## Facts

- Michele J. Shafmaster and Jonathan S. Shafmaster divorced in 1987 after about seventeen years of marriage.
- Their divorce decree incorporated a negotiated property-settlement stipulation based largely on financial information derived from Jonathan’s April 30, 1986 personal financial statement.
- During negotiations, Michele was encouraged to proceed cooperatively and to rely initially on a financial advisor; Jonathan’s accountant supplied information keyed to the April 1986 statement.
- Jonathan possessed a later personal financial statement dated December 31, 1986 showing a substantial increase in asset values, but this updated statement was not provided to Michele, her advisor, or her counsel.
- Michele’s counsel sought to add language to the stipulation that the parties had been “forthright” about assets and values; Jonathan’s counsel refused, and the stipulation was signed without that language.
- After entry of the decree, Michele learned of the December 31, 1986 statement and petitioned to bring forward and modify the property settlement, alleging fraud through intentional concealment or misrepresentation of material financial information.
- A marital master recommended denying Michele’s petition, and the superior court approved.
- Jonathan moved to dismiss on grounds including failure to state a claim and failure to elect remedies; those dismissal motions were denied.
- Michele appealed the denial of her petition; Jonathan cross-appealed the denial of his dismissal motions.

## Issues

1. Whether a divorce property-settlement stipulation incorporated into a decree may be reopened or modified on a showing that it was procured by fraud, including concealment of materially updated financial information.
2. Whether financial statements used in divorce negotiations are merely nonactionable opinions on value or may constitute actionable representations of fact for fraud purposes.
3. Whether the petition should have been dismissed for failure to state a claim or for failure to elect between remedies at the pleading stage.

## Decision

- The Supreme Court of New Hampshire affirmed the denial of Jonathan’s motions to dismiss.
- The Court vacated the order denying Michele’s petition to modify the property settlement and remanded for further proceedings.
- The Court held that Michele’s allegations and the record could support a finding of fraud if proven, based on Jonathan’s nondisclosure of a later financial statement reflecting a significant increase in assets.
- The Court rejected the categorical argument that the financial-statement valuations were mere opinion incapable of supporting a fraud claim.

## Legal Principles

- Although divorce property divisions are generally final, a court may reopen or modify a property settlement on equitable grounds, including fraud in the procurement of the decree.
- Fraud may be established by concealment or omission where a party’s partial disclosures, coupled with knowledge of the other party’s reliance, make silence misleading.
- Personal financial statements in negotiation settings may contain representations of present financial fact (assets, liabilities, net worth) and can support a fraud claim when materially false or misleading and relied upon.
- A pleading alleging fraud in the procurement of a divorce settlement can be sufficient to withstand a motion to dismiss without requiring an early election among potentially available remedies.

## Conclusion

The court held that a spouse’s nondisclosure of a materially updated financial statement during divorce negotiations may constitute fraud warranting reopening a property settlement, and it remanded for further proceedings while also upholding denial of the other spouse’s dismissal motions.


Shafmaster v. Shafmaster, 138 N.H. 460, 642 A.2d 1361 (N.H. 1994)