Walstad v. Walstad
821 N.W.2d 770
| N.D. | 2012Background
- Catherine Walstad and Richard Walstad divorced in 1994 under a stipulated property settlement that claimed full disclosure of all assets and liabilities, with the settlement incorporated into a judgment that equally divided marital property including a business stake.
- In 2009, Catherine sued alleging Richard concealed pre-divorce bonuses totaling over $100,000 to two employees to reduce the business value and her share; she sought relief from the 1994 divorce judgment via an independent equity action based on economic misconduct.
- In 2010, Catherine moved to amend to add a punitive damages claim under N.D.C.C. § 32-03.2-11(1); the district court denied, holding punitive damages not available in this context since the action arose from a contract-like property settlement.
- A bench trial awarded Catherine $37,222.90, calculating the concealed $50,000 and splitting the after-tax amount, plus prejudgment interest and costs.
- The court recognized independent equity relief under Hamilton and N.D.C.C. § 14-05-24(3) but did not clearly show whether it applied economic fault as part of property redistribution; the appellate court remanded for proper analysis of economic fault in the redistribution and equitable relief.
- The court ultimately held punitive damages are not authorized in this context and remanded to apply correct law for the independent action in equity to determine economic fault in redistribution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether punitive damages can be awarded in an independent equity action to relieve a blatantly unjust divorce judgment. | Walstad seeks punitive damages for concealment. | Punitive damages not authorized in this independent equity context. | Punitive damages not authorized; remand for proper equitable relief under Hamilton framework. |
| Whether the district court abused its discretion in denying amendment to plead punitive damages. | Amendment to plead punitive damages should be allowed. | Amendment would be futile and improper under statute and rules. | Court did not abuse discretion; amendment denied. |
| Whether the independent action in equity may consider economic fault in redistributing property. | Economic fault and misconduct should be considered. | Discretion limited; must follow specific procedures. | Remand to apply Ruff-Fischer guidelines and consider economic fault in redistribution. |
Key Cases Cited
- Hamilton v. Hamilton, 410 N.W.2d 508 (N.D. 1987) (independent action in equity to obtain relief from a judgment when not available by Rule 60)
- Hoverson v. Hoverson, 2001 ND 124, 629 N.W.2d 573 (N.D. 2001) (economic and noneconomic fault proper factors in property division)
- United States v. Beggerly, 524 U.S. 38 (U.S. 1998) (independent action in equity available to prevent grave miscarriage of justice)
- Rossi v. Rossi, 90 Cal.App.4th 34 (Cal. App. 2001) (post-judgment disclosure/redistribution discussed; not punitive damages)
- Dale v. Dale, 66 Cal.App.4th 1172 (Cal. App. 1998) (concealment of assets; tort action viability discussed)
- Burris v. Burris, 904 S.W.2d 564 (Mo. Ct. App. 1995) (tool for evaluating punitive damages in concealment context)