Opinion
No. 31379-1-II
Filed: May 10, 2005 UNPUBLISHED OPINION
Appeal from Superior Court of Clark County. Docket No: 02-3-01671-2. Judgment or order under review. Date filed: 01/30/2004. Judge signing: Hon. Diane M Woolard.
Counsel for Appellant(s), John Michael Clark, Attorney at Law, 222 E 4th Plain Blvd, Vancouver, WA 98663.
Counsel for Respondent(s), Carolyn Marie Drew, Scott Horenstein Law Firm PLLC, 900 Washington St Ste 1020, PO Box 61507, Vancouver, WA 98666-1507.
Catherine Wright Smith, Edwards Sieh Smith Goodfriend PS, 1109 1st Ave Ste 500, Seattle, WA 98101-2988.
Michael Barry appeals the trial court's property division and the parenting plan in his dissolution. He asserts that the trial court abused its discretion in (1) failing to characterize the debt to his former wife's mother; (2) miscalculating the debt's balance; and (3) refusing to adopt the parenting investigator's recommendation and imposing restrictions on his residential time with the parties' two children. We affirm.
FACTS
Michael Barry and Anne Marie Murphy were married in March 1996 and separated in September 2002. Murphy subsequently petitioned for dissolution. Barry and Murphy have two children who were four and six years old at the time of trial.
A. Real Property
In 1989, Murphy purchased real property in San Francisco (the San Francisco house), from her mother, Mary Murphy Edwards (Edwards). Murphy assumed the existing mortgage and signed an unsecured promissory note for $140,000, with eight percent per annum interest, payable to her mother in monthly installments of $950. The San Francisco house's rental income paid the mortgage and the $950 monthly installments to Edwards.
Murphy and Barry each owned a home in Clark County, Washington before their marriage. Both properties were sold during the marriage. The proceeds of Murphy's home sale were disposed of before trial. The parties disputed whether Barry put the proceeds of his home sale into a joint or separate account; however, the parties agreed that an outside evaluator would help resolve this asset's value and distribution. Accordingly, Barry does not argue that the proceeds from his home are dispositive here.
After their marriage in 1996, they jointly purchased property in Vancouver, Washington (83rd St.). Murphy refinanced the San Francisco house to obtain funds for improvements to the 83rd St. property. They sold the 83rd St. property near the time they separated and the net proceeds of approximately $17,000 were awarded to Barry at trial.
The parties dispute the actual amount Murphy invested in the 83rd St. property. The record shows that Murphy may have used $6,000 to pay her separate credit card debt.
In 1998, Murphy decided to do a section 1031 exchange with the San Francisco house and replacement rental properties in Washington. But before selling the San Francisco house, at Barry's insistence, Murphy transferred it to the community through an interspousal transfer deed. The net proceeds from the sale, $378,617.68, were used to obtain three community rental properties in Vancouver, Washington: (1) the 1509 NE 90th Avenue (90th Ave.) property; (2) the 1212 NE Cedar Ridge Loop (1212) property; and (3) the 1216 NE Cedar Ridge Loop (1216) property. Murphy and Barry did not pay off the debt to Edwards upon sale of the San Francisco property.
The parties purchased the 90th Ave. property outright for $199,000 and used the remaining proceeds from the sale of the San Francisco house for down payments on the 1212 and 1216 properties. They obtained mortgages for the balance of the debt on the 1212 and 1216 properties. Later, they took a $40,000 loan against the 90th Ave. property to pay off a Yukon vehicle and a Capital One credit card.
Murphy and Barry spent $10,500 to improve the 1216 property so they could reside in it. The rental income from the 90th Ave. and 1212 properties paid the mortgages on the 1212 and 1216 properties and the debt owed to Edwards.
B. Domestic Violence
According to Murphy, Barry was verbally abusive towards her early in their marriage. He also drank excessively, which exacerbated his aggressive episodes. Barry's aggressive behavior continued after their children were born and, at times, escalated into physical violence that involved the police at least three times. In one incident, Murphy threw a pair of hand clippers at Barry during an argument when Barry grabbed her by the neck and pushed her to the ground in front of their children. The police arrested Barry and cited Murphy for throwing the clippers.
Murphy never pressed charges on any occasion because she was afraid that Barry would retaliate against her.
Barry also spat in Murphy's face in front of the children. Murphy testified that she finally decided to leave when she found a handgun Barry had purchased after he warned her during an argument that, 'If you're not careful, I'm going to put you in a body bag.' Report of Proceedings (RP) at 130-31.
Barry apparently admitted to this during an interview with the custody evaluator.
C. Temporary Joint Residential Schedule
Murphy left the family home with the children, filed a petition for dissolution, and obtained an ex parte restraining order against Barry in September 2002. A few days later, Murphy and Barry agreed on a temporary parenting plan. According to the temporary plan, the children were with Barry every other week from Thursday afternoon through Monday. A later agreement provided for the children to alternate weeks with each parent. That plan continued until the dissolution trial. Murphy did not believe the plan was in the children's best interest but claimed that Barry pressured her into agreeing to it.
The court's order allowed Barry to remain at the 1216 property, while Murphy moved to the 90th Ave. property.
D. Parenting Investigation and Trial Testimony
In June 2003, the trial court appointed Dr. Harry Dudley (Dudley) as a bilateral custody evaluator. Dudley testified that (1) his tests showed that both parties scored in the average range for violence potential and anger control; (2) throughout the marriage Murphy expressed concerns to Dr. Ron Miller about Barry's 'alcohol and drug use, control and domestic violence'; (3) Murphy exhibited some behavior indicative of domestic abuse; (4) in some domestic violence cases he finds the abusive party blames the partner; (5) Barry indicated abuse in a previous marriage, but stated that his spouse was the perpetrator; and (6) while admitting to having spat in Murphy's face, Barry said that Murphy's claims of physical abuse were exaggerations.
Dudley did not observe or review either parent's trial testimony. Based on his investigation, he recommended that Murphy be the primary decision-maker for non-emergency issues and that the agreed alternating residential schedule continue because, '[a]ny significant reduction in residential time with either parent would result in a sense of loss' for the children. Exhibit 33. Dudley noted that Murphy and Barry 'vacillate from being able to communicate effectively, to being unable to communicate in an effective manner.' Exhibit 33. His report did not address the potential effects of the domestic abuse on the children, but he stated that the children 'remember[ed] their parents fighting.' Exhibit 33.
Dr. Kirk Johnson testified about the effect of joint custody in families where domestic violence has occurred.
E. Trial Court's Decision 1. Real Property and Debt to Edwards
The trial court awarded Murphy the 1212 and 90th Ave. properties and made her solely responsible for the related mortgages. The court concluded that $140,000 was owed to Edwards under the note, allocated the debt to Murphy, and deducted it from Murphy's award of community property.
Murphy's net share of the community assets was approximately $176,725. The trial court awarded to Barry the 1216 property, its mortgage, and the proceeds from the sale of the 83rd Street home. Barry's net share of the community property was approximately $161,361.
The court explained that the 52/48 percent division of the assets in favor of Murphy was equitable and reasonable because 'there could be an argument made for [Barry] having been unjustly enriched.' RP at 519.
2. Parenting Plan
The trial court declined to follow Dudley's recommendation to continue the alternating week residential schedule. Instead, the court designated Murphy as the primary residential parent and decision-maker for the children and limited Barry to alternate weekend visitation. The trial court found that the parties' testimony provided evidence that Barry had engaged in a pattern of abusive use of conflict and domestic violence directed at Murphy that warranted a restriction on his parenting schedule under RCW 26.09.191. The trial court noted that Dudley's failure to review the parents' testimony influenced its decision to reject his recommendations.
The trial court did not make a specific finding that Barry was an alcoholic, but noted that his 'abusive use of conflict is likely exacerbated by his alcohol use.' Clerk's Papers (CP) at 14.
ANALYSIS I. Characterization and Distribution of Debt to Edwards
Barry argues that the trial court abused its discretion in failing to expressly characterize the $140,000 debt to Edwards, treating the debt as a community obligation, and finding that the balance owed on the note was $140,000. Murphy responds that the trial court's decision was justified based on the evidence that included the testimony of Edwards, Murphy, and Barry about payments on the debt and the community's assumption of the debt following the 1031 exchange.
A. Applicable Legal Standards
In a dissolution action, all property, both community and separate, is before the court for distribution. Friedlander v. Friedlander, 80 Wn.2d 293, 305, 494 P.2d 208 (1972). The trial court has broad discretion in awarding property under RCW 26.09.080 and we will reverse only upon the appellant's showing of a manifest abuse of discretion. In re Marriage of Kraft, 119 Wn.2d 438, 450, 832 P.2d 871 (1992); In re Marriage of Landry, 103 Wn.2d 807, 809, 699 P.2d 214 (1985). A court's abuses its discretion if it is exercised on untenable grounds or in an unreasonable manner. In re Marriage of Gillespie, 89 Wn. App. 390, 398, 948 P.2d 1338 (1997).
We review de novo a trial court's property characterizations. In re Marriage of Skarbek, 100 Wn. App. 444, 447, 997 P.2d 447 (2000). 'Once established, separate property retains its separate character unless changed by deed, agreement of the parties, operation of law, or some other direct and positive evidence to the contrary.' Skarbek, 100 Wn. App. at 447 (emphasis added); see also RCW 26.16.010. And in general, '[t]he burden is on the spouse asserting that separate property has transferred to the community to prove the transfer by clear and convincing evidence, usually a writing evidencing mutual intent.' Skarbek, 100 Wn. App. at 447.
A dissolution court's mischaracterization of property is rarely a proper basis to reverse the court's property distribution. Gillespie, 89 Wn. App. at 399. This is because the dispositive inquiry of the court's property distribution is that the court's decision 'is just and equitable under all the circumstances.' Kraft, 119 Wn.2d at 450; see also Marriage of Davison, 112 Wn. App. 251, 259, 48 P.3d 358 (2002) ('the court is required to make an equitable distribution, not an equal one'). Accordingly, a court's mischaracterization of property requires remand only if '(1) the trial court's reasoning indicates that its division was significantly influenced by its characterization of the property, and (2) it is not clear that had the court properly characterized the property, it would have divided it in the same way.' In re Marriage of Shannon, 55 Wn. App. 137, 143, 777 P.2d 8 (1989) (emphasis added).
B. Characterization of Debt
Barry contends that the $140,000 debt to Edwards remained Murphy's separate legal obligation because Murphy acquired this debt seven years before the parties' marriage and the trial court erred when it did not expressly characterize this debt as separate property. He argues that, although the community obtained all of Murphy's separate interest in the San Francisco house by way of gift from Murphy, she remains solely responsible for this debt related to the property.
The promissory note between Murphy and Edwards was dated February 6, 1989.
The evidence at trial demonstrated that Murphy and Barry treated the debt to Edwards as a community obligation after Murphy transferred title to the San Francisco house to the community. Further, neither party disputed its characterization as a community obligation at trial.
We note that Murphy and Barry were able to transfer ownership of the San Francisco house without satisfying the debt to Edwards because Edwards did not require that the debt be secured against the property.
In response to his counsel's questioning, Barry testified that he was personally involved in paying the debt to Edwards when the couple 'sold the California property' in 1998. RP at 224. Further, Barry clarified that the rental income from the San Francisco property before the sale was used to pay $950 a month to Edwards.
Barry's counsel then asked,
[Counsel]: Do you think you owe that money to her mother?
[Barry]: Yeah.
[Counsel]: Why is that?
[Barry]: Because at the time the San Francisco home was sold, which was the basis of paying [Edwards] 950 a month, the 950 a month had to be replaced, and the only way to replace it would be to come from Anne [Murphy] and I and our replacement properties.'
RP at 225.
Edwards testified that she received payments from Murphy and Barry, consistent with the note, both before and after Murphy sold the San Francisco home. And Murphy testified about her and Barry's joint payment of this debt.
Based on the evidence and testimony at trial, the trial court did not err in concluding that both parties agreed to satisfy the debt to Edwards from the substantial community income generated from the 90th and 1212 properties in Vancouver. Barry expressly concedes that the trial court properly characterized the three replacement Vancouver properties as community property. And although Murphy, Barry, and Edwards did not have a written agreement that converted the debt to Edwards to a community liability, all of the evidence at trial supports a finding of mutual intent by Murphy and Barry to pay the debt from their subsequent community income from the Washington sec. 1031 exchange properties.
Generally, a dissolution court cannot determine the rights of third parties, even if they claim an interest in the property at issue. See, e.g., In re Marriage of McKean, 110 Wn. App. 191, 195, 38 P.3d 1053 (2002); see also RCW 26.09.050, .080.
Thus, the court properly characterized the debt as a community obligation and the lack of a specific characterization of the debt is not reversible error given the facts here. Furthermore, even if the trial court characterized the debt as a separate obligation, the overall distribution of community property was 67 percent to Murphy and 33 percent to Barry, with Murphy then being awarded 100 percent of the separate debt. Such a distribution is within the trial court's discretion. Davison, 112 Wn. App. at 258.
C. Unjust Enrichment
The court referred to Barry's unjust enrichment as a basis for reducing the net value of Murphy's property award by the debt owed to Edwards. The court stated: '[T]hat's a 52/48 percent division, about, which I am finding is reasonable considering this case. And there could be an argument made for [Barry] having been unjustly enriched so that the 52/48 is within the court's discretion.' RP at 519. This reasoning is persuasive.
A dissolution action is one of equity. RCW 26.09.010(1). But contrary to equity principles, a person is unjustly enriched when he or she profits at the expense of another. Farwest Steel Corp. v. Mainline Metal Works, Inc., 48 Wn. App. 719, 731-32, 741 P.2d 58 (1987). Unjust enrichment and liability only occur where money or property has been placed in a party's possession such that in equity and good conscience the party should not retain it. Lynch v. Deaconess Med. Ctr., 113 Wn.2d 162, 166, 776 P.2d 681 (1989). The enrichment must be unjust under the circumstances and as between the two parties. Farwest Steel Corp., 48 Wn. App. at 732.
Here, the evidence is undisputed that Murphy contributed all of her separate property to the community by transferring the San Francisco house to the community through the interspousal transfer deed. And after this transfer, Murphy had no ability to pay the debt to Edwards because she no longer had any separate income with which to satisfy this debt, but the community gained three properties, one to live in and two income-producing. Thus, if we adopt Barry's argument that he should receive additional assets or property to compensate him for the debt to Edwards, Barry benefits even further at Murphy's expense. Here, under the circumstances, equity dictates that Barry should not receive this benefit.
Both Murphy and Barry were employed, but their wages were community property. In re Marriage of Short, 125 Wn.2d 865, 870, 890 P.2d 12 (1995). It is also undisputed that the income from the replacement homes was community property. Barry has not asserted that Murphy had any separate income with which to pay the debt to Edwards.
The trial court did not err in deducting the debt to Edwards from Murphy's gross award of property.
D. Debt Balance
Barry contends that the trial court erroneously calculated the balance due on the debt as $140,000, the exact amount of the principal in 1989. The court has considerable discretion in valuing property and parties are entitled to give their opinion of value of their assets. Gillespie, 89 Wn. App. at 403.
But the evidence at trial was that by August 2002 only about $40 of the $950 due each month reduced the debt's principal. The principal balance was roughly $137,000 by September 2002. Then the parties stopped making payments until December 2002, when Murphy alone paid $500 a month. Consequently, the interest accumulation between September and December 2002 brought the balance back up to just over $140,000. And the parties did not meaningfully challenge the court's valuation of the debt owed to Edwards. The trial court did not act arbitrarily nor did it abuse its discretion in concluding that the balance due was $140,000.
In summary, the trial court did not abuse its broad discretion and it fashioned a fair, equitable, and just division of the property and liabilities between these parties. Barry fails to demonstrate that the trial court erred in the characterization, valuation, or allocation of the debt to Edwards.
II. Parenting Plan
Barry claims that the trial court abused its discretion when it discontinued the alternating week residential schedule, contrary to the recommendations of Dudley, the bilateral custody evaluator. Murphy argues that the trial court was not bound by Dudley's recommendations and that Barry's limited parenting schedule was justified given his history of domestic abuse.
We review the trial court's permanent parenting plan for abuse of discretion. In re Marriage of Cabalquinto, 100 Wn.2d 325, 327-28, 669 P.2d 886 (1983). Barry does not assign error to any of the trial court's findings of fact regarding the parenting plan, thus they are verities on appeal. In re Marriage of Fiorito, 112 Wn. App. 657, 665, 50 P.3d 298 (2002).
Barry complains that Murphy untimely offered Johnson's expert testimony; however, the record plainly shows that Barry waived this issue on appeal and the court did not err in allowing Johnson's testimony.
The purpose of the residential schedule in a parenting plan is to serve the best interests of the child. In re Marriage of Kovacs, 121 Wn.2d 795, 801, 854 P.2d 629 (1993). Generally, the trial court has broad discretion to fashion a parenting plan under RCW 26.09.187. Kovacs, 121 Wn.2d at 801. But '[t]he court may order that a child frequently alternate his or her residence between the households of the parents for brief and substantially equal intervals of time only if the court finds the following: (i) No limitation exists under RCW 26.09.191.' RCW 26.09.187(3)(b) (emphasis added). Under RCW 26.09.191, the court must limit a parent's residential time if the parent has committed domestic violence or engaged in an abusive use of conflict that adversely effects a child's best interests.
Here, substantial evidence supports the trial court's decision to limit Barry's parenting schedule to alternating weekends. The court observed, 'I see a number of instances of behaviors that lead me to conclude that this was a battering relationship and this is characterized by domestic violence . . . Mr. Barry engaged in degradation and verbal abuse of Ms. Murphy. There are a number of people who cited that.' RP at 527-28. The court entered a specific finding of fact that states, 'the testimony in this case demonstrated a pattern of degradation and verbal abuse by the husband.' Clerk's Papers (CP) at 14. The court also found that, it 'had the opportunity to view both parents testimony at trial while Dr. Dudley did not, which impacted the court's decision.' CP at 14.
Barry argues that the trial court erred in relying on Johnson's testimony to the exclusion of Dudley's. But the oral ruling and written findings reference Johnson only in the definition of domestic violence that he used in his testimony. The trial court had used the same domestic violence definition in previous cases.
Barry does not challenge the court's specific factual findings, thus they are verities. Barry ignores that the children here are too young to firmly articulate the effect of the domestic violence they experienced in the home. And we do not review the trial court's credibility determinations of witness and expert testimony. In re Marriage of Rich, 80 Wn. App. 252, 259, 907 P.2d 1234 (1996). Thus, the trial court was not obligated to follow Dudley's recommendations given the evidence of Barry's history of domestic abuse and the limitations this created under the relevant law.
Citing In re Marriage of Wicklund, 84 Wn. App. 763, 932 P.2d 652 (1996), Barry contends that, '[t]here must be a demonstrable nexus between a parent's status or behavior and injury to his or her children.' Br. of Appellant at 25. But Wicklund focused on whether the father's homosexuality caused his children injury that warranted a reduction in his parenting time. Here, the issues are domestic violence and abusive use of conflict that are specifically recognized by RCW 26.09.187 and RCW 26.09.191 as reasons to limit a residential schedule.
In summary, the trial court did not abuse its broad discretion in fashioning a parenting plan that designated Murphy as the primary parent and limited Barry's residential schedule to alternate weekends.
Murphy seeks attorney fees on appeal under RCW 26.09.140 and RAP 18.1, 18.9. But her appellate brief provides neither legal authority nor argument to support her request. Thus, we deny the request. See RAP 18.1(b) (party must provide sufficient argument and citation to legal authority to advise the court of the appropriate grounds for attorney fees); Austin v. U.S. Bank of Wash., 73 Wn. App. 293, 313, 869 P.2d 404 (1994). We also note that although unpersuasive, Barry's appellate issues are not frivolous. Fiorito, 112 Wn. App. at 669-70. Barry's appellate brief did not ask for attorney fees; however, very recently Barry filed a financial declaration requesting fees. We deny his request because we affirm the trial court's rulings Barry challenged on appeal.
Finding no error, we affirm.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
MORGAN, J. and QUINN-BRINTNALL, C.J., Concur.