The Colorado Court of Appeals issued its opinion in In re Marriage of Hunt on Thursday, May 7, 2015.
Legal Separation—Business Valuation—CRCP 16.2(e)—Mandatory Disclosures—Reallocation.
In July 2012, wife petitioned for legal separation of the parties’ marriage. One month later, husband filed a certificate of mandatory disclosures under CRCP 16.2. In September 2012, based on an agreement reached in mediation, the parties entered into a memorandum of understanding (MOU) dividing the marital value of a business, Big R Construction Company (Big R), owned and operated by husband. In March 2013, wife filed a motion for relief from the MOU provisions relating to Big R, which was denied.
On appeal, wife contended that husband violated CRCP 16.2(e) by not disclosing mandatory financial information regarding Big R, and therefore, the district court erred by not granting her motion to reopen the property division under CRCP 16.2(e)(10). Husband had an affirmative duty to disclose financial information regarding Big R, and he violated CRCP 16.2(e) by failing to disclose all personal and business financial statements prepared in the last three years; loan applications and agreements from 2011 and 2012; a 2010 appraisal of Big R’s real property; and a 2012 appraisal of its equipment. Without husband having violated the disclosure requirements of CRCP 16.2, wife would have been bound by her decision to enter into the MOU, acknowledging the uncertain value of Big R. Because husband violated CRCP 16.2(e), however, the plain language of CRCP 16.2(e)(10) applies, which allows a five-year period within which to reallocate “material assets or liabilities, the omission or non-disclosure of which materially affects the division of assets and liabilities. Accordingly, the district court should have applied CRCP 16.2(e)(10) and granted wife’s motion to reopen the property division, despite the MOU language. The district court’s order was reversed and the case was remanded.