of Martin , 2021 COA 101 ( 2021 )

The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.
SUMMARY
July 22, 2021
2021COA101
No. 20CA0835, Marriage of Martin — Civil Procedure — Court-
Facilitated Management of Domestic Relations Cases —
Disclosures
A division of the court of appeals considers whether C.R.C.P.
16.2(e)(10) allows for the reallocation of marital property where
there is no allegation that either party failed to satisfy the
disclosure requirements of C.R.C.P. 16.2 before entering into a
separation agreement that was incorporated into their dissolution
decree. The division concludes that it does not. Because a failure
to disclose under the rule was not established regarding the
challenged assets, the district court erred by applying the rule to
reopen the property division and reallocate the omitted assets.
The division affirms the order in part, reverses it in part, and
remands the case for reconsideration of attorney fees and for
determination of husband’s request for his appellate fees under
section 14-10-119, C.R.S. 2020.
COLORADO COURT OF APPEALS 2021COA101
Court of Appeals No. 20CA0835
Routt County District Court No. 14DR51
Honorable Shelley A. Hill, Judge
In re the Marriage of
James Arthur Martin,
Appellee,
and
Sharon Rose Dumas, f/k/a Sharon Martin,
Appellant.
ORDER AFFIRMED IN PART, REVERSED IN PART,
AND CASE REMANDED WITH DIRECTIONS
Division VII
Opinion by JUDGE FOX
Dunn and Pawar, JJ., concur
Announced July 22, 2021
Drew Johnroe, P.C., Drew Johnroe, Steamboat Springs, Colorado, for Appellee
Feldman Nagel Cantafio & Song PLLC, Ralph A. Cantafio, Miles C. Nowak,
Denver, Colorado, for Appellant
¶1 Sharon Rose Dumas (wife), formerly known as Sharon Martin,
appeals the district court’s order reopening the dissolution decree’s
property division under C.R.C.P. 16.2(e)(10) to allocate two omitted
assets and awarding James Arthur Martin (husband) attorney fees.
We affirm the order in part, reverse it in part, and remand the case
for reconsideration of attorney fees and for determination of
husband’s request for his appellate fees under section 14-10-119,
C.R.S. 2020.
I. Background
¶2 The parties’ twenty-two-year marriage ended in 2014. The
district court approved their separation agreement — which divided
their marital property and waived maintenance — and incorporated
it into the dissolution decree.
¶3 In 2016, husband moved for postjudgment relief, alleging in
relevant part that he was entitled to a share of the proceeds from a
post-decree sale of a property known as the Stagecoach property.
¶4 Wife responded and also moved to dismiss husband’s motion,
asserting that the parties did not own the Stagecoach property at
dissolution, therefore the sale proceeds were not a marital asset,
and C.R.C.P. 16.2(e)(10), which allows a court to allocate
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undisclosed marital assets for up to five years post-decree, did not
apply.
¶5 The district court denied wife’s motion to dismiss and, after a
hearing, found that the Stagecoach proceeds were a marital asset.
It also found that certain retirement assets, which were not
mentioned in husband’s postjudgment motion but were raised at
the hearing, had been overlooked at dissolution. Therefore, the
court invoked C.R.C.P. 16.2(e)(10) to reopen the property division
and address these omitted assets.1
¶6 After another hearing, the court divided the omitted assets
equally and awarded husband prejudgment interest because of
wife’s wrongful withholding of the Stagecoach sale proceeds. The
court also awarded husband his attorney fees — partially under
section 14-10-119, based on the parties’ disparate financial
resources, and partially under section 13-17-102, C.R.S. 2020,
based on its finding that wife’s argument concerning her individual
retirement account (IRA) lacked substantial justification. The court
1 In the district court, husband also challenged the division of a
boat and motor home. Because he does not challenge the court’s
order regarding those assets on appeal, we deem any claims
regarding them waived.
2
ordered husband to submit an attorney fees affidavit and gave wife
time to object. Before attorney fees were resolved, however, wife
filed a notice of appeal. A division of this court dismissed the
appeal for lack of a final order. In re Marriage of Martin, (Colo. App.
No. 18CA1419, Aug. 29, 2019) (not published pursuant to C.A.R.
35(e)).
¶7 Thereafter, the district court held a hearing on attorney fees
and awarded husband $75,000 in fees and costs, including fees and
costs incurred in responding to the appeal, plus an additional
$6,500 on reconsideration.
¶8 Wife again appeals.
II. C.R.C.P. 16.2(e)(10)
¶9 Because wife’s fourth contention, concerning the application of
C.R.C.P. 16.2(e)(10), is partially dispositive of her other contentions,
we address it first.
¶ 10 Wife contends that the district court erred by applying
C.R.C.P. 16.2(e)(10) to reopen the property division and allocate the
Stagecoach property and the IRA. We agree.
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A. Preservation
¶ 11 We first reject husband’s argument that wife stipulated that
$200,000 of the Stagecoach proceeds was marital and should be
divided equally between the parties and thus she cannot challenge
that disposition by the court.
¶ 12 The record reflects that it was only after the district court
denied wife’s motion to dismiss husband’s claim to the Stagecoach
proceeds that wife stipulated that $200,000 of the proceeds had
been deposited in her bank account and argued for an equitable
division of that amount. By doing so, wife did not waive her
argument from her motion to dismiss that “C.R.C.P. 16.2(e)(10) does
not apply under these circumstances” to allow a post-decree
allocation of the proceeds.
¶ 13 Accordingly, the issue is preserved, and we address it. See
Berra v. Springer & Steinberg, P.C., 251 P.3d 567, 570 (Colo. App.
2010) (all that is required to preserve an issue for appeal is that the
issue be brought to the district court’s attention, so the court has
an opportunity to rule on it).
4
B. Relevant Facts
1. The Stagecoach Property
¶ 14 In 2007, husband and wife purchased the Stagecoach
property, intending to build a house on it. After they ran into
serious financial difficulties, they quitclaimed the property to wife’s
parents in 2011.
¶ 15 Husband, who worked as a contractor, later built a house on
the property with wife’s help. Wife’s parents paid all of the
expenses to build the house and paid the parties’ living expenses
during the year-long construction process. Husband and wife
moved into the house in 2012 when it was nearly complete.
¶ 16 In 2013, wife’s parents transferred ownership of the
Stagecoach property to a living trust they created. Wife testified
that she did not know anything about the transfer or her parents’
trust.
¶ 17 A year later, the parties petitioned to dissolve their marriage.
During the dissolution proceedings, neither party disclosed an
interest in the Stagecoach property, which was still owned by wife’s
parents’ trust. The property was not addressed or distributed in
the parties’ 2014 separation agreement.
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¶ 18 Husband argued during the proceedings on his postjudgment
motion that C.R.C.P. 16.2(e)(10) allowed the court to allocate the
Stagecoach sale proceeds post-decree.2 He asserted that he, wife,
and wife’s parents had entered into a joint venture regarding the
property, that he performed significant work building the house,
and that because he did not have counsel during the dissolution
proceedings, he mistakenly failed to include his claimed interest in
the property in the separation agreement.
¶ 19 The district court found that an implied joint venture existed
during the marriage and, therefore, the proceeds from wife’s
parents’ post-decree sale of the Stagecoach property were a marital
asset that could be divided under C.R.C.P. 16.2(e)(10).
2. Wife’s IRA
¶ 20 Wife testified that she mistakenly believed that an IRA that her
parents had opened for her during the marriage was in her mother’s
name, not hers, and that she was only a beneficiary of it.
2 Husband did not bring his motion under C.R.C.P. 16.2(e)(10).
Rather, he cited C.R.C.P. 60 as the basis for his request for relief
from the permanent orders property division. Rule 16.2(e)(10) was
raised at some point during the proceedings, however, and husband
then argued it as the basis for the relief he sought.
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Therefore, she did not list the IRA on her sworn financial statement
filed during the dissolution proceedings. She argued that, in any
case, the IRA was intended as a gift from her mother to her alone
and thus was not a marital asset.
¶ 21 Husband acknowledged that he knew about the IRA during
the marriage and testified that both parties were equally at fault for
not listing that asset in their financial statements at dissolution.
However, he did not allege in the district court, nor does he argue
on appeal, that wife violated a C.R.C.P. 16.2(e) disclosure obligation
regarding the IRA or related documents. His original motion to
reopen the property division does not mention the IRA. Then, when
the IRA came up at the hearing, he testified that both parties had
failed to disclose it — they just “missed it.”
¶ 22 Nonetheless, husband argued at the post-decree hearing that
the IRA was marital property under section 14-10-113(2), C.R.S.
2020, because wife acquired it during the marriage, and he
requested one-half of the IRA’s value as of the post-dissolution
proceedings.
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¶ 23 The district court found that wife did not meet her burden to
establish that the IRA was her separate property and invoked
C.R.C.P. 16.2(e)(10) to divide the asset equally between the parties.
C. Legal Standards
¶ 24 We review de novo the district court’s interpretation of
C.R.C.P. 16.2(e)(10) in determining the sufficiency of husband’s
allegations and granting him relief under the rule. See In re
Marriage of Runge, 2018 COA 23M, ¶ 22; see also In re Marriage of
Durie, 2020 CO 7, ¶ 13 (interpreting C.R.C.P. 16.2 de novo).
¶ 25 C.R.C.P. 16.2 establishes heightened disclosure rules for
domestic relations cases, recognizing that the parties in such cases
stand in a special relationship to each other. See C.R.C.P. 16.2(a),
(e); In re Marriage of Hunt, 2015 COA 58, ¶ 9. Under the rule, the
parties “owe each other and the court a duty of full and honest
disclosure of all facts that materially affect their rights and
interests.” C.R.C.P. 16.2(e)(1); see In re Marriage of Schelp, 228
P.3d 151, 156 (Colo. 2010); Runge, ¶ 12. In discharging this duty,
a party must affirmatively disclose certain specific items, and
generally all information that is material to the resolution of the
8
case, without awaiting inquiry from the other party. C.R.C.P.
16.2(e)(1)-(4); Runge, ¶ 12; Hunt, ¶¶ 13-14.
¶ 26 Regarding undisclosed assets, the rule provides as follows:
As set forth in this section, it is the duty of
parties to an action for decree of dissolution of
marriage . . . to provide full disclosure of all
material assets and liabilities. If a disclosure
contains a misstatement or omission
materially affecting the division of assets or
liabilities, any party may file and the court
shall consider and rule on a motion seeking to
reallocate assets and liabilities based on such
a misstatement or omission, provided that the
motion is filed within 5 years of the final
decree or judgment.
C.R.C.P. 16.2(e)(10).3
D. Analysis
¶ 27 Wife did not fail to disclose a Stagecoach joint venture.
Rather, according to husband’s own allegations, he was a
participant in the alleged venture with her and her parents to
purchase, transfer ownership of, improve, and ultimately sell the
Stagecoach property. Thus, if there was a joint venture, husband
3The 2020 amendments to this rule do not affect the issues we
decide. See Rule Change 2020(01), Colorado Rules of Civil
Procedure (Amended and Adopted by the Court En Banc, Mar. 5,
2020), https://perma.cc/8MCL-72EW.
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was an “owner” of any alleged asset at the time he and wife entered
into the separation agreement. Husband admitted that there was
no written agreement or terms regarding a joint venture. See
Sleeping Indian Ranch, Inc. v. W. Ridge Grp., LLC, 119 P.3d 1062,
1069 (Colo. 2005) (identifying the elements of a joint venture). In
other words, he knew all of the information supporting his joint
venture claim at the time of the dissolution, and he made no claim
that wife failed to disclose any relevant documents.
¶ 28 Regarding wife’s IRA, husband also did not allege any specific
C.R.C.P. 16.2(e) disclosure violation as to any documents. Instead,
he recognized that both parties were equally at fault for omitting the
asset from their disclosures and separation agreement. Moreover,
husband failed to allege in the district court that the omission of
the IRA “materially affect[ed] the division of assets or liabilities,”
which is also required for the omission of an asset to be redressable
under the rule. See C.R.C.P. 16.2(e)(10).
¶ 29 Rule 16.2(e)(10) does not provide husband a post-decree
allocation remedy under these circumstances. Accordingly, the
district court erred by invoking the rule to reopen the property
division to allocate the Stagecoach proceeds and IRA. See § 14-10-
10
122(1)(a), C.R.S. 2020 (a dissolution decree’s property division
provisions may not be modified absent conditions justifying
reopening a judgment).
¶ 30 Our supreme court, in its first case interpreting Rule
16.2(e)(10), concluded that the rule’s property reallocation remedy
“does not operate independently” but rather “works in tandem” with
Rule 16.2(e)’s disclosure requirements. Schelp, 228 P.3d at 157.
Thus, the reallocation remedy applies only “if either party failed to
comply with his or her affirmative duties to disclose financial
information” under the rule’s heightened disclosure requirements.
Id. at 156 (emphasis added). The court further noted that the rule’s
post-decree property allocation provision is expressly prefaced by
and thus “operate[s] in conjunction with” the parties’ special
disclosure obligations under the rule. Id. at 157 (The text of the
post-decree property allocation provision “explicitly refers to the
new affirmative disclosure requirements.”); see C.R.C.P. 16.2(e)(10).
¶ 31 A division of this court then held in Runge that Rule
16.2(e)(10)’s five-year, post-decree asset reallocation remedy did not
apply when a spouse was given extensive information about the
other spouse’s assets but chose to enter into a separation
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agreement without taking the time to review that information.
Runge, ¶¶ 30-31. The division described the rule’s reallocation
remedy as “extraordinary” and “narrow” and unavailable to
“rescue[]” the spouse “from the consequences of her own decision to
settle her dissolution case” without reviewing the information
disclosed to her. Id. at ¶ 34; see also id. at ¶ 39 (concluding that
facts the spouse was told before the dissolution were not
“undisclosed or misrepresented” so as to “trigger” the rule’s
reallocation remedy); cf. Hunt, ¶¶ 18-19 (applying the rule when a
spouse indisputably failed to disclose specific required documents,
but noting that “[w]ithout” that disclosure violation, the other
spouse “would have been bound by her decision to enter into” a
separation agreement acknowledging the uncertain value of the
asset at issue).
¶ 32 More recently in Durie, ¶¶ 36-38, the supreme court cited
Runge with approval and reiterated these principles. In Durie, the
court affirmed this court’s decision that the nondisclosure
allegations in that case, including those made upon information
and belief, were sufficient under Rule 16.2(e)(10) to trigger
discovery. See Durie, ¶¶ 41-43. But the court “stress[ed] the
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importance of finality” in applying the rule, particularly given the
“compelling need for finality” in domestic relations cases. Id. at ¶
36. The court echoed the Runge division’s statement that Rule
16.2(e)(10)’s post-decree property reallocation remedy is
“extraordinary” and “very narrow,” Durie, ¶ 36 (quoting Runge, ¶
34), and said the rule does not entitle an ex-spouse to “the legal
equivalent of a mulligan.” Id. at ¶ 38; see also Runge, ¶¶ 31-32.
¶ 33 Like the ex-spouse in Runge, husband here sought, and the
district court allowed, the “legal equivalent of a mulligan.” See
Durie, ¶ 38. Husband effectively asked for a redo of the separation
agreement to include his claims to the Stagecoach proceeds and
wife’s IRA, not because wife failed to disclose or misrepresented
these assets but because the assets should have been included in,
but were mistakenly left out of, their separation agreement. Rule
16.2(e)(10) is not intended for this purpose.4 See Durie, ¶¶ 36-38;
4 Husband’s allegation of a mutual mistake by the parties, for which
neither was at fault, in not including the omitted assets in the
separation agreement potentially falls under C.R.C.P. 60(b)(1),
which allows a court to relieve a party from a final judgment
because of a mistake. Indeed, husband cited C.R.C.P. 60(b), and
not C.R.C.P. 16.2(e)(10), in his initial motion as the authority for the
relief he sought. But a motion under Rule 60(b)(1) must be filed
within 182 days after a judgment is entered, and husband’s motion
13
Runge, ¶¶ 31-32, 39; Hunt, ¶ 19; see also Schelp, 228 P.3d at 156-
57 (rule’s reallocation remedy applies only when its heightened
disclosure requirements were violated).
¶ 34 Accordingly, the district court erred by applying the rule to
reopen the property division and allocate the Stagecoach sale
proceeds and the IRA, and we reverse the order in that respect,
including the prejudgment interest the court awarded.
¶ 35 Because we conclude based on Durie, Schelp, Runge, and Hunt
that Rule 16.2(e)(10)’s property reallocation remedy does not apply
under the parties’ circumstances, we do not address wife’s
additional argument that husband is barred from invoking the rule
because of the equitable doctrine of unclean hands.
III. Wife’s Other Contentions Involving the Property Allocation
¶ 36 Our disposition reversing the post-decree property allocation
means we need not address wife’s additional contentions. Wife
was filed more than a year after the decree was entered. Thus, he is
also not entitled to relief under Rule 60(b). See In re Marriage of
Seely, 689 P.2d 1154, 1159 (Colo. App. 1984) (“[W]here the only
grounds for relief established are those covered by either C.R.C.P.
60(b)(1) or (2), the six-month time limitation applicable to these
clauses may not be circumvented by reliance on other provisions of
the rule.”); cf. In re Marriage of Durie, 2020 CO 7, ¶ 36 (emphasizing
the importance of finality in dissolution cases).
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claims that in allocating the Stagecoach sale proceeds and the IRA,
the court erred by considering the parties’ financial circumstances
at the time of the post-decree proceedings rather than at the time of
the decree. She also claims that the court erred in characterizing
the IRA as a gift from her mother to the marriage rather than to her
alone.
IV. Attorney Fees in District Court
¶ 37 Wife contends that the district court erred by awarding
husband attorney fees under section 14-10-119 based on the
parties’ relative financial circumstances at the time of the post-
decree proceedings rather than at the time of the decree and by
awarding husband fees under section 13-17-102 for responding to
her IRA argument. We disagree regarding the section 14-10-119
portion of the attorney fees award but agree regarding the section
13-17-102 portion.
A. Section 14-10-119 Fees
¶ 38 We reject wife’s argument that In re Marriage of de Koning,
2016 CO 2, requires the court to consider the parties’
circumstances as they were when the decree was entered. In de
Koning, the section 14-10-119 fee proceedings of the permanent
15
orders were postponed, and fees were not determined until five
months after the decree was entered. Id. at ¶¶ 9-14.
¶ 39 The supreme court held in that “rare” circumstance that the
court must consider the parties’ economic circumstances as they
existed at the time the decree was entered. Id. at ¶¶ 28, 31-33; see
also In re Marriage of Hill, 166 P.3d 269, 272 (Colo. App. 2007)
(When a court determines permanent orders in a dissolution case, it
“must address several intertwined issues, including parental
responsibilities, child support, spousal support, and disposition of
property,” as well as attorney fees under section 14-10-119.).
¶ 40 Here, however, the permanent orders were finally entered in
2014, and section 14-10-119 fees were requested only for
husband’s post-decree motion. Therefore, de Koning does not apply,
and the court properly considered the parties’ economic
circumstances as of the post-decree proceedings. See In re Marriage
of Connerton, 260 P.3d 62, 67 (Colo. App. 2010) (a request for
section 14-10-119 fees should be heard at the time of the hearing
on the motion for which they are requested); see also § 14-10-119
(providing that the court may “from time to time, after considering
the financial resources of both parties,” order a party to pay a
16
reasonable amount for the other party’s attorney fees); cf. In re
Marriage of Wells, 850 P.2d 694, 696 (Colo. 1993) (concluding that
section 14-10-113(1) requires a trial court to consider the economic
circumstances of the respective spouses at the time any hearing
relating to marital property division is held, including a hearing
following a remand for purposes of re-dividing the property between
the parties).
B. Section 13-17-102
¶ 41 The district court did not specify what amount of the fee award
was made under section 14-10-119 and what amount was made
under section 13-17-102 after its finding that wife’s IRA argument
lacked substantial justification. However, in light of our disposition
reversing the portion of the post-decree order allocating the omitted
assets, including the IRA, we also reverse the portion of the fee
award made under section 13-17-102, and we direct the court on
remand to reconsider the fee award and eliminate the portion of the
award that is based on section 13-17-102.
V. Appellate Attorney Fees
¶ 42 Husband requests his attorney fees incurred on appeal under
section 14-10-119, asserting that the parties’ financial
17
circumstances are disparate, and under section 13-17-102 and
C.A.R. 38(b), arguing that wife’s arguments are substantially
frivolous. In light of our disposition, we do not agree that the
appeal is frivolous and thus deny husband’s section 13-17-102 and
C.A.R. 38(b) request. We direct the court to determine his section
14-10-119 request on remand based on the parties’ relative
financial circumstances at that time. See In re Marriage of Alvis,
2019 COA 97, ¶ 30; see also C.A.R. 39.1.
¶ 43 We deny wife’s request for appellate attorney fees because she
did not state a legal or factual basis for the request. See C.A.R.
39.1; In re Marriage of Roddy, 2014 COA 96, ¶ 32.
VI. Conclusion
¶ 44 The portion of the order reopening the dissolution decree’s
property division and allocating the omitted Stagecoach sale
proceeds and IRA is reversed. The portion of the order awarding
attorney fees to husband is affirmed in part and reversed in part,
and the case is remanded for the district court to reconsider the fee
award as directed herein and to determine husband’s request for
his appellate fees under section 14-10-119.
JUDGE DUNN and JUDGE PAWAR concur.
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