Pooley v. Pooley

979 N.W.2d 867

In re the Marriage of: George Graham POOLEY, Respondent,

v.Barbara Lynn POOLEY, Appellant.

A20-1250

Supreme Court of Minnesota.

Filed: September 14, 2022

John C. Lillie, III, Kellie E. Hanck, Kelsey Law Office, P.A., Cambridge, MN, for respondent.

Michael P. Boulette, Seungwon R. Chung, Taft Stettinius & Hollister LLP, Minneapolis, MN; and Heather A. Chakirov, Randen, Chakirov & Grotkin LLC, Bloomington, MN, for appellant.

Rana S. Alexander, Standpoint, St. Paul, MN; and Kaitlyn J. Andren, Terzich & Ort, LLP, Maple Grove, MN, for amicus curiae Standpoint.

OPINION

McKEIG, Justice.

This case involves the proper procedure for considering the division of omitted assets from joint petitions for marriage dissolution. After the parties’ marriage was dissolved through such a joint petition, appellant Barbara Pooley filed an action against respondent Graham Pooley¹ seeking half of his retirement account, or, alternatively, an equitable portion of the account. Graham objected, claiming that he and Barbara had intentionally omitted his retirement account from their joint petition pursuant to an unwritten side agreement, and that Barbara's sole ability to seek a portion of the omitted asset is through satisfying the requirements to reopen a dissolution decree under Minn. Stat. § 518.145, subd. 2 (2020). The district court rejected Barbara's contract and equity arguments, concluding that the relief she sought was beyond the scope of a proper enforcement or clarification order and was time-barred to the extent it sought to reopen the decree under Minn. Stat. § 518.145, subd. 2 (2020). The court of appeals affirmed.

On appeal, Barbara argues that the district court and court of appeals erred in not applying the plain language of the joint petition—to "split equally" their property—to Graham's retirement account. She also argues that district courts have the power to address omitted assets that fall outside the scope of Minn. Stat. § 518.145, subd. 2 ’s grounds for reopening a dissolution decree. We agree that district courts have the power to address omitted assets, and the parties’ omission of their largest asset from the decree made it impossible for the district court to execute its necessary function of determining that the settlement was equitable. Accordingly, we reverse.

FACTS

Graham and Barbara Pooley were married in August 1989. During their 24-year marriage, the couple had one child, born in 1997. The parties separated in January 2014.

In May 2014, the parties jointly petitioned the Washington County district court for the dissolution of their marriage. The parties commenced the dissolution proceeding with a more than 40-page, pre-printed form available on the Minnesota Judicial Branch website entitled "Joint Petition, Agreement, and Judgment and Decree for Marriage Dissolution With Children." Both parties stated in the form that they were not represented by an attorney.

In the form, the parties stated that Graham made between $6,212 and $6,268 a month working for 3M. They stated that Barbara made $660 a month working part time at Macy's and received $1,307 in monthly disability payments. Graham agreed to assume the marital debt of $3,200. He also agreed to provide medical and dental insurance and pay all unreimbursed medical and dental expenses for their then-minor child, and for Barbara until the end of the year. Finally, the parties agreed that Graham would continue to live in the marital home and pay the mortgage until it was sold, at which point the proceeds would be split between them. Both parties waived any claim to spousal maintenance.

One section of the form, entitled "Division of Marital Property," instructed the parties to list all their assets on an attached asset sheet. The form states that the asset sheet is incorporated into the judgment and decree and that "Husband and Wife agree to divide their marital property as listed by them" in the attached sheet. In this section of the form, Barbara wrote "Will be split equally—we will work together."

The attached asset sheet provides that "[e]ach person shall receive as their own all assets in their column." Graham and Barbara inserted zeros for several categories listed on the asset sheet, including cash on hand, cash in bank accounts, stocks and bonds, money owed to them, and business interests. They described and listed the values of vehicles, furniture and furnishings, jewelry and watches, computers, and tools, entering the value of some items in Graham's column, and others in Barbara's. The sum of all the items listed totaled $49,000, with each person receiving property worth $24,500. Graham and Barbara wrote nothing in the lines provided for "Retirement plans." They did not check the box for "Profit Sharing or Pension" or for "401(k), IRAs or other," and the spots to fill in the retirement plan value or account balance in each respective column were left entirely blank. At the time of the dissolution, Graham had a 401(k) account with a value of approximately $235,000 and an interest in a defined-benefit pension through his employment with 3M, while Barbara had a 401(k) account with a zero balance and an unvested interest in a pension plan.

The form also included language that "[e]ach of us states that nothing has been held back, and that we have honestly included everything we could think of in listing our assets ... and that we believe the other has been open and honest in writing this agreement." Both parties also signed before a notary public, attesting to the truth of the statements in the petition.

Graham appeared at a hearing in June 2014 and confirmed under oath, among other things, that he had income from full-time employment, that Barbara was receiving social-security disability benefits, and that the parties had agreed to sell their home and divide the proceeds. Barbara was not present at the hearing. At the hearing, the dissolution court² also asked Graham, "With regards to your personal effects and assets, the two of you have agreed to just divide them up equitably?" Graham responded, "Yes." The presiding judge signed the dissolution decree, and judgment was entered.

In February 2020, Barbara moved to enforce, clarify, or amend the dissolution decree. She sought an order awarding her half of the value of the retirement accounts that Graham possessed in 2014, or, alternatively, for an equitable division of an omitted asset. Both parties were represented by counsel in this proceeding and submitted affidavits and exhibits to the district court.

Graham and Barbara presented conflicting evidence about their intentions regarding the retirement accounts in 2014. Barbara stated in her affidavit that her handwritten statement that they would split the marital property "equally" applied to the couple's retirement accounts. But Graham stated in his affidavit that he and Barbara had specifically discussed their retirement accounts and agreed that they would each keep their own. Graham explained that they had reached an unwritten agreement to keep their own retirement accounts, in part, because he had agreed to assume extra expenses and debt.

The district court explained that it was "logical" that Graham would keep his retirement accounts "as consideration for assuming all marital debts and expenses." The district court therefore denied Barbara's request to enforce or clarify the dissolution decree to give her a division of the retirement assets, reasoning that "[t]o substantially change what appears to be a full and equitable division of the marital estate would be inappropriate, even if one piece of that agreement was not made in writing."

Although the district court stressed that "the retirement accounts should have been disclosed as part of the overall settlement," the court found that "the omission does not make the parties’ agreement unfair or no longer equitable." According to the district court, "[t]o now go back and divide the retirement accounts as though those debts and other expenses did not exist is to give [Barbara] an unfair windfall."

Barbara appealed the district court's order. The court of appeals affirmed. Pooley v. Pooley , No. A20-1250, 2021 WL 2910246, at *6 (Minn. App. July 12, 2021). The court of appeals concluded that the district court did not err by denying Barbara's request to enforce or clarify the dissolution decree by awarding her half of the retirement accounts because the dissolution decree "does not unambiguously state that the parties agreed to equally divide" their retirement accounts, and the district court found that the parties had intentionally omitted the retirement accounts from the joint petition. Id. at *3–5. The court of appeals further held that the district court did not err by denying Barbara's motion to reopen the dissolution decree because Barbara did not satisfy the statutory requirements for such a motion. Id. at *5–6 ; see Minn. Stat. § 518.145, subd. 2 (providing that a court may reopen a dissolution decree based on reasons including mistake, inadvertence, or fraud, when the motion is made within a year of the dissolution decree).

The court of appeals expressed "some discomfort with the implication that it is permissible and acceptable for parties seeking a stipulated dissolution to intentionally file a joint petition containing false information." Pooley , 2021 WL 2910246, at *4 n.1. Nonetheless, because Barbara had "not argued that an agreement to intentionally omit retirement assets from a jointly filed petition should be deemed invalid as a matter of law," the court of appeals "assume[d] without deciding that parties to a stipulated dissolution proceeding may agree to omit marital property from their joint petition." Id.

This court granted Barbara's request for further review.

ANALYSIS

Marriage-dissolution stipulations are a judicially favored means of simplifying and expediting dissolution litigation and are "accorded the sanctity of binding contracts." Shirk v. Shirk , 561 N.W.2d 519, 521 (Minn....