In re Marriage of Shapiro, 29839-6-III

• Decision Date: 30 May 2013
• Docket Number: 29839-6-III
• Parties: In re the Marriage of: SUE SHAPIRO, Respondent, v. MARTIN SHAPIRO, Appellant.
• Court: Washington Court of Appeals

In re the Marriage of: SUE SHAPIRO, Respondent,
v.
MARTIN SHAPIRO, Appellant.

No. 29839-6-III

Court of Appeals of Washington, Division 3

May 30, 2013

UNPUBLISHED OPINION

Siddoway, J.

Martin Shapiro appeals several terms of the trial court's dissolution of his 27-year marriage to Sue Shapiro. He challenges (1) the trial court's distribution of property as inequitable because based upon a characterization of the family home (acquired by him before marriage) as community property and because of its allocation to him of the home in which the parties' daughter resides, (2) the trial court's default finding of a community lien against the family home, (3) the court's valuation of his separately owned business, and (4) an award of maintenance that he alleges is excessive.

The trial court's characterization of the family home as community property fails in light of the Washington Supreme Court's clarification of the law in its post decree decision in In re Estate of Borghi, 167 Wn.2d 480, 484-55, 219 P.3d 932 (2009) but its default finding of a community lien of 90 percent of the home's value is supported by substantial evidence. We reverse in part, with directions to the court to revise the decree to reflect Mr. Shapiro's separate ownership of the home and the community lien, and so that the court may amend the decree to reflect a modification of the maintenance award ordered by the court on reconsideration but not reflected in the existing decree. We otherwise affirm.^[1]

FACTS AND PROCEDURAL BACKGROUND

Martin and Sue Shapiro started dating in college in 1974. After graduating in 1976, Mr. Shapiro returned to Yakima and bought a one-bedroom home and acreage on Dahl Road for $14, 000. Ms. Shapiro moved in with him following her graduation a year later. The parties were married in 1979 and have two adult children, Jessica and Amanda.

Mr. Shapiro had worked since a teenager in his family's business, Chicago Junk & Machinery Company, and returned to work for his father after graduating from college. Chicago Junk buys, processes, and resells scrap metals. It is located on six lots, one of which was given to Mr. Shapiro before the marriage and has always been held in his name. When Mr. Shapiro's father died in 1985, his interest in the business operation passed to Mr. Shapiro individually, but the five remaining lots on which the business was located passed to other members of Mr. Shapiro's family. For a couple of years following his father's death, Mr. Shapiro worked as a warehouse supervisor for Washington Fruit to supplement his and Ms. Shapiro's income while Ms. Shapiro assumed some of his responsibilities at Chicago Junk, so that they could generate the cash flow needed to keep the business running and buy the five lots from his family. They succeeded in purchasing the lots, which Chicago Junk thereafter rented from the marital community.

Mr. Shapiro's income from the business was the principal source of a comfortable living enjoyed by the parties during the marriage. Although the amount of salary that he drew varied over the years, there was testimony at trial that over its long history the business had paid an average of $97, 000 a year to the owner. In the first five months of 2009 (the trial took place in July 2009) Mr. Shapiro had been paid $77, 500 as officer's wages. At the time of trial, Mr. Shapiro was 56 years old. Report of Proceedings (RP) at 254.

Ms. Shapiro's undergraduate degree was in counseling. She worked as a teacher's aide before becoming pregnant with Jessica in 1979. After Jessica was born, she stayed home for a time but then began working part time outside the home in counseling and education-related positions. When her daughters were in their teens she earned her Master's degree in education with a guidance and counseling certification. She and another teacher then started an alternative high school in the late 1990s where she worked for three years. In or about 2001, she quit working for a time and then started substitute teaching, which she continued to do until 2005.

Although she worked part time for much of the marriage and even more when her daughters had grown, Ms. Shapiro testified that her primary role had always been maintaining the household and supporting the children in their school and after-school activities. She also handled the household finances.

Ms. Shapiro had quit working by the time of the parties' separation in 2006 and did not work in the three years between then and the 2009 trial, other than to provide uncompensated baby-sitting for Jessica, who had three children, Jessica was attending school, and Ms. Shapiro baby-sat the children on the several days a week that Jessica had classes.

Ms. Shapiro's income at the time of trial consisted of $2, 000 per month in temporary support being paid to her by Mr. Shapiro and $500 per month she was collecting in rent from Jessica. Her expectation for the next year was that she would continue to baby-sit the grandchildren while Jessica was in school and substitute teach part time, when Jessica did not need her to baby-sit. She testified that gross pay for substitute teachers was $100 per day. When questioned about her prospects for better-paying employment, she explained that she would be unable to teach full time without getting a teaching certificate, which she believed would take at least two years of additional coursework. She believed that with a little more training, she could be a school counselor, but had not made any serious effort to look into that option. At the time of trial, Ms. Shapiro was 54 years old.

The parties owned nine substantial pieces of real property at the time of trial. The first was the home on Dahl Road that Mr. Shapiro had purchased on returning to Yakima after college graduation. In the 29 years the parties lived there before separating, what had started out as a one-bedroom home had been expanded, modified, and remodeled many times.

In 2004, Mr. Shapiro and Ms. Shapiro had refinanced their indebtedness on several properties into a single mortgage against the Dahl Road home. In connection with the refinance, Mr. Shapiro quitclaimed the Dahl Road home to "Martin S. Shapiro and Sue B. Shapiro, Husband and Wife, " "for and in consideration of love and affection." Resp't's Ex. 38 (capitalization omitted). Notwithstanding the recited consideration, Mr. Shapiro testified that he conveyed the property into both parties' names at the lender's insistence, as a condition of the refinancing.

The value of the Dahl Road home at the time of trial was estimated to be $430, 000 by Mr. Shapiro's appraiser and $455, 000 by Ms. Shapiro's appraiser. The mortgage against the home at the time of the parties' separation was $280, 140, 46, but had been reduced to $224, 660.30 by the time of trial.

The second substantial property acquired by the parties and owned at the time of their separation were the five lots of the Chicago Junk business property purchased from members of Mr. Shapiro's family. After the lots were acquired, leases had been prepared from the marital community to Chicago Junk and were producing $2, 000 per month in rentals to the community at the time of trial. Testimony at trial estimated the value of the five community lots and Mr. Shapiro's separate, sixth lot to total $283, 500.

In or about 2000, the couple bought what was referred to below as the 28th Avenue home, to hold as a rental property. Ms. Shapiro moved into the home when the parties separated. At the time of trial, it was owned free and clear. Ms. Shapiro valued it at $170, 000 and Mr. Shapiro valued it at $175, 000. RP at 73.

In 2001, Mr. Shapiro purchased 17 acres neighboring the Dahl Road home. He applied $22, 000 that he had received from the sale of his mother's home, which was separate property, to the purchase price of $76, 000. Before applying the cash bequest to the purchase, however, he deposited it to a joint account. When asked at trial whether he had intended to keep that money separate from his wife, he answered, "Not at the time." RP at 346. He improved the 17 acres with 9 acres of cherry trees and 800 to 1, 000 Christmas trees, which cost about $10, 000, meant for resale. The 17 acres was valued at $97, 000 without the trees.

In 2002, the parties purchased a home on 23rd Avenue with a view to renting it to their daughters. At the time of trial, Ms. Shapiro was renting it to Jessica for $500 per month "because that's all [Jessica] could afford, " although she acknowledged that the rental value was probably $1, 200 per month. RP at 23. Mr. Shapiro had allowed Jessica to live there for a time rent free and advocated giving the home to the daughters, but Ms. Shapiro had insisted that Jessica pay something for rent. Mr. Shapiro had disclaimed the rent, saying it could go to Ms. Shapiro. The house was valued by the parties at $200, 000.

The parties owned a home in Kauai, Hawaii. Mr. Shapiro placed its value at $623, 000. CPat43. It was subject to a mortgage at the time of trial of $319, 304.75. Mr. Shapiro testified that he could no longer afford to make the payments.

The parties owned a cabin in Pleasant Valley, valued at $82, 500.

They owned 80 acres in Umtanum Ridge worth roughly $60, 000.

They owned a lot on Terrace Heights worth $8, 000.

They owned rental mobile home properties on Naches Road that they agreed had a combined value of $90, 000.

The major valuation dispute at the time of trial was over the value of Chicago Junk, of which Mr. Shapiro was the sole shareholder. The court heard valuation testimony from Mr. Shapiro; from Michael Moriarty, the certified public accountant who had done Chicago Junk's accounting work since 1978; and from Ms. Shapiro's valuation expert, Mathew Petersen. Mr. Shapiro also offered and the court admitted the published deposition of Dean Rasmussen, a scrap metal buyer.

Mr, Petersen prepared his valuation for...