This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
STATE OF MINNESOTA
IN COURT OF APPEALS
Roger Kent Smith,
Filed May 17, 2005
Robert H. Schumacher, Judge
Maury D. Beaulier, Hellmuth & Johnson, PLLC, 10400 Viking Drive, Suite 500, Eden Prairie, MN 55344 (for appellant)
U N P U B L I S H E D O P I N I O N
ROBERT H. SCHUMACHER, Judge
In this appeal from a judgment entered on a default order to dissolve his marriage to respondent-mother Katherine Claire Smith, appellant-father Roger Kent Smith argues that the district court abused its discretion by proceeding with a dissolution by default as a sanction for non-compliance with discovery and by dividing the parties' assets and debts and not awarding him spousal support without receiving evidence on those matters. We affirm.
During the proceeding to dissolve the parties' marriage, father refused to provide discovery to mother. Ultimately, a district court referee recommended a judgment, the relevant parts of which awarded neither party spousal maintenance and, by default, awarded mother the bulk of the parties' property. The district court approved the proposed judgment.
On appeal from a default judgment, review is "necessarily limited to issues which the record establishes were actually raised in, and decided by, the [district] court." In re Estate of Magnus, 436 N.W.2d 821, 823 (Minn. App. 1989). Because parties cannot raise new issues on appeal, a party in default
may not deny facts alleged in the complaint when such facts were not put into issue below. By the same token, a party in default may not assert facts on appeal which were not asserted below. Finally, a party in default may not raise procedural irregularities on appeal which were not raised below, provided that adequate and expeditious relief is available by motion in the trial court.
Thorp Loan and Thrift Co. v. Morse, 451 N.W.2d 361, 363 (Minn. App. 1990) (citations omitted), review denied (Minn. Apr. 13, 1990). A party in default may challenge "whether the evidence on record supports the findings of fact and whether the findings support the conclusions of law." Nazar v. Nazar, 505 N.W.2d 628, 633 (Minn. App. 1993), review denied (Minn. Oct. 28, 1993).
1. The district court allowed mother to proceed by default on the property-related issues. See Minn. R. Civ. P. 37.02(b)(3) (allowing entry of default judgment against party not providing discovery). Because the district court decided to sanction father by permitting mother to proceed by default on property-related issues, the sanction to be imposed on father for his failure to produce discovery was decided by the district court and is within our limited scope of review.
The sanction to be imposed for a failure to comply with a discovery order is discretionary with the district court. Chicago Greatwestern Office Condo. Assn. v. Brooks, 427 N.W.2d 728, 730 (Minn. App. 1988). Father cites Firoved v. Gen. Motors Corp., 277 Minn. 284, 152 N.W.2d 364, 369 (1967) for the propositions that (a) appellate courts must give greater scrutiny to a sanction that deprives a party of a decision on the merits of a question than a sanction that does not do so; and (b) a primary concern in selecting a sanction for a discovery violation is the extent of the prejudice to the party seeking discovery that the failure to produce the discovery had on the party seeking the discovery. But Firoved's usefulness in cases involving sanctions imposed under Minn. R. Civ. P. 37.02 has been questioned. See 1A David S. Herr, Roger S. Haydock, Minnesota Practice § 37.9 (noting Firoved involved dismissal under Rule 41 rather than sanctions under Rule 37.02, that Rules 41 and 37.02 employ different standards, and that Firoved was decided before the 1975 amendment of Rule 37.02 making it easier to impose sanctions for discovery misconduct by removing element of willful conduct); compare Minn. R. Civ. P. 37.02 (1974) (allowing sanctions against party who "refuses" to comply with discovery order) with Minn. R. Civ. P. 37.02 (2005) (allowing sanctions against party who "fails" to comply with discovery order).
Under Brooks, which involved a rule 37.02 sanction, "the normal rule [is] that the proper sanction must be no more severe . . . than is necessary to prevent prejudice to the movant." Brooks, 427 N.W.2d at 731 (alteration in original) (quoting Wilson v. Volkswsagon of America, Inc., 561 F.2d 494, 504 (4th Cir. 1977), cert. denied, 434 U.S. 1020 (1978)). Here, by the time of the default judgment father had not produced discovery despite being warned by at least two court orders that failure to produce discovery could result in a default judgment. Father does not identify what less drastic sanction would, given his hostility to producing discovery, convince him to provide discovery. Nor does father identify a route for obtaining discovery from him that was likely to be successful that mother did not take. Thus, under the Brooks no-more-severe-than-necessary test, father has not shown that that the district court abused its discretion by allowing mother to proceed by default.
Father also argues that, under Beal v. Reinertson, 298 Minn. 542, 215 N.W.2d 57 (1974), the default judgment was too harsh a sanction for his conduct in this case. Beal is distinguishable. There, a dismissal for a failure to produce discovery was reversed where a plaintiff failed to produce discovery and, after the district court ordered production, the plaintiff amended his claim so that he believed that the discovery was no longer relevant. Id., 298 Minn. at 543-44, 215 N.W.2d at 58-59.
Here, discovery was requested, not produced, ordered to be produced, not produced, sought at a deposition, and not only still not produced, but father refused to answer any questions at the deposition. Also, unlike the Beal plaintiff, father cannot argue that his failure to produce discovery was justified by an amended pleading rendering irrelevant what mother sought. Further, father's two-and-a-half year refusal to produce discovery is a much more extended refusal than that in Beal.
2. Father alleges procedural problems with the district court's allowing the property issues to proceed by default. We assume father's arguments are properly before us and briefly address them. But see Thorp, 451 N.W.2d at 363 (stating party in default may not raise procedural irregularities for first time on appeal where relief could have been had in district court by motion).
A default judgment cannot award more relief than sought in a complaint, "even if the proof would justify greater relief." Id. Here, because mother's motion generating the order allowing her to proceed by default on the property issues did not seek a default judgment, father argues a default judgment was improper. But the default judgment did not award mother more than the equitable division of marital property she sought in her dissolution petition. Given father's apparent concealment of assets discussed below, he has not shown that the property division is inequitable.
When the district court ruled that mother could proceed by default on the property issues, it conferred with father's then-withdrawing attorney in chambers without father present. Father argues that the district court improperly prevented him from presenting argument on the question of the sanction to be imposed but instead relied on the submissions of mother and the in-chambers conversation with his withdrawing attorney. But father did not ask to present argument on the sanctions question in district court, and on appeal, he does not identify what error the district court committed, what prejudice it caused him, nor what he could have argued to seek a different result. See Midway Ctr. Assocs. v. Midway Ctr., Inc., 306 Minn. 352, 356, 237 N.W.2d 76, 78 (1975) (stating, to prevail on appeal party must show error and that error caused prejudice).
Father also argues that the district court did not adequately address the degree of discovery he provided. But (a) father did not try to present argument to the district court on the scope of the discovery he provided; (b) whatever the defects in the district court's findings regarding the discovery father provided, its statements from the bench make it clear that it believed that what father provided was inadequate; and (c) on appeal, father does not identify the discovery he provided, nor does he allege that it was adequate.
3. Father challenges the district court's handling of the property-related issues and the denial of his alleged request for maintenance. The scope of review on direct appeal from a default judgment includes whether the record evidence supports the findings and whether the findings support the conclusions of law. Nazar, 505 N.W.2d at 633.
The district court awarded mother the bulk of the marital assets identified in the dissolution judgment. Father notes that under Miller v. Miller, 352 N.W.2d 738, 742 (Minn. 1984), when a long-term marriage like the parties' marriage is dissolved, an equal division of marital property is presumptively equitable, and hence appropriate. See Minn. Stat. § 518.58, subd. 1 (2004) (requiring equitable division of marital property). Father challenges the property division, arguing that the lack of evidence of the value of the parties' assets means that there is no evidence showing that the district court equally or equitably divided the marital property.
Appellate courts cannot presume error. Custom Farm Servs., Inc. v. Collins, 306 Minn. 571, 572, 238 N.W.2d 608, 609 (1976). Here, father's brief admits that, to show what he claims is the property division's disproportionality, he must rely on information outside the existing record. Case law, however, precludes father from doing so. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988); Thorp, 451 N.W.2d at 362. Absent demonstrable error and prejudice to father, reversal of the property division is not required. Midway, 306 Minn. at 356, 237 N.W.2d at 78; see Minn. R. Civ. P. 61. Moreover, on appeal, a party cannot complain about a district court's failure to rule in his favor when one reason it did not do so is that party's failure to provide the evidence that would allow the district court to fully address the question. Eisenschenk v. Eisenschenk, 668 N.W.2d 235, 243 (Minn. App. 2003), review denied (Minn. Nov. 25, 2003).
In dividing the real property as mother requested, the district court found that because father had not disclosed his receipt of certain funds to mother, it was "reasonable" to infer that he may have hidden or transferred other marital assets, and divided the marital property accordingly. Father argues that there is no evidence that he hid or transferred any marital assets. But it is undisputed both that he failed to provide asset-related discovery despite opportunities and orders to do so and that his deposition was terminated because he refused to answer questions. How this can be seen as anything other than withholding or hiding asset-related information is not explained.
Regarding assets, consistent with mother's affidavit, the district court found that, after trial and while the district court had the matter under advisement, (a) father received $13,675.10 in payments regarding a parcel of real property in which the parties had an interest; (b) the property is owned by the parties jointly with father's brother, with whom the parties should have split the proceeds; (c) father later tried to re-lease the property to a third party without informing mother or his brother; and (d) "[n]one" of this information was disclosed to mother by father before trial.
Where a party has acted improperly on one subject, a district court may infer improper conduct on other topics. See Bollenbach v. Bollenbach, 285 Minn. 418, 428, 175 N.W.2d 148, 155 (1970) (noting parties to dissolution must make complete disclosure of their assets and not doing so justifies inferences adverse to party who conceals or evades); see also Doering v. Doering, 629 N.W.2d 124, 131 (Minn. App. 2001) (discussing affirmative duty to disclose information that is present for parties to dissolution), review denied (Minn. Sept. 11, 2001); Varner v. Varner, 400 N.W.2d 117, 121 (Minn. App. 1987) (stating court is not required to believe even uncontradicted testimony if there are reasonable grounds to doubt its credibility). Thus, the district court's adverse inferences about father's conduct regarding assets other than the jointly-owned property are permissible.
Father argues that the record addresses the values of neither the parties' real property nor their retirement accounts. In addition to running afoul of Eisenschenk's idea that parties cannot complain when their own failure to provide evidence is at least partially responsible for a district court's ruling against them, father's argument is inconsistent with the position he took in district court. There, in the child-support proceedings, father's attorney submitted a letter argument summarizing his understanding of what the dissolution judgment would contain. Attached to the letter is, among other things, Exhibit C, which contains values for the retirement accounts and the real properties divided in the judgment.
The judgment later valued the retirement accounts at the amounts listed in Exhibit C but did not value the real properties and did not explain why it did not do so. Regarding Exhibit C, father's letter argument states: "Exhibit C is a list of assets with the sources for the various values cited. Much of the information is in the record in one document or another." (Emphasis added.) Thus, in district court, father was advocating the values for the retirement accounts he is currently challenging.
Regarding the real properties, on appeal father is essentially arguing that the district court properly refused to adopt the values for the real property that he submitted. Father has improperly changed his theories of arguing both of these issues. Therefore, his new theories are not properly before this court. See Thiele, 425 N.W.2d at 582 (stating generally, party not allowed to raise new issue or new theory on appeal). In any event, we conclude that the record contains sufficient evidence supporting the district court's valuation of the retirement assets.
Father argues that, because of his poor health, he sought maintenance. But the portion of the record he cites to support his argument lacks a request for maintenance. Also, father did not provide (current) information of his expenses. Thus, even if he did request maintenance, he has not shown that he needs it. See Lyon v. Lyon, 439 N.W.2d 18, 22 (Minn. 1989) (maintenance depends on showing of need).