Court Opinion

ID: 4160827
Source: CourtListenerOpinion
Date Created: 2017-04-17 20:16:42.908275+00
Date Added: 2024-06-11T14:38:13.616348
License: Public Domain

IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON

EDMUND MICHAEL VONALLMEN,
                                                         No. 74726-6-1
                       Appellant,
                                                         DIVISION ONE
       V.

JACQUELYNE LERAY VONALLMEN,                              UNPUBLISHED OPINION

                       Respondent.                       FILED: April 17, 2017

       SPEARMAN, J. — When a long term marriage ends in divorce, the trial court

has broad discretion to distribute property and award maintenance so as to leave

the parties in roughly equal financial positions. Edmund VonAllmen appeals the

trial court's distribution of property and award of maintenance, asserting that

these are based on erroneous calculations and leave him at a financial

disadvantage. But because he fails to demonstrate a manifest abuse of

discretion, we affirm.

                                            FACTS

       Edmund and Jacquelyne ("Jacki") VonAllmen began living together in

1989 and married in 1992. They had two children'together. Edmund filed to

dissolve the marriage in November 2014.1

       1 We refer to the parties by their first names to avoid confusion and intend no disrespect.
No. 74726-6-1/2

       In the early years of the relationship, Jacki was employed doing data entry

and other office jobs. She stopped working outside the home in 2000. Edmund

and Jacki agree that, without retraining, Jacki has an earning capacity of about

$31,000 per year.

      Edmund has worked at Microsoft since 1991. In addition to his salary,

Edmund has received a bonus each year. Edmund also receives stock awarded

as a retention incentive. Stock awards are contingent upon the employee's

continued service and only vest after the employee remains with the company a

designated period of time. Because of his long employment with the company,

Edmund has stock awards that vest each year that he remains at Microsoft.

Edmund's practice has been to sell the stock awards shortly after they vest.

During the marriage, Edmund and Jacki used Edmund's salary, bonus, and stock

awards for family expenses and investments. In 2014, Edmund received a salary

of about $212,000. His total taxable earnings were over $513,000.

      At trial, property distribution and spousal maintenance were before the

court. Edmund and Jacki agreed that they had assets totaling over $6 million,

most in the form of investments. Edmund proposed an equal distribution of

property and maintenance of $5000 per month for nine years, an amount based

on his salary of about $215,000. He argued that, because neither the bonus nor

stock awards were guaranteed, these should not be calculated as part of his

income or property until received. He also argued that his position at Microsoft

was very stressful, the position could end at any time, and he had long wanted to

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No. 74726-6-1/3

leave Microsoft to take a less stressful, and lower paying, job. Edmund proposed

that, for three years, he would award Jacki 50 percent of his bonus when

received and 50 percent of his stock awards granted during the marriage when

these vested.

       Jacki proposed a disproportionate distribution of property in her favor and

an award of maintenance for twelve years, until Edmund reached retirement at

65 years of age. Based on their standard of living during the marriage, Jacki

sought maintenance starting at $15,000 per month and decreasing over time to

$10,000 per month. Jacki acknowledged that Edmund's bonus and stock awards

were not guaranteed, but she argued that Edmund's total compensation per year,

including bonus and stock awards, had been largely consistent over time. Jacki

objected to Edmund's proposal to divide bonus and stock awards when received,

arguing that this would allow him unilateral control over the bulk of his earnings.

       The trial court found that the parties had a long term marriage and virtually

all of their assets and debts were acquired during the marriage. CP at 64. The

court awarded Jacki a 60 percent share of community property, 50 percent of

stock awards granted during the marriage, and maintenance for nine years. The

court detailed the property distribution in a spreadsheet titled "Exhibit A." Clerk's

Papers(CP)at 69-70.

       Edmund appeals.

                                          3
No. 74726-6-1/4

                                    DISCUSSION

       In a dissolution action, the trial court must make a "just and equitable"

distribution of the parties' assets and liabilities. RCW 26.09.080. Both community

and separate property is before the court. Id. In a long term marriage, the court's

objective is to place the parties' in roughly equal financial positions for the rest of

their lives. In re Marriage of Rockwell, 141 Wash. App. 235, 243, 170 P.3d 572

(2007). Similarly, in awarding maintenance, the court must make a just award to

equalize the parties' standard of living for an appropriate period of time.

Washburn v. Washburn, 101 Wash. 2d 168, 179, 677 P.2d 152(1984)(citing RCW

26.09.090(1)(c)(d)). We will not overturn the trial court's distribution of property or

award of maintenance unless the challenging party demonstrates that the trial

court manifestly abused its discretion. Id.

Exhibit A

       Edmund challenges the specific distribution of assets listed in Exhibit A.

He does not appeal the court's order dividing community property 60 percent to

Jacki, but he argues that Exhibit A contains numerous errors that result in a

deviation from the court's ordered ratio. He argues that these errors require

remand.

       Exhibit A details the parties' assets and liabilities and distributes them

between Jacki and Edmund. The exhibit states that Jacki's award amounts to

59.86 percent of the total community property and Edmund's award amounts to

39.26 percent. The court's written order states that the values listed in Exhibit A

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No. 74726-6-1/5

"represent ratios, and may not reflect actual values on the date assets and debts

are divided." CP at 68. The order provides that "[t]o the extent there is a

discrepancy between specific findings and allocations made in the paragraphs

herein and on Exhibit A, the written allocation made herein prevails." Id.

       Edmund's first argument concerns an award of stock that vested after he

and Jacki separated, Edmund sold the stock for net proceeds of $198,051, an

amount listed as item 12 in Exhibit A. Edmund argues that Exhibit A erroneously

characterizes this amount as community, rather than separate, property.

      The trial court awarded Jacki a 50 percent share of stock awards granted

during the marriage. Exhibit A accordingly distributes the $198,051 to Jacki and

Edmund in equal shares. However, the court adopted the characterization of the

stock awards propounded by Edmund. Under this characterization, the stock

award is Edmund's separate property. Exhibit A lists the award as community

property.

       In a motion for reconsideration, Edmund asked the court to clarify whether

it intended to distribute 50 percent of stock awarded during the marriage to Jacki,

despite finding that this stock was Edmund's separate property. Edmund also

argued that, because the court ordered a disproportionate distribution of

community property, it should not award Jacki a share of Edmund's separate

property.

       In response, the court clarified that unvested stock earned during the

marriage is characterized as separate or community based on when it vests. The

                                         5
No. 74726-6-1/6

court stated, however, that both community and separate property is before the

court for distribution. The court repeated its order awarding 50 percent of the

stock granted during the marriage to Jacki. The court also_ordered Exhibit A

amended to the extent it did not accurately reflect the award of Edmund's

separate property.

       On appeal, Edmund asserts that Exhibit A erroneously lists $198,051 as

community property. But as the trial court ordered Exhibit A amended to reflect

that the stock award was separate property, we reject Edmund's argument.

       Edmund's next argument concerns a retirement account referred to as the

Fidelity 401(k). He contends that the trial court erroneously characterized this

account as 100 percent community property when a portion of the account was

his separate property.

       At trial, Edmund testified that the Fidelity 401(k) was valued at about

$1,160,000. He stated that $17,114 of that amount, or about 1.47 percent, was

his separate property. In its order, the court stated that it was awarding Jacki 60

percent of the community property overall and 58 percent of the 401(k). Exhibit A

lists the entire 401(k) as community property and awards 58 percent of it to Jacki.

       The trial court considered the character of the 401(k) and distributed it

accordingly. The award is within the court's discretion. If there was any error in

failing to reflect, on Exhibit A, that 1.47 percent of the account was Edmund's

Separate property, it did not amount to an abuse of discretion. See In re Marriage

of Gillespie, 89 Wash. App. 390, 399, 948 P.2d 1338(1997)("[M]ischaracterization

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No. 74726-6-1/7

of property is not grounds for setting aside a trial court's property distribution if it

is fair and equitable.")(citing In re Marriage of Shannon, 55 Wash. App. 137, 140

777 P.2d 8(1989)).

       Next, Edmund contends that Exhibit A erroneously debits a home equity

line of credit(HELOC)twice. He asserts that this error amounts to an abuse of

discretion.

       The trial court found that the family home was community property valued

at about $1,040,000. The court found that a HELOC of approximately $100,000

was community debt to be paid equally by Edmund and Jacki. Exhibit A lists the

home as a community asset with a gross value of $1,040,000 and a net value,

less the HELOC, of about $940,000. The exhibit shows that this asset is awarded

to Jacki as part of her 60 percent share of community property. The exhibit

deducts the HELOC from the couple's total community assets but does not

reflect the court's order that each party is liable for 50 percent of the HELOC.

       Edmund contends that Exhibit A artificially lowers the value of the home

awarded to Jacki by deducting the HELOC both from the home's value and from

the couple's community property. Jacki concedes that Exhibit A does not subtract

half of the HELOC debt from either party's award. She argues, however, that any

effect on the couple's total community property is slight and does not warrant

remand, as the award of community property remains close to the court's stated

60/40 distribution and within the court's discretion. She also notes that Edmund

failed to raise this issue below.

                                           7
No. 74726-6-1/8

        We agree with Jacki. Exhibit A fails to reflect the trial court's order that

each party was responsible for 50 percent of the HELOC, but the discrepancy is

minor. The error does not amount to a manifest abuse of discretion.

        Next, Edmund argues that Exhibit A fails to deduct a car loan of about

$50,000 from the couple's total community property. He further contends that

Exhibit A lists erroneous figures for the couple's total and net community assets.

Jacki agrees that Exhibit A erroneously fails to deduct the car loan from the total

assets and thus incorrectly sums the couple's community property. She argues

that the error is minor and benefits Edmund.

        Exhibit A lists the car loan and includes the amount in the couple's total

liabilities. But the exhibit fails to deduct the car loan from gross assets to arrive at

the couple's correct net assets. The exhibit lists net assets as $6,330,972 rather

than $6,280,970. The parties agree that, after subtracting each party's separate

property, the total community property amounts to $5,686,485 rather than the

listed $5,736,487.2

        We agree with Jacki that this error is minor and benefits Edmund. Had the

trial court correctly subtracted the car loan from the couple's community property

and left all awards the same, Edmund would have received a slightly higher

proportion of the community property. The error is minimal and does not

constitute an abuse of discretion.

        2 We note that, per the court's statement that it amended Exhibit A to reflect that stock
awards in the amount of $198,051 were Edmund's separate property to be distributed equally
between the parties, this amount must be subtracted from the total community assets and
reflected in each party's separate assets.

                                                 8
No. 74726-6-1/9

       Finally, Edmund contends that the many errors in Exhibit A significantly

affected the court's division of property and caused it to deviate from its stated

intent of distributing community property in a 60/40 ratio. He asserts that the

errors in Exhibit A amount to over a quarter million dollars and require remand.

       Edmund is mistaken. In arriving at his figure of a quarter million dollars, he

relies largely on the stock award valued at $198,051. But the court stated that

Exhibit A was amended to reflect that this amount was separate property to be

divided equally between the parties. The other errors that Edmund points to are

minimal and do not result in a meaningful deviation from the court's intent to

distribute community property in a 60/40 ratio.

Maintenance

       Edmund next asserts several challenges to the award of maintenance. In

awarding maintenance, the court must make a just award to equalize the parties'

standard of living for an appropriate period of time. Washburn, 101 Wash. 2d at 179

(citing RCW 26.09.090(1)(c)(d)). In determining a just award, the court must

consider "all relevant factors." RCW 26.09.090(1). The ability to meet financial

obligations is one relevant factor. RCW 26.09.090(1)(f).

       "The trial court is in the best position to assess the assets and liabilities of

the parties and determine what is 'fair, just and equitable under all the

circumstances." Brewer v. Brewer, 137 Wash. 2d 756, 769, 976 P.2d 102(1999)

(quoting In re Marriage of Hadley, 88 Wash. 2d 649, 656, 565 P.2d 790(1977)). We

review the trial court's findings of fact for substantial evidence, viewing the record

                                           9
No. 74726-6-1/10

in the light most favorable to the party in whose favor the findings are entered. In

re Gillespie, 89 Wn. App.at 404.

       In this case, the trial court found that maintenance was warranted to

account for the length of the marriage, the disparate earning ability of the parties,

and the time necessary for Jacki to maintain her own financial stability. The court

found that Edmund's average annual income, including salary and bonus, was

$262,235 and used this amount in calculating child support and spousal

maintenance. The court ordered Edmund to pay maintenance for nine years:

$8,500 per month for 48 months,followed by $6,500 per month for 36 months,

followed by $5,000 per month for 24 months. CP at 68.

       Edmund argues that the trial court failed to consider his ability to pay as

required by statute. However, the court expressly stated that, in determining the

amount of maintenance, it considered a number of factors, including the financial

circumstances of both parties and Edmund's "ability to meet his financial

obligations after dissolution." CP at 68. The court used Edmund's average

income including salary and bonus in considering his ability to pay. The trial court

did not fail to consider this statutory factor.

       Nevertheless, Edmund asserts that he is unable to pay the amount of

maintenance ordered while also meeting his child support obligations and his

own expenses. He contends that the trial court erred in basing maintenance on

his average income including his bonus. He asserts that, if Microsoft chooses to

award him any bonus, it does not do so until September and he thus must live on

                                           10
No. 74726-6-1/11

his salary alone for most of the year. According to Edmund, the maintenance

order creates a $2,693 monthly shortfall in his living expenses and is therefore

impossible to meet.

       Edmund relies on Bungay v. Bungay, 179 Wash. 219, 36 P.2d 1058

(1934). In that case, a husband was ordered to pay maintenance and child

support of $125 per month as well as the mortgage and taxes on the family

home. Id. at 223. But because the husband earned $200 per month and had no

other means of income, the appellate court described this order as "impossible of

performance." Id. The Bungay court stated that "the law can look only to

appellant's earning power as the measure of his duty to provide." Id.

       Bungay is of no help to Edmund. Unlike the husband in Bungav,

Edmund's salary is not his only means of income. Edmund's compensation has

three sources: salary, bonus, and stock grants. The trial court properly

considered Edmund's earning power, including bonus income, in calculating

maintenance. There was no abuse of discretion.

       Next, Edmund contends that the award of maintenance is "impermissible

double dipping" because he must deplete his savings to meet maintenance

payments. Brief of Appellant at 34. He relies on In re Marriage of Burnett, 63 Wn.

App. 385, 818 P.2d 1382(1991). In that case, this court reversed an award of

maintenance that required the husband to deplete business inventory in which

the wife already owned a 50 percent share. Id. at 388. The court held that the

maintenance award was an attempt to distribute the wife's share of the business.

                                        11
No. 74726-6-1/12

Id. But because the wife had already been awarded one-half the value of the

business, the maintenance order distributed the same property twice. Id.

       Edmund argues that, as in Burnett, the maintenance order in this case

requires him to deplete assets that the court already distributed as property.

Edmund is mistaken. The maintenance order in this case is based on Edmund's

annual income. It is not an attempt to distribute Jacki's share of community

property and does not entail distributing the same property twice.

       Edmund next contends that the court's maintenance order deprives him of

due process. His argument is based on the uncertain nature of his annual bonus.

Edmund argues that, to meet the maintenance order, he must advance to Jacki

bonus income that he has not yet received. He asserts that, if he does not

receive a bonus, he will have no means of recovering the money he has

advanced. Id. He notes that, while he may petition to modify the maintenance

order, modification will apply only to payments subsequent to that petition.

       Edmund relies on State ex rel. Lloyd v. Superior Court of King County, 55
Wash. 347, 104 P. 771 (1909). His reliance is misplaced. The issue in Lloyd was

an award of alimony when it was disputed whether a marriage existed. Id. at 351.

The court held that awarding alimony without determining whether a marriage

existed violated due process because it could "subject the [payor] to an invasion

of property rights for which he might be without redress.. ." Id. Because, in this

case, there is no dispute that the parties were married or that the trial court had

authority to award maintenance, Lloyd, is inapposite.

                                         12
No. 74726-6-1/13

       Edmund's due process argument is without merit. The award of

maintenance is based on Edmund's average annual income derived from his

salary and bonus. If there is a substantial change to this annual income, Edmund

may petition for modification. Edmund points to no authority for the proposition

that the inability to apply modification retroactively violates due process.

       Next, Edmund argues that the award of maintenance is unnecessary

because Jacki's needs are adequately met through the disproportionate

distribution of property. But, in awarding maintenance, the court aims to make a

just award that equalizes the parties' standard of living for an appropriate period

of time. Washburn, 101 Wash. 2d at 179. Financial need is not a prerequisite. In re

Marriage of Wright, 179 Wash. App. 257, 262, 319 P.3d 45(2013). We reject

Edmund's argument.

       Edmund next contends that the award of maintenance as inequitable in

view of the court's overall financial orders. He argues that, in light of the

disproportionate distribution of property, the award of maintenance does not

leave the parties in roughly equal financial positions for the rest of their lives.

       Where the spouses were in a long term marriage, "the court's objective is

to place the parties in roughly equal financial positions for the rest of their lives."

Wright, 179 Wash. App. at 262 (citing Rockwell, 141 Wash. App. at 243). It is within

the trial court's discretion to award both a disproportionate award of property and

maintenance. Id. "The only limitation on the amount and duration of maintenance

under RCW 26.09.090 is that the award must be 'just." Id. at 269(quoting In re

                                          13
No. 74726-6-1/14

Marriage of Bulicek, 59 Wash. App. 630, 633, 800 P.2d 294 (1990)). Future earning

potential "is a substantial factor to be considered by the trial court in making a

just and equitable property distribution." In re Marriage of Hall, 103 Wash. 2d 236,

248, 692 P.2d 175(1984).

        Edmund asserts that Jacki receives nearly $1.3 million more than Edmund

in property and his earning potential is not sufficient to equalize this disparity. He

further argues that, during the nine years he is ordered to pay maintenance, he

will not be able to begin accruing assets to bring his financial position closer to

Jacki's. He relies on a model prepared by his expert to argue that Jacki's income

will be greater than his while she is receiving maintenance of $8,500 per month.3

        Edmund's argument is unpersuasive. At trial, Edmund's expert testified to

various models projecting the parties' future financial positions. Jacki's expert

disputed these projections. The trial court thus considered competing evidence

regarding the parties' future finances. We do not reweigh the evidence on

appeal. Rockwell, 141 Wash. App. at 242 (citing In re Marriage of Greene, 97 Wn.

App. 708, 714, 986 P.2d 144 (1999)).

        The parties in this case are in their 50s. Their earning potential is vastly

disparate, as Edmund has been earning over $500,000 and Jacki is capable of

earning approximately $31,000. The trial court awarded Jacki 60 percent of the

community property, one half of stock awards granted during the marriage, and

         3 In his reply brief, Edmund also relies on an appendix purporting to show the inequality
in the parties' financial position over time. Because this appendix constitutes evidence not in the
record before the trial court, it is not properly before this court on appeal. RAP 10.3(a)(8).

                                                14
No. 74726-6-1/15

maintenance for nine years. Edmund has not demonstrated that, in the

circumstances here, the trial court's award is unjust and thus constitutes an

abuse of discretion.

       Edmund next challenges the maintenance award on the grounds that it

prevents him from taking advantage of a financial opportunity. At trial, Edmund

testified that Microsoft has a policy of allowing long term employees to retire at

age 55 with immediate vesting of all stock awards. He also stated that, under

Microsoft's current policy, the same provision to retire early and vest all stock

awards is available at age 58. Edmund further testified that Microsoft could

change the provision for vesting all stock at early retirement at any time.

       Edmund argues that the obligation to pay onerous maintenance for nine

years prevents him from retiring at age 55 and locking in the value of his

unvested stock awards. We reject this argument. The trial court considered all

relevant factors, including Edmund's earning capacity and the parties' ages. The

court awarded maintenance for nine years, apparently foreseeing that Edmund

will work until the age of 62. Edmund fails to show that the trial court abused its

discretion.

Unvested stock

       Edmund raises several arguments concerning the trial court's award of

one half of the stock awards that were granted during the marriage but had not

yet vested at the time of trial. At trial, Edmund's expert explained that Edmund's

unvested awards represented a right to the underlying stock at some point in the

                                         15
No. 74726-6-1/16

future, contingent upon Edmund remaining employed. He testified that the

awards were currently worth about $400,000. The trial court awarded one half of

these awards to Jacki. In Exhibit A, the spreadsheet attached to the order, the

court listed the amount of these unvested awards as $407,539 and divided that

amount equally to Edmund and Jacki as separate property.

       Edmund contends that the trial court abused its discretion in awarding one

half of the unvested stock to Jacki. He asserts that the award was unnecessary

and exacerbated the disparity between the parties' financial positions. We reject

this argument. As discussed above, Edmund fails to show that, in the

circumstances of this case, the trial court's award was an abuse of discretion.

       Edmund also contends that the court's order fails to make clear whether

the stock awards are property or income. He acknowledges that the court's order

states that it is characterizing the stock as property. But he asserts that the court

created confusion by later stating that it was awarding Jacki one half of this stock

"Rio equalize income over time as well as the vagaries of the stock market. . ."

CP at 66. Edmund asserts that remand is necessary to clarify the character of

the awards.

       Edmund is mistaken. The trial court stated that the awards were property,

not income. Its later sentence referring to income explained why it was awarding

Jacki a one half share of the property.

       Finally, Edmund argues that the trial court erred in assigning a value to

these unvested stock awards. He asserts that he does not own the stock until it

                                          16
No. 74726-6-1/17

vests and its current value is thus $0. He contends that the valuation on Exhibit A

is speculative and must be corrected because it inflates the amount of his actual

separate property and creates an inference that he will receive assets that are

not guaranteed.

       We reject this argument. The value listed on Exhibit A reflects the

testimony of Edmund's expert. The exhibit properly lists the amount as separate

property to be awarded one half to each party. To the extent the value inflates

Edmund's separate property, it also inflates Jacki's separate property. Edmund

fails to show that the listed value caused any error in the trial court's distribution

of property.

Attorney fees

       Jacki requests attorney fees on appeal based on her need and Edmund's

ability to pay. Under RCW 26.09.140, we may award attorney fees based on the

financial resources of both parties. Here, however, the parties have been placed

in roughly equal positions. We decline to award attorney fees to Jacki.
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