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In re Marriage of Runge

Court of Appeals of Colorado, First Division

February 22, 2018

In re the Marriage of Barbara Runge, Appellant, and David Allen Runge, Appellee.

         Boulder County District Court No. 10DR1467 Honorable Bruce Langer, Judge

          Announced February 22, 2018 Robert E. Lanham, P.C., Robert E. Lanham, Boulder, Colorado, for Appellant

          Litvak Litvak Mehrtens and Carlton, P.C., Ronald D. Litvak, John C. Haas, Colorado Springs, Colorado, for Appellee

          OPINION

          FURMAN JUDGE.

         ¶ 1 In this post-dissolution of marriage dispute between Barbara Runge (wife) and David Allen Runge (husband), wife moved under C.R.C.P. 16.2(e)(10) to discover and allocate assets that she alleged husband did not disclose or misrepresented in the proceedings surrounding their 2011 separation agreement. Husband moved to dismiss wife's motion. In a written order, the district court granted husband's motion to dismiss, ruling that wife's motion did not state sufficient grounds to trigger discovery and allocation of assets under the rule.

         ¶ 2 On appeal, wife challenges the district court's order. She contends that the district court erred by (1) not applying the "plausibility" standard, which was announced in Warne v. Hall, 2016 CO 50, when granting husband's motion to dismiss; and (2) ruling that she did not state sufficient grounds in her motion. She also contends that the court should have at least allowed her to conduct discovery to prove her allegations.

         ¶ 3 We conclude that the Warne "plausibility" standard does not apply to the dismissal of a motion under C.R.C.P. 16.2(e)(10). We also agree with the district court that wife's motion did not state sufficient grounds to trigger an allocation of assets or discovery under the rule. Accordingly, we affirm the district court's order.

         ¶ 4 As an initial matter, husband contends that the district court lacked subject matter jurisdiction under C.R.C.P. 16.2(e)(10) because the five-year period during which it may reallocate assets expired the day after wife moved for such relief. We disagree.

         ¶ 5 C.R.C.P. 16.2(e)(10) establishes a five-year period where the court retains jurisdiction to "allocate" material assets or liabilities that were not allocated as part of the original decree. It does not, however, limit the court's jurisdiction to rule on timely motions if the five-year period expires before the ruling. Therefore, the majority concludes that the district court had jurisdiction to rule on the motion because wife's motion was timely - it was filed within the five-year period under the rule. C.R.C.P. 16.2(e)(10).

         ¶ 6 Because we affirm the court's dismissal of wife's motion, this opinion does not decide whether the court would have had jurisdiction to allocate assets if it had granted wife's motion. The separate concurring opinion of Judge Richman concludes that the district court retained jurisdiction to both rule on the motion and allocate assets if necessary. The dissent of Judge Taubman concludes that the district court's jurisdiction to consider the motion was lost as soon as the five-year period expired.

         I. The Separation Agreement

         ¶ 7 The parties, with assistance of counsel, entered into a separation agreement in 2011 to end their twenty-seven-year marriage. They requested that the district court find the agreement to be fair and not unconscionable, and incorporate it into the dissolution decree. The court did so.

         ¶ 8 Four years and 364 days later, wife moved to reopen the property division provisions of the agreement under C.R.C.P. 16.2(e)(10), contending that husband did not disclose and had misrepresented assets during the dissolution case.

         ¶ 9 In response, husband moved to dismiss wife's request, arguing that she had not sufficiently alleged facts showing either material omissions or misrepresentations. He also argued in his reply that the district court lacked subject matter jurisdiction under the rule because the five-year period during which it may reallocate assets expired the day after wife moved for such relief.

         ¶ 10 The district court rejected husband's jurisdictional argument, but it granted his motion to dismiss, ruling that wife had not made a sufficient showing under C.R.C.P. 16.2 that husband had failed to provide material information.

         II. C.R.C.P. 16.2

         ¶ 11 The purpose of C.R.C.P. 16.2 is to provide uniform case management procedures and to reduce the negative impact of adversarial litigation in domestic relations cases. See C.R.C.P. 16.2(a); In re Marriage of Schelp, 228 P.3d 151, 155, 157 (Colo. 2010); In re Marriage of Hunt, 2015 COA 58, ¶ 9. The rule imposes heightened affirmative disclosure requirements for divorcing spouses and allows dissolution courts to reallocate assets in the event that material misstatements or omissions were made by a spouse. See Schelp, 228 P.3d at 155; Hunt, ¶ 9; see also C.R.C.P. 16.2(e).

         ¶ 12 Regarding disclosure, the rule imposes a special duty of candor on divorcing spouses, which includes "full and honest disclosure of all facts that materially affect their rights and interests." C.R.C.P. 16.2(e)(1); see Schelp, 228 P.3d at 156. In discharging this duty, "a party must affirmatively disclose all information that is material to the resolution of the case without awaiting inquiry from the other party." C.R.C.P. 16.2(e)(1); see Schelp, 228 P.3d at 156. The rule requires certain mandatory financial disclosures, which are specified in the appendix to the rule, and a sworn financial statement with supporting schedules. See C.R.C.P. 16.2(e)(2) & app. form 35.1; Hunt, ¶¶ 13-15. It further imposes a general duty on the parties "to provide full disclosure of all material assets and liabilities." C.R.C.P. 16.2(e)(10); see Hunt, ¶ 17.

         ¶ 13 And, as relevant here, C.R.C.P. 16.2(e)(10) provides that,

[i]f the disclosure contains misstatements or omissions, the court shall retain jurisdiction after the entry of a final decree or judgment for a period of 5 years to allocate material assets or liabilities, the omission or non-disclosure of which materially affects the division of assets and liabilities.

See Schelp, 228 P.3d at 156; Hunt, ¶ 17.

         III. Warne Plausibility Standard

         ¶ 14 We first address wife's contention that the district court erred by not applying the "plausibility" standard, which was announced in Warne v. Hall, 2016 CO 50, when granting husband's motion to dismiss. We conclude that the Warne plausibility standard governing motions to dismiss under C.R.C.P. 12(b)(5) does not apply to wife's motion under C.R.C.P. 16.2.

         ¶ 15 We review de novo whether the district court applied the correct standard in dismissing wife's motion. See Ledroit Law v. Kim, 2015 COA 114, ¶ 47.

         ¶ 16 Under the "plausibility" standard from Warne, a complaint must "state a claim for relief that is plausible on its face" to avoid dismissal under C.R.C.P. 12(b)(5) for failure to state a claim. Warne, ¶¶ 1, 5 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2007)). But, we conclude that C.R.C.P. 12(b)(5) does not apply here, and, thus, neither does the Warne standard. We reach this conclusion for two reasons.

         ¶ 17 First, husband did not cite C.R.C.P. 12(b)(5) as authority for his motion to dismiss, nor did the parties argue a ...


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