Opinion ID: 2543712
Heading Depth: 1
Heading Rank: 4

Heading: The magistrate judge's characterization and division of William's interest as a limited partner in the Wallace Reed and Leona Reed Family Limited Partnership is supported by substantial and competent evidence.

Text: As noted above in the standard of review, a trial court's findings of fact which are based upon substantial and competent, although conflicting, evidence will not be disturbed on appeal. DeChambeau, 132 Idaho at 571, 976 P.2d at 925. William acquired an interest as a limited partner in the Wallace Reed and Leona Reed Family Limited Partnership during marriage. William argues that the magistrate judge's characterization of his limited partnership interest as community property is not based on substantial and competent evidence. Separate property is statutorily defined as follows: All property of either the husband or the wife owned by him or her before marriage, and that acquired afterward by either by (sic) gift, bequest, devise or descent, or that which either he or she shall acquire with the proceeds of his or her separate property, by way of moneys or other property, shall remain his or her sole and separate property. I.C. § 32-903. [A]ll other property acquired after marriage, as well as [t]he income of all property, separate or community, is community property. I.C. § 32-903. Thus there is a presumption that all property acquired after marriage is community property. Barton v. Barton, 132 Idaho 394, 396, 973 P.2d 746, 748 (1999). Wallace Reed testified that the contributions made by William and his siblings in exchange for their partnership interest consisted of equities in various pieces of real property that Wallace and Leona had gifted to the children over the years. However, Wallace testified that he never executed deeds to William and his siblings for the properties, and that he was unsure about the mechanics of the gifts. The Certificate of Limited Partnership and Limited Partnership Agreement specified that the specific property constituting capital contributions of each partner was to be listed on Exhibit `A.' While the agreement was entered into evidence, there was no Exhibit A attached. Wallace Reed testified that he had never seen an Exhibit A and could not verify its whereabouts or even its existence. Katherine testified that the contributions to the partnership came from community assets. The magistrate judge was present to observe the testimony and demeanor of these witnesses and to judge the credibility and weight to be given to their testimony. His finding that William failed to overcome the community property presumption was supported by substantial and competent evidence. Alternatively, William contends that if the partnership interest was community property, Katherine transmutated the interest when she signed the partnership agreement. William interprets various provisions of the agreement to say that Katherine waived any community interest in the capital contributions to the partnership, creating a solely separate property interest in his favor. However, it is unnecessary for this Court to interpret the meaning of the relevant provisions, since, although a husband and wife may transmutate property at any time during marriage, they must conform with statutory formalities for doing so. Wolford v. Wolford, 117 Idaho 61, 66, 785 P.2d 625, 630 (1990). Relevant formalities are found in Title 32, Chapter 9 of the Idaho Code. The property rights of husband and wife are governed by this chapter, unless there is a marriage settlement agreement entered into during marriage containing stipulations thereto. I.C. § 32-916. The formalities required of a valid marriage settlement are that it be in writing, that it be executed and acknowledged in the same manner as conveyances of land, and if it affects real property, that it be recorded in the county in which any affected real property is located. I.C. §§ 32-917 and 32-918. Here, the contributions at issue were interests in land, and there is no evidence from the documentation or testimony demonstrating compliance with any of these statutory formalities. Moreover, the party alleging the transmutation has the burden of proving the transmutation. Wolford, 117 Idaho at 66, 785 P.2d at 630. The record contains substantial and competent evidence to support the magistrate judge's finding that William failed to meet his burden of demonstrating the formalities necessary for a transmutation. William also argues that the magistrate judge's division of the community property interest in the partnership interest made Katherine a limited partner in a way contrary to the provisions of I.C. § 53-217, which outlines the ways in which a person may become a limited partner. However, the judge split the partnership interest, rather than making Katherine a limited partner in contravention of I.C. § 53-217. `Partnership interest' means a partner's share of the profits and losses of a limited partnership and the right to receive distributions of partnership assets. I.C. § 53-201(10). The magistrate judge merely gave Katherine a right to share equally in any partnership profits, losses and distributions to which William is entitled, as opposed to giving her partnership status or any control regarding partnership affairs.