DIANA V. GUARDADO, Respondent,
OTTO M. GUARDADO, Appellant.
Guardado appeals the trial court's modification, pursuant
to CR 60(b)(11), of a 2008 dissolution decree entered in an
action dissolving his marriage to Diana Guardado. The decree
had awarded Otto the couple's house but did not remove
Diana's obligation on the house's mortgage. Because
the obligation adversely affected Diana's credit, the
court modified the dissolution decree by ordering Otto to
sell the house. However, Diana filed her CR 60(b)(11) motion
not in the dissolution action, but in a separate action in
which she alleged that Otto breached an oral contract to
remove her name from the mortgage.
that the trial court erred in granting Diana's CR 60
(b)(11) motion because it did not have authority under CR
60(e)(1) to modify the dissolution decree in the separate
breach of contract action. In the unpublished portion of this
decision, we discuss Otto's additional arguments and we
vacate the trial court's award of attorney fees to Diana.
Accordingly, we reverse and vacate the trial court's
modification of the dissolution decree and award of attorney
fees to Diana, and we remand for further proceedings.
and Property Distribution
2008, Otto and Diana filed an action in Skamania County to
dissolve their marriage. The trial court entered a
dissolution decree on October 17, 2008. The couple's
primary asset was the family home in Vancouver. The decree
awarded the property to Otto as his separate property and
allocated to him liability on a mortgage secured by the
property. The decree did not include a provision for removing
Diana from the mortgage. Diana apparently also remained on
Payments and Modification
had trouble making mortgage payments. Diana claimed that he
missed 42 payments through 2012. During this time, the
mortgage's principal balance was greater than the
2012, Otto sought to modify the mortgage. As part of this
process, Otto wrote a letter requesting that Diana be removed
from the loan. The bank required that Otto obtain a quit
claim deed from Diana for her interest in the property. Diana
executed the quit claim deed in November 2012 under the
belief that her name would be removed from the mortgage. The
bank modified the mortgage in April 2013, restructuring the
loan and extinguishing Otto's delinquent payments.
However, the modification did not remove Diana from the
apparently was never forced to make any mortgage payments
herself. But Otto's failure to make mortgage payments
adversely impacted Diana's credit.
Breach of Contract Lawsuit
October 2014, Diana filed a lawsuit against Otto in Skamania
County for breach of contract. She alleged that she and Otto
had a verbal contract that Otto breached by not removing her
from the mortgage. She requested damages, attorney fees, and
other just and equitable relief.
April 14, 2016, the parties proceeded to trial. Both parties
testified on the first day of trial, and Diana rested.
trial court then requested that the parties submit additional
briefing on two issues. First, the court stated, "I want
to know what authority the court has to order specific
performance, in equity, when I would be effectively resulting
in modifying [sic] a divorce decree." Report of
Proceedings (RP) at 85. Second, the court asked, "[W]hat
authority, absent any agreement between the parties,
expressed or implied, do I have to modify a decree, if equity
demands it?" RP at 85. The court clarified, "I want
to know, if they didn't have that oral contract, what
authority do I have in equity to make it happen anyway?"
RP at 86.
parties submitted briefing on April 29, the second day of
trial. Diana also filed a motion for relief from the
dissolution decree pursuant to CR 60(b)(11), requesting that
the court order Otto to refinance or sell his house. Diana
filed the motion under the cause number for the breach of
contract action, not under the cause number for the
Court Ruling and Judgment
end of the second day of trial, the court ruled that
"[a] dissolution decree . . . can be vacated or modified
for extraordinary circumstances to overcome a manifest
injustice, under CR 60(b)(11)." RP at 151. The court
noted that the dissolution decree did not address the
situation if Otto fell behind in mortgage payments or could
not remove Diana's name from the mortgage, and that Diana
had been harmed as a result. The court concluded that
"[t]he easy, simple, elegant solution to this problem .
. . is simply to sell the house." RP at 153. Therefore,
the court found extraordinary circumstances under CR
60(b)(11) to modify the dissolution decree.
trial court ordered Otto to sell the house "to give
meaning to the [hold] harmless provision [in the dissolution
decree], and to bring this matter to a close, in
equity." RP at 155-56. The court entered findings of
fact and conclusions of law reflecting this ruling. The court
also awarded reasonable attorney fees to Diana because it
found that Otto had acted in bad faith "by inducing the
plaintiff to sign a quitclaim deed, and in withholding the
easy solution to the harm he caused the plaintiff."
Clerk's Papers (CP) at 348. ...