In re Johnson

• Citation: 280 Or.App. 71,380 P.3d 983
• Decision Date: 03 August 2016
• Docket Number: A154023
• Parties: In the Matter of the Marriage of Barbara Johnson, Guardian ad litem and Conservator for Joanne M. Price, Petitioner–Respondent, and Gari W. Price, Respondent–Appellant, and Price Family Trust and Peter A. Price, Successor Trustee of Price Family Trust, Respondents below.
• Court: Court of Appeals of Oregon

280 Or.App. 71
380 P.3d 983

In the Matter of the Marriage of Barbara Johnson,

Guardian ad litem and Conservator for Joanne M. Price, Petitioner–Respondent,
and
Gari W. Price, Respondent–Appellant,
and
Price Family Trust and Peter A. Price, Successor Trustee of Price Family Trust, Respondents below.

A154023

Court of Appeals of Oregon.

Argued and submitted December 4, 2014.
August 3, 2016

George W. Kelly argued the cause and filed the brief for appellant.

Michele Grable argued the cause for respondent. With her on the brief were Evan D. Hansen and Grable, Hantke & Hansen, LLC.

Before Ortega, Presiding Judge, and DeVore, Judge, and Garrett, Judge.

ORTEGA, P.J.

280 Or.App. 73

Husband appeals a general judgment of dissolution, challenging the spousal support award and property division by means of four assignments of error. In the first assignment, husband contends that the trial court erred by awarding wife spousal support and continuing that support until wife sells part of the real property awarded to her. In his remaining assignments of error, husband challenges the property division and contends that the court erred by (1) revoking the parties' trust, (2) miscalculating and misapplying tax considerations, and (3) crediting husband with $18,200 worth of equipment sales while failing to credit wife with the sale of a $22,000 piano. For the reasons explained below, we reverse the spousal support award, vacate and remand the property division, and otherwise affirm the dissolution judgment.

Neither party requests de novo review, and we discern no reason to conduct such review. See ORS 19.415(3)(b) (we have discretion to apply de novo review in equitable actions); ORAP 5.40(8)(c) (we will exercise

380 P.3d 986

our discretion to apply de novo review only in exceptional cases). Accordingly, we state the facts “as the trial court found them and as supplemented by our review of the record.” Bailey and Bailey , 248 Or.App. 271, 273, 273 P.3d 263 (2012).

Husband and wife were married in 1952 and separated in 2010 when both were 84 years old. Their five children were adults by that time. Throughout their marriage, husband worked as a log truck driver and, later, as an operator for his excavating company. Wife was a homemaker and the primary caretaker of their five children. At times, wife also gave piano lessons in their home and assisted husband with bookkeeping relating to his excavating business. The parties enjoyed a comfortable middle-class lifestyle, and they owned and lived on a 137–acre ranch.¹ The ranch consisted of pasture and hay meadows and contained a large house where the parties lived, as well as a mobile home that produced $750 a month in rental income. Husband also raised a herd of bison and produced hay on the ranch for profit.

280 Or.App. 74

By the time of trial, however, the parties' circumstances had changed. Wife suffered from dementia, vertigo, and stress-related anxiety. She was unable to care for herself independently and lived in an adult foster home in La Grande.² Husband was generally in good health, but there was evidence that he had difficulty caring for himself, and he displayed some problems with his cognitive functioning. Husband also had difficulty carrying out the bison and hay operations on their ranch, which, by that point, were operating at a loss. The ranch was the parties' major asset and, aside from the bison, they had no liquid assets. Both parties received Social Security; husband received $1,244 per month, and wife received $587 per month. Before trial, the parties sold some of their personal property to obtain additional funds. Wife sold her grand piano for $22,000, which she used to pay her divorce attorney. Husband, in turn, sold several pieces of farm equipment totaling $18,200.

At trial, wife asked the court to award her the long half of the property instead of awarding her spousal support. She also requested that the Price Family Trust, where most of their property was held, be revoked. Husband, in contrast, asked that the court order the sale of the ranch as a whole, undivided parcel, rather than as individual lots. Husband also requested that the court order the sale of a conservation easement on the property. His reasoning was that the sale of the easement would yield enough money to pay for wife's foster care while still ensuring the preservation of the ranch even after its sale. Wife strongly opposed selling a conservation easement, in part, because its requirement that the property be sold as a whole would make the ranch more difficult to market and sell.

The trial court heard testimony from various witnesses and made extensive findings of fact about the parties' property. In the end, it ordered husband to pay wife maintenance spousal support in the amount of $2,600 per month initially, to be increased to $3,000 at the start of the following year. The support amount was intended to cover wife's foster care expenses, which were expected to go up in price.

280 Or.App. 75

The court directed husband to “fund the support [award] from the sale of as many bison as necessary each month.” The court ordered that the spousal support continue “until the first day of the first month following the first sale of one of the real properties awarded to [wife].” That is, the court wanted wife to receive spousal support during the period of time that it took to sell at least one of the tax lots awarded to her, which the court expected she would have to do in order to cover the costs of her care. The court “anticipated that some of wife's land [would] sell within six months,” and it ordered that she “make a good faith effort to sell at least one of her tax lots within the next six months or as soon as possible thereafter.” The court retained jurisdiction to oversee that provision in the judgment.

380 P.3d 987

As to the property division, the court awarded wife tax lots 300, 400, and 3300 for a total value of $618,900,³ and $2,685 worth of personal property. Husband's share included tax lots 3400, 3500, and 3601 (worth $675,000), the bison (worth $43,738), personal property (worth $46,765), and an additional $18,200 worth of personal property that, according to the trial court, husband had impermissibly sold during the pendency of the case.⁴ To equalize the property division, the court awarded wife an additional $83,777, stating:

“All of the equalizing judgment is attributable to my crediting wife with $119,000 in tax consequences based on the anticipated immediate sale of tax lots 3300, 300 and 400. Wife may end up not selling all of her real property immediately. She may decide to only sell half of tax lot 3300 and hence not incur all of the income tax consequences projected by [her tax expert]. Another scenario is that wife

280 Or.App. 76

may choose to sell only tax lot 3300 and devise tax lots 300 and 400 to all or some of her children. By doing so, her children would benefit from the step up in tax basis and thus avoid the large capital gains tax that [her tax expert] predicted. On the other hand, husband will likely need to sell some of the land that has been awarded to him to fund his long term care in spite of the fact he now denies any problems caring for himself. Because husband did not ask for consideration of income tax consequences based on anticipated real estate sales and did not present any evidence on that issue, I did not take that factor into account. In reality, it likely will be a factor and could significantly penalize husband if he sells tax lots 3500 and 3601. In view of the forgoing, depending on the decisions wife makes, wife could end up with the long half of the marital estate.”

We consider husband's assignments of error in turn, beginning with husband's first assignment in which he challenges the spousal support award. In doing so, “[w]e review the trial court's legal conclusions for errors of law. Furthermore, the court's determination regarding ‘what amount and duration of support is just and equitable is discretionary’ and we, accordingly, review for abuse of discretion.” Stuart and Ely , 259 Or.App. 175, 180, 313 P.3d 317 (2013) (internal citations omitted) (quoting Berg and Berg , 250 Or.App. 1, 2, 279 P.3d 286 (2012) ).

Husband contends that the spousal support award in this case is inequitable because he would have to sell the bison that were awarded to him in the property division in order to make his payments. According to husband, “because [he] will have to pay support by selling a part of his share of the marital estate, his share will dwindle, and the 50/50 distribution that the court intended will cease to exist.” We understand the gist of husband's argument to be that the court erred in awarding spousal support where there was no evidence to support a finding that he had the ability to pay that award. Additionally, husband challenges the duration of the award, arguing that, because the court ordered spousal support to continue until wife sells some of the property awarded to her, wife has an incentive to delay the sale of her property for as long as possible. Husband posits that a better...