COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA
December 15, 2010
IN RE THE MARRIAGE OF KIM M. ROBERTS AND GLEN R. ROBERTS. KIM M. ROBERTS, RESPONDENT,
GLEN R. ROBERTS, APPELLANT.
APPEAL from an order of the Superior Court of San Diego County, Jeannie Lowe, Commissioner. Affirmed. (Super. Ct. No. DN133226)
The opinion of the court was delivered by: Nares, Acting P. J.
Marriage of Roberts CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
In this marital dissolution action, Glen R. Roberts (Glen)*fn1 sought to set aside a stipulated judgment of dissolution (stipulated judgment) of his marriage to Kim M. Roberts (Kim). Specifically, Glen sought to set aside that portion of the judgment obligating him to pay credit card debt of approximately $27,000 and that portion awarding spousal support. The motion was based upon Glen's claim that (1) no final declarations of disclosure were served by either party before entry of judgment so he was unaware of the credit card debt; (2) he entered into the stipulated judgment under duress; (3) he was mistaken about the terms of the stipulated judgment relating to spousal support in that he believed it could not be modified; and (4) he was mistaken about his obligation to pay Kim's credit card debt of approximately $27,000 because it was her separate debt.
In its initial tentative decision, the court granted in part Glen's motion to set aside the judgment, finding (1) he was not aware of the credit card debt because no final declarations of disclosure were served by the parties, and (2) he was under the mistaken belief that spousal support could not be modified. Thereafter, before the decision became final, Kim filed a "motion for reconsideration/further hearing on tentative decision." In that motion, Kim submitted evidence that Glen was aware of the credit card debt. Based upon this information, the court reversed its tentative decision and denied Glen's motion to set aside the judgment as to the credit card debts.
Glen appeals, in propria persona,*fn2 asserting the court erred in denying his motion to set aside the stipulated judgment as to the credit card debts because (1) at the time he entered into the stipulated judgment he was unaware that he would be responsible for paying Kim's separate property debts, (2) the motion for reconsideration was an improper vehicle to set aside the court's original decision, and (3) the stipulated judgment was entered into under duress. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
A. Stipulated Judgment
At a hearing held on May 12, 2006, before San Diego Superior Court Commissioner Adam Wertheimer, Glen and Kim entered into a stipulated judgment. As part of that stipulation, Glen agreed to assume all debts of the marriage. Specifically, the stipulated judgment read: "Respondent shall assume and hold Petitioner harmless therefrom all debts and any and all unpaid tax obligations owing to the IRS or Franchise Tax Board." That paragraph of the stipulated judgment originally stated "all separate and community business and personal debts," but that language was stricken, and the final order read "all debts." At the hearing, under questioning from Commissioner Wertheimer, Glen indicated that he understood all terms of the stipulated judgment, he had no questions about any of the terms, and he agreed to be bound by them.
Thereafter, Glen attempted to refinance his residence. During that process, Kim submitted a demand to escrow that Glen pay her credit card debts of $35,914.40.
In response, in February 2007, Glen brought an order to show cause before Commissioner Wertheimer, wherein he sought to challenge his liability for the credit card debts, arguing he did not know of those debts prior to the stipulated judgment. He also argued he understood that language in the stipulated judgment meant he was only to assume community property debts, not her separate property debts, citing the court's striking out of the language "all separate and community business and personal debts." The court rejected Glen's claim, finding that the language of the stipulated judgment that he was to assume "all debts" was intended by the parties to include Kim's credit card debts, but reduced the amount he was liable for to $27,160.40. The court ruled that the term "all debts" meant both community and separate property debts.
B. Motion To Set Aside Stipulated Judgment
Thereafter, in October 2007, Glen brought a motion to set aside the stipulated judgment. He argued that he agreed to the stipulated judgment under duress because of pending contempt charges he was facing based upon unpaid child support. He also asserted he did not understand the stipulation meant that he would be liable for Kim's outstanding credit card debts totaling more than $30,000. Glen asserted that the parties never executed or served final "Declarations of Disclosure" prior to entry of the stipulated judgment and because of that he was unaware of the credit card debts.
A hearing was held on the motion to set aside the stipulated judgment before San Diego Superior Court Commissioner Jeannie Lowe. At that hearing, Commissioner Lowe and Glen focused on the fact that he allegedly did not know about the credit card debts because the parties did not execute and serve final declarations of disclosure. The court stated that the "pretty narrow" focus of the hearing was whether the judgment should be set aside based upon duress and/or the failure to provide final declarations of disclosure. Glen argued that under Family Code*fn3 sections 2106 and 2107, because no final declarations of disclosure were filed, the court was required to set aside the judgment.
Glen also testified at the hearing. He stated he was mistaken when he entered into the stipulated judgment with regard to his obligation to pay the credit card debts. He then stated that, "If there had been a disclosure declaration, it would have been required to list all of the community and/or separate obligations, and I would have known what we were talking about. [¶] I think that is a good example of the very reason why the declarations are required before a judgment dividing property is entered."
The court thereafter issued a statement of decision and tentative ruling on the request to set aside the stipulated judgment. The court first found that Glen had not sustained his burden of proof that the stipulated judgment was entered into under duress because it was in conjunction with a plea agreement in which he pleaded to four counts of contempt for failure to pay support. The court noted the stipulated judgment was read into the record, and "[t]he proper inquiries were made by the Court before acceptance of both the plea agreement and the parties' stipulation for entry of judgment. Significant discussion of the terms of the Stipulation took place before the Court. The Respondent is an experienced attorney. Although not a practicing family law attorney, the Respondent has been a licensed attorney since 1975. The Respondent had been represented in this matter up until March 2006, and had an attorney present and representing him in the contempt portion of the proceedings."
The court also noted that "[n]egotiations regarding the settlement had taken place between the Respondent and Petitioner for over a week prior to the court appearance at which the stipulated judgment was accepted by the Court. The Court also finds in its review of the transcript of the proceeding that while the stipulation was being discussed on the record the Respondent was jovial and actually cracked a joke at one point."
As to Glen's assertion that the stipulated judgment should be set aside as to the credit card debt on the basis of mistake, the court found that Glen had met his burden of proof and was entitled to have the stipulated judgment set aside on that basis. The court found that "[t]here is no dispute by the parties that neither of them had complied with the requirement to serve the other with a Final Declaration of Disclosure. Prior to entry of Judgment neither party waived the service requirement of a Final Declaration of Disclosure. Had the parties complied with this disclosure requirement the Respondent's allegation regarding unknown debts would not be credible. No evidence was presented by the Petitioner that Respondent was aware of the extent of the credit card debt prior to the parties entering into the stipulation." The court further found that "Respondent has shown . . . prejudice and would materially have benefitted from receiving information regarding the extent of the credit card debt he would be obligated to under the terms of the agreement and would materially benefit now from the granting of the set aside."
The court also set aside the spousal support portion of the judgment, finding Glen was not aware that it could be later modified. That portion of the court's order is not before us on this appeal.
C. Motion for Reconsideration/Further Hearing
In response, Kim filed a motion for "Reconsideration/Further Hearing on Tentative Ruling Re: Set Aside Motion." In support of that motion, Kim submitted evidence that prior to the parties entering into the stipulated judgment, she disclosed to Glen the credit card debt and its amount. Specifically, Kim presented evidence that she provided evidence of this credit card debt in her schedule of assets and debts, in documents provided in discovery, and in Glen's examination of her during her deposition.
In response, Glen argued the statement of decision became final after the time elapsed for Kim to file objections, and Kim elected not to file objections. Glen further asserted the motion for reconsideration was not timely and did not show it was based upon new or different facts.
At the hearing on the motion, the court explained the basis for its original decision: "When I issued my decision, I was under the impression that these debts, these thirty thousand dollars worth of debts, came out of nowhere, that you had no idea, as a self-represented litigant, albeit an attorney, of the nature and extent of the debts in this case, and from what I've been presented in the motion, it's clear to me that you had a good idea of the amount of debt that was incurred." The court further stated, "[T]he basis for my decision was that you were really blindsided when there were no final declarations of disclosure, that you were suddenly blindsided by [$30,000] worth of debts, it was a mistake on your part to go forward and agree to debts that you had no idea of. [¶] That's the basis of my decision. [¶] So if you're telling me today that all these debts you ended up paying, you had no idea that they were in existence prior, I will give you the opportunity to show me that, sir." The court concluded, "[M]y view here today is that I should not have granted the set-aside on this debt issue, that you had a lot more information than you let on in the motion."
The court stated it would give Glen time to submit evidence that he did not know of the credit card debt, but also stated that if the facts showed he had knowledge of the credit card debt before entering into the stipulated judgment, that portion of the judgment would stand.
Thereafter, Glen submitted supplemental briefing, arguing that it was never his position that the credit card debt was not disclosed to him. Rather, he asserted it was his understanding that the stipulated judgment did not require him to pay Kim's separate property debt.
A further hearing was held on the matter, wherein Glen asserted, "I never took the position that I didn't know about the credit card debt." Rather, he argued it was his understanding that the stipulated judgment did not require him to pay any of the credit card debt.
In March 2009 the court issued its final statement of decision. The court confirmed its previous tentative decision that Glen could not show the stipulated judgment was the product of duress and confirmed its tentative decision regarding spousal support. As to the credit card debt, the court ruled as follows: "Based upon reconsideration and review of the evidence presented the Court finds the Respondent was fully aware of the existence of these debts at the time he entered into the stipulation to divide the parties' marital estate and essentially mis[led] the Court in declaring the parties failure to serve one another with final declarations of disclosure significantly prejudiced the Respondent. In his most recent pleadings the Respondent has conceded his knowledge of the existence of these debts and now argues these debts were the Petitioner's separate obligations, not community. This is a significant change of position from what was argued by the Respondent as a basis for set aside. It is clear to this Court that through extensive discovery and Petitioner's compliance with the requirement for service of [the] Preliminary Declarations of Discovery that the Respondent gained full knowledge of not only the identity of each of the obligations he was assuming by the terms of the stipulation but the amounts of those debts as well." The court ruled that Glen's request to set aside the portion of the stipulated judgment with regard to the credit card debts was denied.
This timely appeal follows.
I. STANDARD OF REVIEW
We review a court's decision whether to set aside a judgment of dissolution of marriage under the deferential abuse of discretion standard. (In re Marriage of Brewer & Federici (2001) 93 Cal.App.4th 1334, 1346 (Brewer).) " 'A decision will be reversed for an abuse of discretion only when it exceeds the bounds of reason or disregards uncontradicted evidence. [Citation.] The burden rests with the party challenging an [order] to make a clear showing of abuse.' " (Clear Lake Riviera Community Assn. v. Cramer (2010) 182 Cal.App.4th 459, 471.)
A. Mistake of Fact
In order to prevail on a motion to set aside "a judgment, or any part or parts thereof" (§ 2122) based on a marital settlement agreement, the moving party must establish four elements. First, he or she must establish inequity─an essential premise to a successful motion to set aside, but one that is not sufficient in and of itself to warrant setting aside a judgment. (§ 2123; Brewer, supra, 93 Cal.App.4th at pp. 1344-1345; In re Marriage of Rosevear (1998) 65 Cal.App.4th 673, 684-685 & fn. 11 (Rosevear).) Second, the party must establish one or more statutory grounds for setting aside the judgment, such as fraud, perjury, mistake, duress or failure to comply with statutory disclosure requirements. (§ 2122, subds. (a)-(f).) Third, the party must show that the statutory ground materially affected the original outcome. (§ 2121, subd. (b); In re Marriage of Steiner & Hosseini (2004) 117 Cal.App.4th 519, 527; Rosevear, supra, 65 Cal.App.4th at p. 685, fn. 11; Brewer, supra, 93 Cal.App.4th at p. 1345; In re Marriage of Varner (1997) 55 Cal.App.4th 128, 137.) Fourth, the moving party must demonstrate that he or she would materially benefit if the judgment were set aside. (§ 2121, subd. (b); Brewer, supra, 93 Cal.App.4th at p. 1345.) As the moving party, Glen had the burden of proof on each of these issues. (See Evid. Code, §§ 115, 500.)
The court did not abuse its discretion in denying Glen's motion to set aside the stipulated judgment as to the credit card debts. As the court found, Glen had ample knowledge of the existence and amount of those debts. Moreover, the stipulated judgment clearly provided that Glen would assume "all debts," not just community property debts.
On appeal, Glen asserts that "[i]t is not clear from the record in this matter where Commissioner Lowe got the impression that Appellant's argument regarding the credit cards was based upon any facts showing that he was unaware of the credit cards or the amount of the obligation." However, at the hearing on his motion to set aside the stipulated judgment, Glen, in his argument and testimony, clearly stated that he was unaware of those debts and sought to have the court set aside that part of the stipulated judgment on that basis. Indeed, in reconsidering its tentative decision, the court made it clear that it had only set aside that portion of the stipulated judgment based upon Glen's professed ignorance of that debt. When it was shown to the court that Glen did have knowledge of those debts, the court acted within its discretion to deny his motion to set aside as to those items.
Glen asserts that it would be inequitable and unreasonable for him to have to pay Kim's separate debts because he did not believe "the term 'all debts' was intended to include separate debts of Respondent. Such an agreement could conceivably make Appellant responsible [for] Respondent's separate liabilities without even knowing what or how much they are or to whom they are payable." However, as already discussed, the credit card debts, and their amount, were known to him. Thus he cannot show the stipulated judgment to which he agreed was inequitable.
Moreover, a finding of inequity alone─even if supported─will not justify setting aside a judgment. (§ 2123 ["a judgment may not be set aside simply because the court finds that it was inequitable when made, nor simply because subsequent circumstances caused the division of assets or liabilities to become inequitable"]; In re Marriage of Heggie (2002) 99 Cal.App.4th 28, 34-35 [that stock awarded to one spouse had, after judgment, increased in value does not justify setting aside judgment]; see also Rosevear, supra, 65 Cal.App.4th at p. 684, fn. 11.)
Because Glen knew about the credit card debts and specifically agreed to pay "all" of the parties' debts, it is not inequitable to enforce the stipulated judgment in this regard.
Indeed, in denying Glen's motion objecting to liability for the credit card debt, Commissioner Wertheimer, who presided over the drafting and signing of the stipulated judgment, found that the term "all debts" was meant by the parties to include separate and community liabilities. Thus, Glen's assertion he was mistaken when he entered into the stipulated judgment that he would not be liable for Kim's credit card debts is not credible.
In sum, the court did not abuse its discretion in denying that portion of his motion to set aside the stipulated judgment regarding his liability for Kim's credit card debts.
B. Propriety of Court's Reconsideration of Its Tentative Ruling
Glen also asserts it was improper for the court to reconsider its initial ruling as Kim did not present any new facts or circumstances in support of the reconsideration motion as required by Code of Civil Procedure section 1008. We reject this contention.
As detailed above, the court's ruling was specifically labeled "tentative." And while Kim's motion was in part labeled a motion for reconsideration, it also requested a "further hearing on tentative ruling." California Rule of Court, rule 3.1590(a) provides in part: "On the trial of a question of fact by the court, the court must announce its tentative decision by an oral statement, entered in the minutes, or by a written statement filed with the clerk." Subdivision (b) of that rule provides that a "tentative decision does not constitute a judgment and is not binding on the court." Thus, because the court's decision was not final, the court was free to entertain additional arguments and evidence from the parties, without having to meet the requirements of Code of Civil Procedure section 1008.
Further, courts always have the inherent power, outside of the confines of Code of Civil Procedure section 1008, to reconsider an interim ruling, whether on its own motion or at the request of a party. (Le Francois v. Goel (2005) 35 Cal.4th 1094, 1108-1109; Brown, Winfield & Canzoneri, Inc. v. Superior Court (2010) 47 Cal.4th 1233, 1248-1250.) Additionally, because the court allowed Glen to submit further briefing before changing its ruling, Glen cannot complain that he was prejudiced by the court's action. (Ibid.)
Last, Glen asserts the stipulated judgment as to his liability for credit card debts should be set aside because it was the product of duress. This contention is unavailing.
"Under the modern rule, ' "[d]uress, which includes whatever destroys one's free agency and constrains [her] to do what is against [her] will, may be exercised by threats, importunity or any species of mental coercion [citation] . . . ." ' [Citation.] It is shown where a party 'intentionally used threats or pressure to induce action or non-action to the other party's detriment. . . .' [Citations.] The coercion must induce the assent of the coerced party, who has no reasonable alternative to succumbing. [Citation.] [¶] To determine whether a contract . . . was the product of duress, the courts look not so much to the nature of the threats, but to their effect on the state of the threatened person's mind." (In re Marriage of Baltins (1989) 212 Cal.App.3d 66, 84, fn. omitted.)
The court did not abuse its discretion in finding Glen's agreement to the stipulated judgment was not the product of duress. Glen was represented by counsel at the contempt proceedings. Further, as the court noted, at the separate hearing for approval of the stipulated judgment, Glen was jovial and even cracked a joke at one point. The record reflects Glen was competent enough to ask questions and discuss the terms of the stipulated judgment. Glen agreed on the record to assume "all the debts." The court inquired whether Glen heard and understood all the provisions and whether he understood and agreed to be bound by them. Glen responded appropriately to each question and did not indicate he was fearful or reluctant in any way. The record does not contain any evidence Glen was acting under duress at the time he agreed to the stipulated judgment. Indeed, Glen points to nothing in the record to support his claim he was acting under duress.
The order denying Glen's request to set aside that portion of the stipulated judgment obligating him to pay Kim's credit card debts is affirmed. Kim shall recover her costs on appeal.