In Re The Marriage Of: Steve Wazny v. Shantel Wazny, 49393-4

Background

Steven and Shantel Wazny divorced after a CR 2A mediated settlement incorporated into the dissolution decree allocating business interests, property, and debts.
Steven owned a 10% interest in AJP (valued in the CR 2A worksheet at $44,500 after loan repayment) and an interest in NHG (not listed in the worksheet); a CPA earlier valuated AJP and NHG before settlement.
Shantel later moved: (1) under CR 60(b)(4) to vacate the AJP valuation and debt allocations, alleging Steven concealed $300,000 of AJP profit and mischaracterized debts; and (2) under the CR 2A undisclosed-property clause to claim 50% of undisclosed assets (including the alleged $300,000, a $31,733.33 NHG distribution, and NHG value).
The trial court denied both motions applying a clear, cogent, and convincing fraud standard; a commissioner clarified that Shantel was responsible for the family home’s first and second mortgages and denied her fees under RCW 26.09.140.
On appeal the Court of Appeals affirmed most rulings but held the trial court erred by applying the clear, cogent, and convincing standard (instead of preponderance) to the CR 2A undisclosed-property claim and reversed the denial only as to Shantel’s claim that $300,000 were undisclosed AJP profits; it vacated the attorney-fee award to Steven under the CR 2A clause and remanded for reconsideration under the correct burden.

Issues

Issue	Wazny (Plaintiff/Appellant) Argument	Steven (Defendant/Respondent) Argument	Held
1) Whether CR 60(b)(4) relief was warranted to vacate AJP valuation based on alleged $300,000 concealed profits	Steven concealed $300,000 of AJP profits (not loans); CPA valuation would have been higher; vacatur warranted for fraud	Transfers were loans (per Chopra); Shantel failed to prove fraud by clear, cogent, and convincing evidence	Denied — court did not abuse discretion; substantial evidence supports no fraud under CR 60(b)(4) standard
2) Whether CR 2A undisclosed-property clause entitles Shantel to 50% of the alleged $300,000 AJP funds	The $300,000 were undisclosed community property and subject to 50/50 division; lower preponderance standard applies	Same facts but argued trial court’s factual findings supported denial; relied on trial court’s credibility findings	Reversed in part and remanded — trial court applied wrong evidentiary standard; must reconsider under preponderance for the $300,000 claim
3) Whether Shantel is entitled to half of NHG’s $31,733.33 distribution (post-dissolution)	Distribution was undisclosed at settlement, so 50% belongs to Shantel	Distribution was a post-separation acquisition she waived under CR 2A (“each will keep post separation acquisitions”)	Affirmed — distribution is post-separation acquisition; not subject to undisclosed-property clause
4) Whether Shantel is responsible for the second mortgage on the family home	She did not initial handwritten interlineation; division sheet ambiguous so she should not be liable	The dissolution decree incorporated the CR 2A and expressly allocated 1st and 2nd mortgages to wife; decree controls	Affirmed — decree explicitly allocated both mortgages to Shantel; commissioner correctly enforced decree

Key Cases Cited

Dalton v. State, 130 Wn. App. 653 (CR 60(b)(4) fraud requires clear, cogent, and convincing evidence)
Jones v. City of Seattle, 179 Wn.2d 322 (trial court’s CR 60(b) decision reviewed for abuse of discretion)
Tamosaitis v. Bechtel Nat’l, Inc., 182 Wn. App. 241 (abuse-of-discretion standard for CR 60(b) review)
In re Marriage of Maddix, 41 Wn. App. 248 (party must investigate business value before settlement; cannot later relitigate what should have been discovered)
Yeats v. Estate of Yeats, 90 Wn.2d 201 (undivided community property held as tenants in common after decree)
In re Marriage of Yearout, 41 Wn. App. 897 (separation agreement incorporated into decree merges into decree)
Mickens v. Mickens, 62 Wn.2d 876 (when decree approves settlement, rights rest on decree rather than the agreement)
In re Marriage of Wehr, 165 Wn. App. 610 (appellate review of appropriate burden of proof is de novo)
Dep’t of Labor & Indus. v. Rowley, 185 Wn.2d 186 (preponderance is the general civil standard)
In re Marriage of Schwarz, 192 Wn. App. 180 (property acquired after separation is separate, not community, property)