Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions

Touch N' Go
, the DeskTop In-and-Out Board makes your office run smoother.


You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Grove v. Grove (8/11/2017) sp-7189

Grove v. Grove (8/11/2017) sp-7189

           Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  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, email  



                       THE SUPREME COURT OF THE STATE OF ALASKA                                       

MELVIN  B.  GROVE  JR.,                                              )  

                                                                     )      Supreme  Court  Nos.  S-16056/16075  

                                Appellant  and                       )  

                                Cross-Appellee,                      )      Superior  Court  No.  3AN-13-05282  CI  



                                                                     )      O P I N I O N  



CHERYL M. GROVE,                                                                                                  

                                                                     )     No. 7189 - August 11, 2017  



                                Appellee and                         )  

                                Cross-Appellant.                     )  




                      Appeal from the Superior Court of the State of Alaska, Third  


                      Judicial District, Anchorage, William F. Morse, Judge.  


                      Appearances:  John C. Pharr, Law Offices of John C. Pharr,  


                      P.C.,  Anchorage,  for  Appellant/Cross-Appellee.                                  Kara  A.  


                     Nyquist,            Nyquist           Law         Group,           Anchorage,               for  



                      Before:  Stowers, Chief Justice, Winfree, Maassen, Bolger,  


                      and Carney, Justices.  


                      WINFREE, Justice.  



                      Parties in a divorce and property division trial disputed the value of the  


husband's post-retirement military medical benefits. The superior court determined that  


the benefits were a marital asset, but declined to value them or account for their value  


when dividing the marital estate.   The court instead ordered the husband to pay for  

----------------------- Page 2-----------------------


comparable  medical  benefits  for  the  wife  for  the  rest  of  her  life.                               The  court  also  


determined that most of the wife's student loans were marital debt and allocated that debt  


to her. Both parties appeal the superior court's decision regarding the husband's medical  


benefits; the husband also appeals the superior court's characterization of the student  


loans as marital debt.   We affirm the superior court's characterization of the wife's  


student loans as marital debt, but we reverse and remand for the superior court to assign  


a value to the husband's post-retirement military medical benefits and to finalize an  


equitable distribution of the marital estate.  




                    Cheryl and Melvin Grove married in 1986 and separated in 2011; Cheryl  


filed for divorce in 2013.  They had no minor children at the time of separation.  Melvin  


entered the military six months before the marriage and retired in 2005.   He has a  


military pension and lifetime military medical benefits through TRICARE.  From 2009  


to 2012 Cheryl pursued a master's degree, incurring substantial student loan debt.  


                    Trial was held over three days in 2014; the primary asset in dispute for the  


marital property division was Melvin's post-retirement medical benefits.  Both Cheryl  


and Melvin presented expert testimony valuing his benefits.  Cheryl's expert provided  


three values ranging from $239,000 to $284,000; Melvin's expert provided a value of  


$124,400.  The parties also provided testimony about Cheryl's student loan debt.  In a  


March 2015 order the superior court granted the divorce and distributed the marital  




                    The superior court characterized all of Melvin's medical benefits as marital  


but declined to assign a cash value, seeking instead to give Cheryl "half of what Melvin  


has . . . but not something different."   The court ordered "Melvin to pay Cheryl an  


amount of money over time that will enable her to purchase a reasonably equivalent"  


medical insurance policy, "leav[ing] the selection of that policy to the parties to work out  

                                                                -2-                                                         7189

----------------------- Page 3-----------------------


if they can."  Melvin was directed "to deposit the monthly premium into an account  


controlled by Cheryl."  The court ordered that Cheryl use the money only to pay for  


medical insurance premiums "unless the parties, with the approval of the Court, agree  


to an alternate use."  


                    The superior court characterized most of Cheryl's student loans as marital.  


The court credited Cheryl's testimony that about $50,000 of her nearly $60,000 debt was  


incurred before separation and that some loan proceeds wereusedto pay living expenses.  


The court allocated that marital debt to Cheryl in the property division.  


                    Cheryl moved for reconsideration, arguing that the superior court had erred  


by failing to assign a value to Melvin's medical benefits and to take that value into  


account in the property division.   Cheryl alternatively requested clarification of the  


court's  order,  raising  concerns  about  fluctuation  of  premiums  and  the  timing  and  


duration of Melvin's payments. In response Melvin disputed the court's factual finding  


that the medical benefits were 100% marital, noting that he had entered the military prior  


to marrying.  And although Melvin stated that the court's method of distribution for the  


medical benefits was "reasonable," he sought to ensure that Cheryl did not receive more  


comprehensive medical insurance than his TRICARE coverage.  Melvin also disputed  


the court's finding that Cheryl's student loans were marital debt, asserting that no portion  


of the loans was used for living expenses.  


                    On reconsideration the superior court refused to change its distribution of  


the medical benefits or its characterization of nearly $50,000 in student loans as marital  


debt.  The court "declined to put a fair market value on the [medical] benefits because  


of the awkward impact of valuation of this somewhat contingent asset" and because "it  


cannot be easily translated to a liquid value." The court instead described its order as an  


alternative and more appropriate valuation of Melvin's medical benefits.   The court  


clarified, however, that "Melvin must provide the coverage for Cheryl until she dies,  

                                                                -3-                                                         7189

----------------------- Page 4-----------------------

even if he predeceases her," and that Melvin's payments must track any fluctuations in                                                                                                    

Cheryl's   insurance   premiums.     The   court   rejected  Melvin's   assertion   that   Cheryl's  

student loans were separate debt, noting that he was merely repeating or supplementing                                                                        

what he said at trial.                        

                             Melvin appeals the superior court's characterization of Cheryl's student                                                                         

loans as             marital debt,                  and   both   parties appeal the court's method of valuation                                                                      and  

allocation of Melvin's medical benefits.                                                  

III.           STANDARD OF REVIEW                       

                             Equitable   property   distribution   on   divorce   is   a   three-step   process.   


"[C]haracterizing property as either marital or separate,"                                                                                                                    

                                                                                                                                 the first step, "may involve  



                                                                            "Underlying factual findings as to the parties' intent,  

both legal and factual questions." 

                                                                                                                                                     3   "Findings of fact  



actions, and contributions to the marital estate are factual questions." 

are reviewed for clear error, but whether the trial court applied the correct legal rule . . .  


is a question of law that we review de novo using our independent judgment."4  "Second,  


the  trial  court  must  place  a  value  on  the  property,  a  ruling  which  is  a  factual  


determination reviewed for clear error.  To reverse for clear error, we must be left with  


a definite and firm conviction on the entire record that a mistake has been made."5                                                                                                       A  


               1             Beals  v.  Beals,  303  P.3d  453,  458  (Alaska  2013).  

               2             Id.  at  459  (quoting  Odom  v.  Odom,   141  P.3d  324,  330  (Alaska  2006)).  

               3             Id.   (citing   Odom,   141   P.3d   at   330; Doyle   v.  Doyle,   815   P.2d   366,   368  

(Alaska   1991)).  

               4             Id. (quoting Hanson v. Hanson, 125 P.3d 299, 304 (Alaska 2005)).  



               5             Hansen v. Hansen, 119 P.3d 1005, 1009 (Alaska 2005) (footnote omitted)  


(first citing Moffitt v. Moffitt, 749 P.2d 343, 346 (Alaska 1988); then citing Martens v.  


Metzgar, 591 P.2d 541, 544 (Alaska 1979)).  


                                                                                            -4-                                                                                    7189

----------------------- Page 5-----------------------

court's decision whether to value personal property, however, is a legal question that we                                                                                          


review de novo.                                                                                                                                                                    

                                       We review the third step, the equitable allocation of property, for an  



abuse of discretion, reversing only if it is "clearly unjust." 

IV.	          DISCUSSION  


              A.	            Characterizing $50,000 Of Cheryl's Student Loans As Marital Was  


                            Not Erroneous.  


                            Melvin disputes the superior court's determination that all but $10,000 of  


Cheryl's  student  loans  was  marital  debt,  arguing  that  the  loans  all  should  be  


characterized as separate property.  We have held that "there is a presumption that debts  

                                                                                                                         8   That presumption applies to  


incurred during the marriage are to be treated as marital." 

student loan debt; in Veselsky v. Veselsky we determined that absent "evidence showing  


that the parties intended the debt to be separate," a student loan "obtained during the  


marriage" was properly characterized as marital property.9  In McDougall v. Lumpkin we  


similarly held that student loans should be treated as marital debt, especially in light of  


unrebutted evidence that the spouse pursuing higher education did so with the other  


              6             See Mellard v. Mellard                           , 168 P.3d 483, 486 (Alaska 2007) (holding that "it                                                   

was error to fail to value" a marital asset);                                            Cox v. Cox             , 882 P.2d 909, 918 (Alaska 1994)                           

("The court's failure to make any findings regarding the value of personal property                                                                                   

constitutes reversible error . . . .").                          

              7             Hansen, 119 P.3d at 1009 (citing Moffitt, 749 P.2d at 346).  


              8              Veselsky v.Veselsky, 113 P.3d 629, 636 (Alaska 2005).  


              9             Id. ; see also  Wagner v.  Wagner, 386 P.3d  1249, 1252-53 (Alaska 2017)  


(holding post-marriage consolidated student loan, including one pre-marriage loan, was  


all marital debt absent evidence of intent to keep loans separate).  


                                                                                         -5-	                                                                                7189

----------------------- Page 6-----------------------

spouse's support, and that "they had sometimes used the student loans to pay living                                                            

expenses and non-education debts."                              10  

                        Thesuperiorcourt madethefollowing factual findings when characterizing  


the loans:  (1) "[t]he debt at the time of the first day of trial (January 2014) was [about  


$60,000]"; (2) "roughly $10,000 of that total was incurred after separation"; (3) "[a]  


portion of the loans was paid directly to the college for tuition and housing"; and (4) "[a]  


portion went directly to [Cheryl] for living expenses." Based on those findings the court  


determined that nearly $50,000 of Cheryl's student loans was marital debt.  


                        Melvin asserts that "the loans were used exclusively for tuition and no part  


of the student loan funds were used for living expenses" and "the parties agreed that the  


loans would be separate and that [Cheryl] would be responsible for repaying them." But  


Melvin has not shown that the court's factual findings are clearly erroneous or that he  


rebutted the presumption that the loans were marital debt. "[I]t is the function of the trial  


court,  not  of  this  court,  to  judge  witnesses'  credibility  and  to  weigh  conflicting  


                   11  Cheryl testified that her loans paid for tuition, housing, and living expenses,  


that about $10,000 of the debt was incurred after separation, and that Melvin had been  


supportive of her educational endeavors.  The court credited Cheryl's testimony, "and  


we will not re-weigh evidence when the record provides clear support for the trial court's  




                   The court's underlying and ultimate factual findings characterizing $50,000  


of the student loans as marital are not clearly erroneous.  

            10          11P.3d 990,           994 (Alaska 2000) (holding superior court                                 should havetreated   

student loans as marital debt).             

            11          Fink  v.  Municipality  of  Anchorage,  379  P.3d  183,  192  (Alaska  2016)  


(quoting In re Adoption of S.K.L.H., 204 P.3d 320, 325 (Alaska 2009)).  


            12         Id. (quoting In re Adoption of S.K.L.H., 204 P.3d at 325).  


                                                                          -6-                                                                    7189

----------------------- Page 7-----------------------

                                         Based    on    the    law    and    the    facts    we    affirm    the    superior    court's  

characterization of about $50,000 of Cheryl's student loan debt as marital.                                                                                                                                   

                     B.	                 Not  Valuing   Melvin's   Post-Retirement   Medical   Benefits   And   Not  

                                         Accounting For That Value In Distributing The Marital Estate Was                                                                                                                                                    


                                         Both Melvin and Cheryl appeal the superior court's treatment of Melvin's                                                                                                                               

post-retirement medical benefits.                                                                      Cheryl argues that the court erred by failing to assign                                                                                          

a value to the benefits, and she requests that the court be directed to value them and                                                                                                                                                                         

consequently "rebalance the distribution of the marital estate."  Melvin argues that the                                                                                                                                                                          

benefits should not be considered marital, and that his TRICARE benefits cannot be                                                                                                                                                                                  

given an accurate cash value based on the trial testimony and our decision in                                                                                                                                                               Hansen v.   


Hansen .                                                                                                                                                                                                                                         

                                   But Melvin also posits that "a fair cash payment" - rather than a lifetime  


 stream of payments for medical insurance premiums - would be the more appropriate  


method of equalizing the marital estate distribution.  


                                         Melvin's argument that his post-retirement medical benefits are not marital  


property is unpersuasive:  "Health insurance benefits earned during the marriage are a  



marital  asset  of  the  insured  spouse."                                                                                        In  Burts  v.  Burts  we  specifically  analyzed  


TRICARE benefits earned during the marriage and concluded that they properly were  

                     13                   119 P.3d 1005, 1016 (Alaska 2005) (holding that to calculate the post-                                                                                                                                           

retirement medical benefits' value, "the superior court should look to the amount of the                                                                                                                                                                          

premium subsidy provided by the employer, rather than to either the proceeds or the cost                                                                                                                                                                       

of procuring comparable insurance").                                           

                     14                  Id. at 1015 (citing Kinnard v. Kinnard, 43 P.3d 150, 156 (Alaska 2002));  


see also Dundas v. Dundas, 362 P.3d 468, 474-75 (Alaska 2015) (remanding for court  


to  address  "apparent  oversight"  in  failing  to  make  findings  about  "potential  PERS  


retirement health benefit").  


                                                                                                                                  -7-	                                                                                                                      7189

----------------------- Page 8-----------------------

considered marital.15  But characterizing all of Melvin's TRICARE benefits as marital  

was clearly  erroneous.                      The court found that "[a]ll of Melvin's retirement medical  


benefits are marital" because Melvin "entered the military after marrying and left before  


separation." But, as Cheryl acknowledges, Melvinenteredthemilitary sixmonths before  


the marriage. On remand the court should recalculate the portion of Melvin's TRICARE  


benefits  earned  during  the  marriage.16                                  Apart  from  that  error  the  court  correctly  


characterized Melvin's post-retirement medical benefits as marital.  


                        Characterizing the benefits was the first  step  in the equitable division  


process.17   Cheryl argues that the superior court failed to complete the second step when  


it did not value Melvin's post-retirement medical benefits for purposes of an equitable  


division and distribution of the marital estate.  We agree.  


                        Thesuperior court ordered Melvin to payCheryl's lifetimehealthinsurance  


premiums as an alternative valuation of Melvin's post-retirement medical benefits.  But  


the court also expressly "declined to put a fair market value on the benefits." The court's  


order that Melvin "pay Cheryl an amount of money over time that will enable her to  


purchase a reasonably equivalent policy" does not qualify as a valuation under the  


            15          266 P.3d 337, 341-46 (Alaska 2011);                                 see also Horning v. Horning                         , 389   

P.3d 61, 64 (Alaska 2017) (reaffirming                                 Burts and holding spouse's TRICARE benefit  

was marital property to the extent earned during the marriage).                               

            16          See Hansen, 119 P.3d at 1015 ("The court should determine the percentage  


of the benefits that is marital by calculating the 'coverture fraction.' This fraction is  


calculated by dividing the number of years worked during the period of coverture by the  


total  number  of  years  worked."  (footnote  omitted)  (quoting  BRETT    R.    TURNER,  


   QUITABLE DISTRIBUTION OF PROPERTY  6.10 (2d ed. 1994))).                                       




                        See Beals v. Beals, 303 P.3d 453, 458 (Alaska 2013) (first citing Doyle v.  


Doyle, 815 P.2d 366, 368 (Alaska 1991); then citing Wanberg v. Wanberg, 664 P.2d 568,  


570 (Alaska 1983)).  

                                                                          -8-                                                                    7189

----------------------- Page 9-----------------------

second step and cannot substitute for an appropriate equitable distribution of the marital                                                                             


                            Without findings about the value of marital property, we have no "means                                                                   

of evaluating whether an equitable distribution has been achieved"; not making such                                                                                        

                                                                               18  In Mellard v. Mellard, for example, weheld that  

findings "constitutes                       reversibleerror."                                                                                                                 

it was error to distribute a retirement account before assigning it a value.19                                                                               In that case  


the wife did not provide evidence of her retirement account's present value; the court  


distributed the estate and ordered an equalization payment after assigning a value only  


to the husband's retirement account.20   We reversed, holding "it was error to fail to value  



[the wife's] account and to assign [it] a zero value."                                                             Here the superior court did not  


assign a value to Melvin's post-retirement benefits despite testimony by two experts, yet  


the court then ordered an equalization payment without accounting for the value of those  


benefits.   Under Mellard  failure to value the benefits before finalizing an equitable  


division of the marital estate was erroneous.22  


                            The nature of Melvin's post-retirement medical benefits does not relieve  


the superior court of responsibility for determining their value. Hansen is the controlling  


case on valuing post-retirement medical benefits,23 and neither party asked us to overrule  


that case.  In Hansen we held that "the superior court should look to the amount of the  


              18            Cox  v. Cox, 882  P.2d  909,  918  (Alaska   1994)  (citing  Lang  v.  Lang,  741  

P.2d   1193,   1195  (Alaska   1987)).  

              19            168  P.3d  483,  486  (Alaska  2007).  

              20            Id.  at  484.  

              21            Id.  at  486.  

              22            Id.  

              23            See   119  P.3d   1005,   1016  (Alaska  2005).  

                                                                                        -9-                                                                                7189

----------------------- Page 10-----------------------

premium subsidy provided by the employer, rather than to either the proceeds or the cost                                                             


of procuring comparable insurance."                                                                                                                      

                                                                        We acknowledged the "inherent difficulties in  

                                                                                           25  we also explained that even a non- 



attempting to calculate the value of" these benefits; 


transferrable marital asset has value, and "the court should have determined this value."                                                                     


The superior court expressed some concern about the fairness of assigning a cash value  


to Melvin's non-transferrable benefits, noting that - unlike other marital assets -  


health insurance cannot be sold and "symmetry is absent if Cheryl gets cash and Melvin  


gets medical coverage."  But under Hansen the court must determine the value of non- 


transferrable benefits regardless of their nature.27  


                        We  also  explained  in  Hansen  how  to  value  post-retirement  medical  


benefits,28  and it was possible for the superior court to do so here.  Melvin argues that  


TRICARE cannot be valued consistent with Hansen 's requirement because the benefits  


"have no employer subsidy to the recipient employee" and are "provided free by the  


government."  He further argues that both his own expert witness and Cheryl's violated  



Hansen by valuing his benefits based on "the cost of procuring comparable insurance."                                                                         


Melvin argues that Burts, in which we determined that TRICARE benefits were marital  


and could be valued, does not apply here because "the potential violation of Hansen does  


not appear to have been an issue" in that case.  


            24          Id.   at   1016   (citing  BRETT  R.   TURNER,    EQUITABLE   DISTRIBUTION   OF  

PROPERTY  6.26 (2d ed. Supp. 2004)).                     


            25          Id.  

            26          Id.  at   1015.  

            27          See  id.  at   1015-16.  

            28          See  id.  at   1016.  

            29          Id.  (citing  TURNER,  supra  note  24,    6.26).  

                                                                          -10-                                                                     7189

----------------------- Page 11-----------------------

                       Melvin's arguments are not persuasive. We held in                                       Burts  that "TRICARE   


benefit[s] can be objectively valued" and cited sources explaining how to do so.                                                              The  


experts at trial did not impermissibly rely on the cost of replacement insurance to value  


Melvin's TRICARE benefits. Both experts testified that applying Hansen to TRICARE  


is difficult because the government is self-insured and there is no published value for the  


premium subsidy.  But both experts estimated Melvin's TRICARE benefits' premium  


subsidy value by reference to analogous plans, a method that does not violate Hansen 's  


mandate.   We see no reason the superior court cannot on remand rely on the expert  


testimony to make a valuation consistent with Hansen .  


                       We do agree with Melvin's alternative position that the superior court's  


chosen method "bears the strong potential for disputes."  We have a "strong policy"  

                                                                                                31  and requiring Melvin to pay  



favoring reducing financial entanglement after divorce, 

Cheryl's monthly insurance premiums for her lifetime only increases the likelihood of  


                                          32   The court left "selection of that policy to the parties to work  

future financial disputes.                                                                                                                  


out if they can" and, as Melvin observed, if and when they cannot the court would once  


again become involved in the property division.  Under the court's order such conflict  


could continue even after Melvin's death.  Valuing Melvin's post-retirement medical  


benefits and equitably dividing and distributing the marital estate avoids those pitfalls.  


           30          266 P.3d 337, 343 (Alaska 2011) (first citing T                                    RACY  FOOTE, M               ILITARY  


DIVORCE  TIPS  17 (2010); then                          citing M       ARK   E. S       ULLIVAN, T          HE   MILITARY   DIVORCE  

HANDBOOK 522 (Am. Bar Ass'n 2006)).                       


           31          Ethelbahv.          Walker, 225 P.3d 1082,                  1095(Alaska2009)(quoting                        Musgrove  


v. Musgrove, 821 P.2d 1366, 1370 n.7 (Alaska 1991)).  

           32          See 2 BRETT  R. T             URNER, E        QUITABLE  DISTRIBUTION OF  PROPERTY    6.31,  



at 193 (3d ed. 2005) ("Divorced parties are notoriously willing to pursue litigation  


against each other, and future court actions are therefore a significant possibility as long  


as any issues remain outstanding.").  

                                                                       -11-                                                                 7189

----------------------- Page 12-----------------------

                              We note finally that valuation of Melvin's medical benefits will affect the                                                                                     

marital estate's overall value. Once valuation is complete the superior court "may revisit                                                                                             

                                                                                                                                            33  while considering "the  

the larger question of how best to equitably divide the estate,"                                                                                                                            

financial  condition  of  the  parties,  including  the  availability  and  cost  of  health  


insurance."34                    The court retains discretion to divide and distribute the estate equitably,  


including ordering an equalization payment on reasonable terms.35  


V.             CONCLUSION  

                              We AFFIRM the superior court's characterization of a portion of Cheryl's  


student loans as marital.  We REVERSE the superior court's decision about Melvin's  


post-retirement medical benefits and REMAND for the superior court to value those  


benefits and equitably divide and distribute the marital estate.  


               33             Hanson v. Hanson                          , 125 P.3d299,306n.22 (Alaska2005) (citing                                                            Harrower  

v.  Harrower, 71 P.3d 854, 860 n.17 (Alaska 2003)).                                                   

               34             AS 25.24.160(a)(4)(D).  


               35             See Pfeil v. Lock, 311 P.3d 649, 655 (Alaska 2013) (noting that on remand  


"if  the  court  engages  in  an  equitable  distribution  of  all  of  the  parties'  marital  .  .  .  


property, it may reallocate the property or order an equalization payment to achieve an  


equitable distribution").  


                                                                                              -12-                                                                                       7189

Case Law
Statutes, Regs & Rules

IT Advice, Support, Data Recovery & Computer Forensics.
(907) 338-8188

Please help us support these and other worthy organizations:
Law Project for Psychiatraic Rights