THOMAS v. THOMAS, S-13519 (Alaska 4-6-2011)

KEVIN THOMAS, Appellant, v. GAIL THOMAS, Appellee.

Supreme Court No. S-13519.Supreme Court of Alaska.
April 6, 2011.

Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, Peter A. Michalski, Judge, Superior Court No. 3AN-05-04882 CI.

Kevin Thomas, pro se, Anchorage, Appellant.

David Edgren, Edgren Law Offices, LLC, Anchorage, for Appellee.

Before: Carpeneti, Chief Justice, Fabe, Winfree, and Stowers, Justices. [Christen, Justice, not participating.].

1. In 2005 Kevin and Gail Thomas divorced after a 21-year marriage; they have nine children. Their two main marital assets were a large unfinished house on several acres in Glen Alps and a small trailer park business in Anchorage. They also had a substantial amount of gold bullion, bought with the proceeds from a gift from Gail’s father.Page 2

2. In divorce proceedings in the superior court, Kevin was awarded custody of the minor children as well as both the house and the trailer park, and was ordered to pay Gail a $325,000 offset representing her share of the marital estate. The gold was found to be Gail’s separate property. Both parties appealed, and in 2007 we remanded the case to the superior court with instructions to reevaluate the child custody determination.[fn1] On remand Gail was awarded the house and custody of the children, and Kevin retained the trailer park. The judgment for the offset payment, which Kevin had not yet begun to pay, was vacated. During Gail’s ensuing custody of the children, conflict in the home led to Gail being arrested and charged with child abuse. As a result, the superior court held a hearing on November 14, 2008 and ordered custody returned to Kevin.

3. Also at this November 2008 hearing, Kevin and Gail, both acting through counsel, negotiated a settlement that again revised the division of marital property. Kevin received the house (reflecting his custody of the children), and Gail received the trailer park. The parties negotiated this settlement off the record, formalized it on the record, and three days later Kevin, acting through counsel, submitted a draft amended judgment reflecting this settlement to the court. The superior court adopted this settlement as its Amended Judgment and Decree.

4. Although it was not mentioned on the record during the November 2008 hearing, at the time of the settlement negotiation Kevin and the children were apparently living in a rudimentary garage on the trailer park property.[fn2]Page 3

5. Several weeks later, Kevin moved under Alaska Civil Rule 60(b) to set aside the judgment, arguing that the property settlement was invalid due to surprise, duress, and fraud, among other things. The superior court denied Kevin’s motion, and this appeal followed. Kevin is acting pro se on appeal.

6. In his Statement of Points on Appeal, Kevin lists several points concerning child custody, with the balance related to the property settlement. His brief narrows this list to five issues concerning the division of marital property. Accordingly, only the marital property settlement is properly on appeal.[fn3]Page 4

7. We review the superior court’s denial of a Rule 60(b) motion for abuse of discretion, [fn4] and “absent unusual circumstances, we will not reverse the superior court’s denial of a Rule 60(b) motion as an abuse of discretion where the movant has not made a showing of a meritorious defense.”[fn5] An abuse of discretion exists “only where the record as a whole leaves us with a definite and firm conviction that a mistake has been made.”[fn6]

8. Kevin argues that the superior court erroneously adopted the parties’ marital property settlement. In particular, Kevin argues that the superior court “erred in failing to divide the marital property based on proper consideration of” the various statutory factors set forth in AS25.20.030, AS 25.24.150, AS 25.24.160, and AS 25.24.160(a)(4).[fn7] Kevin also argues that the settlement was “hastily contrived” and “negotiated under conditions of surprise and duress,” and that the court erred in characterizing the gold as Gail’s separate property in the original divorce proceeding.

9. Gail argues that the superior court’s refusal to set aside the property settlement was within its discretion, that the settlement was voluntary, and that Kevin’sPage 5
assignment of error with respect to the classification of the gold bullion as Gail’s separate property is without merit.

10. Alaska courts “will treat settlement agreements as contracts provided they meet minimal contractual requirements.”[fn8] Thus, to be valid, a settlement agreement must satisfy basic contract principles.[fn9]
Most relevant to this case is the requirement that “[a]s contracts, settlement agreements `must be entered into voluntarily and knowingly; they cannot be the product of coercion, duress, or misrepresentation.'”[fn10]

11. So long as a settlement satisfies these basic requirements, it need not provide for an equal division of property. We have explained that “[s]tipulations and settlements are favored in law because they simplify, shorten and settle litigation without taking up valuable court resources.”[fn11] Settlements usually also save the parties money and avoid acrimonious trial proceedings. We have also explained that “divorce property settlements do not receive the same statutorily-mandated level of heightened scrutiny that dissolution property agreements receive.”[fn12]
As we recognized in Notkin v. Notkin, “[A] court may accept as `just’ a divorce property settlement entered into by partiesPage 6
represented by counsel.”[fn13] Thus, the superior court was not required to undertake an analysis of statutory factors when it accepted the parties’ settlement. The court instead had to determine whether the settlement was voluntarily and knowingly entered into by the parties.

12. Kevin argues that the property settlement was “negotiated under conditions of surprise and duress” and is therefore invalid. Kevin’s chief argument in support of this contention is that, at the time the negotiations took place, he was living with several children in “a 500 sq. ft. garage” that lacked running water, and as such the settlement is contractually unenforceable due to duress.[fn14] Kevin’s argument fails for four reasons.

13. First, Kevin himself proposed the terms of the eventual settlement with Gail, and negotiated these terms off the record at the November 2008 proceeding. Both Kevin and Gail were represented by counsel at this proceeding, and afterward the parties went on the record to formalize their agreement in open court. That Kevin wasPage 7
assisted by counsel and actively participated in settlement negotiations mirrors the situation in Worland v. Worland, [fn15] in which we stated:

[T]he length of the [parties’] settlement negotiations, [the husband’s] assistance by counsel, and the fact that [he] affirmatively participated in clarifying and defining several of the settlement’s terms, belie any claim that [he] did not enter into the agreement voluntarily and of his own free will.[fn16]

14. Second, on the electronic recording of the November 2008 hearing, Kevin and Gail can be heard in court calmly bargaining over Gail’s precise move-in date at the trailer park, and over final details such as Gail’s desire to have the trailer unit available early so that she could “move in one load at a time.” In Ford v. Ford, we upheld a marital property settlement over the husband’s allegation of duress based on the trial court’s finding that “the degree of [the husband’s] participation [in negotiations] indicated his intent to engage in a final, binding process.”[fn17] Specifically, the husband was found to have participated actively, although he later alleged “he was exhausted and unable to understand the process,” because he “made topical and relevant observations regarding settlement of various issues.”[fn18] Kevin’s calm on-record negotiations satisfy the Ford principle that a party actively participating by stating lucid points on the record cannot later claim duress stemming from exhaustion, physical discomfort, and the like.[fn19]

15. Third, Kevin did not object when the terms of the agreement werePage 8
read onto the record by his own attorney. Simply by virtue of Kevin being present at the negotiation and not objecting to its result, the settlement is enforceable against Kevin.[fn20] 16. Fourth, Kevin — through his own attorney — prepared and filed the proposed Amended Judgment and Decree that memorialized in writing the parties’ oral, on-record agreement. Therefore, we conclude that Kevin entered into the property settlement voluntarily and knowingly.

17. In moving to set aside the property settlement in the superior court, Kevin sought relief from judgment under Alaska Rule of Civil Procedure 60(b).[fn21] Civil Rule 60(b) provides that a court may relieve a party from a final judgment for “mistake, inadvertence, surprise or excusable neglect,” as well as for fraud or newly discovered evidence. Thus, “[t]he purpose of Rule 60(b) is to provide relief from judgments which, for one reason or another, are unjust.”[fn22]

18. In denying Kevin’s Rule 60(b) motion, the superior court stated that “[t]he court’s amended judgment and decree of December 1, 2008 was reached and entered on the record with parties both represented by counsel and agreeing to its terms. Good cause to vacate this judgment has not been established.” We agree.

19. In support of his Rule 60(b) motion, Kevin alleged duress, surprise and fraud.[fn23] He essentially argues the same on appeal.Page 9

20. Kevin characterizes the settlement as a “surprise” in a conclusory manner. This characterization is unpersuasive because (1) Kevin proposed the basic terms of the settlement, (2) Kevin participated actively in settlement negotiations through counsel, (3) Kevin’s counsel prepared the written document that became the superior court’s judgment adopting the settlement, and (4) Kevin did not object to the settlement’s terms when they were read into the record.

21. Kevin also alleges various types of fraud, none of which relate directly to the property settlement or to the judgment adopting it.[fn24]

22. We review the superior court’s denial of a Rule 60(b) motion for abuse of discretion, and will not reverse it absent such abuse and absent a showing of a meritorious defense by the movant.[fn25] The record does not indicate that the superior court’s conclusion was incorrect, and Kevin has not shown a meritorious defense on the underlying issues. Kevin presents no valid arguments under Rule 60(b), and consequently the superior court did not abuse its discretion in refusing to set aside its December 1, 2008 Amended Judgment and Decree.

23. Lastly, Kevin also appears to take issue with the superior court’s earlier characterization of the gold bullion as Gail’s separate property, which we affirmedPage 10
in Thomas I.[fn26] The classification of the gold bullion is not properly on appeal to this court, [fn27] and is not considered here.[fn28]

24. We therefore AFFIRM the superior court’s December 1, 2008 Amended Judgment and Decree, which adopted Kevin and Gail Thomas’s marital property settlement.

[fn*] Entered pursuant to Appellate Rule 214.

[fn1] Thomas v. Thomas, 171 P.3d 98 (Alaska 2007) (Thomas I).

[fn2] Kevin asserted that at the time, he and all nine children lived in a 1,000 square foot garage on the trailer park lot, which was partitioned into two “compartments.” The garage had no bathing facilities, and its toilet was flushed by pouring water from a five gallon bucket, which was hauled to the residence.

[fn3] Failing to brief a point on appeal constitutes waiver. This court has “consistently found that parties have waived challenges to lower court action by . . . failing to brief an issue to this court after including it as a point on appeal.” Maines v. Kenworth Alaska, Inc.,155 P.3d 318, 330 (Alaska 2007) (citing Wasserman v. Bartholomew,38 P.3d 1162, 1171 (Alaska 2002); Union Oil Co. of Cal. v. State, Dep’tof Revenue, 677 P.2d 1256, 1259 n. 6 (Alaska 1984)). While pro se litigants are generally afforded extra leeway in procedural matters, it appears that Kevin does not wish to appeal the earlier custody decision for several reasons. First, his appeal is taken from an order denying an amendment to the property settlement, where custody was not at issue and as such is not properly before this court. Second, although his brief refers to child custody in its Procedural History section, both the Statement of Issues Presented for Review and the Argument section of Kevin’s brief focus on issues of marital property division. Third, according to the record Kevin currently has custody of the children, which cannot revert to Gail absent a court order. Finally, Gail does not raise child custody in her briefing, nor does she respond to anything concerning child custody. For these reasons, even affording Kevin deference as a pro se litigant, we take Kevin’s brief at face value and consider only the marital property settlement, not the earlier child custody determination, as being on appeal here. See Brady v. State,965 P.2d 1, 20 (Alaska 1998) (“Despite our solicitude for pro se litigants, we must conclude that he has waived the claim by failing to brief it adequately.”) (citing A.H. v. W.P., 896 P.2d 240, 243 (Alaska 1995)).

[fn4] Wright v. Shorten, 964 P.2d 441, 443 (Alaska 1998) (citing Johnsonv. Doris, 933 P.2d 1139, 1142 (Alaska 1997)).

[fn5] Id. (quoting Balchen v. Balchen, 566 P.2d 1324, 1328 n. 11 (Alaska 1977) (internal quotation marks omitted)).

[fn6] Wooten v. Hinton, 202 P.3d 1148, 1151 (Alaska 2009) (citing Hopperv. Hopper, 171 P.3d 124, 128 (Alaska 2007)).

[fn7] Kevin also cites AS 25.24.090(3), a nonexistent statutory section. It appears from the associated argument that Kevin intended instead to cite subsection 3 of AS 25.20.090, which provides factors for consideration in awarding shared child custody. In any case, Kevin’s associated argument is framed not in terms of child custody but in terms of “the consequences of the division of marital property,” and as such it is substantially similar to the argument Kevin advances with respect to AS 25.24.160.

[fn8] Ford v. Ford, 68 P.3d 1258, 1263 n. 1 (Alaska 2003) (quoting Cranev. Crane, 986 P.2d 881, 885 (Alaska 1999)).

[fn9] This means that the settlement must include “an offer including all essential terms, an unequivocal acceptance of those terms by the offeree, consideration, and an intent to be bound by the contract.” Id.
(citing Young v. Hobbs, 916 P.2d 485, 488 (Alaska 1996)).

[fn10] Worland v. Worland, 193 P.3d 735, 740 (Alaska 2008) (quotingMullins v. Oates, 179 P.3d 930, 937 (Alaska 2008)).

[fn11] Notkin v. Notkin, 921 P.2d 1109, 1111 (Alaska 1996) (quotingMurphy v. Murphy, 812 P.2d 960, 965 (Alaska 1991)).

[fn12] Id.

[fn13] Id. at 1111-12 n. 1 (quoting Kerslake v. Kerslake, 609 P.2d 559, 560
n. 1 (Alaska 1980)). In this case, both parties were represented by counsel when they entered the settlement in November of 2008. And as we noted in Notkin, although in the case of a dissolution agreement, the trial court must find that the parties’ written agreement to divide property is fair and just, in a divorce case, there is “no affirmative duty on a trial court to examine every property settlement reached by the parties to determine if it is just.” Id. at 1111 n. 1 (quoting Kerslake,609 P.2d at 560 n. 1).

[fn14] Kevin also alleges surprise, which is dealt with in the discussion of Rule 60(b), infra, and fraud, which sounds in contract but does not apply here because the fraud Kevin alleges is unrelated to the settlement. The only claim directly related to the settlement that sounds in contract is Kevin’s allegation of duress. Worland, 193 P.3d at 740
(quoting Mullins, 179 P.3d at 937).

[fn15] 193 P.3d 735 (Alaska 2008).

[fn16] Id. at 740-41 (quoting Mullins, 179 P.3d at 937) (internal quotation marks omitted).

[fn17] 68 P.3d 1258, 1264 (Alaska 2003).

[fn18] Id.

[fn19] Id.

[fn20] Pavek v. Curran, 754 P.2d 1125, 1127 (Alaska 1988).

[fn21] Kevin also sought relief under Civil Rule 90.3 in the superior court, which concerns the calculation of child support awards. Rule 90.3 is not applicable to amending the settlement and is not considered.

[fn22] Wright v. Shorten, 964 P.2d 441, 443 (Alaska 1998) (quotingWellmix, Inc. v. City of Anchorage, 471 P.2d 408, 411-12 n. 13 (Alaska 1970)).

[fn23] Kevin also alleged “new evidence,” but this seems to be only the alleged fraud.

[fn24] Kevin alleges “estate fraud,” essentially arguing that Gail mischaracterized the gold bullion as deriving from an “inheritance.” This contention appears untrue, would not affect the characterization of the gold even if it were true, and concerns only the gold bullion, which was not at issue in the settlement. Kevin also alleges that Gail procured a “fraudulent” domestic violence protective order to evict him from the house. Whether Gail misused a protective order is not properly before this court, and does not directly impact the property settlement at issue. Finally, Kevin alleges that all certificates of service prepared by Gail’s counsel throughout the course of litigation were fraudulent. Even if true, this would be harmless error, since a thorough review of the record reveals no instance where Kevin suffered by failing to respond to one of Gail’s motions.

[fn25] Wright, 964 P.2d at 443 (quoting Balchen v. Balchen, 566 P.2d 1324,1328 n. 11 (Alaska 1977) (internal quotation marks omitted)).

[fn26] 171 P.3d at 107-08.

[fn27] The December 1, 2008 Amended Judgment and Decree that Kevin appeals here did not address the gold bullion; neither did Kevin’s motion to set aside that judgment, nor did the court’s denial of that motion. The bullion also was not considered in the court’s Findings and Order on Remand or its Judgment and Decree.

[fn28] Even if it were properly on appeal here, we upheld the superior court’s allocation of the gold in Thomas I and see no reason to alter it. Whether the gold derived from a gift or an inheritance, it is still correctly classified as Gail’s separate property. See, e.g., Bilbao v.Bilbao, 205 P.3d 311, 313-14 (Alaska 2009) (“Separate property includes property acquired by one spouse before marriage, property acquired by gift, and property acquired by inheritance.”) (citing Schmitz v. Schmitz,88 P.3d 1116, 1127 (Alaska 2004)). Even accepting Kevin’s argument — that the down payment on the apartment complex was not Gail’s “inheritance” — means only that it was, instead, a gift. This is how the superior court classified it and we affirmed that classification in Thomas I.171 P.3d at 107-08.