Opinion ID: 2587710
Heading Depth: 3
Heading Rank: 4

Heading: The Assets of Knik Sweeping

Text: The superior court found that the equipment purchased during the marriage, valued at trial at $176,925, was marital property. Patrick argues that the equipment is not a stand-alone asset, but is part and parcel of Knik Sweeping. He therefore argues that it was error to characterize that portion of the equipment purchased during the marriage with marital funds as marital property. Kimberly argues that the superior court's finding rests on a straightforward reading of AS 25.24.160(a)(4). Because we affirm on the alternative grounds adopted by the superior court, with a virtually identical result, we do not address either party's arguments on this point. The superior court alternatively found that the $174,814 increase in Knik Sweeping's value during the course of the marriage was marital property. The doctrine of active appreciation states that when the separate property of one spouse increases in value due to marital effort, the increase in value is marital property. [44] Active appreciation requires findings that (1) the separate property appreciated during the marriage, (2) the parties made marital contributions to the property, and (3) there was a causal connection between the marital efforts and the appreciation. [45] The non-owning party bears the burden of proving the first two elements. [46] If the non-owning party meets its burden, the spouse owning the separate property bears the burden of showing a lack of causal connection between the marital contributions and the property's increased value. [47] Patrick argues that Kimberly failed to marshal any evidence to demonstrate the value of Knik Sweeping at the inception of the marriage or the value at the time of marital separation and that she thus failed to meet her burden of proof to support a finding of active appreciation during the marriage. But Patrick offered evidence of appreciation during the marriage through his business valuation expert Ronald Greisen, who testified that Knik Sweeping was worth $129,485 at the beginning of the marriage and $304,299 at separation. Patrick worked for Knik Sweeping during the marriage. Furthermore, marital funds were used to purchase sweeping equipment during the marriage. Both the time and funds are marital contributions to the property, satisfying Kimberly's burden. [48] Because Patrick does not argue that there was no causal connection between the marital efforts and the increase in value, the superior court could properly find active appreciation in the amount of $174,814. This is substantially identical to the amount awarded by the superior court.