Marriage of Olivares, Matter of, 28758-3-I

CourtCourt of Appeals of Washington
Citation69 Wn.App. 324,848 P.2d 1281
Decision Date12 April 1993
Docket NumberNo. 28758-3-I,28758-3-I
PartiesIn the Matter of the MARRIAGE OF Stephen R. OLIVARES, Appellant, and Theresa R. Olivares, Respondent. Division 1

Page 324

69 Wn.App. 324
848 P.2d 1281
In the Matter of the MARRIAGE OF Stephen R. OLIVARES, Appellant,
Theresa R. Olivares, Respondent.
No. 28758-3-I.
Court of Appeals of Washington,
Division 1.
April 12, 1993.

[848 P.2d 1282]

Page 325

Philip A. Talmadge, Celeste A. McDonell, and Talmadge & Cutler, P.S., Seattle; [848 P.2d 1283] Thomas D. Bigsby and Bigsby & Willson, Everett, for appellant.

Jerome L. Jager, Donna McNamara, Seattle, for respondent.


This appeal arises out of the dissolution of the marriage of appellant Stephen R. Olivares and respondent

Page 326

Theresa R. Olivares. Stephen appeals the trial court's characterization and distribution of a classic white Ford Mustang automobile and a promissory note/deed of trust. We affirm.

Stephen and Theresa Olivares met when Theresa responded to a newspaper ad placed by Stephen in the Little Nickel Want Ads. Theresa was in her late 40's and Stephen was in his early 50's. When the parties met, Theresa's second divorce was not yet final. The couple dated for about 6 months and married on December 22, 1988, in the state of Arizona. This was the third marriage for each party and both parties have adult children from prior marriages.

At the time of the marriage, Stephen, who is a carpenter by trade, had substantial property. His assets included a rental house in Arlington, Washington, a house under construction in Arlington and a car collection. Theresa's assets at the time of marriage were limited to an old car, a $1000 certificate of deposit, and $3000 in cash.

From the time of their marriage in December 1988, until their separation on August 1, 1990, neither party was employed. The majority of the marriage was spent traveling outside of the United States on an extended honeymoon and on vacations to the southwestern United States, Hawaii and Mexico, paid for by Stephen's parents. When the couple was not traveling they worked together on the Arlington house, which was substantially completed during the marriage.

During their marriage, the Olivares lived off the proceeds of the sale of Stephen's rental house and on gifts and loans from his parents. The couple also borrowed money from Theresa's children.

In early 1989, in an attempt to simplify their affairs, Stephen's elderly parents transferred three trust deeds, one to each of their sons and their sons' wives. Stephen and Theresa were assigned the proceeds of a promissory note/deed of trust worth about $235,000. The note at issue here pays $2000 per month for 27 years.

Page 327

The assignment was accomplished through an escrow company in California, without the assistance of an attorney. Initially, the parents were making the assignment to Stephen. However, the escrow agent added Theresa's name to the transfer documents, explaining to Stephen and his parents that it was "required by law" to include both the husband and wife as joint tenants. 1

Mildred Olivares, Stephen's mother, testified that the purpose of the gifts was to give her three sons and their children part of their inheritance. She also stated, however, that she knew that Theresa's name was included on the assignment and that Theresa would benefit from the gift, as it was expected that Theresa and Stephen would live on the proceeds. Mildred also indicated that she had not considered that her son and Theresa might not stay married and that she had never told Theresa that the gift to her was conditioned upon her and Stephen remaining married.

The payments were set up to go into an escrow account, with both Stephen's and Theresa's social security numbers on the account. Prior to the couple's marital difficulties, no one ever indicated to Theresa that the assignment of the contract was not for her benefit. Theresa testified that Stephen's parents were happy with her and happy that Stephen was finally breaking out of his depression. She testified that she was told she was to be included in the gift and that she told Stephen's parents she was very appreciative and that it was a wonderful present.

During the marriage the Olivares sold Theresa's old car, a 1983 Dodge. Stephen purchased a classic white 1968 Ford Mustang[848 P.2d 1284] with a loan based on his separate credit and placed the title in Theresa's name. Stephen contends that he placed the car's title in his wife's name so that he could sell it later that year. He testified that he had already sold as many vehicles that year as he was allowed by law without obtaining a dealer's license. Theresa asserted that the car's title was in her name because it was a gift to her.

Page 328

The trial court found the marriage to be irretrievably broken and granted dissolution of the marriage. The trial court found the 1968 classic white Ford Mustang to be a gift from Stephen to his wife, characterized it as community property and awarded it to Theresa. 2 The court found that the note/deed of trust was a gift to both Stephen and Theresa, characterized this gift as community property, and awarded each spouse a one-half interest therein. The distribution of the remaining property is not in dispute.


Stephen contends that the trial court erred in holding that (1) the promissory note/deed of trust was a gift to both Stephen and Theresa and (2) the white 1968 Ford Mustang was community property. In addition, he contends that the trial court abused its discretion under RCW 26.09.080 in allocating the property because the marriage was of very short duration and the property allocated was properly characterized as his separate property.

A. Applicable Legal Standards

The trial court has broad discretion with respect to property division in a dissolution action and will be reversed only upon a showing of a manifest abuse of discretion. In re Marriage of Landry, 103 Wash.2d 807, 809, 699 P.2d 214 (1985); In re Marriage of Kraft, 61 Wash.App. 45, 50, 808 P.2d 1176 (1991), aff'd, 119 Wash.2d 438, 832 P.2d 871 (1992); In re Marriage of Tower, 55 Wash.App. 697, 700, 780 P.2d 863 (1989), review denied, 114 Wash.2d 1002, 788 P.2d 1077 (1990). A manifest abuse of discretion is present if the court's discretion is exercised on untenable grounds, Tower, 55 Wash.App. at 700, 780 P.2d 863, Kraft, 61 Wash.App. at 50, 808 P.2d 1176.

In a dissolution action, all property, both community and separate, is before the trial court for distribution. Friedlander v. Friedlander, 80 Wash.2d 293, 305, 494 P.2d 208

Page 329

(1972), and the court must dispose of all of the parties' property which is brought before it. In re Marriage of Soriano, 31 Wash.App. 432, 437, 643 P.2d 450 (1982).

RCW 26.09.080 sets forth relevant factors to be considered by the court, including but not limited to:

(1) The nature and extent of community property;

(2) The nature and extent of separate property;

(3) The duration of the marriage; and

(4) The economic circumstances of each spouse at the time the division of property is to become effective, including the desirability of awarding the family home or the right to live therein for reasonable periods to a spouse with whom the children reside the majority of the time.

In considering the factors set forth in RCW 26.09.080 the courts have established a series of principles. To begin, the trial court has the duty to characterize the property as either community or separate. Blood v. Blood, 69 Wash.2d 680, 682, 419 P.2d 1006 (1966); Baker v. Baker, 80 Wash.2d 736, 745, 498 P.2d 315 (1972); In re Marriage of Hadley, 88 Wash.2d 649, 656, 565 P.2d 790 (1977); In re Marriage of DeHollander, 53 Wash.App. 695, 700, 770 P.2d 638 (1989). To accomplish this the court may consider the source of the property and the date it was acquired. DeRuwe v. DeRuwe, 72 Wash.2d 404, 408, 433 P.2d 209 (1967); Glorfield v. Glorfield, 27 Wash.App. 358, [848 P.2d 1285] 361, 617 P.2d 1051, review denied, 94 Wash.2d 1025 (1980).

However, the status of the property as community or separate is not controlling. Worthington v. Worthington, 73 Wash.2d 759, 768, 440 P.2d 478 (1968). Rather, the trial court must ensure that the final division of the property is " 'fair, just and equitable under all the circumstances.' " In re Marriage of Hadley, 88 Wash.2d at 656, 565 P.2d 790 (quoting Baker, 80 Wash.2d at 745-46, 498 P.2d 315). See also Worthington, 73 Wash.2d at 768, 440 P.2d 478. The court may consider the health and ages of the parties, their prospects for future earnings, their education and employment histories, their necessities and financial abilities, their foreseeable future acquisitions and obligations, and whether the property to be divided should be attributed to the inheritance or efforts of one or both of the spouses. Friedlander, 80

Page 330

Wash.2d at 305, 494 P.2d 208. See also In re Marriage of Kittleson, 21 Wash.App. 344, 352, 585 P.2d 167 (1978), review denied, 92 Wash.2d 1009 (1979); and Glorfield, 27 Wash.App. at 361, 617 P.2d 1051. Only in unusual circumstances would the trial court award the separate property of one spouse to the other. Merkel v. Merkel, 39 Wash.2d 102, 115, 234 P.2d 857 (1951).

Failure to properly characterize the property may be reversible error. Blood, 69 Wash.2d at 682, 419 P.2d 1006. However, mischaracterization of property is not grounds for setting aside a trial court's allocation of liabilities and assets, so long as the distribution is fair and equitable. In re Marriage of Brady, 50 Wash.App. 728, 731, 750 P.2d 654 (1988); Worthington, 73 Wash.2d at 768-69, 440 P.2d 478; Brossman v. Brossman, 32 Wash.App. 851, 854, 650 P.2d 246 (1982), review denied, 98 Wash.2d 1017 (1983). Where there is mischaracterization, the trial court will be affirmed unless the reasoning of the court indicates (1) that the property division was significantly influenced by characterization and (2)...

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