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Hockema v. Hockema (8/25/2017) sp-7191

           Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  REPORTER.  

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                       THE SUPREME COURT OF THE STATE OF ALASKA                                       

JOHN  SCOTT  HOCKEMA,                                                 )  

                                                                      )     Supreme  Court  No.  S-16096  

                                 Appellant,                           )  


                                                                      )     Superior Court No. 3KO-12-00458 CI  

           v.                                                         )  


                                                                            O P I N I O N  


JANET HOCKEMA,                                                        )  


                                                                            No. 7191 - August 25, 2017  

                                 Appellee.                            )  



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


                      Judicial District, Kodiak, Steve W. Cole, Judge.  


                      Appearances:  Herbert M. Pearce, Law Office of Herbert M.  


                      Pearce,  Anchorage,  for  Appellant.                             No  appearance  by  


                      Appellee Janet Hockema.  


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


                      and Carney, Justices.  


                      CARNEY, Justice.  



                      In  2012  John  "Scott"  Hockema  filed  for  divorce  from his  wife,  Janet  


Hockema. The superior court divided the marital estate equally and awarded Janet, who  


had been a homemaker throughout most of the marriage, spousal support for six years.  


Scott appeals the superior court's award of spousal support, its valuation of several  


pieces of marital property and a retirement account, the denial of an offset for certain  


mortgage payments made on the marital home, the denial of an offset for interim spousal  

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

support paid, and the calculation of tax payments made on certain marital property.  We  


affirm the superior court's valuation of the marital property and its decision not to offset  


the interim spousal support payments, but we conclude that the value of the retirement  


account and the amount of property taxes paid were calculated incorrectly.  We also  


conclude that the court did not make sufficient findings regarding its award of spousal  


support, and we remand for further consideration of the necessity, amount, and duration  


of spousal support.  




                    ScottandJanetHockemamarriedin 1987and separatedin November2012.  


Scott filed for divorce the same month.  In September 2013 the superior court ordered  


Scott to pay Janet $5,000 per month in interim spousal support, effective the preceding  


April, pending completion of the divorce proceedings.  Because Janet was living in the  


marital home, the court granted Scott credit for the associated mortgage payments, which  


he was making.  He was therefore required to pay Janet only the difference between the  


$5,000 spousal support obligation and the mortgage amount.  When Janet moved out of  


the residence in September 2014, Scott continued to make mortgage payments on the  


home; he moved into the home the following month but continued to make reduced  


interim spousal support payments to Janet.  


                    The divorce proceedings took place between May and December 2014.  


Both Janet and Scott offered extensive testimony about their respective incomes and the  


value of the marital assets.   They both presented appraisals of their marital home in  


Kodiak.  Janet's real estate agent appraised the home at $295,000, while Scott's real  


estate agent appraised it at $283,000.  The home's septic system needed repair, and a  


local excavation company estimated the repairs would cost $19,500.   The court had  


ordered Scott to repair it in January 2014; Scott failed to comply with the court order.  


                                                               -2-                                                        7191

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


The court therefore adopted the lower appraisal of $283,000 but declined to offset the  


value of the home by an additional $19,500 due to Scott's failure to obey its order.  


                     Scott and Janet had also placed a down payment on a plot of land adjacent  


to the marital home.  During the divorce proceedings and without prior approval from  


the court, Janet relinquished the option to purchase the land and received a refund of the  


$10,000 down payment.  The court counted the $10,000 refund against Janet's balance  


of marital assets.  


                    In addition to their Kodiak property, Scott and Janet owned a six-plex  


apartment building in Coos Bay, Oregon, and six acres of land in Seven Devils, Oregon.  


The court found that Janet had constructive possession of the six-plex for a time but  


relinquished it to Scott in September 2014 because she was unable to keep up with the  


maintenance expenses.  Janet admitted to collecting $3,580 in rent from the building's  


tenants without paying the building's mortgage or maintenance costs; the court allocated  


that amount of the marital assets to her.  


                     Scott and Janet agreed at trial that the Seven Devils property was worth  


$60,000 and should go to Janet.  But in August 2015 Janet disclosed that she had sold  


the property in June for $35,000, in violation of the court's order not to dispose of  


marital assets.  The court assigned the property to her at its full value of $60,000 in the  


property distribution.  


                    Two witnesses testified about Janet and Scott's excavation equipment.  


Michael  Tope,  a  certified  equipment  appraiser  with  30  years  of  experience  in  the  


construction equipment industry, evaluated the equipment twice based on photographs,  


information provided at different times by Scott and Janet, and visual inspection of the  


equipment.          Tope did  not start or  operate the equipment or  observe  it in  use.                                     He  


determined that the equipment was in "fair" condition and valued it accordingly.  He  


explained that "fair" meant the equipment "may require overhaul soon [and] may be old  

                                                                -3-                                                         7191

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


or [have] suffered hard use."  His first appraisal was based on information provided by  


Scott.  He valued the parties' dump truck at $10,000, their excavator at $20,000, and  


their backhoe at $14,000.  After receiving more information from Janet and conducting  


an inspection, he increased the respective valuations to $15,000, $25,000, and $17,500,  


largely based on the presence of "valuable accessories" that Scott had not informed him  


were present on the equipment.  


                    Around the time of Tope's second evaluation, Scott also hired Patrick  


Anderson, a certified diesel and auto mechanic with extensive experience working on  


and operating heavy machinery, to repair the equipment and estimate the cost of further  


necessary repairs.   Anderson performed $2,298.33 in repairs to the dump truck and  


estimated that it needed another $4,459.46 in repairs.  He testified that it could not be  


moved from the property because it did not meet Department of Transportation (DOT)  


standards.  Anderson performed repairs worth $194.90 on the excavator.  He testified  


that it was not safe for use and would require $37,761.23 in further repairs to be safely  


operational. He also performed $323.29 in repairs on the backhoe and estimated it would  


require an additional $5,429 in repairs.  


                    The court adopted Tope's revised valuations of the equipment at $15,000,  


$25,000, and $17,500, but it credited Scott for Anderson's repair work, which the court  


found had contributed to the increase in the equipment's value.  


                     Scott and Janet agreed in court that Scott had one retirement account (IRA)  


with a value of $6,350.  However, in reviewing the evidence, the court discovered two  


conflicting exhibits about the IRA:  Scott's Exhibit 33 showed an account at U.S. Bank  


with a balance of $6,600 on January 8, 2014, while Janet's Exhibit P showed an account  


at Wells Fargo bank with a balance of $6,350 on March 31, 2014.  The court concluded  


that, because the parties had failed to explain this discrepancy, it had "little choice but  


to find there are two IRA's in Scott's name, totaling $12,950." (Emphasis omitted.)  

                                                                -4-                                                         7191

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


                    After valuing the marital property, the court addressed credits due to Scott  


since the parties' separation. In addition to other credits not at issue on appeal, the court  


granted Scott a credit of $5,274 for plumbing and heating repairs to the marital home,  


$3,880 for repairs to the home's flooring, $570 for electrical maintenance on the home,  


and $1,537 for painting the home's interior.   It found that Scott had paid $3,400 in  


property taxes on their Oregon property and determined that he was entitled to an offset  


for that amount.  


                     Scott  requested  an  offset  of  $69,715.20  for  interim  spousal  support  


payments he had made.  The court rejected his request because "allowing such an offset  


would result in completely negating the whole point of ordering interim spousal support  


here in the first place" and granting Scott a credit for these payments "in addition to the  


tax write-off he already received would be double-dipping."  


                     Scott also requested a credit for the $29,004.55 he had paid toward the  


marital  home's  mortgage  since  the  parties'  separation.                              The  court  determined  that  


granting Scott a credit for mortgage payments made before Scott was ordered to pay  


spousal support would be inequitable given that Scott's income was approximately ten  


times Janet's. When Janet was living in the home after the court ordered interim spousal  


support, Scott had been allowed to deduct the mortgage payments from his $5,000  


monthly support obligation.  The court determined that granting him a credit for those  


payments "would essentially be a double-credit, and not one the court is inclined to  


award."  Finally, when Scott was living in the marital home after Janet moved out, the  


court concluded that granting credit for the mortgage payments would be "the equivalent  


of letting him stay in the home free."  The court therefore declined to grant Scott an  


offset for any of the mortgage payments.  


                    After valuing the marital assets available for distribution, the court divided  


the marital estate and awarded Janet spousal support in accordance with the Merrill  

                                                                -5-                                                         7191

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

factors,   which   guide   trial   courts   in   equitably   allocating   the   economic   effects   of   a  



                                                       The court found that Scott, who worked as a commercial fisherman and  


heavy equipment owner and operator, was thesolesourceofincomeduring the marriage.  


After the parties' separation Scott also had access to the majority of their cash and liquid  


                            1                          These factors, which derive their name from                                                                                                                                               Merrill v. Merrill                                                        , 368 P.2d            

 546, 547-48 & n.4 (Alaska 1962), were codified in AS 25.24.160(a)(4), which governs                                                                                                                                                                                                                                               

property division:   

                                                       (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 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 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[.]                                                                                                  

AS25.24.160(a)(2),whichgoverns                                                                                                                   awards ofspousal                                                         support, employs substantially                                                                                                the  

 same factors.   

                                                                                                                                                                             -6-                                                                                                                                                                 7191

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


assets.      Janet had  a  high  school  education,  and  her  primary  occupation  during  the  


marriage was "running the household, managing some aspects of the parties' businesses,  


and caring for the children."   Since the parties separated, Janet had worked at four  


different jobs, earning between $8.40 and $11 an hour.  In her most recent employment  


she was earning $9.25 an hour.   She submitted an exhibit showing that her average  


monthly expenses were approximately $3,450, and she testified that she spent "about the  


amount that [she] get[s] . . . between [her] work and [her] spousal support."  Janet had  


received $35,000 from the sale of the Seven Devils property, but the court noted that the  


money would likely be used to pay attorney's and expert fees and to pay off personal  


debt of $23,000 that she had accrued since the parties' separation.  


                    Janet  insisted  that  she  would  prefer  an  award  of  spousal  support  to  a  


disproportionate share of the marital assets. She testified that she would be unable to sell  


either the excavation equipment or the Oregon six-plex, and she would not be able to  


afford the maintenance costs on the Oregon six-plex or obtain a loan to re-mortgage the  


property in her name.  Janet also indicated that it would be difficult for her to sell the  


Kodiak home because she did not have the money to repair the septic system or perform  


any other necessary repairs.  Given the financial difficulty she would face if she were  


awarded the larger pieces of property, she requested an award of spousal support "or a  


cash judgment."  


                    Janet's expert witness, certified public accountant Lisa Rogers, testified  


about Janet's expected income and costs. Shecalculated that approximately twelveyears  


of spousal support at $60,000 per year would enable Janet to meet her living expenses  


through  the  average  life  expectancy.                     If  Janet  were  awarded  nearly  all  the  marital  


property, Rogers estimated that Janet would still require approximately nine years of  


spousal support at $60,000 per year to retire securely.  She did not assess Scott's ability  


to pay spousal support.  

                                                                -7-                                                         7191

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


                    The court considered the parties' conduct and depletion of marital assets.  


It found that Janet's termination of the option to purchase the lot next to the marital home  


and her sale of the Seven Devils property for significantly less than the stipulated value  


were "serious violations" of court orders and unreasonable depletions of marital assets.  


The court found that Scott had also violated court orders and contributed to the depletion  


of  marital  assets  by  consistently  failing  to  make  timely  spousal  support  payments,  


making "rude and crude comments" to Janet in his electronic transfers, and emptying  


their joint bank accounts of over $30,000 immediately after the parties' separation in  


November 2012.  


                    Taking into consideration Janet's desire to receive support rather than a  


larger share of the marital estate, the court divided the marital property equally.   It  


awarded Janet the stipulated $60,000 value of the Seven Devils property, a cargo trailer  


in Oregon, her vehicle, $1,100 from a "vacation account," five guns, her jewelry, the  


rental payments she collected from the six-plex, and the $10,000 she received from the  


lot adjacent to the marital home.  It also placed on her the obligation to repay a $24,500  


debt owed to a family member.  The court awarded all other marital assets and debts to  


Scott and ordered him to pay Janet an $87,434 cash equalization payment.  


                    In deciding to award Janet future spousal support, the court noted that she  


had been "adamant" in preferring to receive spousal support over additional property.  


The court also considered that most of the larger and more valuable assets were in  


Kodiak and that Janet did "not want the hassle and expense of being a landlord for their  


six-plex in Oregon."  


                    Based on the evidence presented, thecourt determined that Scott's adjusted  


gross income for 2014 was $124,984, and his adjusted gross income for 2015 would be  


$107,900.  It concluded that $216,000 in spousal support to be paid over a period of six  


years would provide both Janet and Scott with "sufficient funds to make investments,  

                                                                -8-                                                         7191

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

prepare for the future, and ease into retirement when that time comes."                                                                                                                                                                                                                                                                                                                                                               The court   

 ordered Scott to pay $4,000 per month for two years beginning on September 1, 2015;                                                                                                                                                                                                                                                                                                                                                                                 

 $3,000 per month for the next two years; and $2,000 per month for the final two years.                                                                                                                                                                                                                                                                                                                                                                                                                  

In addition to the spousal support, the court established a two-year payment schedule for                                                                                                                                                                                                                                                                                                                                                                                             

the $87,434 cash equalization payment and $35,898 in past due interim spousal support                                                                                                                                                                                                                                                                                                                                                                       

that   was   incurred   largely   because   of   the   mortgage   payment   deductions   Scott   had  

 continued applying to Janet's interim spousal support after she had vacated the marital                                                                                                                                                                                                                                                                                                                                                                      


                                                                           Following post-trial briefing and                                                                                                                                                    additionalhearings ontheissueofspousal                                                                                                                                                      

 support, the court entered a final decree of divorce in September 2015. Scott appeals the                                                                                                                                                                                                                                                                                                                                                                                           

 award of future spousal support; the valuation of the home, excavation equipment, and                                                                                                                                                                                                                                                                                                                                                                                           

IRA; the denial of an offset for mortgage payments made on the marital home; the denial                                                                                                                                                                                                                                                                                                                                                                             

 of an offset for interim spousal support paid; and the calculation of the tax payments                                                                                                                                                                                                                                                                                                                                                        

made on the parties' Oregon properties.                                                                                                                                                                                            

III.                                  STANDARD OF REVIEW                                                                                     

                                                                           A trial court's division of marital assets comprises three steps:                                                                                                                                                                                                                                                            

                                                                            (1)   determining what property is available for distribution,                                                                                                                                                                                                           

                                                                            (2)   finding the value of the property, and (3) dividing the                                                                                                                                                                                                                                                               

                                                                           property   equitably.     Under   the   first   step,   we   review   the  

                                                                            "[u]nderlying   factual   findings   as   to   the   parties'   intent,  

                                                                            actions,   and   contributions  to   the   marital   estate"   for   clear  

                                                                            error.   Whether "the trial court applied the correct legal rule                                                                                                                                                                                                                                                         

                                                                           in exercising its discretion is a question of law that we review                                                                                                                                                                                                                                          

                                                                            de novo using our independent judgment."                                                                                                                                                                                                       The second step,                                                      

                                                                           the valuation of property, is a factual determination that we                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                        [  ]  

                                                                           review for clear error.                                                                                                        2    

                                      2                                    Limeresv.Limeres                                                                                         , 320 P.3d 291, 296                                                                                      (Alaska2014)(alterationinoriginal)                                                                                                                        

 (footnotes omitted) (quoting                                                                                                                                    Beals v. Beals                                                                     , 303 P.3d 453, 458-59 (Alaska 2013)).                                                                                                                                            

                                                                                                                                                                                                                                            -9-                                                                                                                                                                                                                             7191  

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

"Clear error is found 'only when we are left with a definite and firm conviction based on                                                                          


the entire record that a mistake has been made.' "                                                                                                            

                                                                                                      "We review the trial court's third  




step, the equitable allocation of property, for abuse of discretion." 


                          "Trial courts' . . . awards of spousal support are reviewed for abuse of  



discretion; we reverse such awards only if they are clearly unjust." 

IV.          DISCUSSION  


             A.           Legal Background  


                          Alaska Statute 25.24.160(a)(4) governs the division of property in divorce.  


It requires property division to be made "in a just manner and without regard to which  

                                                6   In dividing marital property, a trial court must consider the  

of the parties is in fault."                                                               

Merrill factors.7                These factors are not exhaustive, and the court is not required to enter  


findings on each factor; the court's findings regarding the division of property need only  


be sufficient to indicate the basis of the court's conclusion.8                                                        The trial court has broad  


             3            Urban v. Urban                  , 314 P.3d 513, 515 (Alaska 2013) (quoting                                               Barnett v.   

Barnett, 238 P.3d 594, 597 (Alaska 2010)).                             

             4            Limeres,  320  P.3d  at  296  (citing  Beals,  303  P.3d  at  459).  

             5            Urban,  314  P.3d  at  515  (quoting  Barnett,  238  P.3d  at  597).  

             6            AS  25.24.160(a)(4).   

             7            Merrill           v.     Merrill,            368        P.2d         546,        547-48            n.4       (Alaska             1962);  

AS  25.24.160(a)(4).   See  supra  note   1  (listing  factors).  

             8            Oberhansly  v.  Oberhansly,  798  P.2d  883,  884-85  (Alaska   1990)  (quoting  

Lang  v.  Lang,  741  P.2d   1193,   1195-96  (Alaska   1987)).   

                                                                                -10-                                                                          7191

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


latitude in dividing marital property,                              and "we generally will not reevaluate the merits                             

of the property division."                    10  

                        Courts may award spousal support pursuant to AS 25.24.160(a)(2).   In  


doing so, courts must consider nearly identical factors to those weighed in dividing  


marital property, although property divisionand spousal support"servedistinctpurposes  


and are not interchangeable."11                           Spousal support is ordinarily disfavored, "because it is  


generally undesirable to require one person to support another on a long-term basis in  


the absence of an existing legal relationship."12                                        We have therefore required that trial  


courts  should,  where  possible,  address  spouses'  financial  needs  through  property  


distribution, rather than through awards of spousal support.13  To accomplish this, courts  


should  award  a  disproportionate  share  of  the  marital  property  instead  of  awarding  


spousal support.14  


                        Ifnecessary to address adisparity intheparties' financial needsand earning  


power, the court may award spousal support for  a  limited duration; this support is  


            9           Bussell v. Bussell             , 623 P.2d 1221, 1222 (Alaska 1981) (citing                                    Schoning v.   

Schoning, 550 P.2d 373, 374 (Alaska 1976);                                        Burrell v. Burrell              , 537 P.2d 1, 4 (Alaska      


            10          Dundas v. Dundas, 362 P.3d 468, 477 (Alaska 2015) (quoting Stanhope v.  


Stanhope, 306 P.3d 1282, 1289 (Alaska 2013)).  


            11          Hanlon v. Hanlon, 871 P.2d 229, 233 (Alaska 1994) (citing Lewis v. Lewis,  


785 P.2d 550, 553-54 (Alaska 1990)).  


            12          Id. (quoting Jones v. Jones, 835 P.2d 1173, 1179 (Alaska 1992)).  


            13          E.g., Dundas, 362 P.3d at 480; Hanlon, 871 P.2d at 233.  


            14          Dundas, 362 P.3d  at 480  (quoting Day  v.  Williams, 285 P.3d 256, 261  


(Alaska 2012)).  


                                                                          -11-                                                                     7191

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


generally    classified    as    either    reorientation    alimony    or    rehabilitative    alimony.                                


Rehabilitative alimony is "intended to further one spouse's 'job training or other means  


directly  related to entry or advancement within the work force' " and need not be  


predicated on a finding that the party's reasonable needs cannot be met through property  

              16  Reorientation alimony is intended to provide the lower-earning spouse "an  


opportunity to adjust to the changed financial circumstances accompanying a divorce"  


and should be awarded only where unequal property division cannot adequately meet the  


spouse's reasonable needs.17                    It may be appropriate, for instance, where one spouse  


requires time to organize or sell non-liquid property or to obtain a job appropriate to his  


or her skills.18        Because reorientation alimony is meant to be "transitional,"19  we have  


noted that "it is difficult to imagine circumstances under which an award of reorientation  


alimony extending for longer than one year would be justified."20  


                     A  spouse  seeking  spousal  support  must  present  specific  evidence  


establishing the need for that support, and the trial court must make specific findings  


regarding that spouse's financial needs and the court's reasons for determining that the  


          15        Id.  (citing  Jones, 835 P.2d at 1179).         



                    Id. (quoting Davila v. Davila, 876 P.2d 1089, 1094 (Alaska 1994)) (citing  


Barnett v. Barnett, 238 P.3d 594, 601 (Alaska 2010)).  

          17        Id. (quoting Davila, 876 P.2d at 1094).  


          18        Davila, 876 P.2d at 1094 n.3 (citing Money v. Money, 852 P.2d 1158, 1163  


(Alaska 1993)).  


          19         Gallant v. Gallant, 945 P.2d 795, 801 (Alaska 1997) (quoting Davila v.  


Davila, 908 P.2d 1025, 1027 (Alaska 1995)).  


          20        Davila, 876 P.2d at 1094 n.3. Awards of long-termalimony and permanent  


spousal support are not preferred.  See Hanlon v. Hanlon, 871 P.2d 229, 233 (Alaska  


 1994) (citing Jones, 835 P.2d at 1179).  


                                                               -12-                                                          7191

----------------------- Page 13-----------------------


award was just and necessary.                                     The court should also enter findings on the higher-                                      

earning spouse's ability to pay spousal support and "the impact that the payments could                                                                        

be expected to have on [the paying spouse's] own financial circumstances."                                                                          22  


             B.	          The Court Did Not Err In Its Valuation Of The Parties' Excavation  



                          Scott argues that the court's valuation of the excavation equipment was  


contrary  to  the  evidence  presented  at  trial.                                           He  asserts  that  Tope  had  insufficient  


knowledge of equipment auctions in Kodiak and that Tope's appraisal was based on the  


erroneous assumption that the equipment was operable.  


                          Tope, who testified  that he has "bought and  sold  over  $30  million  in  


equipment," based his initial appraisal of the equipment on his conclusion that it required  


significant repairs.  He testified that he took into consideration the poor condition of the  


equipment and that his valuation was significantly lower than the average resale value  


of that equipment.  Tope also testified that he was informed the equipment was not up  


to DOT standard and that he adjusted his appraisals to take that fact into account.  He  


also testified that his appraisal took into consideration the fact that the equipment may  


not start.  


                          Tope's testimony provides clear support for the court's valuation of the  


excavation equipment. The court was entitled to credit Tope's testimony, and it was not  



clearly erroneous to adopt his valuation of the excavation equipment. 

             21           Hanlon, 871 P.2d at 233 (citing                                   Dixon v. Dixon                  , 747 P.2d 1169, 1174              

(Alaska 1987)).   

             22           Davila, 876 P.2d at 1095.  


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


("When reviewing factual findings we ordinarily will not overturn a trial court's finding



                                                                                 -13-	                                                                          7191

----------------------- Page 14-----------------------

                     C.                   The Court Did Not Err In Its Valuation Of The Marital Residence.                                                                                                                            

                                          At the time of the divorce proceedings, the marital home was in need of                                                                                                                                                       

 septic system repairs that a local excavation company estimated would cost $19,500.                                                                                                                                                                                               

 Scott argues that the court erred in declining to deduct the cost of the repairs from its                                                                                                                                                                              

valuation of the home.                                                  He argues that, because the court granted him credit for paying                                                                                                                   

 for   other  home   repairs,   and   because   the   real   estate   agents'   valuation   of   the   house  

 assumed a repaired septic system, the court should also have deducted the cost of the                                                                                                                                                                                

 septic system repairs from the value of the home.                                                                                                          

                                          Two real estate agents offered different valuations of the marital home.                                                                                                                                                                 

Janet's agent valued the home at $295,000, while Scott's agent valued the home at                                                                                                                                                                                        

 $283,000.   The court determined that both valuations were plausible, and we will not                                                                                                                                                                               

 second-guess the trial court's judgment of witness credibility where its determination is                                                                                                                                                                                


 supported by the record.                                                                                                                                                                                                                                               

                                                                                   The court adopted Scott's proposed valuation of $283,000 -  


 $12,000 less than Janet's proposed valuation of $295,000. It declined to offset the value  


by a further $19,500 for the septic system repairs for two reasons: first, because it would  


not cost Scott that much to repair the septic system himself - Scott has training in septic  


 system installation and possesses a contractor's license - and second, because he had  


 already refused to comply with the court's order to repair it in 2014. Because the court's  


valuation of the home was supported by evidence in the record, and because its refusal  

                     23                   (...continued)  


based on conflicting evidence, and we will not re-weigh evidence when the record  


provides clear support for the trial court's ruling; it is the function of the trial court, not  


 of this court, to judge witnesses' credibility and to weigh conflicting evidence." (quoting  


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

                     24                   Id. (quoting S.K.L.H., 204 P.3d at 325).  


                                                                                                                                  -14-                                                                                                                          7191

----------------------- Page 15-----------------------

to offset the home's value by a further $19,500 was an appropriate exercise of discretion,  


we affirm the court's valuation of the home.  


           D.	         The  Court  Did  Not  Err  In  Awarding  Past  Due  Interim  Spousal  


                       Support AndDeclining ToCredit Scott ForMortgage Payments Made  


                       On The Marital Home.  


                       Scott argues that the court abused its discretion in awarding Janet past due  


interim spousal support.                     In 2013 the court ordered Scott to pay $5,000 monthly in                                             

interim spousal support. While Janet lived in the home the court allowed Scott to reduce                                                  

the monthly payments by the amount he paid on the mortgage.  But once Janet moved  


out of the marital residence, Scott was required to pay her the full $5,000 monthly.  He  


now asserts that he was "never informed that he would not continue receiving credit for  


the payments on the marital residence," and that, if he had been, he may have chosen to  


sell the house.  Scott also argues that the award of $5,000 monthly in interim spousal  


support was based on Janet's financial need, which included the mortgage payments on  


the marital home, and that her financial need no longer amounted to $5,000 per month  


once she moved to Oregon.   He argues that the superior court therefore abused its  


discretion in "retroactively modify[ing]"itsinterimspousal supportorder to requireScott  


to pay the full $5,000 for the 11 months that Janet was not living in the marital home.  


Accordingly Scott asks us to vacate the award of outstanding spousal support.  


                       In its September 2013 clarification of its interim spousal support order, the  


superior court explained, "When the court ordered that [Scott] pay $5,000/month, it  


meant that those monies would include . . . the monthly mortgage on the house he was  


paying  and  [Janet] was living  in,  and  her  other  living  expenses he was covering."  


(Emphasis omitted.)   The court reiterated that "[f]rom that $5,000 figure, [Scott] is  


entitled to credit for . . . any monthly mortgage on the marital home that he is paying, and  


her other living expenses."   The court made clear that it granted Scott a credit for  


                                                                       -15-	                                                                7191

----------------------- Page 16-----------------------

mortgage payments while Janet was living in the home because they were a part of                                                                                                                                                                                                                  

Janet's living expenses.                                                            Requiring Scott to pay the full $5,000 after Janet vacated the                                                                                                                                             

home - when the mortgage payments no longer offset Janet's living expenses - was                                                                                                                                                                                                            

therefore not an abuse of discretion.                                                   

                                              Scott also asks us to grant him credit for the mortgage payments he made                                                                                                                                                                 

while he was living in the Kodiak home. Because Scott began living in the marital home                                                                                                                                                                                                 

after   Janet   moved   out,   the   court   found   that   "giving   him a                                                                                                                                          credit   for   his   mortgage  

payments would be the equivalent of letting him stay in the home free," an outcome that                                                                                                                                                                                                      

the court deemed inequitable.                                                                          In  Rodriguez v. Rodriguez                                                                  we held that the trial court did                                                            

not abuse its discretion in refusing to credit the husband for post-separation mortgage                                                                                                                                                                                  

payments made on the marital home while he lived there, reasoning that "any benefit                                                                                                                       

which he may have imparted to the marital estate was offset by the benefit he received                                                                                                                                                                                      

from the estate by living rent-free."                                                                                     25  

                                              In this case Scott was granted credit against his interim spousal support  


payments for the time that Janet was living in the marital home, but the court declined  

to credit Scott for the mortgage payments made while he lived there.  Given the benefit  


 Scott derived from living in the home during that latter period, it was not clearly unjust  


for the court to deny him credit for the mortgage payments he made.26  


                       25                     908 P.2d 1007, 1013 (Alaska 1995).                                                                                           See also Edelman v. Edelman                                                                           , 3 P.3d      

348, 354 (Alaska 2000) (citing                                                                              Ramsey v. Ramsey                                                   , 834 P.2d 807, 809 (Alaska 1992))                                                                 

(rejecting   the   notion  that   a   spouse   must,   as   a   rule,   be   credited   for   post-separation  

payments made to maintain marital property).                                                                               

                       26                     Scott also argues in the alternative that because the marital home was part  


of the marital estate, he should be granted credit for half of the mortgage payments made  


after Janet moved out.  He asserts that the court's equal division of the marital property  


dictates that the parties share equally the obligations owed on the marital estate.  Our  


conclusion that the superior court was not required to grant Scott credit for any of the  



                                                                                                                                              -16-                                                                                                                                       7191

----------------------- Page 17-----------------------

                                E.	                            It Was Error Not To Credit Scott For $510.18 In Property Taxes Paid                                                                                                                                                                                                                                                               

                                                               On The Parties' Oregon Property.                                                                                            

                                                               The court credited Scott for a $3,400 tax payment on the parties' Oregon                                                                                                                                                                                                                                             

property; Scott argues that the court erroneously failed to credit him with an additional                                                                                                                                                                                                                                                                               

 $510.18 he paid on the same day and $3,600 he had paid four days earlier. He notes that                                                                                                                                                                                                                                                                                                               

no evidence contradicted the amounts of these payments, and he asserts that the court's                                                                                                                                                                                                                                                                                                

 failure to credit themwas                                                                                           merely a misinterpretation ofthe exhibit containing the figures.                                                                                                                                                                                                                                        

He therefore asks us to reverse the court's calculation and to remand with instructions                                                                                                                                                                                                                                                                         

to credit the additional $4,110.18 in tax payments.                                                                                                                                                                                             

                                                                Scott testified that he had recently made three separate payments to the                                                                                                                                                                                                                                                                 

Coos County, Oregon property tax department for overdue property taxes:                                                                                                                                                                                                                                                                                                   a $3,600   

payment on December 24, 2013, and two separate payments of $3,403.95 and $510.81                                                                                                                                                                                                                                                                                                 

on December 28.                                                                    Scott submitted an exhibit containing receipts for the $3,403.95 and                                                                                                                                                                                                                                               

 $510.81   payments.     But   he   submitted  no  documentation   of   a   $3,600   payment;   he  

provided only a document showing he had transferred $3,600 from his savings account                                                                                                                                                                                                                                                                                                


to another personal account on December 24.                                                                                                                                                                                     

                                                               The superior court granted Scott a credit for the $3,403.95 payment but did  


not discuss Scott's claims of having made the additional $510.81 and $3,600 payments.  


Because Scott submitted a receipt for the $510.81 payment, and nothing in the record  


contradicts  this  evidence,  we  conclude  that  it  was  error  not  to  credit  him  for  this  


payment.  Because he did not submit any receipts or proof of payment for the $3,600  


                                26                              (...continued)  


mortgage payments applies with equal force to this argument.  

                                27                             The court concluded that "[i]t appears [Scott] had to move money from his                                                                                                                                                                                                                                                                   

 savings account to his checking account" before he could make the $3,403.95 payment.                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                   -17-	                                                                                                                                                                                          7191

----------------------- Page 18-----------------------

credit he seeks, we hold that the court did not err in denying him credit for an additional  



           F.	       It Was Error To Value The IRA At $12,950.  


                     Scott argues that the superior court miscalculated the value of his IRA. He  


notes that the court relied on two exhibits showing the existence of the IRA - Scott's  


Exhibit 33 and Janet's Exhibit P - to reach an aggregate value of $12,950.  However,  


Scott asserts that these two exhibits show the same account: He transferred his IRA from  


U.S.  Bank to Wells Fargo in early 2014, and the value of the account at the time of trial                                          

was $6,350.  Scott asks us to remand to the superior court for adjustment of the marital  


estate accordingly.  


                     The   superior   court   reviewed   the   documentary   evidence   from   the  


proceedings and concluded that the two exhibits showed the existence of two IRAs -  


one at U.S. Bank and one at Wells Fargo. The court acknowledged that these documents  


conflicted with both Scott's and Janet's trial testimony that only one IRA existed, but it  


stated that the parties had had "more than ample opportunity to explain this apparent  




                     Our review of the record reveals that only Exhibit P was admitted and  


entered into the record; Exhibit 33 was not offered at trial.  Thus - consistent with the  


parties' testimony - the evidence shows only a single IRA with a value at trial of  


$6,350. We therefore conclude that it was error to count the IRA twice, and the court on  


remand should value the Wells Fargo IRA at $6,350.  


           G.	       The  Award  Of  Spousal  Support  Must  Be  Remanded  For  Further  



                     1.	        The  court's  decision  to  award  spousal  support  instead  of  a  


                                larger share of the marital estate is not sufficiently supported by  


                                its findings.  


                     Scott argues that the trial court erred in awarding Janet extended spousal  


                                                                  -18-	                                                           7191

----------------------- Page 19-----------------------

support.   He argues that the court improperly deferred to Janet's wish to receive spousal                                                                                   

support and instead should have attempted to provide for her financial needs through                                                                                        

unequal property division.                                  

                             Before awarding spousal support a trial court must determine whether the                                                                                  

financial needs of a disadvantaged spouse can be met by awarding a disproportionate                                                                     

                                                              28       This  determination  must  be  supported  by  adequate  

share   of   the   marital   estate.                                                                                                                                     

findings.29   For example, in Davila v. Davila we found an abuse of discretion where the  


alimony  award  could  have  been  reduced  significantly  by  reallocating  the  parties'  


retirement benefits.30                             And  in  Hanlon  v.  Hanlon  we remanded  for  further  findings  


regarding the reasons for granting spousal support, the basis for calculating the amount  


of the award, and the parties' financial needs and earning power.31  


               28            See Dundas v. Dundas                              , 362 P.3d 468, 480 (Alaska 2015).                             



                              Urban  v.  Urban,  314  P.3d  513,  516  (Alaska  2013)  (citing Barnett  v.  

Barnett, 238 P.3d 594, 601-02 (Alaska 2010)).                                          

               30            908 P.2d 1025, 1026-27 (Alaska 1995).  If the marital property available  


for distribution is not liquid, however, we may uphold an award of alimony without  


requiring the trial court to further divide the non-liquid assets.  See, e.g., Hammer v.  


Hammer,  991 P.2d 195, 197-99 (Alaska 1999) (holding that unavailability of liquid  


marital assets, combined with ex-wife's limited work experience, disability, and parental  


obligations, rendered award of long-term alimony appropriate); Dodson v. Dodson, 955  


P.2d 902, 911 (Alaska 1998) (upholding award of alimony where majority of property  


held by the parties was non-liquid and non-income-producing).  


               31             871  P.2d  229,  233  (Alaska  1994).                                                 Cf.  Urban,  314  P.3d  at  516-17  


(upholding award of spousal support where trial court entered findings regarding each  


party's expenses and income and value of property available for distribution); Hammer,  


991 P.2d at 197-99 (upholding spousal support award based on trial court's specific  


calculations of wife's monthly expenses and income).  


                                                                                          -19-                                                                                    7191

----------------------- Page 20-----------------------

                       When a trial court awards spousal support, it must also evaluate the paying                                          


spouse's ability to pay.                                                                                                                      

                                             In assessing a party's ability to pay spousal support, the court  


                       neednotincludeadollar-by-dollar accountingof[theparty's]  


                       monthly  income  and  expenses;  the  goal  is  to  determine  


                       whether [the party] can reasonably assume the obligation of  


                       paying  the . .  . alimony  award.                           However, the trial court  


                        should make findings that indicate that it has considered [the  


                       party's]necessary expenses, including required work-related  


                        expenses, as well as the funds [the party] could use to meet  



                       those expenses. 

The trial court must also bear in mind that "[i]t is not unreasonable to expect a party to  


a divorce to have to reorganize financially, at least on a short[-]term basis."34                                                       Where a  


property and spousal support award "takes practically all one spouse's income," we may  


find an abuse of discretion.35  



                       In the present case, the superior court noted in its findings that:  


                       Janet has been very adamant and consistent throughout these  


                       proceedings about wanting spousal support, as opposed to  


                       getting more property . . . .  Given her position on this issue,  


                       coupled with the fact that the larger, more valuable assets are  


                       in Kodiak (and she does not want the hassle and expense of  


            32          Gallant v. Gallant              , 882 P.2d 1252, 1255 (Alaska 1994) (citing                                     Jones v.   

Jones, 835 P.2d 1173, 1179 (Alaska 1992);                                  Renfro v. Renfro            , 848 P.2d 830, 834 (Alaska           


            33         Myers v. Myers, 927 P.2d 326, 330 (Alaska 1996) (footnote omitted).  


            34         Monsma v. Monsma , 618 P.2d 559, 560 (Alaska 1980) (quoting Allen v.  


Allen , 554 P.2d 393, 395-96 (Alaska 1976)).  


            35          Gabaig v. Gabaig, 717 P.2d 835, 843 (Alaska 1986) (citing Burrell v.  


Burrell, 537 P.2d 1, 4 n.6 (Alaska 1975)); see also Groff v. Groff, 408 P.2d 998, 1001  


(Alaska 1965) (finding abuse of discretion in part because husband was ordered to pay  


$1,025 per month in spousal support, debt service, and child support, although his net  


monthly income was only $1,012).  


                                                                        -20-                                                                  7191

----------------------- Page 21-----------------------


                    being a landlord for their six-plex in Oregon), none of these  


                    assets are therefore of any use to her, . . . and all of these  


                    arguments  are  reasonable  on  their  face,  so  the  court  will  


                    honor her request and award her post-divorce, future spousal  




(Footnote omitted.)  Deferring to Janet's preference to receive spousal support rather  


than a disproportionate share of the marital property was an abuse of discretion.  The  


court did not enter findings regarding whether her needs could be met through unequal  


property division or through a larger cash equalization payment.  We therefore remand  


for the court to consider in greater detail what Janet's financial needs are and whether  


those needs can be met through some division of the marital property.  


                    If the court finds on remand that Janet's financial needs cannot be met  


through property division, then it should conduct a more detailed inquiry into Janet's  


needs, the appropriate duration of any spousal support award, and Scott's ability to pay  


spousal support.   The court did not enter detailed findings regarding Scott's future  


income or expenses.   It acknowledged that the property awarded to Scott would be  


difficult to sell, yet it made no further findings regarding whether or how Scott could  


meet the financial burden it placed on him.  The court stated only that "[t]his amount,  


spread over these six years, should be more than sufficient to support Janet and let her  


invest for her retirement, while still allowing Scott to have money to similarly live on and  


likewise, to prepare for his own retirement."  If the court determines that an award of  


future spousal support is necessary, it should make additional findings regarding the  


amount and duration of the support award, Scott's ability to pay, and the financial burden  


it will place on Scott.  


                    2.	        The  court  did  not  err  in  declining  to  grant  Scott  credit  for  


                               interim spousal support paid.  


                     Scott argues that, in awarding a total of $216,000 in future spousal support  

                                                               -21-	                                                        7191

----------------------- Page 22-----------------------

to Janet, the court failed to take into consideration the $113,974 that Janet had already                                                                                                                                                                                                                  

been awarded as interim spousal support.  He notes that his own income for 2015 was                                                                                                                                                                                                                

expected to be $107,000, and he has no significant retirement funds.                                                                                                                                                                                                           He states that                           

awarding such a large amount to Janet without crediting himfor the $113,974 previously                                                                                                                                                                                                          

awarded in interim spousal support was an abuse of discretion.                                                                                                                                                                                    

                                                   As   the   trial   court   noted,   "given   the   disparity   [in]   the   parties'   income,  

allowing such an offset would result in completely negating the whole point of ordering                                                                                                                                                                                                                

interim spousal support here in the first place."                                                                                                                                  The trial court concluded that granting                                                                              

 Scott a credit for interim support payments in addition to the tax deduction he received                                                                                                                                                                                                              

for   the   payments   would   amount   to   "double-dipping."     In   light   of   the   parties'  

circumstances, we conclude that it was not clearly unjust to refuse to grant Scott a credit                                                                                                                                                                                                                   

for the interim spousal support payments he made.                                                                                                                        

                                                   3.	                      The court did not err in failing to award Janet rehabilitative                                                                                                                                      


                                                   Scott also argues that the superior court, in deciding to award long-term  


spousal support, erred when it rejected the option of making a short-term award of                                                                                                                                                                                                                                            

rehabilitative alimony instead.                                                                                         As we noted in                                                    Dundas v. Dundas                                                            , a party seeking                  

rehabilitative alimony must present the court with a plan to undertake job training or                                                                                                                                                                                                                                         

                                                                    36        Janet did not request rehabilitative alimony or present such a plan  

further education.                                                                                                                                                                                                                                                                                                 

to the court.  To the contrary, Janet testified that it would not be feasible for her to go  


back to school. The trial court therefore did not abuse its discretion in declining to award  


rehabilitative alimony.  




                                                   362 P.3d 468, 480 (Alaska 2015) (quoting  Tybus v. Holland, 989 P.2d  


 1281, 1288 (Alaska 1999)).  

                                                                                                                                                            -22-	                                                                                                                                                                     7191  

----------------------- Page 23-----------------------

                                                                    4.	                              The court did                                                                   not  abuse its discretion when considering the                                                                                                                                                                                              

                                                                                                     conduct of the parties.                                                        

                                                                    Scott also argues that the court failed to adequately consider the conduct                                                                                                                                                                                                                                                             

of the parties, pursuant to AS 25.24.160(a)(2)(E), in its determination of the spousal                                                                                                                                                                                                                                                                                                                       

 support award.                                                              This argument is without merit.                                                                                                                                    The court addressed the conduct of the                                                                                                                                               

parties at length in its written findings.                                                                                                                                                        The court recognized that Janet had sold marital                                                                                                                                                              

property in violation of the court's order, and it sanctioned her for this behavior by                                                                                                                                                                                                                                                                                                                                               

 allocating to her the value of the purchase option for the lot adjacent to the marital home                                                                                                                                                                                                                                                                                                                            

 and the full value of the Seven Devils property as though she had not sold it. It also took                                                                                                                                                                                                                                                                                                                                 

notice of Janet's failure to pay maintenance costs on the Oregon six-plex while she                                                                                                                                                                                                                                                                                                                                              

collected rent payments for one month, and it allocated to her the value of the rent                                                                                                                                                                                                                                                                                                                                           

payments she kept for herself.                                                                                                                            

                                                                    The   court   also   took   into   account   Scott's   violation  of   the   court   order  

directing him to repair the marital home's septic tank and his depletion of marital assets                                                                                                                                                                                                                                                                                                                            

by withdrawing $30,000 from the parties' joint accounts so that Janet could not access                                                                                                                                                                                                                                                                                                                             

the money.                                                   The court noted that Scott had "consistently failed to make his spousal                                                                                                                                                                                                                                                                        

 support payments on time and in the amounts required."                                                                                                                                                                                                                                        

                                                                    The court took both parties' conduct into consideration in allocating the                                                                                                                                                                                                                                                                                       

marital assets, and its conclusions were supported by the record.  We find no abuse of  

discretion in this regard.                                                            

                                                                    5.	                              The court was not required to find that Janet had a significant                                                                                                                                                                                                                 

                                                                                                     health issue before awarding spousal support.                                                                                                                                                            

                                                                                                                                                                                                                                          37                                                                                                          38  

                                                                   Finally, citing                                                         Gallant v. Gallant                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                     and Jones v. Jones,                                                                                         Scott argues that  


long-term spousal support is appropriate only if the spouse requesting support "has  

                                  37                                945  P.2d  795  (Alaska   1997).  

                                  38                                835  P.2d   1173  (Alaska   1992).  

                                                                                                                                                                                                                -23-                                                                                                                                                                                                        7191  

----------------------- Page 24-----------------------

significant health issues that severely impact their ability to become self[-]sufficient."                                                                                                                                     

He notes that Janet does not have any mental or physical problems that affect her ability                                                                                                                    

to work; indeed, he asserts that she worked as a bookkeeper and office manager for the                                                                                                                               

marital business and obtained full-time employment after the parties' separation.                                                                                                                               

                                  Scott's reading of these cases is incorrect.                                                               Although a court may consider                             

the parties' medical expenses and the impact of a medical condition on a party's ability                                                                                                                    

                                                                                                                     39  we have not held that a court must find  

to work, as we approved in                                           Gallant  and  Jones,                                                                                                                          

"significant health issues" in order to award extended spousal support.  To the contrary,  


we have, on more than one occasion, upheld awards of extended spousal support in the  


absence of medical concerns.40  Extended spousal support must be premised on a finding  


that  the  spouse's  financial  needs  cannot  be  met  through  an  unequal  division  of  


                        41 we decline to hold that it requires any particular finding regarding the lower- 


earning spouse's medical circumstances.  


V.               CONCLUSION  

                                  We REVERSEthecourt'svaluation ofScott's IRA and its denial of a credit  


for $510.18 in property taxes paid, and we REMAND for recalculation of the marital  


estate accordingly.  We VACATE the court's award of spousal support and REMAND  


for further proceedings consistent with this opinion.  We AFFIRM the court's decision  


in all other respects.  


                 39               Gallant, 945 P.2d at 801;                                        Jones, 835 P.2d at 1179.                          

                 40               E.g., Redmond v. Redmond, No. S-9915, 2002 WL 598910, at *2-3 (Alaska  


Apr. 17, 2002); Broadribb v. Broadribb, 956 P.2d 1222, 1225-27 (Alaska 1998).  


                 41               See Dundas, 362 P.3d at 480.  


                                                                                                         -24-                                                                                                   7191

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