Opinion
No. 67128-6-I
07-02-2012
In re the Marriage of TODD K. PARKER, Appellant, v. SHERRY M. PARKER, Respondent.
UNPUBLISHED
Cox, J. — Todd Parker appeals from a decree of dissolution, alleging that the trial court abused its discretion in awarding Sherry Parker an equitable judgment, lifetime maintenance, and attorney fees. He also challenges the parenting plan's visitation schedule for his son. Because the equitable judgment and lifetime maintenance award were based upon the trial court's incorrect finding that Todd breached fiduciary duties to the community, we reverse. In all other respects the trial court properly exercised its discretion, and we affirm.
Todd and Sherry Parker were married in 1993. During the marriage, they had a daughter, K.P., and a son, G.P. The parties separated in 2009, and, after a bench trial, the court entered a decree of dissolution in 2011.
This opinion adopts the naming conventions of the parties and refers to Todd and Sherry by their first names.
The decree of dissolution awarded Sherry a $205,000 equitable judgment for property in Fall City on which the parties resided during the marriage, but quitclaimed to Todd's parents in 2005. The court found that this was community property and that Todd breached a fiduciary duty to the community by failing to account for its value when the couple disposed of it. The trial court also split a $4,919.97 retirement account and other cash assets equally between Todd and Sherry and allowed each to retain his or her personal vehicle. Additionally, it awarded Sherry lifetime maintenance in the amount of $2,000 per month based upon inequities in the parties' earning power, the length of the marriage, and Todd's alleged breach of fiduciary duties to the community. Finally, it awarded $37,688.37 in attorney fees to Sherry. The parenting plan granted Todd residential custody of K.P. and Sherry residential custody of G.P., and both children may choose how much visitation time to spend with the other parent.
Todd moved for reconsideration, challenging the equitable judgment, the lifetime maintenance, the award of attorney fees, and his visitation with G.P. The trial court denied the motion.
Todd appeals.
EQUITABLE JUDGMENT
Todd argues that the trial court erred in determining that the Fall City property was community property and that he breached a fiduciary duty to the community by quitclaiming it to his parents. He argues that the equitable judgment to Sherry, based on his alleged breach, cannot stand. We agree.
The character of property as separate or community is determined at the date of acquisition. The legislature defines separate property as property acquired before marriage or after marriage by gift, bequest, devise, or descent.
In re Estate of Borghi, 167 Wn.2d 480, 484, 219 P.3d 932 (2009).
In re Marriage of Chumbley, 150 Wn.2d 1, 5, 74 P.3d 129 (2003) (citing RCW 26.16.010, .020; Brown v. Brown, 100 Wn.2d 729, 737, 675 P.2d 1207 (1984)).
Separate property will remain separate through changes and transitions, if it remains traceable and identifiable. But if the property becomes so commingled that it is impossible to distinguish or apportion it, then the entire amount becomes community property.
Id. (citing In re Marriage of Pearson-Maines, 70 Wn. App. 860, 865, 855 P.2d 1210 (1993)).
Id. at 5-6.
Once the separate character of property is established, a presumption arises that it remained separate in the absence of sufficient evidence to show an intent to transmute it from separate to community property. This is because:
Borghi, 167 Wn.2d at 484.
"[T]he right of the spouses in their separate property is as sacred as is the right in their community property, and when it is once made to appear that property was once of a separate character, it will be presumed that it maintains that character until some directIn order to convert separate property into community property, the mutual intention of the parties must be evidenced by a writing.
and positive evidence to the contrary is made to appear ."
Marriage of Chumbley, 150 Wn.2d at 6 (alteration in original) (quoting In re Dewey's Estate, 13 Wn.2d 220, 226-27, 124 P.2d 805 (1942) (quoting Guye v. Guye, 63 Wash. 340, 352, 115 P. 731 (1911))).
Estate of Borghi, 167 Wn.2d at 485 (citing In re Estate of Verbeek, 2 Wn. App. 144, 158, 467 P.2d 178 (1970)).
Additionally, where separate property remains separate during a marriage, courts presume that any increase in its value remains separate. But the community may have an equitable claim for reimbursement for sums and labor expended that increase the value of separate property.
In re Marriage of Elam, 97 Wn.2d 811, 816, 650 P.2d 213 (1982).
Id.
A trial court's characterization of property as community or separate is reviewed de novo. The burden is on the spouse claiming separate funds to clearly and convincingly trace them to a separate source.
Marriage of Chumbley, 150 Wn.2d at 5 (citing In re Marriage of Skarbek, 100 Wn. App. 444, 447, 997 P.2d 447 (2000)).
Id. at 6 (citing Skarbek, 100 Wn. App. at 448).
Here, Todd proved by clear and convincing evidence that the Fall City property was his separate property. He testified that he received it in 1988 from his parents, Luther and Marlene Parker, and built a home on it before he and Sherry were married. Todd financed the home's construction with a $70,000 promissory note from his parents, also executed before his marriage to Sherry.
This opinion adopts the naming conventions of the parties and refers to Luther Parker by his first name.
Sherry corroborated this testimony. She testified that the Fall City property belonged to Todd and that she moved in a year after he finished building the house. Shortly before the marriage in 1993, Sherry signed a prenuptial agreement that the Fall City property was Todd's separate asset.
Sherry also testified that in 2005, she and Todd both signed a quitclaim deed giving the Fall City property back to his parents. In exchange, they moved into his parents' larger home. Luther testified that no payments were ever made on the promissory note, meaning that community funds were never injected into the property, and that the 2005 transfer fully relieved the parties of any liability on the $70,000 promissory note.
In its oral decision, the trial court indicated that it believed that even though the Fall City property could be separate property, its appreciation during the period of the marriage would be community property. This is contrary to Washington law.
Report of Proceedings (February 24, 2011) at 395.
See Elam, 97 Wn.2d at 816.
In its written findings and conclusions, the trial court invalidated the prenuptial agreement and found that Todd gifted the Fall City property to the community. It also determined that Todd breached a fiduciary duty to the community by failing to document the property's 2005 appreciated value as compared to the promissory note balance plus interest. The court found that, in 2005, the Fall City property was worth $411,000, well over the balance of the promissory note with interest, and awarded Sherry a $205,000 judgment for her equitable share of the value.
The trial court's conclusion that the Fall City property was community property is not supported by the record. Todd acquired the property and completed construction of the home before the parties were married. There was no evidence that community funds and/or effort were used to improve the property during the marriage, that the asset was comingled with community property, or that Todd intended to gift the property to the community. More importantly, no writing was introduced at trial to show that Todd intended to convert this separate property into community property. The mere fact that Sherry executed a quit claim deed with Todd that conveyed the property to his parents does not change the character of the property as separate. Therefore, the trial court erred in finding that the Fall City property was community property.
See In re Marriage of Shannon, 55 Wn. App. 137, 140, 777 P.2d 8 (1989) ("In order to convert separate property into community property, the mutual intention of the parties must be evidenced by a writing.").
Because the Fall City property was Todd's separate property, he cannot have breached a duty to the community in managing this separate asset. The trial court's equitable judgment to Sherry was based on its finding that Todd breached a fiduciary responsibility to the community by not properly accounting for the value of the Fall City property at its transfer. This was error. While a spouse has a duty to act in good faith while managing community property, there is no duty for a spouse to act in good faith while managing his separate property during a marriage. Therefore, the trial court erred in awarding Sherry an equitable judgment based upon this alleged breach.
See Chumbley, 150 Wn.2d at 9 ("A spouse is required to act in good faith when managing community property, and a disposition of community funds is within the scope of a spouse's authority to act alone only if he or she acts 'in the community interest.'") (quoting Schweitzer v. Schweitzer, 81 Wn. App. 589, 597, 915 P.2d 575 (1996) (citing Hanley v. Most, 9 Wn.2d 429, 461, 115 P.2d 933 (1941)), overruled on other grounds by In re Marriage of Schweitzer, 132 Wn.2d 318, 937 P.2d 1062 (1997)).
Sherry argues that Todd did not assign error to the trial court's finding that the Fall City property was gifted to the community and, therefore, it is a verity on appeal. But the failure to assign error to a finding of fact does not bar appellate review if the appellant's briefing articulates his challenge to the court's decision. Here, Todd's opening brief clearly challenges the trial court's determination that the Fall City property was community property. Therefore, his failure to assign error to that particular finding is not material.
See Johnson v. County of Kittitas, 103 Wn. App. 212, 216, 11 P.3d 862 (2000); All Star Gas, Inc. of Wash. v. Bechard, 100 Wn. App. 732, 740 n.3, 998 P.2d 367 (2000).
Next, Sherry argues that a mischaracterization of the Fall City property is not grounds for setting aside the trial court's equitable judgment because all property, both separate and community, is before the court for division in a dissolution. But here, the court did not divide the Fall City property because neither party owned it at dissolution. Instead, it awarded an equitable judgment to Sherry based upon Todd's alleged breach of his fiduciary duty in dealing with what was, in fact, his separate property. Because Todd did not breach a fiduciary duty to the community, the equitable judgment cannot stand.
Sherry argues that the equitable judgment was proper because Todd's transfer of the Fall City property did not benefit the community. But, as explained above, because the Fall City property was Todd's separate property, he had no fiduciary duty to ensure its transfer benefitted the community.
For the first time at oral argument, Sherry argued that the trial court fashioned the equitable judgment to compensate her for Todd's breach of his fiduciary duty to provide evidence regarding the value of the Fall City property at trial. But we will not consider issues raised for the first time at oral argument.
RAP 2.5(a); RAP 12.1(a); State v. Johnson, 119 Wn.2d 167, 170, 829 P.2d 1082 (1992) (argument raised for first time at oral argument is not properly before the court and need not be considered).
MAINTENANCE
Todd argues that the trial court abused its discretion in awarding lifetime maintenance to Sherry. We agree.
In awarding maintenance, the trial court must consider the following statutory factors: (1) the financial resources of the party seeking maintenance; (2) the time needed to acquire education necessary to obtain employment; (3) the standard of living during the marriage; (4) the duration of the marriage; (5) the age, physical and emotional condition, and financial obligations of the spouse seeking maintenance; (6) and the ability of the spouse from whom maintenance is sought to meet his needs and obligations while providing the other spouse with maintenance. While lifetime maintenance awards are generally disfavored, the sole maintenance limitation is that the amount and duration be just in light of all the relevant factors. "Where the assets of the parties are insufficient to permit compensation to be effected entirely through property division, a supplemental award of maintenance is appropriate."
In re Marriage of Coyle, 61 Wn. App. 653, 657, 811 P.2d 244 (1991).
In re Marriage of Washburn, 101 Wn.2d 168, 178, 677 P.2d 152 (1984).
Id.
An award of maintenance is within the broad discretion of the trial court. An abuse of discretion occurs when the court bases its decision on untenable grounds or reasons. "An award of maintenance that is not based upon a fair consideration of the statutory factors constitutes an abuse of discretion."
In re Marriage of Bulicek, 59 Wn. App. 630, 633, 800 P.2d 394 (1990).
In re Marriage of Foley, 84 Wn. App. 839, 845, 930 P.2d 929 (1997).
In re Marriage of Crosetto, 82 Wn. App. 545, 558, 918 P.2d 954 (1996).
Here, the trial court awarded lifetime maintenance to Sherry, in part, because Todd quitclaimed a number of real properties to his parents without "reasonable, prudent, or good faith regard for the community interest." It is undisputed that during the marriage, Todd and Sherry received an interest in properties located in Kittitas County from Todd's parents. Luther testified that the parties had an agreement whereby he would front the money to purchase, develop, and pay the taxes on the properties and then, once the properties were sold, he would split the profits with Todd and Sherry.
Clerk's Papers at 127.
Todd testified that he and Sherry quitclaimed their interests in these properties back to his parents in 2008. He explained that they did so because, due to the economy and a water moratorium, they were unlikely to realize any profit, given the amounts Luther spent purchasing and developing the properties.
Although the trial court found that Todd was not credible, it found Luther's testimony that the Kittitas County properties were "under water" credible. According to Luther, the properties were "in the tank" due to the economy and a water moratorium. He explained that in the past five years, he was only able to sell one property, despite keeping them all on the market and lowering the prices. No other evidence at trial contradicted Luther's testimony.
The trial court erred in concluding that Todd breached a fiduciary duty to the community by quitclaiming the Kittitas County properties back to his parents. As Luther testified, no profit could be realized by selling the properties. Therefore, Todd cannot have breached a fiduciary duty by quitclaiming the worthless interests back to his parents. In all likelihood, Todd saved the community from having to reimburse his parents for his and Sherry's share of any losses realized upon a future sale.
Sherry argues that the award was within the trial court's discretion because the transfer of the Kittitas County properties to Todd's parents made a just and equitable division of those properties impossible. But she does not explain how the division of property interests that are under water would have improved her financial situation. Without this showing, it is difficult to see why this would have any effect on the just and equitable division of the properties that the parties no longer owned at the time of this dissolution proceeding. In sum, this argument is not persuasive.
The next question is whether the trial court reasonably exercised its discretion in awarding lifetime maintenance given that Todd did not breach a fiduciary duty. We conclude that the trial court abused its discretion because it did not fairly consider all factors of RCW 26.09.090.
Here, the trial court appears to have addressed four of the six statutory factors. It determined that the assets available for distribution were insufficient to meet Sherry's needs; that, due to Sherry's medical and earning history, it was unlikely she would find employment making more than $1,175 per month; and that the seventeen year marriage required that the parties be treated equally post-dissolution. The trial court also determined that Todd's monthly income was $5,880. As a result, it awarded Sherry lifetime maintenance of $2,000 per month. The court did not explicitly consider two of the statutory factors: the standard of living during the marriage or Todd's ability to pay maintenance while meeting his own obligations.
This case is analogous to In re Marriage of Mathews, where Division Three of this court reversed a lifetime maintenance award. There, the trial court ordered the husband to pay nearly two thirds of his salary in lifetime maintenance, even though he had no significant personal property, his wife had a part-time job, and she received all the equity from the family home. A divided panel of the court remanded the award for reconsideration. The majority noted that the husband had no significant personal property and would not be able to meet his own needs while meeting the obligations imposed by the trial court.
70 Wn. App. 116, 853 P.2d 462 (1993).
Id. at 123.
Id. at 123-24.
Id. at 123.
Id. at 123-24.
As in Mathews, Todd has no significant personal property from which to satisfy the lifetime maintenance award. And the trial court did not make a finding regarding his monthly expenses. Thus, it is unclear whether Todd will be able to support himself after making the monthly maintenance payment of $2,000 to Sherry. Given Todd's limited assets and the uncertainty regarding his expenses, the trial court abused its discretion in ordering lifetime maintenance without considering whether Todd will be able to meet his own needs and pay the award. Therefore, we reverse the lifetime maintenance award and remand to the trial court for reconsideration of all the statutory factors.
Sherry claims that the trial court properly considered the required statutory factors. But she does not point to where in the record the trial court considered Todd's ability to meet his own financial needs and pay the maintenance award. Therefore her argument does not relieve the need for the trial court to consider this factor on remand.
Sherry argues that In re Marriage of Morrow, supports the award of lifetime maintenance. We disagree.
53 Wn. App. 579, 770 P.2d 197 (1989).
In that case, this court upheld the lifetime maintenance award of $2,200 per month, in part because the husband dissipated and concealed assets. The court also held that the wife could not earn as much as the husband and that the award properly reflected that she had forfeited economic opportunities during the 23-year marriage while he capitalized on her status as a homemaker.
Id. at 584, 588.
Id. at 587-88.
But in Morrow, the court upheld a lifetime maintenance award in part because the husband was capable of paying the award without sacrificing his own needs. In that case, the court noted that the interest alone on the husband's retained financial resources would yield enough money to pay the maintenance award for life. Here, Todd has no material assets from which to pay lifetime maintenance and the trial court's failure to consider his ability to pay was an abuse of discretion. Therefore, Morrow is distinguishable.
Id.
Id. at 587.
PARENTING PLAN
Todd argues that the trial court abused its discretion in giving G.P. the choice whether to visit Todd in the parenting plan. We disagree.
We review a trial court's parenting plan for an abuse of discretion. A trial court abuses its discretion if its decision is manifestly unreasonable or based on untenable grounds or reasons.
In re Marriage of Kovacs, 121 Wn.2d 795, 801, 854 P.2d 629 (1993).
In re Marriage of Littlefield, 133 Wn.2d 39, 46-47, 940 P.2d 1362 (1997).
Here, Kathleen Kennelly, the parenting evaluator, testified that sixteen year old K.P. should live with Todd and be allowed to decide whether or not to visit Sherry. She also recommended that fourteen year old G.P. live with Sherry. But, she believed that G.P.'s visitation with Todd should be mandatory and not left to G.P.'s discretion.
The trial court's parenting plan largely followed Kennelly's recommendations. It held that K.P. should reside with Todd and G.P. should reside with Sherry. But it held that both children could decide whether or not to spend residential time with the other parent:
If [K.P.] or [G.P.] do not want to spend an residential time with the other parent they should not be forced into doing so and should arrange a time with that parent according to their schedules.The court explained that "[a]lthough the age difference between the children suggests that [G.P.] should perhaps have less discretion or choice in the amount of time he spends with his father the fairness issue in the context of the alienation concerns is more significant." Given this explanation, the trial court did not abuse its discretion.
Clerk's Papers at 228.
Id. at 126.
Todd argues that the trial court's decision is an abuse of discretion because it does not account for G.P.'s best interests, but only for the fairness to Sherry. He claims that the only evidence before the court, specifically Kennelly's testimony, suggested that it was not in G.P.'s best interest to be able to choose whether to have visitation. But, Kennelly also testified that there "was some estrangement going on in the family, and the father was responsible for some of it." Based on her interviews with the family, she believed that Todd and K.P. had an alliance and that Sherry was vilified as a result. This testimony supports the trial court's decision that alienation was a concern that should be considered in assessing G.P.'s best interests. Therefore, alienation was a reasonable consideration when evaluating G.P.'s best interests and Todd has not shown that the trial court abused its discretion.
Report of Proceedings (February 22, 2011) at 38.
Id.
ATTORNEY FEES
Fees at Trial
Todd argues that the trial court abused its discretion in awarding attorney fees to Sherry because he did not breach a fiduciary duty to the community. But, because the trial court awarded attorney fees based on Todd's intransigence, not his breach of a fiduciary duty, we disagree.
A court may award attorney fees if one party's intransigence caused the other party to incur additional legal fees. Attorney fees based on intransigence have been awarded where a party engaged in obstruction and foot dragging or made the proceeding unduly difficult and costly. When awarding attorney fees on the basis of intransigence, a trial court must make findings sufficient to allow appellate review. We review the trial court's award of attorney fees for an abuse of discretion.
In re Marriage of Bobbitt, 135 Wn. App. 8, 30, 144 P.3d 306 (2006).
Id.
Id.; In re Marriage of Greenlee, 65 Wn. App. 703, 708-09, 829 P.2d 1120 (1992).
In re Marriage of Mattson, 95 Wn. App. 592, 604, 976 P.2d 157 (1999).
Here, the trial court awarded over $37,000 in attorney fees to Sherry based on Todd's intransigence during the trial. It explained that Todd:
has failed to comply with court orders. He has made the trial more difficult by failing to provide evidence of transactions and property values. He has attempted to delay the trial with a bankruptcy that apparently has nothing to do with the trial issues.Todd does not challenge any of these findings, so they are verities on appeal. Given these unchallenged findings of fact, Todd fails to show that the trial court abused its discretion in awarding Sherry attorney fees.
Clerk's Papers at 129-30.
In re Interest of Mahaney, 146 Wn.2d 878, 895, 51 P.3d 776 (2002) (unchallenged findings are verities on appeal).
Fees on Appeal
Sherry requests attorney fees on appeal, arguing that the appeal is frivolous under Rule of Appellate Procedure (RAP) 18.9(a). We disagree.
Under RAP 18.9(a), we may impose sanctions for a frivolous appeal. An appeal is frivolous if there are no debatable issues upon which reasonable minds might differ and it is so totally devoid of merit that there is no reasonable possibility of reversal. Because this case must be remanded to the trial court, the appeal is not frivolous and Sherry is not entitled to attorney fees.
Carlile v. Harbour Homes, Inc., 147 Wn. App. 193, 217, 194 P.3d 280 (2008) (citing State ex rel. Quick-Ruben v. Verharen, 136 Wn.2d 888, 905, 969 P.2d 64 (1998)).
We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.
_____________ WE CONCUR:
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