Court Opinion

ID: 9900417
Source: CourtListenerOpinion
Date Created: 2023-11-18 22:12:37.493676+00
Date Added: 2024-06-11T09:21:05.258269
License: Public Domain

No. 341                July 6, 2023                  709

          IN THE COURT OF APPEALS OF THE
                  STATE OF OREGON

             In the Matter of the Marriage of
                     Karen CRAVEN,
                  Petitioner-Respondent,
                            and
                    David R. CRAVEN,
                  Respondent-Appellant.
             Deschutes County Circuit Court
                  20DR04225; A177706

  Alison M. Emerson, Judge.
  Argued and submitted March 22, 2023.
   Andrew W. Newsom argued the cause and filed the briefs
for appellant.
   Ruth A. Casby argued the cause for respondent. Also on
the brief were Janet M. Schroer and Hart Wagner LLP.
   Before Tookey, Presiding Judge, and Egan, Judge, and
Kistler, Senior Judge.
  EGAN, J.
   Vacated and remanded for reconsideration of property
division; otherwise affirmed.
710                                      Craven and Craven

        EGAN, J.
          Husband appeals from a judgment dissolving the
parties’ 26-year marriage, contending that the trial court
erred in its division of marital property, primarily relating
to its equal division of marital appreciation on an investment
account brought into the marriage by husband, which pas-
sively grew from $324,635 when the parties were married in
1995 to $3,477,673 at the time of dissolution in August 2021.
Husband also assigns error to the trial court’s denial of his
request to take judicial notice of public market reports that
he asserts would assist the court in determining the amount
of appreciation in the account due to the parties’ payment
of capital gains taxes from other accounts, as well as to the
trial court’s ultimate “just and proper” division of the mar-
ital property. We agree with husband that the court erred
in rejecting his request that the court take judicial notice
of publicly available information concerning the account’s
earnings. We therefore vacate and remand the judgment for
the court to reconsider whether the presumption of equal
contribution has been overcome and to reconsider its divi-
sion of property.
         Husband’s assignments on appeal all relate to
the trial court’s property division, for which we provide an
overview of the relevant legal principles. ORS 107.105(1)(f)
directs a court entering a judgment of dissolution to divide
property at dissolution in a manner that is “just and proper
in all the circumstances.” Under that statute, the court is
empowered “to distribute any real or personal property that
either or both of the parties hold at the time of dissolution,
including property that the parties had brought into the
marriage.” Kunze and Kunze, 337 Or 122, 133, 92 P3d 100
(2004).
         “Marital assets” fall into a subcategory of marital
property and consist of assets acquired during the mar-
riage, including the appreciation of assets brought into
the marriage. Id. Marital assets are subject to a statutory
presumption of equal contribution. ORS 107.105(1)(f)(C)
(describing rebuttable presumption that both parties have
contributed equally to the acquisition of marital assets,
regardless of “whether such property is jointly or separately
Cite as 326 Or App 709 (2023)                                             711

held”).1 The presumption “embodies a legislative intent to
recognize that, absent evidence to the contrary, each spouse’s
efforts during a marriage equally contribute to, and are
made for the benefit of, the marital estate, regardless of the
nature of those efforts or how the property is held.” Kunze,
337 Or at 134. When the statutory presumption is not
rebutted, absent other considerations, the “just and proper”
division of the marital assets is an equal division between
the parties. Id.
         A party seeking to rebut the presumption of equal
contribution “has the burden of proving by a preponderance
of the evidence that the other spouse’s efforts during the
marriage did not contribute equally to the acquisition of the
disputed marital asset.” Id. If the presumption is rebutted,
the court decides, in its discretion, how to distribute the
asset without regard to any presumption, based on what is
“just and proper in all the circumstances,” in light of the
parties’ proven contributions to the asset. Staveland and
Fisher, 366 Or 49, 57, 455 P3d 510 (2019). “A rebuttal of the
presumption may justify a division of the marital assets on
less than an equal basis.” Id. When the party has proved
that a marital asset was acquired free of any contributions
from the other spouse, absent other considerations, it is “just
and proper” to award that marital asset separately to the
party who has overcome the statutory presumption. Kunze,
337 Or at 135.
         In determining whether the statutory presumption
has been rebutted with respect to appreciation in the value
of an asset owned by one spouse at the time of the mar-
riage, the court’s first task is to determine the contribution
by each party. Hixson and Hixson, 235 Or App 217, 230 P3d

   1
     ORS 107.105(1)(f) provides, in part:
       “In determining the division of property under this paragraph, the fol-
   lowing apply:
       “* * * * *
       “(B) The court shall consider the contribution of a party as a homemaker
   as a contribution to the acquisition of marital assets.
       “(C) Except as provided in subparagraph (D) of this paragraph, there is
   a rebuttable presumption that both parties have contributed equally to the
   acquisition of property during the marriage, whether such property is jointly
   or separately held.”
712                                         Craven and Craven

946, adh’d to as clarified on recons, 235 Or App 570, 232 P3d
996 (2010). The court looks at the extent to which the other
spouse contributed or did not contribute to the increase in
value. Massee and Massee, 328 Or 195, 205, 970 P2d 1203
(1999). An inquiry into the relative contributions of the par-
ties is required:
       “The court first must determine the magnitude of each
   spouse’s overall contribution to the acquisition of mari-
   tal assets from evidence in the record. If one spouse is a
   homemaker, that determination necessarily will include an
   assessment of the homemaker spouse’s contribution to the
   enterprise of homemaking. A homemaker spouse’s overall
   contribution may consist of a combination of domestic con-
   tributions and economic or other nondomestic contributions.
       “Once the court has determined each spouse’s overall
   contribution to the acquisition of marital assets, the court
   compares the respective contribution of the spouses. The
   ultimate question is whether the spouse seeking to rebut
   the presumption of equal contribution has proved, by a pre-
   ponderance of the evidence, that the other spouse did not
   contribute equally to the acquisition of marital assets.”
Id. (footnote omitted). In assessing whether a party has
satisfied that burden, ORS 107.105(1)(f) requires the court
to consider both economic and noneconomic spousal contri-
butions, including the contributions of a spouse as a home-
maker. ORS 107.105(1)(f) (court shall consider contribution
of spouse as homemaker). As the court said in Massee, 328
Or at 207:
   “[T]here is no difference in kind, analytically, between hus-
   band’s contribution to the acquisition of the marital assets
   at issue here and wife’s homemaker contribution to that
   acquisition. The only difference may be one of magnitude.
   Husband, here the spouse challenging the presumption of
   equal contribution, must prove by a preponderance of the
   evidence that wife did not contribute equally to the acquisi-
   tion of the appreciation, during the marriage, of husband’s
   separately held assets.”
        Evidence that appreciation of a nonmarital asset
was not attributable to either spouse, i.e., was “passive,” gen-
erally will support a determination that the presumption
has been overcome. See Wolfe and Wolfe, 248 Or App 582,
Cite as 326 Or App 709 (2023)                                   713

595, 273 P3d 915, rev den, 352 Or 266 (2012) (presumption
overcome when entire account appreciation was passive and
traceable to husband’s premarital interest in the property);
cf. Denton and Denton, 326 Or 236, 243-44, 951 P2d 693
(1998) (wife’s willingness to relocate, as well as her eco-
nomic and domestic efforts, were contributions to husband’s
enhanced earning capacity).
          Evidence of “commingling” of an asset with house-
hold finances can come into play twice in a property division
determination under ORS 107.105. In the context of the pre-
sumption, an act of commingling can preclude the court from
identifying a spouse’s separate contribution with sufficient
reliability to determine whether or not both spouses have
contributed equally to the disputed asset, Kunze, 337 Or at
138, and thus defeat an effort to overcome the presumption.
         After determining whether the presumption of
equal contribution has been overcome, the court makes a
division of marital property that the court deems “just and
proper in all the circumstances.” ORS 107.105(1)(f). In the
court’s “just and proper” determination, a spouse’s commin-
gling of a separately held asset again becomes relevant. The
court said in Kunze:
   “[E]ven if acts of commingling do not preclude the court
   from identifying the source of a disputed asset with suf-
   ficient reliability, the integration of a separately acquired
   asset into the parties’ joint financial affairs through com-
   mingling may require the inclusion of that asset in the
   property division for a different reason. Specifically, * * *
   acts of commingling may operate to convert a separately
   acquired asset into a joint asset of the marital partnership.”
337 Or at 139 (footnote omitted). In determining whether
an act of commingling requires the inclusion of separately
acquired property in the property division, the court eval-
uates the extent to which the separately acquired asset
has been integrated into the joint finances of the marital
partnership and whether any inequity would result from
the award of that asset to that spouse as separate property.
Id. at 142.
        We turn to the trial court’s rulings in this case as
they bear on the primary dispute on appeal, which concerns
714                                                   Craven and Craven

the trial court’s division of the appreciation of an invest-
ment account. The trial court found that husband brought
the account into the marriage, because the source of the
account could be traced to husband’s premarital investment,
and that finding is not challenged on appeal. The court thus
awarded to husband the full value of the account at the time
of the marriage.2 But the court determined that the appreci-
ation in the account, which was due both to passive growth
and to the continued reinvestment of the account’s earnings
over the 26 years of the marriage, was a marital asset, and
that husband had not overcome the presumption of wife’s
equal contribution to that appreciation.3 The court therefore
split the appreciation portion of the account equally between
the parties.
         In determining that husband had not overcome the
presumption of equal contribution with respect to the appre-
ciation of the account, the trial court cited the following:
    “(a) Wife refused to consider a Prenuptial Agreement as she
    insisted the marriage be one of equal sharing. Although
    not agreeing to that position, Husband proceeded with the
    marriage in full awareness of her position; (b) Wife was the
    primary homemaker and parent for the [parties’] children
    throughout the marriage and by all accounts, including
    Husband’s, performed these roles excellently; (c) Although
    Husband handled all of the [parties’] investment decisions,
    during much of the marriage Wife handled their day to day
    finances; (d) there were a handful of times during the mar-
    riage that Husband made investment decisions about the
    location of these funds.
       “* * * Finally, the use of the [parties’] joint funds to pay
    the income taxes that were incurred as the result of the
    annual growth of these accounts is impossible to over-
    look. This occurred throughout the entire marriage. This
    resulted in a substantial benefit to these separately held
    accounts. Husband now acknowledges that this should not
    have occurred and seeks to now reimburse the marital
    estate from this separate account for these income tax pay-
    ments. The Court appreciates his efforts to do so. However,

    2
      That award is not challenged on appeal.
    3
      It is undisputed on appeal that the appreciation of the account is a marital
asset.
Cite as 326 Or App 709 (2023)                                   715

   that does not change the 25+ year history of what happened
   with these accounts.
       “* * * Therefore, the Court finds that all but $324,635 of
   that account to be a marital asset upon which the presump-
   tion of equal contribution has not been overcome.”
The court rejected husband’s post-trial request to take judi-
cial notice of public account earning reports that husband
contended would assist the court in determining how much
the fund grew as a result of the payment of capital gains
taxes from the parties’ joint assets. The court explained:
      “I intentionally did not address the request for me to take
   Judicial Notice of the information requested by Husband.
   This is because of the fact that the issue in the case for me
   was not whether the account in question benefited $200k,
   $400k, $600k, or some other number, over the years. The
   issue is that marital resources were used for more than 25
   years to the benefit of this account.”
Thus, the trial court concluded that, in light of the use of
marital resources throughout the marriage for the pay-
ment of taxes, the offered public information concerning
the account’s earnings would have no bearing on the court’s
determination whether the presumption had been overcome.
The trial court determined that husband had not overcome
the presumption of equal contribution.
         In making a “just and proper” division of mari-
tal property, the trial court rejected husband’s contention
that it should consider wife’s possible inheritance from her
father, explaining that the father was still alive and that any
award anticipating the inheritance would be speculative. In
its division of the marital property, the court awarded to
wife half of the marital growth in the disputed appreciation,
$1,576,519.
         Husband challenges the trial court’s rulings relat-
ing to the property division in three assignments of error.
In reviewing the court’s rulings, we accept the trial court’s
findings that are supported by any evidence in the record,
Kaptur and Kaptur, 256 Or App 591, 596 n 2, 302 P3d 819
(2013), and review the trial court’s legal determinations for
errors of law. Morton and Morton, 252 Or App 525, 527, 287
P3d 1227 (2012). The court’s property division will not be
716                                       Craven and Craven

disturbed “unless the trial court misapplied the statutory
and equitable considerations required by ORS 107.105(1)(f)[.]”
Van Winkel and Van Winkel, 289 Or App 805, 810, 412 P3d
243, rev den, 363 Or 224 (2018).
         A party seeking to rebut the presumption of equal
contribution must persuade the trier of fact that “it is more
probable than not that the other spouse did not contribute
equally to the acquisition of the property.” Massee, 328 Or
at 204-05. Whether a party has overcome the presumption
of equal contribution to appreciation of a premarital asset
is a question of fact for the trier of fact. Staveland, 366 Or
at 58 (“[Whether or not the presumption is rebutted] is a
factual determination to be made by the trial court in the
first instance.”). However, there are situations when the
underlying facts are not in dispute and the question instead
is whether the trial court misapplied the law. See, e.g.,
Maldonado and Freed, 294 Or App 583, 432 P3d 1154 (2018).
In husband’s view, this is such a case. In his first assign-
ment of error, husband does not challenge the trial court’s
findings but contends that the court’s determination relat-
ing to the presumption of equal contribution demonstrates
legal error, and that the undisputed evidence requires the
finding that the presumption of equal contribution has been
overcome.
         In the explanation for its ruling, the trial court
cited wife’s contribution as a homemaker. It is undisputed
that, throughout the marriage, wife was the homemaker
and the primary caregiver of the parties’ children; she also
managed the family’s home finances, while husband man-
aged their investments. Husband nonetheless argues that
the factors cited by the trial court relating to wife’s contri-
bution as a homemaker do not support the trial court’s con-
clusion relating to the presumption, because the evidence
shows that those homemaker contributions did not contrib-
ute to the growth of the investment account.
         We agree with husband that on this record, as in
Lind and Lind, 207 Or App 56, 65, 139 P3d 1032 (2006), and
Wolfe, 248 Or App at 595, it does not appear that wife’s con-
tributions as a homemaker made a direct contribution to the
growth in the investment account.
Cite as 326 Or App 709 (2023)                                              717

          But wife’s homemaker role did contribute indi-
rectly. It is undisputed that, throughout the marriage, hus-
band paid taxes on capital gains on investments sold in the
account from the parties’ joint accounts, rather than from
husband’s separate funds or from the account earnings.
Husband earned the money for the tax payments while wife
was supporting husband’s employment through her home-
making and child-rearing contributions. Those payments
therefore constituted a contribution by wife. They allowed
the account not to be diminished by payment of taxes and
in that way contributed to the growth of the account, a fact
that is not disputed by husband.4
         The trial court relied on wife’s indirect contribution
through the payment of taxes on capital gains to conclude
that the presumption of equal contribution had not been over-
come. Husband asserts, however, that the record requires the
finding that wife’s contribution to the account through the
payment of taxes on capital gains was not equal to growth
solely attributable to the passive growth of the investment
during the 26 years of the marriage. He asserts that the por-
tion of the tax payments attributable to wife resulted in, at
most, a growth of approximately 10.8 percent in the account,
a figure that wife does not directly dispute, except to assert
that husband “overstates” its accuracy. Husband contends
in his second assignment of error that, in aid of the trial
court’s determination of the extent of wife’s contribution, the
trial court should have taken judicial notice of the publicly
available historical data that husband offered by way of his
request for judicial notice concerning the account’s earnings
during the relevant period, which he argues would have
been relevant to the trial court’s determination whether
wife’s contribution to the appreciation through her share of
the tax payments was “equal” to husband’s. As noted, the
trial court declined to consider the information, determin-
ing that it was irrelevant, based on the court’s conclusion
    4
      We note that the parties do not argue that, apart from earnings that
accrued to the account from the payment of taxes, the reinvestment into the
account of the account’s earnings themselves constituted marital contributions
to the appreciation of the account that are partially attributable to wife. That
argument would be foreclosed by our opinion in the factually similar Wolfe, 248
Or App at 595, where we did not treat reinvested earnings as a marital contribu-
tion to growth in an investment account.
718                                       Craven and Craven

that wife’s contributions as a homemaker and the parties’
26-year practice of paying the account’s capital gains taxes
out of joint funds was sufficient to support the rejection of
husband’s contention that wife’s contribution was not equal.
We review the trial court’s ruling excluding the evidence
based on relevance for legal error. See State v. Titus, 328 Or
475, 481, 982 P2d 1133 (1999) (relevancy rulings reviewed
for legal error).
        Judicial notice applies to a fact that is “not subject
to reasonable dispute,” because the fact is either:
       “(1) Generally known within the territorial jurisdic-
   tion of the trial court; or
      “(2) Capable of accurate and ready determination by
   resort to sources whose accuracy cannot reasonably be
   questioned.”
OEC 201(b). See Bowden v. Davis et al, 205 Or 421, 430-31,
289 P2d 1100 (1955) (taking judicial notice of the physical
and geographic arid conditions in southeast Oregon); Volny
v. City of Bend, 168 Or App 516, 519 n 2, 4 P3d 768 (2000)
(taking judicial notice of the population of Bend). There is no
contention that historical earnings data offered by husband
does not meet those prerequisites. We agree with husband
that the trial court’s reasoning for declining to take judi-
cial notice of the publicly available information concerning
account earnings because it had no bearing on the extent of
wife’s contribution in light of wife’s contributions as a home-
maker and other contributions to the marital partnership
was incorrect. The court’s determination that wife had made
a contribution to the appreciation through the payment of
taxes did not eliminate the need to determine the “magni-
tude” of her contribution. Massee, 328 Or at 207 (“[T]here is
no difference in kind, analytically, between husband’s con-
tribution to the acquisition of the marital assets at issue
here and wife’s homemaker contribution to that acquisition.
The only difference may be one of magnitude.”). Contrary
to the trial court’s determination, evidence of the effect of
the payment of taxes on capital gains over the years on the
growth of the account, as wife’s indirect contribution as a
homemaker, was relevant to the court’s determination of the
extent of wife’s contribution to the growth of the fund. Thus,
Cite as 326 Or App 709 (2023)                                             719

we conclude that the trial court committed legal error in
concluding that that information was irrelevant, and there-
fore erred in rejecting the request for judicial notice and in
determining on this record that husband had not overcome
the presumption of wife’s equal contribution to the appreci-
ation in the account.5
         In light of our conclusion that the trial court erred
in determining on this record that the presumption of equal
contribution was not overcome, we must remand the case to
the trial court for it to reconsider husband’s argument that
the presumption has been overcome in light of evidence con-
cerning the amount by which wife’s portion of the parties’
tax payments contributed to the growth of the fund. After
the court makes that determination, the court will again
have an opportunity to reconsider a just and proper distri-
bution of the marital property.
         Because the issue could arise on remand, we also
address husband’s third assignment of error, in which he
contends that the trial court’s division of the marital prop-
erty was not “just and proper,” because the court erred in
failing to consider wife’s prospective inheritance from her
father in determining a “just and proper” division of assets.
The primary asset of that potential inheritance is an invest-
ment fund. We agree with the trial court that, in light of the
fact that wife’s father was still living, consideration of that
potential inheritance in the property division would have
been speculative.
         Vacated and remanded for reconsideration of prop-
erty division; otherwise affirmed.

    5
      Our conclusion hinges on those aspects of the marital property that, based
on the record, are quantifiable.