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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Cartee v. Cartee (9/24/2010) sp-6512
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
Terry A. CARTEE, )
) Supreme Court No. S-13319
Appellant, )
) Superior Court No.
v. )
) O P I N I O N
Catherine M. CARTEE, )
) No. 6512 - September 24, 2010
Appellee. )
)
Mary A. Gilson and Allison E. Mendel, Mendel &
Associates, Anchorage, for Appellant.
Sarah J. Tugman, Anchorage, for Appellee.
Before: CARPENETI, Chief Justice, FABE, WINFREE,
and CHRISTEN, Justices.
OPINION
CARPENETI, Chief Justice.
I. INTRODUCTION
A husband appeals the trial court's award to his former wife
of 60% of the marital property. He argues that the trial court
abused its discretion by improperly awarding rehabilitative
alimony, and by improperly considering his non-marital assets,
the parties' age difference, his daughter's future college
expenses, and his spending habits during the marriage. He also
challenges the court's valuation of a marital gun collection as
clear error, and challenges the court's exclusion of his expert
airplane appraiser as an abuse of discretion. Because the trial
court did not abuse its discretion or clearly err in its division
and valuation of property, we affirm the superior court on all
issues.
II. FACTS AND PROCEEDINGS
A. Facts
After nearly 16 years of marriage, Terry and Cathy Cartee separated
on June 25, 2006. At the time of trial, Terry was in his early 60s
and Cathy was about 50 years old. The parties have one child, a
daughter, K.C., born in 1993.
1. The parties' conduct, contributions, and financial arrangements
during the marriage
During the marriage, Terry worked a week-on/week-off schedule as an
electrician on the North Slope. He spent a few days of each off-week
flying for the National Guard and he guided hunting trips a few times
a year. Also during the marriage, Terry earned a hunting guide license
and an EMT license, worked on a pilot instructor's license, trained
for the fire brigade, and otherwise pursued opportunities for career
advancement. The year after the parties separated, Terry earned
approximately $166,000.
Before the marriage, Cathy had earned a nursing degree and during the
marriage she worked part-time as a nurse. Cathy also bore sole
responsibility throughout the entire marriage, and particularly during
Terry's long absences, for taking care of the home and taking care of
K.C. Because of her childcare and housekeeping responsibilities, Cathy
was unable to work full time. Also as a result of her domestic
responsibilities, Cathy forwent the opportunity to accept promotions,
complete additional education, or otherwise advance her career during
the marriage. At trial Cathy testified that she would have liked to
pursue an advanced nursing degree during the marriage, but that her work
schedule and her responsibilities of caring for K.C. made this impossible.
Cathy testified that she is still interested in earning the degree, which
would significantly increase her earning capacity. After the separation,
Cathy went to work full time. She currently earns approximately $38 an
hour.
During the marriage, all of Cathy's nursing income went to pay for
her own and K.C.'s expenses, including food, clothes, and medical
bills. Terry paid the mortgage and utility bills for the family home
from his earnings, but much of his income was spent on his personal
interests and hobbies, including buying guns, buying hunting and camping
gear, and refurbishing his personal airplane.
Terry has significant non-marital assets including the premarital
portion of his retirement accounts and a valuable piece of land.
Cathy came into the marriage with little other than an encumbered
vehicle and a small savings account.
2. The marital guns
Terry and Cathy's marital property includes a substantial gun collection.
Terry submitted at least four different firearm inventories at various
points in the litigation: in his initial disclosures, on a handwritten
list generated by him at an unknown time and for an unknown purpose, on
his July 2008 property spreadsheet, and on the August 2008 spreadsheet
provided with his trial brief. The values he gave for the same guns across
different lists varied widely FN1 and some lists included guns that did not
appear elsewhere. Terry testified that, other than a few missing items that
he identified, the August 2008 spreadsheet was accurate as to the number of
guns and their values. He did not offer an appraisal. Cathy did not cross-
examine Terry's testimony as to the gun values, but she did testify that
during the marriage Terry secretly purchased several firearms.
FN1. For example, the value of a Robar appeared on Terry's handwritten
list as $6,000, in his initial disclosures as $5,600, and on his August
2008 spreadsheet as $2,800.
3. The marital airplane
The marital property also includes a small airplane. Cathy's expert
witness Keenen Zerkel, a certified appraiser, testified that the plane
was worth $162,979 and Terry did not cross-examine him. Thereafter,
Terry sought to introduce Dan Hollingsworth, owner of an airplane repair
business, as a “rebuttal witness.” The trial court ruled that Hollingsworth
could not give an expert opinion as to the airplane's value because Terry
had failed to provide an appraiser's report in compliance with the trial
calendar order. The court did permit Hollingsworth, who was personally
familiar with the plane, to testify as a fact witness about the plane's
components.
B. Proceedings
Trial was held on August 12-13, 2008, regarding child custody and property
division. The court issued detailed oral findings at the conclusion of
trial and subsequently issued written findings of fact and conclusions
of law. The court denied motions for reconsideration by both Cathy and
Terry.
1. Equitable division of marital property
The trial court awarded Cathy 60% of the marital property.FN2 The trial
court made no finding as to the net value of the marital estate, but using
Terry's estimate of $1,131,681, the difference to Terry between a 50%
allocation and the 40% he received is approximately $113,000.
FN2. The 60/40 split was subject to one exception; the marital portion
of Terry's National Guard retirement was divided 50/50 by stipulation
of the parties.
Among its several bases for the property division, the trial court found
that under the circumstances, Cathy was “entitled to an equivalent of
rehabilitation alimony that comes in the form of an uneven division of
property.” That way, the court said “she could reasonably contemplate
taking some time off and going full time to school if that were something
that interested her.” In its order denying reconsideration, the court
explained that
[t]he evidence established that Cathy bore the burden of daily child rearing,
with pitifully few exceptions. This necessarily retarded her career development
as a nurse.... At one point she had to decline a promotion to a supervisory
position because of [K.C.]. This role division permitted Terry to develop
ancillary aviation and guiding skills. As a practical matter Cathy was too
tied up ... to get the masters degree in nursing to which she still aspires,
and which would materially increase her earning capacity. The extra resource
allocated to her by the court will give her the opportunity to take two years
out of the work force to obtain that degree.
The court cited two additional justifications for the unequal division.
First, Terry, unlike Cathy, “has very substantial non-marital assets” and
is therefore better equipped to deal with the effects of an unequal property
division. Second, because of Terry's higher earning capacity, he could
readily compensate for the unequal division by increased savings over his
remaining work life, or by working an additional year beyond his planned
retirement. In addition, the court observed that K.C. “must look to her mother
as the only 100% reliable underwriter of a future college expense,” a
circumstance that the court noted was “merely illustrative of Cathy's
situation, [and not] an independent basis for an unequal property division.”
Finally, the court clarified that although it was aware Terry had spent
“wildly over his marital portion of their resources and assets of the
marriage for his personal consumption and use,” its unequal property
division was not, and could not properly have been, founded on this fact
or crafted to penalize Terry on this basis.
2. Valuation of marital gun collection
The trial court valued the marital gun collection at $24,125, saying it
arrived at this figure by selecting the largest value for each gun that
it found among the multiple inventories submitted by Terry. In its order
denying reconsideration, the court explained that
Terry did not explain with specificity why he valued his guns at particular
amounts. He conceded that he purchased some of the guns secretively. He did
not offer an appraisal. The court felt the fairest approach was to accept
the highest value he had given any particular weapon on the various listings
produced....
3. Valuation of marital airplane
The trial court valued the marital airplane at $162, 979, explaining
that it accepted the value testified to by Cathy's expert appraiser, Mr.
Zerkel. The court said it found Zerkel to be a “credible witness and [an]
accomplished ... highly credentialed appraiser” who took Terry's criticisms
of the appraisal into account. In its order denying reconsideration, the
court further explained that
Terry's own appraiser was excluded from trial because he was not on
the expert witness list and had not produced a report. Terry testified
that ... he would not sell [the plane] at any price, effectively
depriving the court of the option of simply ordering [the plane] sold
and dividing the proceeds. Terry did not cogently explain how he settled
at his own valuation of $120,000. The court accepted the certified
appraisal rather than Terry's unsupported lay opinion.
Additional facts and proceedings relating to the trial court's exclusion
of Terry's expert airplane appraiser appear below.
Terry appeals the trial court's equitable division of property on
several grounds. Terry also appeals the trial court's valuation of the
marital gun collection and the court's decision to exclude the expert
testimony of his appraiser.
III. STANDARD OF REVIEW
We review a trial court's equitable division of property between parties
at divorce for abuse of discretion, and we will not disturb the result
unless it is clearly unjust.FN3 Whether the trial court applied the
correct legal rule in exercising this discretion is a question of law
that we review de novo, using our independent judgment.FN4
FN3. Walker v. Walker, 151 P.3d 444, 447 (Alaska 2007).
FN4. Cox v. Cox, 882 P.2d 909, 913 (Alaska 1994).
Property valuations by the trial court are factual determinations
which we will upset only if there is clear error.FN5 A finding is
clearly erroneous if we are “left with a definite and firm conviction
on the entire record that a mistake has been made.” FN6
FN5. Walker, 151 P.3d at 447.
FN6. Id.
A trial court's decision to admit or exclude evidence is reviewed by
us for abuse of discretion, and will be upset only if we find there
has been an error which affected the substantial rights of a party.FN7
FN7. Dobos v. Ingersoll, 9 P.3d 1020, 1023 (Alaska 2000).
IV. DISCUSSION
A. The Trial Court's Award To Cathy Of 60% Of The Marital Property
Was Not An Abuse Of Discretion.
Before discussing Terry's specific objections to the court's property
division, we briefly review the applicable law. Although a division of
marital property should generally begin with the presumption that an
equal division is equitable, a trial court has broad discretion to
overcome this presumption.FN8 Under AS 25.24.160(a)(4), a court may
provide for an unequal division of property “in a just manner” which
“fairly allocate[s] the economic effect of divorce” and is based on a
consideration of the following factors (the “ Merrill factors” FN9):
FN8. Odom v. Odom, 141 P.3d 324, 339 (Alaska 2006); Veselsky v.
Veselsky, 113 P.3d 629, 637 (Alaska 2005).
FN9. AS 25.24.160(a)(4) codifies and expands the factors articulated
in Merrill v. Merrill, 368 P.2d 546, 547-48 n. 4 (Alaska 1962). Odom,
141 P.3d at 339.
(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 ...;
(E) the conduct of the parties, including whether there has been
unreasonable depletion of marital assets; ... [and]
(G) the circumstances and necessities of each party;....
In addition to these factors, a trial court may consider “any other
factors it deems relevant” to dividing the property.FN10 While the
trial court need not make findings pertaining to each Merrill factor,
its findings must be sufficient to indicate a factual basis for the
conclusion reached. FN11 Where the trial court makes these threshold
findings, we generally will not reevaluate the merits of the property
division.FN12
FN10. McCoy v. McCoy, 926 P.2d 460, 463 (Alaska 1996). See also Hooper
v. Hooper, 188 P.3d 681, 689 (Alaska 2008) (stating list enumerated in
AS 25.24.160(a)(4) is “not exhaustive” and it is “entirely appropriate”
for a court to consider other factors) (quoting Nicholson v. Wolfe, 974
P.2d 417, 422 (Alaska 1999)).
FN11. Nicholson, 974 P.2d at 422.
FN12. Id.
Terry appeals the trial court's equitable division of property on five
separate grounds. We discuss each in turn.
1. The trial court's award of additional property to compensate Cathy for
her lower earning capacity and to enable her to pursue additional education
did not constitute an award of rehabilitative alimony, and the trial court
did not abuse its discretion in making the award.
The trial court's property division rested in part on the court's finding
that during the marriage Cathy sacrificed her career to care for the couple's
child while Terry advanced his career away from home. This, the court found,
entitled Cathy to “an equivalent of a rehabilitation alimony that comes in
the form of an uneven division of property.” This extra resource, the court
said, would “give [Cathy] the opportunity to take two years out of the work
force” to earn an advanced degree. Terry argues that the trial court erred
because an allocation of property that considers the effect of the marriage
on a spouse's earning capacity, or a spouse's interest in pursuing additional
education, is really an award of rehabilitative alimony. Therefore, Terry
argues, the court abused its discretion by making the award without making
the specific findings required for rehabilitative alimony under Tybus v.
Holland.FN13 Because we conclude that the trial court's property division
did not constitute an award of rehabilitative alimony, we hold that the court
did not err by neglecting to make the rehabilitative alimony findings.
FN13. 989 P.2d 1281 (Alaska 1999). A trial court can award rehabilitative
alimony to enable a spouse to pursue education or job training which will
increase the spouse's earning capacity if such an award is “just and necessary.”
Id. at 1287. The recipient spouse must present the court with an education plan
that identifies “a career goal, a degree program aimed at realizing that goal,
and a time frame during which the degree may be earned through reasonable diligence.”
Id. at 1287-88 n. 26 (quoting Myers v. Myers, 927 P.2d 326, 328 (Alaska 1996)).
Equitable divisions of property and awards of alimony are two of the
tools available to a trial court in meeting the needs of the parties at
divorce.FN14 Different bodies of law govern these two mechanisms: AS
25.24.160(a)(4) identifies the factors a court must consider in making an
equitable property division, while AS 25.24.160(a)(2) and the cases
interpreting it articulate the findings a court must make to justify a
rehabilitative alimony award. These two mechanisms require trial courts
to undertake two very different analyses. A court fashioning an equitable
division of property may in its broad discretion consider the parties'
“earning capacity ... educational backgrounds, training, employment
skills, work experiences, length of absence from the job market, and
custodial responsibilities for children during the marriage.” FN15 The
court may also consider “the circumstances and necessities of each
party” FN16 including a spouse's need for additional income while pursing
a professional degree.FN17 By contrast, a court's parameters for making
an award of rehabilitative alimony are much narrower; under Tybus, the
party seeking rehabilitative alimony must present a detailed “educational
or job training plan so that the reviewing court can determine whether a
support award is necessary and appropriate.” FN18 In addition, the award
must be supported by a finding that the recipient spouse actually intends
to use the award for that purpose.FN19
FN14. AS 25.24.160(a)(2), (4).
FN15. AS 25.24.160(a)(4)(C).
FN16. AS 25.24.160(a)(4)(G).
FN17. Hooper v. Hooper, 188 P.3d 681, 686 (Alaska 2008) (citing
Hayes v. Hayes, 756 P.2d 298, 300 (Alaska 1988)).
FN18. Tybus, 989 P.2d at 1288.
FN19. Myers v. Myers, 927 P.2d 326, 328 (Alaska 1996).
The standards for property divisions and rehabilitative alimony
awards differ because the two mechanisms serve different purposes.
While a rehabilitative alimony award is made specifically to fund
a spouse's job training,FN20 a property division can be made for a
more flexible range of reasons, including to compensate a spouse for
the effect that her role in the marriage has had on her earning
capacity, or to give her the option to pursue further education.FN21
Because alimony awards and property divisions are guided by different
principles and aimed at serving different purposes, we hold that
property awards made to potentially facilitate career training are
distinct from rehabilitative alimony awards, and should be analyzed
by the trial court under the property division statute, and not the
rehabilitative alimony standard.
FN20. See Fernau v. Rowdon, 42 P.3d 1047, 1058 (Alaska 2002)
(“Rehabilitative alimony is appropriate ‘when the recipient spouse
intends to apply the alimony toward job training designed to lead to
employment.’ ”) (quoting Jones v. Jones, 835 P.2d 1173, 1178-79 (Alaska
1992)).
FN21. See AS 25.24.160(a)(4).
Because we conclude that the trial court did not err by awarding
additional property to Cathy without making the rehabilitative alimony
findings, the only remaining question is whether the trial court abused
its discretion in making the property award. We hold that it did not.
Abuse of discretion may occur when the trial court “considers improper
factors, fails to consider statutorily mandated factors, or gives too
much weight to some factors.” FN22 In this case, the trial court “fairly
allocate[d] the economic effect of divorce” FN23 by fashioning a property
division that would either allow Cathy to support herself while maintaining
her current income, or allow her to pursue an advanced degree which would
increase her earning power. In explaining part of the basis for its property
division, the trial court said it found that “Cathy bore the entire burden
of daily child rearing” which “necessarily retarded her career development
as a nurse.” The court found that while this arrangement permitted Terry to
develop his career skills, it meant “Cathy was too tied up, and too strapped
for resources ... to get the masters degree in nursing ... which would
materially increase her earning capacity.” Under AS 25.24.160(a)(4)(C), these
are entirely appropriate factors for a trial court to consider.FN24
FN22. Long v. Long, 816 P.2d 145, 150 (Alaska 1991) (describing abuse of
discretion in making child custody decision).
FN23. AS 25.24.160(a)(4).
FN24. AS 25.24.160(a)(4)(C) permits consideration of “the earning
capacity of the parties, including their educational backgrounds,
training, employment skills, work experiences ... and custodial
responsibilities during the marriage.”
Terry argues that the trial court nonetheless abused its discretion
because its factual findings in support of the property division were
clearly erroneous. First, Terry argues that the court clearly erred
in finding that Cathy's domestic responsibilities during the marriage
“necessarily” impeded her career development because it was Cathy's
“choice to stay home with K.C.” and “[t]here is no evidence that the
parties could not have afforded child care.” Terry mischaracterizes
the court's finding. The court did not find that it was absolutely
necessary for Cathy to stay home with K.C. or that Terry pushed Cathy
into this role against her will. Rather, the court found that the role
division that the couple in fact adopted-with Cathy working part-time
and bearing almost all responsibility for the home and for K.C., while
Terry worked and pursued his interests away from home-necessarily
resulted in a situation where Cathy was left without enough time to
pursue additional education. Because this finding is supported by
sufficient evidence, Cathy's testimony, we hold that the court did not
clearly err in this regard.
Second, Terry argues that the court clearly erred in finding that
Cathy's domestic role “permitted Terry to develop ancillary [career]
skills.” Terry argues that because he already had substantial career
skills before the marriage, Cathy's sole responsibility for domestic
matters during the 16-year marriage did not actually benefit him
professionally. Terry's contention is not supported by the record. Not
only did Terry gain over a decade of work experience during the marriage,
the record shows he also earned a hunting guide license and an EMT
license, worked on a pilot instructor's license, and trained for the
fire brigade. Much of this training took place away from home. From
this evidence, it was not clear error for the trial court to find that
Terry developed career skills during the marriage and that this was
enabled, in no small part, by Cathy's role as sole caregiver to the
couple's child.
Because the trial court had a sufficient and proper basis for awarding
Cathy additional property in recognition of her lower earning capacity
and interest in pursuing additional education, we hold that the trial
court did not abuse its discretion in this regard.
2. The trial court did not abuse its discretion in considering Terry's
non-marital assets.
The court's equitable division of property was also based in part on
its finding that Terry's “significant non-marital assets” would cushion
him from the “effects of an unequal property division.” Terry argues
that consideration of his separate property was an abuse of discretion
because “[t]he proper test to be applied by the trial court in making
an unequal division of property is the reasonable needs of the parties”
and “Cathy presented no specific evidence that she has unmet financial
needs.” Terry cites Odom v. OdomFN25 for the proposition that the
“reasonable needs” test controls an equitable division of property.
However, this misstates Odom's holding. In OdomFN26, we held that the
trial court abused its discretion in awarding a wife $2.25 million and
invading the husband's separate property in order to allow her to
maintain her previously extravagant lifestyle without first considering
whether an unequal division of marital property could properly balance
the equities.FN27 We held that “ the decision to invade separate
property may be undertaken only after the trial court has attempted
to use the marital estate to balance the equities ... in light of the
parties' reasonable needs.” FN28
FN25. 141 P.3d 324 (Alaska 2006).
FN26. Id. at 341.
FN27. Id. at 339-41.
FN28. Id. at 340 (emphasis added).
Unlike Odom, this case does not involve an invasion of separate
property. This case involves the equitable division of marital
property, a task that must be guided by the factors listed in AS
25.24.160(a)(4).FN29 One of those factors is “the financial condition
of the parties.” FN30 Indeed, “the circumstances and necessities of
each party” are also proper considerations.FN31 However, the trial
court has wide discretion to ascribe different weights to these
factors upon hearing the evidence at trial. FN32 Because the trial
court's consideration of Terry's “financial condition,” including
his separate property, was proper under AS 25.24.160(a)(4), we hold
that the trial court did not abuse its discretion in this regard.
FN29. In other sections of his brief, Terry acknowledges that
AS 25.24.150(a)(4) controls equitable division. See also Young v.
Lowery, 221 P.3d 1006, 1014 and n. 38 (Alaska 2009) (rejecting former
spouse's argument that the Odom “reasonable needs” test applied to
division of marital property).
FN30. AS 25.24.160(a)(4)(D).
FN31. AS 25.24.160(a)(4)(G).
FN32. Veselsky v. Veselsky, 113 P.3d 629, 637 (Alaska 2005); Cox
v. Cox, 882 P.2d 909, 913 (Alaska 1994).
3. The trial court's consideration of the parties' ages was not an
abuse of discretion.
Terry argues that the trial court abused its discretion in dividing
the marital property without adequately considering the age difference
between the parties. Because we conclude that the trial court adequately
considered the parties' age difference, we hold that the trial court
did not abuse its discretion in this regard.
Terry is correct that the age of the parties is one factor that a trial
court may properly consider in equitably dividing the marital estate.FN33
However, a court has broad discretion to consider several factors in
fashioning its property division,FN34 and it need not place equal weight
on every factor. In addition, while a trial court must make sufficient
findings to indicate a factual basis for its conclusion, there is no
requirement that it make specific findings pertaining to each element.FN35
Here, the trial court was aware of the 12-year age difference between Cathy
and Terry, and aware that Terry's anticipated age of retirement was approaching.
In fact, the court explicitly considered this, saying that with Terry's
high salary, he could “readily make up for this unequal property division
by increased savings over his remaining work life, or by working one
additional year beyond his planned retirement.”
FN33. AS 25.24.160(a)(4)(B).
FN34. Veselsky, 113 P.3d at 637.
FN35. Nicholson v. Wolfe, 974 P.2d 417, 422 (Alaska 1999).
Nonetheless, Terry argues, it was an abuse of discretion to consider
Terry's high salary and advanced age without also considering that Cathy
“has many more years in the work force” in which her earning capacity
might increase. However, while AS 25.24.160(a)(4)(C) explicitly permits
consideration of the parties' present earning capacities, it “does not
require the court to consider the party's potential future earning capacity
following significant additional education.” FN36 Thus, Terry's true protest
seems to be not that the court failed to sufficiently consider the parties'
age difference, but that the court failed to view the age difference in the
light most favorable to Terry. We generally do not reevaluate the merits of
a property division where the trial court has made findings sufficient to
indicate its factual basis.FN37 Because we conclude that the trial court
did make sufficient findings with regard to the AS 25.24.160(a)(4) factors,
including the age and present earning capacities of the parties, we will
not upset the court's property division on that basis.
FN36. Hooper v. Hooper, 188 P.3d 681, 688 (Alaska 2008).
FN37. Nicholson, 974 P.2d at 422.
4. The trial court's property division was not based on an improper
consideration of K.C.'s future college expenses.
Terry further argues that the trial court abused its discretion by
improperly allocating property to Cathy to account for K.C.'s future
college expenses. Terry is correct that he has no legal obligation
to pay for his daughter's post-majority college expenses FN38 and
that the court could not indirectly compel him to do so via a property
division. However, because we conclude that K.C.'s college expenses
were not a basis for the trial court's property division, we hold that
the court did not abuse its discretion in this regard.
FN38. See H.P.A. v. S.C.A., 704 P.2d 205, 209-10 (Alaska 1985).
AS 25.24.170 limits post-majority support for educational purposes to
“unmarried 18-year-old children of the marriage while they are actively
pursuing a high school diploma or an equivalent level of technical or
vocational training and living as dependents with a parent....”
In denying reconsideration of its decision to award 60% of the marital
property to Cathy, the trial court said that
[w]hile it is to be hoped that Terry will contribute to [K.C.'s] college
education, he is under no obligation to do so.... [K.C.] must look to her
mother as the only 100% reliable underwriter of a future college expense.
The court views this circumstance as merely illustrative of Cathy's
situation, but not as an independent basis for an unequal property division.
Terry argues that despite the court's disclaimer, “it is evident that
the court considered this factor....” We disagree. The trial court
correctly recognized that Terry has no obligation to fund K.C.'s college
education and made clear that future college expenses were not an
independent basis for its property division. The court did not cite
college expenses in its initial oral findings or in its written
findings of fact and conclusions of law, and the court made sufficient
findings to otherwise indicate a factual basis for its property division.
Therefore, we take the trial court at its word that Cathy's potential
responsibility for K.C.'s college expenses was not a basis for its
division of property. Because the trial court did not improperly consider
K.C.'s college expenses in dividing the marital property, we hold that
the court did not abuse its discretion in this regard.
5. The trial court's property division was not based on an improper
consideration of Terry's spending habits during the marriage.
Terry makes two different arguments with respect to the trial court's
consideration of his spending habits during the marriage: first, that
the court improperly considered his extravagant personal spending in
awarding Cathy a larger portion of the marital property, and second
that the court erred by considering his spending habits while excluding
his testimony on the matter. Terry is correct that a trial court must
divide the marital property without regard to fault and may not consider
a party's moral or legal marital failings that do not amount to economic
misconduct.FN39 However, both of Terry's arguments rest on the assumption
that the trial court indeed based its equitable division of property, at
least in part, on Terry's spending habits during the marriage. Because
we conclude that the trial court did not base its property division in
any part on Terry's spending, we hold that the court did not abuse its
discretion in this regard.
FN39. Jones v. Jones, 942 P.2d 1133, 1139 (Alaska 1997). Cathy
acknowledged that she was not alleging financial misconduct of the
sort that would merit recompense via uneven property distribution.
Terry points us to a handful of statements by the trial court to
illustrate his argument. First, Terry cites the court's question (in
overruling a relevance objection regarding airplane expenditures)
wondering if Terry “has spent $195,800 from 1990 to 2006, might that
have some tendency and reason to prove ... the nature of his conduct
during the marriage ...?” However, this section of the transcript
read in full shows that the court was actually asking whether Terry's
conduct in making the expenditures might “be to some extent useful in
ascertaining by inference conclusions about the value of the plane.”
Therefore, this quote cannot be viewed as illustrating the court's
improper consideration of Terry's spending.
Second, Terry cites the court's observation in its oral findings that
Terry “is a miser, ... what's his is his, that he's not sharing....”
Again, Terry has taken the court's statement out of context. This
statement was a finding of fact which the court made not with regard
to the division of marital property but in support of its conclusion
that a piece of land Terry purchased before the marriage had not been
transmuted into marital property.FN40 Terry's argument that the court
should not have made this finding while denying him the opportunity
to testify about the money he spent on his family misses the point
that in this instance, the court's recognition of his financial philosophy
actually inured to his benefit. Terry's contention that the court found
these facts “determinative in making the unequal division” is unsupported
by the record.
FN40. The court explained that although Cathy did yard work on this
land during the marriage, Terry's fierce “what's mine is mine” attitude
indicated overwhelmingly that Terry lacked the donative intent necessary
to transmute his separate property into marital property.
Terry's third example has some degree of merit. He cites the court's
written findings of fact and conclusions of law that “[t]he property
division shall be 60/40 in Ms. Cartee's favor.... Mr. Cartee spent
wildly over his marital portion of the resources and assets of the
marriage for his personal consumption and use.” This statement is
problematic to the extent that it was a basis for the court's unequal
property division. However, we conclude that the court's clarification
of its basis for the division, set forth in the court's subsequent orders
denying Cathy and Terry's motions for reconsideration, alleviates the
troubling effect of the court's initial statement.
In its order denying Cathy's motion for reconsideration,FN41 the court
demonstrated that it was well aware of the applicable law; it said
“a court is not entitled to consider moral or legal misconduct ... as
entitling the other spouse to an enhanced portion of the marital estate”
and “[j]udicial value judgments concerning discretionary spending during
a marriage are generally to be avoided.” In its order denying Terry's
motion for reconsideration, the court put to rest any lingering questions
about the basis for its property division:
FN41. Cathy's motion for reconsideration regarded the court's finding
that a piece of land purchased by Terry before the marriage remained
his separate property, and did not relate to the equitable division of
marital property. However, we find it helpful in determining how the
court considered evidence of Terry's spending habits.
Terry is quite correct that the court cannot penalize him because he
consumed markedly more of marital income than Cathy. As the court made
clear in denying Cathy reconsideration of the denial of transmutation
of the residential lot, she must live with her election to remain
married to a freewheeling spender. But the court may properly consider
the huge present disparity in income, the availability of retraining to
modestly redress that imbalance, the retarding effect the marriage had
on her career development, and the significant non-marital assets which
cushion this gentleman from the effects of an unequal property division.
Terry has not presented us with any evidence to doubt the trial court's
reasoning. Because we conclude that the trial court did not base its
property division on an improper consideration of Terry's spending habits
during the marriage, we hold that the trial court did not abuse its
discretion in this regard.
In sum, because we find that the trial court had a sufficient and proper
basis for its decision, we affirm in full the trial court's division of
marital property.
B. The Trial Court's Valuation Of The Marital Guns Was Not Clearly
Erroneous.
Terry argues that the trial court erred in its valuation of the marital
gun collection. A trial court's valuation of property when dividing
marital assets is a factual determination and will be reversed only if
it is clearly erroneous.FN42 A finding is clearly erroneous if a review
of the record leaves us with a definite and firm conviction that a mistake
has been made.FN43 Because we conclude that the trial court's valuation of
the marital guns was supported by sufficient evidence, and indeed based on
valuations submitted by Terry himself, we hold that the trial court's
valuation was not clear error.
FN42. Jones v. Jones, 835 P.2d 1173, 1175 (Alaska 1992).
FN43. Williams v. Alyeska Pipeline Serv. Co., 650 P.2d 343, 347 (Alaska
1982).
During the litigation, Terry submitted at least four different gun lists.
The values given for particular guns varied widely from one list to
another. FN44 Terry offered no formal appraisal, but testified that he
considered the most recently submitted list (the “August 2008 list”) to
be accurate. The trial court said it ultimately arrived at its valuation by
selecting the highest value it found for each gun from among Terry's multiple
lists.
FN44. See supra note 1.
First, Terry argues that the court clearly erred because it made insufficient
findings to justify its reliance on the earlier lists over the more recent
August 2008 list. Terry correctly points out that under Ogard v. Ogard,FN45
the valuation of an asset should reflect its value as of the time of trial,
and that when the court chooses an earlier valuation date, such as the date
of the parties' separation, it should make a specific finding as to why the
earlier date is more appropriate.FN46 If the court in this case had valued
the guns as of an earlier date and ignored evidence that the guns had increased
or decreased in value by the time of trial, we agree that this would have been
error under Ogard. However, Terry has presented no evidence that this occurred.
Terry produced no evidence at trial that the changes in value from one list to
another were related to appreciation or depreciation over time. Rather, Terry's
argument rests on a conflation of the date on which a document was submitted to
the court with the date as of which an asset was valued. Because Terry points to
no evidence showing that the court used an improperly early valuation date,
we find no clear error in this respect.
FN45. 808 P.2d 815 (Alaska 1991).
FN46. See Ogard, 808 P.2d at 819-20.
Second, Terry argues that the court clearly erred because, even if the
court's valuation date was not improperly early, its conclusion still
lacked a sufficient evidentiary basis. Terry is correct that a trial
court cannot pull values out of thin air, but must have an evidentiary
basis to support its findings.FN47 Terry argues that the court's
valuation was clear error because it “is not supported by testimony
or appraisals,” because there is “no testimony or appraisal contradicting
Terry's trial testimony,” and because “[t]he court rejected [Terry's]
sworn testimony of the gun values.” That much is true; but it is not true
that the court had no evidentiary basis for its valuation. As the court
explained, it valued the guns by selecting from among the values on the
lists submitted by Terry himself. Terry's first three lists, submitted at
different phases of discovery, do constitute evidence that the court may
properly consider. FN48 Terry's testimony of course also constitutes
properly considered evidence, but the evidentiary weight to be given to
an owner's opinion testimony as to the value of his property falls squarely
within the trial court's discretion.FN49
FN47. See Matson v. Lewis, 755 P.2d 1126, 1129 (Alaska 1988).
FN48. See Alaska R. of Evid. 801(d)(2). We have previously found no error
where the trial court valued an asset at the amount provided in a party's
response to an interrogatory. Davila v. Davila, 876 P.2d 1089, 1092 (Alaska
1994).
FN49. See Schymanski v. Conventz, 674 P.2d 281, 286 (Alaska 1983) (holding
that weight to be given to owner's testimony as to value of real property
falls within trial court's discretion).
The court explained that it gave little weight to Terry's testimony on
the matter because “Terry did not explain with specificity why he valued
his guns at particular amounts” and “[h]e did not offer an appraisal.” In
addition, the court heard evidence that gun collecting was Terry's personal
interest, not Cathy's, and that Terry was secretive about his gun purchases
during the marriage. From this evidence a court could infer that Terry knew
the gun collection would ultimately be awarded to him in the property division,
giving him an incentive in testifying to adjust his valuations downward.
Faced with conflicting evidence, and absent an explanation from the person
best suited to provide one, we hold that the trial court did not clearly err
in choosing to value the guns based on Terry's discovery responses rather than
his testimony at trial.
C. The Trial Court's Decision To Exclude The Expert Testimony Of Terry's
Airplane Appraiser Was Not An Abuse Of Discretion.
At trial the court excluded the testimony of Dan Hollingsworth, Terry's
expert airplane appraiser, because Terry, in violation of the trial calendar
order, had failed to produce Hollingsworth's appraisal report.FN50 Terry
argues that the court's decision to exclude Hollingsworth's expert testimony
was an abuse of discretion which affected his substantial rights, and urges
us to remand for a revaluation of the plane. Because we conclude that the
trial court's decision was not an abuse of discretion, we will not upset
the trial court's valuation.
FN50. The court ruled on this objection twice during trial and both
times based its decision to exclude the testimony on Terry's failure
to timely provide an appraisal report. In its order denying reconsideration
of the airplane value, the court inaccurately recalled that it excluded the
testimony both because of Terry's failure to provide appraisal reports and his
failure to identify Hollingsworth as an expert on the witness list. Our
decision rests only on the appraisal report requirement, as it was the only
basis for exclusion cited by the court at the time of the ruling. Additionally,
even assuming it would have been error to exclude Hollingsworth's testimony
for failure to identify him as an expert witness, the result would not change
as we still conclude it was within the court's discretion to exclude him for
failure to provide a report.
1. Additional facts and proceedings about the airplane expert issue
In March 2008 the court issued a trial calendar order which provided
in part that “[a]ppraisals/brokers opinions are to be completed and
exchanged thirty days prior to trial.” Cathy commissioned an appraisal
of the airplane from Zerkel. Terry did not submit a plane appraisal
report. At trial, Cathy called Zerkel to testify about his appraisal
and Terry did not cross-examine him. Later, during his case-in-chief,
Terry called Hollingsworth to give his expert opinion of the plane's
value. Cathy objected on the basis that Terry had never provided an
appraisal report from Hollingsworth. The court ruled that Hollingsworth
could not testify as an expert, explaining that the “trial calendaring
order says appraisals ... are to be completed and exchanged thirty days
prior to trial,” and that Terry had not provided a sufficient reason for
his non-compliance.
Although the court ruled that Hollingsworth could not offer an expert
opinion as to the value of the plane, the court did allow him to testify
as a lay witness as to the condition of the plane and its components.FN51
Hollingsworth testified that the plane was in reality exactly as Zerkel's
appraisal report had described it to be, that Zerkel's appraisal accurately
reflected all modifications to the plane, and that the appraisal did not
add value for any equipment that was not actually part of the plane. The
court ultimately valued the plane at $162,979-the value at which Zerkel,
Cathy's expert, had appraised it.
FN51. Terry also offered his own lay opinion, valuing the plane at $120,000.
2. The trial court's decision to exclude Hollingsworth's expert testimony
based on Terry's non-compliance with the trial calendar order was not an
abuse of discretion.
Terry argues that the trial court erred in excluding Hollingsworth's
testimony on the basis of Terry's non-compliance with the trial calendar
order because the trial calendar order did not require disclosure of
appraisal reports for rebuttal experts like Hollingsworth, and that,
even if disclosure was so required, the court's failure to excuse this
requirement under the circumstances was an abuse of discretion. Cathy
argues that the trial calendar order did require Terry to disclose
Hollingsworth's appraisal report, and that therefore the court properly
excluded Hollingsworth's testimony.FN52 Because we conclude that the trial
calendar order did require Terry to disclose an appraisal report for
Hollingsworth, and hold that the court did not abuse its discretion in
refusing to excuse Terry's non-compliance, we will not upset the trial
court's airplane valuation.
FN52. Because we hold that the trial calendar order required Terry to
disclose the appraisal report, and because the trial court excluded the
testimony on this basis, we need not reach Cathy's argument that Terry
was also required to make the disclosure under Civil Rule 26.1(b)(G)
and Civil Rule 26(a)(4).
Alaska Rule of Civil Procedure 16(e) provides that after a final
pretrial conference, the trial court shall enter an order (“trial
calendar order”) reciting the action taken and such order “shall
control the subsequent course of the action unless modified by a
subsequent order.” The trial calendar order “shall be modified only
to prevent manifest injustice.” FN53 Civil Rule 37(b)(2) provides a
trial court with various sanctions it may apply when a party fails
to comply with a trial calendar order, including issuing an order
prohibiting the disobedient party from introducing designated matters
into evidence.FN54 The trial court has “broad discretion” to choose
an appropriate sanction.FN55 However, before making such an order,
the trial court must consider:
FN53. Alaska R. Civ. P. 16(e).
FN54. Alaska R. Civ. P. 37(b)(2)(B).
FN55. Coffland v. Coffland, 4 P.3d 317, 320 (Alaska 2000).
(A) the nature of the violation, including the willfulness of the
conduct and the materiality of the information that the party failed
to disclose;
(B) the prejudice to the opposing party;
(C) the relationship between the information the party failed to
disclose and the proposed sanction;
(D) whether a lesser sanction would adequately protect the opposing
party and deter other discovery violations; and
(E) other factors deemed appropriate by the court or required by law.[[FN56]
FN56. Alaska R. Civ. P. 37(b)(3).
We review a trial court's decision to admit or exclude evidence,
including expert witness testimony, for abuse of discretion FN57
and will only reverse an erroneous decision if it affected the
substantial rights of a party. FN58
FN57. Nelson v. Progressive Corp., 976 P.2d 859, 865 n. 9 (Alaska 1999)
(applying abuse of discretion standard to trial court's exclusion of
testimony where party violated court order by failing to give timely
notice).
FN58. Dobos v. Ingersoll, 9 P.3d 1020, 1023 (Alaska 2000) (citing
Alaska R. Civ. P. 61).
Terry first argues that the trial calendar order did not require him
to disclose Hollingsworth's appraisal report in the first place, so
any sanction under Civil Rule 37 was improper. In support of this
interpretation, Terry offers two pieces of evidence: the fact that the
order “does not address rebuttal witnesses at all,” and the fact that
“as a practical matter, rebuttal reports could not be submitted under
the same deadline as initial expert reports.” We do not find Terry's
interpretation persuasive. Although Terry is correct that the trial
calendar order did not address rebuttal appraisers specifically, the
order did address appraisers generally, and required that appraisers'
opinions be “completed and exchanged thirty days prior to trial.” This
requirement was framed in general terms, and is fairly read as applying
to all appraisers who testify to their opinions during trial. Terry's
suggested interpretation sets up an untenable situation wherein a party
could disclose no appraiser at the outset, but then freely introduce
one at the last moment to testify that the other party's appraisal was
all wrong. This is the precise type of surprise and disorder that trial
calendar orders are designed to avoid. FN59
FN59. See, e.g., Yukon Equip. Inc. v. Gordon, 660 P.2d 428, 432 (Alaska
1983), overruled on other grounds by Williford v. L.J. Carr Invs., Inc.,
783 P.2d 235 (Alaska 1989).
Terry argues that rebuttal reports could not be disclosed, as a practical
matter, on the same deadline as initial reports. However, we agree with
the trial court about when Terry should have raised that point:
[w]hen you got the appraisal, if you didn't like the value or you thought
it was an incorrect analysis, you certainly could have moved ... for leave
to add a late witness and given an explanation. And you quite likely would
have been all right in that circumstance. But to wait until after the
plaintiff's expert is on and off and gone ... I think you would agree that
can't be.
Because the trial court order is fairly and sensibly read as applying to all
testifying appraisers, and because Terry waived any objection as to the timing
of rebuttal disclosures by failing to raise the issue at a reasonable time, we
conclude that the trial calendar order required Terry to disclose Hollingsworth's
appraisal report 30 days before trial.
The next question is whether the trial court abused its discretion in excluding
Hollingsworth's testimony under Civil Rule 37(b). In Nelson v. Progressive Corp.,FN60
we explained that decisions to exclude evidence under this rule
FN60. 976 P.2d at 859.
involve a complex balance of interests and objectives. The trial court must
evaluate matters such as the effects of delay, the reasons offered for
noncompliance with time deadlines, the importance of the testimony sought
to be rebutted, the nature of the offered rebuttal, and the nature of the
claimed prejudice. This process is committed to the sound discretion of the
trial court. Only in rare cases where an appellate court is ‘left with a
definite and firm conviction’ that the trial court erred in striking the
balance reflected by its ruling is reversal warranted.[FN61]
FN61. Id. at 865-66 (quoting Harris v. Keys, 948 P.2d 460, 466 (Alaska
1997)).
The record does not leave us with a “ ‘definite and firm conviction’ that
the trial court erred.” FN62 Before making its final ruling, the court
heard substantial oral argument from both sides. The court made detailed
findings to support its decision: that Terry could have easily avoided the
delay in receiving Zerkel's worksheets, that the worksheets revealed no
significant new information, that Terry would not be highly prejudiced by
the exclusion, and that Cathy would be highly prejudiced if the testimony
were permitted. In addition, the court minimized the prejudicial impact
of its decision on Terry by crafting its ruling narrowly, permitting
Hollingsworth to testify as a fact witness and critique any factual
errors in Zerkel's report. FN63
FN62. Id.
FN63. See McCubbins v. State of Alaska, Dep't of Natural Res., Div. of
Parks and Recreation, 984 P.2d 501, 508 (Alaska 1999) (exclusion of
defendant's undisclosed witness after plaintiff already closed case-in-
chief was not abuse of discretion, in part because court's ruling was
narrowly crafted so witness could still testify on other subjects).
The only remaining question for this court, therefore, is whether the
trial court abused its discretion in refusing to modify its trial calendar
order to excuse Terry from the appraisal disclosure requirement. Because
we conclude that modification of the trial calendar order was not necessary
to prevent “manifest injustice,” FN64 we hold that the trial court's
decision was not an abuse of discretion.
FN64. Alaska R. Civ. P. 16(e).
The trial court's findings in support of its ruling demonstrate that
Terry suffered no manifest injustice from the exclusion. Terry argues
that he was unfairly surprised by the worksheets supporting Zerkel's
report and it was unjust to deny him the opportunity to respond. However,
we have held that a trial court does not abuse its discretion in finding
no manifest injustice where the complaining party with due diligence
could have easily avoided the complained-of surprise.FN65 Here, the trial
court found that Terry could easily have requested Zerkel's worksheets
in discovery or asked for a court order at a time much earlier than
the middle of trial. Because Terry is responsible for the prejudice he
now complains of, we hold that the trial court did not abuse its discretion
in refusing to modify its trial calendar order to excuse Terry from the
appraisal disclosure requirement.
FN65. Yukon Equip., Inc. v. Gordon, 660 P.2d 428, 432 n. 2 (Alaska 1983).
Because we hold that the trial court's decision to exclude Hollingsworth's
expert testimony was not an abuse of discretion, we affirm the trial court's
valuation of the marital airplane.
V. CONCLUSION
Because the court's property division did not constitute an award of
rehabilitative alimony, because the court properly considered Terry's
non-marital assets and the age difference between the parties under
AS 25.24.160(a)(4), and because the court did not improperly consider
K.C.'s college expenses or Terry's spending habits during the marriage,
we hold that the court did not abuse its discretion in awarding Cathy
60% of the marital estate. Because the court based its valuation of the
marital guns on evidence submitted by Terry himself, we hold that the
trial court's valuation was not clear error. Finally, because Terry
violated the trial calendar order by failing to disclose an appraisal
report without good cause, we hold that the trial court's exclusion of
Terry's airplane valuation expert was not an abuse of discretion.
Therefore, we AFFIRM the decision of the trial court in all respects.
EASTAUGH, Justice, not participating.
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