Opinion
19-P-1764
07-10-2020
ARTHUR H. BLAIR, III v. KAREN ANN BLAIR.
NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
Karen Ann Blair (wife), appeals from a judgment of divorce from Arthur H. Blair (husband). She argues that the distribution of the marital estate was unequal and significantly favored the husband. More specifically, she claims that (1) the judge's findings regarding the valuation and ownership of her businesses are not supported by the evidence; (2) the judge erred by including the marital home, which the wife acquired before the marriage, in the marital estate; and (3) the judge failed to take into account the husband's alleged dissipation of assets during the pendency of the divorce proceedings. We affirm.
The husband did not file a brief in this appeal and did not take part in oral argument.
Background. We summarize the facts from the judge's findings and the uncontradicted evidence in the record. See Pfannenstiehl v. Pfannenstiehl, 475 Mass. 105, 106 (2016). The parties were married on January 30, 1993. The marriage was the fourth for each party, and while no children were born of the marriage, each party had children from prior marriages.
Both parties worked throughout the course of the marriage and contributed to the marital estate. The husband was a union laborer and the wife was self-employed, primarily as a publisher. She started her own business, a publishing company called the Free Bird Times, which she operated out of the marital home. The Free Bird Times publishes several small local newspapers that generate income by running paid advertisements. In addition to her publishing company, the wife operated a farmer's market, the Middleboro Farmer's Market, and a blues festival, the New England Blues Festival. The wife also worked as a constable, a notary public, and a justice of the peace.
By approximately October 2012, an irretrievable breakdown of the marriage occurred. The husband left the marital home and, ultimately, filed a complaint for divorce on March 11, 2014.
A few months before the husband filed a complaint for divorce, the wife filed a complaint for separate support, but that action was not pursued.
In May 2013, after the parties had separated, but before a complaint for divorce was filed, the husband purchased a home for himself located at 81 West Street, Whitman, Massachusetts (husband's residence). Shortly thereafter, the husband was seriously injured in a work-related accident that required numerous surgeries and left him with no feeling in the lower part of one of his legs. He received a worker's compensation settlement of $72,000 in connection with the accident during the pendency of the divorce proceedings. The husband used the money from the settlement to pay his mortgage and other debts, living expenses, and legal fees. The wife received no part of the settlement.
The judge determined the husband's income at the time of trial was $474 per week in Social Security disability benefits. Aside from his Social Security benefits, the husband did not make enough to require him to file a tax return. The judge found that the wife had an average income from all of her business ventures of $27,697.50, or $532.64 per week between 2013 through 2016. The judge relied on the wife's income tax returns to determine her income because he did not credit the information she had provided on her financial statement. He noted that the wife's business income was not being deposited in any of the accounts that she had listed on her financial statements. Nor did the judge believe the wife's assertion that she had no interest in the company (a Florida company, Hull Associates) that owned the Free Bird Times.
The wife asserted that she was unemployed and disabled. The judge did not credit these representations and noted that the wife did not provide any evidence that she was disabled, and found that she did not receive and had not applied for any form of disability income.
Equitable division of the marital estate. The only significant assets at issue were real property held by the parties, the businesses owned by the wife, and the husband's union pension and annuity. The judge determined that the parties were married for just over twenty-five years. They both worked throughout the marriage and had a middle class lifestyle. They divided the household work, with the wife doing most of the work inside the home and the husband doing most of the exterior work. The parties historically deposited their respective income into a joint account, from which the mortgage on the marital home and other bills were paid. The mortgage was paid off in full during the course of the marriage. At the time of trial, the husband was sixty-two and the wife was sixty-three years old. Both parties had health issues. The judge found that as a result of her ongoing business ventures, the wife is in a better position than the husband to acquire future assets and income. In light of the length of the marriage and the parties' financial contributions, and after consideration of all the statutory factors set forth in G. L. c. 208, § 34, the judge divided the assets roughly equally between the parties. The husband was awarded his residence, subject to a mortgage and with a current value or equity of $78,000; the full amount of his Massachusetts Laborer's Pension ($126,471.75) and Massachusetts Laborer's Annuity ($126,136); his Toyota vehicle; a small bank account; and other personal property in his possession. The wife was awarded the marital home located at 11 Robin Hood Avenue, Middleborough, Massachusetts (marital home), valued at $250,000; three adjoining lots of land with a total value of $30,000; her entire interest in the Free Bird Times, the New England Blues Festival, and the Middleboro Farmer's Market; her Prudential accounts valued at $43,695; two cemetery plots valued at $10,000; her Chevrolet vehicle; and certain small accounts, as well as a certificate of deposit. The judge also ruled that the wife was responsible for $9,800 in credit card debt related to the husband's Citibank credit card. There was no award of alimony to either party.
Discussion. Our review of a judgment pursuant to the equitable distribution statute, G. L. c. 208, § 34, proceeds under a two-step analysis. See Adams v. Adams, 459 Mass. 361, 371 (2011). "First, we examine the judge's findings to determine whether all relevant factors in § 34 were considered" (citation omitted). Id. "The second tier of our review requires us to determine whether the reasons for the judge's conclusions are 'apparent in his findings and rulings'" (citation omitted). Id. "A judge's determinations as to equitable distribution will not be reversed unless 'plainly wrong and excessive'" (citation omitted). Id.
The wife first argues that the judge miscalculated the value of her businesses. The valuation of a business or real property is a question of fact, and a judge's findings regarding valuation are subject to review for clear error. See Bernier v. Bernier, 449 Mass. 774, 785 (2007) (value of business); Williams v. Massa, 431 Mass. 619, 629 (2000) (value of real property).
The judge determined that the businesses had no value other than the income that the wife derived from them. This determination was made on the basis of the parties' statements and documentary evidence. The wife contends that there was insufficient evidence to support this finding. She also contends, for the first time, that the husband should have presented expert testimony on this issue. We note, as the judge observed, that the wife did not respond to discovery requests regarding the value of her businesses. Moreover, the judge did not credit most of the wife's representations regarding her income. Under the circumstances, we discern no error in the judge's reliance on the statements of the parties to determine the value of the wife's businesses and conclude that the judge's finding was adequately supported.
Next, the wife challenges the judge's finding that she owned the businesses. The judge based his findings on the husband's testimony that the wife owned the Free Bird Times and, as we have noted, did not credit her testimony that she had no interest in Hull Associates, its parent company. The judge also noted the wife's businesses operated out of the marital home and that the business addresses for the Free Bird Times and the New England Blues Festival were the same as that of the marital home. Thus, we discern no error in the judge's finding, which was supported by the evidence, that the wife owned the Free Bird Times, the New England Blues Festival, and the Middleboro Farmer's Market.
Next, the wife argues that the marital home and three adjoining lots purchased in 2002 were erroneously classified as marital assets because she had acquired the marital home before the marriage and had since placed the home and all three adjoining lots in a revocable trust. We disagree.
As the judge found, in April 2013, the marital home and the three lots were transferred to the wife as trustee of the Blair Family Revocable Trust (trust). The wife is the present beneficiary of the trust, and her three adult children are the future beneficiaries upon the wife's death. At the time, the wife consulted with her attorney about creating the trust, but the husband was not involved in any of the discussions. The judge found that the husband did not know that a trust was being created and did not execute any of the trust documents. Rather, at the wife's request, he met the wife at the attorney's office and signed some deeds. The judge credited the husband's testimony that the deeds were put in front of him to sign, and he did so.
At one point during the divorce proceedings, the wife continued to list the marital home as her property, but later removed it. The judge found that the wife wished to preserve the marital home as an asset for her children, but that she was also motivated by a desire to ensure that the husband received no portion of it.
Although held in the trust, the judge found the marital home and all three lots to be marital property and subject to equitable division. We agree. "It is well established that trust assets are marital assets subject to distribution pursuant to G. L. c. 208, § 34." Ruml v. Ruml, 50 Mass. App. Ct. 500, 511 (2000). Whether a party's interest in trust property is to be included in the marital estate for the purposes of equitable division depends on the specific attributes of the trust. See Pfannenstiehl, 475 Mass. at 112-113. An interest in trust property will be included if it provides "a fixed and enforceable property right" (quotation omitted), as opposed to a remote, speculative right that may be deemed a mere expectancy. Id. See Lauricella v. Lauricella, 409 Mass. 211, 216 (1991) (beneficial interest in trust property included in marital estate where husband had "a present, enforceable, equitable right to use the trust property for his benefit"). Where a spouse retains broad powers over the trust property either as settlor or trustee, the property may be included in the marital estate. See Ruml, supra at 511-512, citing Sullivan v. Burkin, 390 Mass. 864, 872 n.6 (1984) (where husband as settlor retained broad powers, trust property was included in marital estate).
The trust documents are not included in the record appendix in this appeal.
As trustee and sole beneficiary of the revocable trust until her death, the wife had "a present, enforceable, equitable right to use the trust property" for her benefit. Lauricella, 409 Mass. at 216. She exercised this right by continuing to occupy the home after creating the trust. See id. Furthermore, as settlor and trustee, she retains broad powers over the trust property, including the ability to revoke the trust. See Ruml, 50 Mass. App. Ct. at 511-512. In light of these facts, the judge did not err by including the marital home and the three adjoining lots held in the trust in the marital estate.
Finally, the wife argues that the judge erred by not finding that the husband had dissipated martial assets in violation of Rule 411 (a) (1) of the Supplemental Rules of the Probate and Family Court by using his $72,000 worker's compensation award to pay his mortgage and other debts and living expenses.
Rule 411 (a) (1) imposes an automatic restraining order that limits the parties' use of marital property. Rule 411 contains exceptions that allow a party to use funds "as required for reasonable expenses of living" and "in the ordinary and usual course of business." The judge found that the husband used the award "to live off of, pay attorney fees, pay mortgage arrears and auto loan arrears, and to repay his sisters for money he was forced to borrow when he was injured." The judge's findings thus indicate that the husband's use of the award fell into the exceptions to the restraining order imposed by rule 411 (a) (1), and it was not error for the judge to find that the husband did not squander the funds and not to award the wife any share of the award.
We have considered the wife's remaining arguments and conclude they do not merit discussion.
Judgment affirmed.
By the Court (Vuono, Milkey & Desmond, JJ.),
The panelists are listed in order of seniority.
/s/
Clerk Entered: July 10, 2020.