Van Vlack v. Van Vlack

537 P.3d 751

Josh VAN VLACK, Appellant (Plaintiff),

v.Emma VAN VLACK, Appellee (Defendant).

S-23-0065

Supreme Court of Wyoming.

October 31, 2023

Representing Appellant: Toni E. Hartzel and Elizabeth B. Lance, Lance & Hall LLP, Cheyenne, Wyoming.

Representing Appellee: Linda J. Steiner and Abigail E. Fournier, Steiner, Fournier, Zook & Case, LLC, Cheyenne, Wyoming.

Before FOX, C.J., and KAUTZ, BOOMGAARDEN, GRAY, and FENN, JJ.

GRAY, Justice.

[¶1] Following the entry of a Stipulated Final Decree of Divorce (Stipulated Decree), Josh Van Vlack refinanced the marital home. Emma Van Vlack believed the Stipulated Decree entitled her to half of the net equity in the home at the completion of the refinance. Mr. Van Vlack disagreed, claiming she was only entitled to half the net proceeds if the house was sold. Ms. Van Vlack filed a Rule 60 motion seeking to set aside the Stipulated Decree due to inadvertence or mistake. The district court determined the Stipulated Decree unambiguously required Mr. Van Vlack to pay Ms. Van Vlack half the equity in the property from the refinance or sale of the home. The district court granted Ms. Van Vlack's motion and entered its order requiring that any equity recognized through sale or refinance of the home is to be equally divided between Mr. Van Vlack and Ms. Van Vlack. Mr. Van Vlack appealed. We reverse and remand for an evidentiary hearing.

ISSUES

[¶2] Mr. Van Vlack presents one issue:

Did the district court err when it granted Ms. Van Vlack's motion for relief thereby modifying the property awarded to the parties in their Stipulated Final Decree of Divorce?

We reframe his single issue into two:

1. Did the district court err when it determined the Stipulated Decree was unambiguous allowing a correction under Rule 60(b)(1)?

2. Did the record contain sufficient evidence to clarify the Stipulated Decree under Rule 60(a)?

FACTS

[¶3] Josh and Emma Van Vlack were married on September 15, 2012. They had no children. In December 2021, Mr. Van Vlack filed a pro se complaint for divorce. Ms. Van Vlack accepted service of the complaint and filed her answer and counterclaim for divorce.

[¶4] The next relevant document in the record is a Stipulated Final Decree of Divorce and Order Discharging Counsel.¹ Paragraph 5(b) of the Stipulated Decree contained an express waiver of exchange of financial disclosures under W.R.C.P. 26.² The Stipulated Decree states the parties freely entered into the Stipulated Decree and that all terms were "fair and not unconscionable."

[¶5] The subject of the parties’ dispute is paragraph 17 of the Stipulated Decree. It provides:

a. The parties own real property at 1324 Bobcat Trail, Cheyenne, Wyoming ....

i. This real property is awarded to [Mr. Van Vlack] as his sole and separate property and [Mr. Van Vlack] shall hold [Ms. Van Vlack] harmless thereon.

ii. [Mr. Van Vlack] shall refinance the property in his separate name within ninety (90) days of the entry of this Decree . If [he] is unable to refinance the property into his name in that time frame, the property shall be immediately listed for sale. [Ms. Van Vlack] shall be entitled to one half (1/2) the net proceeds from the home and she shall receive her portion owing directly from the title company.

iii. [Mr. Van Vlack] is solely liable for the mortgage and any other debts or liabilities associated with the home and [Mr. Van Vlack] shall hold [Ms. Van Vlack] harmless thereon.

[¶6] Mr. Van Vlack refinanced the property and no payment was made to Ms. Van Vlack. Ms. Van Vlack filed a Motion for Order Setting Aside Stipulated Final Decree of Divorce and Order Discharging Counsel, or, Alternatively Order Granting Defendant Relief from the Stipulate[d] Final Decree of Divorce and Order Discharging Counsel and Request for Expedited Hearing. Her motion claimed the Stipulated Decree "is clear that [she] was awarded one half (1/2) of the net proceeds regardless of [whether] the home was sold or refinanced." She alleged that when Mr. Van Vlack refinanced the home, he failed to provide her with one half of the net proceeds from that transaction. The motion requested relief under Rule 60(b)(1) and 60(b)(2) asserting the "verbiage in the [Stipulated Decree] needs to be clarified to accurately reflect the parties’ agreement on the division of net equity after the sale or refinance of the marital home."³

[¶7] Mr. Van Vlack objected. He asserted paragraph 17 did not require him to pay half the home equity if he refinanced. Instead, he claimed this provision unambiguously required him to pay Ms. Van Vlack half of the net proceeds from the sale of the home if he failed to refinance.

[¶8] The district court set a hearing on the matter for September 7, 2022. Although the parties were prepared to present evidence, no evidence was received. The district court declined parol evidence, stating it would rely on the arguments of counsel and the existing record.

[¶9] Ms. Van Vlack's counsel argued that the parties had agreed to split the "net equity or net proceeds" on the Bobcat Trail property equally. She averred that, prior to the Stipulated Decree, the home had been appraised, and based on the mortgage balance, "we estimate about $280,000 in equity." (Emphasis added.) Ms. Van Vlack's counsel maintained it would be unfair to interpret the provision to deny Ms. Van Vlack equity in the largest asset of the marriage.

[¶10] To clarify Ms. Van Vlack's position, the district court asked, "[Y]our position is that ... once the check was cut, he should have then interpreted the decree the way you do, and set over half of that money?" Counsel responded, "Agreed, Your Honor." Counsel added:

I do think that the decree could have been worded to avoid that conflict, but that is why we come before the Court under Rule 60(b)(1) during which the Court can set aside the decree for mistake or good cause. We would ask that the Court set that decree aside for mistake and good cause as the decree does not accurately represent the parties’ agreement that they were to split the net equity, the proceeds in their home, and it's really not an equitable division of their assets at all if the decree is read as it has been interpreted [by Mr. Van Vlack].

[¶11] The district court then asked counsel for Mr. Van Vlack to explain his position. Counsel responded, "the plain language of that section, Section 17 states that the property is Mr. Van Vlack's sole and separate property, and that only if he is unable to refinance within 90 days does the property then go to sale, and then the proceeds are split between the parties." The district court then asked counsel:

So if I exclude evidence on the parol evidence rule and decide on the basis of the document and the rule, you don't believe it qualifies under Rule 60. Well, first off [your argument is that] I shouldn't set aside the agreement, stipulated agreement. And, second, it doesn't qualify for the correction, modification, if you will, under Rule 60 ?

Counsel responded, "Correct, Your Honor."

[¶12] The district court issued its decision letter dated October 25, 2022:

Plaintiff's argument that only sale, not refinance, entitled Defendant to one half of the home's equity makes no sense legally or grammatically.

The Court is well aware of the sanctity of property distributions, particularly those created by settlement. But common sense leads to only one conclusion when a significant asset, apparently $240,000^[4] equity in a home, is somehow legally of a different character if the money results from a refinance as opposed to a sale of the property. Both events result in some debt relief and the clearing of the Defendant from title or loan obligations (the only assertion of benefit argued here). There is no other distinction.

There is no reason which appears in the Decree, the pleadings, or the arguments of counsel that lend an ounce of logic to an interpretation that leaves a $120,000 property division up to the chances of Plaintiff qualifying for refinancing. Beyond that this Court interprets the last sentence of the paragraph to modify both refinance and sale as, in either event, a title company closes, and they would be required to pay Defendant directly.

The Court is loath to reopen the Decree in its entirety. It could be concluded that the Court should set it aside as such a provision may not have been approved in the first instance. Such a drastic measure is not called for here as the request for relief under Rule (60)(b)(1) would be correction due to inadvertence in drafting, or a clear clerical mistake. While this may resemble a matter of "interpretation or clarification" the Court still believes it is fair to conclude mistake and inadvertence rather than require the Defendant to file a contempt motion which would call upon the Court to apply this same interpretation to Plaintiff's failure to pay over equity. The interests of judicial economy and the expense to the parties of requiring further pleadings of that nature also support this ruling.

... Defendant's motion for Rule 60 relief is GRANTED and paragraph 17.a.ii is corrected to reflect that any equity recognized through sale or refinance of the home is to be equally divided between Plaintiff and Defendant. The parties are to bear their own costs.

[Defendant's counsel] is directed to prepare the Order, incorporating this decision letter by reference and submit it pursuant to [R]ule 58 W.[R].C.P.

[¶13] The parties were unable to agree on the form and content of the proposed order. Pursuant to Rule 58, Mr. Van Vlack objected to the proposed order because certain paragraphs referenced an amount of equity not supported by the record, and there was no evidence the parties agreed on the amount of equity in the property. Mr. Van Vlack further argued when the refinance was finalized, no equity was realized. He asserted when he refinanced the property, he refinanced for the remaining debt, and he received no "proceeds" to pay over to Ms. Van Vlack. He asked the district court to reject the proposed...