Opinion ID: 1133492
Heading Depth: 3
Heading Rank: 2

Heading: Lora's Post-Separation Mortgage and Home-Repair Payments and Samuel's Military Retirement Pay

Text: Finding that Samuel's military retirement had a net present value of $200,000 at the time of trial, and concluding that all of the retirement benefit was marital property, the superior court awarded seventy-five percent of the retirement benefit to Samuel and twenty-five percent to Lora. In doing so, the court came admirably close to achieving an equal division of marital assets: it awarded Samuel marital property worth $150,000 (consisting exclusively of his share of the retirement benefit) and it awarded Lora marital property worth $150,703. The marital property awarded to Lora included the house (valued at the difference between its market value at time of trial and the debt then owing on it), twenty-five percent of Samuel's retirement benefit, and other items. Lora argues that it was error to award her less than fifty percent of Samuel's retirement. She reasons that she paid $58,000 on the mortgages and $8,000 for home repairs between the time the parties separated and the time of trial, and that those payments exceeded the $50,000 value of her twenty-five percent share of Samuel's retirement. She asks for an award of fifty percent of Samuel's retirement, or for remand for consideration of the weight to be given to her mortgage and repair payments. Although the parties' arguments focus on Samuel's retirement, this is really a dispute about whether it was error not to credit Lora for post-separation mortgage and repair payments. Lora's claim that she should receive another twenty-five percent of Samuel's retirement simply identifies the only marital asset whose division would be affected if the credit were granted. [9] Samuel argues that the equal division of property is presumptively fair. He contends that courts are not required to give credit for post-separation payments to maintain marital property; he says a court may consider factors such as which party benefitted from the use of the asset during the separation and whether or not the asset was one capable of generating income. He argues that Lora benefitted from the use of the home, that he was effectively excluded from the home, and that the repairs and maintenance payments of $8,000 may have been necessary due to Lora's neglect and failure to maintain the property. Samuel also argues that reimbursing Lora for the payments would award her more than fifty percent of the marital estate. That consideration is irrelevant if the evidence justifies giving a credit to Lora for her use of personal assets to preserve or enhance the value of marital property. An equal division of marital property is presumptively just. [10] An equal division is the starting point for application of the [AS 25.24.160] factors the court must consider. [11] However, [a]n unequal division may be upheld `when it is justified by relevant factors identified in the findings of the court.' [12] Courts may give credit to one spouse for post-separation payments made to preserve marital assets, but are not required to do so. As we have explained: [I]t is our view that no fixed rule requiring credit in all cases should be imposed. Instead, the fact that one party has made payments from non-marital income to preserve marital property should be considered as one of the circumstances to be weighed by the trial court in dividing the marital property. [13] We have required trial courts to make factual findings on whether a credit is appropriate. [14] Although Lora testified about her post-separation payments, the superior court did not expressly resolve the credit issue in its oral findings and comments or in its written findings of fact and conclusions of law. The court's property division necessarily denied Lora's request for the credit, but no findings explain why it was denied. We must therefore determine whether the record supported Lora's request for a credit. If it did, this issue cannot be decided as a matter of law, and the failure to make fact findings on the issue cannot be considered harmless. We conclude that the record contains evidence sufficient to create a genuine, material fact dispute, and that we cannot hold as a matter of law that Lora was entitled to no credit. Lora testified that she paid $58,000 on the home loans between the time the parties separated and the time trial began, thirty-six months later. Any benefit Lora received by living in the house may have been offset by its poor condition. Lora testified that the house was a total wreck in November 1993 when Sam left; that there was water damage everywhere; and that it was depressing to enter the house. She implied that, although the house was worth $149,000 at the time of trial, no one would have rented it before she remodeled and repaired it. Lora's testimony supported a finding that the home's state of disrepair significantly depressed its rental value, thus permitting (but not compelling) a finding that the mortgage payments exceeded the value of the benefit Lora received from living in the house. It therefore raised a genuine dispute about whether Lora should have received a credit for her debt payments. Lora's testimony that she paid for repairs was also sufficient to create a genuine fact dispute about whether she should be given a credit for those payments, because that evidence supported a finding that she used her personal resources to maintain marital assets. Even if the improvements enhanced the rental value to the point that the benefit of living there was equivalent to the debt payments, the use of non-marital assets to enhance the rental value potentially justified a credit. But there are many reasons why the court may have denied the requested credit for the mortgage payments. For example, it might have found that Lora's mortgage payments roughly equaled the benefit she received from living in a three-bedroom home. Further, some of Lora and Samuel's testimony seems to imply that proceeds from a mortgage loan were used to pay for the remodeling. If so, the court may have decided that it would be inequitable to reimburse Lora for the remodeling expenses. Alternatively, the court may have reasoned that repairs or improvements did not substantially change the market value of the house as of the time of trialor accepted Samuel's claim that Lora failed to maintain the house during the marriage and wasted or depleted marital assets. But the evidence does not compel any of these findings, and the absence of fact findings on the credit issue consigns us to speculation and prevents us from applying the deferential clearly erroneous standard of review. [15] We therefore remand for consideration of Lora's claim that she should receive credit for these payments. Samuel argues that Lora received the post-separation benefit of claiming a deduction for the mortgage interest. Although that circumstance might justify reducing or denying a credit, it is a matter for the trial court to consider and explain. That circumstance cannot justify affirmance absent any findings on the issue.