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Richard K. Kelly v. Karol L. Kelly

August 22, 2011

RICHARD K. KELLY,
PLAINTIFF AND APPELLEE
v.
KAROL L. KELLY,
DEFENDANT AND APPELLANT



Appeal from the District Court of Burleigh County, South Central Judicial District, the Honorable Sonna M. Anderson, Judge.

The opinion of the court was delivered by: Sandstrom, Justice.

N.D. Supreme CourtKelly v. Kelly, 2011 ND 167

This opinion is subject to petition for rehearing. [Go to Documents]

[Download as WordPerfect]

AFFIRMED AND REMANDED.

Opinion of the Court by Sandstrom, Justice.

Kelly v. KellyNo. 20100388

[¶1] Karol Kelly appeals from a judgment in a divorce action brought by Richard Kelly in which the district court granted her custody of the parties' minor child, restrained her from interfering with Richard Kelly's insurance business for five years, and awarded Richard Kelly a $40,000 cash payment for Karol Kelly's conduct. We conclude the district court had subject matter jurisdiction to decide child custody, the court did not abuse its discretion in awarding Richard Kelly the $40,000 cash payment, and the court did not err in restraining Karol Kelly from interfering with Richard Kelly's insurance business. However, we conclude the court erred in not limiting the geographic scope of the restraining order under N.D.C.C. § 9-08-06.

I

[¶2] Richard Kelly is a non-Indian, and Karol Kelly and the parties' minor child are enrolled members of the Standing Rock Sioux Indian Tribe. The parties began a relationship in 1997, when both lived in South Dakota, where Richard Kelly operated his family's insurance agency in Sioux Falls with his father. The insurance agency specialized in selling insurance to Indian tribes, and Karol Kelly began working for the agency. Karol Kelly subsequently moved to Cannonball, where she owned land on the Standing Rock Sioux Indian Reservation, and she incorporated Great Plains Tribal Insurance to handle insurance accounts for tribal entities. Richard Kelly also moved to Cannonball, where he incorporated Kelly Insurance to handle tribal insurance accounts, and the couple lived on the land owned by Karol Kelly on the Standing Rock Sioux Indian Reservation. Karol Kelly worked at Kelly Insurance, preparing billing statements and sales proposals and assisting with clients. Richard and Karol Kelly were married in Nevada in 2003, and their minor child was born in Bismarck in 2003. The family lived together at Cannonball on the Standing Rock Sioux Indian Reservation until 2005, when Richard Kelly left the home and ultimately rented a condominium in Bismarck. In March 2006, Richard Kelly purchased a house in Bismarck, and he later moved Kelly Insurance to Bismarck.

[¶3] In December 2006, Richard Kelly brought this divorce action against Karol Kelly in state district court. Karol Kelly made a general appearance in the action and answered and counterclaimed, seeking a divorce, child custody, child support, spousal support, attorney fees, and an equitable division of the parties' marital property. While the state court divorce action was pending, Karol Kelly continued to work at Kelly Insurance in Bismarck until October 2007, when Richard Kelly terminated her employment. Richard Kelly claims the parties had attempted to reconcile while the divorce was pending and Karol Kelly and the minor child lived with him in Bismarck from March 2007 through June 2007.

[¶4] In December 2007, the parties disputed holiday visitation, and after a hearing, the state district court granted Richard Kelly holiday visitation. Karol Kelly subsequently moved to dismiss the state court divorce action for lack of subject matter jurisdiction, and on January 11, 2008, she filed a separate divorce action in the Standing Rock Sioux Tribal Court. The state court decided it had jurisdiction to dissolve the marriage, but ruled it lacked jurisdiction over the incidents of the marriage. A May 2008 state court judgment granted Richard Kelly a divorce from Karol Kelly, but dismissed the rest of the action.

[¶5] In Kelly v. Kelly, 2009 ND 20, ¶¶ 10-11, 759 N.W.2d 721, we concluded the state court had personal jurisdiction over Karol Kelly and ordinarily would have had subject matter jurisdiction to adjudicate the incidents of the marriage; however, we recognized the jurisdictional issue was interrelated with tribal court jurisdiction and considerations of tribal sovereignty and autonomy. We held the state court had concurrent subject matter jurisdiction with the tribal court to adjudicate the incidents of the parties' marriage and the state court erred as a matter of law in concluding the tribal court had exclusive jurisdiction. Id. at ¶ 18. We nevertheless said our conclusion that the state court had concurrent jurisdiction with the tribal court over the incidents of the marriage did not end the inquiry, because there were separate statutory jurisdictional requirements involving "home state" status in the Uniform Child Custody Jurisdiction and Enforcement Act ("UCCJEA"), N.D.C.C. ch. 14-14.1, for a court of this State to exercise jurisdiction over child custody determinations. Kelly, at ¶ 19. We said the UCCJEA treated the tribe as a state, and we outlined the statutory requirements in N.D.C.C. § 14-14.1-12 for initial custody determinations in cases involving different states. Kelly, at ¶¶ 19-23. We reversed the state court dismissal and remanded, stating:

The UCCJEA essentially prioritizes home state status, and if this state is the child's home state the district court has jurisdiction. If this state is not the child's home state, the court must determine whether another state is the home state and, if so, may only acquire jurisdiction if a court of the home state has declined jurisdiction. Thus, on remand, the parties should be given an opportunity to present evidence relevant to the jurisdictional facts, and the district court must determine whether this state, the reservation, or neither is the child's home state.

Although the UCCJEA governs jurisdiction of the determination of child custody, it does not control jurisdiction over the remaining issues in the divorce. Thus, even if the district court determines that the reservation is the child's home state and that the tribal court therefore has jurisdiction over child custody, the district court retains concurrent jurisdiction over the remaining incidents of the marriage and may choose to exercise that jurisdiction or defer to the tribal court if the court concludes that the tribal court is a more convenient forum. Kelly, at ¶¶ 21-22 (citations omitted).

[¶6] While Kelly was pending in this Court, the Standing Rock Sioux Tribal Court denied Richard Kelly's motion to dismiss the tribal court action on June 23, 2008, concluding the tribal court had jurisdiction to decide child custody. The tribal court judge thereafter disqualified himself, and on December 31, 2008, a different tribal court judge granted Richard Kelly's motion for a continuance for preparation of a custody investigator's report. This Court filed its decision in Kelly on February 3, 2009.

[¶7] On remand after Kelly, the state court asked the parties about the status of the tribal court action. The record reflects the Standing Rock Sioux Tribal Court dismissed Karol Kelly's tribal court divorce action with prejudice on April 8, 2009, about two months after this Court's decision in Kelly, because Karol Kelly had "willfully disregarded the [Tribal] Court's orders concerning the custody investigator." The record also includes a May 14, 2009, letter from the state court judge to the tribal court judge, in which the state court judge recognized the tribal court action had been dismissed with prejudice and said the state court would exercise its jurisdiction to resolve the case in a trial scheduled for January 2010.

[¶8] In May 2009, the state court issued interim custody and visitation orders. On January 8, 2010, Karol Kelly moved to dismiss the issue about child custody in the state court action, arguing the Standing Rock Sioux Indian Reservation was the child's home state and the state court lacked jurisdiction to decide custody, because the Standing Rock Sioux Tribal Court had not expressly declined jurisdiction and affirmatively deferred jurisdiction to the state court. Karol Kelly provided the state court with a decision by the Standing Rock Sioux Tribal Supreme Court issued on November 18, 2009, which reversed the Standing Rock Sioux Tribal Court's dismissal to the extent the action was dismissed with prejudice. In that decision, the Standing Rock Sioux Tribal Supreme Court ruled the tribal court's decision "failed to vest North Dakota with jurisdiction over the incidental issues that arose on the Standing Rock Indian Reservation involving a tribal member and her enrolled minor child who were both residents of the Standing Rock Indian Reservation." At the beginning of the January 12, 2010 trial, the state court acknowledged Karol Kelly's motion to dismiss the custody issue and indicated the court would take the motion under advisement and rule after completion of the trial. At trial, Karol Kelly testified she had begun another divorce action in the Standing Rock Sioux Tribal Court, but Richard Kelly testified he had not been personally served in the tribal court action.

[¶9] In a decision issued June 23, 2010, the state court acknowledged the Standing Rock Sioux Tribal Supreme Court's decision and said Karol Kelly had represented that she had refiled her tribal court divorce action, but she did not provide a case number for the refiled tribal court action and Richard Kelly testified he had not been served with a new tribal court action. The state court decided the child's "home state" was the Standing Rock Sioux Indian Reservation and said the state court had contacted the tribal court clerk's office in June 2010 and was informed tribal court records indicated no open cases involving Karol and Richard Kelly. The state court ruled the tribal court had declined to exercise jurisdiction as a result of Karol Kelly's unjustifiable conduct, and the state court decided it had jurisdiction over child custody. The state court awarded Karol Kelly custody of the parties' minor child, distributed the parties' marital property, restrained Karol Kelly from interfering with Richard Kelly's insurance business for five years, and awarded Richard Kelly a $40,000 cash payment in part for Karol Kelly's conduct in tribal court proceedings.

[¶10] Karol Kelly moved for reconsideration, arguing the tribal court had not declined jurisdiction over child custody. She provided the state court with documents from the tribal court indicating that in February 2010, she had served Richard Kelly with an amended complaint for the tribal court divorce action. Karol Kelly also provided the state court with March 2010 letters from both parties to the clerk of the Standing Rock Sioux Tribal Court, which indicated a hearing in tribal court was not necessary until after the state court issued its decision. Richard Kelly acknowledged there was a pending case in tribal court and was "uncertain as to why the Tribal Court Clerk told [the state court] otherwise." Karol Kelly's submission to the state court also included a document reflecting a tribal court judge had been assigned to the tribal court action on January 5, 2010, but does not otherwise indicate when that tribal court action was filed. The state district court denied Karol Kelly's motion for reconsideration, acknowledging there was a pending action in tribal court, but deciding it would "stand on the opinion and order already issued so that the appeals, if any may be filed and the case can move towards final resolution." A final judgment was entered, and Karol Kelly appealed.

[¶11] The district court had jurisdiction to decide the incidents of the parties' marriage under our decision in Kelly, and the primary issue in this case involves the district court's subject matter jurisdiction to decide child custody under N.D.C.C. § 14-14.1-12. Karol Kelly's appeal is timely under N.D.R.App.P. 4(a). This Court has ...


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