Olio v. Olio, 2012 VT
44.
We forget in the midst of the hyperbole of modern life that
there are some arguments, some tools, some procedures that are off-limits to
everyday use.
For all the talk of “nuclear options” that float around in
our rhetoric, it would seem that few of us appreciate the idea that some power
is only to be used in case of emergency.
The law, however, has many such tools entrenched in its case
law and procedural rules. The phrase “extraordinary
relief” means just that—remedies in case of emergency.
This term the SCOV has made several
rulings
in this vein that have highlighted, not the merits of the parties’ case, but
the procedural limitation in bringing a claim.
Today’s case is cut from the same cloth and further
illustrates both the limits of Rule 60 relief and the severe limitations on
parties to bring claims.
In July 2006, husband and wife signed a stipulated final
divorce decree that separated them and allocated their assets. The stipulated divorce settlement was
premised on the financial disclosures each side provided the other.
Several months later, wife filed a Rule 60(b) motion to set
aside the final divorce order because she had learned that husband had a bank
account that he did not reveal to her. The
trial court denied the motion because it was relatively minor amount and did
not constitute a substantial breach of the stipulation since both parties had
opened bank accounts after their initial separation, which were not included in
the financial disclosures.
Flash forward four years, and husband is back in court
trying to modify his spousal maintenance obligations due to an unanticipated
decline in his income. At that time,
husband reveals to wife’s attorney that he had a secret bank account in his
sister’s name that was really his. Cue needle being dragged
across the record.
The trial court ordered an additional hearing in August 2010
on this account and ordered husband to produce statements. At that hearing, husband’s sister testified
that the account was held by her, that she had kept it empty, and that her
brother had started using it after the divorce.
Husband’s testimony concurred. No
big deal here your honor. Just an honest
mistake . . . ha, ha, ha . . . let’s move along . . . Please?
Only the documents produced show a different story. Husband was actually added onto the account
in March 2006—three months before the final stipulation. At the time he was added to the account, it
had over $24,000. By the time the
parties signed their stipulation to the divorce, the account had over $56,000.
You can see where this is going. After the August hearing, wife filed a motion
for contempt and enforcement, a request to order husband to disclose information
relating back to the inception of the account, subpoenas on the bank for
documents relating to the history of the account and her husband’s
contributions, and a motion to reopen the 2006 divorce.
What happens next, however, illustrates the limitations that
the courts follow in such cases. The trial
court, in November, upon husband’s motion quashed the bank subpoenas pending
its decision on wife’s motions to enforce the contempt order and to reopen the
divorce. It did seem to ask husband to
trace the account back to zero.
In December, the trial court ordered husband to provide
statements showing the balance of the account when he was joined in March
2006. Wife sought to clarify this order since
the March documents had actually already been produced and the trial court had
previously raised a question about the origin of the money in the account prior
to March 2006. Husband responded with an
affidavit stating that any money in the account prior to March 2006 had been a
loan from family members that he was obligated to re-pay.
The trial court did not return to this case until August
2011 when it ruled on the outstanding motions.
On the motion for contempt and enforcement, it denied wife’s motion. Husband had produced what the court
requested, ergo, no contempt.
The trial court also denied wife’s Rule 60(b) motion because
she was outside of the one-year time limit for Rule 60(b)(3) (fraud) and was
not eligible for Rule 60(b)(6) (any other reason justifying relief). The trial court denied a hearing on the
matter and ruled that wife had not established the elements of fraud.
On appeal, wife challenges the trial court’s Rule 60 (b)
motion. The essence of her argument is
that husband lied, and if she cannot reopen the divorce proceedings, he will
have gotten away with it.
Unlike the trial court, the SCOV is more responsive to wife’s
position. From the evidence, it does
appear that husband engaged in some highly questionable actions and may very
well have committed fraud. The problem
is that wife did not discover the fraud until four years after the judgment was
entered. This puts her outside of the
one-year window of relief under Rule 60(b)(3).
Therefore, no matter how clear the fraud is, the law will not allow wife
to re-open the settled judgment.
This forces wife to argue that this is an extraordinary
event and warrants the catch-all relief of Rule 60(b)(6) for what she contends
is a fraud-on-the-court. The SCOV does
not agree. In the final analysis,
Husband’s fraud is merely a common fraud.
Those of us raised under the catechism recognize it as the sin of
omission. While a serious wrong, it does
not rise the extraordinary levels of fraud that permit Rule 60(b)(6)
relief.
To illustrate the SCOV discusses prior cases of fraud that
have met the standard for Rule 60(b)(6) relief.
These cases are primarily affirmative frauds, usually committed by
attorneys, upon the court and the judicial institutions themselves. For example, such relief was granted when an
attorney fabricated an article and used it to obtain a favorable judgment
before an appellate court on a patent issue.
Thus, the SCOV concludes, the fraud-on-the-court use of Rule 60(b)(6) is
narrow and used only in special cases of fraud.
Since husband’s fraud is really against the wife and not the
court and does not rise to the higher level of an affirmative
fraud-on-the-court, it does not merit Rule 60(b)(6) relief. Without the larger timeframe, wife’s claims
are DOA, and the SCOV affirms the trial court’s dismissal and refusal to disturb
the 2006 judgment.
It is clear that the SCOV recognizes the difficulty of wife’s
position (how can you find fraud when its whole purpose is to conceal), but it
refuses to grant relief merely because wife’s situation may be sympathetic and
merit some recognition on an emotional level.
The reason as the SCOV indicates that some relief is
reserved for only extreme situations.
Granting relief here lowers the threshold and permits this relief to
flow more freely than it was intended.
Restraint in this instance preserves the standards for the whole. Not a warm thought, but it is one that like
most conservative judicial impulses preserves the institution and its larger
purpose.
For wife, it no doubt feels like, “Tag, you’re it!”
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