Opinion ID: 874270
Heading Depth: 2
Heading Rank: 1

Heading: Evidence beyond a deed is admissible to show or disprove transmutation.

Text: The trial court in a divorce proceeding is charged with identifying and assigning the parties' interest in the community property. I.C. § 32-712 (In case of divorce by the decree of a court of competent jurisdiction, the community property and the homestead must be assigned....). Idaho Code § 32-713 reiterates this obligation: [t]he court, in rendering a decree of divorce, must make such order for the disposition of the community property.... As it is undisputed that the Etna property was Ann's separate property at the time of the parties' marriage, the inquiry is whether the character of that property changed during the marriage. The determination whether property has been transmuted, from separate to community property or vice versa, is, as we have long stated, a question of intent. Hoskinson v. Hoskinson, 139 Idaho 448, 459, 80 P.3d 1049, 1060 (2003); Suchan v. Suchan, 106 Idaho 654, 664, 682 P.2d 607, 617 (1984); In re Bogert's Estate, 96 Idaho 522, 526, 531 P.2d 1167, 1171 (1975); see also Ustick v. Ustick, 104 Idaho 215, 222, 657 P.2d 1083, 1090 (Ct.App.1983); Griffin v. Griffin, 102 Idaho 858, 861, 642 P.2d 949, 952 (Ct.App. 1982). The party asserting transmutation must prove the claim by clear and convincing evidence. [W]here it is asserted ... that a spouse intended to transmute property or to make a gift, the burden is on the party urging the assertion to prove the intent in question by clear and convincing evidence. Concomitantly, because the question of whether a clear and convincing burden of proof has been met is a question for the trier of facts to decide in the first instance, the determination of the trial judge-that a claim was not shown by clear and convincing evidence-is entitled to great weight on appeal. Hoskinson, 139 Idaho at 459, 80 P.3d at 1060 (quoting Ustick, 104 Idaho at 222, 657 P.2d at 1090). In this case, the magistrate judge considered this Court's decisions in Hall v. Hall, 116 Idaho 483, 777 P.2d 255 (1989) and Bliss v. Bliss, 127 Idaho 170, 898 P.2d 1081 (1995), and held that the [quitclaim] deed shows no ambiguity, and the court finds that it transmuted the Etna real estate from separate property to community property. Although the trial court's interpretation of Hall and Bliss is understandable, we conclude that the language of a deed executed in the course of refinancing does not conclusively determine the character of property for purposes of a divorce action. Rather, the intention of the party or parties executing the deed is dispositive. Thus, neither I.C. § 55-606 nor the statute of frauds governs because the pertinent question is not the effectiveness of the deed. Although the trial judge, as the finder of fact, may consider a deed as evidence in determining intent, it is not the only evidence available to a judge considering the question of transmutation. This Court has previously allowed courts to look to a variety of factors in determining the character of property. In Hoskinson, while recognizing that marriage settlement contracts require formalities, the Court felt free to look to additional testimony to ascertain the intent of the parties. 139 Idaho at 459-60, 80 P.3d at 1060-61. Similarly, in Winn v. Winn, 105 Idaho 811, 673 P.2d 411 (1983), involving a property purchase concluded some months after the marriage using separate property of the husband, the Court considered a variety of factors to be considered in the absence of the parties' actual, articulated intent: (1) whether the community was liable for payment on the loan; (2) the source of the payments toward the loan; (3) the basis of credit upon which the lender relied in making the loan; (4) the nature of the down payment; (5) the names on the deed; and (6) who signed the documents of indebtedness. Id. at 814-15, 673 P.2d at 414-15. This Court explained: [t]he presence or absence of any or all of the above listed factors is relevant in determining the character of the credit by which a loan is obtained. None is conclusive. We deliberately refrain from selecting one item as dispositive. Such an approach is too rigid in light of our ultimate purpose of determining the likely intent of the spouses and in consideration of the highly individualistic and often complex fact situations presented. Id. at 815, 673 P.2d at 415. The fact that Winn involved the purchase of new property rather than the question of whether existing property was transmuted does not change the analysis here. Winn was clear in its holding that evidence beyond the deed itself could be introduced to determine the character of property even where that determination might differ from the language of the deed. We recognize that some of our cases have employed language that would suggest the opposite conclusion. In Hall v. Hall , this Court stated that [w]here the language of a deed is plain and unambiguous, the intention of the parties must be determined from the deed itself, and parol evidence is not admissible to show intent. 116 Idaho at 484, 777 P.2d at 256; see also Dunagan v. Dunagan, 147 Idaho 599, 603, 213 P.3d 384, 388 (2009); Bliss, 127 Idaho at 174, 898 P.2d at 1085. However, these statements have obscured decisions that are otherwise consistent with the rule expressed today. In Dunagan, there was no challenge on appeal to this Court from the determination that the execution of a quitclaim deed in favor of husband and wife during refinancing transmuted the wife's separate property. On appeal, the primary question presented to this Court was whether a substantially equal distribution of the community property was appropriate. Thus, the Court's statement that courts do not have discretion under I.C. § 32-712(1) to consider compelling reasons to alter the terms of a deed that is plain on its face was dictum. Dunagan, 147 Idaho at 603, 213 P.3d at 388. In Bliss, the husband executed a quitclaim deed to his wife in order to prevent the Internal Revenue Service (IRS) from attaching the property to satisfy a previous tax liability. 127 Idaho at 171-72, 898 P.2d at 1082-83. This Court upheld the determination that the property was the wife's separate property. The reasoning behind this decision is clear: in order to avoid seizure of the property by the IRS, husband intended to convey the property to wife. Indeed, a contrary result would have placed the Court in a position of not only condoning, but facilitating tax evasion. Because a court of equity will not knowingly aid in the furtherance of an illegal transaction, the husband's testimony was properly excluded. Stearns v. Williams, 72 Idaho 276, 290, 240 P.2d 833, 842 (1952). Finally, Hall is distinguishable on two separate grounds. First, Hall concerned a deed from a third party (the husband's grandmother), and therefore takes it outside the question of the character of property established within the marriage. Hall, 116 Idaho at 483-84, 777 P.2d at 255-56. Second, Hall is notable for its fractured decision. Of the five justices, Justices Huntley and Johnson voted to exclude parol evidence, while Justice Bistline concurred, finding that clear and convincing evidence had not been presented. Chief Justice Bakes dissented and would have remanded for additional factual findings, and Justice Shepard did not participate due to his untimely death. Id. at 484, 495, 777 P.2d at 256, 267. This Court has previously stated that, where the third vote necessary to pronounce a decision is by a justice who concurs in the result only, the rationale contained in the opinion is not a decision of the Court and is not controlling in other cases. Osick v. Pub. Employee Ret. Sys. of Idaho, 122 Idaho 457, 460, 835 P.2d 1268, 1271 (1992). [3] Although this Court possesses authority to revise the disposition of community property on appeal, I.C. § 32-714, the determination whether property has been transmuted is a question of fact turning on intent. In making this factual determination, trial courts are free to consider all relevant evidence regarding that intent. We therefore affirm the district court's decision to remand the case to the magistrate judge for consideration of additional evidence. In light of this decision, we do not reach the question of whether Ann would be entitled to an unequal division of the community property under I.C. § 32-712(1)(a). In the event that the magistrate judge determines that the Etna property is community property, he should further decide whether that determination constitutes compelling circumstances warranting an unequal division of community property. Dunagan, 147 Idaho at 603, 213 P.3d at 388. Greg has asked this Court to decide whether he met his burden of proof to show a transmutation. We decline to do so. As noted, this is a factual question of intent. It is not the function of this Court to make findings of fact. Walter v. Potlatch Forests, Inc., 94 Idaho 738, 740, 497 P.2d 1039, 1041 (1972).