Nielsen v. Nielsen

810 	275 Nebraska reports
the record in the instant case supports the district court’s
factual determination that on February 5, 2005, bill’s sold
alcoholic liquor to t.b., a minor, in violation of the provisions
of the act and the Commission’s rules and regulations, as
charged. With respect to the penalty to be imposed, the evi-
dence showed that at some point in the past, bill’s had seen an
unspecified Canadian identification presented by t.b. and that
on this basis, had sold liquor to t.b. on 10 to 20 occasions. the
Canadian identification served as a poor foundation for estab-
lishing t.b.’s age, as the district court noted. see § 53-180.06
(listing proper documentary proof of age). bill’s did not check
t.b. for proof of age on February 5. after February and before
the october 2005 hearing in this case, bill’s failed a compli-
ance check and admitted to a violation for selling liquor to a
minor in May 2005. the district court determined that based
upon the record, the sanction of revocation imposed by the
Commission was appropriate.
based on the record before the district court and our stan-
dard of review, we conclude that the district court’s order
following its de novo review, which affirmed the order of the
Commission, is supported by competent evidence and is neither
arbitrary, capricious, nor unreasonable. We affirm.
CoNCLUsIoN
We conclude that the district court did not err when it
affirmed the order of the Commission that revoked JCb’s liquor
license. accordingly, we affirm.
affiRmed .
geRRaRd, J., not participating.
don duane nielsen , peRsonal R epResentative of the estate
of B aRBaRa J ean nielsen , appellant and cRoss - appellee ,
v . donald e. nielsen , appellee and cRoss - appellant .
749 N.W.2d 485
Filed May 30, 2008. 	No. s-07-312.
1. Motions to Vacate: Proof: Appeal and Error. an appellate court will reverse
a decision on a motion to vacate or modify a judgment under Neb. rev. stat.
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:55 AM CST

§ 25-2001(4)(b) (Cum. supp. 2006) only if the litigant shows that the district
court abused its discretion.
2. Courts: Judgments: Fraud: Proof. a party seeking to set aside a judgment after
term for fraud under Neb. rev. stat. § 25-2001(4)(b) (Cum. supp. 2006) must
prove that he or she exercised due diligence at the former trial and was not at fault
or negligent in the failure to secure a just decision.
appeal from the District Court for Cuming County: R oBeRt
B. ensz, Judge. affirmed.
richard J. thramer for appellant.
Mark D. Fitzgerald, of Fitzgerald, Vetter & temple, for
appellee.
heavican , c.J., WRight , connolly , stephan , mccoRmack ,
and milleR-leRman , JJ.
connolly , J.
sUMMarY oF Case
the personal representative of barbara Jean Nielsen’s estate
(the estate) petitioned to vacate the marital estate distribution
in a 1989 dissolution decree. the decree dissolved the mar-
riage of barbara and Donald e. Nielsen. the estate claimed
that Donald obtained the decree by fraud and that the parties’
property settlement agreement did not accurately reflect the
marital estate’s value. the district court dismissed the estate’s
petition. the court concluded the estate failed to prove that
barbara acted with due diligence in determining the value of
the marital estate during the divorce proceeding. We agree with
the district court and affirm.
baCkGroUND
Donald and barbara were married in 1951. they had three
sons. In the mid-1970’s, Donald incorporated Nielsen oil and
propane, Inc. (Nielsen oil). Donald and barbara were the
shareholders of Nielsen oil. Donald held an 80-percent inter-
est, and barbara held the remaining 20 percent. Donald ran the
business, and barbara was the company’s bookkeeper.
about 1980, barbara was diagnosed with breast cancer. but
she continued to work for Nielsen oil, as her health allowed,
until 1987 or 1988. In 1988, she met with attorney ronald
k. parsonage to discuss estate planning and the possibility
NIeLseN v. NIeLseN 	811
Cite as 275 Neb. 810

812 	275 Nebraska reports
of pursuing a divorce. barbara suggested to parsonage that
Donald was hiding assets from her. parsonage’s file is in the
record. the file contains a notarized affidavit of barbara stating
that she had transferred title to property to Donald and others
because he inflicted duress upon her and undue influence over
her. the affidavit also stated she had reason to believe Donald
had forged her name on “numerous” documents of title and had
transferred the property to the “detriment” of barbara.
B aRBaRa files foR dissolution
In september 1989, barbara filed for divorce. William Line
represented barbara, and Clarence Mock represented Donald.
In November, the parties signed a property settlement agree-
ment. the settlement agreement awarded most of the parties’
real and personal property to Donald and required Donald to
pay (1) $625,000 cash to barbara; (2) $15,000 in attorney fees
to barbara’s attorney, Line; and (3) barbara’s medical expenses
for the remainder of barbara’s life. the settlement agreement
included an acknowledgment that each party was aware of the
other’s financial position and that there had been a full disclo-
sure of the financial assets of both parties.
dissolution heaRing
barbara’s health was deteriorating, and she could not attend
the final hearing on November 20, 1989. at the hearing, Donald
testified that the settlement agreement fully, fairly, and equita-
bly divided the marital estate. the court asked for a property
statement, but Line stated he had not brought one with him. He
then stated:
[barbara] is in extremely poor health. I have gone
over it in considerable length with her. I can assure the
Court that I have fully advised her of her rights and fully
analyzed the property and I believe this to be in her best
interest because of her extremely frail health.
the parties’ attorneys then stipulated, “from their independent
investigations,” that the value of the marital estate was between
$1 million and $3 million. the court entered a decree approving
the settlement agreement. the same day, Donald paid barbara
the $625,000 and barbara executed a will devising all her prop-
erty to the couple’s three sons. on July 24, 1990, barbara died.

estate petitions to vacate
almost 15 years later, in March 2004, the estate petitioned
to vacate the dissolution decree. the estate alleged that Donald
obtained the decree by fraud. It alleged that he never fully
informed barbara of the value and investments composing the
marital estate. It further alleged that Donald, Mock, and Line
conspired to conceal the value and extent of the marital estate
from barbara and the court. according to the estate, Donald
obtained Line’s cooperation by paying him $25,000, including
the $15,000 in attorney fees in the settlement agreement. the
estate also alleged barbara relied on a financial statement that
did not list all the marital assets and that failed to reflect the fair
market value of the assets. Finally, the estate alleged that the
personal representative first learned of the conspiracy and the
extent of Donald’s financial holdings at a meeting with rodney
Zwygart, Donald’s accountant, in December 2001. Zwygart had
contacted the personal representative and requested the meeting.
the estate’s petition requested that the court vacate and set
aside the decree’s distribution of the marital estate and that it
determine a fair and equitable division of the marital estate.
Donald moved for summary judgment. In resisting summary
judgment, the estate relied on Zwygart’s affidavit. according
to the estate, Zwygart opined in his affidavit that at the time
of the divorce proceedings, the marital estate had a fair market
value between $60 million and $80 million. the court granted
summary judgment for Donald. the court acknowledged that
some evidence showed the marital assets were greater than the
$1- to $3-million range stipulated by the parties. the court con-
cluded, however, there was no evidence that the parties were
dissatisfied with the property settlement or that barbara was
misled into signing the agreement. the estate appealed.
estate appeals , and cause R emanded
In an unpublished decision, the Nebraska Court of appeals
reversed the district court’s entry of summary judgment.1
Viewing the evidence in the light most favorable to the estate,
1 Nielsen v. Nielsen, No. a-04-894, 2005 WL 1719731 (Neb. app. July 26,
2005) (not designated for permanent publication).
NIeLseN v. NIeLseN 	813
Cite as 275 Neb. 810

814 	275 Nebraska reports
the court concluded that Zwygart’s deposition testimony pre-
sented material issues of fact. the Court of appeals determined
that material issues of fact existed regarding the true value
of the marital estate and whether barbara was fully aware of
that value.
after a bench trial following remand, the district court
entered judgment for the estate in December 2006. the court
decided that the estate proved by clear and convincing evidence
the theories of fraudulent concealment and fraudulent misrepre-
sentation. the court determined that Donald underrepresented
the marital estate’s value and that a more accurate representa-
tion “would have been conservatively $4 million.” the court
rejected Donald’s affirmative defenses.
Donald moved for a new trial. In a March 2007 order, the
court sustained Donald’s motion and dismissed the estate’s
petition. the court stated that the reasoning in its December
2006 order was flawed in that it provided an incomplete analy-
sis. the court explained that its prior order focused on Donald’s
conduct and did not consider whether barbara acted with due
diligence as required by Eihusen v. Eihusen.2 Upon further
consideration, the court determined barbara did not exercise
due diligence to determine the entire marital estate. according
to the court, barbara failed to do discovery that should have
led to the disclosure of assets and their valuations. the court
dismissed the estate’s petition. the estate appeals.
assIGNMeNts oF error
the estate assigns, restated, that the district court erred in (1)
concluding barbara did not exercise due diligence to ascertain
the entire value of the marital estate, (2) determining the mari-
tal estate had a value of $4 million, and (3) deciding barbara
was entitled to only 40 percent of the marital estate.
Donald’s consolidated assignment of error on cross-appeal is
that the district court erred in rejecting his affirmative defenses
in its December 2006 order.
2 Eihusen v. Eihusen, 272 Neb. 462, 723 N.W.2d 60 (2006).

staNDarD oF reVIeW
[1] an appellate court will reverse a decision on a motion
to 	vacate 	or 	modify 	a 	judgment 	under 	Neb. 	rev. 	stat.
§ 25-2001(4)(b) (Cum. supp. 2006) only if the litigant shows
that the district court abused its discretion.3
aNaLYsIs
the estate’s petition to vacate sought to set aside the marital
estate distribution in the 1989 dissolution decree for fraud. the
estate contends that the district court erred in concluding that
barbara failed to exercise the requisite due diligence during the
divorce proceeding.
[2] Under § 25-2001(4)(b), a district court may vacate or
modify its own judgments or orders after term for fraud prac-
ticed by the successful party in obtaining the judgment or order.
but we have held that a party seeking to set aside a judgment
after term for fraud under this section must prove that he or
she exercised due diligence at the former trial and was not at
fault or negligent in the failure to secure a just decision.4 Here,
the estate must prove that the alleged failure to secure a just
decision was attributable only to Donald’s misrepresentation or
concealment, and not to any fault or negligence of barbara.5
applicaBle case laW
In Caddy v. Caddy,6 we affirmed the district court’s denial
of a motion to vacate or modify a divorce decree. there, the
appellant had moved to vacate or modify the decree, alleging
that during the divorce proceedings, the appellee had submitted
a false financial statement that left out items of property. We
concluded the appellant had failed to exercise due diligence.
We observed that she later testified that at the divorce proceed-
ing, she was aware of the existence of the property allegedly
3 see Eihusen, supra note 2.
4 see, Eihusen, supra note 2; McCarson v. McCarson, 263 Neb. 534, 641
N.W.2d 62 (2002); Caddy v. Caddy, 218 Neb. 582, 358 N.W.2d 184
(1984).
5 see, Eihusen, supra note 2; McCarson, supra note 4.
6 Caddy, supra note 4.
NIeLseN v. NIeLseN 	815
Cite as 275 Neb. 810

816 	275 Nebraska reports
concealed, although she did not then know the property’s exact
value. We also noted that she had available to her the same
avenues to discover the facts at trial as she employed for her
motion to vacate. We decided the trial court properly denied
her motion, because she “chose to proceed without adequate
representation and with at least a general knowledge of the
underlying facts, and made no effort to bring before the court
the correct information.”7
We similarly affirmed the denial of a petition to vacate
a divorce decree for fraud in Eihusen. there, the appellant
claimed the appellee procured the parties’ settlement agreement
by concealing the true value of a debenture listed in the property
settlement. We noted that during the settlement negotiations and
throughout the divorce proceeding, the appellant was aware of the
debenture’s existence. as in Caddy, we observed that during the
negotiations and divorce proceeding, the appellant had the same
means of discovery that she employed to support her motion to
vacate. but she had elected not to use them to her advantage.
We concluded that the appellant failed to exercise due diligence
because she “proceeded through the settlement negotiations and
divorce proceeding without making any effort to ascertain what
she now asserts to be the true value of the debenture, despite
a general knowledge of the debenture and the [share price she
now uses as the basis for valuing the debenture].”8
R esolution
We disagree with the estate’s attempt to distinguish our
decisions in Caddy and Eihusen. the estate contends that the
appellants in those cases were aware of the allegedly concealed
property at the time of the divorce proceedings but had failed
to determine the property’s value at that time. the estate argues
that here, barbara was unaware of the existence of many assets.
We find this distinction of little import. although barbara may
not have been aware of all the assets in the marital estate, the
evidence shows that a year before she filed for divorce, she
had suggested to parsonage, her attorney at the time, that she
7 Id. at 584, 358 N.W.2d at 186.
8 Eihusen, supra note 2, 272 Neb. at 469, 723 N.W.2d at 65.

suspected Donald was hiding assets from her. Yet, the evidence
fails to show that barbara acted on those suspicions and exer-
cised due diligence to determine the value of the marital estate
during the settlement negotiations or divorce proceedings.
We recognize that barbara’s health was fragile, but she was
represented by legal counsel during all the relevant proceed-
ings. and although the estate alleged that barbara’s attorney,
Line, was involved in a conspiracy to conceal the value of the
marital estate, the district court determined the evidence did
not support such a finding. the estate does not assign as error
the district court’s determination on that issue. so, in addition
to barbara’s efforts, we will consider Line’s efforts to conduct
discovery on barbara’s behalf. as the district court observed,
absent from the record is evidence that barbara or Line con-
ducted extensive discovery that should have led them to the
disclosure of marital assets and the assets’ valuations.
after 	Zwygart 	met 	with 	the 	personal 	representative 	in
December 2001, one of the sons called Line, but Line hung up
on him. after Line died, the estate made discovery attempts to
obtain barbara’s file, but was informed that Line’s files were
destroyed after his death. therefore, the evidence about Line’s
discovery efforts came from others’ testimony.
the record shows that Line submitted interrogatories to
Donald. but Mock objected because there were more than 50
interrogatories, which violated the discovery rules. according
to Mock, the court sustained his objection. this is the only
evidence in the record of formal discovery conducted by Line.
Mock also testified that Line had told Mock he had investigated
Donald’s properties and that he had copies of the parties’ finan-
cial statements. but the record does not establish the extent of
Line’s investigations or identify any other discovery Line may
have conducted. Zwygart, as Donald’s accountant, was a seem-
ingly likely source for information regarding the marital estate.
Zwygart testified, however, that during the divorce proceedings,
neither barbara nor Line asked him to supply any financial
documents. Nor did barbara ever ask him about the value of
the marital estate.
the estate contends that the court “must measure requisite
due diligence in light of the active fraudulent concealment and
NIeLseN v. NIeLseN 	817
Cite as 275 Neb. 810

818 	275 Nebraska reports
fraudulent misrepresentation”9 that Donald was allegedly com-
mitting before and during the dissolution proceedings. but the
record does not show that Donald’s alleged misrepresentations
or concealments prevented barbara or Line from conducting an
independent investigation into the marital estate and its value.
For instance, no evidence shows that responses to discovery
requests were fraudulent or untrue. the estate’s argument has
little merit.
the estate also contends that barbara had a right to rely on
the district court’s order restraining the parties from transfer-
ring or concealing real or personal property assets. according
to the estate, barbara “had a right to believe that Donald . . .
had made full disclosure and that he would testify truthfully in
[c]ourt.”10 apparently, the estate believes that the court’s order
somehow excused barbara from exercising due diligence to
independently determine the marital estate’s value. the estate,
however, fails to provide any authority supporting its con-
tention that the order excused barbara from conducting an
independent investigation.
a year before the divorce proceeding, barbara suspected
that Donald was hiding assets. the record, however, does not
establish that she or Line made sufficient efforts to determine
the value of the marital estate during the settlement negotiations
or divorce proceedings. Without further evidence of barbara’s
or Line’s efforts to determine the marital estate’s value, we
cannot conclude that the estate proved barbara exercised the
requisite due diligence. the record shows that barbara’s failure
to secure a more favorable result was attributable to her failure
to use discovery methods to uncover the assets and their value.
and this failure to conduct discovery may have been intentional
given her circumstances.
admittedly, the record reflects that the marital estate might
have been greater than the $1- to $3-million range stipulated
by Line at the final hearing. but we cannot conclude that
Line was negligent in representing barbara. because barbara
and Line are both dead, we cannot know why barbara agreed
9 brief for appellant at 10.
10 Id. at 12.

to the settlement. the evidence suggests that settling for the
lesser amount may have been barbara’s strategy because of her
impending death. Mock testified that he had instructions from
Donald that the divorce should be “done by the book” to draw
out the divorce proceedings. the record suggests that the only
property barbara held solely in her name was a 20-percent
minority interest in Nielsen oil and that she sought the divorce
to secure other marital assets she could pass to the couple’s
sons upon her death. this would not have occurred if barbara
had died before the divorce was complete. a reasonable infer-
ence is that barbara agreed to the property settlement to com-
plete the divorce before her impending death. at the final hear-
ing, Mock explained to the court that “part of the reason for the
settlement has to do with the result for estate planning purposes
on her part.” Line agreed that estate planning was “a strongly
motivating factor” in agreeing to the settlement. perhaps this
strategy to quickly settle explains why neither barbara nor Line
conducted extensive discovery. We conclude that the district
court did not abuse its discretion in denying the estate’s peti-
tion to vacate.
CoNCLUsIoN
the estate did not prove that barbara exercised due dili-
gence during the divorce proceeding. Nor did the estate prove
that the alleged failure to secure a just decision was not attrib-
utable to the fault or negligence of barbara. therefore, the
district court did not abuse its discretion in denying the estate’s
petition to vacate. because we affirm the dismissal of the peti-
tion, we need not reach the estate’s other assignments of error
or Donald’s assignments of error on cross-appeal.
affiRmed .
geRRaRd, J., not participating.
NIeLseN v. NIeLseN 	819
Cite as 275 Neb. 810