Ferguson v. Ferguson
| Decision Date | 20 December 1996 |
| Docket Number | No. S-6764,S-6764 |
| Citation | 928 P.2d 597 |
| Parties | Donald J. FERGUSON, Appellant, v. Lori Beth FERGUSON, Appellee. |
| Court | Alaska Supreme Court |
G.R. Eschbacher, Anchorage, for Appellant.
James E. Curtain, Olmstead & Conheady, Juneau, for Appellee.
Before COMPTON, C.J., and RABINOWITZ, MATTHEWS, EASTAUGH and FABE, JJ.
This appeal presents two related questions: (1) whether an interest in an Individual Fishing Quota (IFQ) for halibut and sablefish is property subject to division if marital, and (2) how the marital portion of this interest should be determined. We hold that the superior court correctly treated the interest in the IFQ as property subject to division if marital, but abused its discretion in determining that the entire interest in the IFQ at issue was marital property.
Donald J. Ferguson and Lori Beth Ferguson were married in December 1988. They separated in December 1993. The superior court divided their property in divorce proceedings held in October of 1994. One of the items the court determined to be marital property is an interest Donald holds in an IFQ for halibut and sablefish.
The IFQ program is a federal regulatory response to various problems in the halibut and sablefish fisheries, including allocation conflicts, discard mortality, safety, and economic stability. Pacific Halibut Fisheries; Groundfish of the Gulf of Alaska; Groundfish of the Bering Sea and Aleutian Islands; Limited Access Management of Fisheries Off Alaska, 58 Fed.Reg. 59,376 (1993). In the interest of promoting "the conservation and management of halibut and sablefish resources," the program replaces the previous "open access" regulatory regime with a limited access system. Id. To qualify for an IFQ, a person must have owned or leased a vessel that made fixed gear landings of halibut or sablefish during 1988, 1989, or 1990. 50 CFR § 676.20(a)(1)(i) (1994). Once people qualify, their initial "quota shares" are determined in proportion to their history of landings from 1984 to 1990 for halibut, and from 1985 to 1990 for sablefish. 50 CFR § 676.20(b) (1994).
The superior court determined that the interest Donald holds in the IFQ is marital property, because the time spent in the fisheries during the qualifying years which created the interest was spent during the marriage. Because the court determined that Donald's interest in the IFQ is marital property, it ruled that Lori is entitled to half the total value of this interest. 1
Donald appeals the superior court's award of half the value of his interest in the IFQ to Lori.
A trial court's determination of the property available for distribution in a property division "is reviewed under the abuse of discretion standard, although it may involve legal determinations to which this court applies its independent judgment." Moffitt v. Moffitt, 749 P.2d 343, 346 (Alaska 1988).
Donald argues that the IFQ conveys no property rights and therefore should not be the subject of a property division. He supports this argument with language from the Federal Register stating that the IFQ "regulations do not convey property rights in the fishery resources," that "the IFQ program is not irreversible," and that "the IFQ program does not establish an entitlement to [quota shares] and IFQ, which, if 'taken' by the government, requires just compensation under the Fifth Amendment of the U.S. Constitution." 58 Fed.Reg. 59,400 (1993).
The superior court never attempted to divide any property interest in the fishery resources themselves. It could not have, since fish do not become the property of individuals until reduced to capture. Instead, the court merely divided the interest in the IFQ that has value independent of any fish that may or may not be caught. Furthermore, the fact that an interest in an IFQ does not constitute "property" for Fifth Amendment purposes is not determinative of whether such an interest is "property" for the purpose of a marital property division.
In Moffitt this court observed that business good will should be considered in a property division "if the evidence suggests that it has value and is marketable." 749 P.2d at 347. The same considerations are relevant here. An interest in an IFQ, while it may not be property under the Fifth Amendment, has value and is marketable. The IFQ has a value independent of the value of the fishery resources because it grants the holder the right to compete in an industry to which entry is limited. Furthermore, the holder is free to market this independent value, for a person holding an IFQ "may sell, lease, or otherwise transfer all or part of their [quota share] or IFQ to another person [ ] in accordance with [ ] transfer restrictions and procedures...." 50 CFR § 676.21 (1994).
Finally, we see no reason why Donald's interest in the IFQ should not be the subject of a finding that it is divisible marital property when a limited entry fishing permit 2 can be the subject of such a finding. 3 See Brosnan v. Brosnan, 817 P.2d 478, 479-80 (Alaska 1991); Thomas v. Thomas, 815 P.2d 374, 376-78 (Alaska 1991). While the federal IFQ program and the state system of limited entry permits differ in various ways, interests held through either regulatory scheme are of value for essentially the same basic reason, namely, for the right of limited access to fishery resources they provide.
An IFQ creates a property interest which, if marital, is subject to division.
Donald observes that even if the Fergusons were married during 1988, 1989, and 1990, the qualifying years for participation in the IFQ program, the actual size of the quota share to which he is entitled is based on his participation in the fisheries from 1984 and 1985 through 1990, participation both prior to and during the marriage. Thus, he argues, Lori should only be awarded half the value of that portion of the quota share that is derived from landings during the marriage years; the portion of the quota share that is calculated on the basis of landings prior to the marriage should be considered separate pre-marital property. We agree with Donald and hold that the superior...
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