Jeffries v. Jeffries , 1989 S.D. LEXIS 12 ( 1989 )

MILLER, Justice.

In this appeal we hold that the trial court did not err in (1) refusing to specifically find that the parties to the divorce action enjoyed a confidential relationship while negotiating a property settlement, and (2) refusing to set aside a default divorce decree.

FACTS

Carolee and Lawrence Jeffries were married in Wyoming in 1965. During the course of their marriage, which produced three children, they encountered marital difficulties. The two most serious occasions prior to their divorce were in 1975 and 1978, at which time they temporarily separated. The couple reconciled after the 1978 separation, but executed a post-nuptial agreement concerning their respective property rights should either of them file for a divorce in the future. The need for a post-nuptial agreement was prompted by Carolee’s excessive spending habits.

In August 1986, Carolee indicated that she was planning to leave Lawrence. Lawrence then retained attorney Robert A. Amundson (Amundson) to represent him in the divorce proceedings.¹ Carolee did not retain counsel, although she knew that she was free to do so.² Rather, Carolee decided to negotiate a property settlement agreement with Lawrence without professional assistance. She consulted with Amundson, who advised her that he could not represent her in the divorce proceeding and that she had a right to retain a lawyer of her own choosing. However, during this consultation, Amundson answered Caro-lee’s questions regarding the custody of the couple’s children. Later, Amundson advised both Lawrence and Carolee that they could attempt to work out a property settlement and custody agreement on their own, reduce it to writing, and bring it to him to be formally drafted.

Lawrence and Carolee then finalized an agreement regarding the disposition of their property. The agreement, which was handwritten by Carolee, provided for alimony, custody and visitation of the children, and distribution of the couple’s property, including payment of all marital bills by Lawrence. Amundson did not participate in these negotiations. The agreement, in Carolee’s handwriting, acknowledged the existence of all of the couple’s property, including Lawrence’s securities, inherited property,³ savings and pension plans. Essentially, Carolee indicated that she wanted only certain items of personal property and one-half of the value of the couple’s marital home, which was valued at $80,000. The value of her one-half interest in the home ($40,000) was reduced by Lawrence’s agreement to pay Carolee’s accumulated debts and to provide for her purchase of a new automobile.

The handwritten agreement was presented to Amundson, who prepared a formal property settlement agreement which was executed by the parties. Carolee acknowledged that the formal property settlement agreement was consistent with her handwritten version. She also stated that she had read and understood the agreement’s terms. The trial court later entered a decree of divorce incorporating the settlement agreement formulated by the parties.

Approximately four months later, Caro-lee moved that the decree of divorce be set aside, pursuant to SDCL 15-6~60(b), on the grounds that Lawrence induced her into signing the property settlement agreement “by making representations which were fraudulent or misrepresentations and by his misconduct.” After an evidentiary hearing, the trial court denied the motion and she appeals from that holding.

ISSUES PRESENTED

Carolee has specifically stated the issues as follows:

I

The lower court erred by refusing wife’s proposed finding that the relationship between the parties was a confidential relationship.

II

Where wife was not represented by an attorney and where the parties occupied a confidential relationship, the court erred by (1) imposing a burden of investigation on wife, (2) failing to impose any duty of disclosure on husband, and (3) by failing to find that the agreement must be fair and reasonable and free from fraud.

III

The court also erred by failing to find other examples of fraud or mistake legally sufficient to justify setting aside the decree of divorce.

We observe that the issues as propounded by Carolee use a “shotgun approach” to attack the entire spectrum of the trial court’s order. A fair analysis of the legal arguments presented in Carolee’s briefs convinces us that the primary, viable issues center around the trial court’s refusal to (1) sign her proposed findings that a confidential relationship existed between the parties, and (2) find fraud on the part of Lawrence during the negotiation processes.

DECISION

I

WHETHER LAWRENCE AND CARO-LEE ENJOYED A CONFIDENTIAL RELATIONSHIP DURING THE NEGOTIATION OF THE PROPERTY SETTLEMENT AGREEMENT.

We note that the first time this issue was specifically presented to the trial court was in Carolee’s ten-page document entitled “Defendant’s (Carolee’s) Objections to Plaintiff’s Proposed Findings and Conclusions and Defendant’s Additional Proposals”. Therein, at paragraph XVIII, she objected to Lawrence’s proposed Conclusion of Law IV “based upon the following findings and conclusions which are hereby proposed by (Carolee):

A. Husband and wife enjoyed a confidential relationship.

B. Husband had a duty to wife under that confidential relationship.

C. That duty was fiduciary or confidential or of a trust nature.”

Those subsections were followed by subsections D through R, which generally assailed the property settlement. The trial court endorsed the document as “denied.”

None of Carolee’s proposals are specifically designated as findings or conclusions and it is difficult to ascertain Carolee’s intent in that regard. Some are obviously findings, some are conclusions and some are mixed.

Nowhere in the record does it appear that Carolee raised the confidentiality issue or presented it specifically to the trial court. Although Carolee may have technically preserved the issue, the trial court was certainly placed at a disadvantage and a meaningful appellate review is clearly hampered. We discourage such shotgun tactics.

Carolee argues to us that a confidential relationship existed between her and Lawrence which increased Lawrence’s duties of disclosure and fairness with respect to the property settlement negotiations and the resulting agreement. She asserts that this relationship placed a duty upon Lawrence to disclose the nature and value of all of the couple’s assets.

While it is generally true that a husband and wife do enjoy a confidential relationship, see, e.g., SDCL 25-2-10,⁴ we do not believe that such a relationship existed here. When the parties to a marriage are negotiating a property settlement, recognizing that their interests are adverse to one another and that they are dealing at arms length, neither spouse owes to the other the duty of disclosure which he or she would normally owe if their relationship remained, in fact, a confidential one. See Collins v. Collins, 48 Cal.2d 325, 309 P.2d 420 (1957); see also In re Marriage of Bradach, 422 N.E.2d 342 (Ind.App.1981), wherein the court noted that the confidential relationship of a husband and wife applies only in those circumstances where they are still living together. Given the fact that Lawrence and Carolee were living apart during the time they were negotiating their property settlement, and that they were negotiating the settlement in contemplation of their divorce, we hold that no unique confidential relationship existed between this couple, and that Carolee was equally responsible for ascertaining the nature and value of the couple’s marital assets. While we hold that each spouse must assume equal responsibility for ascertaining such nature and value, we do not intend to grant to estranged spouses any license to hide or misrepresent the value of any marital assets, nor will any such practice be condoned.

We must further observe that in entering its extensive findings and conclusions, the trial court found and held that Carolee had knowledge of the couple’s property, (although maybe not specific values) throughout their marriage, and that she failed to make efforts to ascertain any additional information during the negotiation process. These determinations are clearly supported by the record.

II

WHETHER THE COURT ERRED BY NOT FINDING FRAUD SUFFICIENT TO JUSTIFY SETTING ASIDE THE DIVORCE DECREE.

The only remaining viable issue relates to Carolee’s claimed fraud by Lawrence.⁵

We first note that we will not overturn the ruling of the circuit court on a property division unless we find that the court abused its discretion. Wegner v. Wegner, 391 N.W.2d 690 (S.D.1986); Rogers v. Rogers, 351 N.W.2d 129 (S.D.1984). Moreover, in the absence of fraud or some other reason which would apply to any judgment, a divorce decree which incorporates a property settlement agreement is a final and conclusive adjudication which is not subject to later modification. Blare v. Blare, 302 N.W.2d 787 (S.D.1981).

Here, Carolee complains that Lawrence concealed or fraudulently failed to disclose the nature and value of the assets of the parties when they were negotiating their property settlement agreement. She also argues that Lawrence deceived her by stating that the settlement was fair. We note, however, that Carolee, a school teacher with a college education, entered into the agreement voluntarily, freely and intelligently. The evidence also indicates that Carolee received from the marital estate those possessions which she wanted, as well as receiving alimony. Car-olee did not operate under a mistake of fact; rather, she entered into the agreement without exercising due diligence to ascertain the specific nature and value of various marital assets. This does not constitute grounds for relief from the property settlement agreement. In the absence of fraud, free deliberate choices are not subject to relief under Rule 60(b). Ackermann v. United States, 340 U.S. 193, 71 S.Ct. 209, 95 L.Ed. 207 (1950). We know of no law suggesting that because a husband is not represented by counsel, a property settlement signed by him is voidable. In re Estate of Henry, 6 Ariz.App. 183, 430 P.2d 937 (1967).

Given the fact that Carolee entered into the agreement knowingly and voluntarily, had knowledge of the couple’s assets, and did not operate under a mistake of fact, fraud or duress, we do not believe that the trial court abused its discretion by denying Carolee’s motion to set aside the judgment of divorce.

AFFIRMED.

MORGAN and HENDERSON, JJ., concur. WUEST, C.J., concurs specially. SABERS, J., dissents.

1 . Amundson had previously represented Lawrence in divorce proceedings which were instituted but later terminated in 1978.

2 . Carolee had previously consulted with another attorney regarding their domestic problems.

3 .Lawrence's large inheritance came from his aunt and mother. During the course of the marriage, Carolee, by her improvident spending, depleted its value by $40,000.

4 . SDCL 25-2-10 provides: “Either husband or wife may enter into any engagement or transaction with the other ... respecting property ... subject ... to the general rules which control the actions of persons occupying confidential relations with each other_”

5 . SDCL 15-6-60(b) provides that the court may relieve a party from a final judgment, order, or proceeding, due to mistake, inadvertence, newly discovered evidence, fraud, etc. Carolee has not specifically stated upon which of the six subsections of Rule 60(b) she bases her theory. (She has not raised excusable neglect, which was the sole basis in our holding in Clarke v. Clarke, 423 N.W.2d 818 (S.D.1988).)