Court Opinion

ID: 2714999
Source: CourtListenerOpinion
Date Created: 2014-08-06 17:10:09.533232+00
Date Added: 2024-06-11T15:11:28.277791
License: Public Domain

i101 Wash. 2d 168, 179, 677 P.2d 152 (1984).
       3 In re Marriage of Bulicek. 59 Wash. App. 630, 633, 800 P.2d 394 (1990).
       4 RCW 26.09.090.
No. 69242-9-1/4

       Permanent maintenance awards are generally disfavored.5 But a lifetime
maintenance award in a reasonable amount is proper "when it is clear the party seeking

maintenance will not be able to contribute significantly to . . . her own livelihood."6
       We review a trial court's award of maintenance for abuse of discretion.7 "A trial

court abuses its discretion if its decision is manifestly unreasonable or based on

untenable grounds or untenable reasons."8
              A court's decision is manifestly unreasonable if it is outside the
       range of acceptable choices, given the facts and the applicable legal
       standard; it is based on untenable grounds if the factual findings are
       unsupported by the record; it is based on untenable reasons if it is based
       on an incorrect standard or the facts do not meet the requirements of the
       correct standard.[9]

       Dan does not challenge the maintenance award of $10,000 per month until Nao

turns 62 years old, but he argues that the other two tiers of maintenance were simply a

"vehicle" to allow the court to retain jurisdiction over the parties. The third tier of

maintenance awarded by the trial court was $100 per month from age 72 until Nao's

remarriage, her death, or Dan's death. Under these facts, we agree that the award is

an impermissible placeholder award.

       In its oral ruling, the trial court admitted that there was no basis for the monetary

amount of the award:

       5 In re Marriage of Covle, 61 Wash. App. 653, 657, 811 P.2d 244 (1991).
       6 In re Marriage of Mathews. 70 Wash. App. 116, 124, 853 P.2d 462 (1993); see
also In re Marriage of Morrow, 53 Wash. App. 579, 770 P.2d 197 (1989) (affirming a
lifetime maintenance award where the statutory factors justified maintenance and the
wife suffered from a medical condition that occasionally rendered her legally blind and
unable to work full time).
       7 In re Marriage of Mueller. 140 Wash. App. 498, 510, 167 P.3d 568 (2007).
       8 In re Marriage of Littlefield. 133 Wash. 2d 39, 46-47, 940 P.2d 1362 (1997).
       9 Id. at 47.
No. 69242-9-1/5

         [M]y problem here is that I .. . sound like I'm being somewhat arbitrary as
         far as just picking a number here. And I guess there's a reason for that
         because I guess I should never admit on the record that I'm being
         arbitrary. That probably wouldn't look good on appeal.[10]
In justifying a lifetime award, the trial court stated that "the reason I'm doing this in the

first place is to allow the parties, you know, to come back in to court and revisit the

maintenance in its entirety versus simply depending on how much per month I've

added."11 The trial court also explained that the drop to $100 per month would allow

Nao to retain the "ability for [an] ongoing maintenance adjustment" and also provide "a

time at which . . . people can believe that at leastthat payment will be reduced."12
Neither the trial court nor the parties discussed any other reasons for the placeholder

award.

         The question presented is whether the trial court abused its discretion in making

a placeholder award simply to extend jurisdiction over the parties. Two Washington

cases have addressed placeholder maintenance awards based upon a party's possible

future medical needs: Morgan v. Morgan13 and In re Marriage of Rouleau.14 In Morgan.

the trial court awarded the wife spousal maintenance of $150 per month until her

remarriage orfurther order ofthe court, and the husband appealed.15 He argued that
the award was based upon the trial court's worry that the stress of the wife's job and the

breakup of the marriage might adversely affect her health and she would no longer be

         10 Report of Proceedings (RP) (July 27, 2012) at 22.
         11 ]d, at 23.
         12 Id, at 26.
         13 59 Wash. 2d 639, 369 P.2d 516 (1962).
         14 36 Wash. App. 129, 672 P.2d 756 (1983).
         15
              Morgan, 59 Wash. 2d at 641.
No. 69242-9-1/6

able to work.16 The Supreme Court noted that it was "not clearwhat the basis was for
the trial court's award of alimony" and held that the award was error:

       [Tjhere is neither evidence in the record nor a finding of fact to support an
       alimony award on such a conjectural basis.. .. There is no evidence of an
       existing or reasonably anticipated future impairment of respondent's
       health that now adversely affects her earning capacity. It is, therefore,
       clear that a finding of necessity, upon which an award of alimony depends,
       cannot be based upon the conjectural possibility of a future change in
       circumstances.'171

       In Rouleau, the wife appealed a nominal lifetime maintenance award to the

husband.18 There, the husband suffered an aneurysm near the end of their nearly 20-

year marriage, leaving him disabled.19 The trial court found that the husband could not
work because of his disability, but that he received enough money from private disability

benefits and Social Security to meet his needs.20 Even so, the court awarded the
husband maintenance of $1 per year because "the door should be left open for the

husband to apply for increased maintenance should circumstances change in the

future."21 The trial court further explained that "while [the husband's disability] does not

create a financial need at this moment[,] it creates an underlying need which may

become a financial need should . . . something occur in the future."22
       On appeal, the wife argued that the maintenance award was improper because it

was based on speculation that the husband's needs would change and because it

       16]cL at 643.
       17 ]±
       18 Rouleau. 36 Wash. App.   at 131.

       19!cL at   130.

       20 Id,
       21 Id
       22 Id.
No. 69242-9-1/7

allowed the trial court to retain jurisdiction over the parties where ordinarily it could not.23
Division Three ofthis court agreed and reversed.24 Relying on Morgan, the court noted
that maintenance must be based upon necessity and '"cannot be based upon the

conjectural possibility of a future change in circumstances.'"25 The court held that the

record did not contain any facts indicating that the husband's financial needs were likely

to change and, absent any testimony that the husband would require additional

assistance, the court could only "speculate" about his future needs, in violation of

Morgan.26 The court declined to reach the wife's jurisdiction argument, stating:
              [The wife] also argues that the award is improper because it allows
       the court to retain jurisdiction over the parties where it ordinarily could not.
       We have determined the record is insufficient to support an award of
       nominal maintenance. Therefore, we need not decide whether a
       reservation ofjurisdiction on the question of alimony is ever appropriate;
       i.e., where the evidence is such that a future change of circumstances is
       likely.[27]

       Here, Nao presented expert testimony from her treating physician, Dr. James

Bowen, about the likely progression of her medical conditions. He testified that during

recent years, Nao's MS has been "relatively stable" but that "MS is an unpredictable

disease."28 He explained that patients generally develop a progressive disability over
time and the extent of that disability is hard to predict. Dr. Bowen testified that about

two-thirds of MS patients will develop more progressive symptoms after living with the

       23 ]d at 131.
       24 jd at 132.
       25 Id (quoting Morgan, 59 Wash. 2d at 643.)
       26 jd
       27 Id (emphasis added).
       28RP(Apr. 19, 2012) at 534.
No. 69242-9-1/8

disease for 10 years. At trial, Nao had been diagnosed with MS for six years.

       Dan also presented expert testimony on the typical progression of MS. Dr.

William Likosky testified that while MS is "known for some uncertainty," the average

person with MS "does pretty well."29 He estimated that 15 years after diagnosis, about
one in three people will have some kind of disability, such as having to use a cane or

having weakness on one side of the body.

       In its findings of fact and conclusions of law, the trial court did not address this

testimony directly, except to acknowledge that Dr. Bowen and Dr. Likosky each testified.

While the court found that "[t]he wife may incur future medical expenses and have future

rehabilitation costs due to her medical conditions," it did not make any findings as to the

likelihood or degree to which Nao's condition might worsen.30 Importantly, the trial court
declined to fund the life care plan because it found that "a factual basis was not

presented to prove that the wife is in need of all services detailed in the [l]ife [c]are

[p]lan at this time."31
        Even if we assume that, by finding Nao "may" incur future medical expenses, the

trial court accepted that there would be some worsening of her condition, these findings

do not provide an adequate foundation for retaining jurisdiction. A dissolution is

supposed to finalize the parties' obligations to one another.32 By reserving jurisdiction to
modify maintenance for the duration of Nao's lifetime, or until her remarriage, Dan's

       29RP(Apr. 17, 2012) at 254.
       30 Clerk's Papers at 350.
        31 Id
        32 Shaffer v. Shaffer, 43 Wash. 2d 629, 630-31, 262 P.2d 763 (1953) (holding that
the trial court's property distribution was an abuse of discretion because it leftthe
parties' obligations under the decree unsettled).
No. 69242-9-1/9

obligations under the decree remain unsettled. While maintenance is a flexible tool, there

is no showing that the legislature intended to grant broad authority for open-ended

maintenance as urged by Nao. Maintenance cannot be used as an insurance policy

against potential hardship in the absence of specific findings regarding the certainty that

those hardships are likely to occur.33 In the absence of a specific finding on the likelihood
that Nao's condition will worsen and she will need additional maintenance, the trial court

abused its discretion by awarding the $100 per month lifetime placeholder maintenance

award, and that portion of the decree must be reversed.

       Dan also challenges the $1,000 per month maintenance from age 62 to 72 as a

speculative placeholder award. But we conclude the trial court did not abuse its

discretion in awarding Nao maintenance from age 62 to 72. During its oral ruling, the

trial court stated that "there were other considerations that [it] made in coming up with a

thousand dollars, other than simply being a simple vehicle to allow maintenance."34 It
acknowledged that rather than selecting a nominal amount to simply extend jurisdiction,

the court picked the $1,000 amount "in recognition of the belief that there should be

additional maintenance."35 Specifically, the trial court explained that the $1,000 a month
"was justified, in my mind with, again, a continued concern as far as the medical bills."36

      33 We do not address whether there could ever be facts supporting the use of a
placeholder award to retain jurisdiction under different circumstances, e.g., ifa trial court
entered specific findings as to the likelihood of future medical expenses or worsening
condition.

       34 RP (July 27, 2012) at 9; see also City of Lakewood v. Pierce County, 144
Wash. 2d 118, 127, 30 P.3d 446 (2001) ("If findings of fact are incomplete, the appellate
court may look to the trial court's oral decision to eliminate speculation concerning the
legal theory upon which the trial court based its decision.").
       35 RP (July 27, 2012) at 9.
       36 Id. at 24.
No. 69242-9-1/10

The trial court also noted concern over Nao's "medical needs" and "what insurance will

cover" in explaining the basis for the $1,000 a month.37
       Dan contends the court's vague concern with medical bills from age 62 to 72 was

a transparent rationale for a placeholder award, merely intended to keep the door open

for a potential modification if Nao's health worsened. While the court's explanation of

this award is not as specific as it could have been, Dan does not establish that the trial

court abused its discretion.

       Even though the trial court did not fund the life care plan, that plan provided

some evidence of Nao's current and ongoing medical expenses. There was also

evidence that Nao could no longer be covered under Dan's medical insurance and

would have to find a policy that would accept her preexisting medical conditions. The

court's decision to award maintenance beyond age 62 was appropriate because of its

concern regarding Nao's medical bills and insurance limitations. The trial court had a

reason, apart from simply extending its own jurisdiction, to award Nao additional

maintenance from age 62 to 72. The $1,000 a month maintenance award was not a

placeholder award.

       Dan argues that the trial court abused its discretion because it did not consider

whether Dan will have the ability to pay maintenance after he retires. But the trial

court's finding that "the husband has the ability to pay" maintenance has not been

challenged.38

       37 Id at 26.
       38 Clerk's Papers at 349.

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No. 69242-9-1/11

      Dan also argues that the maintenance award was an abuse of discretion

because it constituted a "double dip" into his award of Naodan.39 He contends that

Naodan's valuation was based on the company's future income streams and Nao was

already compensated for her interest in those future income streams when the trial court

divided the couple's assets. So, he argues, the award of maintenance based upon

Dan's income, which comes from Naodan, compensates Nao twice for the same asset.

      Dan relies on In re Marriage of Barnett, which gave rise to the "double dip" line of

cases.40 There, the couple was married 44 years.41 Their major asset was their
salvage business, valued at $200,000.42 The trial court awarded the business to the
husband but gave a $100,000 lien against the business to the wife.43 The court also

awarded the wife $500 per month in lifetime maintenance44 Division Three of this court

held that the maintenance award was essentially a distribution of assets because the

husband was selling off existing scrap and not acquiring more.45 The husband's
proceeds from the business were notfrom its operation but from its liquidation.46
Because the distribution of the business had already been effected by the lien to the

      39 Br. of Appellant/Cross Respondent at 16.
      40 63 Wash. App. 385, 818 P.2d 1382 (1991).
      4 1
            ]d at 386.
      42
            id.
      43
            14
      44
            Id,
      45
            id. at 388.
      46
            Id.

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No. 69242-9-1/12

wife, the trial court impermissibly distributed the same property twice through the lien

and the maintenance award.47

       Here, there was no double award because Naodan's valuation was not simply

based on the company's future income streams, as Dan suggests. James Weber, the

financial expert upon whom the trial court relied, testified that if Dan were to sell the

business and the new owner had to hire someone with Dan's knowledge and

experience, the reasonable replacement compensation would be $400,000 a year. In

calculating the business's average income stream for the valuation, that $400,000

expense, along with the other salary expenses and operating expenses, was deducted

to arrive at a "net" return for the new owner or investor. Therefore, because this

reasonable replacement compensation was carved out of the income streams used for

the valuation, Nao was not compensated for Dan's replacement salary in the asset

distribution, and the maintenance payments do not duplicate the property distribution.

       Nao argues that if the record supports the award of $1,000 for 10 years, then

logically it must also support the lesser $100 award. But the $100 per month lifetime

award was made solely as a placeholder award. Because the trial court had a

nonplaceholder rationale for the $1,000 per month award from age 62 to 72 and only

made the $100 per month placeholder award after age 72 to extend jurisdiction over the

parties, this argument is not persuasive.

       Nao also argues that the third tier of maintenance should stand because Dan

argued for a nominal amount and, therefore, invited the error. But nowhere in the

       47
            Id.

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No. 69242-9-1/13

record did Dan suggest a nominal amount of lifetime maintenance was appropriate.
Therefore, this argument is not persuasive.

                             Cross Appeal—Property Division

       Nao argues that the trial court abused its discretion in declining to award her an

additional $468,531 for her life care plan. We disagree.

       In a marriage dissolution proceeding, the trial court must dispose of the property

and the liabilities of the parties, either community or separate, in a just and equitable

manner considering all relevant factors.48 Such factors include, but are not limited to
"(1) [t]he nature and extent of the community property; (2) [t]he nature and extent of the

separate property; (3) [t]he duration of the marriage or domestic partnership; and

(4) [t]he economic circumstances of each spouse or domestic partner at the time the

division of property is to become effective."49 We review a trial court's division of
property for abuse of discretion.50

       Here, the trial court awarded Nao community property worth $3,288,409.53 (55.5

percent of the community assets) and separate property worth $484,233. It awarded

Dan community property worth $2,632,915.48 (44.5 percent of the community assets)

and separate property worth $612,293. The court declined to give Nao an additional

$468,531 for her life care plan.

       In the findings of fact and conclusions of law, the court supported its decision by

finding that "a factual basis was not presented to prove that the wife is in need of all

       48 In re Marriage of Muhammad. 153 Wash. 2d 795, 803, 108 P.3d 779 (2005)
(citing RCW 26.09.080).
       49 RCW 26.09.080.
       50 Muhammad, 153 Wash. 2d at 803.

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No. 69242-9-1/14

services detailed in the [l]ife [c]are [p]lan at this time."51 Atrial court's findings offact
are reviewed for substantial evidence.52 Nao assigned error to this finding, but offers no
compelling argumentthat it was unsupported by substantial evidence.53 The trial court
was not required to accept her forecast of lifetime medical needs and treatment costs.

Nao does not meet her burden to show that the trial court erred in making the finding or

abused its discretion in failing to award her the value of the life care plan.

       Nao argues that courts routinely assess uncertainties during litigation and that

the trial court applied an incorrect legal standard in considering whether to fund the life

care plan, but she cites no authority that the court was compelled to accept her

projection of possible future medical and treatment costs.54
                                Cross Appeal—Maintenance

       In her cross appeal, Nao argues that the entire award of maintenance is

inadequate given her extraordinary needs. She argues that she should have been

awarded the maintenance she requested of $20,000 per month until she turns 66 years

old.

       Nao does not argue that the trial court failed to consider all relevant factors,

weighed the factors improperly, or made findings unsupported by substantial evidence.

She only argues that this case closely resembles other cases where a court awarded

       51 Clerk's Papers at 350.
       52 Sunnvside Valley Irrigation Dist. v. Dickie. 149 Wash. 2d 873, 879, 73 P.3d 369
(2003).
      53 Humphrey Indus.. Ltd v. Clav Street Assocs., 176 Wash. 2d 662, 675, 295 P.3d
231 (2013).
       54 Cowiche Canyon Conservancy v. Boslev. 118 Wash. 2d 801, 809, 828 P.2d 549
(1992) (the court need not consider an issue absent citation to legal authority).

                                               14
No. 69242-9-1/15

substantial or permanent maintenance. This argument essentially asks us to evaluate

each of the relevant factors de novo and determine that $20,000 per month until age 66

is more appropriate than the maintenance awarded. Absent an abuse of discretion, we

cannot substitute our judgment for that of the trial court. Accordingly, we reverse the

$100 per month placeholder maintenance award after age 72, but affirm the remaining

maintenance awarded to Nao.

                                      Attorney Fees

       Nao seeks attorney fees under RAP 18.1 and RCW 26.09.140. We may award

attorney fees after considering the relative resources of the parties and the merits of the

appeal.55 Because Nao was awarded substantial property and maintenance, we decline

to award her attorney fees on appeal.

                                      CONCLUSION

       We reverse the $100 per month lifetime placeholder maintenance award, but

affirm the remainder of the maintenance award as well as the trial court's property

division.

WE CONCUR:

£     fc^vi/v     ^r
                       A.C-Z.

       55
            RCW 26.09.140; In re Marriage of Leslie, 90 Wash. App. 796, 807, 954 P.2d 330
(1998).

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