In the Matter of The Marriage of Barbara Ellen Frost

• Decision Date: 29 June 2011
• Docket Number: 023347D3; A143835.
• Citation: 244 Or.App. 16,260 P.3d 570
• Parties: In the Matter of the MARRIAGE OF Barbara Ellen FROST, nka Barbara Ellen Johnson, Petitioner–Appellant,andSteven Richard Frost, Respondent–Respondent.
• Court: Oregon Court of Appeals

244 Or.App. 16
260 P.3d 570

In the Matter of the MARRIAGE OF Barbara Ellen FROST, nka Barbara Ellen Johnson, Petitioner–Appellant,andSteven Richard Frost, Respondent–Respondent.

023347D3; A143835.

Court of Appeals of Oregon.

Argued and Submitted April 18, 2011.Decided June 29, 2011.

[260 P.3d 570]

Russell Lipetzky, Salem, argued the cause and filed the briefs for appellant.Laura Graser, Portland, argued the cause and filed the brief for respondent.Before BREWER, Chief Judge, and CARSON, Senior Judge.BREWER, C. J.

[244 Or.App. 18] Wife appeals the trial court's supplemental judgment terminating husband's maintenance spousal support obligation to wife. Wife argues that several findings of fact that the trial court made did not comport with uncontroverted evidence, that those erroneous

[260 P.3d 571]

findings infected the trial court's conclusion that spousal support should be terminated, and that, in any event, the trial court erred in retroactively terminating support to the date wife was served with husband's motion to modify the judgment. Because the notice of appeal in this case was filed after the effective date of the 2009 amendments to ORS 19.415(3), we have discretion whether to review the facts de novo.¹ For the reasons explained below, we accede to wife's request that we exercise our discretion to review de novo. After finding certain facts anew on the record, we nonetheless conclude that the trial court properly terminated husband's spousal support obligation, and we reject without discussion wife's argument that the court improperly exercised its discretion to terminate the obligation retroactively under ORS 107.135(6). Accordingly, we affirm.²

[244 Or.App. 19] The parties were married for 20 years before they separated in 2001. In late 2003, they entered into a marital settlement agreement that was incorporated into a judgment of dissolution. The dissolution judgment awarded wife maintenance spousal support in the amount of $3,000 per month for a period of eight years. The parties received several hundred thousand dollars each in an equal property division, with wife receiving much of her share in the form of an equalizing judgment. At the time of dissolution, the parties' two children were older teenagers attending school. Husband was (and remains) a pharmacist who earned $12,000 per month at the time of dissolution. Wife was (and remains) a dental hygienist who, at the time of dissolution, was working part-time at a salary of $3,200 per month. Although the dissolution judgment did not state the purpose of the maintenance support award, the evidence at trial showed that its purpose was to narrow the discrepancy between the parties' incomes.

Wife and her current husband, Johnson, had a relationship predating the dissolution

[260 P.3d 572]

of wife's marriage to husband. Wife and Johnson began living together in September 2003. They signed a cohabitation agreement in October 2004. At that time, Johnson, a retired dentist and real estate investor, had a net worth of more than $4.6 million and an annual income of $332,000. Wife had a net worth of $776,000 and annual income (including spousal support from husband) of [244 Or.App. 20] $76,000. Wife and Johnson built a home together in 2004 that cost $800,000 to construct. They originally took out a $500,000 mortgage to build the home. That home was substantially larger and more expensively furnished than the residence that husband and wife lived in during their marriage.³ Also in 2004, Johnson paid wife $50,000 in interest on an investment that she had made with him.

The trial court found, and on de novo review, we also find, that, at the time of dissolution, husband did not anticipate that wife and Johnson would marry. However, wife and Johnson did marry in March 2007. They executed a prenuptial agreement, which included several provisions that are pertinent here. According to the agreement, Johnson's annual income had increased to $500,000 and wife's remained the same as in 2004. Johnson's assets were worth $7 million, and wife's net worth was more than $1 million. Under the terms of the prenuptial agreement, wife agreed to contribute $2,000 per month to a household account, and Johnson agreed to contribute $4,000 to the same account. Wife and Johnson pay their mortgage, taxes, insurance, and other household expenses from that account. By its terms, the prenuptial agreement required wife and Johnson to equally divide their non-housing-related joint living expenses. However, each was free to make gifts to the other. Also by its terms, the agreement was scheduled to terminate on December 31, 2011. That date was chosen, at least in part, to coincide with the termination of husband's spousal support obligation to wife in October 2011. After that date, the agreement provided that Johnson would pay all of his and wife's joint living expenses.

In 2008, husband filed a motion to modify the dissolution judgment to terminate his spousal support obligation. When the case came to trial in October 2009, the primary focus of the proceeding was on whether the financial resources that Johnson contributed to his marriage with wife had supplanted the purposes of the spousal support award in this case. At the time of trial, Johnson's pension income had declined, but there was very little current evidence about his other sources of income. The residence that wife and Johnson [244 Or.App. 21] co-owned was worth $1.4 million. Husband's employment income was higher than at the time of dissolution and wife's employment income had not materially changed. Wife and Johnson had taken many vacations over the previous five years, including trips to California, New Zealand, Africa, the Caribbean, and elsewhere. Johnson had paid for all their vacation expenses. During their marriage, husband and wife also had traveled, but much more modestly.

After they built their home, wife and Johnson took out a home equity loan so that wife could lend $383,000 to one of husband and wife's sons for business purposes. Wife receives a monthly payment of $5,000 from her son on that loan, and she pays approximately $4,000 per month to the lender on the home equity loan. Wife previously had loaned the same son $110,000 from the proceeds of her share of the property division from the dissolution of her marriage to husband. Her son pays a monthly principal payment, but no interest, on that loan.

On appeal, wife challenges certain findings of fact that the trial court made, its ultimate conclusion that it was just and equitable to terminate spousal support, and the court's determination that support should be retroactively terminated. We begin with wife's challenge to the trial court's findings. In the judgment terminating spousal support, the trial court made four findings of fact that wife challenges on appeal. In a nutshell, the court found that (1) the parties' son pays wife $5,000 per month on his larger loan, and wife pays only $1,500 per month on her corresponding home equity loan; (2) wife could...