Toney v. Burgess
541 S.W.3d 469
| Ark. Ct. App. | 2018Background
- Toney (formerly Burgess) and Jerry Burgess executed a property-settlement agreement incorporated (but not merged) into a divorce decree in July 2016; the agreement stated "Wife agrees to pay the 2014 personal property tax debt."
- The 2014 personal property taxes were small (~$225); the 2014 income tax debt was much larger (~$12,500).
- Burgess filed a motion to correct a scrivener's error, alleging the agreement should have read "income tax debt"; counsel acknowledged an oversight.
- The circuit court held a hearing, found the parties had made a mutual mistake, and reformed the decree to require payment of the 2014 income tax debt.
- Toney appealed, arguing (1) parol-evidence was improperly admitted, (2) the court lacked jurisdiction under Ark. R. Civ. P. 60, and (3) there was insufficient evidence of mutual mistake.
- The appellate court affirmed: it held the court retained jurisdiction via a general reservation, parol evidence is admissible in mutual-mistake reformation, and the mutual-mistake finding was not clearly erroneous.
Issues
| Issue | Plaintiff's Argument (Toney) | Defendant's Argument (Burgess) | Held |
|---|---|---|---|
| Court's jurisdiction to modify decree under Rule 60 | Modification more than 90 days violated Rule 60; court lacked jurisdiction | Court reserved general jurisdiction; issue was considered in original action so modification permitted | Affirmed: reservation of jurisdiction allowed modification; no abuse of discretion |
| Admissibility of parol evidence | Parol-evidence rule bars testimony varying an unambiguous written agreement | Parol evidence is admissible when reformation is sought for mutual mistake | Affirmed: parol evidence admissible because reformation was based on mutual mistake |
| Existence of mutual mistake | No clear and convincing evidence both parties intended "income tax debt"; at most unilateral mistake | Testimony and surrounding circumstances show both parties intended income tax debt; counsel conceded error | Affirmed: credibility finding not clearly erroneous; reformation proper |
| Proper remedy (reformation) | Decree should stand as written; cannot rewrite independent settlement | Reformation is proper equitable remedy when mutual mistake caused written instrument to misstate agreement | Affirmed: reformation appropriate to reflect parties' intent |
Key Cases Cited
- Linn v. Miller, 261 S.W.3d 471 (Ark. App. 2007) (Rule 60 review is for abuse of discretion; jurisdictional limits when issues were not considered in original action)
- Jones v. Jones, 759 S.W.2d 42 (Ark. App. 1988) (once court approves and incorporates independent settlement, it generally may not be modified unless jurisdiction retained)
- Carver v. Carver, 217 S.W.3d 185 (Ark. App. 2005) (general reservation of jurisdiction permits post-90-day modification when the issue was considered in original action)
- Walt Bennett Ford, Inc. v. Dyer, 631 S.W.2d 312 (Ark. App. 1982) (parol-evidence rule bars evidence that varies an unambiguous written contract absent fraud, duress, or mutual mistake)
- Stalter v. Gibson, 379 S.W.3d 710 (Ark. App. 2010) (parol evidence is admissible in reformation cases based on mutual mistake)
- Mauldin v. Snowden, 386 S.W.3d 560 (Ark. App. 2011) (reformation requires clear and convincing evidence of mutual mistake; credibility determinations are for the trial court)