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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Partridge v. Partridge (5/21/2010) sp-6478
Notice: This opinion is subject to 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,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| JAMES R. PARTRIDGE, | ) |
| ) Supreme Court No. S- 13256 | |
| Appellant, | ) |
| ) Superior Court No. 3AN-06- 05416 CI | |
| v. | ) |
| ) O P I N I O N | |
| ERLINDA PARTRIDGE, | ) |
| ) No. 6478 May 21, 2010 | |
| Appellee. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Sharon Gleason, Judge.
Appearances: Donna C. Willard, Law Offices
of Donna C. Willard, Anchorage, for
Appellant. Herman G. Walker, Jr., Limn &
Walker, Anchorage, for Appellee.
Before: Carpeneti, Chief Justice, Fabe,
Winfree, and Christen, Justices. (Eastaugh,
Justice, not participating.)
CHRISTEN, Justice.
I. INTRODUCTION
James and Erlinda Partridge obtained a final decree of
divorce in June 2008. James appeals the trial courts property
division which allocated cash and income-expending assets to him
and the marriages most significant cash-producing asset to
Erlinda. He argues that the trial courts allocation violates AS
25.24.160(a)(4), which requires that property divisions fairly
allocate the economic effect of divorce. James also claims the
trial court erred by mischaracterizing assets, failing to value
each partys pension, and failing to consider his contributions of
separate property to the marriage. Because the trial courts
property division was not an abuse of discretion, we affirm it.
But we remand for further proceedings because the trial court did
not credit James for some of the marital debts he paid during the
separation period, and because the trial court credited both
parties with the full value of marital pension payments they
received during the separation period without determining whether
they spent these funds on normal living expenses.
II. PROCEEDINGS
James and Erlinda Partridge were married in 1987.
Erlinda filed a complaint for legal separation in February 2006
and converted it into a complaint for divorce in May of that
year.
The case was tried in December 2007 and April 2008.
The trial court determined that the legal date of separation was
June 30, 2006, that a fifty/fifty property division was
appropriate, and that the total value of the marital estate was
$7,666,445. The court awarded James assets valued at $3,667,251
and Erlinda assets totaling $4,013,130 and ordered Erlinda to
make an equalizing payment of $172,940 to James by December 31,
2009. If Erlinda made the equalizing payment after December 31,
2009, it was to be subject to 7.75% interest retroactive to April
28, 2008. Both parties filed motions for reconsideration which
the trial court denied. James appeals.
III. FACTS
The Partridges accumulated a substantial estate during
their marriage. James retired from his job as a pilot for
Northwest Airlines in 1996 with a monthly pension of $6,784.
Erlinda retired in 2001 after working for thirty-three years as a
flight attendant. She receives an annuity payment of $789 per
month attributable to pre-marital employment. This annuity will
continue indefinitely. She also receives a monthly pension
payment of $1,312 that will cease when she turns sixty-five and
becomes eligible for social security. At trial, Erlinda was
sixty-one years old and James was sixty-nine. No children were
born during their marriage, and the superior court observed that
both parties were in basically good health.
A. Kent Corporate Park
The Partridges owe much of their prosperity to an
investment in four warehouses located in Kent, Washington known
as Kent Corporate Park (KCP). The four buildings sit on two
separate parcels. Lot three contains buildings A and B with
approximately 65,601 square feet of rentable space and a monthly
base rent of $28,168. Lot four contains buildings C and D with
72,553 square feet of rentable space and a monthly base rent of
$32,837. The two lots were separately owned until 1998 when the
Partridges predecessor-in-interest purchased them. If the two
parcels had been owned separately at the time of trial, the owner
of lot four would have needed an easement across lot three to
access the only available road.
The Partridges acquired KCP in 2001. The acquisition
was the culmination of two tax-exempt exchanges spanning the
previous decade, with each exchange resulting in ownership of an
investment property of successively greater value.1 The trial
court adopted Erlindas $9,027,288 valuation of KCP. At this
value, KCP had a total divisible equity of $3,541,375. James
never actively disputed KCPs status as marital property at trial;
he referred to it as held jointly and as a marital asset on
several occasions.
Although KCPs equity comprises half of the marital
estate, it produced nearly two-thirds of the Partridges monthly
income at the time of trial.2 A manager handled the day-to-day
operation of the warehouses and performed [n]inety-eight percent
of the business management for KCP during the marriage. Notably,
six-figure maintenance burdens such as a roof replacement and
flooding repairs created negative cash flow for KCP in some
recent years.
James had exclusive access and control over income from
KCP during the separation period. This included his unilateral
settlement of a lawsuit arising from a tenants environmental
contamination of part of KCP for $400,000. James did not inform
Erlinda of the settlement amount until compelled to do so by the
court.3 He spent much of the approximately $259,000 in net
settlement proceeds to purchase property in Wasilla. James also
took twenty-two monthly draws of $8,000 each and $120,000 of
additional draws from KCP during the separation period. Erlinda
received no income from KCP during this time and testified that
she borrowed funds from family members to pay her living
expenses. The trial court awarded KCP entirely to Erlinda.
B. Wasilla Property
In the summer of 2006, James purchased a home and
several residential lots on Lake Lucille in Wasilla. James used
income from KCP to make a down payment on the home and to
purchase two adjoining lots. Erlinda co-signed on the note for
the purchase of the house, but not on the adjacent lots. She
testified that she signed for the house because [James] couldnt
buy the Lake Lucille house without my signature . . . . I agreed
to sign so he could have a place to heal. James testified that
the house and lots were marital property because he had hoped at
the time of purchase that he and Erlinda would reconcile and live
together in a new home built on one of the lots.4
While living on the Lake Lucille property prior to and
during trial, James spent nearly $70,000 on mortgage payments and
insurance for the Lake Lucille home. He also used approximately
$67,000 to renovate it and improve the adjoining lots. These
improvements were made without consulting Erlinda and using funds
over which she had no control, but James characterized them as
marital expenses.
In his closing argument, James again characterized the
Lake Lucille home and adjacent lots as marital property, but he
asked that the court award them to him so he could continue
living there. The trial court determined that the house and
adjacent lots were Jamess separate property. The court
explained:
Although Ms. Partridges name is on the
house, shes not on the adjoining lots. And
its clear to me from the testimony that the
Wasilla home was not intended to be a joint
investment by the parties.
Mr. Partridge has made a number of
improvement[s] on the property where he seeks
to reside, but those were not improvements
that were made as joint decision[s], to cut
down trees and put in doors and other things.
Those were decisions that he made for
property that he alone has resided in. So I
dont see that the Wasilla property and
adjacent lots should be considered to be a
marital estate marital assets. And thats
consistent with the June 06 separation date.
The trial court found there has been depletion of the
marital estate by Mr. Partridge in the purchase of the Wasilla
home and the considerable funds that he spent there. The court
recaptured those funds by treating them as a prior cash
distribution to James in its accounting.
C. Yamhill Investment Property
The couples third significant asset is approximately
sixty-five acres of undeveloped land in Yamhill County, Oregon
with a stipulated value of $1,459,557. James and Erlinda owned
the Yamhill property free and clear at the time of trial.
In June 2005 James contracted with Al Nordgren to
develop the Yamhill property. The agreement provided that
Nordgren would submit a zoning change application to allow for
subdivision and development of the property. If the rezoning
application is successful, Nordgren will receive fifty percent of
the net profit realized from the investment. Nordgren will
receive nothing if the rezoning application is not approved
within two years of its submission.
At trial, James argued that Yamhill should be equitably
divided between the parties with the goal of fairly allocat[ing]
both the risk and the benefit of ownership of [Yamhill]. The
trial court awarded Yamhill solely to James, finding that he had
a far better demonstrated ability to develop it.
IV. STANDARD OF REVIEW
We review the trial courts judgment in property
division cases for abuse of discretion as provided by AS
25.24.160(a)(4).5 Property division involves a three step
process in which the trial court determin[es] what property is
available for distribution, assess[es] its value, and allocat[es]
it equitably.6
We review step one, characterizing the property as
separate or marital,7 under the abuse of discretion standard,
although it may involve legal determinations to which this court
applies its independent judgment.8 An abuse of discretion occurs
where the court considers improper factors, fails to consider
relevant statutory factors, or assigns disproportionate weight to
some factors while ignoring others.9 All assets acquired during
the marriage become marital property excepting only inherited
property and property acquired with separate property which is
kept as separate property.10
We review step two, placing a value on the property, as
a factual determination that we will upset only upon a showing of
clear error.11 Reversal for clear error requires that we find
ourselves left with a definite and firm conviction on the entire
record that a mistake has been made.12
We review step three, allocating the property
equitably, under the abuse of discretion standard.13 We will not
disturb the trial courts allocation unless it is clearly unjust.14
V. DISCUSSION
A. The Courts Characterization of the Partridges Assets
Was Not An Abuse of Discretion.
1. James waived the argument that KCP is his separate
property by failing to raise it in the trial
court.
James argues on appeal that KCP is his separate
property, but this argument bears little resemblance to his trial
court presentation. James expressly waived this argument by
affirmatively characterizing KCP as a marital asset both in open
court and in several filings, including his Supplemental Trial
Brief and his written closing argument. We will not consider
arguments that parties fail to raise in the lower court, let
alone arguments they have conceded below, unless the trial court
committed plain error.15 Because we find that no plain error was
committed error so prejudicial that failure to correct it will
perpetuate a manifest injustice16 we affirm the lower courts
classification of KCP as a marital asset.
2. The trial courts classification of the Lake
Lucille home and lots as Jamess separate property
was not an abuse of discretion.
Following separation, James moved out of the marital
home in Anchorage and into the home he purchased on Lake Lucille
in Wasilla. James spent hundreds of thousands of dollars on this
home, the adjacent lot, and on improvements in violation of a
standing injunction prohibiting the parties from dispos[ing] of,
encumber[ing], transfer[ing], or dissipat[ing] any marital
property without written consent of the other party or an order
from the court. The trial court found that James had engaged in
a depletion of the marital estate by using income from KCP to
purchase the Lake Lucille properties and other lots in the
Wasilla area. The court characterized these properties as Jamess
separate property, and charged James with receiving a $776,836
advance of marital funds he had spent on them. James argues that
if the KCP income is deemed marital, the trial court committed
plain error by characterizing the Wasilla properties as his
separate property.
The real property James purchased can be divided into
two groups: property acquired before June 30, 2006 the court-
determined date of separation and property acquired after that
date. The Lake Lucille home and an adjoining lot were purchased
in June 2006. James argues that these properties fit the
definition of marital property property acquired during marriage17
because they were acquired before the separation date using
marital funds drawn from KCP. We have held that the relevant
factors for determining whether property should be characterized
as marital are . . . (1) the use of property as the parties
personal residence . . . , (2) the ongoing maintenance and
managing of the property by both parties, (3) placing the title
of the property in joint ownership and (4) using the credit of
the non-titled owner to improve the property.18
Applying the facts to this legal framework, we find
that the trial court did not abuse its discretion by finding the
Lake Lucille home and lot were Jamess separate property. Erlinda
presented evidence regarding the first and second factors. James
testified that Erlinda never intended to live at the Lake Lucille
home, never owned a key to the home, and never spent a night
there. As to the third factor, Erlinda explained that the Lake
Lucille home was titled jointly because [James] couldnt buy [it]
without my signature and [I] agreed to sign so he could have a
place to heal. We also believe it is significant that Jamess
expenditures violated the February 22, 2006 pre-trial order,
which prohibited both parties from using marital funds or assets
except for . . . immediate, personal, and necessary living
expenses. A party may not disregard an injunction prohibiting
the use of marital funds, then strategically characterize the
assets acquired in violation of the court order to their
advantage.
Jamess argument that the other Wasilla properties
those purchased after the date of separation are marital relies
on the rule that assets acquired after separation can be deemed
marital property if they are acquired with marital property.19
The totality of the evidence, including Erlindas testimony,
supports the courts characterization of this asset. Erlinda
never intended to live on or near the properties, her name was
not on the titles, and James decided to purchase them
unilaterally. His purchase of the other Wasilla properties
amounted to conversion of marital assets into a non-marital form.20
The trial court did not err by recapturing the KCP
cash distributions James used to buy the Wasilla properties. We
have held that [w]here there is evidence that a marital asset was
dissipated, wasted, or converted to a non-marital form, the court
can recapture the asset by giving it an earlier valuation date
and crediting all or part of it to the account of the party who
controlled the asset.21 The trial court recaptured the funds
James spent purchasing and improving the Wasilla properties by
crediting him with receipt of the KCP income he invested in this
real estate.
Finally, James contends that the trial court erred by
charging him with all of the marital funds he spent purchasing
and improving the Wasilla properties. He argues that his
expenditures were made for a valid marital purpose and therefore
no dissipation, waste, or conversion of marital assets occurred.
But the same evidence that supports the trial courts conclusion
that the Lake Lucille properties were Jamess separate property
supports the conclusion that the funds were not spent for a
marital purpose. With the exceptions identified in Part C of
this decision, the trial court credited James for expenditures he
made on marital expenses during the separation period.
It was not an abuse of discretion for the court to
characterize the Wasilla properties as Jamess separate property,
and to recapture the funds James invested in them as a prior cash
distribution.
B. The Trial Courts Valuation of the Marital
Estate Was Not Clearly Erroneous.
1. It was not clear error to divide the Partridges
pensions by QDRO.
James contends that the trial court erred by failing to
direct the parties to value their pensions. This argument is
without merit because the court accounted for the parties
pensions by issuing a qualified domestic relations order (QDRO).22
Moreover, Jamess closing argument suggested dividing the parties
pensions by QDRO and did not pursue the valuation issue.23 The
trial court stated in its findings: [t]here was inadequate
valuation evidence to determine a present value [of the pensions]
and so the QDRO solution, as our Supreme Court said[,] seemed to
me the only feasible way to approach that. The trial court
accurately interpreted our precedent and did not commit clear
error by using a QDRO to divide the pensions.24
2. The trial court considered and properly valued the
KCP reserve accounts.
James argues that the trial court erred by finding KCP
reserve accounts totaling over $209,000 to be inconsequential and
awarding them to Erlinda without crediting them to her in the
courts property division spreadsheet. But James mischaracterizes
the courts finding. The trial court found that the estimated
balance in KCPs reserve accounts roughly equaled its liabilities.
The court added $47,712 from the environmental reserve account,
$80,893 from the cash in operations account, and $43,693 from the
cash in reserve account, then subtracted the $120,000 allowance
for a roof repair and $47,712 from the future environmental
expense account. The net of these account balances totaled
$4,586, which prompted the court to comment, I do not see that
there was sufficient evidence to warrant their inclusion [in the
property division]. The court noted that the property taxes were
not addressed by the evidence introduced at trial and that the
evidence regarding the cost of the roof repair was inconclusive.
The trial courts decision to net KCPs approximate cash balance
against its estimated outstanding liabilities was not clear
error.25
C. The Trial Courts Allocation of Marital Assets Was Not
an Abuse of Discretion.
James argues on appeal that the trial court erroneously
concluded that the parties could not jointly own KCP post-divorce
and inadequately considered the possibility of dividing KCP
between them. He also challenges the trial courts application of
the Merrill factors26 enumerated in AS 25.24.160. Specifically,
he challenges the trial courts consideration of the circumstances
and necessities of each party and the income-producing capacity
of the property at the time of the division.27 Finally, he
alleges the trial court failed to adequately consider the
separate property he brought into the marriage.
The trial court has broad discretion to divide property
in divorce cases.28 We review the trial courts property division
purely under the abuse of discretion standard.29 Alaska Statute
25.24.160(a)(4) requires trial courts to fairly allocate the
economic effect of divorce and codifies several factors for
courts to consider to achieve this goal.30 We have held that
these statutory factors are not exhaustive and that the trial
court need not make findings pertaining to each factor,31 but it
must make sufficient findings to indicate the factual basis for
the conclusion reached.32 We view the trial courts factual
findings in the light most favorable to the prevailing party
below,33 and will not reverse a trial courts factual
determinations accompanying equitable distribution except upon a
finding of clear error.34 We will not overturn a property
division unless it is clearly unjust.35
1. The trial courts decision to award Yamhill solely
to James was not an abuse of discretion.
James challenges the trial courts decision to award the
Yamhill County investment property entirely to him. He argues
that it would have been simple to divide Yamhill fifty/fifty and
that the trial court failed to account for Jamess contingent
liability to Nordgren. We find these arguments unpersuasive.
The trial court awarded Yamhill to James for two
reasons. First, the court concluded that the parties could not
successfully co-own the property due to Jamess lack of candor
regarding his business dealings, including his dealings with
Nordgren. Yamhill is undeveloped real estate and jointly
developing it would necessarily entail considerable cooperation
and communication between the parties. The courts concern with
Jamess candor and conduct supports awarding Yamhill to one party
or the other. Because the court found that Jamess relationship
with Nordgren put him in a far better position to be able to
develop [Yamhill] and turn it into a[n] income producing property
within a reasonable time frame the court awarded it to James
rather than Erlinda. The court considered Jamess history of
success developing properties and commented, I see Mr. Partridge
as having a far better demonstrated ability to develop [Yamhill],
[and] create it into an income producing property than Ms.
Partridge.
James also contends that the trial court failed to
account for the obligation owed to Nordgren for his help
developing Yamhill. But this argument overlooks the parties
stipulation regarding Yamhills value, and the trial courts
adoption of their stipulation. Stipulations are generally
controlling in the absence of fraud, duress, concealment of
assets or other facts showing that the agreement was not made
voluntarily and with full understanding.36 Because there is no
evidence of fraud, duress, or concealment, James waived his
argument challenging the Yamhill valuation.
Finally, James argues that the economic downturn has
pummeled Yamhills value, its prospects for development, and that
he is left bearing all of the risk of a bad economy. The
argument that this constitutes error ignores settled law. We do
not doubt the serious impact a falling real estate market can
have on a party who receives a large allocation of real property.
But we have repeatedly held that the date on which the trial
court values marital property generally should be as close as
practicable to the date of trial.37 This case perfectly
illustrates the importance of the rule. No one can divine the
economys next move, and we will not reverse the trial court for
failing to anticipate market fluctuations that cause asset values
to change after they have been reasonably pegged at trial.
2. The trial court did not abuse its discretion by
awarding Erlinda the sole income-producing asset.
James argues that the trial court abused its discretion
by awarding KCP to Erlinda because that allocation resulted in an
unequal division of the parties monthly income. In support of
this argument he compares his monthly income and expenses to
Erlindas projected income: [Jamess] monthly expenses, [$9,298]
of which are directly related to the property he received, exceed
his [monthly] income [of $5,934] by over $3,300. As reflected on
the other side of the same ledger, Erlinda enjoys a monthly
income of $20,619. Accepting Jamess claim that the economic
effect of the property division has been devastating requires
that we ignore the assets he received in the property division.
The trial court awarded James the vast majority of the marital
estates liquid assets.38 Nevertheless, James contends that the
trial court failed to divide the marital assets in a manner that
fairly apportions the overall monthly income stream. He argues
that the court ignored the income-producing capacity of the
property.39
The record convinces us that the trial court did
consider the income-producing versus income-consuming nature of
the assets it awarded.40 The court was aware of the effect of
allocating KCP to Erlinda and Yamhill to James:
With regard to income producing capacity . .
. [KCP has] $3.6 [million] thereabouts of
value, of equity. I look, however, at
Yamhill, $1.4 [million] undeveloped, but I
see Mr. Partridge as having a far better
demonstrated ability to develop that, create
it into an income producing property than Ms.
Partridge . . . . I looked at that and I gave
Mr. Partridge a lot of the cash, every bit I
could except for $50,000 for what I assume
would go toward any needs of Ms. Partridge,
thats the other reason I put all the cash in
his corner, is to balance that out.
The trial court arrived at this allocation largely
because of Jamess own conduct: his lack of disclosure, candor and
forthrightness with regard to [] finances during the separation
period convinced the court that the parties could not
successfully co-own assets such as Yamhill or KCP. The trial
court did not believe the parties should even be neighbors: the
type of continued contact of being adjoining property owners
requires an ability for each party to treat the other one fairly
and openly. That has not been demonstrated here.
We are mindful that the four warehouses comprising KCP
were previously held by two separate owners and that the only
physical barrier to returning to the previous ownership
configuration appears to be easily overcome: an easement could
be provided to the owner of lot four to cross lot three. James
makes a strong argument that it was an abuse of discretion for
the trial court to decline to award one lot to each party in
light of the income-producing capacity of KCP, the fact that both
parties have retired and are no longer earning income, and the
absence of any other income-producing assets in the marital
estate. This is admittedly a very close call, but we ultimately
conclude that the trial court did not abuse its discretion. The
reason for this again relates to the courts findings regarding
Jamess conduct during the separation period.
Yamhill and KCP are the two largest assets in the
Partridge estate. James essentially created a third indivisible
subset of the marital estate by spending hundreds of thousands of
dollars on the Wasilla properties during the separation period.
The court credited James with a prior cash distribution of
$776,836 for the reasons explained above. And the court awarded
Yamhill to James because it found that the parties should not co-
own a large undeveloped tract of real estate and because Jamess
experience and relationship with Nordgren made him the better
choice to receive that property. The value of Jamess pre-trial
cash distribution, plus the value of Yamhill, totals $2,236,393.
Given these awards, the court could not split KCP, maintain a
fifty/fifty property division, and still order a reasonable
equalizing payment. Jamess conduct forced the courts hand.
Finally, the trial court considered the value each
party bid for KCP. Erlinda valued KCP at $676,000 more than
James did and was willing to have it awarded to her at that
value. The courts decision to adopt Erlindas value for KCP
benefitted James. Having considered all of these circumstances,
we do not find that the trial courts property division was
clearly unjust.41
3. The trial court considered Jamess separate
property contributions.
James contends that the trial courts property division
fails to account for the separate property he contributed to the
marriage. James makes two arguments. The first pertains to a
farm he owned in Minnesota at the time the parties married.
James argues that the court should have considered whether the
substantial appreciation of the farm between 1987 and 1991 was
active or passive. Because he believes it was passive, he argues
that he should be credited with the appreciation as his separate
property. Second, James faults the court for not considering
$150,000 of pre-marital equity he had in condominiums.
Jamess arguments are not supported by the evidence or
Alaska law. The trial court expressly considered Jamess
Minnesota farm in its order. The evidence established that the
farm was exchanged for an apartment building, and the parties
later exchanged the equity in the apartment building for KCP.
James conceded at trial that KCP was marital property. The court
did not fail to account for Jamess pre-marital ownership interest
in the Minnesota farm; the court recognized that this equity was
contributed toward the purchase of an asset that was conceded to
be marital. Nor did the court overlook Jamess pre-marital equity
in the condominiums. Leaving aside the question of whether the
condominium equity was transmuted into marital property over the
course of the parties marriage, the trial court acknowledged that
Jamess separate property contributions were noteworthy but
concluded that his pre-marital contributions of equity comprised
a relatively small component in the amassment of wealth that has
occurred during the course of this 20-year marriage.
We have held that contributions of separate property
may be relevant to equitable division [but] we have not held that
failure to make an adjustment for such contributions constitutes
an abuse of discretion.42 James may disagree with the weight
accorded to these contributions, but that alone does not support
a conclusion that the trial court failed to consider these
contributions or otherwise abused its discretion.43
4. Failing to credit James for paying over $100,000
of marital debt was error.
James argues that the trial court erred by failing to
credit him for $101,808 in marital loans that he paid during the
separation period.44 We agree.
A bank statement for June 8 to July 7, 2006 shows that
the Partridges owed $101,808 on three debts near the time of
their separation: loans for a 2005 Roadtrek motorhome and a 1993
Monaco motorhome, and a line of credit. Each debt is
presumptively marital because each was outstanding as of June 30,
2006, the court-declared date of separation. We have held that,
[a]bsent any showing that the parties intended a debt to be
separate, the trial court must presume that a debt incurred
during the marriage is marital and should consider it when
dividing the marital estate.45
James made four payments of $2,705.25 on the motorhome
loans in June, July, August, and September 2006. In October 2006
James paid off the loan balances for both motorhomes and the
credit line. It does not appear that James received credit in
the courts final accounting for paying these marital debts. The
court adopted Erlindas experts accounting and credited James for
paying just $23,454.55 of marital debt during the separation
period. Erlindas expert explicitly classified Jamess payments on
the motorhome loans as his separate property without explanation
and omitted his satisfaction of the balance on the line of credit
entirely. Because the trial court did not credit James for
retiring these marital loans, we remand the courts property
division for consideration of this credit.46
5. It was error to credit the parties with the
marital portion of pensions received between their
separation and divorce without determining whether
they spent their pensions on normal living
expenses.
James argues that the trial court erred by charging
each party with the marital portion of the pension payments
received during the separation period. During that period, James
received $49,694 and Erlinda received $27,192 from marital
pensions. The trial court treated these amounts as pretrial cash
distributions made to each party for property division purposes.
Assets that no longer exist at the time of trial are
normally not available for distribution.47 Marital assets that
are spent after separation for marital purposes or normal living
expenses are not typically taken into account in the final
property division.48 Here, no evidence was presented that the
pension payments the parties received during the two-year
separation period still existed at the time of trial. Erlinda
testified that her pension was one of her only sources of income
during that time. James did not testify to how he used the
marital portion of his pension or whether the funds still
existed, but he argues on appeal that it was perfectly obvious
that both parties were using the[] [pensions] to fund ordinary
living expenses.
We remand for the trial court to make findings on
whether the pension funds still existed at the time of trial,
whether they were spent on normal living or marital expenses, or
whether they were disposed of differently before charging each
party with the full value of the income received from pensions
during the separation period.
VI. CONCLUSION
We REVERSE and REMAND for consideration of the credit
due to James for paying marital debt and for findings on the
disposition of the pension payments received during the
separation period. We AFFIRM the trial courts judgment in all
other respects.
_______________________________
1 The Partridges purchased KCP with a mortgage and an
Internal Revenue Code 1031 tax-free exchange of equity from a
Seattle apartment complex they owned.
2 The parties monthly income also included their pension
payments and Jamess social security payments.
3 James claims to have submitted the KCP contamination
settlement information to his attorney who, he alleges, failed to
convey the information to opposing counsel. Jamess attorney
attributed the belated disclosure of the settlement agreement to
Erlindas counsels failure to pursue the issue in discovery.
4 James testified that he thought [Erlinda] wanted to
live out there, we were planning on building a house on one of
the lots.
5 Walker v. Walker, 151 P.3d 444, 447 (Alaska 2007)
(citing Moffitt v. Moffitt, 749 P.2d 343, 346 (Alaska 1988)).
6 Forshee v. Forshee, 145 P.3d 492, 497 (Alaska 2006)
(quoting Fortson v. Fortson, 131 P.3d 451, 456 (Alaska 2006)).
7 Wanberg v. Wanberg, 664 P.2d 568, 570 (Alaska 1983).
8 Walker, 151 P.3d at 447 (quoting Moffitt, 749 P.2d at
346).
9 Hansen v. Hansen, 119 P.3d 1005, 1009 (Alaska 2005)
(citing West v. West, 21 P.3d 838, 841 (Alaska 2001)).
10 Id. (quoting Lewis v. Lewis, 785 P.2d 550, 558 (Alaska
1990)).
11 Walker, 151 P.3d at 447 (quoting Moffitt, 749 P.2d at
346).
12 Hansen, 119 P.3d at 1009 (citing Martens v. Metzgar,
591 P.2d 541, 544 (Alaska 1979)).
13 Id. (quoting Moffitt, 749 P.2d at 346).
14 Id.
15 Tybus v. Holland, 989 P.2d 1281, 1285 (Alaska 1999)
(citing Wettanen v. Cowper, 749 P.2d 362, 364 (Alaska 1988)).
16 Forshee v. Forshee, 145 P.3d 492, 500 n.36 (Alaska
2006) (quoting Hosier v. State, 1 P.3d 107, 112 n.11 (Alaska App.
2000) (citations omitted)).
17 Hansen, 119 P.3d at 1009 (Alaska 2005).
18 Beal v. Beal, 88 P.3d 104, 121 (Alaska 2004) (internal
citations omitted).
19 Bosquet v. Bosquet, 731 P.2d 1211, 1217 n.14 (Alaska
1987) ([A]ssets acquired subsequent to separation are not
considered marital property absent evidence that the spouse used
marital property to obtain them.); Schanck v. Schanck, 717 P.2d
1, 3 (Alaska 1986).
20 We note that the trial court characterized Jamess
purchase of the Wasilla properties as unreasonable depletion of
the marital estate. We do not believe this characterization is
technically correct. The term depletion is generally reserved
for cases where one spouse used marital property for his or her
own benefit with the intent to deprive the other spouse of his or
her share of the marital property. See Jones v. Jones, 942 P.2d
1133, 1140-41 (Alaska 1997). Jamess conduct is better described
as converting marital assets to a non-marital form. But under
either characterization, the result is the same: our cases
support recapture where marital assets have been dissipated or
converted to a non-marital form. Foster v. Foster, 883 P.2d 397,
400 (Alaska 1994).
21 Foster, 883 P.2d at 400.
22 James claims that Mellard v. Mellard, 168 P.3d 483, 486
(Alaska 2007), authorizes the court to direct the parties to fill
an evidentiary void in situations where a couple neglects to
value their pensions. Mellard only suggests this solution in
cases where the trial court did not wish to resolve the matter by
using a QDRO. Id. The trial court used a QDRO in this case so
Mellard does not control.
23 James stated: The marital portions of the pensions can
be divided by QDRO or they can be left with the person presently
receiving them.
24 James also mentioned the trial courts failure to order
the parties to value their health insurance benefits in his
points on appeal. Since James failed to brief this issue, it is
waived. Carpentino v. State, 42 P.3d 1137, 1139 (Alaska App.
2002) (A partys failure to brief an issue constitutes abandonment
of that issue) (quoting Booth v. State, 903 P.2d 1079, 1090
(Alaska App. 1995)).
25 See Ogden v. Ogden, 39 P.3d 513, 520 (Alaska 2001)
(holding that the valuation step of division of marital assets
involves factual determinations reversed only where the trial
court clearly erred in making them) (citing Dodson v. Dodson, 955
P.2d 902, 905 (Alaska 1998)).
26 Merrill v. Merrill, 368 P.2d 546, 547 n.4 (Alaska
1962).
27 AS 25.24.160(a)(4)(G) and (I).
28 Abood v. Abood, 119 P.3d 980, 984 (Alaska 2005) (citing
Cox v. Cox, 882 P.2d 909, 913 (Alaska 1994)).
29 Walker v. Walker, 151 P.3d 444, 447 (Alaska 2007)
(quoting Moffitt v. Moffitt, 749 P.2d 343, 346 (Alaska 1988)).
30 AS 25.24.160(a)(4)(A)-(I), otherwise known as the
Merrill factors. Merrill, 368 P.2d at 547 n.4. AS 25.24.160
states, in relevant part:
The division of property must fairly allocate the economic
effect of divorce by being based on 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
educational 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 an unreasonable depletion of marital assets;
(F) 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 the children;
(G) the circumstances and necessities of each party;
(H) the time and manner of acquisition of the property in
question; and
(I) the income-producing capacity of the property and the
value of the property at the time of division.
31 Nicholson v. Wolfe, 974 P.2d 417, 422 (Alaska 1999)
(citing Brooks v. Brooks, 677 P.2d 1230, 1233 (Alaska 1984)).
32 Id. (citing Merrill, 368 P.2d at 548 n.10).
33 Rausch v. Devine, 80 P.3d 733, 737 (Alaska 2003)
(citing Klosterman v. Hickel Inv. Co., 821 P.2d 118, 121-22
(Alaska 1991)).
34 McCoy v. McCoy, 926 P.2d 460, 463 (Alaska 1996) (citing
McDaniel v. McDaniel, 829 P.2d 303, 305 (Alaska 1992)).
35 Wanberg v. Wanberg, 664 P.2d 568, 574 n.20 (Given
adequate factual findings, and a demonstration that the trial
court weighed those facts in reaching its conclusion, we will not
overturn a property division unless it is clearly unjust.).
36 Forshee v. Forshee, 145 P.3d 492, 502 (Alaska 2006)
(citing Jordan v. Jordan, 983 P.2d 1258, 1264 (Alaska 1999)).
37 Id.
38 The courts division provided James $228,357 in cash, a
$62,572 retirement savings account, a $20,307 investment
account, and an equalizing payment of $172,940 a total of
$484,176 in liquid assets.
39 AS 25.24.160(a)(4)(I).
40 The court adopted Erlindas appraisal of KCP which
itself was based on an income approach.
41 McCoy v. McCoy, 926 P.2d 460, 463 (Alaska 1996).
42 Fortson v. Fortson, 131 P.3d 451, 459 (Alaska 2006).
43 Id.
44 James argues the court failed to account for marital
loans of $101,898.88. But the sum of the debts he cited equals
$101,808.88 (38,902.11+14,209.34+48,697.43).
45 Ginn-Williams v. Williams, 143 P.3d 949, 956 (Alaska
2006) (quoting Hansen v. Hansen, 119 P.3d 1005, 1009 (Alaska
2005)).
46 We note that while the trial court must consider the
payments James made to maintain the marital property, it is for
the trial court to decide whether he should receive a dollar-for-
dollar credit in the final property division. Ramsey v. Ramsey,
834 P.2d 807, 809 (Alaska 1992).
47 Brandal v. Shangin, 36 P.3d 1188, 1194 (Alaska 2001)
(citing Cox v. Cox, 882 P.2d 909, 918 n.5 (Alaska 1994)).
48 Jones v. Jones, 942 P.2d 1133, 1139 (Alaska 1997).
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