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Brotherton v. Brotherton (7/18/97), 941 P 2d 1241
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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, phone (907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
DOUGLAS WAYNE BROTHERTON, )
) Supreme Court No. S-7209
Appellant, )
) Superior Court No.
v. ) 3AN-94-1210 CI
)
TAHNI BROTHERTON, ) O P I N I O N
)
Appellee. ) [No. 4848 - July 18, 1997]
)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Rene J. Gonzalez, Judge.
Appearances: Herbert M. Pearce, Law Office of
Herbert M. Pearce, Anchorage, for Appellant. Allen M. Bailey, Law
Offices of Allen M. Bailey, Anchorage, for Appellee.
Before: Compton, Chief Justice, Rabinowitz,
Matthews, Eastaugh, and Fabe, Justices.
COMPTON, Chief Justice.
I. FACTS AND PROCEEDINGS
Douglas Brotherton and Tahni Brotherton were married in
1981. They have two children. They separated in 1991, and Tahni
filed a complaint for divorce in 1994. In April 1995, the superior
court entered a decree of divorce that awarded Tahni and Douglas
joint legal custody of the children, awarded Tahni primary physical
custody of the children, divided the parties' assets, dealt with
Tahni's request for alimony by "consider[ing] all of the property
of the parties, including the $33,800 equity in Douglas' premarital
property in Wasilla,"and awarded Tahni $2,500 for attorney's fees.
Douglas appeals. He disputes several aspects of the superior
court's property division, the invasion of his premarital property
to satisfy Tahni's alimony request, and the attorney's fees award.
We reverse and remand for further proceedings.
II. DISCUSSION
A. The Property Division Was Flawed in Several Respects.
1. Standard of review
Property division consists of three steps: determining
what property is available for distribution, placing a value on
that property, and allocating the property equitably. Moffitt v.
Moffitt, 749 P.2d 343, 346 (Alaska 1988); Wanberg v. Wanberg, 664
P.2d 568, 570 (Alaska 1983).
The first step is to determine what property is marital,
and thus available for distribution. Moffitt, 749 P.2d at 346.
The court's characterization of property as marital or separate is
reviewed for an abuse of discretion. See Jones v. Jones, 835 P.2d
1173, 1175 (Alaska 1992); Doyle v. Doyle, 815 P.2d 366, 368 (Alaska
1991). However, when the court makes a legal determination in the
course of taking this step, that determination is reviewed de novo.
Cox v. Cox, 882 P.2d 909, 913 (Alaska 1994); Moffitt, 749 P.2d at
346.
The second step is to place a value on the marital
property. Wanberg, 664 P.2d at 570. The court's determinations of
value are factual decisions that will be reversed only if clearly
erroneous. Doyle, 815 P.2d at 368; Cox, 882 P.2d at 913-14.
The final step is to determine if an equitable
distribution of the property is possible. The court's decision on
distribution is reviewed under an abuse of discretion standard, and
will be reversed only if clearly unjust. Cox, 882 P.2d at 914;
Doyle, 815 P.2d at 368.
2. The superior court erroneously failed to consider
Tahni's receipt of the Papoose Twins property in its allocation of
the marital property.
During the marriage, Douglas and Tahni staked and
improved a five-acre parcel known as the Papoose Twins Property.
Title to the property is in Tahni's name. Tahni testified that the
property is not transferable and requested that the court award the
property to her. Douglas did not object to her request. Douglas
and Tahni agree that the value of the property is $3,500. The
superior court did not mention the Papoose Twins Property in its
allocation of the marital estate.
Douglas argues that the superior court abused its
discretion by failing to acknowledge Tahni's receipt of the Papoose
Twins property and adjust the property allocation for its $3,500
value. Tahni agrees that "[t]he trial court should have allocated
the Papoose [T]wins parcel to one of the parties,"but argues that
the nontransferability of the property made an award to her the
only possible option. She further argues that the award of the
property to her should not affect the other aspects of the court's
property division.
Douglas is correct. With few exceptions, [Fn. 1] the
property available for distribution includes all assets acquired
during marriage. Lundquist v. Lundquist, 923 P.2d 42, 47 (Alaska
1996). The Papoose Twins property was acquired during the parties'
marriage. It is marital property that the court should have
allocated. Furthermore, the $3,500 value the parties ascribe to
the property is not insignificant in comparison with the value of
the net assets allocated by the court, which approximate $68,000.
We therefore remand the case to the superior court for an
allocation of the Papoose Twins property and a reevaluation of the
equity of the division of the marital estate, in light of the
allocation of that property.
3. The superior court did not err in determining the
date of separation.
The superior court found that "[t]he parties separated
for the final time on or about September 1991." Douglas argues
that this finding was erroneous, because "the trial testimony of
both Tahni and Douglas was that the parties separated in June of
1991 and from that time forward ceased to function economically as
a single unit." His argument is not persuasive.
In his reply brief, Douglas contradicts his earlier
assertion, stating that "[t]he only evidence offered at trial as to
the date of separation was the testimony of Douglas." He testified
that he believed the date of separation should be June, because
that was when he divided up the couple's bank accounts. However,
Douglas also testified that he spent two weeks in August -- the
only two weeks in July and August during which he was not working
at a remote location -- in the home he shared with Tahni and did
not move into a separate apartment until September 1991. The
couple's cohabitation during August is not consistent with
Douglas's claim that he and Tahni ceased to function as a single
economic unit at the end of June. We affirm the superior court's
finding with regard to the date of separation. [Fn. 2]
4. The superior court did not err in its valuation of
the personal property of the parties.
Douglas argues that the superior court erred in valuing
the personal property as of June 30, 1991 when it had concluded
that the parties separated as of September 1991.
With his trial brief filed in February 1995, Douglas
included a schedule of the value of the couple's personal property,
which they had divided when they separated. In the schedule
Douglas valued the property as of June 30, 1991. In a similar
schedule Tahni submitted, she adopted, with a few exceptions, the
values Douglas apparently had provided. The court did not
explicitly state the date it used for valuing the personal
property. However, the court noted: "No independent evidence was
given to the court as to the fair market value of the used
property. The only evidence presented was the respective opinions
of both parties as to the estimated value of the personal
property." Thus, it is apparent that many of the values used by
the court originated from Douglas's estimates of the value as of
June 30, 1991.
In Ogard v. Ogard, 808 P.2d 815, 819 (Alaska 1991), we
explained that "[o]rdinarily . . . the date of valuation, which may
be distinct from the date employed to distinguish marital from
post-marital property, should be as close as practicable to the
date of trial." See also Rodriguez v. Rodriguez, 908 P.2d 1007,
1012 (Alaska 1995) (property valued as of trial date); McDaniel v.
McDaniel, 829 P.2d 303, 306-07 (Alaska 1992) (trial court provided
no findings supporting decision to value property at date of
separation rather than date of trial). We continued:
As noted, there may be special situations
in which the date of separation is more appropriate. Where, for
example, "one of the spouses dissipates assets or deliberately
allows their value to decline following separation, or the value of
marital property increases due to the efforts of one of the
spouses,"use of the separation date may be warranted. In that
event, there should be specific findings as to why the date of
separation is the more appropriate choice for valuation.
Ogard, 808 P.2d at 820 (quoting L. Golden, Equitable Distribution
of Property sec. 7.02 at 208 (1983)).
There is no evidence that the property has been
deliberately dissipated by or has accreted through the effort of
one of the parties, yet the superior court gave no specific reasons
for departing from the general rule of valuing the assets as of the
date of trial. Nonetheless, a persuasive argument has been made
for affirming its determination.
The superior court never stated that it was valuing the
property as of June 30. The only evidence Douglas presented to the
court was the June 30 property values. "[This court has]
previously held that it is the duty of the parties, not the court,
to ensure that all necessary evidence is before the court in
divorce proceedings and that a party who fails to present
sufficient evidence may not later challenge the adequacy of the
evidence on appeal." Root v. Root, 851 P.2d 67, 69 (Alaska 1993);
see also Hartland v. Hartland, 777 P.2d 636, 640 (Alaska 1989)
(party who failed to present sufficient evidence at trial could not
challenge adequacy of evidence on appeal). Having failed to offer
evidence of value at any date other than June 30, no basis exists
for challenging the superior court's valuation determination.
5. The superior court erroneously failed to consider
Douglas's post-separation payments on the marital debt.
During the marriage Douglas and Tahni borrowed money from
both Douglas's and Tahni's parents. At the time of the separation,
the outstanding balance on the debt was approximately $15,600. At
the time of trial, the outstanding balance on the debt was
approximately $13,000. The superior court allocated the entire
$13,000 debt to Douglas and gave him credit for the same amount in
dividing the marital estate. Douglas argues that the court erred
by not giving him credit for the approximately $2,600 in payments
he made from post-separation income.
In Cox, we observed:
This court has required that trial courts
consider payments made to maintain marital property from post-
separation income when dividing marital property. The fact that
one party has made payments from non-marital income to preserve
marital property should be considered as one of the circumstances
to be weighed by the trial court in dividing the marital property.
Cox, 882 P.2d at 919 (citations and internal quotations omitted).
The court's findings show no consideration of Douglas's
preservation of the marital estate by reduction of the marital debt
with post-separation income. On remand, the superior court should
consider whether Douglas should be given credit for the
contributions he made from separate property in order to preserve
marital property. See Ramsey v. Ramsey, 834 P.2d 807 (Alaska 1992)
(holding no fixed rule requiring credit in all cases should be
imposed).
B. The Superior Court Must Clarify the Character of the
Wasilla Property Which It Invaded in Order to Provide Alimony for
Tahni.
The superior court made the following findings with
regard to the Wasilla property and Tahni's request for alimony:
12. A parcel [of] real property located in
Wasilla, Alaska, was purchased by Douglas approximately one year
before the marriage. Payments have been made on that property
using marital funds during the ten years of the marriage, and
Douglas has continued to make payments since separation. The court
finds, after considering the disparate earning capability between
these two parties, their necessities, and the contributions during
the marriage, that all of the current equity in the Wasilla
property is before the court for division. That is a total amount
of $33,800.
. . . .
14. Douglas has a long history of being . . .
employed. He is currently in relatively good health and is capable
of self-support.
15. Tahni has a history of employment during
the marriage, she has some marketable skills and is able to type
from 50 to 60 words per minute. Her work experience includes
working in a one-person office, management of that office, taking
care of the reception and secretarial needs of that office. She
also has work experience as a long-distance telephone operator.
Her earning capability, based on her work history, ranges from $10
to $15 per hour. She is not now currently employed. She has not
been employed since the date of the separation. Prior to that
date, she actually ceased being employed upon the birth of her
children.
16. Tahni has petitioned the court for
alimony for a period of time. . . .
17. In determining whether alimony is just
and necessary, this court is obligated to consider the
circumstances and assess the needs of the requesting spouse. This
court, based on the limited marital estate of this case and the
employment history of both parties, finds that the most appropriate
way to deal with a request for alimony is to consider all of the
property of the parties, including the $33,800 equity in Douglas'
pre-marital property in Wasilla.
18. In determining the most equitable
distribution of the marital estate this court has considered the
respective ages of the parties, their earning ability, the duration
and conduct of each during the marriage, their station in life, the
circumstances and necessities of each, their health and physical
condition, their financial circumstances including the time and
manner of acquisition of the property, its value at the time and
its income producing capacity.
The superior court divided the equity in the Wasilla property
equally between the parties. Douglas argues that the superior
court concluded that the Wasilla property was his premarital
property, and that the court erred in invading that property and
awarding half of the equity in it to Tahni.
The court is vested with broad discretion in making
alimony determinations. Faro v. Faro, 579 P.2d 1377, 1380 (Alaska
1978). Where there is no abuse of that discretion, we will not
interfere. Id.
There is ample support in Alaska law for an invasion of
separate property in order to do equity in divorce proceedings.
The court must determine what marital property
is available for distribution, value that property, and make an
equitable division if possible. If an equitable division is not
possible, the court turns to the parties' separate property. At
that point, the court is addressing the question of whether the
balance of the equities between the parties requires that the
property be invaded. If invasion is required, the court should
determine what separate property the parties own, value it, and
adjust the initial distribution as needed.
Chotiner v. Chotiner, 829 P.2d 829, 831 (Alaska 1992); see also
Morris v. Morris, 908 P.2d 425, 428 n.2 (Alaska 1995) ("[W]e have
repeatedly stated a preference for property division over
alimony."). The factors the superior court listed as having
considered in its Finding 18 are the very factors this court has
instructed superior courts to consider in making equitable
divisions of marital property and alimony determinations. See
Merrill v. Merrill, 368 P.2d 546, 547-48 n.4 (Alaska 1962). In
addition, we have held that "[w]hen a couple has sufficient assets,
the spouse with the smaller earning capacity can and should receive
a larger share in the property distribution to aid him or her in
this transition." Dixon v. Dixon, 747 P.2d 1169, 1173 (Alaska
1987).
However, the status of the Wasilla property is not clear.
Although at one point the court describes the Wasilla property as
Douglas's premarital property, it also noted that payments were
made on the property using marital funds, and concluded that "all
of the current equity in the Wasilla property is before the court
for division." It is well established in Alaska that "[a]n asset
that is originally premarital may be treated as marital for
purposes of distribution if the parties, by their actions during
the marriage, demonstrated an intent to treat the asset as a joint
holding." Rhodes v. Rhodes, 867 P.2d 802, 804 (Alaska 1994). On
remand the court must clarify the status of the property and the
parties' rights to the equity in it. [Fn. 3]
C. The Superior Court Did Not Err in Its Award of Attorney's
Fees.
The superior court awarded Tahni $2,500 for her
attorney's fees on the basis of "the disparate economic situation
of both parties"and "the superior earning capability that Douglas
has [and] the resources he has at hand." Douglas argues that the
award of attorney's fees was error.
Alaska Statute 25.24.140(a)(1) provides that a court may
award one spouse "attorney fees and costs that reasonably
approximate the actual fees and costs required to prosecute or
defend the action." Whether to make such an award is a decision
within the sound discretion of the court. H.P.A. v. S.C.A., 704
P.2d 205, 212 (Alaska 1985). Furthermore, in a divorce action the
"prevailing party"standard of Alaska Civil Rule 82 does not apply.
Id. Instead, the court should consider the parties' relative
economic situations and earning powers. Id.; see also Kowalski v.
Kowalski, 806 P.2d 1368, 1372 (Alaska 1991).
Even allowing for the superior court's erroneous
characterization of Tahni's work history, her economic situation
and earning capability are clearly inferior to Douglas's. The
attorney's fees award was not an abuse of discretion.
III. CONCLUSION
The judgment of the superior court is REVERSED and the
case is REMANDED for an allocation of the value of the Papoose
Twins property, a clarification of the findings with regard to the
Wasilla property, and any necessary adjustments to the distribution
resulting from these issues and the court's treatment of the
reduction of the marital debt.
FOOTNOTES
Footnote 1:
See, e.g., Julsen v. Julsen, 741 P.2d 642, 648 (Alaska 1987)
(spouse's inheritance not marital property).
Footnote 2:
With regard to certain retirement benefits Douglas had earned,
the superior court found that it could not accurately value them,
and therefore entered a qualified domestic relations order dividing
equally between the parties the retirement benefits earned between
October 1, 1981, and September 1, 1991. As a corollary to his
argument that the court incorrectly found the date of separation to
be September 1991, Douglas argues that the court improperly
allocated these retirement benefits. Since we conclude that the
court's determination of the date of separation was not in error
and that Tahni is otherwise entitled to these benefits, we affirm
this aspect of the superior court's findings.
Footnote 3:
The court's finding, in Finding 15, that Tahni has not been
employed since the date of separation is clearly erroneous. Tahni
testified that she has held two jobs, for a total of approximately
eighteen months, since the separation. If on remand the Wasilla
property is found to be marital, the issue of Tahni's post-
separation employment is irrelevant. However, if it finds the
property to be separate, it must consider the extent to which its
mistaken finding on Tahni's work history affected its disposition
of the Wasilla property.
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