In the Matter of The Marriage of Hans Alexander Hendgen

• Decision Date: 20 April 2011
• Docket Number: No. DO070104; A138497.
• Citation: 242 Or.App. 242,255 P.3d 551
• Parties: In the Matter of the MARRIAGE OF Hans Alexander HENDGEN, Petitioner–Appellant,andShauna Lynne HENDGEN, Respondent–Respondent.
• Court: Oregon Court of Appeals

242 Or.App. 242

255 P.3d 551

In the Matter of the MARRIAGE OF Hans Alexander HENDGEN, Petitioner–Appellant,andShauna Lynne HENDGEN, Respondent–Respondent.

No. DO070104; A138497.

Court of Appeals of Oregon.

Argued and Submitted Nov. 9, 2010.Decided April 20, 2011.

John H. Case, Salem, argued the cause for appellant. With him on the brief was Feibleman & Case, P.C. On the reply brief was Stephanie F. Wilson.Eric Larson, Portland, argued the cause for respondent. With him on the brief were Robin J. Wright and Gevurtz Menashe, P.C.

Before SCHUMAN, Presiding Judge, and WOLLHEIM, Judge, and ROSENBLUM, Judge.SCHUMAN, P.J.

Husband appeals from a dissolution judgment, contending that the trial court erred in awarding wife $4,000 in indefinite spousal support, in valuing some of the parties' marital property, and in dividing their property without attributing to wife alone some debts that she incurred after the parties' separation. On de novo review, ORS 19.415(3) (2007), ¹ we conclude that the dissolution judgment must be modified to reduce the award of spousal support and to correct an error, which wife concedes, in the property valuation. We affirm, however, with respect to the court's treatment of the disputed debt.

The parties married in 1980 and had been married for 26 years when they separated at the end of 2006. At the time of trial, husband was 49 and wife was 46. Husband is in good health. Wife has some health issues, including depression and an intestinal condition for which she takes medication. The parties have three children, one of whom is a minor living with mother. ²

The parties both graduated from high school. Throughout the marriage, they have been self-employed, supporting the family primarily through investing in residential and commercial real estate. The parties created two limited liability companies to own and manage their properties.

Although the parties were joint owners of the business, husband was the principal provider of income for the family. Husband located, purchased, developed, and sold real estate. At the beginning of the marriage, wife helped him manage the properties; after the birth of the parties' first child, wife worked primarily as homemaker and primary caretaker of the parties' children, but she also worked in the office, completing the payroll and helping to keep the books.

The parties enjoyed success in their business from the beginning, and the trial court found that they had a high standard of living throughout the marriage. Their income peaked in 2003 and 2004, with incomes of $474,531 and $436,927, respectively, primarily derived from the sale of timber and real estate in the Portland area. In 2005, the parties sold properties in Dallas and McMinnville in order to purchase an Alabama shopping center. The Alabama property has generated a net income of approximately $150,000 per year for the parties and is expected to continue to do so indefinitely. In 2005, the parties had income of $234,514; in 2006, they had income of $149,218. Husband testified that investment income has declined and that the only source of income in 2006 was the Alabama property.

Husband testified that, because of the downturn in the real estate market, the parties currently have no prospects for income from their holdings, other than from the Alabama property, and that they are also faced with significant debt on a property husband would like to sell. He explained that the division of the parties' assets in the dissolution will reduce his ability to borrow funds for future investment. He testified that he no longer plans to seek out investments and has decided to live off the income from the Alabama property. Husband asked the trial court to award him the family residence, which includes a farm that earns a net income of approximately $25,000 per year, and to determine his future income based on that income and the income from the Alabama property. Other than that income and the history of the parties' earnings in the four years before trial, there is no evidence in the record concerning husband's future income, and the court did not make findings concerning the parties' future incomes or earning capacities.

The primary assets of the marriage are the marital residence, valued at over $1.2 million (encumbered by debt of approximately $400,000), several investment properties, including the Alabama property, and personal property. During the marriage, the parties kept large amounts of cash-between $60,000 and $100,000–in an envelope in the home, for miscellaneous expenses. After the parties separated, that money disappeared; each party blames the other for its disappearance. The trial court found, and we agree, that the evidence was not sufficient to establish either the amount of money that had disappeared or who should be accountable for it. The court charged neither party with the inability to account for those funds.

The court made an equal division of the remaining martial property. In dividing the real property, the trial court determined that the marital residence would be sold and the proceeds divided equally between the parties. As requested by the parties, the trial court ordered that the parties remain equal owners of the Alabama shopping center, so as to provide each of them with equal incomes of approximately $6,236 to $7,500 per month.

In considering wife's request for spousal support, the court found that there was a “substantial disparity” in the parties' earning capacities and anticipated incomes. The court found that, although each party will have the same income from the Alabama property, husband has much greater earning potential as a result of his training, work experience, and past employment, and that, despite the current slowdown in the real estate market, husband's earning potential “is substantially in excess” of wife's. Accordingly, the trial court concluded that an award of maintenance support was appropriate.

Wife estimated that her monthly expenses were not less than $13,300. The trial court rejected that level of financial need, however, explaining that it was not justified in light of the real estate market and the decline in the family's income since 2004. The court determined that it was just and equitable to award wife indefinite monthly maintenance spousal support of $4,000. The court did not explain how it arrived at that amount.

Husband contends in his first assignment of error that the trial court erred in awarding wife indefinite support or, for that matter, in awarding any support at all. Husband asserts primarily that an award of spousal support is not justified by the record, in the absence of evidence that husband has income from any source other than the shopping center property that was equally divided between the parties. Further, husband contends, the trial court's award results in a substantially unequal division of the parties' financial resources, with wife having a combined income after support of $122,800, and husband having an after-support income of only $26,832. In husband's view, in light of the trial court's equal division of the marital property, including the income-producing property, resulting in roughly equivalent monthly incomes for the parties, and in the absence of evidence that husband's income will be higher than wife's, the trial court erred in awarding any spousal support. Husband asserts further that he does not have the ability to pay support of $4,000 each month without borrowing.

Wife points out that an equal division of property does not necessarily preclude an award of spousal support. See, e.g., Cullen and Cullen, 223 Or.App. 183, 194 P.3d 866 (2008) (spousal support not precluded because a party also received a large property award); ORS 107.105(1)(d)(C)(v) (“[W]age earner's continuing income may be a basis for support distinct from the income that the supported spouse may receive from the distribution of marital property [.]”). Further, she contends, since the beginning of the marriage, the parties have enjoyed a high standard of living, despite the fact that, because of the nature of the land development business, their incomes have fluctuated over the years. Even with those fluctuations, wife points out, over the last four years, their income has averaged $30,000 per month. In light of the trial court's finding that husband is the primary earner, wife asserts, and despite the absence of evidence of future income above the Alabama property income and husband's statement of his intention to no longer work in land development, the trial court could make an award of spousal support based on past income and husband's earning capacity. See Christensen and Christensen, 123 Or.App. 412, 415, 859 P.2d 1192 (1993) (in determining spousal support, the trial court is not limited to consideration of the income that husband was earning at the time of trial, but could take into account the record of the parties' earnings, their work histories and other factors in determining earning capacities).

Husband acknowledges that, in the absence of evidence of actual income, a court may make an award of spousal support based on a forecast of the obligor's earning capacity. He argues, however, that, although spousal support may be based on forecasted income, the forecast itself cannot be based on speculation but must be based on reliable estimates of future income. Weber and Weber, 184 Or.App. 190, 201, 56 P.3d 406 (2002), rev'd on other grounds, 337 Or. 55, 91 P.3d 706 (2004) (although spousal support may be fixed based on forecast income, the forecast must be predicated on facts existing at the time the award is made). He asserts that the record in this case shows that the parties' incomes in 2003 and 2004 were due to extraordinary sales...