Kartchner v. Kartchner

2014 UT App 195_________________________________________________________
THE UTAH COURT OF APPEALS
KELLY KARTCHNER,
Plaintiff and Appellee,
v.
KATHALYN KARTCHNER,
Defendant and Appellant.
Opinion
No. 20130014-CA
Filed August 14, 2014
Fourth District Court, American Fork Department
The Honorable Thomas Low
No. 110100815
Ben W. Lieberman, Attorney for Appellant
Kenneth A. Okazaki, Nathan D. Thomas, and
Stephen C. Clark, Attorneys for Appellee
SENIOR JUDGE PAMELA T. GREENWOOD authored this Opinion, in
which JUDGES J. FREDERIC VOROS JR. and MICHELE M.
CHRISTIANSEN concurred.1
GREENWOOD, Senior Judge:
¶1 Kathalyn Kartchner (Wife) appeals from the trial court’s
judgment in favor of Kelly Kartchner (Husband) on his claim of
fraud upon the court. We affirm.
1. The Honorable Pamela T. Greenwood, Senior Judge, sat by
special assignment as authorized by law. See generally Utah Code
Jud. Admin. R. 11-201(6).
Kartchner v. Kartchner
BACKGROUND2
¶2 Husband and Wife married in 1976. Wife dropped out of
college shortly thereafter when she became pregnant, and Husband
continued his studies and eventually completed medical school. In
1998, the couple began to have marital difficulties and separated.
Wife filed for divorce. The parties executed a separation agreement
that was filed with the court. As provided in the agreement,
Husband gifted his interest in the marital home to Wife and paid
Wife alimony and child support totaling $19,560 per month.
Husband did so in order to provide long-term stability for Wife
and their children. After two or three months of separation, the
parties reconciled and Husband moved back into the home.
Despite this reconciliation, Husband continued to make separate
maintenance payments to Wife, and Wife used those funds to make
the mortgage payments on the marital home, which remained in
her name.
¶3 In 2006, Husband asked for a divorce. As part of their
negotiations, Husband agreed to pay alimony to Wife even if Wife
were to eventually remarry. Wife had a stipulation prepared that
reflected this agreement (the 2006 Stipulation). The 2006 Stipulation
required Husband to pay approximately $23,000 per month in total
support. After all the children reached majority, Husband’s
support payments would decrease to $18,000 per month. This
amount would continue as long as both Husband and Wife lived,
but it would decrease if Wife or a future husband earned an
income. Husband agreed to this provision because he felt guilty
about seeking a divorce. The 2006 Stipulation also provided that
Wife would retain the marital home. In April 2006, the parties
signed the 2006 Stipulation, and Wife filed it with the court. The
2. “On appeal from a bench trial, we view the evidence in a light
most favorable to the trial court’s findings, and therefore recite the
facts consistent with that standard.” Bel Courtyard Invs., Inc. v.
Wolfe, 2013 UT App 217, ¶ 2 n.1, 310 P.3d 747 (citation and internal
quotation marks omitted).
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2006 Stipulation also stated that there were irreconcilable
differences between Husband and Wife, but it did not describe
their differences. Although Wife agreed to take the necessary
actions to finalize the divorce, she did not do so.
¶4 Instead, Husband and Wife reconciled again in August 2006.
The 2006 Stipulation remained in the court’s file, but neither party
made efforts to finalize the divorce. As was the parties’ habit for
the preceding eight years, Husband continued to make separate
maintenance payments to Wife as outlined in the 1998 separation
agreement. Husband also made the payments on a credit card that
Wife used for household expenses.
¶5 In 2007, Wife began earning an income as a distributor for a
multi-level marketing company. Wife never accounted to Husband
for this income, but he was not unaware of it. Nevertheless,
Husband’s separate maintenance payments never decreased
relative to Wife’s income, and neither party contemplated that the
payments should be reduced.
¶6 While the parties were on a Mediterranean cruise in 2009,
Wife informed Husband that she wanted to proceed with the
divorce. Immediately after the cruise, Husband went to Egypt for
a volunteer medical mission from April 16 to May 4, 2009. When
Husband returned home, Wife told him to stay in a hotel room she
had reserved for him, where she had left an envelope for him
containing a copy of proposed findings of fact and conclusions of
law based on the parties’ 2006 Stipulation. When Husband called
and asked Wife about the document, Wife indicated that she
intended it to be a starting point for discussion and that they
needed to reach an agreement on the final terms of the divorce
decree. However, Wife did not disclose that the documents had
been submitted to the court for signature. Rather, she discussed
their details with Husband as if she were negotiating with him, and
the parties talked about whether they should finalize the divorce
based on the terms of the 2006 Stipulation or whether to discard
those terms and start over. Husband also expressed his
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disagreement with the 2006 Stipulation’s description of Husband’s
and Wife’s respective incomes and with the requirement that
Husband pay alimony even if Wife were to remarry. As an
alternative, Husband proposed using a fixed percentage of his
income as a basis for alimony, but Wife informed him that her
attorney opined that the court would not approve such a term.
¶7 Contrary to her representations to Husband, Wife had
already instructed her attorney to finalize the divorce based on the
2006 Stipulation. In fact, Wife’s attorney had followed these
instructions by filing the proposed findings of fact and conclusions
of law and a decree of divorce with the court and had submitted
them to the court for finalization on May 1, 2009—three days
before Husband’s return from Egypt. These proposed findings and
decree were outdated and contained several inaccuracies.3 For
instance, the proposed findings incorrectly represented that Wife
was not gainfully employed. In an apparent effort to cure this
misrepresentation and to render the proposed findings more
reflective of then-present facts, Wife abruptly resigned her position
with her company. Wife never returned to work but continued to
receive commissions throughout the ensuing months.
¶8 The court did not immediately sign Wife’s proposed final
documents. Had the court signed them soon after filing, as Wife
intended, Husband would have been divorced, without notice,
before returning from Egypt. Due to Wife’s attorney’s initial failure
to file some required documents, he filed additional documents on
June 24, 2009. That same day, he mailed a copy of a statement of
compliance to Husband. This document, however, did not notify
Husband that a divorce was being finalized based on the outdated
3. Also, these documents erroneously omitted the 2006
Stipulation’s provision that alimony would be reduced by Wife’s
income and the income of any future husband. In the present
action, the parties agreed that the final divorce decree should be
reformed to include this provision.
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2006 Stipulation. On July 22, 2009, Wife’s attorney mailed a copy of
a request to submit for decision to Husband. This document should
have notified Husband that Wife was seeking to finalize the
divorce, yet Husband did not immediately respond. Throughout
the period of May to July 2009, Wife continued to feign
negotiations with Husband, even as her attorney was trying to
finalize the divorce. On July 28, 2009, the court entered the divorce
decree (the 2009 Decree).
¶9 The next day, Husband learned that the parties’ divorce had
been finalized. Because Husband hoped to reconcile with Wife,
Husband did not move for relief from the 2009 Decree. In early
2010, Husband consulted with an attorney who advised him that
the court would not consider the case because more than ninety
days had passed since the date of the 2009 Decree. During this
period, Husband frequently told Wife that he did not agree with
the 2009 Decree and that he would not pay alimony once she
remarried. Husband continued to make payments to Wife, albeit
not in the amounts prescribed by the 2009 Decree.4
¶10 In the summer of 2010, Husband learned that Wife was
romantically involved with another man (Boyfriend). In June 2011,
Husband tried to release himself from the obligation to pay
alimony after Wife’s remarriage by offering to pay off Boyfriend’s
debts. A month later, Wife announced her engagement to
Boyfriend. In late September 2011, Wife married Boyfriend.
¶11 On October 26, 2011, Husband filed the present action
against Wife, seeking equitable relief from the 2009 Decree and
alleging that Wife perpetrated a fraud against Husband and upon
the court. Husband sought reformation of the 2009 Decree and
requested damages for the amount of alimony he had paid Wife. In
response, Wife argued that Husband had forfeited his fraud claim
4. Wife never brought any enforcement actions against Husband
alleging underpayment.
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by failing to file a motion under rule 60(b) of the Utah Rules of
Civil Procedure. Wife also raised the doctrine of laches as an
affirmative defense.
¶12 After conducting a bench trial in October 2012, the trial court
determined that the 2009 Decree was entered through fraud upon
the court. The trial court therefore concluded that Husband was
entitled to partial relief from certain provisions of the 2009 Decree.
In granting that partial relief, the trial court reformed Husband’s
ongoing alimony obligation under the decree to require Husband
to pay Wife $5,000 per month until December 2020 or until the date
that the mortgage on Wife’s home is satisfied, whichever is sooner.
The trial court also ordered that Husband’s alimony obligation
would not be reduced by Wife’s remarriage or by any income
earned by Wife or her new husband. The trial court also applied
laches and refused to relieve Husband of his alimony obligation
that accrued during the time between the entry of the 2009 Decree
and the filing of Husband’s claim in October 2011.5 Next, the trial
court partially relieved Husband of the life insurance obligation in
the 2009 Decree by reforming it to require Husband to maintain a
$200,000 life insurance policy, with Wife named as a beneficiary, as
long as his alimony obligation continues. The trial court ruled that
all other terms of the 2009 Decree would remain essentially
undisturbed. Wife appeals.
ISSUES AND STANDARDS OF REVIEW
¶13 On appeal, Wife argues that the trial court erred in granting
relief to Husband on his fraud upon the court claim because
Husband’s carelessness and neglect should have barred his entire
claim. The trial court rejected this argument based on its
5. However, the trial court did allow Husband’s accrued obligation
during this period to be reduced by the monthly earnings, if any,
of Wife and her husband.
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interpretation of rule 60(b) of the Utah Rules of Civil Procedure.
“The trial court’s interpretation of the rules of civil procedure
presents a question of law which we review for correctness.”
Nunley v. Westates Casing Servs., Inc., 1999 UT 100, ¶ 42, 989 P.2d
1077.
¶14 Wife raises several other challenges to the trial court’s
rulings and reformation of the 2009 Decree. First, Wife argues that
the trial court erred in its formulation and application of the
elements of an action for fraud upon the court. Next, Wife contends
that the trial court erred in ruling that the 2006 Stipulation was
void. Finally, Wife claims that the trial court erred in reforming the
life insurance provision of the 2009 Decree. “‘The availability of [an
equitable] remedy is a legal conclusion that we review for
correctness.’” Smith v. Simas, 2014 UT App 78, ¶ 10, 324 P.3d 667(alteration in original) (quoting Ockey v. Lehmer, 2008 UT 37, ¶ 42,
189 P.3d 51). “However, the trial court’s formulation and
application of an equitable remedy is reviewed for an abuse of
discretion.” Id.; see also Collard v. Nagle Constr., Inc., 2006 UT 72,
¶ 13, 149 P.3d 348 (“When a district court fashions an equitable
remedy, we review it to determine whether the district court
abused its discretion.”). “[B]ecause a trial court is in an ‘advantaged
position’ to consider equities, we give ‘considerable deference to
[its] findings and judgment.’” Hone v. Hone, 2004 UT App 241, ¶ 5,
95 P.3d 1221 (second alteration in original) (quoting Jacobson v.
Jacobson, 557 P.2d 156, 158 (Utah 1976)).
ANALYSIS
I. Husband’s Failure to File a Rule 60(b) Motion
¶15 Wife argues that the trial court erred in allowing Husband
to pursue his fraud upon the court claim because Husband
forfeited his claim by failing to file a motion under rule 60(b) of the
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Utah Rules of Civil Procedure.6 Rule 60(b) permits a party to move
for relief from a judgment for, among other reasons, “(1) mistake,
inadvertence, surprise, or excusable neglect” or “(3) fraud (whether
heretofore denominated intrinsic or extrinsic), misrepresentation or
other misconduct of an adverse party.” Utah R. Civ. P. 60(b) (emphasis
added). When a motion is filed under subsections (1) or (3) of rule
60(b), “[t]he motion shall be made within a reasonable time,” which
means it shall be made “not more than 90 days after the judgment,
order, or proceeding was entered or taken.” Id.
¶16 Wife concedes that a plaintiff is not required to bring a rule
60(b) motion as a prerequisite to filing an independent action for
fraud upon the court. Instead, Wife contends that a plaintiff may
not maintain such an action if the failure to file a rule 60(b) motion
is due to the plaintiff’s own carelessness or neglect. Consequently,
under Wife’s argument, if Husband’s failure to file a rule 60(b)
motion for fraud was due to his own neglect, then he is barred
from asserting an independent claim for fraud upon the court.
¶17 However, Wife’s position is directly contradicted by the
plain language of rule 60(b). The rule expressly states, “This rule
does not limit the power of a court to entertain an independent
action to relieve a party from a judgment, order or proceeding or
to set aside a judgment for fraud upon the court.” Id.7
¶18 Wife’s position is also contrary to case law from Utah’s
appellate courts. For instance, in St. Pierre v. Edmonds, 645 P.2d 615(Utah 1982), a wife filed for divorce and the court entered a default
6. We refer to Husband’s claim as an independent action for “fraud
upon the court,” consistent with rule 60(b)’s language, even though
some cases use the term “fraud on the court” or “fraud against the
court.”
7. Although Wife’s opening brief includes the entire text of rule
60(b) as a determinative rule, Wife otherwise fails to address this
specific language in her opening brief.
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judgment against the husband. Id. at 617. Ten days later, the
husband moved to withdraw his earlier consent to the default
judgment and filed additional documents, including a property
settlement stipulation signed by both parties that substantially
reduced the property awarded to the wife. Id. The court granted
the divorce and divided the estate according to the terms of the
stipulation. Id. Nearly two years later, the wife filed an
independent action, raising common law claims based on her
allegations that the husband used harassment and intimidation to
force her to sign the stipulation. Id. After the trial court dismissed
the wife’s complaint for failure to state a claim upon which relief
could be granted, the Utah Supreme Court recognized that the wife
could not obtain relief under rule 60(b) because the time to file a
motion to set aside the divorce decree had expired. Id. However,
the supreme court explained that the wife was not barred from
seeking relief from judgment because rule 60(b) “expressly
recognizes and preserves the court’s historic powers to relieve a
party from the operations of an unconscionable judgment or
order.” Id. at 618. The supreme court further stated that “it has long
been recognized by state and federal courts alike that an
independent equitable action for relief from a prior judgment is
available in addition to those remedies afforded under Rule 60(b).”
Id. (emphasis added). As the Utah Supreme Court explained, rule
60(b) does not restrict the court from hearing “an independent
common law action to set aside a judgment . . . for fraud . . . after
the three-month period [for filing a rule 60(b) motion] has expired.”
Id. That is, nothing in rule 60(b)’s language indicates that a
plaintiff’s neglect in failing to move for relief under the rule
precludes a plaintiff from later filing an independent action for
fraud upon the court. Thus, even if a plaintiff did not exercise
reasonable care and did not file a rule 60(b) motion, “[t]he time
limitation in Rule 60(b) . . . does not control the filing of an
independent action.” See id. As a result, the supreme court reversed
the trial court’s dismissal of the wife’s complaint. Id. at 618–20.
¶19 This court addressed similar circumstances in Bayles v.
Bayles, 1999 UT App 128, 981 P.2d 403. There, a divorcing couple
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signed a property settlement agreement that was incorporated into
the court’s divorce order. Id. ¶¶ 4–6. Five months later, the
husband filed a petition for modification based on his allegations
that before filing for divorce, the wife had removed assets from the
business that they had operated together. Id. ¶ 7. The wife filed a
motion to dismiss the petition, that the trial court denied. Id.
¶¶ 8–10. On interlocutory appeal, we explained that rule 60(b) is
the appropriate avenue for relief from a judgment entered in a
divorce proceeding based on an agreed-upon stipulation that was
fraudulently procured. Id. ¶ 15. We acknowledged that “[r]ule
60(b) has stringent filing deadlines,” id., but we further explained
that the expiration of the time for filing “does not limit the power
of the court to entertain an independent action,” id. ¶ 16 (citation
and internal quotation marks omitted). We therefore held,
If [the husband’s] assertions prove true, [the
husband] may be entitled to relief. This
notwithstanding, [the husband] failed to timely file a
Rule 60(b)(3) motion. Because a claim of fraud
contemplated in the context of a divorce is not
generally a proper basis for a petition to modify a
divorce decree, [the husband’s] only avenue for relief
under the facts of this case is to file an independent
action.
Id. ¶ 17.
¶20 As these cases indicate, Utah law does not bar a party who
failed to file a rule 60(b) motion from later filing an independent
fraud upon the court claim. Wife attempts to distinguish these
cases by arguing that neither “addresses carelessness, neglect, and
lack of diligence as a bar to independent-action relief.” But in the
face of rule 60(b)’s plain language that the rule does not limit the
court’s power to entertain an independent action for fraud upon
the court, differences in factual scenarios do not weaken the
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statements in St. Pierre and Bayles recognizing the availability of an
independent action despite failure to file a rule 60(b) motion.8
¶21 Nevertheless, Wife further argues that affirming Husband’s
relief on his fraud upon the court claim under these circumstances
would open the floodgates to collateral attacks on judgments and
would render the ninety-day limitations period on rule 60(b)(3)
motions meaningless. However, our supreme court has indicated
that the time frame for filing an independent action for fraud upon
the court is not unlimited. See St. Pierre, 645 P.2d at 618. “Rather,
the doctrine of laches and other equitable principles determine the
time within which the action must be brought.” Id.; see also In re
Adoption of S.L.F., 2001 UT App 183, ¶ 22 n.4, 27 P.3d 583(“[I]ndependent actions [as allowed under rule 60(b)] . . . are
governed by equitable principles such as laches.” (citing Maertz v.
Maertz, 827 P.2d 259, 261 n.4 (Utah Ct. App. 1992))); Maertz, 827
P.2d at 261 n.4 (“Equitable principles such as laches, rather than the
Rule 60(b) time constraints, would apply to limit an independent
action.”). Because independent actions for fraud upon the court are
subject to equitable principles, we are not persuaded by Wife’s
8. Wife also relies on Redfield v. First National Bank, 244 P. 210 (Utah
1925), arguing that it stands for the proposition that equitable relief
is not available to those who, like Husband, lose alternative
remedies, i.e., rule 60(b) relief, because of their own fault, neglect,
or carelessness. Redfield states, “A court of equity does not interfere
. . . unless the party complaining was, without his fault, deprived
of his opportunity to present his defense in the original action on
the merits.” Id. at 215 (citation and internal quotation marks
omitted). But as we have explained, rule 60(b) does not restrict the
court’s power to hear an independent action for fraud upon the
court even if a party did not file a rule 60(b) motion. See Utah R.
Civ. P. 60(b); St. Pierre v. Edmonds, 645 P.2d 615, 618 (Utah 1982). As
a consequence, if a party files an independent action for fraud upon
the court after failing to file a rule 60(b) motion, the trial court has
discretion to determine if equitable principles justify allowing the
action to proceed.
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argument that the trial court’s grant of relief to Husband under the
facts of this case would expose all other judgments rendered in this
state to wholesale attacks.
¶22 The parties do not dispute that Husband never filed a rule
60(b)(3) motion for fraud. Husband instead filed the present action
for fraud upon the court more than two years after the 2009 Decree
was entered. Although Husband was not as diligent in pursuing
relief from the 2009 Decree as he could have been, Husband did not
forfeit his claim by not filing a rule 60(b) motion. We therefore
affirm the trial court’s ruling that Husband’s failure to invoke rule
60(b)(3) does not foreclose his ability to file an independent action
for fraud upon the court.
II. Unconscionability
¶23 Wife argues that the trial court applied an incorrect standard
for fraud upon the court. Specifically, Wife argues that for
Husband to be entitled to relief, the trial court was required to find
that the 2009 Decree was substantively unconscionable. She further
argues that the 2009 Decree was neither substantively nor
procedurally unconscionable and that the trial court therefore erred
in relieving Husband from some provisions of the 2009 Decree. In
response, Husband argues that a finding of substantive
unconscionability is not required and that the proper focus of a
fraud upon the court claim is on the integrity of the judicial process
itself.
¶24 In ruling on Husband’s fraud upon the court claim, the trial
court applied the standard articulated in St. Pierre, stating that “to
establish his fraud on the court claim, [Husband] must establish ‘an
intentional act by a party in a divorce action which prevents the
opposing party from making a full defense.’” (Quoting St. Pierre v.
Edmonds, 645 P.2d 615, 619 (Utah 1982).) The trial court then
determined that Husband met this burden by clear and convincing
evidence. The trial court found that in 2009 Wife represented to the
court that the 2006 Stipulation “remained viable” and so accurately
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described the parties’ agreement, thereby preventing Husband
from making a full defense. In addition, the trial court found that
Wife intentionally misled Husband. Wife led Husband to believe
that the proposed findings of fact and conclusions of law, which
were based on the 2006 Stipulation, were a starting point for
negotiations even though she had already submitted the
documents to the court for approval. The trial court found that as
a result of the court’s failure to sign these documents promptly,
Wife “continue[d] the deception through the summer by
pretending to negotiate with [Husband].” The trial court’s order
then indicated that even though Utah law may not require a
finding that Wife had fraudulent intent, such a requirement would
be met in this case.
¶25 In arguing that the trial court was required to find that the
2009 Decree was both procedurally and substantively
unconscionable, Wife relies on two statements from our supreme
court. Specifically, Wife points to language in St. Pierre that notes
that the court holds the power “to relieve a party from the
operations of an unconscionable judgment or order.” St. Pierre, 645
P.2d at 618. Wife also directs us to our supreme court’s explanation
that “[a] fraud on the court is an unconscionable plan or scheme
which is designed to improperly influence the court in its decision.”
Chen v. Stewart, 2005 UT 68, ¶ 40, 123 P.3d 416 (citation and internal
quotation marks omitted). Wife asks us to interpret the supreme
court’s use of the word “unconscionable” in these contexts as a
clear indication that a plaintiff asserting a fraud upon the court
claim and seeking relief from an order must show that the order
itself is substantively unconscionable. We do not agree that Utah
law imposes such a requirement.
¶26 “[T]he term [fraud on the court] as used in obtaining relief
from judgment . . . embrace[s] only that type of conduct which
defiles the court itself, or fraud which . . . prevent[s] the judicial
system from functioning in the customary manner of deciding
cases presented in an impartial manner.” Kelley v. Kelley, 2000 UT
App 236, ¶ 28 n.10, 9 P.3d 171 (first and second alteration in
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original) (citation and internal quotation marks omitted); see also
Black’s Law Dictionary 732 (9th ed. 2009) (defining “fraud on the
court” as when “a lawyer’s or party’s misconduct [is] so serious
that it undermines or is intended to undermine the integrity of the
[judicial] proceeding”). In divorce proceedings, “a decree of
divorce obtained by collusion of the parties, or by the suppression
of the facts, or false testimony, is a fraud upon the court, and
against public policy.” Karren v. Karren, 69 P. 465, 466 (Utah 1902);
see also Kelley, 2000 UT App 236, ¶ 57 (Jackson, J., dissenting) (“In
Utah divorce proceedings, fraud, deceit, collusion, and perjury are
wrongs against the state and a fraud upon the court . . . .” (citation
and internal quotation marks omitted)). Thus, “[a]n intentional act
by a party in a divorce action which prevents the opposing party
from making a full defense amounts to fraud upon the opposing
party, as well as upon justice.” St. Pierre, 645 P.2d at 619 (citation
and internal quotation marks omitted); see also Kelley, 2000 UT App
236, ¶ 28 n.10 (describing other examples of fraud upon the court
justifying relief, including “such ‘egregious misconduct’ as bribery
of a judge or jury, or fabrication of evidence by counsel[,] or the
prevention of an opposing party from fairly presenting his case”
(citations omitted)). Such actions “justif[y] a court in setting aside
the decree so obtained.” St. Pierre, 645 P.2d at 619 (citation and
internal quotation marks omitted).
¶27 The trial court in this case applied the correct definition of
fraud upon the court and did not err in requiring Husband to
establish “‘an intentional act by a party in a divorce action which
prevents the opposing party from making a full defense.’”
(Quoting id.) Further, the trial court did not err in determining that
Husband established that Wife’s conduct met this standard. Wife
intentionally misrepresented to the court that the 2006 Stipulation
accurately reflected the state of the parties’ negotiations regarding
their 2009 divorce proceedings. And by submitting the 2006
Stipulation to the court for signature while Husband was abroad
and unable to contest it, Wife “suppress[ed] . . . facts” that
Husband and Wife had reconciled after filing the 2006 Stipulation,
see Karren, 69 P. at 466, and thereby “prevent[ed Husband] from
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making a full defense,” see St. Pierre, 645 P.2d at 619. Wife’s conduct
therefore constitutes a fraud upon the court that justified granting
Husband relief from the 2009 Decree.9
¶28 In summary, the trial court did not err in concluding that
Utah law does not require a plaintiff to demonstrate substantive
unconscionability when asserting a claim for fraud upon the court.
We therefore affirm the trial court’s determination that Husband
met his burden to establish that Wife perpetrated a fraud upon the
court.
III. Voidness of the 2006 Stipulation
¶29 Next, Wife contends that the trial court erred in determining
that the 2006 Stipulation was void under Lund v. Lund, 315 P.2d 856(Utah 1957). Wife argues that this determination was central to the
trial court’s conclusion that Wife committed fraud upon the court
by misrepresenting to the court that the 2006 Stipulation remained
viable.
¶30 In Lund, the trial court entered an interlocutory decree of
divorce in February 1954. Id. at 857. Three months later, the
husband and wife reconciled, “bestowing on each other all the
privileges and benefits of [the marital] relationship.” Id. However,
the parties separated again in September 1955. Id. Thereafter, the
trial court vacated the interlocutory decree, and the wife appealed.
Id. In affirming the trial court, the Utah Supreme Court ruled that
9. Wife also argues that even if she misled Husband “in connection
with the procedural status of the divorce case, no conduct was
directed at the court itself” and that therefore she did not have the
requisite fraudulent intent. The trial court acknowledged that Wife
would likely have been ignorant of the impact of Lund v. Lund, 315
P.2d 856 (Utah 1957), discussed later in this opinion, see infra
¶¶ 29–34, but nevertheless concluded that Wife’s actions supported
a finding of fraudulent intent. We therefore are not persuaded by
this argument.
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“the trial court was right in holding that the original grounds
which led to the entry of the interlocutory decree were not now
available in the action because they had been condoned and
forgiven.” Id. at 858. The supreme court explained that the parties
had no written agreement placing conditions on their reconciliation
and noted that the parties’ relationship during their reconciliation
was not different from the relationship before any difficulties arose.
Id. at 857–58. The court further reasoned,
It would be a hard rule to hold that where the parties
resume the marital relationship after the entry of the
interlocutory decree, that regardless of how happy
the parties may have been for six months, one, two or
three years, that one party could hold the
interlocutory decree over the head of the other and
demand that the line be toed. With the realization
that after the parties have become reconciled and
have resumed the marital relationship, except in
flagrant cases where fraud is present and good faith
absent, the cause of action was dead and was no
longer available to obtain a quick final decision, it is
very probable that the parties might well be induced
to try the harder to make a success of the marriage in
order not to be required to start from scratch.
Id. at 858.
¶31 In this case, the trial court applied the reasoning from Lund
to hold that the 2006 Stipulation was void and could no longer
serve as the basis for the 2009 Decree. As the trial court explained,
it was undisputed that the irreconcilable differences that led to
Husband’s request for a divorce and to the 2006 Stipulation were
resolved in August 2006. The trial court also stated that it was
undisputed that “an entirely different set of irreconcilable
differences, raised by [Wife], arose in 2009.” Because the 2006
differences were resolved when the parties reconciled, the trial
court ruled that Wife could not substitute her differences in 2009
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for Husband’s differences in 2006. The trial court reasoned that,
under Lund, “[Husband’s] now-dormant desires for a divorce were
‘no longer available to obtain a quick final decision’ on [Wife’s]
desires for a divorce.” (Quoting id.) As a result, “the original
grounds which led to the [filing of the 2006 Stipulation] were not
now available in the action because they had been condoned and
forgiven.” See Lund, 315 P.2d at 858.
¶32 Wife argues that Lund is inapplicable here for several
reasons. First, Wife asserts that Lund does not apply because
Husband made separate maintenance payments to Wife during
their reconciliation from 2006 to 2009. Second, Wife contends that
the reconciliation was conditional because Husband was operating
with “two strikes” against him and Husband’s support payments
indicated that the parties’ relationship during their reconciliation
was different from their relationship before difficulties arose. Third,
Wife argues that, unlike the vacated interlocutory decree in Lund,
the 2006 Stipulation is a binding contract. Finally, similar to her
rule 60(b) argument, Wife contends that the 2006 Stipulation cannot
be deemed void because Husband never filed for relief from the
2006 Stipulation.
¶33 We are not persuaded that the trial court erred in applying
Lund to the facts of this case. First, the trial court found that
Husband had been paying support to Wife since 1998 and that this
practice was not altered by the 2006 Stipulation. As a result,
Husband’s payments made during the parties’ reconciliation do not
necessarily establish that the parties were strictly complying with
the terms of the 2006 Stipulation or otherwise had not reconciled.
Second, despite Wife’s claim that Husband had “two strikes”
against him during the couple’s reconciliation, Wife does not point
us to any evidence of a “written agreement containing any
condition upon which the reconciliation and condonation were to
be voided,” see id. at 857. We therefore agree with the trial court
that, as in Lund, Husband and Wife had resolved their differences
relating to the couple’s 2006 separation and that the grounds
supporting the 2006 Stipulation could not serve as the basis for the
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2009 Decree. Next, we do not agree with Wife that the distinction
between the interlocutory decree in Lund and the 2006 Stipulation
here renders Lund inapplicable. We see no reason why a
reconciliation sufficient to “condone[] and forgive[]” the grounds
supporting an interlocutory decree would not be sufficient also to
“condone[] and forgive[]” the grounds supporting a stipulation, see
id. Last, we are not convinced that Husband’s failure to move to
withdraw the 2006 Stipulation renders relief unavailable in this
case. Rather, we agree with Husband that “the gravamen of the
holding in Lund was not the procedural steps the parties had taken,
or not taken, in the time since the interlocutory decree was entered;
it was whether the irreconcilable differences leading to the
interlocutory decree had been condoned and forgiven.” Similar to
the parties in Lund, Husband and Wife condoned and forgave the
irreconcilable differences leading to the 2006 Stipulation when they
resumed their marital relationship.
¶34 We agree with the trial court that Husband and Wife’s
resolution of the differences that caused Husband to ask for a
divorce and that served as the grounds for the 2006 Stipulation
could not serve as the basis for the 2009 Decree. We therefore
affirm the trial court’s determination that the 2006 Stipulation was
void under Lund.
IV. Reformation of the Life Insurance Provision
¶35 Finally, Wife contends that the trial court erred in reforming
the life insurance provision of the 2009 Decree. In particular, Wife
argues that the trial court erred in granting relief from the life
insurance provision because Husband admitted on cross-
examination that he removed Wife as the beneficiary of his life
insurance policy in contravention of the 2009 Decree. Wife further
argues that the trial court reformed the provision significantly to
Husband’s benefit and that the doctrine of unclean hands should
have barred such relief. In contrast, Husband contends that the trial
court’s reformation of the life insurance provision was a proper
exercise of the court’s equitable discretion and was consistent with
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the parties’ longstanding agreement to ensure Wife’s security in the
marital home.
¶36 The 2009 Decree required Husband to “maintain an
insurance policy on his life in the face amount of $2,000,000 . . . for
the benefit of [Wife], or if she dies, the children of the parties, who
shall be the sole and irrevocable beneficiaries thereof.” At trial,
Husband argued that this provision was inequitable and requested
relief from that provision in its entirety. The trial court agreed with
Husband that the life insurance provision was inequitable but only
“to an extent.” Thus, instead of relieving Husband from his life
insurance obligation completely, the trial court reformed the 2009
Decree to require Husband to maintain life insurance in the amount
of $200,000, with Wife named as beneficiary, as long as Husband’s
alimony obligation continues. The trial court reasoned that its
reformation of the life insurance provision was “sufficient to ensure
that the home can be paid for in the event of [Husband’s] untimely
demise.”
¶37 “Reformation is an equitable remedy and because of the
advantaged position of the trial court, we give considerable
deference to [the trial court’s] findings and judgment.” Bowen v.
Bowen, 2011 UT App 352, ¶ 14, 264 P.3d 233 (alteration in original)
(citation and internal quotation marks omitted). “The doctrine of
unclean hands expresses the principle that a party [who] comes
into equity for relief . . . must show that his . . . conduct has been
fair, equitable, and honest as to the particular controversy in issue.”
Goggin v. Goggin, 2013 UT 16, ¶ 60, 299 P.3d 1079 (alteration and
omissions in original) (citation and internal quotation marks
omitted). “In other words, a party will not be permitted to take
advantage of his own wrongdoing or claim the benefit of his own
fraud.” Id. However, our supreme court “ha[s] never held [the
doctrine of unclean hands] to be an absolute bar to recovery.”
Parduhn v. Bennett, 2005 UT 22, ¶ 42, 112 P.3d 495; see also Park v.
Jameson, 364 P.2d 1, 3 (Utah 1961) (“Although the clean hands
doctrine states a fundamental principle of equity jurisprudence this
principle is not, in its application, so much an absolute rule to be
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followed by the courts as it is a guide for determining whether, in
a suit between two or more wrongdoers, relief should be granted.”
(footnote citation omitted)).
¶38 On appeal, Wife claims that Husband’s unclean hands
resulting from his alleged violation of the 2009 Decree barred the
trial court from granting equitable relief to Husband. Although the
trial court did not make any findings or undertake any analysis on
the doctrine of unclean hands, the trial court apparently rejected
Wife’s argument by reforming the 2009 Decree.
¶39 We cannot conclude that the trial court exceeded its
discretion in declining to invoke the unclean hands doctrine against
Husband. See Parduhn, 2005 UT 22, ¶ 42 (“[A] district court’s
application of the unclean hands doctrine is reviewable only for
abuse of discretion.”). Instead, we are of the view that the trial
court appropriately exercised its discretion in applying equitable
principles and in granting partial relief to Husband. At trial,
Husband sought relief from the life insurance provision altogether.
However, because the trial court agreed with Husband that the
provision was inequitable only “to an extent,” it reduced the policy
limit of the insurance that Husband was required to maintain. In
light of the trial court’s determination that Wife procured the 2009
Decree by committing a fraud upon the court, the trial court’s
reformation of the life insurance provision in this regard was a
reasonable exercise of its discretion.
¶40 The trial court also exercised its discretion to reform other
provisions of the 2009 Decree. In granting additional relief to
Husband, the trial court reduced Husband’s alimony obligation
and required Husband to continue paying alimony until December
2020 or until the mortgage on the marital home is retired. The trial
court also specifically applied the equitable doctrine of laches. See
generally Fundamentalist Church of Jesus Christ of Latter-Day Saints v.
Horne, 2012 UT 66, ¶ 29, 289 P.3d 502 (describing the elements of
laches under Utah law as “(1) [t]he lack of diligence on the part of
plaintiff and (2) [a]n injury to defendant owing to such lack of
20130014-CA 20 2014 UT App 195Kartchner v. Kartchner
diligence” (alterations in original) (citation and internal quotation
marks omitted)). After finding that Husband showed a lack of
diligence, the trial court determined that it would not be equitable
to vacate the portions of the alimony obligations that accrued
before Husband filed his complaint. Under the circumstances of
this case, Wife has not persuaded us that the trial court exceeded
its discretion in reforming the 2009 Decree.
¶41 In sum, we conclude that the trial court acted within its
discretion in granting relief to Husband despite his alleged
violation of the 2009 Decree. We also conclude that the trial court
appropriately exercised its discretion in crafting its partial
reformation of the 2009 Decree.
CONCLUSION
¶42 The trial court correctly concluded that Husband could
pursue a fraud upon the court claim even after failing to file a rule
60(b)(3) motion. The trial court did not err in determining that
Wife’s conduct perpetrated a fraud upon the court, and the trial
court did not err in ruling that the 2006 Stipulation was void and
could not serve as the basis for the 2009 Decree. Finally, the trial
court acted within its discretion in reforming portions of the 2009
Decree, including the life insurance provision.10
¶43 Affirmed.
10. Neither party requests an award of attorney fees, although
Husband concludes that “[e]ach party should bear its own
attorney’s fees on appeal and [Husband] should be awarded his
costs on appeal.” Because we have affirmed the trial court’s
judgment, Husband is entitled to an award of costs. See Utah R.
App. P. 34(a) (“[I]f a judgment or order is affirmed, costs shall be
taxed against appellant unless otherwise ordered . . . .”).
20130014-CA 21 2014 UT App 195