MURRAY AND MURRAY

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Docket Number

D8911-69045; CA A72726

Attorney(S)

Jeanette Bello, Portland, argued the cause for appellant. With her on the brief was Dobbins McCurdy, Portland. Doreen Stamm Margolin and Margolin Margolin, Portland, filed the brief for respondent.

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Smart Summary

Factual and Procedural Background

The case concerns an appeal by the husband from a dissolution judgment entered after the trial court granted the wife's motion to set aside an original stipulated dissolution judgment. The original stipulated judgment, entered on May 22, 1991, dissolved the parties' 21-year marriage, awarded the husband the family home, and custody of the younger son. At the time, the older son was attending college out of state but later returned to live with the husband. Following altercations between the two sons, the younger son moved to live with the wife. The wife then moved under ORCP 71B to set aside the dissolution judgment, arguing she agreed to relinquish her interest in the home based on the assumption that the husband would be the sole support for the younger child. The trial court granted this motion, entered a new dissolution judgment ordering the home sold, and divided liquidated assets equally. The husband appeals the order granting the motion to set aside the stipulated judgment.

Legal Issues Presented

Whether the trial court abused its discretion in setting aside the original stipulated dissolution judgment under ORCP 71B.
Whether a stipulated dissolution judgment, as a contract approved by the court, can be set aside on grounds of mutual mistake of fact or mistake occurring after the contract was made.
Whether the wife's motion to set aside the judgment was supported by clear and convincing evidence of fraud, misconduct, mutual mistake, or lack of agreement sufficient to rescind the stipulated judgment.

Arguments of the Parties

Appellant's Arguments

The husband assigns error to the trial court's order granting the wife's motion to set aside the stipulated dissolution judgment, arguing that the court abused its discretion.

Respondent's Arguments

The wife contends that the trial court's ruling was within its discretion under ORCP 71B either on the ground of mistake (ORCP 71B(1)(a)) or because it was no longer equitable for the judgment to have prospective application (ORCP 71B(1)(e)).
Specifically, the wife argues that the stipulated judgment should be rescinded due to a mutual mistake of fact, namely the mistaken assumption that the younger child would reside with the husband.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Kachaturian and Kachaturian, 58 Or. App. 497, 648 P.2d 1313 (1982)	Standard of review for setting aside a judgment: abuse of discretion.	The court reviewed the trial court's order granting the motion to set aside the judgment under the abuse of discretion standard.
Rousseau and Rousseau, 76 Or. App. 528, 709 P.2d 764 (1985)	Property division in dissolution judgments may not be modified under ORS 107.135(1)(a).	Distinguished from setting aside a judgment under ORCP 71, which is permissible.
Renninger and Renninger, 82 Or. App. 706, 730 P.2d 37 (1986)	A dissolution judgment, including property division, may be set aside under ORCP 71.	Supported the proposition that the trial court had authority to set aside the stipulated judgment.
Eltzroth and Eltzroth, 67 Or. App. 520, 679 P.2d 1369 (1984)	Same as above: setting aside dissolution judgments under ORCP 71.	Reinforced the legal basis for setting aside judgments under ORCP 71.
Erwin and Erwin, 100 Or. App. 64, 784 P.2d 1109 (1990)	A stipulated judgment is a contract approved by the court and can be set aside only on grounds adequate to rescind a contract, requiring clear and convincing proof of fraud, misconduct, mutual mistake, or lack of agreement.	Set the standard that the wife needed to meet to rescind the stipulated judgment.
Shop. Centers v. Stand. Growth Prop., 265 Or. 405, 498 P.2d 781, 509 P.2d 1189 (1973)	Mutual mistake of fact as ground for rescission applies only to mistakes existing at the time of contract formation and must be fundamental enough to frustrate the contract's purpose.	Used to reject the wife's argument that changed circumstances after the contract justified rescission.

Court's Reasoning and Analysis

The court began by acknowledging that the stipulated judgment is a contract approved by the court and thus can only be set aside on grounds sufficient to rescind a contract. The moving party must prove fraud, misconduct, mutual mistake, or lack of agreement by clear and convincing evidence. The wife argued mutual mistake of fact based on the assumption that the younger child would live with the husband. However, the court clarified that mutual mistake applies only to facts existing at the time the contract was made and must be fundamental to the contract's purpose. The wife did not argue that the parties were mistaken about facts existing at the time of the contract but rather that circumstances changed afterward. The court held that changed circumstances or unanticipated facts arising after contract formation do not justify rescission on the basis of mutual mistake. Therefore, the trial court abused its discretion in setting aside the stipulated judgment, and the original stipulated judgment was reinstated.

Holding and Implications

REVERSED; original stipulated judgment reinstated.

The court reversed the trial court's order setting aside the stipulated dissolution judgment and reinstated the original stipulated judgment. No costs were awarded to either party. The decision directly affects the parties by restoring the original terms of dissolution, including property division and custody arrangements. The opinion does not establish new precedent beyond clarifying the application of mutual mistake in the context of setting aside stipulated judgments.

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In the Matter of the Marriage of Donna Jean MURRAY, Respondent, and Clifford Lavern MURRAY, Appellant.

LEESON, J.

Reversed; original stipulated judgment reinstated. No costs to either party.

LEESON, J.

Husband appeals a dissolution judgment that was entered after the trial court granted wife's motion to set aside the original stipulated dissolution judgment. We reverse, and reinstate the original stipulated judgment.

The stipulated judgment was entered May 22, 1991. It dissolved the 21-year marriage and awarded husband the parties' home and custody of the younger of their two sons. At that time, the older son was attending college in another state. Shortly thereafter, the older child returned to Oregon to live with husband. The two children got into fights that injured the younger child, who then went to live with wife. On June 24, 1991, wife moved under ORCP 71B to set aside the dissolution judgment, because she had agreed to give up her interest in the parties' home in the belief that husband would be the sole support for the younger child. The trial court granted the motion. Following trial, the court entered a new dissolution judgment ordering the home sold and the liquidated assets divided equally between husband and wife.

Husband assigns error to the order granting wife's motion to set aside the stipulated dissolution judgment. We review that ruling for abuse of discretion. Kachaturian and Kachaturian, 58 Or. App. 497, 648 P.2d 1313 (1982).

Although a property division may not be modified under ORS 107.135(1)(a), Rousseau and Rousseau, 76 Or. App. 528, 709 P.2d 764 (1985), a dissolution judgment, including the property division, may be set aside under ORCP 71. Renninger and Renninger, 82 Or. App. 706, 711, 730 P.2d 37 (1986); Eltzroth and Eltzroth, 67 Or. App. 520, 679 P.2d 1369 (1984). Wife argues that the ruling granting her motion was within the trial court's discretion either on the ground of mistake, ORCP 71B(1)(a), or that it was no longer equitable that the judgment have prospective application. ORCP 71B(1)(e).

In general, ORCP 71B(1)(a) and (e) provide grounds to set aside a judgment. However,

"[a] stipulated judgment * * * is a contract that has been approved by a court. It can only be set aside on grounds adequate to rescind a contract. It follows that wife[, as the moving party,] has to show by clear and convincing proof that husband committed fraud or misconduct, that there was a mutual mistake or that there was no agreement." Erwin and Erwin, 100 Or. App. 64, 67, 784 P.2d 1109 (1990). (Citations omitted.)

Wife's sole argument for rescission here is that the contract was based on mutual mistake of fact, because the parties incorrectly assumed that the younger child would be living with husband.

Mutual mistake is a ground for rescission where the parties are mistaken as to the facts existing at the time of the contract, if the mistake is so fundamental that it frustrates the purpose of the contract. Shop. Centers v. Stand. Growth Prop., 265 Or. 405, 411, 498 P.2d 781, 509 P.2d 1189 (1973). Wife does not argue that the parties were mistaken as to the facts existing at the time they entered into the contract. She argues that circumstances changed, and an unanticipated fact arose after the parties entered into the contract. That does not establish grounds for rescission based on mutual mistake of fact.