Source: http://masscases.com/cases/sjc/441/441mass28.html
Timestamp: 2018-01-20 03:37:34
Document Index: 516892067

Matched Legal Cases: ['§ 560', '§ 4', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 4', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34']

KITTREDGE vs. KITTREDGE, 441 Mass. 28
In composing an order dividing a marital estate pursuant to G. L. c. 208, s. 34, a Probate and Family Court judge properly found that the husband lost a net amount of $400,000 gambling, where the judge had the discretion to place somewhat greater credence in the husband's expert's opinion, based on the judge's assessment of the witnesses' credibility, and to use a degree of approximation similar to that which both sides' experts used in their own calculations [33]; moreover, there was no error in the judge's treatment of three specific items the wife claimed should have been added to the calculation of the losses, where the husband's expert, who had done accounting work for the family business for many years, testified that one relevant transaction had already been accounted for elsewhere in the analysis, and where the wife's arguments concerning the estimation of the husband's weekly personal expenses that were paid in cash and the propriety of the judge's finding that two checks for large dollar amounts were for vacation expenses rather than payments to bookies were without merit [33-34].
A Probate and Family Court judge did not err in determining that only ten per cent of a husband's total gambling losses constituted dissipation of marital assests for purposes of dividing the marital estate pursuant to G. L. c. 208, s. 34, where the wife did not specifically argue below that the illegality of her husband's gambling expenditures rendered them in their entirety a dissipation of marital assets as a matter of law [34-35], and where illegality did not automatically equate with dissipation of marital assets in any event, as dissipation depended on the circumstances and timing of the gambling activity in question, and the record demonstrated that the husband's gambling losses did not undermine the family's financial security, and the wife did nothing to protest the husband's gambling [36-42]; likewise, the judge's decision to treat ten per cent of the gambling losses as dissipation and treat the remaining ninety per cent as ordinary expenditures, while unexplained, was not arbitrary, where the husband continued to incur gambling losses when it was clear that the divorce would proceed and that the marital estate would need to be divided, and the judge calculated that final year of gambling as ten per cent of the losses incurred over the relevant ten-year period [42-43].
amount that enabled her to continue the same comfortable lifestyle she enjoyed throughout the years of her marriage, notwithstanding the husband's extensive gambling, which did not adversely affect the family. [43-45]
sporting events, and his sole form of entertainment was to gamble and watch television games on which he had placed bets. This gambling activity -- which the wife characterized as "compulsive" -- occurred throughout the course of their twenty-seven year marriage.
The case was tried before a master, and the judge adopted the master's findings but modified the master's recommended division of the marital property. The marital estate, including the wife's inheritance from her father, [Note 2] was valued at $4,442,284, of which $2,442,065 was held by the husband and $2,000,219 was held by the wife. The judge ordered that the husband transfer to the wife his one-half interest in the marital home, [Note 3] $100,000 in liquid assets, a $100,000 share in his pension plan, and his real estate investments through an entity referred to as
Grove Limited Partnership (then valued at $397,400). In percentage terms, this equated to awarding sixty-two per cent of the marital estate to the wife and thirty-eight per cent of the estate to the husband. In ordering this division, the judge relied on the master's finding that the husband's gambling losses over the course of the marriage were on the order of $30,000 to $35,000, and those losses were not a factor in the judge's assessment of the appropriate division of the marital property.
2. Proceedings on remand. On remand, the judge conducted a further evidentiary hearing with respect to the amount of the husband's gambling losses and the appropriate treatment of those losses in the division of the marital estate. [Note 5] The parties presented evidence and proposed calculations of net gambling
losses incurred from 1983 to 1992. [Note 6] Expert accountants for both sides agreed, at least in concept, as to how the net gambling losses (which had never been documented or recorded in any fashion) could be reconstructed from existing records of that ten-year period. The husband had deposited his gambling winnings in and paid his gambling debts from identified accounts, but had also deposited other nongambling earnings in those same accounts and had used funds from those accounts to pay other expenses. By identifying and quantifying deposits and expenditures that were not related to gambling, the parties' experts proceeded on the assumption that everything else was attributable to gambling -- any deposit that could not be attributed to some other source was treated as gambling winnings, and every expenditure from the account that could not be identified for some other purpose was treated as a gambling loss. Thus, the dispute centered on whether particular items had or had not been properly traced to some nongambling activity. Based on differing treatment of those items, the experts reached vastly disparate calculations of the husband's net gambling losses over that ten-year period, with the wife's expert opining that the losses amounted to $707,543, while the husband's expert arrived at a figure of $296,690.
The wife also raises arguments concerning three specific items that allegedly should have been added to the calculation of losses. The wife complains that the judge should have included an alleged loan repayment from Kittredge Equipment Company to the husband as a nongambling deposit (thus reducing the total computation of gambling winnings). However, the husband's expert, who had done accounting work for the company for many years, testified that the transaction in question was not a loan but a contribution to capital that had already been accounted for elsewhere in the analysis. Notwithstanding alleged gaps in the documentation of that transaction, the
judge's decision to credit the accountant's testimony is one we do not disturb.
a. Waiver. The husband contends that this argument concerning the illegality of the husband's gambling was waived. Indeed,
the judge's findings noted the absence of any argument concerning the illegality of the husband's form of betting: "The issue of the gambling losses as an illegal activity [h]as not [been] raised or argued by [the wife] and is therefore not a consideration in this decision."
While there is no definition of "dissipation" in our own case law, other jurisdictions define dissipation as a spouse's expenditures for his or her own personal enjoyment at a time when the marriage is apparently coming to an end, from which it can be inferred that the spouse's expenditures were made in order to deprive the other spouse of his or her fair share of the marital estate. See Herron v. Johnson, 714 A.2d 783, 786 (D.C. 1998), quoting Cox v. Cox, 639 A.2d 97, 99 (D.C. 1994) (dissipation is "disposition of marital property by a spouse in a manner intended to 'circumvent the equitable distribution of the marital estate,' " which may be shown by evidence that "spouse used marital property for his or her own benefit and for a purpose unrelated to the marriage at a time when the marriage was undergoing an irreconcilable breakdown"); McCleary v. McCleary, 150 Md. App. 448, 462-463 (2002), quoting Jeffcoat v. Jeffcoat, 102 Md. App. 301, 311 (1994) (dissipation consists of spending marital assets "for the principal purpose of reducing the funds available for equitable distribution"); Harris v. Harris, 261 Neb. 75, 87 (2001), quoting Am. Jur. 2d Divorce and Separation § 560 (1998) ("one spouse's use of marital property for a selfish purpose unrelated to the marriage at the time when the marriage is undergoing an irretrievable breakdown"). See also American Law Institute (ALI) Principles
of the Law of Family Dissolution: Analysis and Recommendations § 4.10(2) & comment c, at 754 (2002) (recommending that property division be adjusted to account for marital property lost or destroyed through spouse's "intentional misconduct" occurring during fixed period of time prior to commencement of proceedings, noting that "only transactions during a period immediately preceding commencement of a dissolution action should ordinarily be considered"). The concept thus incorporates an element of timing (referring to the time period after it becomes evident that the marriage will not last), and an element of intent (that the expenditure is made for the purpose of thwarting the other spouse's rights to a share of the estate in the impending divorce). Conspicuously absent from these attempts to define or describe the concept of dissipation is any requirement that the allegedly wasteful expenditure be unlawful or any pronouncement that unlawful conduct will automatically constitute dissipation.
However defined, the concept of dissipation must be viewed within the context of the statutory factors governing the equitable division of marital property under G. L. c. 208, § 34. In making an equitable division of property under § 34, the judge must consider "all the relevant factors" identified by the statute and must not consider "irrelevant factors," i.e., factors outside those listed in the statute. Baccanti v. Morton, 434 Mass. 787 ,
790 (2001), and cases cited. Consistent with that requirement, dissipation can be considered as part of the "conduct of the parties during the marriage" (which the judge must consider under § 34), and it can also be considered in the assessment of a spouse's "contribution" to "the acquisition, preservation or appreciation in value" of assets (which the judge may consider under § 34). "Conduct" that has harmed the marriage or the marital estate may be viewed negatively, and considered as a factor that would diminish that spouse's equitable share of marital property. However, it is conduct having an adverse impact on the marriage or the marital estate, not simply conduct that is in some other sense considered "good" or "bad," that is to be weighed. [Note 11] An equitable division of marital property is intended to effect fairness between the parties in light of all of the circumstances, not to punish "bad" behavior or enforce the criminal laws. See Putnam v. Putnam, 5 Mass. App. Ct. 10 , 15-16 (1977) (order transferring property may not be justified "purely on the basis of the blameworthy conduct of one of the spouses"). See also Davisson v. Davisson, 12 Mass. App. Ct. 420 , 424 (1981) ("matters such as custody support and alimony are not affected by . . . the relative moral rectitude of the spouses"). Thus, the fact that a spouse's "conduct" during the marriage included unlawful conduct, and that the marital estate is less valuable as a result of that unlawful conduct, is but one circumstance, not necessarily determinative in itself, for a judge to consider in equitably distributing property pursuant to § 34. [Note 12] See Jones v. Jones, 942 P.2d 1133, 1140 (Alaska 1997) (illegal
nature of husband's gambling "is not of central importance" to determination whether his gambling was "an unreasonable depletion of marital assets").
631 (2000) ("no mathematical formula" used to weigh § 34 factors); Denninger v. Denninger, 34 Mass. App. Ct. 429 , 430 (1993) (judge has broad discretion in giving weight to § 34 factors, noting that "[m]athematical precision is not the test").
surrounding that gambling, including the impact it has had on the other spouse and the other spouse's acquiescence in the activity. See Jones v. Jones, 942 P.2d 1133, 1139, 1141 n.8 (Alaska 1997) (reversing finding that gambling during marriage constituted "waste," where losses occurred prior to separation and did not interfere with husband's support of family, noting that "value judgments concerning the nature of discretionary spending during a marriage should be avoided"); Beck v. Beck, 112 Md. App. 197, 215-217 (1996) (husband converted $127,000 of assets to cash, spending some on legitimate expenses and an unknown amount on gambling trips; in light of finding that both parties enjoyed "high" standard of living, no error in determination that husband had not dissipated assets); Marriage of Williams, 84 Wash. App. 263, 270-271 (1996) (although wife spent "large sums" on gambling over period of years, no dissipation found where she also brought in "substantial amount of income" from three jobs and husband aware of her gambling); Askinazi v. Askinazi, 34 Conn. App. 328, 332 (1994) (wife's claim that husband dissipated assets through gambling rejected where she accompanied husband to jai alai games, voiced no disapproval of his betting on games, and shared in winnings). See also ALI Principles of the Law of Family Dissolution: Analysis and Recommendations § 4.10 Reporter's Notes to comment e, at 766 (2002) (noting that gambling losses not "easily distinguishable" from "speculative investment" for purposes of dissipation analysis).
The specific facts of the husband's gambling in this case do not support characterizing his entire $400,000 loss as a dissipation of assets for purposes of an equitable division of property pursuant to G. L. c. 208, § 34. The husband's gambling occurred throughout the parties' marriage -- it was not something that started in response to the breakdown of the marriage or in anticipation of divorce. There is no suggestion that the husband intended to deprive the wife of her share of the marital estate, or that he gambled away the money rather than see it go to her. At no time was the husband derelict in his support of the wife and children -- to the contrary, the wife and children were more than comfortably provided for at all times, leading "an upper class lifestyle," with college and graduate education for
the children. And, notwithstanding the magnitude of the husband's gambling losses, the marital estate to be divided now supplies the wife with ample means to maintain that same "upper class lifestyle" following divorce. See Denninger v. Denninger, 34 Mass. App. Ct. 429 , 430 (1993) (one objective of § 34 award is to "provid[e] means, to the extent the marital assets allow, which enable the parties to approximate the standard of living enjoyed during marriage"). Thus, the husband's gambling losses did not and will not undermine the family's financial security or cause sacrifices in their high standard of living. Finally, while the wife did not herself participate in her husband's gambling, she was aware of it for many years and, whatever concerns she may have harbored about it, there is no evidence that she did anything to protest it. See Askinazi v. Askinazi, supra. See also Bertholet v. Bertholet, 725 N.E.2d 487, 500 (Ind. Ct. App. 2000) (other spouse's "participation in or consent to" expenditure is relevant to determination whether expenditure constituted dissipation). On these facts, the husband's gambling was not a form of "conduct" that harmed the marriage, nor did it prevent him from making a very substantial financial "contribution" to the marital estate. As such, the judge did not err in refusing to treat the entirety of the gambling losses as dissipation.
making it apparent that the expenditure will reduce the assets available to the other spouse. Here, although heavy gambling had been a regular feature of the husband's conduct throughout the parties' marriage (and thus long predated even the earliest onset of the "subtle" breakdown that allegedly occurred during the 1980's), the judge could view with particular concern the fact that the husband's gambling -- and all of the risks that such heavy gambling entails -- continued unabated even after the wife filed for divorce, counselling proved unsuccessful, and the husband vacated the marital home. The calculation of $400,000 in net gambling losses covered a ten-year period, and during the final year of that period, it was clear that the divorce would proceed and that the marital estate would need to be divided. Gambling losses that continued to be incurred from that point forward directly reduced the size of the marital estate at a time when the husband knew that the wife was entitled to her share of that estate. Charging the husband with dissipation for the gambling losses he incurred in that final year (calculated roughly as ten per cent of the losses incurred over that ten years) is thus not arbitrary. [Note 14]
6. Division of marital property. The appropriate weighing and balancing of the § 34 factors, and the resulting equitable division of the parties' marital property, is left to the judge's broad discretion. Williams v. Massa, 431 Mass. 619 , 631 (2000). Heins v. Ledis, 422 Mass. 477 , 480-481 (1996). Early v. Early, 413 Mass. 720 , 727 (1992). According broad discretion to the judge's division of property under the § 34 factors "is necessary
in order that the courts can handle the myriad of different fact situations which surround divorces and arrive at a fair financial settlement in each case." Rice v. Rice, 372 Mass. 398 , 401 (1977). "We will not reverse a judgment with respect to property division unless it is 'plainly wrong and excessive.' " Baccanti v. Morton, 434 Mass. 787 , 793 (2001), quoting Mahoney v. Mahoney, 425 Mass. 441 , 447 (1997).
The order dividing the marital property in these proportions does not condone the husband's gambling, but merely recognizes, as it must, the actual role that that gambling played in the husband's over-all contribution to the marital estate. While society may have a significant interest in punishing and deterring the conduct in which this husband engaged, the division of
marital property under § 34 is not a mechanism for exacting that punishment or effecting deterrence. Had the husband's gambling resulted in damage to the family's well-being, or had it been intended to deprive the wife of her rightful share of the estate, the treatment of that gambling under the § 34 factors would presumably have been very different. However, the equitable division of marital property deals in the reality of the parties' past conduct and contributions and their present situation and needs, not in hypothetical, abstract, or judgmental consideration of how a spouse's shortcomings -- or even unlawful behavior -- might have harmed the other spouse or the family's interests. On the facts of this case, the husband's gambling losses, despite their magnitude, did not adversely affect the family, and the application of the § 34 factors did not compel the judge to make an even larger adjustment to the division of marital property in favor of the wife.