Court Opinion

ID: 1087041
Source: CourtListenerOpinion
Date Created: 2013-10-25 17:09:23.384884+00
Date Added: 2024-06-11T11:56:03.718202
License: Public Domain

Notice: This opinion is subject to correction before publication in the P ACIFIC R EPORTER .
      Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
      303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
      corrections@appellate.courts.state.ak.us.

               THE SUPREME COURT OF THE STATE OF ALASKA

AARON PFEIL,                                       )
                                                   )    Supreme Court No. S-14798
                      Appellant,                   )
                                                   )    Superior Court No. 3AN-11-08760 CI
      v.                                           )
                                                   )    OPINION
CHACHEE LOCK,                                      )
f/k/a CHACHEE PFEIL,                               )    No. 6836 - October 25, 2013
                                                   )
                      Appellee.                    )
                                                   )

              Appeal from the Superior Court of the State of Alaska, Third
              Judicial District, Anchorage, Frank A. Pfiffner, Judge.

              Appearances: Jürgen Jensen, The Law Office of Jürgen
              Jensen, Anchorage, for Appellant. Mario Lincoln Bird,
              Anchorage, for Appellee.

              Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and
              Bolger, Justices.

              WINFREE, Justice.

I.    INTRODUCTION
              A couple initiated divorce proceedings after two years of marriage. Noting
the marriage’s short duration, the wife requested that the superior court “return the
parties as much as possible into their pre-marital financial status” and sought a property
division under Rose v. Rose.1 The husband requested that the superior court “equitably
divide all marital property.”2
              After a one-day trial the superior court granted a divorce decree and divided
marital property based on a determination that the “parties are asking the court to apply
a modified version of Rose.” The superior court divided all of the property, based partly
on Rose and partly on equitable division. The husband moved for reconsideration,
arguing that the superior court had ignored his request for equitable distribution of all
marital property and that the resulting distribution was inequitable. The superior court
denied the reconsideration motion without explanation. The husband appeals.
              Because the superior court’s decision was (1) based on the faulty premise
that both parties agreed to a Rose property division and (2) not otherwise supported by
necessary factual findings, we reverse and remand for a new property division.
II.    FACTS AND PROCEEDINGS
       A.     Facts
              Aaron Pfeil and Chachee Lock began dating in 2005 or 2006, became

       1
              755 P.2d 1121, 1125 (Alaska 1988), holding that:
              [I]n marriages of short duration, where there has been no
              significant commingling of assets between the parties, the
              trial court may, without abusing its discretion, treat the
              property division as an action in the nature of rescission,
              aimed at placing the parties in, as closely as possible, the
              financial position they would have occupied had no marriage
              taken place.
       2
              See Wanberg v. Wanberg, 664 P.2d 568, 570 (Alaska 1983) (“Equitable
division of marital assets by the superior court involves a three-step procedure. First, the
trial court must determine what specific property is available for distribution. Second,
the court must find the value of this property. Third, it must decide how an allocation
can be made most equitably.”).

                                            -2-                                       6836

cohabitants sometime between December 2007 and March 2008, and married in June
2009. The parties’ primary disputed assets, which essentially are the sole focus of this
appeal, are two houses, a vehicle, and a four-wheeler.3
             1.      Real property
             In December 2007 Chachee purchased a home on East 65th Avenue in
Anchorage (E. 65th home). The parties dispute exactly when Aaron moved into that
home, but agree they were cohabitants from at least March 2008 until December 2010,
when Aaron purchased a home on Langnes Court in Anchorage (Langnes home). The
parties then used the Langnes home as their marital residence and the E. 65th home as
a rental property.
             While they shared the E. 65th home — both before and after marriage —
Aaron and Chachee each deposited around $1,200 monthly into a joint account. This
money was used to pay the mortgage and other household bills. Both also contributed
to home improvements. After moving into the Langnes home they rented out the E. 65th
home, but the rental income was insufficient to cover all of that home’s expenses.
During this period Aaron paid the Langnes home mortgage and Chachee paid any
E. 65th home expenses exceeding the rental income. Chachee also paid for some
improvements to the Langnes home.
             At the time of trial the Langnes home was worth $335,000 and the E. 65th
home was worth $236,500. The Langnes home mortgage was $355,864, and the E. 65th
home mortgage was $225,055. Thus the Langnes home had about $20,000 negative
equity, but the E. 65th home had about $11,000 positive equity.

      3
              The parties had many other items of personal property, including disputed
firearms, tax debt, a vehicle trailer, and numerous miscellaneous items. Aaron did not
challenge the superior court’s determinations of separate versus marital property for
those items or their valuation and division.

                                          -3-                                     6836
             2.     Vehicles
             In September 2008, during cohabitation but before marriage, Chachee
purchased a Chevrolet Silverado Duramax pickup truck (the Duramax). At the time of
divorce both parties were listed on the Duramax registration. Both parties drove the
Duramax during cohabitation and marriage. Chachee made all of the payments on the
Duramax, and the vehicle loan was in her name. At the time of trial the Duramax was
worth $16,572 with slightly over $11,000 debt.
             In June 2010 Chachee gave Aaron $7,000 to purchase a Yamaha Grizzly
four-wheeler (the Grizzly). Aaron subsequently reimbursed Chachee $3,500. At the
time of trial the Grizzly was worth $2,180.
      B.     Proceedings
             Chachee filed for divorce in June 2011, attaching a property and debt
worksheet. Aaron answered, partly denying Chachee’s property and debt assertions and
requesting “an equitable division of property.”
             In her trial brief Chachee stated that “[t]he parties have agreed that each will
keep their separate residences . . . and the loans thereon” but that “the division of
personal property is still in dispute.” Chachee requested the Duramax and that either
Aaron pay her $3,500 or the court award her the Grizzly. She also requested other
personal property items and reimbursement for expenditures she made on improvements
for the Langnes home. She asserted that “Aaron may claim that there should be some
payment from Chachee towards equalizing the division of assets. This is a marriage of
short duration and pursuant to Rose v. Rose . . . the court should attempt to return the
parties as much as possible into their pre-marriage financial status.”
             In his trial brief Aaron requested an equal division of the marital property.
Aaron asserted that the E. 65th home and the Duramax were transmuted marital
properties. He suggested that each party retain the home they were then living in (Aaron

                                            -4-                                        6836

the Langnes home and Chachee the E. 65th home), that each party be liable for the debt
on any property they retain (including the homes), and that he receive the Duramax and
Grizzly. He concluded with a request that the court “include the real property and
property acquired during cohabitation and equitably divide all the disputed property,”
and “that Chachee pay a $13,089.42 equalizing payment to balance the marital estate.”
             Trial took place in April 2012. The superior court issued its findings of fact
and conclusions of law in May. In its discussion of property valuation and division the
court first introduced the “Wanberg rules,”4 and then, citing Rose, explained that “[t]he
Wanberg rules do not apply in a marriage of short duration where the parties have not
significantly commingled assets and can be put in the position that they were at the time
the marriage commenced.”5 The court stated:
             In this case, without necessarily articulating their position
             both parties are asking the court to apply a modified version
             of Rose. In other words, the parties are asking the court to
             identify many assets as pre-marital and award the asset and
             any related debt to the party who acquired the property before
             marriage. The parties are effectively asking the court to
             apply [the] Wanberg rules with regard to disputed items of
             property. The court will adopt the methodology requested by
             the parties and will make valuation and distribution
             determinations for contested items.
             The superior court awarded Aaron and Chachee their respective bank
account balances, retirement accounts, and credit card debts. The court awarded
Chachee the E. 65th home and debt and awarded Aaron the Langnes home and debt,
explaining that it was awarding “the real property and the debt thereon in the fashion

      4
             See Wanberg, 664 P.2d at 570 (describing three-step equitable division
process).
      5
             See Rose, 755 P.2d at 1125.

                                           -5-                                       6836
requested by the parties.” The court awarded Chachee the Duramax “because she
purchased the vehicle before the marriage.” The court awarded Chachee the Grizzly,
finding that Aaron paid Chachee half the money she lent him for the Grizzly, but “he was
a primary user of the vehicle and essentially used up the value of his investment.”
               After distributing the rest of the marital property — property not disputed
on appeal — the court concluded that the “distribution represents an approximately
equal distribution of the value of the parties’ marital personal property” and explained
that “[f]or the non-Rose distribution of part of the marital [property], this court starts out
with the presumption that an equal division of property is most equitable. . . . In this case,
an approximate 50/50 split of the marital assets and debt to be divided is fair and
equitable.”6
               Aaron moved for reconsideration, arguing that the superior court had
ignored his request that “all property, real and personal, acquired during cohabitation and
marriage be equally divided between the parties.” He argued that the court: (1) failed
to realize that items purchased during cohabitation were marital property; (2) overlooked
his request that “the equity in the parties’ real property be allocated between the parties”;
and (3) distributed the marital estate inequitably. Aaron stated that “Chachee was
awarded the majority of the items that retained any value. Aaron on the other hand, was

       6
               The superior court did not value all of the property it divided. The court
explained:
               The parties have listed values for the personal items set forth
               . . . based on their opinions of value. Suffice it to say that
               these valuations are guesses at best. The court concludes that
               the overall value of the marital personal property items
               awarded to each party is approximately equal and no
               additional allocation of marital assets and no additional
               equalization payment need be made . . . .

                                             -6-                                        6836

awarded a home that is underwater $20,000, a debt to Chachee of $2,095.14, and was not
awarded any of the vehicles that were purchased during their cohabitation.” The superior
court denied Aaron’s motion for reconsideration without explanation.
III.   DISCUSSION
       A.     Marital Property Distribution: Wanberg And Rose
              Marital property generally is divided under an equitable distribution
framework.7 Under Wanberg equitable division of marital assets involves three steps:
(1) determining the specific property available for distribution; (2) valuing the available
property; and (3) equitably dividing property available for distribution.8 “An equal
division of marital property is presumptively just.”9
              “Marital property includes all property acquired during the marriage,
‘excepting only inherited property and property acquired with separate property which
is kept as separate property.’ ”10 Property acquired during premarital cohabitation may
be considered marital.11 Premarital separate property may become marital through

       7
              See Beals v. Beals, 303 P.3d 453, 458-61 (Alaska 2013) (explaining
equitable distribution framework before determining Rose rescission not appropriate);
Wanberg, 664 P.2d at 570.
       8
              Wanberg, 664 P.2d at 570.
       9
            Berry v. Berry, 978 P.2d 93, 96 (Alaska 1999) (citing Brown v. Brown, 914
P.2d 206, 209 (Alaska 1996); Wanberg, 664 P.2d at 574-75).
       10
             Schmitz v. Schmitz, 88 P.3d 1116, 1125 (Alaska 2004) (quoting Lewis v.
Lewis, 785 P.2d 550, 558 (Alaska 1990)).
       11
               McLaren v. McLaren, 268 P.3d 323, 332 (Alaska 2012) (“The general rule
is that courts divide property acquired only during marriage. But so long as the parties
do marry, the trial court is free to consider the parties’ entire relationship, including any
period(s) of premarital cohabitation, in making its property division . . . .” (internal
                                                                                (continued...)

                                             -7-                                        6836

transmutation, “the process by which one spouse’s separate property becomes marital
property, [which] ‘occurs when a married couple demonstrates an intent, by virtue of
their words and actions during marriage, to treat one spouse’s separate property as
marital property.’ ”12
              A court may order an unequal property division after considering the
factors enumerated in AS 25.24.160(a)(4), as long as the division is “just” and “fair.”13
A court is not limited to the statutory factors and “may consider ‘any other factors it
deems relevant’ to dividing the property.”14 Factual findings supporting marital property
distribution “must be sufficient to indicate a factual basis for the conclusion reached.”15
              We have concluded that:
              for marriages of short duration in which assets have not been
              commingled, “the trial court may, without abusing its
              discretion, treat the property division as an action in the
              nature of rescission, aimed at placing the parties in, as closely
              as possible, the financial position they would have occupied
              had no marriage taken place.”[16]

       11
            (...continued)
quotation marks and footnotes omitted)).
       12
             Abood v. Abood, 119 P.3d 980, 984 (Alaska 2005) (quoting Schmitz, 88
P.3d at 1125).
       13
              Cartee v. Cartee, 239 P.3d 707, 712 (Alaska 2010).
      14
              Id. at 713 (quoting McCoy v. McCoy, 926 P.2d 460, 463 (Alaska 1996)).
       15
              Id. (citing Nicholson v. Wolfe, 974 P.2d 417, 422 (Alaska 1999)).
       16
            Dunn v. Dunn, 952 P.2d 268, 273 (Alaska 1998) (quoting Rose v. Rose, 755
P.2d 1121, 1125 (Alaska 1988)).

                                            -8-                                      6836

But we have “refused to apply Rose when the parties have commingled assets.”17
              We have affirmed a superior court’s application of Rose even when one
marital asset was divided equitably,18 but in an unpublished decision we cautioned that
“[e]quitably dividing one of a couple’s assets makes sense; applying Rose’s rescission
theory to one asset does not. The parties have either maintained largely separate
economic identities, in which case application of Rose is permissible, or they have not.”19
       B.     Standard of Review
              When a superior court applies Rose rescission “we will review that
application under our independent judgment.”20
       C.     Why We Remand For A New Property Division
              The superior court’s findings of fact and conclusions of law stated:
(1) “both parties are asking the court to apply a modified version of Rose”; and
(2) “[n]either party proposes that the other party be allocated any of the equity, whether
positive or negative, in the real property that the other party receives.” But Aaron
specifically requested an equitable distribution of marital property in his answer to

       17
             Id. (citing Cox v. Cox, 882 P.2d 909, 914 (Alaska 1994); Bell v. Bell, 794
P.2d 97, 102 (Alaska 1990)); see, e.g., McCoy, 926 P.2d at 463 (affirming trial court’s
finding of significant commingling as not clearly erroneous); Cox, 882 P.2d at 914
(concluding sufficient evidence supported trial court’s finding of commingling and
determination that Rose was inapplicable); Bell, 794 P.2d at 102-03 (concluding
commingling was “hardly insignificant” and reversing trial court’s application of Rose).
       18
              See Dunn, 952 P.2d at 273-74 (explaining circumstances allowed for a Rose
rescission and also holding superior court did not abuse its discretion when treating van
as a marital asset).
      19
            Morrissette v. Kim, Mem. Op. & J. No. 1267, 2006 WL 3334056, at *2 n.12
(Alaska, Nov. 15, 2006).
       20
              McCoy 926 P.2d at 463 (citing Bell, 794 P.2d at 102 n.10).

                                           -9-                                       6836

Chachee’s divorce complaint. In his trial brief Aaron “respectfully request[ed] that [the]
court include the real property and property acquired during cohabitation and equitably
divide all the disputed property.” His argument that the E. 65th home and the Duramax
were transmuted to marital property makes sense only if Aaron were asserting a claim
to the equity in the property. And although Aaron’s property spreadsheet suggested
awarding himself the Langnes home and debt and awarding Chachee the E. 65th home
and debt, Aaron requested an equalization payment to balance the property division.
              Aaron’s theories and questions at trial provide further support for his
assertion that he requested an equitable division of marital property. Aaron’s lawyer
questioned Chachee on whether she alone should receive the equity in the E. 65th home,
Aaron testified that he was entitled to equity in the E. 65th home, and in closing
arguments Aaron’s lawyer described the homes and their associated equity and debts as
“[t]he big things in this [case].” Finally, Aaron’s motion for reconsideration — denied
by the superior court without explanation — argued that the court had overlooked
Aaron’s request that “all property, real and personal, acquired during cohabitation and
marriage be equally divided between the parties.”
              Chachee argues that even if Aaron had not consented to a Rose property
division, the superior court found her arguments more compelling and thus applied Rose.
But this argument ignores the court’s statements that the parties requested Rose and that
neither party requested “that the other party be allocated any of the equity, whether
positive or negative, in the real property that the other party receives,” as well as the fact
that the court made no explicit findings to support its Rose application. Without findings
“sufficient to indicate a factual basis for the conclusion reached,” it is impossible to

                                            -10-                                        6836

evaluate whether the court properly applied Rose.21
             The superior court’s decision to apply “a modified version of Rose,”
applying rescission principles to some property and then dividing other property
equitably under Wanberg, may be problematic as well. In Dunn v. Dunn we affirmed a
superior court decision applying Rose rescission to all of a couple’s property except a
van, which the court divided equitably.22 In a later unpublished opinion we explained
that equitably dividing a single commingled asset may make sense, but applying Rose
to only one asset does not make sense — if the parties maintained separate economic
identities then Rose should be applicable to almost all assets, but if the parties
significantly commingled assets then Rose should not apply at all.23 Here it appears that
the superior court applied Rose only to the real property, while applying equitable
division to the personal property.
             We vacate the superior court’s property division and remand for further
proceedings.24 We therefore do not need to decide whether the court erred in its
distribution of the two vehicles, as they will be a part of any new property division. We

      21
             Cf. Cartee v. Cartee, 239 P.3d 707, 713 (Alaska 2010) (requiring findings
to support property division applying Wanberg rules and Merrill factors).
      22
             952 P.2d 268, 273-74 (Alaska 1998).
      23
            Morrissette v. Kim, Mem. Op. & J. No. 1267, 2006 WL 3334056, at *2 n.12
(Alaska, Nov. 15, 2006).
      24
               Because the superior court failed to make factual findings determining
whether Aaron and Chachee commingled their property, we decline to decide whether
they significantly commingled assets and whether the superior court is precluded from
applying Rose. But we note that this case appears similar to Bell v. Bell where we found
that the parties commingled assets to purchase and improve properties, the commingled
assets were a substantial portion of the parties’ income, and the “assets to which there
has been mutual contribution by the parties greatly depreciate or appreciate in value.”
794 P.2d at 102.

                                          -11-                                     6836

do not mean to suggest that the court’s allocation of the many other items of personal
property is vacated, although if the court engages in an equitable distribution of all of the
parties’ marital (and possibly pre-marital, cohabitation) property, it may reallocate the
property or order an equalization payment to achieve an equitable distribution.
IV.    CONCLUSION
              For the reasons stated above, we VACATE the property division and
REMAND for further proceedings.

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