Grengs v. Grengs , 2020 ND 242 ( 2020 )

20190339
FILED
IN THE OFFICE OF THE
CLERK OF SUPREME COURT
NOVEMBER 19, 2020
STATE OF NORTH DAKOTA
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2020 ND 242
Greg Grengs, Plaintiff and Appellant
v.
Lisa Grengs, Defendant and Appellee
No. 20190339
Appeal from the District Court of Renville County, Northeast Judicial District,
the Honorable Anthony S. Benson, Judge.
AFFIRMED.
Opinion of the Court by Jensen, Chief Justice.
Irvin B. Nodland, Bismarck, ND, for plaintiff and appellant.
Harry M. Pippin, Williston, ND, for defendant and appellee.
Grengs v. Grengs
No. 20190339
Jensen, Chief Justice.
[¶1] Greg Grengs appeals from a judgment and decree of divorce entered on
September 3, 2019, and two post-trial orders. On appeal, Greg Grengs asserts
the district court erred in dismissing his post-trial motion to set aside the
judgment; argues the parties’ settlement agreement should not be enforced
because prior to the agreement the court erred in finding the parties’ post-
marital agreement to be unenforceable; contends he was not competent to
consent to the settlement agreement; and asserts the court erred in finding
him in contempt for failing to execute a mortgage to encumber property he did
not hold title to as an individual. We affirm.
I
[¶2] Greg and Lisa Grengs married in 2001. In July 2017, Greg Grengs
initiated divorce proceedings. In March 2018, Greg Grengs submitted a post-
marital agreement to the district court which was signed by both parties in
2014. The post-marital agreement provided for the distribution of property and
assets upon separation or divorce.
[¶3] Lisa Grengs contested the validity of the post-marital agreement. The
district court determined the post-marital agreement was unenforceable under
N.D.C.C. § 14-03.2-08 after finding Lisa Grengs did not receive adequate
financial disclosures prior to execution of the agreement, and she signed the
agreement while subject to duress.
[¶4] The parties’ trial was scheduled for July 10, 2019. The day before the
trial, the parties reached an agreement on terms for settlement. On the day
scheduled for the trial, the parties participated in a telephonic hearing with
the district court during which they placed the terms of their settlement on the
record. Greg Grengs was represented by counsel during the telephonic hearing.
Lisa Grengs was represented by counsel during the telephonic hearing. Lisa
Grengs’ attorney read the terms of the settlement agreement into the record.
In addition to the terms read by Lisa Grengs’ attorney, Greg Grengs’ attorney
1
added that Greg Grengs would retain his personal property as part of the
agreement.
[¶5] After the terms of the parties’ agreement had been placed into the record,
the district court questioned the parties as follows:
THE COURT: Mr. Grengs, you heard Mr. Pippin’s comments and
reading the -- I guess I’ll just call it the larger points, into the
record as well as your attorney’s comments, I just want to confirm
with you, is that your understanding and are you agreeable to
what’s been presented to the court?
[GREG GRENGS]: Yes Your Honor.
THE COURT: Okay. Thank you very much. And then Mrs. Grengs,
same question, do you understand everything that’s been
presented and are you on the same page or are you in agreement
with that resolution?
[LISA GRENGS]: Yes Your Honor.
Following the telephonic hearing, Greg Grengs’ attorney drafted the proposed
findings of fact, conclusions of law, and order for judgment which were entered
by the court on September 3, 2019. A judgment was entered the same day.
[¶6] The judgment required Greg Grengs to make a lump sum payment to
Lisa Grengs within 120 days of July 9, 2019, as part of the property division.
The judgment also required Greg Grengs to provide a security interest and
mortgage in and to real estate owned by GLG Farms, LLC, to secure the
property division payment. Greg Grengs is the sole owner of GLG Farms, LLC.
The property division payment, security interest, and mortgage required by
the judgment did not vary from the terms read into the record during the
telephonic hearing.
[¶7] Greg Grengs failed to pay Lisa Grengs as required under the terms of
the parties’ judgment and he failed to execute the mortgage to secure the
property settlement. Greg Grengs was found to be in contempt for failing to
follow the terms of the judgment. In its order finding Greg Grengs in contempt,
the district court provided Greg Grengs with an opportunity to partially stay
the terms of the judgment if he executed the required mortgage within 14 days.
Additionally, the court provided Greg Grengs with an opportunity to further
2
stay the terms of the judgment if he filed a bond in the amount of $115,000.
The order also provided that Greg Grengs would be sanctioned to serve 60 days
in jail until he executed the mortgage and/or made the bond payment,
whichever occurred sooner. The court later modified those requirements and
ordered Greg Grengs to pay Lisa Grengs $150,000 for the property award in
the judgment to purge the contempt finding. Greg Grengs made the $150,000
payment to satisfy the court’s contempt order.
[¶8] The district court subsequently set a hearing for November 19, 2019, to
consider a proposed sale of assets to satisfy the property division payment Greg
Grengs owed to Lisa Grengs. On November 14, 2019, Greg Grengs initiated an
appeal to this Court. On November 21, 2019, this Court remanded this case to
the district court for the purpose of holding the hearing on the sale of assets
and to consider any pending contempt of court issues. On December 20, 2019,
while the case was on remand in the district court, Greg Grengs filed a motion
to set aside the judgment pursuant to N.D.R.Civ.P. 60(b). Greg Grengs did not
request a remand of the pending appeal from this Court before filing his motion
to set aside the judgment. The court dismissed the motion to set aside the
judgment after finding it lacked jurisdiction to decide the motion because Greg
Grengs had failed to secure a remand from this Court.
[¶9] Greg Grengs makes four arguments on appeal: (1) the district court had
jurisdiction to decide the motion to set aside the judgment and abused its
discretion in dismissing the motion; (2) the parties’ settlement agreement is
unenforceable because the court erred in its earlier ruling finding the post-
marital agreement unenforceable; (3) he was not competent to consent to the
settlement agreement during the telephonic hearing; (4) the district court
erred in holding him in contempt of court for failing to execute a security
interest and a mortgage on real estate owned by GLG Farms, LLC.
II
[¶10] Greg Grengs argues the district court erred in dismissing his post-
judgment motion to set aside the judgment pursuant to N.D.R.Civ.P. 60(b). The
district court found it lacked jurisdiction to consider Greg Grengs’ motion to
3
set aside the judgment after finding the case was on appeal and he had failed
to obtain leave for resolution of the motion from this Court.
[¶11] “Generally, a district court loses jurisdiction when a notice of appeal is
filed.” Investors Title Ins. Co. v. Herzig, 2011 ND 7, ¶ 6, 793 N.W.2d 371. “The
jurisdiction of the Supreme Court attaches upon the filing of the appeal, and
generally the trial court has no further jurisdiction in the matter.” State ex rel.
Heitkamp v. Family Life Servs., Inc., 2000 ND 166, ¶ 54, 616 N.W.2d 826.
Further, “[a]n order or judgment entered by the trial court after an appeal has
been filed is ordinarily void for lack of jurisdiction.” J.S.S. v. P.M.Z., 429
N.W.2d 425, 429 (N.D. 1988) (citing Harwood v. Harwood, 283 N.W.2d 144,
145 (N.D.1979)).
[¶12] Greg Grengs concedes he did not file with this Court a motion to obtain
authority for the district court to consider his request to set aside the judgment.
He argues this Court’s earlier remand of the case to allow the court to hold a
hearing on the pending motion for the sale of assets and consideration of
pending motions for contempt was sufficient to give the court jurisdiction to
resolve his motion to set aside the judgment. Additionally, he argues the court
acted inconsistently by dismissing his motion to set aside the judgment while,
at the same time, modifying the judgment’s payment terms and conditions. On
appeal, he does not seek to set aside the alleged modified judgment terms.
[¶13] Our earlier order temporarily remanding this case to the district court
was specific in instructing the court to hold “a hearing regarding the sale of
any proposed assets” and to consider motions for contempt so long as the
judgment on appeal was not affected. Our order for a temporary remand is
unambiguous and did not grant leave for either party to seek a modification of
the judgment or seek to set aside the judgment. The court correctly determined
it lacked jurisdiction to resolve Greg Grengs’ motion to set aside the judgment
and correctly found that resolution of the motion while an appeal was pending
was improper. However, the court also lacked jurisdiction to dismiss the
motion and the court’s order is void to the extent it dismissed the motion while
it lacked jurisdiction.
4
III
[¶14] Greg Grengs challenges the district court’s distribution of property and
allocation of debts as provided within the judgment and decree of divorce. Greg
Grengs argues he was not competent at the time he entered into the stipulated
settlement, and the court erred by refusing to enforce the parties’ post-marital
agreement.
[¶15] “Oral stipulations of the parties in the presence of the court are
generally held to be binding, especially when acted upon or entered on the
court’s records.” Aaker v. Aaker, 338 N.W.2d 645, 647 (N.D. 1983). “When a
judgment is entered based on the parties’ stipulation, the party challenging
the judgment must show there is a justification for setting aside the stipulation
under the law of contracts.” Eberle v. Eberle, 2009 ND 107, ¶ 17, 766 N.W.2d
477 (citing Knutson v. Knutson, 2002 ND 29, ¶ 8, 639 N.W.2d 495).
[¶16] “When a settlement agreement between divorcing parties is challenged,
the court should consider whether the agreement was entered into freely and
knowingly, without mistake, duress, menace, fraud, or undue influence, and
whether the agreement is unconscionable.” Eberle, 2009 ND 107, ¶ 17 (citing
Knutson, 2002 ND 29, ¶ 8). “Whether an agreement is unconscionable is a
question of law, but findings of fact are necessary to make a determination.”
Id. (citing Weber v. Weber, 1999 ND 11, ¶ 8, 589 N.W.2d 358).
[¶17] Greg Grengs challenges the parties’ settlement agreement. In section II
of this opinion, we concluded the district court did not abuse its discretion in
denying Greg Grengs’ motion to set aside the judgment after finding the motion
was procedurally deficient because Greg Grengs had failed to secure a remand
from this Court. Greg Grengs did not otherwise raise a challenge to the parties’
stipulation in the proceedings below.
[¶18] This Court will not address issues raised for the first time on appeal.
Chapman v. Chapman, 2004 ND 22, ¶ 7, 673 N.W.2d 920. Because the district
court properly denied Greg Grengs’ motion to set aside the judgment on
procedural grounds, the merits of Greg Grengs’ motion have not been properly
raised in the court and will not be addressed for the first time on appeal.
5
[¶19] Greg Grengs includes within this appeal the district court’s ruling on the
parties’ post-marital agreement made prior to the parties’ stipulation to resolve
their divorce proceedings. His challenge to the court’s ruling on the post-
marital agreement is raised in the context of setting aside the parties’
stipulated settlement. Absent a determination the settlement agreement is
unenforceable, anything this Court may say regarding the post-marital
agreement would be purely advisory, “and we do not render advisory opinions.”
Chapman, 2004 ND 22, ¶ 6 (citing In re Shatzka, 2003 ND 147, ¶ 8, 669 N.W.2d
95).
IV
[¶20] Greg Grengs contends the district court erred in finding him in contempt
for failing to execute a security interest and mortgage to secure the property
division payment as required in the judgment. The property is held in the name
of GLG Farms, LLC. He contends a “charging order” issued pursuant to
N.D.C.C. § 10-32.1-45 is required to make GLG Farms, LLC execute a security
interest and mortgage.
[¶21] Greg Grengs’ reliance on N.D.C.C. § 10-32.1-45 is misplaced. A charging
order issued under N.D.C.C. § 10-32.1-45 is a collection device used by a
judgment creditor to satisfy a judgment against a judgment debtor who is a
member of a limited liability company. The charging order, once secured,
requires the limited liability company “to pay over to the person to which the
charging order was issued any distribution that would otherwise be paid to the
judgment debtor.” N.D.C.C. § 10-32.1-45(2). The payment of distributions is
the judgment creditor’s “exclusive remedy,” “no other remedy” is allowed, and
a judgment creditor does not have “any right to obtain possession of or
otherwise exercise legal or equitable remedies with respect to a property of the
company.” N.D.C.C. § 10-32.1-45(6). Lisa Grengs is not seeking to obtain
distributions from GLG Farms, LLC that would otherwise be payable to Greg
Grengs. A charging order has no application to whether or not Greg Grengs
can be held in contempt. The question present in this case is not whether Lisa
Grengs can pursue collection of Greg Grengs’ liability from assets of the limited
liability, the question is whether Greg Grengs has the ability to execute a
6
security interest and mortgage on assets owned by the limited liability
company.
[¶22] A district court “may require either party to give reasonable security for
providing maintenance or making any payments required under” the terms of
a divorce and may enforce the security “by appointment of a receiver or by any
other remedy applicable to the case.” N.D.C.C. § 14-05-25. A district court has
broad equitable powers including “compelling the surrender […] of property”
by the debtor spouse, but also “imposing an equitable lien upon the property.”
Martian v. Martian, 399 N.W.2d 849, 852 (N.D. 1987).
[¶23] Contempt includes “[i]ntentional disobediance, resistance, or obstruction
of the authority, process, or order of a court or other officer, including a referee
or magistrate[.]” N.D.C.C. § 27-10-01.1(1)(c); see also Kettle Butte Trucking
LLC v. Kelly, 2018 ND 110, ¶ 12, 910 N.W.2d 882. “In civil contempt
proceedings the complainant must clearly and satisfactorily show the alleged
contempt has been committed.” Kettle Butte Trucking LLC, at ¶ 12. (quoting
Peterson v. Schulz, 2017 ND 155, ¶ 18, 896 N.W.2d 916). “Contempt requires a
willful and inexcusable intent to violate a court order.” Id. We review a finding
of contempt under the following standard:
When reviewing a contempt sentence, the ultimate determination
of whether or not a contempt has been committed is within the
trial court’s sound discretion. A trial court’s finding of contempt
will not be overturned unless there is a clear abuse of discretion.
An abuse of discretion occurs when the trial court acts in an
arbitrary, unreasonable, or unconscionable manner or when it
misinterprets or misapplies the law.
PHI Fin. Servs., Inc. v. Johnston Law Office, P.C., 2016 ND 114, ¶ 22, 881
N.W.2d 216 (quoting BeauLac v. BeauLac, 2002 ND 126, ¶ 10, 649 N.W.2d
210).
[¶24] Greg Grengs’ argument is that he does not have the ability to comply
with the judgment because he is not the owner of the property. An inability to
comply with an order is a defense to contempt proceedings based on a violation
of that order, but the alleged contemnor has the burden to establish the defense
7
and show an inability to comply. Holkesvig v. Welte, 2012 ND 14, ¶ 9, 809
N.W.2d 323. Although we have concluded his reference to charging orders as
provided in N.D.C.C. § 10-32.1-45(2) is misplaced, we will review his argument
that he does not have the ability to comply with the judgment because he is not
the owner of the property.
[¶25] This Court has previously considered whether an obligor spouse is able
to comply with a district court order to deliver property to a creditor spouse
when the property was owned by a corporation. Werven v. Werven, 2016 ND
60, ¶ 36, 877 N.W.2d 9. In Werven, we noted the obligor had previously been a
fifty percent owner of a corporation and served as the corporation’s vice
president. Id. at ¶¶ 2 and 40. Following the parties’ divorce, the obligor was
removed as an officer and owner of the corporation. Id. at ¶ 4. This Court held
the district court erred in awarding the property, rather than its value, to the
creditor spouse because the obligor was not the owner of the property. Id. at ¶
40. We further held the obligor could not be held in contempt for failing to
comply with the court order and deliver the property because the property was
owned by the company. Id.
[¶26] This case is distinguishable from our decision in Werven. In Werven, the
obligor was only a fifty percent owner of a corporation at the time of the divorce
and not an owner at the time of the contempt proceedings. In Werven, we
specifically noted the obligor “sufficiently showed he was unable to comply with
the divorce judgment and deliver the decal cutter because he did not own it.”
2016 ND 60, ¶ 40. In contrast, Greg Grengs is the sole owner of GLG Farms,
LLC and has exclusive control of GLG Farms, LLC. Greg Grengs offered no
evidence to support a finding he does not have the ability to secure the
execution of the mortgage from GLG Farms, LLC. He has not argued that he
lacks control of GLG Farms, LLC; he has not argued he is prohibited by an
operating agreement from encumbering the assets of GLG Farms, LLC; and he
has not argued he is otherwise prevented from complying with the terms of the
judgment. While it is true the title is held by GLG Farms, LLC, Greg Grengs
has failed to demonstrate he does not have the ability to comply with the
judgment by executing a security interest and mortgage on behalf of GLG
Farms, LLC.
8
[¶27] Greg Grengs failed to demonstrate that he has a defense to the finding
of contempt; an inability to comply with the terms of the judgment. Under the
circumstances presented in this case, we conclude the district court did not
abuse its discretion in finding Greg Grengs to be in contempt for failing to
secure a security interest and mortgage from GLG Farms, LLC as required by
the judgment. The court did not act in an arbitrary, unreasonable, or
unconscionable manner, and did not misinterpret or misapply the law.
V
[¶28] The district court did not abuse its discretion in dismissing the motion
to set aside the judgment when it lacked jurisdiction because of a pending
appeal. Whether the parties’ stipulation agreement is enforceable has not been
properly raised in the court and we will not address the issue for the first time
on appeal. The court did not abuse its discretion in finding the sole owner of a
limited liability company in contempt of court for violating the provisions of a
judgment requiring him to execute a security interest and mortgage to
encumber property owned by the limited liability company when the owner
failed to establish an inability to comply with the judgment. We affirm.
[¶29] Jon J. Jensen, C.J.
Gerald W. VandeWalle
Lisa Fair McEvers
Jerod E. Tufte
I concur in the result.
Daniel J. Crothers
9