IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

In re Marriage of: ] NO. 69833-8-1 I-O O IfiO -tc 

## CHRISTOPHERROSS LARSON, j DIVISION ONE O -r, . Appellant, ]
and ro

CO "ft ~.:-Z -O i

JULIA LARSON CALHOUN, PUBLISHED OPINION en Respondent. i FILED: November 25, 2013



### Lau, J. —This case requires us to determine whether a trialcourt's authority to 

### award one spouse's separate property to the other spouse in a dissolution action is limited to circumstances where a spouse cannotbe amply provided for from community 

### property alone. Weconclude thatRCW 26.09.080 does notsingle out theproperty's character or any other factor to be given moreweight. This statute and controlling case authority direct the trial court to make afair and equitable property division after 

### weighing all relevantfactorswithin the contextofthe parties' specific circumstances. Because the trial courtproperly exercised its discretion when it applied this rule to determine a fair and equitable propertydivision, we affirm.69833-8-1/2

FACTS Before marrying Julia Calhoun in 1986, Christopher Larson acquired an equity 

### interestin ayoung company called Microsoft.1 This interestdeveloped into acolossal fortune, which Larson held principally as his separate property. The marital community also amassed considerable wealth, traceable largely to Microsoft stock options 

### exercised by Larson during the marriage. Larson treated allpurchased stock as a 

### community asset, thereby relinquishing any claim to the separate property portion of the asset.2

### During this long-term marriage, Calhoun "made a major contribution to all that the 

### community accomplished, measured interms of their children, theirfoster children, their 

### impact in the broad community and their more narrowbusiness interests." The trial court found that "the marital community benefitted greatly from [Calhoun] serving as, in her phrase, the 'approachable face' ofthe couple." 

### Following a three-week trial, the courtentered detailed findings of fact and conclusions of law, identified the couple's assets and liabilities, determined their value, 

### characterized each as separate or community, and directed a fair and equitable division. The court awarded Calhoun various community assets worth approximately $139 

### million. Larson assumed a net community obligation ofapproximately $29.5 million. 

### Calhoun retained separate property worth $669,000. She assumed no community debt.



### 1Larson worked part-timeforMicrosoft in 1975, in association with Bill Gates. 

### Upon graduation from college in 1981, heworked full-time until heretired in 2001. 2See In re Marriage ofShort, 125 Wn.2d 865, 890 P.2d 12(1995).

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### Citing its "broad equitable powers" to "make a lopsided division of community assets and also invade a separate estate to the extent necessary to achieve a just result," the court also awarded Calhoun more than $40 million dollars of Larson's separate property. To effectuate this award, itordered Larson to transfer shares of 

### Microsoft stock, valued at approximately $14million,3 and to make three cash installment payments totaling $27 million. Larson ultimately retained separate assets worth approximately $357 million. His combined award totaled approximately $327 milliondollars. Calhoun's combined award totaled approximately $181 million. Larson appeals the award of a portion of his separate property to Calhoun.
ANALYSIS Larson challenges the trial court's decision to award approximately $40 million of his separate property to Calhoun. He asserts no challenge to the court's decision to award Calhoun 100 percent of the net community estate orto the court's valuation or characterization ofthe parties' property. He acknowledges, "[T]his is not a factual appeal." Br. ofAppellant at 4. Larson contends that the trial court "applied an improper legal standard and consequently abused its discretion in awarding Calhoun a significant share of [his] separate estate in addition to the net value of all the community property, because more 

### than ample provision could have been made for Calhoun from the parties' $109 million net community estate." Br. ofAppellant at4-5. He argues that we should "reverse the


### 3Posttrial, the parties agreed to sell the Microsoft stockfortax purposes and to transfer the cash proceeds to Calhoun. -3-69833-8-1/4

trial court's distribution ofthe marital estate and direct the trial court on remand to limit its award to the wife to the net value ofthe community estate." Br. ofAppellant at42. In a dissolution action, the trial court must order a "just and equitable" distribution ofthe parties' property and liabilities, whether community or separate. RCW 26.09.080. Allproperty is before the court for distribution. Farmerv. Farmer, 172 Wn.2d 616, 625, 259 P.3d 256 (2011). When fashioning just and equitable relief, the court must consider (1) the nature and extent ofthe community property, (2) the nature and extent ofthe separate property, (3) the duration ofthe marriage, and (4) the economic circumstances ofeach spouse at the time the property distribution is to become effective. RCW 26.09.080. These factors are not exclusive. The statute requires the courtto consider all "relevant factors." RCW 26.09.080. The court has "broad discretion" to determine what isjust and equitable based on the circumstances of each case. In re Marriage of Rockwell, 141 Wn. App. 235, 242, 170 P.3d 572 (2007). Ajust and equitable division "does not require mathematical precision, but ratherfairness, based upon a consideration of allthe circumstances ofthe marriage, both past and present, and an evaluation ofthe future needs of parties." In re Marriage of Crosetto, 82 Wn. App. 545, 556, 918 P.2d 954 (1996). "Fairness is attained 

### by considering all circumstances ofthe marriage and by exercising discretion, not by utilizing inflexible rules." In re Marriage ofTower, 55 Wn. App. 697, 700, 780 P.2d 863 (1989). "Just and equitable distribution does not mean that the court must make an 

### equal distribution." Inre Marriage ofDewBerrv, 115 Wn. App. 351, 366, 62 P.3d 525 

### (2003). "Under appropriate circumstances . . . [the trial court] need not award separate69833-8-1/5 

### propertyto its owner." In re Marriage of White. 105 Wn. App. 545, 549, 20 P.3d 481 (2001).The trial court is inthe best position to decide issues offairness. Brewer v. 

### Brewer. 137Wn.2d 756, 769, 976 P.2d 102 (1999). Accordingly, "[a] property division made during the dissolution of a marriage will be reversed on appeal only ifthere is a manifest abuse ofdiscretion." In re Marriage ofMuhammad. 153 Wn.2d 795, 803, 108 P.3d 779 (2005). 

### A trial court abuses its discretion if its decision is manifestly unreasonable or based on untenable grounds or untenable reasons. 

### Acourt's decision is manifestly unreasonable if it is outside the range of acceptable choices, given the facts and the applicable legal standard; it is based on untenable grounds ifthe factual findings are unsupported by the record; it is based on untenable reasons if it is based on an incorrect standard or the facts do not meet the requirements ofthe correct standard. 

### In re Marriage ofLittlefield. 133 Wn.2d 39, 46-47, 940 P.2d 1362 (1997) (citation omitted). "Trial court decisions in dissolution proceedings will seldom be changed on appeal." Inre Marriage ofStenshoel. 72 Wn. App. 800, 803, 866 P.2d 635 (1993). Larson contends that while the trial court generally has broad discretion to order

ajust and equitable distribution under RCW 26.09.080, Washington law prohibits the award of separate property to the nonowning spouse if"ample provision for the 

### [nonowning] spouse can be madefrom thecommunity estate alone."4 Br. ofAppellant at 21. As discussed below, controlling Washington law imposes no such restriction on the trial court's broad discretion to make a fair and equitable property distribution.



### 4Larson earlierarguedin his statement ofgroundsfor direct reviewthat our Supreme Court should limitthe award of separate property of one spouse to another except in exceptional circumstances. He does not make this claim on appeal. -5-69833-8-1/6
Larson relies on several cases but principally on Holm v. Holm, 27 Wn.2d 456, 178 P.2d 725 (1947), to support his contention. In Holm, the trial court awarded the 

### wife half ofthe parties' community property (worth $269,397.66) and half ofthe husband's separate assets (worth $72,836.01). On appeal, the husband argued the 

### distributionwas inequitable because itfailed to accountfor the characterof the property. The Supreme Court reversed the separate property award, reasoning inpartthat the 

### wife could be "amply provided for out of the community property, without invading the separate property ofthe appellant." Holm. 27 Wn.2d at466. Itexplained, "This is not a

case where, in orderto make adequate provision for the necessitous condition ofthe 

### wife, the court is constrained to take from the husband his separate property." Holm, 27 Wn.2d at 465. Itthen concluded, "We considerthe division made by the trial court unjust and inequitable in so far as itawarded to the respondent a portion ofwhat was appellant's separate property." Holm, 27 Wn.2d at 466. Larson thus argues, "[A]naward to the wife [Calhoun] of more than $100 million in community property meets the threshold of 'ample provision' that prohibits invasion of 

### the husband's separate estate."5 Br. ofAppellant at 42. Holm isunpersuasive. To the extent the above quoted language in Holm constitutes a holding, this approach was rejected in Konzen v. Konzen. 103 Wn.2d 470, 693 P.2d 97 (1985). In Konzen, the trial court awarded 30 percent ofthe husband's separate military pension to the wife to help maintain liquidity. Konzen, 103 Wn.2d at 472. Italso ordered an equal division ofthe parties' community property. On appeal, the husband 

### 5Larson claims, "[A]n award of 100% of the value of the community estateto the wife, debt-free, would have generated income for her ofat least $2,196,000 a year, without invasion ofprincipal." Br. ofAppellant at 34. The court made no such finding. -6-69833-8-1/7 

### challenged the award of his separate property. He relied on Bodine v. Bodine. 34 Wn.2d 33, 207 P.2d 1213 (1949), a case predating the enactment of RCW 26.09.080. 

### In Bodine, the court stated, "[W]hile the superiorcourt may, under certain circumstances, award part or all ofone spouse's separate property to the other, the situations which warrant such action are exceptional." Bodine, 34 Wn.2d at 35. 

### Konzen leaves no doubt that separate property is no longer entitled to special treatment. It noted that when Bodine was decided, "courts were free to weigh the 

### characterof the property more heavilythan otherfactors when allocating separate 

### property."6 Konzen. 103 Wn.2d at477. Unlike its predecessors, RCW26.09.080, enacted in 1973, "specifically applies the statutory criteria to separate property." Konzen. 103 Wn.2d at 477. The court concluded: This court willnot single out a particularfactor, such as the character ofthe property, and require as a matter of law that itbe given greater weight than other relevantfactors. The statute [RCW 26.09.080] directs the trial courtto weigh all ofthe factors, within the context ofthe particular circumstances ofthe parties, to 

### come to a fair,just and equitable division ofproperty. The character ofthe property is a relevant factor which must be considered, but is not controlling. Konzen. 103 Wn.2d at478 (emphasis added). In In re Marriage of Griswold. 112 Wn. App. 333,48 P.3d 1018(2002), Division Three ofthis court addressed the husband's claim that the trial court abused its discretion when itawarded $138,000 of his separate property to the wife withoutfinding 

### 6Holm and Bodine relied onRemington's Revised Statutes § 989,which provided, "In granting a divorce, the court shall also make such disposition ofthe property ofthe parties as shall appearjust and equitable, having regard to the respective merits of the parties, and to the conditions in which they will be left by such divorce, and to the party through whom the property was acquired, and to the burdens imposed upon it for the benefit ofthe children, and shall make provision for the guardianship, custody, and support and education ofthe minor children ofsuch marriage."69833-8-1/8 

### "unusual or exceptional circumstances." Griswold. 112Wn.App. at 347. Rejecting Bodine and the cases following it, the court reasoned: 

### [N]one ofthese cases acknowledges that inthe same yearthe court decided Bodine. the Legislature revised the dissolution statute, listingthe specific factors to be considered. See Laws of 1949, ch. 215, § 11. The revision modified the 

### principlethat one factor should weigh more heavily than others: 

### Under Konzen. a court need notfind exceptional circumstances to justify awarding a portion ofone spouse's separate [property] to the other spouse. The trial court here thus did not abuse its discretion by failing to findthere were exceptional circumstances. Griswold. 112 Wn. App. at 347-48. Larson also contends thatWashington courts applying RCW 26.09.080 and 

### Konzen continue to award separate property to the nonowning spouse only when necessary to prevent the nonowning spouse from "falling into poverty." Br. ofAppellant at 28 (formatting omitted). He relies on Griswold. In re Marriage ofWilliams. 84 Wn. App. 263, 927 P.2d 679 (1996), and Bulicek v. Bulicek. 59 Wn. App. 630, 800 P.2d 394 

### (1990), among others, to support thiscontention.7 In each case, thewife earned less than her husband earned or had lesser earning potential. Ineach case, the court upheld the distribution ofthe husband's separate property. Griswold, Williams, and



### 7Larson also citesOestreich v. Oestreich. 2Wn.2d 72, 97 P.2d 655 (1939), to support his claim that the trial court is allowed to award one spouse's separate property to prevent impoverishing the other. Oestreich is not applicable because the court reasoned that the trial court was free to award all separate and community property to the wife if justified by the circumstances, regardless of herfinancial circumstances. Larson's reliance on Luithle v. Luithle. 23 Wn.2d 494, 161 P.2d 152 (1945), is also not applicable. There, the court took into account the wife's permanent loss ofher monthly social security benefit on marriage in concluding this loss counterbalanced the separate property award. The key consideration in affirming this award was the wife's necessitous condition and the husband's financial ability.

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Bulicek do not establish a rule that poverty or "necessitous circumstances" alonejustify 

### theaward of separate propertyto the nonowning spouse.8 In Griswold. discussed above, the court relied on Konzen to hold that the trial court properly declined to find exceptional circumstances existed because itwas not required to do so. The court concluded the trial court properly weighed all the facts to determine the distribution wasjust and equitable. InWilliams, the husband contended, among other issues, that the trial court improperly based the maintenance award on retirement benefits not then accessible and that included four years of his premarital military service. Division Three ofthis court affirmed, acknowledging thatfour years of premarital military benefits were, "strictly speaking, [the husband's] separate property." Williams, 84 Wn. App. at 269. Nevertheless, itheld, "[T]he status of property as community or separate is not controlling
.... [T]he ultimate question is whether, underthe circumstances, the award 

### is just." Williams. 84 Wn. App. at 269 (citing inpart RCW 26.09.080). In Bulicek. the husband contended that the trial court's pension formula 

### improperly allowed the wife to share in his postseparation contributions to the plan. We observed, "The result is that [the wife] will in effect receive a portion ofthe 

### postdissolution retirement contributions, which are [the husband's] separate property." Bulicek. 59 Wn. App. at 636. Affirming the trial court's pension formula, we reiterated the RCW 26.09.080 factors that the trial court is required to considerwhen making a 

### just and equitable disposition of marital property. We stated: 

### 8We are likewise unpersuaded by Larson's reliance oncase authority from Wisconsin, Minnesota, Alaska, and Mississippi. As discussed above, RCW 26.09.080 and Konzen control.69833-8-1/10


### We acknowledge that [the husband's] retirementfund may receive proportionately higherfuture contributions based upon his career longevity and 

### anticipated increases inannual pay. We further acknowledge thatthe formula utilized for division offuture retirement benefits could result in [the wife's] sharing inthose increases. However, far from condemning this apportionment method, 

### we specifically approve itas a means ofrecognizing the community contribution to such increases. Bulicek, 59 Wn. App. at 638-39. Larson also relies on Stokes v. Pollev, 145 Wn.2d 341, 37 P.3d 1211 (2001), a 

### quiet title and partition action involving the disputed meaning of a term in a dissolution decree. Unlike the present case, Stokes involved no dispute regarding an award of 

### separate property to the non-owning spouse upon the dissolution of marriage. Nevertheless, Larson points to the court's passing commentthat "Washington courts refrain from awarding separate property ofone spouse to the other ifa just and 

### equitable division is possible without doing so." Stokes. 145 Wn.2d at 347. Larson 

### mistakenly characterizes this bare statement as a binding "limitation on thetrial court's authority to invadeseparate property . . . ." Br. ofAppellant at 26. As discussed above, Konzen controls this issue. We are not free to ignore binding Washington Supreme 

### Courtprecedent and we err when we disregard it. See 1000Virginia Ltd. P'ship v. Vertecs Corp.. 158 Wn.2d 566, 578, 146 P.3d 423 (2006) (Washington Supreme Court 

### decisions are binding on all lowercourts in the state); State v.Wentz. 149Wn.2d 342, 346, 68 P.3d 282 (2003) (the Washington Supreme Court has the ultimate authority to say what a statute means). We conclude the trial court acted well within its broad discretion by awarding 

### Calhoun approximately $40million ofLarson's separate property. During athree-week trial, the court"listened closelyto thetestimony of the parties and ten additional
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### witnesses," "reviewed the exhibits admitted into evidence as well as extensivelegal briefing," and "heardclosing arguments ofcounsel." Following trial, thetrialjudge issued 25 pages ofcarefully-drafted findings of fact and conclusions of law. It later 

### issued 16 additional pages ofamended findings and conclusions to reflect certain 

### posttrialagreements. The record supports Calhoun's correct assertion that "[t]he trial court, an experienced trial judge, did not make a capricious decision." Resp't's Br. at 10. 

### The court recognized the unique (and possibly incomparable) nature of the case before it. Itstated, "To firstaddress the 'elephant in the ballroom', this is not a case like
so many others where the concern is with making sure all inthe family are housed, 

### clothed and fed." Itrecognized that Larson "leaves the marriage inexcellentfiscal and 

### physical health," and that Calhoun's "fiscal and physical conditions are likewise strong." It also noted, "Both ofthese impressive people will go on to do well and to do good." The court found itnecessary to award a portion of Larson's separate estate to 

### Calhoun "toachieve a just result." According to the trial court, the separate property award served two objectives. First, itrecognized Calhoun's intangible contributions to 

### the marital community. The court explained, "Thiswas, after all, a long-term marriage in which the wife made a major contribution to all thatthe community accomplished, measured in terms oftheir children, theirfoster children, their impact inthe broad community and their more narrow business interests." Itfound that the marital community benefited from Calhoun's engagement with the community at large: During her marriage, [Calhoun] was active as a parent, foster parent, overseer of major construction projects and the generous and committed benefactor of numerous charitable organizations. Both the community at large and the marital
-11-69833-8-1/12 community benefitted greatly from her serving as, in her phrase, the "approachable face" ofthe couple. Inotherwords, while Larson generated the couple's considerable wealth, Calhoun's intangible contributions served equally to benefitthe marital community. Second, the award helped ensure Calhoun's short- and long-term financial 

### security. The court found that Calhoun held a college degree in English literature but
was not "gainfullyemployed" during the marriage. Larson, incontrast, obtained 

### significant employment and investmentexperience during the marriage. The court found he had a "keen business sense" and that, "[i]n recent years, he has stayed busy 

### actively managing his extensive investments and philanthropicendeavors." As between the two, Larson was in a better position to acquire and manage future wealth. The court stated, "It is notthat [Calhoun] leaves the marriage inneed but the fact is she will leave 

## the marriage in aless advantageous position than herhusband."9 The $40 million separate property award—consisting ofMicrosoft stock and cash—provided Calhoun with immediate liquidity. Meanwhile, the $139 million community property award

### consisting largely of realproperty and fine artwork—helped guarantee Calhoun's longterm financial health. The courtfound, "The division to be effectuated will provide the 

### wifewith substantial earning capacity, moderate liquidity and assets that can be liquidated prudently as time goes by." 

### The trial court provided ample, tenablejustifications for its decision to award a 

### portion ofLarson's separate estate toCalhoun. Its decision fell well within "the range of acceptable choices,given the facts and the applicable legal standard." Littlefield. 133 

### 9Although Larson assigns errorto thisfinding, he does notcontend that the finding is unsupported by substantial evidence. -12-69833-8-1/13
Wn.2d at 47. Itproperly characterized all separate and community property and made a 

### just and equitable distribution ofthe marital property inaccordance with RCW 26.09.080. Finding no abuse ofdiscretion, we affirmthe trial court's property 

### distribution and its decree of dissolution.10 ATTORNEY FEES ON APPEAL 

### "Upon any appeal, the appellate court may, in its discretion, order a party to pay for the costto the other party of maintaining the appeal and attorneys' fees in addition to statutory costs." RCW26.09.140. "As an independent ground we may award attorney fees and costs based on intransigence of a party, demonstrated by litigious behavior, 

### bringing excessive motions, or discovery abuses." In re Marriage of Wallace. 111 Wn. App. 697, 710, 45 P.3d 1131 (2002). "Ifintransigence is established, we need not considerthe parties' resources." Wallace. 111 Wn. App. at 710. Calhoun contends she is "entitled to her fees on appeal due to Larson's 

### intransigentconduct."11 Resp't's Br. at42. She does notargue thatLarson was intransigentbelow.12 Instead, she contends thatLarson's appeal constitutes intransigencejustifying a fee award. She explains:


### 10 Given ourdisposition in this case, we do notaddress Calhoun'sinvited error claim. 

### 11 Calhoun states, "While RCW 26.09.140 provides that a party in a dissolution 

### action may recover his or her attorneyfees on appeal, the statute is not the basisfor Calhoun's fee request. Rather, she isentitled to her fees on appeal due to Larson's intransigent conduct." Resp't's Br. at 42. 12 The trial court did not find that Larson was intransigent. To the contrary, it 

### described the parties as "morecongenial. . . than istypical." It also stated, "To the credit of both the parties and their counsel, manypotentiallythorny points ofcontention have been agreed upon." -13-69833-8-1/14


### Inthis case, there was no need for this appeal.
. . .



### .... Anexperienced trialjudge ruled inLarson's favor on the legal issue of the characterization of the marital property after a 3-plus weektrial. The court 

### then made a discretionary decision to allocate the spouses' property on a 65-35 basis that favored Larson. That should have been the end ofthis case. But Larson could not stand the fact that his ex-wife received that allocation ofmarital 

### property and he pursued this needless appeal, seeking to overturn established precedent. 

### Resp't's Br. at 42-43. She concludes, "Larson's appeal is motivated byself-interest and spite." Resp't's Br. at 43-44. 

### "Intransigence is the quality or state ofbeing uncompromising." In re Marriage of 

### Schumacher. 100 Wn. App. 208, 216, 997 P.2d 399 (2000); see, e.g.. In re Marriage of Foley. 84 Wn. App. 839, 846, 930 P.2d 929 (1997) (appellantfiled "numerous frivolous motions," refused to show up for his deposition, and refused to read correspondence from the opposing party's attorney); see also Eide v. Eide. 1 Wn. App. 440, 462 P.2d 

### 562 (1969) (appellanttampered with exhibits). Finding no intransigent conduct by 

### Larson, we denyCalhoun's fee request.13
CONCLUSION Because the record shows no abuse of trial court discretion, we affirm the decree ofdissolution. Calhoun's attorney fees request is denied.

WE CONCUR: 

# SfciL^flyvC

13 Calhoun does not contend that Larson filed a "frivolous appeal" within the meaning of RAP 18.9(a). -14-