Kittredge v. Kittredge

• Decision Date: 04 September 2003
• Citation: 803 NE 2d 306,441 Mass. 28
• Parties: ELIZABETH A. KITTREDGE v. SIDNEY KITTREDGE.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

441 Mass. 28

803 NE 2d 306

ELIZABETH A. KITTREDGE v. SIDNEY KITTREDGE.

Supreme Judicial Court of Massachusetts, Hampden.

September 4, 2003.

February 13, 2004.

Present: MARSHALL, C.J., GREANEY, IRELAND, SPINA, COWIN, SOSMAN, & CORDY, JJ.

Wendy H. Sibbison for Elizabeth A. Kittredge.

Thomas A. Kenefick, III (Mary H. Patryn with him) for Sidney Kittredge.

SOSMAN, J.

In this appeal challenging the order of the Probate and Family Court dividing the parties' marital estate pursuant to G. L. c. 208, § 34, the wife contends that the judge erred when he failed to treat the entirety of her husband's gambling losses as a dissipation of marital assets. She also claims that the judge's findings with respect to the amount of those losses are erroneous. We granted the wife's application for direct appellate review, and we now affirm the judgment.

1. Background. The plaintiff, Elizabeth A. Kittredge (wife), and the defendant, Sidney Kittredge (husband), were married in 1967. The husband worked in a family business, Kittredge Equipment Company, of which he was a part owner. The wife was the primary homemaker over the course of the marriage, staying at home to raise their three children. The wife acknowledges that, throughout the marriage, the husband was "an excellent economic provider," enabling the family to live "an upper class lifestyle," including "a fine home, clothing, vacations, travel, and recreational activities." Over the many years that the husband was the sole financial provider for the family, the wife and children did not "want[] for anything."

The husband was, however, a heavy gambler, regularly placing large bets through bookies, plus occasionally gambling at casinos. Most of his bets were placed on professional and college sporting events, and his sole form of entertainment was to gamble and watch television games on which he had placed bets. This gambling activity — which the wife characterized as "compulsive" — occurred throughout the course of their twenty-seven year marriage.

The wife's father died in 1987, and in 1990 she received an inheritance valued at approximately $1.3 million. With the income from that inheritance, the wife began to pay some of the daily household expenses, while the husband paid the taxes on that additional income and paid for the children's education. As of the time of the master's hearing, the wife estimated that the husband had spent over $350,000 on the children's educational expenses,¹ and it was anticipated that the husband would be paying $50,000 for the upcoming weddings of two of their daughters.

The wife filed for divorce in February, 1991, alleging an irretrievable breakdown of the marriage. The wife claimed that that breakdown occurred gradually as "a subtle and slow process" during the 1980's, but that she had continued with the marriage until the children were grown. An attempt at marriage counselling, undertaken over a period of months after the wife filed for divorce, was unsuccessful, and the husband moved out of the marital home in January, 1992.

The case was tried before a master, and the judge adopted the master's findings but modified the master's recommended division of the marital property. The marital estate, including the wife's inheritance from her father,² was valued at $4,442,284, of which $2,442,065 was held by the husband and $2,000,219 was held by the wife. The judge ordered that the husband transfer to the wife his one-half interest in the marital home,³ $100,000 in liquid assets, a $100,000 share in his pension plan, and his real estate investments through an entity referred to as Grove Limited Partnership (then valued at $397,400). In percentage terms, this equated to awarding sixty-two per cent of the marital estate to the wife and thirty-eight per cent of the estate to the husband. In ordering this division, the judge relied on the master's finding that the husband's gambling losses over the course of the marriage were on the order of $30,000 to $35,000, and those losses were not a factor in the judge's assessment of the appropriate division of the marital property.

Both parties appealed. In an order and unpublished memorandum and order pursuant to its rule 1:28, the Appeals Court reversed and remanded that portion of the judgment pertaining to the division of assets, ordering further proceedings with respect to two specific issues: a determination of the amount of the husband's gambling losses (as to which there had been insufficient evidence to support the judge's finding), and a valuation (including consideration of tax consequences) of the husband's interest in Grove Limited Partnership.⁴ Kittredge v. Kittredge, 45 Mass. App. Ct. 1109 (1998). The Appeals Court also criticized the judge for adopting, without modification, findings by the master that were replete with disapproving remarks about the wife's lifestyle. The Appeals Court set aside the award of marital assets on the ground that, in failing to scrutinize the master's findings, the judge had not properly considered the factors under G. L. c. 208, § 34.

2. Proceedings on remand. On remand, the judge conducted a further evidentiary hearing with respect to the amount of the husband's gambling losses and the appropriate treatment of those losses in the division of the marital estate.⁵ The parties presented evidence and proposed calculations of net gambling losses incurred from 1983 to 1992.⁶ Expert accountants for both sides agreed, at least in concept, as to how the net gambling losses (which had never been documented or recorded in any fashion) could be reconstructed from existing records of that ten-year period. The husband had deposited his gambling winnings in and paid his gambling debts from identified accounts, but had also deposited other nongambling earnings in those same accounts and had used funds from those accounts to pay other expenses. By identifying and quantifying deposits and expenditures that were not related to gambling, the parties' experts proceeded on the assumption that everything else was attributable to gambling — any deposit that could not be attributed to some other source was treated as gambling winnings, and every expenditure from the account that could not be identified for some other purpose was treated as a gambling loss. Thus, the dispute centered on whether particular items had or had not been properly traced to some nongambling activity. Based on differing treatment of those items, the experts reached vastly disparate calculations of the husband's net gambling losses over that ten-year period, with the wife's expert opining that the losses amounted to $707,543, while the husband's expert arrived at a figure of $296,690.

The judge ultimately found that the net gambling losses over that time period were $400,000, but he concluded, without making any subsidiary findings in support of the figure, that only $40,000 of that amount should be characterized as "waste" of marital assets. He ordered the husband to make an additional $40,000 transfer to the wife in order to account for that "waste," plus other adjustments to the original division to account for such things as the new valuation of Grove Limited Partnership. As a result of these adjustments, the over-all division of marital property awarded sixty-four per cent of the estate to the wife and thirty-six per cent to the husband. The wife now appeals, challenging the judge's finding as to the amount of the gambling losses and his decision to treat only ten per cent of those losses as a dissipation of marital assets. 3. Amount of gambling losses. The wife complains that the judge's finding of $400,000 in net gambling losses was arbitrary, as it was not supported by either side's expert and did not constitute the mathematical average of the two expert opinions. See Ross v. Ross, 50 Mass. App. Ct. 77, 82 (2000) (judge has discretion "to average conflicting experts' assessments"). We reject the wife's argument. The judge did not entirely credit either expert, finding various defects in both of their computations and analyses, and concluding that a "precise determination" of the net gambling losses was not possible on the evidence presented. That assessment of the expert testimony did not require the judge to find that the gambling losses were at the precise midpoint between the two discredited opinions. Although the judge did not articulate his reasons for selecting the figure of $400,000 (a figure $100,000 less than the average of the two opinions), he did articulate general grounds for placing somewhat greater, although not total, credence in the husband's expert, thus making it rational to select a figure closer to the husband's expert's opinion.⁷ Where both sides used a certain amount of approximation and estimation in their own calculations, we see no error in the judge's finding that effectively used a similar degree of approximation and that was based on his assessment of the witnesses' credibility.

The wife also raises arguments concerning three specific items that allegedly should have been added to the calculation of losses. The wife complains that the judge should have included an alleged loan repayment from Kittredge Equipment Company to the husband as a nongambling deposit (thus reducing the total computation of gambling winnings). However, the husband's expert, who had done accounting work for the company for many years, testified that the transaction in question was not a loan but a contribution to capital that had already been accounted for elsewhere in the analysis. Notwithstanding alleged gaps in the documentation of that transaction, the judge's decision to credit the accountant's testimony is one we do not disturb.

We similarly reject the wife's argument with respect to the estimation of the husband's weekly personal expenses that were paid in cash. The husband's practice was to pay his bookies by withdrawing cash (using checks payable to himself) from the...