Mackessy v. Allinger (In re Re)
| Decision Date | 15 December 2016 |
| Docket Number | No. 33827-4-III,33827-4-III |
| Parties | In re: LEE L. MACKESSY, fka LEE L. ALLINGER, Appellant, v. RICHARD J. ALLINGER, Respondent. |
| Court | Washington Court of Appeals |
KORSMO, J. — This case illustrates one of the many difficulties that arise when parties dissolve their marriage without the assistance of legal counsel. After hearing testimony, the trial court concluded that the parties had agreed to walk away from the marriage without claiming any interest in the other's potential military pension. As the record supports this determination, the inchoate pension rights were not overlooked property negligently excluded from the dissolution decree. We affirm the trial court's decision to deny partition of the husband's military pension.
Lee Mackessy and Richard Allinger met while each was serving in the U.S. Army. They married November 1, 1986. Ms. Mackessy left the army in 1988, the same year the couple's first child was born. Mr. Allinger left the army by the end of 1989; the couple's second child was born in 1992. Mr. Allinger returned to service in the reserves in August 1995.
The parties, each then represented by counsel, filed for dissolution in 1996. They subsequently reconciled for a period of time and halted the dissolution proceedings. Their third child was born in December 1996. The parties, proceeding pro se, instituted a new dissolution action in 1998. There was no written property settlement agreement. Instead, the decree of dissolution entered December 2, 1998, awarded the husband seven named items such as a TV and VCR, along with "everything already taken." Clerk's Papers (CP) at 8. The decree awarded the wife five categories of items, including the family house and furnishings. CP at 8-9. The decree did not recognize any other assets: no bank accounts, insurance policies, retirement plans, or the like were listed in the decree. A separate appendix indicated all of the credit card debt was awarded to the husband, while the wife took the car and house payments. The decree indicated that the parties had no separate property.
The parties occasionally modified the parenting plan over the years. Mr. Allinger's reserve unit was activated for service in Iraq and, after the tragic events of 2001, he went to active duty. Ms. Mackessy spent a brief time in the reserves before ending her service. Mr. Allinger remained in the service and his military retirement vested in 2012. He thereafter took his retirement and also received a disability retirement.
When she became aware of the military retirement income, Ms. Mackessy sued to partition it, claiming 17.5 percent of it as her share of an undivided community asset.1 After competing motions for summary judgment were denied, the matter eventually proceeded to trial. Both parties testified that they earned "points" toward military retirement benefits while in the active service and in the reserves, and each was aware that both of them had accumulated points during the marriage. Mackessy testified that the topic of the retirement points had not been discussed during the marriage, whileAllinger testified that they had decided to each keep their own points and walked away from the other's points since neither anticipated serving sufficiently long to obtain a military retirement. Mr. Allinger testified that the couple had talked about it during the dissolution and again several years later when he decided not to seek support from Mackessy during a time when he had custody of all three children.
The trial judge rejected the motion to partition the retirement benefit and found no basis to award attorney fees to either side. The court entered findings of fact largely consistent with Allinger's testimony. The court concluded that the parties had discussed the retirement benefit and had agreed to leave each with their own points, largely because no one believed they would ever amount to anything. The court concluded that Ms. Mackessy had waived any interest in her ex-husband's possible pension, and that the doctrine of laches would also bar recovery. In support of its reasoning, the court noted that numerous other items were divided by the parties, but not listed in the decree of dissolution.
Ms. Mackessy then timely appealed to this court.
Ms. Mackessy presents three arguments on appeal, but we believe they are really only two. Accordingly, we address first the dispositive issue that we believe is present inthis case—is the failure to list an item of property in a dissolution decree conclusive evidence that it is an overlooked community asset subject to later division by a court? We answer that question in the negative. We also conclude that substantial evidence supports the determination that Ms. Mackessy waived her right to any future pension benefits.
Ms. Mackessy argues that the trial court erred in finding that she had "no valid, legal theory" supporting her argument and that the failure to list the retirement in the decree means that it is an overlooked asset as a matter of law. The trial court did not err.
The law governing division of marital assets and community property is primarily statutory and the general principles have long been settled. In a dissolution, all property, separate or community, is before the court for distribution. RCW 26.09.080. A property settlement entered into by the parties is binding on the court unless it finds the agreement unfair at the time of execution. RCW 26.09.070(3). Similarly, during the marriage the parties are free to dispose of their interests in community or separate property, including changing the characteristics of the property. RCW 26.16.030, .050, .120.
In the event that community property is not called to the attention of the court during a dissolution and, thus, not awarded to either party, the property is held by the former couple as tenants in common. Chase v. Chase, 74 Wn.2d 253, 257-258, 444 P.2d 145 (1968), overruled on other grounds by Aetna Life Ins. Co. v. Wadsworth, 102 Wn.2d652, 689 P.3d 46 (1984). However, the question of whether an asset is "overlooked" is not one which has attracted much attention in the case law. We thus turn to that question.
First, however, some preliminary comments are in order. Ms. Mackessy repeatedly argues that the military pension was an overlooked asset at the time of the decree. It was not. The pension right was not vested in either the husband or the wife, and neither expected to stay in the military long enough to obtain a pension. The property right at issue was the community's interest in the pension credits (points) accumulated during the marriage. As those credits were earned during the marriage, they were community assets. That is the item of community property at issue here.
An additional preliminary matter concerns the trial court's determination, later reduced to writing, that there was "no valid, legal theory" supporting the argument for partition. CP at 179. Ms. Mackessy argues that this statement indicates that the judge did not believe he had any basis on which to grant her claim for relief and asks that we remand for a new hearing since partitioning of an overlooked asset is permissible. This argument is an overreaction to what is, at most, use of colloquial language that is erroneously treated as a term of art. The trial court did not make the statement in response to a motion for judgment as a matter of law under CR 12(b)(6). It came during the summation of the evidence in the course of ruling at the conclusion of a bench trial. The statement simply reflected the judge's conclusion that petitioner did not have a winning case. It did not reflect a misunderstanding of his authority to entertain herrequest. The language may have been imprecise in context, but it was nothing more than recognition that plaintiff did not have a winning argument.
With those preliminaries aside, it is time to turn to the actual issue presented—what constitutes an overlooked asset for purposes of the distribution of property during a dissolution? The most instructive case is In re Marriage of Knight, 75 Wn. App. 721, 880 P.2d 71 (1994), review denied, 126 Wn.2d 1011 (1995). There the parties had entered into a written property settlement agreement that gave the family business to the wife; the couple believed that the business had no value. Id. at 724-725. After the dissolution, the business prospered greatly and the husband moved to set aside the agreement due to undue influence and concealment of assets. Id. at 724. The trial court found the claims unproven, but sua sponte determined that the parties had not understood the concept of "goodwill," valued the goodwill of the business, and awarded half of that figure to the husband as an overlooked asset. Id. at 725. This court reversed that ruling after pointing to evidence developed at the hearing that the parties understood and discussed all of the factors that constituted goodwill, even though they did not understand that word's technical meaning as an accounting concept. Id. at 726-727. Accordingly, the parties "possessed and considered the information necessary to value all the component parts of the business." Id. at 728. The fact that they erroneously valued the business was not a basis for reopening the agreement. Id.
This case is in a very similar posture. Although there was no written agreement, the parties in both cases discussed their property settlement and sought to resolve all issues. Unlike the Knights, the parties here did not detail all of the property they were distributing to each other. As noted previously, there is no indication that the parties had any bank accounts to distribute, whether as either separate or community property, but they actually did. The dissolution decree indicates that neither party had any separate property, but, again, they clearly did. Each agreed, for instance, that Ms. Mackessy got to keep her...
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