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Davila v. Davila (7/1/94), 876 P 2d 1089
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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,
AK 99501.
THE SUPREME COURT OF THE STATE OF ALASKA
ROBERT DAVILA, )
) Supreme Court No. S-5551
Appellant, )
) Superior Court No.
v. ) 3PA-91-1014 DR
)
RITA DAVILA, ) O P I N I O N
)
Appellee. ) [No. 4099 - July 1, 1994]
_________________________)
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Palmer,
John R. Lohff, Judge pro tem.
Appearances: Allison E. Mendel, Mendel
& Huntington, Anchorage, for Appellant.
Kathleen C. Barron, Wasilla, for Appellee.
Before: Moore, Chief Justice,
Rabinowitz, Matthews, Compton, Justices, and
Bryner, Justice pro tem.*
BRYNER, Justice, pro tem.
This appeal, which arises from divorce proceedings
between Robert and Rita Davila, presents issues concerning
property valuation and spousal support. Robert challenges the
superior court's valuation of certain marital property and
contends that the court abused its discretion in awarding
reorientation alimony to Rita. We affirm the property valuation
and remand for further findings on alimony.
I. FACTS
On October 26, 1992, Rita and Robert Davila divorced
after twenty-five years of marriage. They have four children,
all of whom are emancipated. During the marriage, Rita took care
of most domestic responsibilities. Since 1980, she worked a full
time civil service job, and at the time of trial was employed as
a GS-6 civilian employee in the accounting department at Fort
Richardson. Robert was in the military for nineteen years until
he retired in 1986. He later obtained a position as an aviation
safety inspector with the Federal Aviation Administration and, at
the time of the divorce, he was at the GS-13 pay level.
The parties took their first step toward separation in
approximately January 1990, when they began occupying separate
floors of their residence in Wasilla. They maintained this
living arrangement until the time of trial. During this period,
Robert paid all household bills, including the mortgage payments,
car payments, and utilities. Rita bought food and other
household items. The parties continued using joint accounts
until May 1992, approximately three months before trial.
At the time of trial, the parties owned various items
of personal property, their family residence, and a half-acre lot
in Timberon, New Mexico. The trial court found that the parties
were also owed money by Robert's sister. Robert and Rita each
had a retirement account with the federal government, and Robert
was receiving military retirement pay and disability pay. Each
was paying ongoing debts.
The trial court valued the marital property and awarded
a larger share of the estate to Rita based on her lower education
and earning capacity. Rita received the family residence and
Robert received the Timberon lot and the debt owed to the parties
by his sister. The court initially awarded Rita four years of
combined rehabilitative and reorientation alimony. On
reconsideration, however, the court amended its order by
eliminating the rehabilitative alimony and increasing the amount
of reorientation alimony. The court also awarded Rita $2,000 in
attorney's fees.
On appeal, Robert disputes the values that the court
assigned to certain properties, arguing that the court overvalued
property it gave to him and undervalued property it gave to Rita.
These errors, according to Robert, resulted in an award of
marital property even more favorable to Rita than the
disproportionate award the court contemplated. Although Robert
does not challenge the disproportionate division of property as
such, he does rely on it as a basis for questioning the trial
court's award of reorientation alimony. Robert contends that,
with the correct property values factored in, the property award
is so favorable to Rita that it renders reorientation alimony
unjust and unnecessary. Robert further argues that, even if the
court did not err in its property valuation, the record would not
support its alimony order.
II. DISCUSSION
A. Valuation of Property
The trial court's valuation of property when dividing
marital assets is a factual determination and will be reversed
only if clearly erroneous. Jones v. Jones, 835 P.2d 1172, 1175
(Alaska 1992). A finding may not be set aside as clearly
erroneous unless the reviewing court has a definite and firm
conviction that a mistake has been made. Williams v. Alyeska
Pipeline Service Co., 650 P.2d 343, 347 (Alaska 1982).
1. The Marital Home
The trial court valued the Davila's marital residence
at $100,000 and awarded it to Rita, subject to the outstanding
mortgage, which was then approximately $83,000. Robert argues
that the trial court's valuation of the residence was erroneous
because the tax appraisal at the time of trial was $128,000 and
the house was being advertised for sale at $120,000. Robert
claims that, since no other evidence of value was presented, the
residence should have been assigned a value of no less than
$120,000.
Robert mistakenly views the evidence in the light most
favorable to himself. Although appraised at $128,000 for tax
purposes, the house was on the market at that price for a
significant period of time and had not sold. Shortly before
trial, the price was reduced to $120,000, and it remained unsold.
At trial, Rita testified that she thought the house was worth
"[a] lot less" than its current asking price. In addition,
Robert listed the estimated value of the house at $100,000 in
response to a pretrial interrogatory. On cross-examination,
while acknowledging that his estimate was based on "[r]eally
nothing"and was "just what I thought,"Robert testified that he
thought the estimate remained valid "[i]n the present market."
Although saying that he had no opinion on what the house could
actually be sold for "at the moment,"Robert testified that he
believed it could be sold for less than its assessed value.
Considering the entire record, we conclude that the
trial court's valuation of the marital home was not clearly
erroneous, and we affirm the trial court's finding.
2. The Debt from Robert's Sister
In 1980, Robert's sister evidently experienced
difficulty making payments on her house in Bexar, Texas. To
prevent her from losing the house, Robert and Rita bought it from
her, paying $2,000 and taking over payments. They kept the house
as a rental property until Robert's sister's financial situation
improved; then, in 1990, they reconveyed it to her. The trial
court concluded that, as a result of these transactions, Robert's
sister owed the Davilas $2,000. The court awarded Robert the
right to collect the debt.
Robert argues that the trial court clearly erred in
setting a $2,000 value on his "unsupported hope that he might
someday be paid by his sister." Again, however, Robert's
argument draws selectively from the record. At trial, the
parties offered conflicting testimony about the house. Robert
testified that he purchased the house from his sister when she
could not make the payments and reconveyed it in 1990. When
asked whether his sister owed him any money from the transaction,
Robert stated, "She did, but it's been so long that nothing's
come of it." He testified that "[t]here was really no promise to
pay anything, it was just what . . . she could pay. I was hoping
to get back at least $2,000, but I didn't even get that." In
contrast, Rita testified that Robert's sister owed them $10,000
for the transaction, indicating that Robert's sister might have
paid the money had Robert "fought her for it,"but that Robert
"didn't want to."
"[I]t is the function of the trial court, not of this
court, to judge witnesses' credibility and to weigh conflicting
evidence." Parker v. Northern Mixing Co., 756 P.2d 881, 892
(Alaska 1988). As stated previously, we will not set aside a
finding as clearly erroneous unless we have a definite and firm
conviction that a mistake has been made. Williams v. Alyeska
Pipeline Service Co., 650 P.2d 343, 347 (Alaska 1982). From the
foregoing testimony, the trial court could have reasonably
concluded that Robert's sister owed the Davilas money as a result
of the purchase and reconveyance of her Texas home and that the
debt remained unpaid only because of Robert's reluctance to press
the issue. Giving Robert the benefit of the doubt, the court
could have also reasonably concluded that the remaining debt
amounted to $2,000. We find no error and affirm the trial
court's finding.
3. The Timberon Lot
The trial court originally fixed the value of the
parties' lot in Timberon, New Mexico, at $8,000. It gave the lot
to Robert. After Robert moved for reconsideration, the court
revised the value to $6,000. On appeal, Robert challenges this
value as unsupported, arguing that the only value substantiated
by the record is $4,000, the amount indicated in the most recent
tax assessment on the Timberon property.
The trial court, however, properly expressed doubt
concerning the reliability of the tax assessment, which purported
to be based on a percentage of the "full value"of the property
but did not explain what "full value"meant. Moreover, testimony
was presented at trial supporting the $6,000 value that the trial
court ultimately determined to be the property's value. Rita
testified that the Davilas originally bought the lot for $8,000.
Robert, on the other hand, stated in his trial brief that the
value of the lot was $6,000. At trial, he attempted to
equivocate. On direct examination, he stated that he had "no
idea" what the market value of the property might be. Yet when
the trial court asked Robert the basis for the $6,000 value
listed in his trial brief, he stated, "Speculation. We paid
$5,000, and I figure it would be at least -- we'd be able to get
$1,000 more out of it."
Taking Robert's testimony in conjunction with Rita's,
the trial court could reasonably conclude that the Timberon
property was worth more than its $4,000 assessed tax value. The
court could also reasonably opt to set the value at $6,000,
Robert's own estimate, instead of $8,000, Rita's estimate.1 The
trial court's finding was not clearly erroneous.
B. Reorientation Alimony
Rita's trial brief requested an award of rehabilitative
alimony to assist her in completing a bachelor's degree in labor
management. The trial court awarded Rita four years of
rehabilitative support "to allow her a chance to gain a degree in
accounting or business,"as well as an additional amount for
reorientation alimony. After reconsideration, however, the court
concluded that it "erred in its determination that both
rehabilitative and reorientation alimony should be awarded." The
court ordered Robert to pay reorientation alimony for four years,
with payments of $800 per month for the first two years and $700
per month for the second two years. The court stated that the
purpose of the award was "to aid [Rita] to adjust to new
financial circumstances and a new life style." This award will
be reviewed for abuse of discretion. Money v. Money, 852 P.2d
1158, 1163 (Alaska 1993).
Alaska Statute 25.24.160(a)(2) directs the trial court
to "fairly allocate the economic effect of divorce" by
considering certain factors, among which are the parties' earning
capacities, educational backgrounds, employment skills, work
experiences, length of absence from the job market, and custodial
responsibilities for children during the marriage. To this end,
the court is expressly empowered to order alimony "as may be just
and necessary without regard to which of the parties is in
fault[.]"2
Our decisions have recognized reorientation alimony as
appropriate to "allow the requesting spouse an opportunity to
adjust to the changed financial circumstances accompanying a
divorce." Richmond v. Richmond, 779 P.2d 1211, 1215 n.6 (Alaska
1989) (citing Dixon v. Dixon, 747 P.2d 1169, 1173 (Alaska 1987)).
We have indicated, however, that reorientation alimony should
ordinarily be awarded only "when the property settlement will not
adequately meet the parties' reasonable needs. Id. Furthermore,
given its inherently transitional nature, reorientation alimony
may properly be awarded only for relatively short periods of
time.3
Our decisions have also recognized that a separate form
of temporary support, rehabilitative alimony, may be appropriate
in some cases "for a specific purpose and a short duration even
with an adequate property division[.]" Id. at 1215 (citing
Bussell v. Bussell, 623 P.2d 1221, 1223-24 (Alaska 1981)). While
an award of rehabilitative alimony need not be predicated on a
finding that the parties' needs cannot be met through the
division of marital property, this form of alimony is narrowly
restricted "to job training or other means directly related to
entry or advancement within the work force,"and "[t]he party
seeking rehabilitative alimony must intend to use it for such
purposes." Id. (citing Schanck v. Schanck, 717 P.2d 1, 5 (Alaska
1986), and Miller v. Miller, 739 P.2d 163, 165 (Alaska 1987)).
Although reorientation and rehabilitative alimony serve
separate goals, require different findings, and are consequently
distinct forms of temporary support, they are not mutually
exclusive; in some instances, when supported by the record, both
may be appropriate. See Money, 852 P.2d at 1164 (approving award
involving both rehabilitative and reorientation support although
the trial court designated award as only rehabilitative).
In all cases, however, an award of alimony must be
accompanied by adequate findings, particularly with respect to
the financial needs and abilities of both parties:
A trial court is required to make
specific findings to support a determination
that an award of alimony is just and
necessary. Jones v. Jones, 835 P.2d 1173,
1179 (Alaska 1992). . . . Although a trial
court need not make findings regarding every
factor, we have remanded awards of alimony
when there is an insufficient analysis of the
needs of the alimony recipient or the means
of the paying party. Jones, 835 P.2d at
1179; Renfro v. Renfro, 848 P.2d 830, 834
(Alaska 1993).
Gallant v. Gallant, __ P.2d __, Op. No. 4098 at 7 (Alaska, July
1, 1994).
In the present case, the trial judge made findings
regarding the earning capacity, job skills, and educational
background of each party. At the time of trial in August 1992,
Rita was forty-three years old and Robert was forty-six years
old. Rita's yearly salary was approximately $21,000 plus a
twenty-five percent non-taxable COLA, yielding $1,516 in net
monthly pay. Robert's yearly salary was $49,290 plus a twenty-
five percent non-taxable COLA, yielding $3,200 in net monthly
pay; in addition, he received $270 per month in disability pay
and $639 per month in military retirement, for total monthly
earnings of $4,109.
Rita delayed her career plans during the marriage in
the interests of raising her children and subordinated her career
to Robert's. During the marriage, Robert received a number of
higher educational degrees while Rita received an associate's
degree. At the time of trial, Rita was studying for a bachelor's
degree, which she expected to complete in five years at the
current rate of taking two classes per semester while working
full time. She could not advance in her current job without
higher education. The trial court found that Rita left the
marriage with vastly inferior job skills and earning power than
Robert. The court's finding of economic disparity is amply
supported by the record. This is precisely the "economic impact
of divorce"which AS 25.24.160(a)(2) directs the trial court to
consider in awarding spousal support. The trial court further
found that
[the] parties do not have sufficient
liquid assets, nor property which can be
converted to liquid assets to properly
allocate an equitable division of property
between plaintiff and defendant. Although
the property division, including the granting
of the parties['] residence to plaintiff, is
more favorable to plaintiff, the equities are
still not in her favor.
This finding is also supported by the record and is not clearly
erroneous.
Based on these findings, the court concluded that Rita
was entitled to reorientation alimony and ultimately ordered
Robert to pay Rita $800 per month for two years and $700 per
month for two additional years. Nevertheless, in issuing its
order, the court did not specifically address Rita's needs: while
generally indicating that the alimony was meant to aid Rita to
"adjust to new financial circumstances," the court did not
specify the nature of the financial circumstances Rita would face
or the scope of the adjustment she would be required to make.
More particularly, the court failed to explain why it selected
the monthly payments specified in its order, and how it concluded
that the duration of those payments should be fixed at four
years. Nor did the court specifically address Robert's financial
needs, his ability to pay the ordered alimony, or the impact that
the payments could be expected to have on his own financial
circumstances.
Finally, the trial court did not adequately explain its
decision, on reconsideration, to eliminate rehabilitative alimony
in favor of an increased award of reorientation alimony. Rita
had expressly requested rehabilitative alimony to assist her in
obtaining a college degree and had provided specific information
to support her request. Relying on this information, the trial
court originally awarded rehabilitative alimony. On
reconsideration, however, the court rescinded the award, stating,
without further clarification, only that "[t]he court apparently
erred in its determination that both rehabilitation and
reorientation alimony should be awarded."4
The trial court's failure to address the foregoing
issues with specificity in its findings precludes informed
appellate review by this court of the disputed alimony award.
For this reason, we must remand to the superior court for
additional consideration of and findings on the issue of alimony.
III. CONCLUSION
We AFFIRM the trial court's valuations of the family
home, the debt from Robert's sister, and the Timberon lot. We
REMAND the trial court's award of reorientation alimony to Rita
for reconsideration and specific findings in conformity with this
opinion.5
_______________________________
* Sitting by assignment made pursuant to article IV,
section 16 of the Alaska Constitution.
1 Indeed, the trial court's findings on reconsideration
reflect the court's belief that, in selecting $6,000 instead of
$8,000, it was adopting the value that Robert himself had
proposed:
[Robert] did testify that a tax
statement for the lot indicated a taxable
value of $1,333 (Exhibit G). The exhibit G
also indicates the taxable value is
considered to be 33-1/3% of "Full Value."
There was no evidence to the court as to the
meaning of [the] term "Full Value"and as to
how the "Full Value"relates to actual market
value. The original purchase price of $8,000
is not, therefore, an inappropriate value for
determination of market value.
In an abundance of caution,
however, it appears appropriate to reduce the
value of the Timberon property awarded from
the original $8,000 purchase price to $6,000.
This is exactly half-way between the "Full
Value"and the original price of $8,000.
On appeal, Robert condemns the trial court for merely
"splitting the difference"between $4,000 and $8,000, a valuation
technique he asserts was discredited by this court in Matson v.
Lewis, 755 P.2d 1126, 1128 (Alaska 1988). This argument lacks
merit. In Matson, we disapproved of a trial court decision to
"split the difference"between two different values the parties
had proposed, only one of which was supported by the evidence.
Id. In contrast, here, all three of the values in issue, the
$4,000 assessed value, the $6,000 value adopted by the court
based on Robert's estimate, and the $8,000 value reflected in
Rita's testimony, find support in the evidence. Matson is
inapposite under these circumstances.
2 AS 25.24.160(a) provides as follows:
In a judgment in an action for divorce
or action declaring a marriage void or at any
time after judgment, the court may provide
. . . .
(2) for the recovery by one party
from the other of an amount of money for
maintenance, for a limited or indefinite
period of time, in gross or in installments,
as may be just and necessary without regard
to which of the parties is in fault; an award
of maintenance must fairly allocate the
economic effect of divorce by being based on
a consideration of the following factors:
(A) the length of the
marriage and station in life of the parties
during the marriage;
(B) the age and health of the
parties;
(C) the earning capacity of
the parties, including their education
backgrounds, training, employment skills,
work experiences, length of absence from the
job market, and custodial responsibilities
for children during the marriage;
(D) the financial condition
of the parties, including the availability
and cost of health insurance;
(E) the conduct of the
parties, including whether there has been
unreasonable depletion of marital assets;
(F) the division of property
under (4) of this subsection; and
(G) other factors the court
determines to be relevant in each individual
case.
3 Reorientation alimony may be appropriate for a
transitional period to provide supplemental support to a spouse
who needs time to sell property the spouse is awarded which is
not appropriate to the spouse's current needs or financial
status. See Money, 852 P.2d at 1163 (reorientation alimony
awarded to aid spouse during period needed "to organize the
considerable non-liquid and non-income producing property being
distributed to her from the marital estate"). Reorientation
alimony might also be justified when a spouse requires time to
get a job appropriate to the spouse's existing skills. In view
of these and similar purposes, it is difficult to imagine
circumstances under which an award of reorientation alimony
extending for longer than one year would be justified.
4 Under the circumstances, it appears that the trial
court may have mistakenly believed that reorientation and
rehabilitative alimony are mutually exclusive. As we have
indicated in the text of this opinion, although each requires
that separate prerequisites be met and involves a different
purpose, the two forms of temporary support may be simultaneously
awarded when the evidence establishes both to be just and
necessary. Money, 852 P.2d at 1164.
We further note that the trial court's order on
reconsideration also summarily concluded that the court had
"apparently erred in requiring that the [alimony] award come from
Mr. Davila's military retirement." Although the court provided
no reason for this conclusion, it apparently acted pursuant to 10
U.S.C. 1408(e)(1) which prohibits payments to spouses from
military retirement benefits in excess of fifty percent of the
benefit. Given the absence of any express findings, however, it
is unclear why the court vacated the award from Robert's military
retirement in its entirety when it could have reduced the award
to the statutorily acceptable level. It is similarly unclear why
a pro rata share of Robert's military retirement could not have
been awarded to Rita as part of the property division, without
recourse to reorientation alimony. See Chase v. Chase, 662 P.2d
944, 946 (Alaska 1983). This issue should be addressed by the
parties and the trial court on remand.
5 In order to expedite the ultimate resolution of the
case and avoid unnecessary expense to the parties, we retain
jurisdiction over this appeal and direct the trial court to
submit its additional findings to this court within forty-five
days after the date of this opinion. Once the trial court
submits its supplemental findings, the parties may file
supplemental briefs. The additional briefs of both parties shall
be due simultaneously within twenty days after the date the trial
court distributes its supplemental findings. The 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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