Breit v. Breit

DONALD H. BREIT III, APPELLANT, v. MARIANNE S. BREIT, APPELLEE.

No. A-13-675.

NEBRASKA COURT OF APPEALS

November 4, 2014

MEMORANDUM OPINION AND JUDGMENT ON APPEAL

NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).

Appeal from the District Court for Lancaster County: JOHN A. COLBORN, Judge. Affirmed.

Donald H. Bowman and Terri M. Weeks, of Bowman & Krieger, for appellant.

W. Patrick Betterman, P.C., L.L.O., for appellee.

MOORE, Chief Judge, and IRWIN and PIRTLE, Judges.

MOORE, Chief Judge.

I. INTRODUCTION

Donald H. Breit III appeals from the order of the district court for Lancaster County, which granted Marianne S. Breit's complaint to vacate the decree dissolving the parties' marriage as to the property settlement only. Donald assigns error both to the court's decision to vacate the property settlement and the award of attorney fees to Marianne. Because we find no abuse of discretion in the court's decisions, we affirm.

II. BACKGROUND

The parties' original divorce trial occurred on September 15 and 16, 2010. On October 27, the district court entered a decree dissolving the parties' marriage. The court awarded the parties joint legal custody and Marianne physical custody of the parties' three minor children and ordered Donald to pay child support of $3,900 per month for three children. The court approved the parties' property settlement agreement and divided the marital estate accordingly. Under the property settlement agreement, Donald was awarded the parties' interest in The WillowsCorporate, LLC (the Willows), at a value of $50,000 and an entity known as DHB III, LLC (DHB), at a value of $0. The agreement did not list or value any interest in Custom Spine, Inc., stock. The division of property resulted in a net award to Donald of $848,298 and to Marianne of $848,299. The court awarded Marianne alimony of $6,000 per month for 84 months. The court also ordered Donald to pay $5,000 toward Marianne's attorney fees, but it ordered the parties to pay their own litigation expenses.

On April 26, 2011, Marianne filed a complaint, seeking to vacate the decree with respect to the property settlement and to modify the decree with respect to alimony and child support. Marianne alleged that Donald fraudulently misrepresented the value of the parties' interest in the Willows and that he fraudulently concealed and misrepresented his interest in 45 shares of common stock of Custom Spine. Marianne set forth additional allegations in connection with her motion to modify alimony and child support. Marianne stated that she had no adequate remedy at law but also noted that the court had the inherent power under Neb. Rev. Stat. § 25-2001 (Reissue 2008) to vacate or modify its judgments or orders upon a motion filed within 6 months after the entry of the judgment or order. Marianne asked the court to vacate the decree and set aside the property settlement agreement on the ground that it was fraudulently obtained and inequitable as a matter of law. She further asked the court to modify the decree to provide for an equitable division of the marital estate, including an award to Marianne of half the proceeds of the Willows in excess of $50,000 and a one-half interest in DHB, an increase in child support based on Donald's increased monthly income, and alimony of $8,000 for at least 120 months. Marianne also sought an award of attorney fees.

The district court determined that it should bifurcate the trial on the complaint to vacate the property settlement portion of the decree from the trial on the complaint to modify the decree with respect to child support and alimony. Accordingly, we do not discuss Marianne's request to modify child support and alimony further. The court heard evidence on the complaint to vacate the decree with respect to the property settlement on December 6, 2011; the court heard additional evidence in 2012 on April 18 and 19, April 23, September 26 and 27, and October 11. Subsequent to the hearings on the complaint to vacate, the parties filed motions seeking attorney fees. The court heard these motions on March 22 and April 12, 2013. We have set forth relevant details of the evidence presented at these hearings in the analysis section below.

On July 11, 2013, the district court entered an order vacating the October 2010 decree as to the property settlement only. After a lengthy analysis of the evidence with respect to Donald's interest in the Custom Spine stock shares and the parties' interest in the Willows, the court found that it did not have "all of the honest facts in this case" and determined that the property settlement agreement should be vacated. The court stated that the matter would be set for retrial on the division of property, at which time the court would receive evidence and determine the value of the parties' property in order to divide the marital estate in an equitable manner. We have set forth relevant details of the court's decision on this issue in the analysis section below. The court denied Donald's motion for attorney fees; it granted Marianne's motion, in part, awarding her attorney fees of $50,000. Donald subsequently perfected his appeal to this court.

III. ASSIGNMENTS OF ERROR

Donald asserts, restated and reordered, that the district court abused its discretion by (1) granting Marianne equitable relief when she had an adequate remedy at law, (2) failing to consider whether Marianne exercised due diligence, (3) failing to address whether the elements of fraud had been established in this case, (4) vacating the decree as to the property settlement agreement, and (5) awarding Marianne $50,000 in attorney fees.

IV. STANDARD OF REVIEW

An appellate court will reverse a decision on a motion to vacate or modify a judgment under the statutory grounds listed in § 25-2001 only if the litigant shows that the district court abused its discretion. Nye v. Fire Group Partnership, 263 Neb. 735, 642 N.W.2d 149 (2002). A judicial abuse of discretion exists when the reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in matters submitted for disposition. Breci v. St. Paul Mercury Ins. Co., 288 Neb. 626, 849 N.W.2d 523 (2014).

In an action for the dissolution of marriage, the award of attorney fees is discretionary with the trial court, is reviewed de novo on the record, and will be affirmed in the absence of an abuse of discretion. Vlach v. Vlach, 286 Neb. 141, 835 N.W.2d 72 (2013).

V. ANALYSIS

1. COURT EXERCISED INHERENT

POWER TO VACATE DECREE

Donald's first three assignments of error concern the district court's power to vacate the decree. In civil cases, a court of general jurisdiction has inherent power to vacate or modify its own judgment during the term in which it was issued. State on behalf of B.M. v. Brian F., 288 Neb. 106, 846 N.W.2d 257 (2014). The relevant local court rule provides that the district court's term commences on January 1 and ends on December 31 of each calendar year. See Rules of Dist. Ct. of Third Jud. Dist. 3-1 (rev. 1999). The decree in this case was entered on October 27, 2010. Marianne filed her complaint and motion seeking to vacate the decree on April 26, 2011. Because Marianne did not file her complaint to vacate within the 2010 calendar year, the court's inherent power to vacate the decree during the term in which it was issued had expired.

Nebraska case law makes it clear, however, that a court may modify or vacate a judgment after the term has expired under any of the reasons set out in § 25-2001 or under the district court's independent equity jurisdiction. See, Roemer v. Maly, 248 Neb. 741, 539 N.W.2d 40 (1995); Welch v. Welch, 246 Neb. 435, 519 N.W.2d 262 (1994); Portland v. Portland, 5 Neb. App. 364, 558 N.W.2d 605 (1997). Section 25-2001 provides in relevant part:

(1) The inherent power of a district court to vacate or modify its judgments or orders during term may also be exercised after the end of the term, upon the same grounds, upon a motion filed within six months after the entry of the judgment or order.

(2) The power of a district court under its equity jurisdiction to set aside a judgment or an order as an equitable remedy is not limited by this section.

. . . .

(4) A district court may vacate or modify its own judgments or orders after the term at which such judgments or orders were made . . . (b) for fraud practiced by the successful party in obtaining the judgment or order . . . .

Donald first asserts that the district court abused its discretion by granting Marianne equitable relief when she had an adequate remedy at law, but he confuses the court's power under its equity jurisdiction with the court's inherent power to vacate judgments within term as extended by statute in § 25-2001(1). To proceed in equity, the litigant must show that he or she is without a legal remedy; more specifically, that § 25-2001 could not provide adequate relief. Hornig v. Martel Lift Systems, 258 Neb. 764, 606 N.W.2d 764 (2000). Marianne filed her complaint to vacate within 6 months of entry of the decree. Accordingly, the court's inherent power to vacate or modify its decisions as extended by § 25-2001(1) had not expired and Marianne had a legal remedy available to her. A review of the court's July 2013 order shows that it exercised its power under § 25-2001(1) to vacate the property settlement portion of the decree and that it did not vacate the property settlement pursuant to its equity jurisdiction. Donald's assertions to the contrary are without merit.

Next, Donald asserts that the court abused its discretion by failing to consider whether Marianne exercised due diligence. He also asserts that the district court abused its discretion by failing to address whether the elements of fraud had been established in this case. He argues that this case should be evaluated under § 25-2001(4) and that the court should...