Lundquist v. Lundquist

• Decision Date: 16 August 1996
• Docket Number: No. S-6761,S-6761
• Citation: 923 P.2d 42
• Parties: George LUNDQUIST, Appellant, v. Jean LUNDQUIST, Appellee.
• Court: Alaska Supreme Court

Page 42

923 P.2d 42

65 USLW 2176

George LUNDQUIST, Appellant, v. Jean LUNDQUIST, Appellee.

No. S-6761.

Supreme Court of Alaska.

Aug. 16, 1996.

Allan Beiswenger, Robinson, Beiswenger & Ehrhardt, Kenai, for Appellant.

Linn J. Plous, Kenai, for Appellee.

Before COMPTON, C.J., and RABINOWITZ, MATTHEWS, EASTAUGH and FABE, JJ.

OPINION

FABE, Justice.

I. INTRODUCTION

This appeal is from a judgment dividing property in a divorce proceeding. George Lundquist disputes the trial court's determinations as to the character, value, and proper distribution of the marital property. We affirm in part and reverse in part.

II. FACTS AND PROCEEDINGS

George Lundquist has worked as a commercial fisherman in Alaska since the 1960s. He has held a limited entry permit ¹ for drift net fishing in the upper Cook Inlet. In 1985 George's fishing boat sank near Kodiak Island. In March 1986, George purchased a new fishing vessel, the F/V Koosh-da-kaa. The purchase price for the F/V Koosh-da-kaa was $95,000; George paid $25,000 in cash, $20,000 of which represented the insurance proceeds from the sinking of his old vessel. George financed the balance with a promissory note in the amount of $70,000. Title was in George's name alone.

According to George, he and Jean Lundquist began living together in March 1987 when they rented an apartment and opened a joint bank account. Jean claims that they started living together in April 1986. George and Jean were married in Reno, Nevada, on February 7, 1988. It was George's second and Jean's fifth marriage. At the time, George was forty-nine years old. Jean was forty-three years old and had worked as a bartender.

George and Jean purchased a residence, built a shop on the premises, and directed money into various investment and retirement accounts. They used marital funds to lengthen the F/V Koosh-da-kaa.

In 1987 the Glacier Bay spilled oil in Cook Inlet, and George received a settlement payment for damages sustained as a result of that spill. In 1989, the Exxon Valdez oil spill prevented George from fishing for salmon in the Cook Inlet. He received a partial payment from Exxon for lost income as a result of that spill. George also participated in a lawsuit against Exxon, seeking damages for lost income from fishing for 1989 and 1990, as well as punitive damages.

In 1990 George purchased a motor home. According to George, the purchase was paid for with the proceeds of the Glacier Bay oil spill settlement. Jean was aware that George had received funds from the Glacier Bay spill but was unsure where those funds went. Although she was uncertain about what funds were used to purchase the motor home, she contended that it was most likely purchased with the proceeds from the Exxon Valdez oil spill. Title to the motor home was held jointly, and Jean contends that joint funds were used to purchase it.

When George's mother, Frieda Eklund, died in 1990, George was named executor of her estate. Eklund's will left George her interest in a checking account. The remainder of the estate was to be divided between George, his daughter Laura, and his niece Suzanne Lundquist. Apparently Suzanne removed substantial funds from Eklund's checking account prior to her death. According to George, he and Jean went to California, and Jean assisted him by going through the checks to determine how much Suzanne had taken. On June 25, 1992, George received a check for $64,000 from his mother's estate. He deposited the check into his "separate" account, ² and issued his daughter a check for $22,710, representing her share of the estate. George then paid Jean $1,000 for her work on the estate. George retained approximately $40,000 that remained in his separate account.

Jean tells a somewhat different version of the events surrounding the death of George's mother. She claims that George asked her to assist him in the probate proceedings and promised her that anything she got out of the estate would be hers.

George and Jean separated in August 1992 when Jean moved out. Both parties sought an interim award of occupancy of the marital residence. Judge Cranston entered an order granting George the right to live in the marital home. George claimed that a number of items of his personal property had been removed from the house by Jean.

At trial, Jean conceded that George's limited entry permit was his pre-marital property but claimed that the F/V Koosh-da-kaa was a marital asset. George argued that because part of the boat was paid for with the insurance proceeds and the rest with money derived from the limited entry permit, the boat was his separate property. Both parties agree that the house was a marital asset. Jean valued the house and shop building at $125,000. George valued the house and shop at $115,000. Jean claimed that the inheritance from George's mother should be treated as marital property. The parties disagreed about who was responsible for the items missing from the residence.

After trial, Judge Cranston asked for annotated arguments from counsel. The court then entered its Findings of Fact, Conclusions of Law, and Order. It found the value of marital property to be $379,855. The court found that the F/V Koosh-da-kaa, the inheritance, the several bank and retirement accounts, the damage awards from the Glacier Bay and Exxon Valdez oil spills, and the motor home were marital assets. The court divided the property on a 50-50 basis, awarding George the F/V Koosh-da-kaa, his Capital Construction account, his inheritance, and other marital funds in his separate checking account. Jean was awarded the investment accounts, the marital residence, and the motor home. The court found that a piece of property George owned in Whittier was partially marital and partially separate. The court also found that Jean should be held responsible for the missing items of George's personal property.

Based on George's motion for clarification or reconsideration of several aspects of the court's decision, the court entered an order changing the date of the parties' marriage from February 1987 to February 1988 and the initial loan amount on the F/V Koosh-da-kaa from $75,000 to $70,000. The court denied the remainder of George's motion. George appeals.

On appeal George disputes the trial court's characterization of the F/V Koosh-da-kaa, motor home, inheritance, and Exxon Valdez damages as marital property. He also finds fault with the trial court's valuation of the marital residence, Whittier parcel, his separate checking account, and his fishing gear. Finally, he takes issue with the trial court's 50-50 distribution of the marital assets.

III. DISCUSSION

A. Standard of Review

Property division in Alaska consists of three steps: determining what property is available for distribution, placing a value on that property, and allocating the property equitably. Moffitt v. Moffitt, 749 P.2d 343, 346 (Alaska 1988); Wanberg v. Wanberg, 664 P.2d 568, 570 (Alaska 1983).

B. Did the Trial Court Err in Its Characterization of the Property?

The first step in any property division is determining what property will be divided. The trial court determines what property is marital. Moffitt, 749 P.2d at 346. The available property will include all assets acquired during marriage. ³ Rhodes v. Rhodes, 867 P.2d 802, 804 (Alaska 1994). If the parties by their actions demonstrate an intent to treat any separate property as a marital holding, it must also be treated as marital property. Id.; Chotiner v. Chotiner, 829 P.2d 829, 832 n. 4 (Alaska 1992); Wanberg, 664 P.2d at 571. Once the trial court determines that the property was treated as a marital holding, it may not refuse to treat the property as marital and distribute it. Wanberg, 664 P.2d at 571; Compton v. Compton, 902 P.2d 805, 812 (Alaska 1995); Lowdermilk v. Lowdermilk, 825 P.2d 874, 878 (Alaska 1992).

The trial court's characterization of property as marital or separate is reviewed for an abuse of discretion. See Jones v. Jones, 835 P.2d 1173, 1175 (Alaska 1992); Doyle v. Doyle, 815 P.2d 366, 368 (Alaska 1991). However, when the trial court makes a legal determination in the course of carrying out this step, that determination is reviewed de novo. Cox v. Cox, 882 P.2d 909, 913 (Alaska 1994); Moffitt, 749 P.2d at 346.

1. Characterization of the F/V Koosh-da-kaa

George bought the F/V Koosh-da-kaa for $95,000, putting $25,000 down and executing a note for the balance of the purchase price. At the time of the parties' marriage, George owed $60,094 towards the purchase of the F/V Koosh-da-kaa. When the parties separated, the principal balance was $36,106. The value of the vessel at the time of the divorce was $80,000. The trial court found that the equity in the F/V Koosh-da-kaa was $43,893. The trial court then determined that the F/V Koosh-da-kaa was marital property.

Jean presented evidence of the parties' intent to treat the F/V Koosh-da-kaa as marital property. Jean testified that she took an active role in the fishing venture and contributed substantial efforts towards it. She detailed her contributions as "working on the boat, working on the fishing gear, frequent grocery shopping and cooking for the crew, going out on the boat and working as a deck hand, tending to the business needs of the enterprise while George was out fishing, and helping to pay for the boat by contributing to the growing equity in the Koosh-Da-Kaa."

Jean further argues that the parties always referred to the fishing business as "our business" and agreed that whatever they acquired during marriage would be marital property. Further, the improvements to the boat were paid for with marital funds.

Marital funds were used to pay off a substantial portion of the loan on the F/V Koosh-da-kaa, as well as to fund a major capital improvement. Jean presented evidence that she made substantial contributions to the fishing enterprise and the operation of the F/V Koosh-da-kaa. While George disputed Jean's version of events, ...