Olivieri v. Olivieri, 99-253-Appeal.

• Decision Date: 01 November 2000
• Docket Number: No. 99-253-Appeal.,99-253-Appeal.
• Parties: Mario OLIVIERI, Jr. v. Sherrie L. OLIVIERI.
• Court: Rhode Island Supreme Court

760 A.2d 1246

Mario OLIVIERI, Jr. v. Sherrie L. OLIVIERI.

No. 99-253-Appeal.

Supreme Court of Rhode Island.

November 1, 2000.

Present: WEISBERGER, C.J., LEDERBERG, BOURCIER, FLANDERS, and GOLDBERG, JJ.

Colleen Crudele, Steven N. Ortoleva, Warwick, for plaintiff.

John D. Lynch, Warwick, for defendant.

OPINION

PER CURIAM.

This case came before the Court for oral argument on September 27, 2000, pursuant to an order directing both parties to appear in order to show cause why the issues raised by this appeal should not be summarily decided. After hearing the arguments of counsel for Mario Olivieri, Jr. and Sherrie L. Olivieri and examining the memoranda filed by the parties, we are of the opinion that cause has not been shown and that the issues raised by this appeal should be decided at this time.

This is an appeal by the wife, Sherrie L. Olivieri (defendant), from a Family Court decision pending entry of final judgment that awarded an absolute divorce to the husband and wife on the grounds that irreconcilable differences caused the irremediable breakdown of the marriage. The defendant contends that the general magistrate committed reversible error by (1) including within the marital estate, $160,000 worth of bonds held in defendant's name, (2) awarding to defendant fifty percent of the marital estate, including the marital domicile, and failing to take into consideration all the factors set forth in G.L.1956 § 15-5-16.1, and (3) ordering the parties to maintain any insurance policies on behalf of the children until they reach age twenty-one. The defendant also argues that the magistrate was biased against her in that he prematurely judged the case by making certain statements about its outcome and, as a result, defendant is entitled to a new trial before an impartial judge. We affirm the decision of the magistrate, but modify that portion of the decision relating to the insurance policies on behalf of the minor children.

The facts insofar as pertinent to this appeal are as follows. The parties were married on April 12, 1987. Two children were born of the marriage, John Charles in 1988 and Jacklyn Leigh in 1995. The record indicates that the parties had a tumultuous relationship, with most of their problems relating to the behavioral problems of the oldest child, John Charles, who is currently in the custody of the Department of Children, Youth and Families (DCYF). The defendant is employed by the State of Rhode Island Department of Transportation (department) as a senior accountant. She has been with the department for twenty years and earns approximately $35,000 per year.

The husband, Mario Olivieri, Jr. (plaintiff), had a sporadic work history and changed jobs frequently, which put additional stress on the marital relationship. There were periods of unemployment. However, plaintiff eventually passed the Certified Public Accountant (CPA) exam and worked as an accountant from approximately 1992 until 1996. He has since allowed his license to lapse, and is employed as a revenue officer by the State of Rhode Island Division of Taxation, earning approximately $29,500 per year. Despite the parties' relatively modest incomes, they were successful in acquiring substantial assets composed mostly of stocks and bonds and some bank certificates of deposit.

In an oral decision rendered on October 21, 1998, the magistrate granted both parties' petitions for an absolute divorce on the grounds of irreconcilable differences. The magistrate found that neither party was at fault for the breakdown of the marriage and distributed the marital estate equally between the parties. He also ordered the parties to maintain their health coverage for each other and for the children and to maintain any life insurance policies then in effect for the benefit of the children until age twenty-one.

I

In her appeal, defendant first challenges the magistrate's determination that the following bonds were marital assets and subject to equitable distribution under § 15-5-16.1: (1) East Providence bond ($100,000), (2) Burrillville bond ($10,000), (3) Kent County Water Authority bond ($15,000), (4) North Providence bond ($10,000), (5) Rhode Island Depositors Economic bond ($15,000), and (6) City of Warwick bond ($10,000). She next contends that the magistrate failed to consider all the statutory factors enumerated in § 15-5-16.1 when distributing the marital estate. We shall address both contentions seriatim.

A

It is well-established that the equitable distribution of property is a three-step process. See Lancellotti v. Lancellotti, 481 A.2d 7, 10 (R.I.1984)

. The first step is to "determine which assets are `marital property' and which are `non-marital property.'" Id. Next, the trial justice must take into account the factors set forth in § 15-5-16.1 and, finally, he or she must distribute the estate. See Lancellotti, 481 A.2d at 10.

In conducting the first part of the analysis, the magistrate first itemized all the parties' assets. The magistrate excluded from the marital assets a Dreyfus Class A Growth Account and a Fleet retirement account; only the interest accruing on those accounts was deemed marital in nature. Other assets, including a Rhode Island Hospital Trust Golden Passbook Account, a Putnam investmentaccount in defendant's name, and fifty-one shares of Eaton Vance Corporation stock, were stipulated by the parties to be non-marital and were excluded from the distribution of the estate. All other assets, including the bonds in question and the marital domicile, were deemed marital property. The magistrate also determined that the automobiles were marital property and awarded each party his or her respective automobile.

The defendant disputes only the inclusion of the bonds. She argues that the purchasing of the bonds in her name, specifically the East Providence bond, eradicated any intent on her part to make the funds marital property. We disagree.

In Quinn v. Quinn, 512 A.2d 848, 852 (R.I.1986), we stated that the "transfer of nonmarital assets from one spouse to both spouses jointly, in the absence of clear and convincing evidence to the contrary, will be understood as evincing an intention to transfer the property to the marital estate." This doctrine, known as transmutation, is consistent with the recognition that marriage is a partnership. See id. The provisions in § 15-5-16.1 are designed to achieve that end. See Quinn, 512 A.2d. at 852

. In Quinn, the husband placed the proceeds from the sale of his inherited property, first, into a jointly held certificate of deposit and, then, ultimately, into a joint account. See id. at 852-53. We held that this action evinced an apparent consent to the wife's demand for an ownership interest in the funds. See id. at 853. The husband then used a portion of those funds to acquire a piece of realty, which he held jointly with his wife. See id. We said that "[s]uch an act [was] consistent with, and indicative of, an intent that the parcel become part of the marital estate." Id.

In the case at bar, plaintiff testified that both he and his wife had brought some cash into the marriage and that they held a joint checking account from which certain bonds had been purchased. The plaintiff testified that at one point during the marriage he became aware that the bond account andthe statements from the Fleet One account, which covered the bond account, appeared in defendant's name only. The plaintiff requested that his name be put on both accounts and defendant agreed. Furthermore, defendant admitted in her testimony that the bonds, specifically the $100,000 bond, were purchased from the Fleet One account that she held jointly with her husband. These acts indicate an intent on the part of defendant to make the bonds part of the marital estate.

The defendant also argues that the bonds should be excluded from the marital estate because the proceeds used to purchase the bonds were traceable to her premarital investments. This included the sale of certain securities held by defendant before the marriage. This argument is equally without merit. In Quinn, the husband challenged the classification of certain securities as marital property on the grounds that certain inherited assets served as the source of money for those investments and were not part of the marital estate. See Quinn, 512 A.2d at 853

. We held that when those inherited assets were commingled with assets that were not inherited, and those assets were "exchanged for other property, the newly acquired asset [was] marital property." See id. (citing Anderson v. Anderson, 584 S.W.2d 613 (Mo.Ct.App.1979)).

The magistrate acknowledged that even though most of the money in the joint account may have been premarital in nature, interest accrued on that money, thereby creating a commingling of funds. The bonds were then purchased with those funds. Following our analysis in Quinn, we conclude that the magistrate correctly determined that the bonds were marital in nature.

B

The defendant next challenges the distribution of the marital estate. It is her contention that she contributed more financially to the marriage than did plaintiff and that, while plaintiff studied for the CPA exam, she primarily supported the family. She contends that the magistrate did not take intoconsideration all the factors enumerated in § 15-5-16.1, particularly her contributions and support while plaintiff studied for his CPA exam and worked at a reduced salary. As a result of these endeavors, defendant argues, she was entitled to more than 50 percent of the marital estate. In addition, defendant asserts that it was an abuse of discretion to award 50 percent of the marital domicile to plaintiff because the source of that property was a gift to the parties by defendant's parents, although she does not dispute that the domicile is marital property.

Section 15-5-16.1, our equitable-distribution statute, provides in pertinent part, as follows:

"Assignment of...