In the Matter of the Marriage of Patricia POLLOCK, Petitioner on Review, and William Lawrence POLLOCK, Respondent on Review
Argued and Submitted September 16, 2014
On review from the Court of Appeals CC D008-0256; CA
Pollock & Pollock, 259 Or.App. 230, 313 P.3d 367 (2013)
David N. Hobson, Jr., Hobson and Associates, LLC, Aloha, argued the cause and filed the briefs for petitioner on review.
Helen C. Tompkins, Law Office of Helen C. Tompkins, PC, Lake Oswego, argued the cause and filed the brief for respondent on review.
[357 Or. 576] BREWER, J.
The issue in this case is whether discovery of the parties' assets must be provided in a marital dissolution action after the parties have entered into a settlement agreement but before the trial court has ruled on a contested motion to enforce the agreement. As explained below, we conclude that the trial court in this case did not satisfy its duty under ORS 107.105(1)(f)(F) to ensure that the parties had fully disclosed their assets before it decided husband's motion to enforce a mediated agreement and entered a judgment of dissolution based on that decision. Accordingly, we reverse the portion of the decision of the Court of Appeals that upheld the trial court's discovery ruling, vacate the remainder of the Court of Appeals' decision, and reverse the judgment of dissolution and remand to the circuit court for further proceedings.
I. FACTS AND OTHER BACKGROUND
We take the relevant facts from the Court of Appeals' decision and the record. The parties were married in 2001 after signing a premarital agreement providing that, in the event of a marital dissolution, each party would receive his or her separate property as listed in an attached schedule. In May 2008, wife filed a petition for dissolution of the marriage. Wife contested the validity of the premarital agreement, but the trial court concluded that it was enforceable and entered a limited judgment to that effect. Wife did not appeal from that judgment.
Wife first filed a request for production of documents several months after she initiated the dissolution action. After the trial court upheld the premarital agreement, wife's counsel continued to request discovery related to husband's separate property that was excluded from division under the premarital agreement. In a letter to husband's attorney, wife's counsel stated, " If we can reach some understanding with regards to [our discovery requests and another matter], then we are more than willing to mediate." Husband's counsel eventually sought a protective order to limit disclosure related to husband's separate assets. The trial court did not directly rule on the motion for a protective [357 Or. 577] order, or on wife's request for production, but instead set " parameters" on the discovery. The court indicated that, in light of the premarital agreement, it would permit discovery of certain of husband's separate property, but explicitly deferred ruling on the discovery issues to afford the parties an opportunity to settle the case. Husband's counsel subsequently produced a substantial amount of the requested discovery materials, including some materials relating to assets excluded from division under the premarital agreement, but withheld certain other materials on the ground that they were not relevant in light of the terms of the pre-marital agreement.
Eventually, the parties agreed to mediate their dispute concerning the division of their marital assets and other financial issues not covered by the premarital agreement. Both parties were represented by counsel in the mediation process, which was conducted by a private mediator. At the conclusion of the mediation, they signed a handwritten settlement agreement (the mediated agreement) that purported to " resolve[ ] all claims between the parties." Among other provisions, the mediated agreement divided their marital assets between them and provided for a spousal support award to wife. The mediated agreement also provided that husband would receive " all accounts in his name." The parties did not place their settlement on the record in open court. Nor did the mediated agreement indicate whether the parties had fully disclosed their assets to each other or, if not, why further disclosure was unnecessary.
Based on the mediated agreement, husband proposed a " Stipulated General Judgment of Dissolution of Marriage," which he forwarded to wife. After some disagreement between the parties over the terms, husband eventually submitted a proposed judgment to the trial court. Wife objected to the proposed
judgment, arguing that the mediated agreement should not be enforced. Wife asserted that she had signed the agreement under duress that was the product of various actions of her previous attorney (who had been replaced) and the side effects of recent surgery. Wife also contended that the property division provided in the mediated agreement was not just and proper.
[357 Or. 578] Thereafter, husband filed a motion to enforce the mediated agreement. Before the trial court held a hearing on that motion, wife filed a new request for production of documents, and, after husband declined to provide certain documents pertaining to his separate property, wife filed a motion to compel production. The trial court deferred ruling on wife's motion to compel production. The court stated that it would not order wife's requested discovery in the event that it determined that the mediated agreement was enforceable; if it were to conclude that the agreement was not enforceable, the court stated, it would revisit wife's motion to compel production.
In August 2010, after a two-day hearing on husband's motion to enforce the mediated agreement, the trial court issued a letter opinion that included a detailed valuation of the parties' marital assets and numerous specific findings of fact and conclusions of law. The court determined, among other things, that neither party had been coerced or improperly induced to enter the agreement; that " [wife] and [husband] entered into the mediated settlement agreement freely and voluntarily" ; and that the agreement did not " violate the law or contravene public policy."
The trial court nevertheless made an " adjustment" to the mediated agreement by ordering husband to pay wife an additional $300,000. The adjustment involved a loan of approximately $300,000 that husband had made to a Ms. Baldocci. In its letter opinion, the court made two determinations explaining the adjustment. The court first stated:
" The Court specifically finds that the mediated settlement agreement without the distribution of the marital asset of the loan to * * * Baldocci, with the values of the property adjusted as discussed above, is within the range of possible [357 Or. 579] property divisions that are just and proper in all of the circumstances of this case."
Immediately following that statement, the court concluded:
" The Court further finds that with the adjustment of the mediated settlement agreement with the award of the loan to * * * Baldocci to [wife] continues the settlement agreement to be within the range of possible property divisions that are just and proper."
In the wake of the trial court's ruling, confusion arose between the parties as to the trial court's reasoning with respect to the Baldocci loan. In an effort to resolve that confusion, the trial court explained at a later hearing that it had considered it inequitable for husband to draw down on a line of credit against the parties' residence--that was distributed to wife in the mediated agreement--and then reduce the amount of spousal support that he owed to wife under the mediated agreement by amounts that he had paid on the line of credit. In an effort to rectify that perceived inequity, the court explained that it had turned to the Baldocci loan, which apparently had nothing to do with the line of credit beyond the fact that its outstanding balance of $300,000 approximated the amount that husband had withdrawn on the line of credit. Because, as the trial court further explained, it believed that the Baldocci loan was a marital asset that had not been allocated by the mediated agreement, the court had awarded that loan to wife.
Husband appealed the ensuing dissolution judgment, contending, among other arguments, that the terms of the mediated agreement should control the division of the parties' marital property and that the trial court had erred in adjusting the property division. Wife cross-appealed, [357 Or. 580] arguing, as pertinent here, that the trial court had erred in failing to rule on and grant her discovery ...