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F. Davila v. S. Davila (12/29/95), 908 P 2d 1027
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; (907) 264-0607.
THE SUPREME COURT OF THE STATE OF ALASKA
FRANCOISE J. DAVILA, )
) Supreme Court No. S-6654
) Superior Court No.
v. ) 4FA-93-1770 Civil
STEPHEN J. DAVILA, ) O P I N I O N
Appellee. ) [No. 4301 - December 29, 1995]
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District,
Richard D. Savell, Judge.
Appearances: A. RenJ Broker, Cook, Schuhmann
& Groseclose, Inc., Fairbanks, for Appellant.
Patrick T. Brown, Law Offices of Patrick T.
Brown, Fairbanks, for Appellee.
Before: Moore, Chief Justice, Rabinowitz,
Matthews, Compton and Eastaugh, Justices.
This appeal arises out of a divorce proceeding in which
the only contested issue was the property division. On appeal,
Fran Davila challenges the adequacy of the superior court's
findings and argues that the superior court mischaracterized
certain stocks as marital property. She also contends that the
superior court failed to adequately provide for her support
through the property division and therefore should have granted
her spousal support or an award of attorney's fees or both.
I. FACTS & PROCEEDINGS
Stephen (Steve) and Francoise (Fran) Davila were
married on April 16, 1977. During their marriage, they had one
child, Christina, born on October 19, 1977. The parties
separated after sixteen years of marriage on August 1, 1993. At
the time of trial, both Steve and Fran were 37 years old.
The parties were able to agree on all issues pertaining
to their child Christina, including their respective support
obligations. They agreed to share physical and legal custody of
Christina, who will spend alternating months living at each
parent's home until she graduates from high school. Pursuant to
Civil Rule 90.3, Steve is required to pay $397.38 per month for
child support. Additionally, so long as it is available through
the benefits he receives from the military, Steve will continue
to provide Christina's health insurance.
Steve has been in the Air Force since shortly after the
parties were married. He intends to retire on June 1, 1997, when
he completes 20 years of service. At the time of trial, he was a
Technical Sergeant specializing in munitions systems and had a
rank of E-6. He had been selected for promotion to a rank of E-
7, but had not yet been promoted. Steve has an associate's
degree in munitions systems technology from the Community College
of the Air Force. He is currently working on a bachelor's degree
in business administration, which he plans to have completed by
the time he retires. Steve has also obtained an Alaska Assistant
From his job in the military, Steve earns the following
BASE PAY Base Pay: $1,857
COLA: $ 338
Rations: $ 206
HOUSING Quarters Pay: $ 314
Housing Allowance: $ 1862
TOTAL/MONTH $ 500
Thus, Steve earns approximately $28,812 per year from his job in
the Air Force, plus $6,000 for housing. Both the COLA and the
amounts for housing are non-taxable. When he is promoted, Steve
will receive a pay raise of approximately $250 per month. Before
the separation Steve held a second job as a cashier and pump
attendant, from which he earned $4,042. He quit this second job
in July 1993, the same month he filed his complaint for the
Fran obtained her GED in 1987, but has no post-
secondary education except for a six-month computer training
course. She has been employed intermittently throughout her
marriage in various part- and full-time positions. She has
worked as a waitress, swimming instructor, and most recently as a
Extensive testimony was received at trial regarding
Fran's medical condition. In February 1991, Fran tripped over a
chain and broke the metatarsals in her left foot. The injury
developed into a condition called reflex sympathetic dystrophy
syndrome (RSD). The symptoms of RSD are swelling, chronic pain,
tightness of the skin, and a general inability to use the
extremity in a normal fashion. Additionally, Fran suffers from
depression which is often associated with RSD. Her treating
physician testified that her ability to work would be affected by
RSD because of
the problem that her foot causes for her
ambulating ability, for her ability to be on her
feet for a period of time to engage in any kind of
employment activity which requires that she be up
on her feet or even be sitting at a desk there
with her foot dependent, which also would cause it
She was terminated from her most recent job as a medical
secretary when she was hospitalized in April 1994.
Fran has been hospitalized three times as a result of
this condition: (1) from January 5, 1993, to July 31, 1993,
except for two weeks; (2) in December 1993 for approximately two
weeks; (3) in April and May 1994 at the University of Washington
Pain Clinic. At the time of trial, Fran was undergoing daily
physical therapy, was on various medications, and was seeing a
Besides affecting her ability to work, Fran's condition
has numerous economic consequences for her which affect the
divorce proceeding. First, the cost of the various medications
which she takes is approximately $400 per month. Second, because
her hospitalization at the University of Washington occurred
after the Davilas separated, she is solely liable for the roughly
$9,500 in hospital bills which her insurance did not cover.3
Finally, her existing insurance which she receives through
Steve's employment will be terminated as a result of the divorce.
Because of her pre-existing condition, she is unable to obtain
private health insurance. Thus, her only option is to enter
Alaska's high-risk pool. The premium in this pool is $306 per
month, and there is a $500 annual deductible and a 20% co-payment
on the first $10,000 of coverage.
Following a three-day bench trial, the superior court
entered oral findings and thereafter written findings of fact and
conclusions of law. The court determined that Fran was entitled
to $78,009 in non-marital property, and 53% or $54,674 of the
marital estate. Steve's total award including both marital and
non-marital property was $52,732. Fran was also awarded a pro
rata share of Steve's pension when he retires from the military.
Additionally, the court denied Fran's request for rehabilitative
and reorientation alimony, concluding that the availability of
non-marital assets and the award of more liquid marital assets
were sufficient to meet her needs. Fran then moved for
reconsideration and for attorney's fees. The trial court denied
both motions. Fran now appeals.
II. STANDARD OF REVIEW
A three-step process is used in Alaska to divide
marital assets. First, the court determines what specific
property is available for distribution. Second, the court values
that property. Finally, the court equitably allocates it between
the parties. Wanberg v. Wanberg, 664 P.2d 568, 570 (Alaska
1983). The court makes this allocation based on the criteria in
Fran challenges the superior court's rulings with
regard to steps one and three of this analysis. As to the first
step, we review a trial court's determination of whether
particular assets are marital or separate property for an abuse
of discretion. Doyle v. Doyle, 815 P.2d 366, 368 (Alaska 1991).
"[T]he trial court's findings that the parties intended to treat
property as marital are disturbed only if clearly erroneous."
Cox v. Cox, 882 P.2d 909, 913 (Alaska 1994) (citation omitted).
Regarding the third analytic step, a trial court has broad
discretion in fashioning a property division which will not be
disturbed unless it is clearly unjust. Laing v. Laing, 741 P.2d
649, 651 (Alaska 1987) (citations omitted).
Finally, Fran challenges the superior court's decision
not to award her some type of spousal maintenance or attorney's
fees. We review both of these decisions for an abuse of
discretion. Johnson v. Johnson, 836 P.2d 930, 933 (Alaska 1992).
A. Dean Witter Stock
At the time Fran and Steve separated, they had an
investment account with Dean Witter which contained stocks worth
approximately $23,700. The money used to purchase these stocks
originated from the estate of Fran's mother who died in 1988.
According to her mother's written will, Jim Carey (Jim), Fran's
brother, was to receive a majority of the property in the estate.
However, Jim testified that after the will was written his mother
requested that the property be divided equally between Fran and
himself. In accordance with these wishes, after the estate had
been distributed, he decided to transfer some of the property he
had received to Fran. To avoid federal gift taxes, Jim sent
separate checks of $10,000 to Fran, $10,000 to Steve, and $3,500
to Christina. The money was first placed in separate individual
accounts. It was eventually combined into a joint account with
Dean Witter, bearing both Fran's and Steve's names, and stocks
were purchased. It is the ownership of these stocks which is now
In its oral findings, the superior court held that the
stocks were marital property. It based this conclusion on the
fact that the stock was purchased from a joint account, that the
money used to purchase the stocks was initially given to Fran and
Steve as individuals, and because it was Steve who was primarily
responsible for managing the investment account.
The superior court's determination that the parties
intended to treat the stock as a marital asset was not clearly
erroneous, and therefore the decision that it was available for
distribution was not an abuse of discretion. We agree with Fran
that none of the factors discussed by the superior court mandate
a finding that the stock was treated as marital property by the
parties. However, viewing the factors cumulatively, it was not
unreasonable for the superior court to reach such a conclusion.
In Julsen v. Julsen, 741 P.2d 642, 646-47 (Alaska
1987), we noted that the fact that stocks inherited by one of the
parties during the marriage were held in a joint account was not
dispositive in determining whether they were marital property.
Nonetheless, the fact that property is held jointly may be used
as evidence of intent. Similarly, we stated in McDaniel v.
McDaniel, 829 P.2d 303, 306 (Alaska 1992), that "[p]articipation
. . . in the management and maintenance of . . . property will
not automatically transform pre-marital into marital property.
Rather, the participation must be significant and evidence an
intent to operate jointly." In this case, although the number of
stock transactions was small,4 the superior court could have
considered evidence that Steve managed the stock account as
tending to show the parties' intent.5 Further, the superior
court relied on the fact that $10,000 was initially given to
Steve individually. Fran and Jim testified that their intent was
solely to gain a tax advantage. However, such an intent is not
inconsistent with joint ownership -- because neither Jim nor Fran
foresaw divorce, both may have viewed the gift to Steve as a way
to gain the tax benefit while benefitting Fran by giving a gift
to the Davilas as a couple. Therefore we hold that in light of
the various indicia of joint ownership the superior court's
finding that the Davilas treated the stock in the Dean Witter
account as a marital asset is not clearly erroneous.
B. The Adequacy of the Superior Court's Findings
Alaska Statute 25.24.160(a)(4) lists nine factors which
the trial court must consider in dividing marital and non-marital
property. In making its property division, the trial court is
required to "articulate sufficiently specific factual findings to
indicate the basis for the division." Lang v. Lang, 741 P.2d
1193, 1195 (Alaska 1987). One of the primary functions of this
requirement is to allow this court to engage in a meaningful
review and thus assure that the trial court has considered the
appropriate factors. See Merrill v. Merrill, 368 P.2d 546, 547-
48 (Alaska 1962). Thus, the trial court need not make findings
as to every factor, nor do these findings need to be exhaustive,
but where the parties raise significant issues regarding
particular factors, the trial court must address these issues in
its findings. Brooks v. Brooks, 677 P.2d 1230, 1233 (Alaska
The superior court's division of the property was
guided by its consideration of a number of factors. First, the
court concluded that Fran's medical condition was not so severe
that she would be unable to work. Second, the court found that
once she was able to work her earning potential would be greater
than Steve's. And finally, the court noted that its relatively
large award of separate property made a significantly unequal
property division unnecessary. We conclude that the superior
court's findings addressed the salient issues raised at trial,
and are supported by the record. Additionally, based on these
findings, we cannot say that the property division is clearly
Addressing the particular issues raised by Fran, the
superior court adequately considered the source of the assets in
determining whether particular assets were marital or separate
property. Additionally, the written findings clearly discuss the
fact that numerous assets originated with Fran's inheritance from
her mother but were treated as marital property. In light of the
fact that most of the property which Fran inherited was
classified as separate property and awarded to Fran, we conclude
that these findings were sufficient.
With respect to Fran's health, the superior court
discussed, in its written findings, her primary problem -- RSD.
The superior court also concluded in its oral findings that RSD
would probably not prevent Fran from going back to work and that
the stress-related component of RSD would probably diminish as a
result of the conclusion of divorce proceedings. Thus, the
superior court considered the primary economic impact of Fran's
condition, and, as discussed in greater detail in the next
section, the court's view that Fran would be able to work around
the condition finds support in the record.
The court relied primarily on the testimony of Fran's
own expert to determine her future earning capacity.6 If one
credits her expert, which the trial court was entitled to do, the
record supports the finding that her earning capacity will be at
least comparable to Steve's.
With respect to Fran's present financial condition, the
superior court made no specific findings as to her post-
separation medical debts or the costs of health insurance7 and
her rehabilitation program. However, the court did make a
general finding that the large separate property award was
sufficient to meet her rehabilitation expenses and her "special
needs." Our review of this issue leads us to conclude that Fran
was awarded sufficient assets to satisfy all of her present
liabilities, finance her rehabilitation program, and meet her
future living expenses (including the cost of medical insurance)
during the rehabilitation period.8
We conclude that the superior court's findings address
the main issues raised by the parties below in a manner
sufficient to permit adequate review. In light of Fran's failure
to demonstrate that her needs have not been met as a result of
this distribution, and our conclusion in the following section
that as a result of the rehabilitation program which she proposes
she will have adequate financial resources, we conclude that the
property distribution is not clearly unjust.
C. Spousal Support and Attorney's Fees
Fran's final argument on appeal is that the superior
court's total property award to her is inadequate to meet her
existing medical bills, attorney's fees, future medical expenses,
and reorientation and rehabilitative needs. Therefore she
contends that the trial court erred in not awarding spousal
support9 or attorney's fees and costs.
At trial, Fran called Dr. Vincent Gollogly as an expert
witness. Dr. Gollogly is a vocational rehabilitation counselor
and psychologist. He met with Fran, performed various aptitude
and intelligence tests, reviewed her medical records, and spoke
with a representative from the University of Washington Pain
Clinic who had previously worked with Fran while she was
hospitalized there. Taking into account such factors as Fran's
physical limitations, the job market, Fran's economic needs, and
her various aptitudes, Dr. Gollogly recommended that Fran pursue
a career as a dental hygienist. Dr. Gollogly recommended that
Fran spend one year in Fairbanks taking two prerequisite courses
at UAF (chemistry and biology) and then enter a two-year program
at West Liberty College in West Virginia. Upon completion of the
program, she would be able to earn approximately $30/hour and
would be able to obtain a job with relatively flexible
scheduling. Dr. Gollogly testified that working part time would
enable Fran to earn $30,000 per year, and that if she was able to
work full time she could earn as much as $60,000 per year. At
trial, Fran expressed a desire to pursue a career as a dental
hygienist as recommended by Dr. Gollogly. In its
oral findings the superior court explained its decision not to
award spousal support as follows:
Now, the total non-marital property before pension
considerations awarded -- I mean total non-marital
property awarded to Ms. Davila here is $78,009.31.
This separate property is important to the Court
in its determination of the claim of spousal
support and special needs. This Court concludes
that Ms. Davila, if she completes the two years of
study required for dental hygienist certification,
will far surpass Mr. Davila in earning ability,
capable of earning a salary in Fairbanks, Alaska,
of $60,000 annually. Ms. Davila worked full-time
before. I believe she'll work full-time
again. . . . The availability of these significant
non-marital funds caused the Court to make a
closer than balanced distribution than otherwise
would have been given, although as I've stressed,
there is a tilting of the liquid items to her and
a distribution tilt in her favor nonetheless.
The court made no specific findings with respect to its order
denying attorney's fees.
From the trial testimony it appears that Fran has
sufficient assets to cover all of her expenses over the next
three years, as well as her current liabilities. Fran details
these expenses as follows:
Health Insurance ($306 per month) $ 11,016
Outstanding Hospital Bill $ 9,400
Attorney's Fees and Costs $ 29,420
Rehabilitation Costs10 $ 48,000
Prescriptions11 $ 2,400
This amount does not include two items mentioned by
Fran. First, the court allocated to Fran 75% of the capital
gains tax payable on any profit made on the sale of the Davilas'
home. However, this amount is relatively small as the total
profit on the house after expenses was roughly $1,000. Thus Fran
has a one time tax expense on a capital gain of approximately
$750. The only other possible expense mentioned is any medical
expense (other than prescription drugs) incurred during the self-
insurance period. The trial court dealt with this issue by
stating that Fran could minimize expenses during this period by
only receiving necessary treatments.12
Based on the superior court's distribution of property,
Fran received $132,683 in assets, including more than $110,000 in
cash and securities. This does not include (1) any return on
these investments, (2) any social security or vocational
rehabilitation benefits to which she might be entitled,13 (3) any
income she might receive if able to work, or (4) her share of
Steve's pension benefits, which will begin in June 1997.14 Thus,
based on the rehabilitation scenario which Fran presented at
trial, she has received sufficient assets to complete the three
year program necessary to become a dental hygienist without
having to liquidate any of her other assets.15
Fran has failed to demonstrate that her share of the
property division is inadequate to fulfill her rehabilitation
plan.16 The superior court found, based on the evidence, that
Fran would likely be able to work again. There is ample evidence
in the record to support this conclusion. For example, Fran's
treating physician testified that one of the "mainstays of
treatment" for RSD is for the patient to force herself to use the
foot.17 Additionally, Fran's own expert rehabilitation specialist
stated that he chose the program with Fran's medical condition in
mind. Because the property settlement was sufficient to fund a
three year rehabilitation program designed by her own expert
witness, we conclude that the decision not to award spousal
support was not an abuse of discretion.
The same reasoning supports a denial of attorney's
fees. The sole purpose in awarding attorney's fees in divorce
actions is to "enable the other spouse to prosecute or defend the
action[.]" AS 25.24.140. Thus, even if Steve earns more than
Fran, if her resources are sufficient for the superior court to
reasonably expect her to pay her own fees, it is not an abuse of
discretion to require her to do so. See H.P.A. v. S.C.A., 704
P.2d 205, 212 (Alaska 1985). Because of the large property
settlement, Fran had sufficient resources in the present case.
Based on the foregoing, we AFFIRM the superior court's
property distribution, as well as its decisions to deny
attorney's fees and spousal support.
1 After three seasons as either an unclassified or
Class-A assistant, the licensee may obtain a guide-outfitter
license allowing the holder to contract to guide-outfit big game
hunts. AS 08.54.350(c).
2 According to Steve's testimony, the Housing
Allowance fluctuates based on the actual expenses of the
recipient, up to a capped amount. The $186 as estimated by Fran
in her brief is based on testimony by Steve that his actual
expenses are approximately $450-500.
3 Until the date the divorce was finalized, Fran was
covered by Steve's medical insurance which he received from the
Air Force. The military insurance covers 100% of treatments
given at a military hospital, but only 80% of all reasonable
expenses incurred at a civilian hospital. Fran's bill for the
seven-week in-patient stay was approximately $47,000.
4 According to Steve's testimony, three stocks were
purchased when the account was initially established. These
stocks were later sold and the proceeds were used to purchase the
stocks currently in the account.
5 Significantly, in Julsen, we relied on the fact
that the non-donee spouse did not participate in management
decisions regarding the stock account to show that the parties
intended that the stock would remain separate property. 741 P.2d
at 646-47. Implicit in this reasoning is that the non-donee
spouse's management of the account would have been evidence that
the parties intended joint ownership.
6 The court also stated in its findings that Fran had
worked outside the home at various times during the marriage.
7 The record reveals that the superior court was
cognizant of the health insurance issue and found that Fran
should bear the contingent liability should she need medical care
during the six months she is without health insurance.
8 See Section III.C infra for a full discussion of this
9 There are two distinct types of continuing spousal
support. "[R]ehabilitative alimony is properly limited to job
training or other means directly related to the end of securing
for one party a source of earned income." Schanck v. Schanck,
717 P.2d 1, 5 (Alaska 1986). Reorientation alimony, on the other
hand, is meant 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). For example, reorientation alimony is appropriate to
allow the recipient spouses time to reorganize their assets into
a more liquid form, or to find jobs commensurate with skills
which they already possess.
10 This figure includes Dr. Gollogly's estimate that
attendance at West Liberty College (including living expenses and
airfare) would cost $35,540.
11 This amount represents the $400 per month cost of
Fran's prescription medicines multiplied by six months while she
has no insurance. Once she enters the high risk insurance pool,
her prescriptions will be covered.
12 On its face the superior court's decision to assign
this contingent liability to Fran in light of her past frequent
hospitalization might seem inequitable. However, in light of
Fran's ability to control expenses by seeking only necessary
treatment, and the nature of her ailment -- Fran's most recent
hospitalization was at a pain clinic and, however real, her
ailment threatened neither life nor limb -- we conclude that it
was not an abuse of discretion to assign this liability to Fran
13 A CPA who testified for Fran stated that Fran might
qualify for supplemental social security income. Dr. Gollogly
testified that Fran "would have a good chance of obtaining"
vocational rehabilitation services through the State which would
pay some or all of her tuition.
14 Fran will receive 40.425% of Steve's pension if he
retires in June 1997. Steve's pension is based on 50% of his
base salary at retirement, which, assuming he is promoted, will
be at least $2,350 per month. At this salary level, Fran would
receive roughly $475 per month.
15 According to our calculation, Fran would have
approximately $10,000 in liquid assets to spare. Thus, even
assuming she had already used $7,400 in CD proceeds to cover
expenses before trial, she would still have sufficient resources.
16 This court's decisions have established a preference
for meeting the parties' needs with the division of property,
rather than with alimony, where the marital assets are adequate
to do so. Bussell v. Bussell, 623 P.2d 1221, 1224 (Alaska 1981);
Malone v. Malone, 587 P.2d 1167, 1168 (Alaska 1978).
17 The physician testified at another point, "The usual
course of treatment for this problem has to do with encouraging
the individual to use the extremity and trying to provide as much
pain relief by whatever method seems to be workable."
Additionally, her rehabilitation specialist testified "I still
think that she should be able to do work, yes, and that's the