Opinion ID: 2297994
Heading Depth: 1
Heading Rank: 5

Heading: Student Loans

Text: The substantive issue on appeal in this case is whether the trial justice erred in finding that the student loans taken out by JoAnne to pay for the educations of her and Steven's children are not marital debt. JoAnne asserts that the Family Court has power to allocate marital debt, even in a case where the assets are not at issue. JoAnne points to an unpublished opinion from the Ohio Court of Appeals, Vergitz v. Vergitz, 2007 WL 901597 (Ohio Ct.App. Mar. 23, 2007), for the proposition that parents' loans incurred during the marriage by one spouse for the educational benefit of a child are marital debts, and she further points to a Rhode Island case, Curry, as being similar in princip[le]. JoAnne argues that the trial justice erred as a matter of law by not determining the student loans to be marital debt and by overlook[ing] salient uncontradicted evidence in determining the allocation. Specifically, JoAnne points to her own testimony that Steven directed her to do the necessary to effect the[ir] daughter's college education and that he knew after the fact that [she] was paying the loans out of the spouses' joint checking account. JoAnne also points out that Steven admitted on the stand that the loans were taken out for the benefit of the children    during the marriage    after he had repeatedly consented to providing the children with a college education. Finally, JoAnne urges us to reverse the trial justice's decision on public policy grounds. In response, Steven argues that the trial justice did not err as a matter of law, but rather    clearly explained his reasoning within the facts of this case throughout his [d]ecision. Steven further points out that there was no consent by [him]    in regard to the alleged loans and no ratification was proven, such that JoAnne acted separately from the marital structure and acted as an individual. Steven argues that to automatically consider student loans taken out by one parent to be marital debt solely on the basis that the debt was incurred during the marriage would be against public policy. Finally, Steven asserts that even if we deem the student loans at issue to be marital debt, the trial justice's error in holding otherwise was harmless because the debt properly was assigned to JoAnne. The equitable distribution of property is a three-step process, which requires the trial justice first to determine which assets are marital property, then to consider the factors set forth in [G.L.1956] § 15-5-16.1(a), [9] and finally to distribute the property. Koutroumanos, 865 A.2d at 1096. We previously have said that determining what constitutes marital property and dividing it in an equitable fashion is within the `sound discretion of the trial court.' Curry, 987 A.2d at 238 (quoting DiOrio v. DiOrio, 751 A.2d 747, 750 (R.I.2000)). Further, `[a]s long as this Court is able to review a lower court's decision and to determine therefrom that all the necessary facts and statutory factors were considered,' the trial justice need not `explicitly list[] his or her findings on each factor.' Id. (quoting Chiappone v. Chiappone, 984 A.2d 32, 37 (R.I.2009)). Although § 15-5-16.1 does not explicitly permit a trial justice to assign marital debt, we previously have reviewed lower courts' assignments of marital debt in the same fashion as assignments of marital assets. Curry, 987 A.2d at 239, 240 (affirming trial justice's assignment of student-loan debt, taken out by husband for son's education, to husband); Thompson, 973 A.2d at 509 (affirming trial justice's assignment of debts, on credit cards standing in each party's name, to husband and wife individually); Koutroumanos, 865 A.2d at 1098-99 (affirming classification of credit-card debt as marital debt and assignment of such debt to husband). It is clear from these precedents that a trial justice has the authority to classify and assign marital debt. Although debts incurred solely by one spouse during the course of the marriage may well be deemed marital in nature, we are satisfied that such is not always the case. Our statutes do not create a presumption concerning whether such debts are marital or nonmarital, and we will not infer one judicially. Rather, a trial justice properly may consider all the circumstances surrounding the debt, including the purpose of the debt, the receipt of the benefits, the conduct of the parties concerning the debt, the consent or lack thereof by the nonsignatory spouse, and the knowledge of the debt by said spouse at the time the debt was incurred. In the case at hand, our analysis is largely informed by the credibility determinations and findings of fact of the trial justice, to which we afford great deference. See B.S. International Ltd. v. JMAM, LLC, 13 A.3d 1057, 1062 (R.I.2011) (We accord a substantial amount of deference to [the credibility] determinations that a trial justice sitting without a jury makes in order to arrive at the necessary findings of fact.). The trial justice found JoAnne's testimonythat she and Steven had discussed taking out loans for their children and that Steven had agreed that JoAnne should do soto be evasive, less than credible and fraught with bias and prejudice. Conversely, the trial justice found Steven's testimony to be forthright and credible, and he characterized Steven's statements expressing his desire to assist the children with their college educations as merely precatory in nature. The trial justice specifically found that the loans were signed by JoAnne without Steven's consent and that Steven had no knowledge of the loans until after they had been signed. The trial justice further found that documentary evidence of these loans was never introduced into evidence as to whether or not the loans were actually for the benefit of either of the children. The trial justice also took note of testimony by all three hearing witnesses that, at the time that the loans were taken out, the family was in dire financial straits. In light of these findings, we are of the opinion that the trial justice's exclusion of these loans from the marital estate was a sustainable exercise of his discretion to classify and assign marital debts. We therefore affirm.