In re Marriage of Collins

Decision Date01 August 2019
Docket Number35749-0-III
Citation9 Wn.App.2d 1083
PartiesIn the Matter of the Marriage of KIMBERLEY A. COLLINS, Respondent, and JAMES R. WALLACE, Appellant.
CourtWashington Court of Appeals

9 Wn.App.2d 1083

In the Matter of the Marriage of KIMBERLEY A. COLLINS, Respondent, and JAMES R. WALLACE, Appellant.

No. 35749-0-III

Court of Appeals of Washington, Division 3

August 1, 2019


UNPUBLISHED OPINION

SIDDOWAY, J.

James Wallace, who represented himself at the trial of this proceeding to dissolve his and Kimberly Collins's marriage, assigns error to issues that for the most part were not raised during the bench trial, or with respect to which his own evidence was insufficient.

The issues and arguments on appeal suggest that Mr. Wallace might have obtained more favorable dissolution terms had he better understood the importance of marshalling evidence and making his case during the two days devoted to the dissolution trial. Given the evidence presented and arguments made during trial, the trial court did not err or abuse its discretion on any issue except one: the imputation of Mr. Wallace's income, which raised an issue of first impression. We reverse the decision on Mr. Wallace's child support payments and remand for further findings on the imputation of income issue, but otherwise affirm.

FACTS AND PROCEDURAL BACKGROUND

Kimberly Collins filed a petition for the dissolution of her then 10-year marriage to James Wallace in August 2016. Both parties operated businesses during the marriage. Ms. Collins worked as a software consultant for health insurance companies. Mr. Wallace operated an auto mechanic business, coupled in the early years of their marriage with a rental car business. It is undisputed that Ms. Collins was the primary breadwinner for the family during the marriage.

A point of contention for many years of the marriage was Mr. Wallace's failure to file tax returns and pay taxes. Ms. Collins and Mr. Wallace jointly filed their taxes for the first year of their marriage, with Ms. Collins's accountant helping Mr. Wallace get caught up on some prior years' returns. After that first year, Ms. Collins began filing her taxes separately. As of the time of trial, Mr. Wallace had not filed federal income tax returns for tax years 2008 through 2016.

During the marriage, the couple first lived in the Seattle/Tacoma area. In 2011, they acquired a home in Cle Elum that they initially used on weekends. Over time, they remodeled the inside of the home, added a large garage with a second story apartment, and added a barn. In 2014, the couple sold the home in Federal Way that had been their primary residence. When their planned purchase of a home in Gig Harbor failed to close, they began living full-time in the Cle Elum home.

At the time of the dissolution trial, the parties owned three residential properties: the Cle Elum home and two rental properties in Tacoma. Ms. Collins had persuaded Mr. Wallace to quitclaim his interest in the Cle Elum home to her in connection with a refinancing in August 2014. Given Mr. Wallace's "looming IRS[1] issues" she took the position that it was "a risk to my family to have him continue to be on the deed." Report of Proceedings (RP) at 67.

Another asset owned at the time of the dissolution trial was a cannabis retail license application for the city of SeaTac that Mr. Wallace applied for in the name of his limited liability company and that became eligible to move forward when Mr. Wallace won a lottery in 2013. Mr. Wallace never acted on the license application, because from the time he won the lottery, the city of SeaTac prohibited any land use that violated federal law.

In her petition for dissolution filed in August 2016, Ms. Collins took the position that spousal maintenance should not be ordered. In his response to the petition filed in April 2017-at a time when he was represented by counsel-Mr. Wallace agreed.

The dissolution trial was set for September 26, 2017. A month before trial, Mr. Wallace's lawyer filed notice of his intent to withdraw on September 7. He withdrew without objection and Mr. Wallace proceeded pro se.

Trial

Trial began as scheduled on September 26. As a first order of business, Ms. Collins's lawyer informed the court that the trial brief received from Mr. Wallace the day before sought a spousal maintenance award for Mr. Wallace, contrary to the position he had taken five months earlier in answering the petition. Claiming surprise, Ms. Collins objected to the court's consideration of the request. Mr. Wallace responded that he had "defective counsel" at the time he answered. RP at 24. He also argued that his and Ms. Collins's financial information was all before the court in connection with other issues, consideration of spousal maintenance should not come as a surprise, and "it doesn't seem like there's anything that should require any additional time." RP at 31.

The trial court ruled that "at this point . . . maintenance is not an issue." RP at 42. But it stated that it would hear the evidence on the issues that remained in the case "[a]nd then I'm going to let you raise that issue one more time at the end of the trial . . . because I don't know what the evidence is going to be." Id.

Three witnesses testified on behalf of Ms. Collins: herself, Adam Robertson, and Thomas Gordon.

On issues relevant to the appeal, Ms. Collins testified to her own and Mr. Wallace's income or earning capacity. She described the terms of the contract under which she was then working for a New York company and identified $14, 000 as the amount she expected to gross monthly.

As for Mr. Wallace's income, she testified that he had never earned as much from self-employment as he could have as an employee. She identified exhibit P12, a compilation of job postings for "high end" automotive service advisor jobs for which she believed he was qualified. RP at 110. A job listed in Burien paid $5, 500-$9, 000 per month, and the remaining jobs, located in Kirkland, Puget Sound, and Monroe, had average salaries ranging from $60, 000 to $90, 000.

She testified that after she and Mr. Wallace separated, they discussed a division of assets, and Mr. Wallace refused to recognize any value to his cannabis retail license application, characterizing it as a "worthless piece of paper." RP at 83. Believing it might have value, she located a broker, Thomas Gordon, who obtained an offer for the license application and would testify to its value at the trial.

Finally, she testified to the circumstances under which Mr. Wallace had quitclaimed his interest in the Cle Elum home, which she considered to be her separate property.

Mr. Robertson, an automotive repair and technology instructor who had been Mr. Wallace's business partner for about eight years, testified to Mr. Wallace's earning capacity. He characterized Mr. Wallace's abilities as a repair technician as "[definitely above average" and testified that given his advanced certifications, Mr. Wallace would have no problem getting a job. RP at 139. He reviewed exhibit P12, comprising the four job postings Ms. Collins had identified from the greater Seattle area, and testified that Mr. Wallace was qualified for all of them.

Thomas Gordon, a real estate and business opportunity broker, testified that after being contacted by Ms. Collins, he had obtained a third party's offer to purchase Mr. Wallace's cannabis retail license application, which he forwarded to Mr. Wallace in July 2017. The offer called for Mr. Wallace to receive the following amounts:

• $100, 000 when the buyer was added to the license application and all parties had completed their identity history summary check
• A further $100, 000 upon licensing
• A further $200, 000 after licensing, payable in $10, 000 monthly installments, and
• A further $300, 000 upon the earlier of the retail store opening for business or any license transfer.

Ex. P13. Mr. Gordon testified that the offeror was the experienced owner of a retail license who was then operating in the city of Seattle. He stated that the offeror had the wherewithal to stand behind the offer. He agreed with Ms. Collins's counsel's characterization of the offer as having a "prospective value" of $700, 000. RP at 185.

In cross-examining Mr. Gordon, Mr. Wallace's questioning included the following:

Q. Well, according to the City of SeaTac, they-they passed a moratorium back in 2014 and they weren't going to allow any stores to open and I was just wondering if you were aware of that.
[MS. COLLINS'S COUNSEL]: I'll object to the question stating facts not in evidence.
THE COURT: Sustained.

RP at 191-92. Mr. Wallace then attempted to question Mr. Gordon about moratoria or bans on marijuana sales in Washington cities other than SeaTac. His questions drew objections to relevance that were sustained. His efforts to question Mr. Gordon about what would happen if the voters of SeaTac or the voters of some other city voted to ban marijuana drew objections that he was calling for speculation; those objections were also sustained.

Mr. Wallace questioned Mr. Gordon about whether the license was only good in a certain geographical area, to which Mr. Gordon responded, "The license-can travel. A 502 license can travel to-a [sic] area that-whose licenses are not sold out, where . . . there's openings." RP at 200. Asked by Mr. Wallace if there were any such areas in the state, Mr. Gordon answered that there were.

When it was Mr. Wallace's turn to present his case, he served as his only witness. Responding to Ms. Collins's evidence of his earning capacity, he accused Mr. Robertson of bias, stating that he and Mr. Robertson had ended their business dealings on bad terms. He characterized the four job postings compiled as exhibit P12 as "pie in the sky" possibilities. RP at 306. He also told the court that his goal was to stay in Cle Elum, close to his children, and to continue to be self-employed. He told the court that when the family moved to Cle Elum, "we wanted to get away from what was going on on the west side...

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