Geier v. Geier

#26389-rev & rem-LSW

2013 S.D. 24

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

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JAMES R. GEIER, Plaintiff and Appellee,

v.

JANET M. GEIER, Defendant and Appellant.

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APPEAL FROM THE CIRCUIT COURT OF
THE FIFTH JUDICIAL CIRCUIT
ROBERTS COUNTY, SOUTH DAKOTA

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THE HONORABLE JON S. FLEMMER
Judge

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NANCY L. OVIATT of
Green, Roby, Oviatt,
Cummings & Linngren, LLP
Watertown, South Dakota Attorneys for plaintiff
and appellee.

ROGER W. ELLYSON
Watertown, South Dakota Attorney for defendant
and appellant.

****

CONSIDERED ON BRIEFS
ON FEBRUARY 12, 2013

OPINION FILED 03/20/13
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WILBUR, Justice

[¶1.] Janet Geier appeals from the trial court’s denial of her motion to set

aside a judgment. We reverse and remand.

FACTS AND PROCEDURAL HISTORY

[¶2.] Janet and James Geier were married on February 15, 1997. At the

time of the hearing, James was 61 and Janet was 54. During their marriage, Janet

and James worked at a hospital in Milbank, South Dakota, as registered nurses.

They did not have any children together.

[¶3.] Janet was diagnosed with relapsing-remitting multiple sclerosis in

1992. James was aware of Janet’s diagnosis at the time of their marriage. She also

has a history of dementia, cognitive deficits, anxiety, and depression. She has been

prescribed medication to deal with several of these infirmities. In December 2002,

she was declared disabled and began to receive disability benefits in July 2003.

[¶4.] James testified that Janet had good days and bad days. On her bad

days, she would require assistance getting out of bed, to the restroom, and around

the house. He further stated that the multiple sclerosis would affect her strength

and, on occasion, her vision and speech. Even though Janet had more good days

than bad days, James testified that he worried about her ability to remain safely at

home. On December 4, 2010, Janet fell and broke her tailbone, requiring

hospitalization.

[¶5.] In February 2011, James contacted attorney, Craig Ash, about starting

a divorce action. James admitted that the stated purpose of the divorce was to help

Janet qualify for Medicaid and to protect his assets from depletion if Janet were to

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require nursing home care. On February 16, 2011, James presented Janet with the

admission of service, which she signed. Upon seeing her emotional state, James

asked Janet if she wanted him to call her sister, Rebecca Woodard. Janet indicated

that she did and James called Woodard and informed her that he had started the

divorce proceedings. In the days following the commencement of the divorce, James

testified that the parties discussed the divorce nearly every day and he told Janet

that, married or not, she could live at their house as long as her health permitted.

[¶6.] Janet fell at home and broke her hip on March 24, 2011, requiring

another lengthy hospitalization. James testified that he called Attorney Ash and

informed Attorney Ash that he was going to wait to proceed with the divorce until

James could see how Janet recovered. James further testified that he “told [Janet]

if she could show [him] that . . . she could be safe at home and start eating better

and regain her strength that [he] would hold off on the divorce proceedings.”

Woodard testified that, not long after she had heard from James that he had

commenced the divorce, Janet had told her that the divorce had been called off.

[¶7.] At the end of July 2011, James contacted Attorney Ash to have him

prepare the marital termination agreement (the agreement) and affidavits. On

August 16, 2011, Janet was unresponsive and was taken by ambulance to the

hospital. She was diagnosed with a urinary tract infection. Janet made a relatively

quick recovery from the infection. Following her hospitalization, James, on his own

accord, took over management of Janet’s medications. James testified that after

August 16, Janet did not have any more flare-ups and was quite functional and

conversant.

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[¶8.] Attorney Ash proceeded to prepare the agreement and affidavits and

James picked up the documents on August 31, 2011. James testified that he

presented the documents to Janet and reviewed them with her nearly every day.

[¶9.] On September 6, 2011, James testified that Janet got out of bed by

herself, took care of all of her own personal needs, ate breakfast, walked to the car

with assistance, and used a wheelchair to move from the car to Attorney Ash’s

office. While at Attorney Ash’s office, Attorney Ash testified that Janet seemed

alert and responded appropriately. He also stated that Janet “appeared . . . she

understood why she was there from how she responded.” Attorney Ash further

testified that he advised Janet that he was not her attorney and that she may have

an attorney if she wanted. Attorney Ash then proceeded to go through each

paragraph of the agreement. Attorney Ash testified that he explained to Janet that,

if she signed the agreement, Janet would be waiving alimony. Janet signed the

agreement at the meeting, which lasted 40 minutes.

[¶10.] In her affidavit to the trial court, Janet disputed this testimony. When

James presented the agreement to Janet, Janet stated that she only had 10 minutes

to review it. Janet also asserted that James never told her that she should hire her

own lawyer or that he would pay for it. Because of her deteriorated condition in

September 2011, Janet stated that she does not remember meeting Attorney Ash or

signing the agreement.

[¶11.] The agreement gave James the marital home, a 2004 pickup, a 2011

car, a boat and trailer, a utility trailer, his retirement accounts, stocks, bonds,

checking and savings accounts, and life insurance. The values as to these

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properties were not given in the agreement. The agreement also provided that each

party is capable of supporting themselves and waived any claim to alimony. In

addition, the agreement erroneously contained a provision for child support and the

notary provision involving Janet’s signature stated that the agreement was signed

on September 6, 2007. The judgment and decree of divorce were filed on September

12, 2011.

[¶12.] On September 27, 2011, because they were no longer married and

Janet was no longer on his health insurance, James arranged for an insurance

agent to come to his house. 1 Janet engaged in conversation with the agent and

purchased a Medicare supplement insurance policy. The next day, Janet could not

get out of bed and was confused. James took Janet to the hospital where the

medical staff noted Janet’s progressive weakness and significant weight loss. The

parties dispute whether James told the hospital staff that Janet would not be able

to return home or whether the hospital staff told James that Janet was too ill to

return home. 2 Woodard testified that James called to inform her that he and Janet

were divorced and that Janet was ill and not permitted to return home.

[¶13.] The next day, Woodard came to South Dakota and observed Janet’s

grave condition. Woodard contacted an attorney to meet with Janet at the hospital

and steps were taken to have Woodard appointed as Janet’s guardian. Woodard

1. James allowed Janet to stay in the house after the divorce.

2. A medical record dated September 28, 2011, contained within the exhibits
admitted by the court, indicates that “[h]er ex-husband has divorced her and
is apparently giving up her care to other family or long-term care facility as
he is unable to keep her at home anymore.”

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signed a petition for appointment of guardian and conservator on October 3, 2011.

On October 10, 2011, Janet was released from the hospital and transferred to a

nursing facility in Watertown, South Dakota. Woodard was appointed Janet’s

guardian and conservator on November 1, 2011.

[¶14.] Following Woodard’s appointment, Janet served James with

interrogatories, a request for the production of documents, a motion to set aside

judgment, Woodard’s affidavit, and notice of hearing. James filed a motion for a

protective order on January 23, 2012. Woodard filed the motion to set aside

judgment and a motion to compel on January 24, 2012.

[¶15.] A hearing on those motions took place on February 2, 2012. The trial

court determined that it would hear the motion to set aside judgment first. The

trial court admitted two exhibits of medical records stating that “[o]bviously, what

conclusions may be drawn from the records or what opinions may be offered about

them will depend on witnesses who – who present testimony . . . .” Additionally, the

trial court admitted an exhibit of Woodard’s valuation of the couple’s property. The

court heard testimony from James, Attorney Ash, Bridget Johnson, 3 and Woodard.

Janet did not attend the hearing. 4

3. Johnson is a social worker at the hospital where Janet was hospitalized.

4. Janet contended that she was unable to attend the motion hearing because
the courthouse in Roberts County did not have an elevator and her multiple
sclerosis had bound her to a walker or a wheelchair. Janet’s counsel
conceded that he did not think it was necessary to have Janet attend the
hearing. The court indicated that it would have accommodated Janet’s needs
had a request been made.

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[¶16.] After both sides rested, the court announced its decision but was

interrupted by Janet’s counsel who asked for the opportunity to submit a written

argument to the court in order to present statutes, cases, and testimony. The court

permitted Janet’s counsel to make a written argument, with James’s counsel having

the opportunity to respond, but warned that the court had made its decision. Janet

submitted her brief to the court on February 8, 2012, and filed an affidavit on

February 9, 2012. On April 23, 2012, the trial court filed a memorandum decision

denying Janet’s motion to set aside. In its memorandum decision, the court

declined to consider Janet’s affidavit because “[n]o permission was sought or

received from the [c]ourt to submit such an [a]ffidavit after the parties had rested”

and there was “no opportunity for James to cross-examine Janet about the contents

of the [a]ffidavit or rebut [its] contents . . . .” Janet appeals the following issues:

1. Whether the trial court abused its discretion in denying Janet’s
motion to set aside the judgment.

2. Whether the trial court erred in failing to require James to
answer Janet’s interrogatories.

3. Whether the trial court erred in failing to consider Janet’s
affidavit.

ANALYSIS AND DECISION

[¶17.] Janet contends that the trial court abused its discretion when it denied

her motion to set aside the judgment. Janet argues that because of her infirmities

and the circumstances surrounding the execution of the agreement, she did not

know the consequences of what she was doing. Specifically, Janet points to a

number of circumstances in support of her argument: her poor physical and mental

health; her complete reliance on James; the fact that James’s counsel prepared the

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agreement; her lack of legal representation at the signing of the agreement; the fact

that no family member or friend representing Janet’s interests was notified or had

the opportunity to review the agreement prior to Janet’s signature; the errors

contained within the agreement itself; the fact that Janet signed the agreement in

front of James’s attorney and James at the attorney’s office; and the terms of the

agreement were adverse to Janet’s interests. Janet further asserts that she

established a meritorious defense in that she would receive a more favorable

property settlement if the judgment were set aside.

[¶18.] “The decision to grant or deny a motion under SDCL 15-6-60(b) rests

with the sound discretion of the trial court and will not be disturbed on appeal

unless there has been an abuse of discretion.” Lowe v. Schwartz, 2006 S.D. 48, ¶ 8,

716 N.W.2d 777, 779 (quoting Walsh v. Larsen, 2005 S.D. 104, ¶ 6, 705 N.W.2d 638,

641). SDCL 15-6-60(b) provides:

On motion and upon such terms as are just, the court may
relieve a party or his legal representative from a final judgment,
order, or proceeding for the following reasons:
(1) Mistake, inadvertence, surprise, or excusable neglect;
(2) Newly discovered evidence which by due diligence
could not have been discovered in time to move for a new
trial under § 15-6-59(b);
(3) Fraud (whether heretofore denominated intrinsic or
extrinsic), misrepresentation, or other misconduct of an
adverse party;
(4) The judgment is void;
(5) The judgment has been satisfied, released, or
discharged, or a prior judgment upon which it is based
has been reversed or otherwise vacated, or it is no longer
equitable that the judgment should have prospective
application; or
(6) Any other reason justifying relief from the operation of
the judgment.
The motion shall be made within a reasonable time, and for
reasons (1), (2), and (3) not more than one year after the

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judgment, order or proceeding was entered or taken. A motion
under this subdivision (b) does not affect the finality of a
judgment or suspend its operation. Section 15-6-60 does not
limit the power of a court to entertain an independent action to
relieve a party from a judgment, order, or proceeding, or to grant
relief to a defendant not actually personally notified as provided
by statute or to set aside a judgment for fraud upon the court.

SDCL 15-6-60(b) “is not a substitute for an appeal. It does not allow relitigation of

issues that have been resolved by the judgment. Instead it refers to some change in

conditions that make continued enforcement inequitable.” Lowe, 2006 S.D. 48, ¶ 10,

716 N.W.2d at 779 (quoting Sjomeling v. Stuber, 2000 S.D. 103, ¶ 14, 615 N.W.2d

613, 616). “The intent of this rule is to ‘preserve the delicate balance between the

sanctity of final judgments and the incessant command of a court’s conscience that

justice be done in light of all the facts.’” Id. ¶ 11 (quoting Action Carrier, Inc. v.

United Nat’l Ins. Co., 2005 S.D. 57, ¶ 14, 697 N.W.2d 387, 391). “The trial court

should exercise its discretion liberally in accordance with legal and equitable

principles so as to promote the ends of justice.” Id. (quoting Elliott v. Cartwright,

1998 S.D. 53, ¶ 7, 580 N.W.2d 603, 604). Furthermore, “there is much more reason

for liberality in reopening a judgment when the merits of the case never have been

considered than there is when the judgment comes after a full trial on the merits.”

Id. ¶ 12 (quoting MIF Realty L.P. v. Rochester Assocs., 92 F.3d 752, 756 (8th Cir.

1996)).

[¶19.] A party seeking relief from a final judgment under SDCL 15-6-60(b)(1)

must show: “(1) exceptional circumstances constituting excusable neglect (or other

statutory grounds); and (2) a probable meritorious defense.” Crothers v. Crothers,

2001 S.D. 78, ¶ 15, 630 N.W.2d 103, 107. “Excusable neglect must be neglect of a

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nature that would cause a reasonable, prudent person to act similarly under similar

circumstances.” Clarke v. Clarke, 423 N.W.2d 818, 821 (S.D. 1988). “‘[E]xcusable

neglect’ has no fixed meaning and is to be interpreted liberally to insure that cases

are heard and tried on the merits.” Id.

[¶20.] The trial court abused its discretion in denying Janet’s motion to set

aside. In making its determination on Janet’s motion to set aside, the trial court

stated in its memorandum decision:

However, in this case, the [c]ourt did not make a division of
property; the [c]ourt simply approved an [a]greement between
the parties. The issue then is more complicated than simply one
of whether the [a]greement favors one party more than the
other; the issue is whether the written document was entered
into voluntarily and reflects the actual [a]greement of the
parties.

Whether the agreement “was entered into voluntarily” is not the standard by which

we determine whether or not to set aside a judgment. Instead, we have consistently

stated that in order to set aside a judgment under SDCL 15-6-60(b) a party must

demonstrate exceptional circumstances constituting one of the statutory grounds

and a probable meritorious defense. Crothers, 2001 S.D. 78, ¶ 15, 630 N.W.2d at

107.

[¶21.] Here, the record demonstrates the presence of exceptional

circumstances constituting excusable neglect. It is apparent from testimony and

medical records admitted at the hearing that Janet’s physical and mental

infirmities have affected and continue to affect her everyday living. Janet was

declared disabled in 2002. She was hospitalized for breaking her tailbone in 2010

and her hip in 2011. Additionally, the record demonstrates that Janet has “onset of

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dementia,” a history of cognitive deficits, anxiety, depression, and a seizure

disorder. And, she was taking a number of prescription medications for these

infirmities. Further, as of August 2011, Janet was completely dependent on James

for her care and transportation.

[¶22.] While not a determinative factor by itself, it is also important to note

that Janet was unrepresented by counsel throughout the negotiations and the

execution of the agreement. James provided Attorney Ash with the terms of the

agreement. And, no one other than Attorney Ash and James spoke with Janet

about the terms of the agreement before she signed it. 5

[¶23.] In order to prevail, Janet must also show a probable meritorious

defense to successfully obtain relief from the judgment. “The party seeking relief

must present facts either by answer or affidavit from which it could be inferred that

upon a trial he would be entitled to a judgment more favorable to himself than the

judgment from which he is seeking relief.” Frieberg v. Frieberg, 509 N.W.2d 415,

419 (S.D. 1993) (quoting Clarke, 423 N.W.2d at 821). “An applicant for relief from a

judgment satisfies the meritorious defense requirement, however, if he makes only

a prima facie showing.” Id. “The rule does not intend that there should be two

trials on the merits.” Id. (quoting Nat’l Sur. Corp. v. Shoemaker, 86 S.D. 302, 310,

195 N.W.2d 134, 138–39 (1972)).

[¶24.] Here, Janet has demonstrated a probable meritorious defense in that

she would receive a more favorable property settlement if the judgment were set

5. In her affidavit, Janet stated that, because of her deteriorated health, she did
not recall meeting Attorney Ash or signing the agreement.

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aside. The agreement provided for a grossly disproportionate division of property

that left Janet, who is disabled and unable to earn an income, with very little

marital property to support herself. The agreement did not place valuations on the

property. After filing her motion to set aside, Janet served interrogatories on

James, which sought to establish the value of the martial property. James

subsequently filed a protective order. In response, Janet filed a motion to compel.

These motions went unaddressed at the hearing. Thus, we are left with Woodard’s

valuation of the marital property in determining the proportionality of the division

of such property as contemplated in the agreement.

[¶25.] The agreement gave James the marital home, two vehicles, a boat and

trailer, a utility trailer, his retirement accounts, stocks, bonds, checking and

savings accounts, and life insurance worth approximately $232,500 (92 percent) of

the property. Janet, however, only received approximately $20,149 (8 percent) of

the property and she waived alimony. These valuations may very well be below the

value of all of the property making the division of the property in the agreement

even more disproportionate. The valuations may also be above the value of all of

the property. It is not clear from this record and “justice [must] be done in light of

all of the facts.” Lowe, 2006 S.D. 48, ¶ 11, 716 N.W.2d at 779 (quoting Action

Carrier, Inc., 2005 S.D. 57, ¶ 14, 697 N.W.2d at 391). In order for justice to be done,

a trial on the merits, after appropriate discovery, is necessary. Therefore, Janet has

demonstrated exceptional circumstances constituting excusable neglect and a

probable meritorious defense mandating relief from the final judgment. Because of

our holding on this issue, we need not address the remaining issues.

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CONCLUSION

[¶26.] The trial court abused its discretion in denying Janet’s motion to set

aside. Janet has demonstrated exceptional circumstances constituting excusable

neglect and a probable meritorious defense. Therefore, we reverse and remand to

the trial court for a trial on the merits.

[¶27.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER, and

SEVERSON, Justices, concur.

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