Martinez v. Gutierrez-Martinez, 02CA0559.

• Citation: 77 P.3d 827
• Decision Date: 10 April 2003
• Docket Number: No. 02CA0559.,02CA0559.
• Parties: In re the Marriage of Sammy J. MARTINEZ, Appellant, v. Gloria N. GUTIERREZ-MARTINEZ, Appellee.
• Court: Court of Appeals of Colorado

77 P.3d 827

In re the Marriage of Sammy J. MARTINEZ, Appellant, v. Gloria N. GUTIERREZ-MARTINEZ, Appellee.

No. 02CA0559.

Colorado Court of Appeals, Div. V.

April 10, 2003.

Certiorari Denied October 6, 2003.

Brian DeBauche & Associates, L.L.C., Brian DeBauche, Denver, Colorado, for Appellant.

Scheideler & Associates, P.C., Joseph Scheideler, Chris Matz, Dwight H. Mann, Denver, Colorado, for Appellee.

Opinion by Judge NIETO.

In this dissolution of marriage proceeding between Sammy J. Martinez (husband) and Gloria N. Gutierrez-Martinez (wife), husband appeals from the property division entered as part of the trial court's permanent orders. We affirm in part, reverse in part, and remand for further proceedings.

The parties married in 1992. They had no children together and the primary issues concerned the valuation and division of the marital estate. The decree dissolving their marriage was entered by the court on May 3, 2001.

I.

Husband first contends that the trial court erred in failing to include certain real property as a marital asset. We disagree.

The trial court found, with record support, that this property was previously owned by wife's sister and was her residence. The sister began having difficulties and was in jeopardy of losing her house to foreclosure. The court further found that, because the sister was unable to refinance her mortgage, she transferred title to the house to wife, who then refinanced it on her sister's behalf. The evidence was undisputed that the sister continued to reside in the property and remained solely responsible for its upkeep, maintenance costs, insurance premiums, and mortgage payments. Wife testified that her sister owned the house, and wife disclaimed any beneficial ownership of the house. Nothing in the record suggests that wife received any beneficial interest from the title transfer. The court held that the sister was the owner of the property notwithstanding that title was in wife's name.

The presumption that property acquired during the marriage is marital property may be overcome by showing that the property was obtained by one of the methods listed in § 14-10-113(2), C.R.S.2002. However, the form in which title is held is not dispositive in determining whether property is marital. In re Marriage of Stumpf, 932 P.2d 845 (Colo.App.1996).

The trial court, in effect, held that a resulting trust arose when the sister conveyed title to wife. "A resulting trust is a trust implied by law when the circumstances surrounding the transfer of property raise the inference that the parties intended to create a trust." Mancuso v. United Bank, 818 P.2d 732, 738-39 (Colo.1991). The record supports this conclusion.

It is fundamental that a trustee holds trust property separate from his or her personal estate, and the trust property is not subject to claims from the trustee's personal creditors. See Lagae v. Lackner, 996 P.2d 1281, 1284 (Colo.2000)("A fundamental tenet of trust law is the protection of the trust estate from a trustee's personal creditors."); Mancuso v. United Bank, supra (trust funds on deposit with bank may not be applied to trustee's personal debt).

Accordingly, we conclude that where a spouse takes title to property under circumstance that give rise to a resulting trust, that property has not been "acquired" for purposes of § 14-10-113(3), and therefore, the trust property is not part of the marital estate. Thus, the trial court correctly excluded the sister's house as an asset of the marital estate.

Also, because the property was held in trust by wife, it constituted neither an economic circumstance to be weighed in the overall property division nor evidence that husband's economic resources allowed wife to live beyond her ordinary means. Similarly, we conclude that it was unnecessary for the trial court to consider either the value of the car owned by wife's sister under a similar arrangement or the value of the car that wife and her former husband gave to wife's daughter.

II.

Husband next contends that the trial court erred by failing to determine whether two houses owned separately by the parties prior to their marriage had appreciated in value and by failing to consider that appreciation in value when dividing the marital estate. We agree.

The first property (Colgate residence) was owned by husband prior to the marriage and was used as the marital residence. Husband continued to make the mortgage payments out of his salary. At the time of the permanent orders hearing, the outstanding balance for the mortgage loan on that property was $32,000.

The second property (W. 32nd residence) was owned by wife prior to the marriage. The parties refinanced that home in 1996 and added husband to the title. They used funds obtained from the refinance to make repairs on the property. Despite the joint ownership, wife continued to make the mortgage payments for that property from her own earnings. At the time of the permanent orders hearing, the balance on the mortgage loan for the W. 32nd residence was approximately $36,000.

The trial court found that the evidence was insufficient to determine the increase in value of the properties or the portion of increased value that was marital property. The court found that each property was the separate property of the party who owned it prior to the marriage and then awarded the separate property and the marital equity in that property, if any, to that party.

Generally, property acquired by either spouse during the marriage is presumed to be marital property. Section 14-10-113(3), C.R.S.2002; In re Marriage of Bartolo, 971 P.2d 699 (Colo.App.1998). Marital property also includes any appreciation in the value of separate property or any income produced by separate assets during the marriage. Section 14-10-113(4), C.R.S.2002; In re Marriage of Seewald, 22 P.3d 580 (Colo.App. 2001).

A property division in permanent orders that omits property without any explanation cannot stand. In re Marriage of Sim, 939 P.2d 504 (Colo.App.1997).

Here, the record contained evidence of the premarital value of each property. Husband submitted a 1992 property tax statement for the Colgate property that indicated a value at that time of $109,100. Husband also submitted a copy of the 1990 sale contract for the W. 32nd residence, which showed that it had been purchased for $30,000. We recognize that this evidence may not be the best source for determining the premarital property values, and the quality of the evidence may affect the weight given to it. However, when we consider this evidence in combination with the parties' evidence that valued each property in excess of $200,000, we are satisfied that the trial court had a sufficient basis to determine the amount of marital appreciation realized in both properties.

The court awarded each party his or her premarital residence, and we do not find such an allocation to be improper. However, because the trial court did not take the properties' appreciation in value into consideration in dividing the martial estate, this matter must be remanded for a new hearing. The court must determine the properties' appreciation in value and the part of the increase that is marital property and then redetermine the property division taking those values into consideration. See In re Marriage of Wells, 850 P.2d 694 (Colo.1993)(where property division is remanded for rehearing, the character and value of property are established as of the date of decree of dissolution, but in dividing the marital estate, the court must consider the economic circumstances of the parties at the time of rehearing).

III.

Husband contends that the trial court erred in its valuation of his VALIC annuity. Wife concedes this issue and agrees that the trial court must reconsider its...