In re the Marriage of Steven R. Durie, Appellee, and Kelly J. Durie, n/k/a Kelly J. Simmerman, Appellant.
Douglas County District Court No. 14DR30238. Honorable
Michael Spear, Judge.
Epstein Patierno, LLP, Steven B. Epstein, Wendy J. Smock,
Denver, Colorado, for Appellee.
Stevens, Littman, Biddison, Tharp & Weinberg, LLC, Craig A.
Weinberg, Boulder, Colorado, for Appellant.
Welling and Kapelke[*] , JJ., concur.
What happens when a spouse in a post-dissolution of marriage
proceeding believes that the other spouse failed to disclose
facts that materially impacted the valuation of a significant
marital asset — their business — during
negotiations for their separation agreement before the entry
of the decree? C.R.C.P. 16.2(e)(10) provides a
mechanism for that spouse to seek to reopen the division of
marital property if the other spouse made misstatements or
omissions concerning material assets. However, the rule does
not address whether such a motion may be countered with a
motion to dismiss, whether the moving party may make
allegations based on information and belief, or whether the
moving party is entitled to undertake limited discovery in
support of his or her motion.
[¶2] In this case, we follow the
division's opinion in In re Marriage of Runge,
2018 COA 23M, 415 P.3d 884, concluding that filing a motion
to dismiss under C.R.C.P. 12(b)(5) is not proper. We
also conclude, as matters of first impression, that a moving
party may make allegations on information and belief and that
such party may be permitted to undertake discovery to support
his or her motion.
[¶3] In this post-dissolution of marriage
proceeding between Steven R. Durie (husband) and Kelly J.
Durie (wife), now known as Kelly J. Simmerman, wife appeals
the district court's order dismissing her motion to
reopen the property division.
[¶4] About three years after the district
court entered a decree incorporating a separation agreement
dividing the parties' marital property, wife moved under
Rule 16.2(e)(10) to reallocate proceeds from husband's
post-decree sale of business assets. In response, husband
filed a motion to dismiss wife's motion, which the
district court granted. Wife appealed.
[¶5] Both parties initially focused their
arguments on whether the district court properly applied Rule
12(b)(5) and the " plausibility" standard set forth
in Warne v. Hall, 2016 CO 50, 373 P.3d 588. After
the parties submitted their briefs but before oral argument,
a division of this court decided Runge, holding that
Rule 12(b)(5) and the Warne plausibility standard do
not apply to a Rule 16.2(e)(10) motion.
[¶6] Therefore, we asked the parties to
address this holding of Runge during oral argument,
as well as whether wife could allege facts on information and
belief in her motion and whether she was entitled to conduct
discovery on her motion. Wife's counsel asserted at oral
argument (1) that he did not agree with the Runge
division's holding and (2) that C.R.C.P. 7(b)(1) provided
an appropriate standard for determining whether to allow a
party to proceed on a motion under Rule 16.2(e)(10) by
requiring that such a motion " state with particularity
the grounds therefor, and . . . set forth the relief or order
sought." For his part, husband's counsel agreed with
the Runge division's holding, but also argued
that Rule 16.2(e)(10) is essentially an anti-fraud provision,
and therefore a motion under that rule must comply with
C.R.C.P. 9(b), which requires that in all pleadings "
aver[ring] . . . fraud or mistake,
the circumstances constituting fraud or mistake shall be
stated with particularity." Wife maintained that her
motion set forth sufficient facts under any standard to
warrant discovery, while husband urged us to affirm the
district court's order under any of the asserted
[¶7] We now reverse the district court's
order and remand with directions for further proceedings.
[¶8] Husband filed for divorce in April
2014. At the parties' request, the district court
incorporated a separation agreement dividing the marital
estate in a decree of dissolution issued in September 2014.
Under the separation agreement, husband received the
parties' business interests with an equalization payment
due to wife for half of the value. In the separation
agreement, the parties agreed that the total business assets
were valued at $878,589. A joint appraisal expert had valued
the business assets at $855,000 investment value and $770,000
fair market value as of August 2014. Additionally, wife hired
an independent expert, who valued the business assets at just
[¶9] In 2017, wife moved under Rule
16.2(e)(10) and under a similarly worded provision of the
separation agreement to set aside or reopen the property
division and reallocate the proceeds from husband's
post-decree sale of a portion of the business interests.
[¶10] Wife alleged in her motion that
husband had failed to disclose facts that materially impacted
the value of the parties' business assets. Specifically,
she alleged that in October 2015 — just over a year
after the decree was entered — husband sold a portion
of the business interests that were allocated to him under
the separation agreement to a Tennessee company for
$6,900,000, over 850% more than the parties' joint expert
had valued the total business interests.
[¶11] She further alleged, on information
and belief, that husband had traveled to Tennessee in May
2014 and had " engaged in negotiations to sell a portion
of the business" interests prior to the parties entering
into the separation agreement. Wife claimed that,
[u]pon information and belief, Husband had been in
negotiations with [the Tennessee purchaser] involving a deal
or potential deal to sell [the business or a portion thereof]
prior to the time that the joint expert had performed his
valuation. Upon information and belief, Husband failed to
disclose and intentionally concealed material facts that
impacted the value of the parties' business and the
valuation performed by [the expert] and/or failed to update
the information to [the expert] or Wife once those
[¶12] Husband moved to dismiss wife's
motion, asserting that she had not alleged sufficient facts
to trigger Rule 16.2(e)(10). Husband admitted that he had
sold " some" of the business assets in October 2015
for $6,900,000 to a Tennessee purchaser. He further admitted
that he had travelled to Tennessee in May 2014, but denied
that the purpose of the trip was to engage in any
negotiations. Nevertheless, husband argued that there was no
basis to reopen the property division because ...