Lewis v. Smart
2017 ND 214
| N.D. | 2017Background
- Nina Lewis and John Smart divorced after a 1999 marriage; they had a minor son, Dashiell. A stipulated divorce judgment was entered in Sept. 2013 shortly after Lewis’s father died; the judgment did not resolve Lewis’s potential inheritance.
- Smart moved under N.D.R.Civ.P. 60 to reopen the judgment to seek a share of Lewis’s inheritance; the court later granted relief and reopened the case to consider the inheritance and related property issues.
- The parties disputed possession and ownership of personal property subject to a trust for the son; a receiver was appointed and the son intervened to protect trust assets.
- The district court awarded Lewis her inheritance (approx. $937,000) and found Smart had received direct monetary benefits and caused loss/waste of marital and trust property (~$267,000), increased Lewis’s expenses (~$17,850), and caused other unanticipated expenses (~$15,000) to the son.
- The amended judgment ordered Smart to relinquish trust assets in his possession to the son (or designee), allowed limited continued use of a Mercedes with insurance, and required sale of trust property as needed to pay fees and reimburse Lewis; Smart’s post-judgment motions under Rules 52, 59, and 60 were denied and Lewis awarded $2,500 in attorney’s fees as a sanction.
Issues
| Issue | Plaintiff's Argument (Lewis) | Defendant's Argument (Smart) | Held |
|---|---|---|---|
| Reopening judgment to distribute inheritance and redistribute marital property | Reopening was proper; court should equitably distribute including inheritance and account for Smart’s misconduct and debts he failed to pay | Reopening exceeded scope of Smart’s Rule 60 request (he sought only distribution of inheritance); court impermissibly altered benefits he received under the stipulated judgment | Court affirmed reopening under Rule 60(b) was within discretion; redistribution was equitable and not clearly erroneous |
| Assessment for alleged waste/loss of trust and marital property (~$267,000) | Court permissibly considered Smart’s waste, nonpayment of debts, and benefit from inheritance when equitably reallocating property | Court improperly "assessed" him for storage/sale losses and punished him though property/trust issues were non-marital or trustee duties lay with Lewis | Findings that Smart caused loss/waste supported redistribution; district court’s factual findings not clearly erroneous |
| Jurisdiction over trust property / handling beneficiary possession | Lewis (and receiver) were allowed to protect beneficiary interests and court could address possession/use of trust assets awarded in original judgment | Smart argued court lacked jurisdiction to assert control over non-marital trust assets | Court limited relief to possession/use and beneficiary interest; did not change trust ownership—this was permissible; Murphy distinguished |
| Attorney’s fees for post-judgment filings | Fees warranted as sanction because Smart’s motions were untimely, unsupported, prolonged litigation, and increased Lewis’s fees | Fees improper because court failed to consider parties’ needs/ability to pay under §14-05-23 | Court awarded $2,500 as sanction under its inherent authority; need/ability-to-pay analysis not required for sanction award |
Key Cases Cited
- Knutson v. Knutson, 639 N.W.2d 495 (N.D. 2002) (Rule 60(b) review is for abuse of discretion and settlement judgments require contract-justification to be set aside)
- Wanttaja v. Wanttaja, 873 N.W.2d 911 (N.D. 2016) (district courts must equitably distribute marital property and apply Ruff-Fischer factors)
- Rebel v. Rebel, 833 N.W.2d 442 (N.D. 2013) (lists Ruff-Fischer guidelines to consider in property division)
- Ulsaker v. White, 717 N.W.2d 567 (N.D. 2006) (separate property, including inheritance, may be included in marital estate)
- Keita v. Keita, 823 N.W.2d 726 (N.D. 2012) (post-judgment redistribution may be appropriate where a party fails to comply with property distribution)
- Murphy v. Rossow, 787 N.W.2d 746 (N.D. 2010) (trust property not owned by parties cannot be divided as marital property; court may value beneficiary interest instead)
- Kelly v. Kelly, 806 N.W.2d 133 (N.D. 2011) (attorney fees in divorce: consider needs/ability to pay; courts may also sanction litigants for misconduct and award fees)
- Holte v. Holte, 837 N.W.2d 894 (N.D. 2013) (trusts may be treated as marital assets where a present beneficial interest exists)