In re Marriage of Evans.
2021 COA 141. No. 20CA1104. Post-Dissolution Disposition of Property—Omitted or Misstated Asset—Child Support—Security for Child Support—Attorney Fees.
November 18, 2021
The district court approved the parties’ separation agreement and parenting plan, which resolved all issues concerning property division, parenting time, child support, maintenance, and attorney fees, and entered a dissolution decree. Wife later sought to modify husband’s $534 monthly child support obligation based on her anticipated employment and belief that husband had more income than he had originally disclosed. Through discovery, wife learned that husband had failed to disclose his 100% ownership interest in Premier Earthworks & Infrastructure, Inc. (PEI) during the dissolution proceedings. Wife asked the court to reopen the property division and allocate the PEI ownership as a marital asset.
A magistrate awarded wife $1,168,639 as her share of husband’s PEI ownership interest and ordered husband to provide security to insure payment. The magistrate also increased husband’s monthly child support obligation to $12,000 and ordered him to pay $62,691.75 of wife’s attorney and expert witness fees. A district court judge upheld the child support and attorney fees orders but rejected the allocation of PEI ownership and remanded for further findings regarding the CRS § 14-10-113 factors. The magistrate made such findings and reaffirmed the PEI allocation, and the judge adopted the magistrate’s order.
Husband contended on appeal that wife waived her right to invoke CRCP 16.2(e)(10) and allocate PEI ownership when she entered into the separation agreement. However, husband did not dispute that he knew about PEI’s existence during the dissolution proceedings but did not inform wife about PEI or disclose any documents relevant to its existence or valuation. Therefore, husband did not provide a full disclosure of PEI as contemplated by the settlement agreement and as required by CRCP 16.2. Accordingly, the separation agreement is null and void as to PEI and the court had jurisdiction to divide the asset.
Husband also argued that the magistrate erred when she reopened the property division under CRCP 16.2(e)(10) and allocated the ownership interest in PEI between the parties after finding that a third party, not husband, owned PEI. Here, the magistrate acted within her discretion to resolve conflicting evidence and her findings were supported by the record. Further, husband’s failure to disclose the existence of a marital asset violated CRCP 16.2 and entitled wife to seek relief under the rule, so the magistrate did not err.
Husband further contended that the magistrate did not consider any of the CRS § 14-10-113 factors when allocating PEI. The Court of Appeals determined that (1) CRCP 16.2(e)(10) does not require a complete reallocation of the marital estate; (2) the CRS § 14-10-113 factors are relevant, and the court must value the previously misstated or omitted asset as of the date of the decree or as of the date of the hearing on the disposition of property if such hearing precedes the date of the decree; and (3) a CRCP 16.2(e)(10) allocation considers the parties’ current economic circumstances. Here, the magistrate followed these considerations and did not err in allocating PEI.
Husband also argued that the magistrate made no findings to support the $12,000 monthly child support order. Where the parties’ combined gross income exceeds the uppermost level of the child support guidelines, the court must use its discretion and consider all relevant factors, including those listed in CRS § 4-10-115(2)(b). However, the magistrate here did not explain the basis for the monthly child support figure.
Husband further argued that the magistrate abused her discretion when she ordered him to provide security to ensure the enforcement of her orders. Here, the magistrate ordered husband to pay wife’s share of the PEI value at the rate of a minimum of $50,000 per month until paid in full and ordered that his payments toward the obligation would create a lien against all other assets in husband’s name. However, this order was unsupported by sufficient factual findings, so the magistrate abused her discretion.
Lastly, husband argued that the magistrate did not make sufficient findings to support the order for him to pay wife attorney and expert fees. However, the record showed that husband’s monthly income was over 114 times wife’s and supported the conclusion that he had the greater ability to pay. In addition, had husband disclosed PEI during the dissolution proceedings, these supplemental proceedings would not have been necessary. Accordingly, there was no abuse of discretion.
The parts of the order modifying child support and imposing security were reversed and the case was remanded for further findings on those issues. Pending the entry of new orders, the existing child support and security orders will remain in place. The order was affirmed in all other respects.