Marriage of Huff, In re, 91SC266

• Decision Date: 20 July 1992
• Docket Number: No. 91SC266,91SC266
• Citation: 834 P.2d 244
• Parties: In re the MARRIAGE OF William Sterling HUFF, Petitioner/Cross-Respondent, and Joada Hankins Huff, Respondent/Cross-Petitioner.
• Court: Colorado Supreme Court

Page 244

834 P.2d 244

In re the MARRIAGE OF William Sterling HUFF Petitioner/Cross-Respondent and Joada Hankins Huff, Respondent/Cross-Petitioner.

No. 91SC266.

Supreme Court of Colorado En Banc.

July 20, 1992.

As Modified on Denial of Rehearing Aug. 24, 1992.

Litvak & Litvak, P.C., Lawrence Litvak, Holme Roberts & Owen, C. Jean Stewart, Denver, for petitioner, cross-respondent.

Williams, Youle & Koenigs, P.C., Michael A. Williams, Denver, for respondent, cross-petitioner.

Justice VOLLACK delivered the Opinion of the Court.

We granted certiorari to review the court of appeals' unpublished opinion in In re Marriage of Huff, No. 89CA1190 (Colo.App. Feb. 21, 1991). Both the wife and husband assert multiple errors in the court of appeals opinion. We affirm in part, reverse in part, and remand with directions.

I.

The wife and husband were married in 1958. At the time of their marriage, the husband had graduated from both college and law school. The wife had graduated from college.

In 1961, the wife and husband resided in Boston where the husband returned to school and obtained a master of law degree. While in Boston, both the husband and the wife worked part-time. The husband operated a mimeograph machine in the history department at a local university. The wife worked for approximately one year in a store, sorting art prints. For the remainder of their marriage, the wife worked as a homemaker and raised the children.

In 1962, the wife and husband moved to Denver. The husband worked as an associate with a local law firm. In 1964, their daughter was born. In 1965, the husband left the law firm to become an assistant professor of law at the University of Denver. The couple's second child, a son, was born in 1968. In 1973, the wife and husband purchased a house. The wife has lived in this house since the purchase.

In 1977, the husband moved out of the family home and moved into an apartment. The wife and children remained in the family home. The wife and husband never lived together again. In 1978, the husband quit his teaching job and began working full-time as a partner with a Denver law firm.

In 1980, the husband created an irrevocable life insurance trust which named the wife as trustee. In 1985, the husband asked the wife, as trustee of the irrevocable life insurance trust, to borrow approximately $30,600 against the cash value of the trust. The husband needed the money for a downpayment on a house he wanted to purchase. The wife agreed, and the husband used the money to buy the house that same year.

In February 1987, the husband filed a petition for dissolution of marriage or legal separation, claiming the marriage was irretrievably broken. At the time of the filing, the husband was 52 and the wife was 50.

In February 1989, the district court for the City and County of Denver conducted a dissolution hearing in which the court heard testimony from the wife, the husband, and various other witnesses regarding the allocation of property, maintenance, child support, and other matters which arose from the parties' marital dissolution. Both parties offered accounting experts who testified regarding the value of the husband's partnership interest in his law firm. The husband also introduced the testimony of a vocational rehabilitation expert.

On February 24, 1989, the district court issued its decree and permanent orders. In its award of child support, the district court ordered the husband to pay the son's expenses for his last year of college, but specified that obligation would terminate upon the son's graduation or on January 1, 1991, whichever first occurred.

Next, the district court disposed of the marital property. The district court rejected the husband's argument that the marital property should be valued as of the date of the parties' separation in 1977. Pursuant to section 14-10-113(5), 6B C.R.S. (1987), ¹ the district court divided the property based on its value at the time of the dissolution decree.

The district court found the marital estate to be worth $871,000. The court awarded $442,000 to the wife and $428,000 to the husband. The district court found that the irrevocable life insurance trust had a $23,000 cash surrender value and included the cash surrender value of the trust in the wife's award. ² The district court did not require either party to repay the $30,600 borrowed from the trust in 1985, but did order the husband to pay the interest on the money borrowed from the trust so that the trust would retain its value. ³ The court also ordered the husband to pay any termination costs incurred by the wife, if she chose to terminate the trust.

The district court also found that $113,000 represented the value of the husband's interest in his law firm. This value, which was offered by the husband's expert, was based on the "excess earnings" method for valuing an interest in a business or partnership. The court concluded that this value most accurately represented the value of the husband's partnership interest in his law firm. The court rejected a $42,442 figure, which was based on a formula in the husband's partnership agreement, because this figure did not consider all the present facts and intentions of the parties. The court rejected a value provided by the wife's expert, which was based on the excess earnings method, because the expert's capitalization rate of 5 was too high.

After disposition of the marital property, the district court ordered the husband to pay maintenance to the wife. The court found that the wife had met the threshold requirements of section 14-10-114(1)(a) and (b), 6B C.R.S. (1987). ⁴ The court concluded that the assets the wife received in the property distribution were not sufficient to pay her expenses and that, at the time of the decree, she would not be able to support herself through appropriate employment. The district court ordered maintenance to be paid as follows:

For the remainder of calendar year 1989 and calendar year 1990, maintenance in the amount of $5,000 per month. For calendar year 1991 and 1992 $4,000 per month. For calendar years 1993 and 1994 $3,000 per month. For the years 1995 and 1996 $2,000 per month. For the years 1997 and until [the wife] dies or remarries $1,000 [per month].

The district court also ordered the husband to pay the wife's attorney fees. The court concluded that $40,000 was a "reasonable and necessary" amount for the wife's attorney fees. The court then ordered the husband to pay $30,000 of the wife's attorney fees, and gave him a $10,000 credit for money he had "previously given [the wife] for attorney fees." The court further ordered that the husband would not be required to pay the attorney fees until June 1990. The court stated that "[a]t that time [the husband] shall increase the maintenance payment in amount sufficient to pay the $30,000 over a three-year period."

The court of appeals affirmed in part, reversed in part, and remanded the case to the district court with directions. The court of appeals affirmed the district court's maintenance award and its marital property disposition, including the district court's valuation of the partnership interest and treatment of the trust as marital property. The court of appeals also affirmed the district court's ruling that the husband pay the interest on the money borrowed against the life insurance trust. In affirming the district court's decision, the court of appeals stated that "[a]ny claim which the wife as a trustee of the trust may have, in contrast to claims she has as spouse, are not the subject matter of this action for dissolution." Regarding attorney fees, the court of appeals affirmed the district court's order requiring payment of attorney's fees as increased maintenance. However, the court of appeals reversed the district court's award of a $10,000 credit to the husband and ordered the husband to pay the full $40,000 amount of wife's attorney fees. The court of appeals reversed the district court's ruling regarding payment of the son's college expenses. The court of appeals held that a child who is twenty-one years old and capable of self-support, but voluntarily chooses to attend college, is not entitled to receive child support payments.

We granted certiorari to consider the wife's and husband's allegations of error in the court of appeals opinion.

II.

Both the wife and the husband assert error concerning the award of attorney fees.

A.

The wife argues that the court of appeals erred in affirming the district court's order that the husband pay the wife's attorney fees through increased maintenance payments over a three-year period. We agree.

The Uniform Dissolution of Marriage Act, §§ 14-10-101 to -133, 6B C.R.S. (1987) (the Act), provides separate sections that govern the different elements of a dissolution order. Section 14-10-113, 6B C.R.S. (1987), governs the disposition of property. Section 14-10-114, 6B C.R.S. (1987), governs the award of maintenance. Section 14-10-115, 6B C.R.S. (1987), governs the payment of child support. Section 14-10-119, 6B C.R.S. (1987), governs the award of attorney fees.

The Act requires a district court to make separate property, maintenance, and attorney fees orders based on separate considerations. The court must first divide the marital property. § 14-10-113; In re Marriage of Jones, 627 P.2d 248, 252 (Colo.1981). Once the property division is made, the court then decides whether maintenance is necessary to provide for the reasonable needs of one of the parties. § 14-10-114; Jones, 627 P.2d at 253. The award of maintenance is based on both the property awarded and on the earning capacity of the party seeking maintenance. Id. at 252. Section 14-10-119 provides that attorney fees may be awarded based on the "financial resources" of the parties. ⁵ Each of these awards--property, maintenance, and attorney fees--can be separately appealed. See Jones, 627 P.2d at 253.

In the present case, the attorney...