No. 90-360
IN THE SUPREME COURT OF THE STATE OF MONTANA
1990
IN RE THE MARRIAGE OF BARBARA BURNER,
Petitioner and Respondent,
and
MAX D. BURNER,
Respondent and Appellant.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis and Clark,
The Honorable Thomas Honzel, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Thomas F. Dowling; Dowling Law Firm; Helena, Montana
For Respondent:
Ann L. Smoyer, Helena, Montana
JAN 4 1991 - Submitted on Briefs: November 29, 1990
.f'i G' Decided: January 4, 1991
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Justice R. C. McDonough delivered the Opinion of the Court.
Appellant Max. D. Burner, respondent below, appeals the order
of the Montana First Judicial District Court, Lewis and Clark
County, denying his motion to set aside a property settlement
stipulation and denying his motion for new trial. We affirm.
The husband frames a sole issue on appeal:
Did the District Court err in not granting a motion for a new
trial and in not setting aside a Stipulated Disposition of the
Burner's marital estate?
The Burner's marriage was dissolved on May 16, 1990. Prior
to the entry of the decree, the parties had difficulty resolving
how to divide the marital estate. The court held a hearing for the
purpose of resolving the dispute. During a recess the parties
negotiated a settlement. Back in court they advised the court of
the resolution and entered into a stipulation disposing of the
property. The stipulation provided that the husband would receive
the couple's business and be solely responsible for all tax
liabilities on the property.
Prior to the open-court property stipulation, the wife
allegedly discovered certain facts about the earnings and value of
the business. These facts greatly enhanced the value of the
business, and consequently the wife's share of the marital estate,
as well as the business's potential tax liability. She informed
her attorney of this discovery as well as the parties' accountant,
and these three met with the husband's counsel to discuss the
situation.
2
In addition, the wife turned over these business records to
the Internal Revenue Service (IRS), generating an investigation.
The husband alleges that she did not inform him that she turned
this information over to the IRS, and that because of her actions
he now has discovered that he is facing an enormous tax liability
under the property stipulation, and that this amounts to newly
discovered evidence warranting a setting aside of the property
disposition and a new trial.
We agree with the District Courtvsconclusion that the husband
has failed to meet the criteria for setting aside a decree and
granting a new trial. See Rule 59(a), M.R. Civ.P., § 25-11-102,
MCA, Rule 60(b)(2), M.R.Civ.P. The criteria granting a new trial
on the grounds of "newly discoveredvvevidence are:
1. The substantial rights of the party moving for new
trial must be materially affected.
2. The Ivnewly discoveredvv evidence sought to be
introduced must be material to the issue involved in the
trial.
3. The Ivnewlydiscoveredvv
evidence must be such as could
not have been discovered and produced at trial with the
exercise of reasonable (or vvduelv, per Rule 60,
M.R.Civ.P.) diligence, or could not have been discovered
by reasonable diligence in time to move for a new trial
under Rule 59, M.R.Civ.P.
Kartes v. Kartes (1977), 175 Mont. 210, 214, 573 P.2d 191, 193.
In Kartes, we also noted that the burden was on the moving party
to demonstrate that:
1. The alleged I1newly discoveredvvevidence came to his
knowledge after the trial;
2. It was not a want of diligence which precluded its
earlier discovery;
3. The materiality of the evidence is so great it would
probably produce a different result on retrial; and,
4. The alleged "new evidencew is not merely cumulative,
not tending only to impeach or discredit witnesses in the
case.
Kartes, 573 P.2d at 194, citing Kerrigan v. Kerrigan (1943), 115
Mont. 136, 144, 139 P.2d 533, 535. Furthermore, "[wlhere the
moving party in a motion for new trial on the ground of 'newly
discovered' evidence has had the books and documents in his
possession, from which he later ldiscoversvthe 'new evidence', the
motion will be denied, even though the evidence itself may be
material." Kartes, 573 P.2d at 194, citing Rand v. Kipp (1902),
27 Mont. 138, 142, 69 P. 714, 715.
Here, the record indicates that the husband not only had the
necessary business records in his possession but that he also had
full knowledge of the couple's potential tax liability pursuant to
his attorney meeting with the wife, her attorney, and the
accountant four days prior to entering the stipulation. He knew
at the time of the hearing that there was unreported income and
that if they were audited, there would be substantial tax
consequences. The only "new1'information the husband lldiscoveredll
after the entry of the decree was that the wife had informed the
IRS of the couple's potential tax liability, which arose from the
couple's alleged failure to report income earned in the operation
of the business and for which both parties could be liable to the
IRS regardless of assignment of such liability in the divorce
decree.
The husband essentially contends that such failure by the wife
to disclose her actions prevented the District Court from equitably
apportioning the property in the marital estate, and therefore the
decree should be set aside and the property equitably apportioned
pursuant to further proceedings. See B 40-4-202, MCA. However,
it is a long established maxim of jurisprudence that " [plarties
must not expect relief in equity, unless they come into court with
clean hands." Mitchell v. Leland Co. (9th Cir. 1917), 246 F.
103, 107; see also Fey v. A.A. Oil Co. (1955), 129 Mont. 300, 318,
285 P.2d 578, 587; Tomsheck v. Doran (1953), 126 Mont. 598, 607,
256 P.2d 538, 543; Perry v. Ludig (1950), 123 Mont. 579, 591, 217
P.2d 207, 218. Here, the husband had full knowledge of the
unreported tax liability. The order denying the motion to set
aside the decree is
AFFIRMED.
We Concur:
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Chief ~ustice