Court Opinion

ID: 9559515
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:30:30.930165+00
Date Added: 2024-06-11T09:11:16.018240
License: Public Domain

Dolliver, J.
This is an appeal of the property division and maintenance award in a decree of dissolution. Appeal to this court was allowed pursuant to ROA I-14(e) (now RAP 4.2(a)(4)), due to "fundamental and urgent issues of broad public import requiring prompt and ultimate determination" presented by this case. Mr. Hadley, the respondent, has cross-appealed the award of attorney's fees to the wife.
Richard and Claudette Hadley were married in 1964. At that time, Claudette was 28 years old and owned no significant property. Richard was 42 years old and had assets of approximately $2.3 million as a developer and owner of commercial real property. Two children were born during the marriage. Custody of the children was awarded to Mr. Hadley and is not at issue in this proceeding.
About a year after the marriage, Mrs. Hadley was diagnosed as having multiple sclerosis. She has had a progressive deterioration of her physical condition and is now totally disabled, requiring full-time nursing care and other medical attention.
Due to the complexity of the issues before the trial court, a certified public accountant was appointed as a special *652master to assist the court in matters of accounting and taxation. At the time of trial, which lasted 3 weeks, the Hadleys' net worth was approximately $9.4 million. Of this amount, Mrs. Hadley received approximately $545,000 in community property and $480,000 in maintenance, to be paid at $4,000 per month for 10 years. Mr. Hadley received all other property in the estate.
The appellant is alleging that the decree manifests an abuse of discretion and requires modification. After studying the transcript of the trial, the briefs of the parties, the trial court's oral and written findings and conclusions, we are of the opinion that the decree should be affirmed. In making the property division, the trial court was mindful of Mrs. Hadley's substantial need for income to pay her medical and living expenses and was also aware that the future security of Richard, Claudette and their children was dependent upon Richard's continuing financial success. At the time of the trial, the corporations upon which both parties were dependent for their financial security were at a critical juncture. In order for Mr. Hadley to borrow funds to pay for the present operations of the businesses, the trial court found that it was necessary that there be no substantial diversion of major assets. The corporations were interrelated and interdependent as a result of loans between them and as a result of some pledging of property to secure a debt of related corporations which was owed to third parties. Under these circumstances,'the trial court had a difficult job dividing the property in such a way as to avoid impairing the productivity of the corporations. The court's division of the property provided for a substantial and steady income to Mrs. Hadley in the form of maintenance payments and capital assets which were income producing. The remaining Hadley properties were awarded to Mr. Hadley, thus allowing him to obtain the necessary loans to keep the businesses productive. Both parties will benefit from this arrangement. The trial court was conscientious and fair in its decree, considering all of the facts and circumstances. Under these conditions, we will not substitute *653our judgment. Baker v. Baker, 80 Wn.2d 736, 746, 498 P.2d 315 (1972).
The initial question before this court is whether Mrs. Hadley has waived her right to appeal by her acceptance of the benefits of the dissolution decree. We have before us an uncontested affidavit stating that Mr. Hadley delivered certain properties and maintenance payments to Mrs. Hadley pursuant to the dissolution decree, that she accepted them and has exercised dominion and control over them.
Mr. Hadley does not contend that Mrs. Hadley is entitled to any less than she received; rather, he argues, the decree is just and equitable. A successful appeal by Mrs. Hadley could only increase her share of the property. Thus, Mr. Hadley has not been prejudiced by Mrs. Hadley's acceptance of what he must be deemed to admit as her fair share. He has not cross-appealed on any issue other than attorney's fees.
As a matter of community property law, Mrs. Hadley has a right to some portion of the Hadley assets. She has not accepted his property but rather has accepted her share of the community. As a totally disabled person, she is in need of constant services and has no means of support other than the maintenance payments. To require that she abstain from accepting the delivered property under these circumstances may effectively eliminate her opportunity to appeal. We find there is no inconsistency here in her accepting the award and filing an appeal. Schreiber v. Schreiber, 217 So. 2d 301 (Fla. 1968), on remand, 217 So. 2d 343 (Fla. Ct. App. 1969); McIlroy v. McIlroy, 191 Ark. 45, 83 S.W.2d 550 (1935); Cohen v. Cohen, 102 Cal. App. 2d 624, 228 P.2d 54 (1951); Hancox v. Hancox, 54 Ill. App. 2d 476, 203 N.E.2d 613 (1964); Marshall v. Marshall, 364 P.2d 891 (Okla. 1961); Hofer v. Hofer, 244 Ore. 88, 415 P.2d 753 (1966); Frankel v. Frankel, 41 Ariz. 396, 18 P.2d 911 (1933); Hansen v. Hansen, 233 Cal. App. 2d 575, 43 Cal. Rptr. 729 (1965); Kassebaum v. Kassebaum, 178 Neb. 812, 135 N.W.2d 704 (1965).
*654Respondent has urged that Murray v. Murray, 38 Wn.2d 269, 229 P.2d 309 (1951) and Potter v. Potter, 46 Wn.2d 526, 282 P.2d 1052 (1955), control the disposition of this issue. However, in neither of these cases was there a showing of either total disability or necessity which distinguishes this case.
The appellant assigns error to the acceptance by the trial court of a series of property status agreements as being a valid characterization of the property as community or separate. Both appellant and respondent urge that the validity of the property status agreements is determined by the standards set forth in Friedlander v. Friedlander, 80 Wn.2d 293, 494 P.2d 208 (1972), and Hamlin v. Merlino, 44 Wn.2d 851, 272 P.2d 125 (1954). Although these cases involved prenuptial agreements and the trial court characterized the agreement here as neither prenuptial, nor post-nuptial, nor made in contemplation of dissolution but rather "analogous to a community property agreement," we believe the principles set forth in Friedlander and Hamlin are applicable here. The tests are: (1) whether full disclosure has been made by respondent of the amount, character and value of the property involved, and (2) whether the agreement was entered into fully and voluntarily on independent advice and with full knowledge by the spouse of her rights. Both of these tests have been met.
During the Hadley marriage, three property status agreements motivated by Mrs. Hadley's illness were executed by the parties. Their undisputed purpose was to minimize her death and estate taxes. The trial court made a finding of fact that the agreements were based on a study conducted by a certified public accountant and an attorney who traced the assets to their respective sources and characterized the assets accordingly. During the marriage, the parties relied on these agreements in financing subsequent ventures, preparing income tax returns, opening and maintaining bank accounts, and in making various expenditures. The trial court also made a finding, supported by substantial evidence, that the agreements were voluntarily and knowingly *655signed. Mrs. Hadley testified she was not forced to sign the agreements and did not feel her relationship with her husband would change had she declined to sign. Prior to signing, she traveled to each of the major businesses and was kept informed of developments by her husband. There was a complete disclosure to her of the Hadley assets. There is no evidence of fraud or overreaching in connection with the signing of any of the agreements.
The property status agreements were drafted by counsel who represented the Hadleys in both their business and personal affairs. Mrs. Hadley had spoken highly of this lawyer and he was available to her for independent consultation. At one time, Mrs. Hadley had engaged another lawyer to examine the agreements. However, he did not render legal advice to Mrs. Hadley because he needed further information which she failed to give to him. While this may have been an unfortunate omission on her part, it is unfair to penalize Mr. Hadley for it. We find that Mr. Hadley demonstrated his good faith, candor and sincerity in his dealings with Mrs. Hadley. His actions were consistent with those required in a relationship of trust and confidence.
Mrs. Hadley now urges this court to disregard the agreements because they were drafted with death rather than dissolution of marriage in mind. We are unsympathetic to this plea. In addition to Mr. Hadley's reliance upon these agreements, creditors, financial institutions, the Internal Revenue Service and other third parties had also relied upon them. Furthermore, Mrs. Hadley specifically incorporated the property status agreements into her will, executed on September 10, 1974. As we find no fraud or overreaching, we will not allow Mrs. Hadley to choose at this late date the purposes for which these agreements may be used.
The appellant next alleges that the trial court violated Baker v. Baker, 80 Wn.2d 736, 498 P.2d 315 (1972), by failing to characterize each of the party's property as separate or community. While the trial court did not list each of the properties in the findings, assigning them separate or community status, it did adopt the characterization of the *656properties as contained in the property status agreements discussed above. These agreements included nearly all of the Hadley assets.
In Baker v. Baker, supra, we held that the court must have in mind the character of property as community or separate. See also Blood v. Blood, 69 Wn.2d 680, 419 P.2d 1006 (1966); Shaffer v. Shaffer, 43 Wn.2d 629, 262 P.2d 763 (1953). The trial court found, and it is not challenged, that the assets were traced by a certified public accountant prior to the signing of the agreement. Those findings were before the court. Testimony was taken from Mr. Durwood Alkire, another certified public accountant, who independently traced the Hadley assets. Additionally, Mr. Hadley testified as to the source and evolution of every major asset before the court. The testimony as to the character of each of the assets was compatible with the characterization of the property made in the property status agreements. In that community property is not required to be divided equally but rather equitably, we find that the strict particularity in listing each asset urged by the appellant to be unnecessary. In so holding, we in no way intend to alter the standards for tracing set forth in Berol v. Berol, 37 Wn.2d 380, 223 P.2d 1055 (1950). Furthermore, as was stated in Baker v. Baker, supra at 745-46, "Characterization of the property, however, is not necessarily controlling; the ultimate question being whether the final division of the property is fair, just and' equitable under all the circumstances." We are satisfied the trial court met this test.
The appellant next assigns error to the trial court's alleged failure to assign a value to each of the Hadley assets in the findings and conclusions. The court made a finding of fact that the 1975 financial statement prepared by a certified public accountant fairly reflects the present value of the assets before the court. The court found that those corporations which are not described in the statement have no significant value. The appellant makes no allegation to the contrary. Of those items omitted from the 1975 financial statement, there is testimony in the record giving an exact *657valuation of each, with the exception of Mrs. Hadley's personal effects. However, her personal effects were of relatively insignificant value compared with the other assets and were not taken into account in the property division.
The purpose of requiring that the trial court set forth its valuation of the property in a dissolution action is to provide the appellate court with an opportunity to discover whether there has been an abuse of discretion. In this case, unlike Wold v. Wold, 7 Wn. App. 872, 503 P.2d 118 (1972), which is cited by appellant, the 1975 financial statement and the statement of facts contain a valuation of each of the significant items of property. We are able to determine the value of the entire estate and the value of the awards to each of the spouses. Consequently, we find that this assignment of error is without merit.
The appellant next alleges that the trial court erred in failing to distribute the tax reserve fund to either party. As a result of this error, she contends, the spouses become tenants in common as to the undistributed property. Pittman v. Pittman, 64 Wn.2d 735, 393 P.2d 957 (1964). In making the property distribution, the court divided the Hadley net worth, not including the tax reserve, between the parties. Mrs. Hadley received certain property and maintenance and Mr. Hadley received "all other separate and community property." Regardless of the court's theory of distribution, we find that the award to Mr. Hadley of the remainder of the property is sufficiently broad to encompass the tax reserve.
The appellant contends that the trial court erred by substituting future maintenance payments for Mrs. Hadley's community property interest. The court awarded Mrs. Hadley property valued at $545,000 and $4,000 per month maintenance. It imprecisely referred to this amount as her community property share. In actuality, the court had determined that the property owned by the community was minimal; $545,000 was considerably more than half of the community property. The major assets had been traced as Mr. Hadley's separate property. Therefore, $545,000 alone *658constituted a generous award of the community property. The additional future payments greatly exceed her community property share.
We have held in the past that the use of the terms alimony, maintenance payment, or property award does not necessarily require that the award be so treated. There is no magic in the use of these terms. Thompson v. Thompson, 82 Wn.2d 352, 510 P.2d 827 (1973); Walls v. Walls, 179 Wash. 440, 38 P.2d 205 (1934). Our concern is with the fairness of the award as determined by those factors set out in RCW 26.09.080 (property) and RCW 26.09-.090 (maintenance). The trial court properly considered those factors. Its award of property was carefully thought out to meet the needs of both parties. We are satisfied that the label attached to Mrs. Hadley's award does not invalidate what is a fair and equitable decree.
The appellant contends that the trial court erred in accepting the valuations of the Pacific Building and the Denny Building as stated in the 1975 financial statement. The financial statement used those values as set by the county assessor. The appellant contends that the 9 percent capitalization rate, rather than the assessed value, is the proper valuation.
We are unsympathetic to the appellant's contentions for several reasons. First, appellant offered no testimony regarding the fair market value of the buildings in question. As we have held in the past, property valuations which are not supported by the record will not be considered by the court on appeal. American State Bank v. Butts, 111 Wash. 612, 191 P. 754, 17 A.L.R. 168 (1920); see Startin v. Startin, 4 Wn. App. 339, 481 P.2d 452 (1971). The only evidence of the value of the buildings other than that in the financial statement was produced by cross-examining Mr. Hadley's accountant. The accountant was asked to compute the value of the buildings using a 9 percent capitalization rate. There was no determination that this was a proper way to determine fair market value. Secondly, Mrs. Hadley was asked by interrogatory prior to trial if she accepted the *659valuations assigned in the 1974 financial statement to the Hadley assets. The 1974 statement contained the same values for the Pacific Building and the Denny Building as did the 1975 statement. Mrs. Hadley replied in the affirmative. Having no evidence to the contrary, the trial court did not err in accepting the valuations of the properties included in the 1975 financial statement.
Mr. Hadley has cross-appealed the trial court's award of $25,000 attorney's fees to the wife, arguing that Mrs. Hadley is able to pay these fees out of her maintenance payments. The trial court properly considered Mrs. Hadley's needs in determining the amount of her maintenance payments. However, it did not allocate funds to her for the payment of attorney's fees. At the time of the litigation, Mrs. Hadley had no separate property. Accordingly, we find that there was no abuse of discretion in awarding attorney's fees to the wife. See Fite v. Fite, 3 Wn. App. 726, 479 P.2d 560 (1970).
The judgment is affirmed on the appeal and the cross-appeal.
Wright, C.J., and Rosellini, Hamilton, and Brachten-bach, JJ., concur.