's statement indicates judicial notice; it is simply a small part of the trial court's oral explanation for its decision. And even if we were inclined to agree with Joan and deem the trial court's statement equivalent to an act of judicial notice under ER 201, such an act would then have constituted a ruling on the admissibility of evidence. Unlike Vandercook, there was no objection here by Joan's counsel. 120 Wn. App. at 650. Thus, Joan's failure to object to the admission of evidence does not properly preserve the issue for appellate review. RAP 2.5(a); ER 103(a)(1).
Further, in Vandercook, the trial court relied on its memory of the oral testimony in an earlier dissolution trial and applied that recollection to a separate probate proceeding involving the same parties. 120 Wn. App. at 650-51. In this case, the hearing on Joan's motion to set aside the settlement agreement referred to the same earlier proceeding, i.e., the CR 2A settlement agreement. Also unlike Vandercook, the trial court did not rely on any specific recollected statement or testimony from the settlement conference in making its determination to deny Joan's motion. 120 Wn. App. at 650-51. In sum, Joan's argument based on ER 201 fails.
Joan also argues that the trial court should have recused itself from motions challenging the settlement agreement that it had mediated. Even assuming a trial court's prior involvement in a CR 2A settlement is a proper reason for recusal when a party challenges the validity of that agreement, there is no reason why Joan would not be aware at the time of either of the hearings that the trial court was subject to potential disqualification. "A litigant who proceeds to a trial or hearing before a judge despite knowing of a reason for potential disqualification of the judge waives the objection and cannot challenge the court's qualifications on appeal." Buckley v. Snapper Power Equip. Co., 61 Wn. App. 932, 939, 813 P.2d 125 (1991). Joan's recusal argument fails.
Finally, Joan contends the trial court erred in determining that Robert did not commit fraud at the settlement conference. She argues that he acted fraudulently or in bad faith because he had knowledge of and misrepresented her mental incapacity or "the profitability of the family business," and because he failed to disclose a separate bank account "bearing his social security number with a balance of $180,000." Appellant's Br. at 40.
As previously noted, Joan's alleged incapacity at the time of the settlement conference does not bind the trial court here. Therefore, the trial court did not need to conclude that the commissioner's guardianship order meant that Robert knew of her incapacity and failed to disclose that information before the CR 2A stipulation. Joan's argument alleging fraud by Robert based on his "knowledge" of her incapacity fails.
Additionally, at the hearing on the motion to set aside the settlement agreement, the trial court found that Joan failed to meet her burden that Robert committed fraud or otherwise acted in bad faith. She must prove fraud by clear and convincing evidence. Lindgren v. Lindgren, 58 Wn. App. 588, 596, 794 P.2d 526 (1990). The trial court found that the funds at issue likely belonged to Robert's mother outright, and Joan had not shown otherwise by clear and convincing evidence. Nor has Joan explained on appeal how Robert's behavior or alleged lack of disclosure meets all nine elements of fraud. See In the Matter of the Marriage of Angelo, 142 Wn. App. 622, 643, 175 P.3d 1096 (2008). The trial court did not abuse its broad discretion and Joan's fraud argument fails.
To establish fraud, a litigant must show:
(1) representation of an existing fact, (2) materiality of the fact, (3) falsity of the fact, (4) the speaker's knowledge of the falsity of the fact, (5) the speaker's intent that the fact should be acted on by the person to whom the fact was represented, (6) ignorance of the fact's falsity on the part of the person to whom it is represented, (7) reliance on the truth of the factual representation, (8) the right of the person to rely on the factual representation, and (9) the person's consequent damage from the false factual representation.
In the Matter of the Marriage of Angelo, 142 Wn. App. 622, 643, 175 P.3d 1096 (2008).
Attorney Fees
Joan seeks attorney fees and costs on review under RAP 18.1(a), RCW 26.09.140, and RCW 11.96A.150. We decline to award her attorney fees.
Affirmed.
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.
We concur:
Armstrong, J.
Quinn-Brintnall, J.