Byrne v. Ackerlund

• Decision Date: 16 July 1987
• Docket Number: No. 52927-2,52927-2
• Citation: 108 Wn.2d 445,739 P.2d 1138
• Court: Washington Supreme Court
• Parties: Pauline BYRNE, formerly known as Pauline Ackerlund, Respondent, v. William ACKERLUND, Petitioner.

Page 445

108 Wn.2d 445

739 P.2d 1138

Pauline BYRNE, formerly known as Pauline Ackerlund, Respondent, v. William ACKERLUND, Petitioner.

No. 52927-2.

Supreme Court of Washington En Banc.

July 16, 1987.

Oles, Morrison, Rinker, Stanislaw & Ashbaugh, Pamela D.O. Larson, Seattle, for petitioner.

James L. Vonasch, Seattle, for respondent.

GOODLOE, Justice.

This case involves the validity and interpretation of a dissolution decree which awarded a parcel of real property to one spouse and liens on that property to the other spouse. The decree provided that the liens would be payable upon the sale or transfer of the property. The Court of Appeals determined the decree was defective for failure to finally and definitely dispose of all marital property and held that finality requirements could only be satisfied by interpreting the decree to require sale of the property within a reasonable time. Byrne v. Ackerlund, 44 Wash.App. 1, 719 P.2d 1363 (1986). We reverse.

In 1972, the King County Superior Court entered a decree of dissolution for respondent Pauline Byrne and petitioner William Ackerlund. The decree incorporated a property settlement agreement awarding a parcel of real property to Ackerlund. The decree also awarded a judgment of $2,500 to Byrne and granted her a lien on the property to secure the judgment. The decree stated that the lien was "payable upon the voluntary or involuntary transfer or disposition of the said realty by [Ackerlund]." Clerk's Papers, at 23. The property settlement agreement contained substantially the same language as the decree and included a stipulation that Byrne additionally receive "one-half of the excess of the net proceeds of the sale or other disposition of the said realty over $16,500 for which ... [she] shall be awarded a lien on the above described real property." Clerk's Papers, at 26. The property settlement agreement was drafted by Byrne's attorney. Ackerlund was not represented by separate counsel.

In 1982, Byrne filed a complaint seeking a declaratory judgment that the terms of the dissolution decree entitled her to an accounting and partition of the property to satisfy her liens. Byrne argued that a declaratory judgment was a proper action to establish her rights under the decree and that, in light of the statutory requirement that property be fully disposed of in a dissolution, the decree should not be interpreted to allow the parties' interests to remain tied together indefinitely. She requested the court to interpret the decree and property settlement agreement as requiring the sale of the property, or satisfaction of her liens, within a reasonable time. Byrne also argued that her ability to force a sale of the property was contemplated by the decree's provision for "involuntary" transfer.

Ackerlund, in turn, argued that the language of the decree did not require him to sell the property or to satisfy the liens within any given time period. Thus, he asserted, interpretation through a declaratory judgment action was unnecessary and improper. Ackerlund also argued that the decree was res judicata and could not be modified under the guise of interpretation. Finally, Ackerlund argued that the decree's provision for involuntary transfer contemplated only transfer by third parties and did not empower Byrne to force a sale of the property.

Neither party presented the trial court with any extrinsic evidence as to their intent at the time the property settlement agreement was executed. Both sought summary judgment in the trial court relying solely on the language contained in the decree and settlement agreement.

The trial court granted Ackerlund's motion for summary judgment and dismissed the action. The Court of Appeals reversed. The Court of Appeals determined that the trial court in the original dissolution action had erred by incorporating the terms of the property settlement agreement into the dissolution decree. The court determined that the terms of the agreement violated the requirement that property be disposed of in a manner that finally and definitely determines the interests of the parties. Byrne, at 4, 719 P.2d 1363. The court further determined that because the decree did not fix a time for sale, a reasonable time would be implied. The court concluded that a reasonable time had passed since the entry of the decree, and directed the trial court to "determine a deadline for the sale of the property, or in the alternative, an accounting and satisfaction of Byrne's liens." Byrne, at 5-6, 719 P.2d 1363. We granted Ackerlund's petition for discretionary review.

The issue before this court shall be addressed in three parts as follows:

(1) Was the dissolution decree defective for failure to finally and definitely dispose of all marital property?

(2) Is the dissolution decree now subject to interpretation by declaratory judgment?

(3) May the court imply an obligation not contained in the original dissolution decree?

We answer each of these questions in the negative.

I. Defective Decree?

Initially, we note that prior to the enactment of Laws of 1973, 1st Ex. Sess., ch. 157 (the present dissolution statute), provision for the entry of a divorce decree was contained in RCW 26.08.110 (Laws of 1949, ch. 215, § 11, p. 701). Since the dissolution in this case took place in 1972, the former statute governs. Lang v. Lang, 40 Wash.App. 758, 762, 700 P.2d 375 (1985); see also Wagner v. Wagner, 95 Wash.2d 94, 98, 621 P.2d 1279 (1980). Both parties, along with the Court of Appeals, have erroneously relied on a successor provision, RCW 26.09.080. However, this oversight is not significant as the relevant portions of the current dissolution statute are similar to and have been construed consistently with the former RCW 26.08.110. See In re Marriage of Little, 96 Wash.2d 183, 190-94, 634 P.2d 498 (1981).

RCW 26.08.110 required the court in a divorce proceeding to make "such disposition of the property of the parties, either community or separate, as shall appear just and equitable". As interpreted, this statute established a duty on the part of the trial court to dispose of all property brought to its attention. In addition, it gave to the parties in a dissolution action the right to have their respective interests in property "definitely and finally determined", without the prospect of future litigation. Shaffer v. Shaffer, 43 Wash.2d 629, 631, 262 P.2d 763 (1953); accord Bernier v. Bernier, 44 Wash.2d 447, 267 P.2d 1066 (1954).

In the present action, the Court of Appeals held that the trial court in the original dissolution action had failed to meet the requirements of the statute. The court reasoned that by not providing a definite time for sale, the decree left the parties in a situation where their interests would be tied together indefinitely. Thus, the dissolution court had failed to dispose of the property so as to definitely and finally determine the parties' respective interests. Byrne, 44 Wash.App. at 4, 719 P.2d 1363.

In reaching this conclusion, the Court of Appeals relied on Shaffer, which held that the dissolution court had failed to perform its statutory duty when it awarded certain property to the parties as tenants in common. Shaffer noted that where community property is not disposed of by the trial court, it also passes to the former spouses as tenants in common. See, e.g., Olsen v. Roberts, 42 Wash.2d 862, 864, 259 P.2d 418 (1953). The Shaffer court reasoned that if it is improper to leave the parties as tenants in common by judicial failure to act, it is likewise improper to do so by decree. The court was also concerned that the decree left the parties with the prospect of future litigation to decide their respective interests in the property. Shaffer, 43 Wash.2d at 630-31, 262 P.2d 763.

Reliance on Shaffer in this case is inappropriate. First, the lien/title arrangement incorporated into the dissolution decree is different from the tenancy in common disposition found in Shaffer. Here, the parties are not left in the same situation as if the trial court had simply failed to dispose of the property.

Second, a lien/title division of interests is less likely to lead to future litigation. Tenancy in common is a form of co-ownership involving equal rights to possession, enjoyment, and income from the property. This form of co- ownership also imposes certain fiduciary duties between the tenants. 86 C.J.S. Tenancy in Common §§ 17-25 (1954). The possibility of animosity between divorced tenants creates a likelihood that litigation may be necessary in order to finally dispose of the property or otherwise terminate the tenancy in common relationship. In contrast, where one party holds title and the other a lien, the parties' respective interests are more removed. A lien is merely an encumbrance to secure an obligation and involves no characteristics of co-ownership. See Swanson v. Graham, 27 Wash.2d 590, 597, 179 P.2d 288 (1947). Where, as here, the value of the lien is fixed at a specific dollar amount or by mathematical formula and is enforceable only upon the occurrence of a particular event (the voluntary or involuntary sale of the house), the prospect that future litigation will be necessary to finally determine the respective interests of the parties is less likely.

Naturally, a lien/title property division can lead to disputes and future litigation in that the party who is given title can prevent the other from ever collecting upon the lien by simply not selling the property. Yet this is a prospect the parties can readily contemplate and address when drafting their property settlement agreement. Indeed, divorcing parties may perceive mutual advantages in a lien/title form of disposition. Where, for example, the parties' principal wealth consists of equity in a home, this arrangement may be the only practical means of dividing that wealth without forcing a sale of the property. Since a home often possesses value beyond pure economic...