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P. Hanlon v. J. Hanlon (3/25/94), 871 P 2d 229
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NOTICE: This opinion is subject to formal correction
before publication in the Pacific Reporter. Readers
are requested to bring errors to the attention of the
Clerk of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501.
THE SUPREME COURT OF THE STATE OF ALASKA
PATRICIA HANLON, )
) Supreme Court
Appellant, ) No. S-5351
)
v. ) Superior Court
) No. 3AN-91-2103 CI
JOSEPH A. HANLON, )
) O P I N I O N
Appellee. )
________________________________) [No. 4068 - March 25, 1994]
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Peter A. Michalski, Judge.
Appearances: William T. Ford, Anchorage,
for Appellant. Patrick J. McKay, Anchorage,
for Appellee.
Before: Moore, Chief Justice, Rabinowitz, Matthews and Compton,
Justices. Bryner, Justice, Pro Tem.*
BRYNER, Justice, Pro Tem.
This appeal arises from a divorce action between
Patricia and Joseph Hanlon. Patricia Hanlon appeals, contending
that the trial court erred in fixing the date for determining the
portion of Joseph's retirement benefits to be included as marital
assets, in awarding her insufficient spousal support and an
inadequate share of the marital property, and in failing to allow
her to remain in the family home for a reasonable period after
the divorce. We affirm in part and remand for further findings.
I. FACTS
Patricia and Joseph Hanlon were married in
Massachusetts in 1968. Throughout the course of their marriage,
Joseph has worked as an FBI agent. For the first several years
of the marriage, Patricia taught school; after the birth of her
first child, she became a full-time homemaker. In 1983, the FBI
transferred Joseph to Alaska. Patricia and the three Hanlon
children moved to Alaska to join Joseph in 1985. In early
November 1986, Joseph moved out of the family home and into an
apartment. Several years later, in July 1990, Patricia and
Joseph agreed to dissolve the marriage. They were unable to
agree on a division of marital property, however, and Joseph
filed for divorce in March 1991.
At the time of trial, Joseph was forty-nine years old
and was still employed by the FBI. He had less than eight years
remaining before mandatory retirement and earned $89,000 per
year, a portion of which was deposited directly to a deferred
income account.
Patricia was forty-seven years old and worked part-time
as a substitute teacher, averaging approximately $545 per month
income. Patricia suffered from rheumatoid arthritis, a chronic
and progressive bone disease that impaired her earning capacity.
The evidence presented by Patricia and Joseph conflicted,
however, as to the extent of the impairment and its impact on
Patricia's ability to pursue a teaching career.
At the time of trial, only one of the Hanlons'
children, sixteen-year-old Michelle, was still a minor. She
remained in the family home with Patricia. Patricia and Joseph
agreed that Michelle would remain in Patricia's physical custody
until Michelle turned eighteen in June 1994, and that Joseph
would pay monthly child support of $1,000.
The Hanlons' marital assets included a variety of
personal items that they had divided by agreement. The marital
assets also included their Anchorage home, which they agreed had
essentially no equity, Joseph's retirement benefits,1 an IRA
account valued at approximately $17,400, about $7,800 in unused
leave Joseph had accrued, and the proceeds from the Hanlons'
former family home in California, which they sold in May 1991 for
$436,567.57.2
The primary issues that remained unresolved at the time
of trial were the correct date for distinguishing between the
marital and post-marital portions of Joseph's retirement
benefits, how much compensation Patricia should receive -- either
in the form of spousal support or an increased share of the
marital estate -- in light of her reduced earning capacity, and
who should receive the Anchorage family home.
At trial, the court fixed the date for calculating the
marital portion of Joseph's retirement benefits at April 1988.
The court awarded Patricia spousal support of $1500 through
January 1993, decreasing to $1000 per month thereafter until
Patricia became eligible to receive her share of Joseph's
retirement benefits. The court ordered all other marital assets
and liabilities except the Anchorage home divided equally,
specifically directing that the proceeds from the sale of the
California home be applied first toward payment of various
marital debts and the rest divided evenly between the parties.
Finding no equitable value in the Anchorage home, and concluding
that Patricia had inadequate earning capacity to make the
required monthly payments, the court awarded the home to Joseph.
After unsuccessfully moving for reconsideration,
Patricia filed this appeal.
II. DISCUSSION
A. Valuation of Retirement Benefits
Patricia first contends that the trial court erred in
selecting April 1988 as the functional termination date of the
marriage for the purpose of calculating the portion of Joseph's
retirement benefits available for inclusion in the marital
estate. Patricia argues that the date should properly have been
July 1992, the date of trial, or at the very least, July 1990,
when she and Joseph first expressly agreed to dissolve the
marriage.
Although the date for valuation of marital property in
a divorce ordinarily "should be as close as practicable to the
date of trial,"Ogard v. Ogard, 808 P.2d 815, 819 (Alaska 1991),
the date for segregating marital from post-marital property is
ordinarily the date of the functional termination of the
marriage, that is, the date "when the marriage has terminated as
a joint enterprise"or "when a married couple cease functioning
economically as a single unit." Schanck v. Schanck, 717 P.2d 1,
3 & n.7 (Alaska 1986), see also Bays v. Bays, 807 P.2d 482, 486
(Alaska 1991).
Determining the cutoff date for distinguishing marital
from non-marital property is a matter for resolution by the trial
court on a case-by-case basis; we have declined to treat the
matter as an issue of law. Schanck, 717 P.2d at 3, see also
Bays, 807 P.2d at 486; Dixon v. Dixon, 747 P.2d 1169, 1174-75
(Alaska 1987). We review the trial court's selection of the
cutoff date for segregating marital and non-marital property
under the abuse of discretion standard. Bays, 807 P.2d at 486.
In the present case, we find ample evidence in the
record to support the trial court's conclusion that the Hanlons'
marriage had terminated as a joint enterprise by April 1988.3
The evidence indicates that, by that date, Joseph had done
virtually everything in his power to separate himself physically
from the marriage and to establish himself on an independent
economic footing. The evidence further indicates that, although
Joseph may have been discouraged from discussing termination of
the marriage while Patricia underwent surgery and treatment for
cancer in 1987 and early 1988, any uncertainty concerning the
future of the marriage ended by the spring of 1988. By then,
Patricia was working as a substitute teacher. According to
Joseph, it was at this point that he began actively and
unequivocally pursuing efforts to end the marriage.
Patricia points to her own testimony and testimony of
her sister disputing Joseph's claim that he unequivocally
communicated his desire to end the marriage in the spring of
1988. However, assessing witness credibility is a trial-court
function, and the court in this case clearly acted within its
discretion by crediting one version of events over another.
Parker v. Northern Mixing Co., 756 P.2d 881, 892 (Alaska 1988)
("it is the function of the trial court, not of this court, to
judge witnesses' credibility and to weigh conflicting evidence").
Patricia also insists that Joseph's continued provision
of money for his family's living expenses and his payments of the
mortgage on the family home demonstrate that the marriage
continued to function as a joint economic enterprise after the
spring of 1988. These actions, however, standing alone, seem
indicative of little more than Joseph's recognition of his
obligation to provide ongoing support for his family's separate
financial needs and to pay the note on the house in accordance
with his legal obligation to do so.
Considering the totality of the record, we conclude
that the trial court did not abuse its discretion in determining
April 1988 was an appropriate date for distinguishing marital
property from post-marital property. Accordingly, in
establishing the value of the Hanlon's marital property at the
time of trial, the superior court properly relied on April 1988
as the cutoff date separating the marital and post-marital
portions of Joseph's retirement benefits.
II. SPOUSAL SUPPORT AND DIVISION OF PROPERTY
Patricia next contends that the trial court's award of
spousal support was inadequate to meet her needs. She argues
that if the court believed Joseph could not afford larger
payments, it should have awarded her a greater share of the
marital assets instead of dividing the assets equally.
In an action for divorce, the trial court is vested
with broad discretion to award spousal support "as may be just
and necessary." AS 25.24.160(a)(2). We will not set aside a
spousal support award unless the trial court abuses its
discretion. Jones v. Jones, 835 P.2d 1173, 1178 (Alaska 1992).
The trial court is similarly vested with broad discretion to
order that marital property be divided "in a just manner." AS
25.24.160(a)(4). We will not reverse a trial court's decision
allocating property unless the court abuses its discretion and
the award is clearly unjust. Jones, 835 P.2d at 1175.
Although the factors trial courts consider in
determining whether to award spousal support are essentially
identical to those considered in deciding the allocation of
marital property, Dixon, 747 P.2d at 1173, spousal support and
property-division serve distinct purposes and are not inter
changeable. See Lewis v. Lewis, 785 P.2d 550, 553-54 (Alaska
1990). "We have announced a policy of encouraging trial courts
to provide for parties' financial needs by property disposition,
rather than by alimony." Dixon, 747 P.2d at 1173 (citations
omitted), see also Schanck, 717 P.2d at 5. Permanent awards of
spousal support are particularly disfavored, "because it is
generally undesirable to require one person to support another on
a long-term basis in the absence of an existing legal
relationship." Jones, 835 P.2d at 1179.
In a limited number of situations, however, we have
recognized that spousal support may properly be substituted for
property division as a means of redressing inequalities in
earning power. See, e.g., Bays, 807 P.2d at 485 (policy favoring
property division over spousal support inapplicable to
rehabilitative spousal support and other forms of short-term
spousal support), Dixon, 747 P.2d at 1173 (policy inapplicable
when marital assets fail to meet the needs of a divorcing
spouse). Nevertheless, in such cases we have consistently
emphasized that specific evidence must be presented to establish
the need for spousal support and specific findings must be made
reflecting the trial court's reasons for concluding that the
amount of spousal support ordered was just and necessary. Id. at
1174. As we previously observed: "In the absence of specific
findings concerning [the recipient's] financial needs, we are
unable to evaluate whether . . . alimony is just and necessary."
Jones, 835 P.2d at 1179, see also Lewis, 554 P.2d at 554
("Without an explanation, this court cannot determine whether the
trial court abused its discretion").
In the present case, the record indicates that the
trial court found Patricia's earning power to be lower than
Joseph's. Despite the availability of substantial marital
assets, the court attempted to remedy the inequality not through
property division but by ordering Joseph to make substantial and
relatively long-term spousal support payments. Yet the court
made no findings to explain its reasons for preferring spousal
support over distribution of marital property, nor did it reveal
the manner in which it determined the amount of spousal support
it ordered Joseph to pay. Moreover, while the court's findings
generally touched on many of the Merrill factors,4 they did not
expressly address the "circumstances and necessities" of the
parties, Merrill, 368 P.2d at 547 n.4, and failed to resolve the
issues raised at trial concerning Patricia's earning capacity and
her financial needs and expenses. See Jones, 835 P.2d at 1179.
These omissions are especially troubling because sharply
conflicting evidence was presented at trial on the extent to
which Patricia's earning capacity was impaired by her medical
condition.
To permit meaningful appellate review, the trial court
must provide "sufficiently detailed and explicit findings 'to
give [this] court a clear understanding of the basis of the trial
court's decision, and to enable it to determine the ground on
which the trial court reached its decision.'" Lang v. Lang, 741
P.2d 1193, 1195 (Alaska 1987) (quoting Merrill, 368 P.2d at 548).
Because the trial court did not explain its reasons for prefer
ring spousal support over property distribution, failed to
disclose the basis for the amount of spousal support it awarded,
and made no specific findings determining the earning power and
financial needs of the parties, it is not possible for us to
determine whether the court abused its discretion in this case.
Accordingly, we must remand this case for additional findings on
these issues.5
III. AWARD OF MARITAL RESIDENCE
Patricia argues, lastly, that the trial court erred in
awarding the family home to Joseph and in failing to provide for
her continued residence there. As we have previously noted, the
trial court is vested with broad discretion in allocating marital
assets. See AS 25.24.160(a)(4). Here, the parties agreed that
the family home had no equitable value and would require a
substantial amount to repair the house to make it salable. The
trial court awarded the home to Joseph, reasoning that Patricia
lacked "adequate earning power to maintain the home." This
decision is supported by the record and does not amount to an
abuse of discretion.
Patricia nevertheless objects to the trial court's
failure to provide her with the right to remain in the home
temporarily, until Michelle graduates from high school. Patricia
points out that AS 25.24.160(a)(4)(F) requires the court to
consider "the desirability of awarding the family home, or the
right to live in it for a reasonable period of time to the party
who has primary physical custody of children."
Patricia had primary custody of Michelle. The trial
court expressly considered "the desirability of awarding the
family home to"Patricia and found good reason not to do so.
However, the court made no mention of the second portion of the
statutory provision, which required it to consider the
desirability of awarding Patricia, as Michelle's custodian, "the
right to live in [the family home] for a reasonable period of
time."
At trial, Patricia testified that she "would like to be
able to live in the house for two more years 'til [sic] Michelle
graduates from high school." The record sheds no light on the
court's reasons for failing to allow Patricia to remain in the
family home as requested. In light of the clear statutory
directive requiring the trial court to consider the desirability
of Patricia's continued residence in the family home for a
reasonable period, the court should specifically address this
issue on remand.
IV. CONCLUSION
In summary, we affirm the trial court's determination
of the date for distinguishing between marital and post-marital
property. We remand for additional findings on the remaining
issues presented. In order to expedite the ultimate resolution
of the case, we retain jurisdiction and direct the trial court to
submit its additional findings to this court within forty-five
days of the date of this opinion.6
AFFIRMED in part and REMANDED in part for supplemental
findings in conformity with this opinion.
_______________________________
*Sitting by assignment made under article IV, section 16 of
the Alaska Constitution.
1 The trial determined that all portions of Joseph's
retirement benefits earned during the marriage would be divided
by means of a qualified domestic relations order so as to insure
that Patricia would remain eligible for health insurance through
Joseph's employment with the FBI. The parties disputed only the
correct date for valuation of the retirement benefits as a
marital asset.
2 The proceeds of the sale had been deposited into a
joint savings account, from which the Hanlons evidently agreed to
pay various joint debts totaling approximately $122,000. The
balance was retained for distribution in the divorce proceedings,
in accordance with the court's orders.
3 The evidence concerning the period between the initial
separation of the parties in November 1986 and the commencement
of the divorce action in March 1991 may be summarized as follows:
When Joseph moved out of the family home in November
1986, there was no immediate discussion of dissolving the
marriage. Joseph claimed that he mentioned the topic several
months later, in April or May 1987. In June 1987 Patricia was
diagnosed with breast cancer, which required surgery and follow-
up treatment. During Patricia's illness, Joseph refrained from
any further mention of ending the marriage, but he continued to
live outside the family home.
By February or March 1988, Patricia had fully
recovered, and she began working as a substitute teacher.
According to Joseph, soon after that he renewed his earlier
suggestion to dissolve the marriage. Joseph claimed that he gave
Patricia paperwork to initiate dissolution proceedings on two
occasions. He recalled that over the next two years he continued
to discuss ending the marriage with Patricia, unsuccessfully
attempting to resolve the issue without involving attorneys.
Patricia's recollection differed from Joseph's.
Patricia acknowledged that Joseph dropped off dissolution
paperwork on two occasions in 1988, but she said she was not
there when he left the paperwork, and no discussion of ending the
marriage occurred. Patricia claimed that she did nothing with
the dissolution paperwork because she thought that, "if [Joseph]
was gonna do something, he can do it[.]"
In any event, it appears that in July 1990, Patricia
and Joseph tentatively agreed to dissolve the marriage. Later,
however, they became involved in a dispute over the valuation of
Joseph's retirement benefits. Patricia proposed to calculate the
value of the benefits as of July 1990, the date of the tentative
dissolution agreement; Joseph insisted that the value be
determined as of November 1986, the date of separation. In March
1991, after discussion on this point reached an impasse, Joseph
filed for divorce.
Between his initial separation in November 1986 and his
commencement of the divorce action in March 1991, Joseph
continued to reside in his own apartment but occasionally entered
the family home to collect and pay household bills or to leave
Patricia money for food and other daily expenses. Joseph also
continued to make mortgage payments on the home and to deposit
monies for the family into the joint checking account he main
tained with Patricia. Patricia exercised sole control of this
account; Joseph maintained a separate account from which he paid
his own expenses. At some point, Joseph closed the family's
credit card accounts or otherwise separated them, except for one
joint Master Card that he left with Patricia for emergency use.
4 See Merrill v. Merrill, 368 P.2d 546, 547 n.4 (Alaska
1962).
5 In connection with her argument concerning the reason
ableness of the spousal support and property division, Patricia
contends that the trial court erred in awarding Joseph the
entirety of his accrued leave. The original findings entered by
the trial court did not address Joseph's accrued leave. In
response to a motion for reconsideration by Patricia, however,
the trial court commented: "It was the court's understanding that
[Patricia] intended [Joseph] to receive his annual leave and this
court should consider the value of it in looking at the whole
picture in dividing the marital estate. This is what the court
did." Since the court's comment does not specify the manner in
which it made the adjustment, the court should specifically
address this issue on remand, as well.
6 The trial court is authorized to reconsider and modify
its original decision to the extent it deems such action
necessary and appropriate on remand. Once the trial court
submits its supplemental findings to this court, the parties will
be allowed to file additional briefs addressing those findings.
The additional briefs of both parties shall be due simultaneously
within twenty days of the date the trial court distributes its
supplemental findings. The additional briefs may be filed in
memorandum form and need not comply with the formal requirements
of Appellate Rule 212. No further oral argument shall be heard
unless otherwise ordered by this court.
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