Proctor and Proctor

• Decision Date: 28 December 2005
• Docket Number: 15-02-23725; A123045.
• Citation: 203 Or. App. 499,125 P.3d 801
• Court: Oregon Supreme Court
• Parties: In the Matter of the Marriage of John M. PROCTOR, Respondent, and Joyce A. Smith Proctor, Appellant. Joyce A. Smith Proctor, Appellant, v. John Kendall Mavis, Respondent, and Chris Popov, Sandra Meyers, and William Martell Meyers, Third-Party Respondents below.

125 P.3d 801

203 Or. App. 499

In the Matter of the Marriage of John M. PROCTOR, Respondent, and Joyce A. Smith Proctor, Appellant Joyce A. Smith Proctor, Appellant, v. John Kendall Mavis, Respondent, and Chris Popov, Sandra Meyers, and William Martell Meyers, Third-Party Respondents below.

15-02-23725; A123045.

Court of Appeals of Oregon.

Argued and Submitted October 3, 2005.

Decided December 28, 2005.

Mark Johnson, Portland, argued the cause for appellant. With him on the briefs was Johnson Renshaw & Lechman-Su PC.

Ridgway K. Foley, Jr., Portland, argued the cause for respondent John M. Proctor. With him on the brief was Greene & Markley, P.C.

Russell Lipetzky argued the cause and filed the brief for respondent John Kendall Mavis.

Before HASELTON, Presiding Judge, and ARMSTRONG and ROSENBLUM,^* Judges.

ARMSTRONG, J.

Wife appeals from a judgment of dissolution, assigning error to the trial court's division of property, specifically its award of certain marital assets to husband; its allowance of a "reimbursement" to husband under California law for contributions made to the acquisition of marital assets; its failure to award attorney fees to wife; and its award of attorney fees to respondent Mavis. We conclude that the trial court erred with respect to the property division and otherwise affirm.

The parties were married in California in 1991. They came into the marriage with separate assets, and had a premarital agreement describing the treatment of those assets.¹ The premarital agreement included a "choice-of-laws" provision: "This agreement is made and entered into between the parties in California and shall be interpreted as construed in accordance with the laws of the State of California."

The trial court entered a dissolution judgment in November 2003. It divided the marital property as proposed by husband. The trial court explained that the award of property to husband included "reimbursement" to husband for his contributions to the acquisition of marital assets, in the amount of $453,845.63. Reimbursements are a component of property divisions under California dissolution law. California Family Code section 2640(b) provides, in part:

"In the division of the community estate under this division, unless a party has made a written waiver of the right to reimbursement or has signed a writing that has the effect of a waiver, the party shall be reimbursed for the party's contributions to the acquisition of the property to the extent the party traces the contributions to a separate property source."

The trial court apparently concluded that the parties' premarital agreement, specifically, the choice-of-laws provision, required that the parties' marital assets be divided pursuant to California law.

In her first assignment of error, wife asserts that the trial court erred in treating the premarital agreement's choice-of-laws provision as requiring application of California substantive law to the division of property.² Rather, she contends, the provision merely governs the construction of the agreement, and Oregon law applies to the division of property. We agree. Under the Uniform Premarital Agreement Act (UPAA), ORS 108.700 to 108.740, which has also been enacted in California, Cal Fam Code §§ 1601 to 1612, the parties to a premarital agreement may contract with respect to, among other terms, "the choice of law governing the construction of the agreement." ORS 108.710(1)(g)³; Cal Fam Code § 1612(a)(6). The choice-of-laws provision in the parties' premarital agreement is just that: an agreement that California law will govern the construction of the agreement. The provision does not relate to the law applicable to the division of property on dissolution. Furthermore, there is no other provision in the premarital agreement that can be understood to require the application of California law to the division of property. Accordingly, we conclude that, in this Oregon dissolution case, Oregon law applies to the division of property and the trial court erred in applying California law, including California Family Code section 2640(b). See Day and Day, 137 Or.App. 264, 269, 904 P.2d 171 (1995), rev. den., 322 Or. 598, 910 P.2d 1110 (1996).

In her second assignment, wife contends that the trial court erred in awarding to husband, as his own separate property, five specific assets that she asserts are marital assets: (1) $100,000 received by husband as repayment of a "loan" made to third-party respondent Popov, which are the proceeds of Popov's sale of Lot 15, adjacent to the parties' marital residence, to third-party respondent Mavis; (2) a Starduster Bi-plane; (3) a 1994 Cadillac; (4) the proceeds of the sale of a 2000 Ford truck; and (5) a contract receivable interest on property at Kimmel Lane. It is undisputed that the assets were acquired during the marriage. Accordingly, there is a presumption that the parties contributed equally to their acquisition. ORS 107.105(1)(f); Kunze and Kunze, 337 Or. 122, 133, 92 P.3d 100 (2004). The presumption can be overcome by evidence that the other spouse's efforts during the marriage did not contribute equally to the acquisition of the disputed marital asset. Id.

In Kunze, the Supreme Court said that, in assessing whether a party has satisfied its burden to overcome the presumption of equal contribution, ORS 107.105(1)(f) requires the court to consider both economic and noneconomic spousal contributions. If a party ultimately rebuts the presumption that the other spouse contributed equally to a disputed marital asset, then the court decides how to distribute that marital asset without regard to any presumption and, instead, considers only what is "just and proper in all the circumstances," including the proven contributions of the parties to the asset. Id. at 135, 92 P.3d 100. However, when a party has proved that a marital asset was acquired free of any contributions from the other spouse, absent other considerations, it is "just and proper" to award that marital asset separately to the party who has overcome the statutory presumption. Id.

The trial court did not specifically identify which properties it considered to be marital assets, which properties it awarded to husband as his own separate assets, and which properties it considered to be part of the reimbursement to husband for his contribution to the acquisition of marital assets. The trial court did adopt the facts and analysis set forth in husband's trial memorandum, as well as husband's suggested division of property. It is not possible to tell from that document, however, whether the five specific assets at issue on appeal were considered by the trial court to be the separate property of husband or were awarded to husband as reimbursement for his contribution to the acquisition of marital assets. We have reviewed the record de novo, and have engaged in the tracing of assets necessitated by the parties' divergent contentions. It would not be helpful to the bench, bar, or public to set forth the details of our analysis with respect to each asset. Suffice it to say that husband has not overcome the presumption of equal contribution with respect to each of the assets by showing that the assets were acquired free of any contribution from wife. Accordingly, on remand, the trial court should treat the five assets as assets to which the parties contributed equally to their acquisition.

In her second amended response and third-party petition, wife requested attorney fees. In a letter opinion, the trial court said that "[n]either party is awarded attorney fees or cost against the other." In her third assignment of error, wife contends that the trial court erred in denying her request for attorney fees. Specifically, she argues that the trial court should not have denied the request for attorney fees without following the procedures set forth in ORCP 68.

Husband argues that wife did not preserve any objection to the failure to follow the procedures of ORCP 68, because she did not raise that question in the trial court. We agree. Under ORCP 68, if a party wishes to make a claim for attorney fees pursuant to ORCP 68 C(4)(a), the party may file a statement, ORCP 68 C(4)(a)(I), and is entitled to the court's consideration of the request. O'Neal and O'Neal, 158 Or.App. 431, 974 P.2d 785 (1999). A party objecting to the statement must be allowed 14 days to file an objection. ORCP 68 C(4)(b). Young and Young, 172 Or.App. 108, 111, 17 P.3d 577 (2001). The failure of the trial court to follow those procedures is error. Id. However, any claim of error must be preserved to be considered on appeal. See Weatherspoon v. Allstate Ins. Co., 193 Or.App. 330, 337, 89 P.3d 1277, rev. den., 337 Or. 327, 99 P.3d 291 (2004); see also Northwest Country Place v. NCS Healthcare of Oregon, 201 Or.App. 448, 459, 119 P.3d 272 (2005); McDougal v. Griffith, 156 Or.App. 83, 87, 964 P.2d 1135 (1998), rev. den., 328 Or. 330, 987 P.2d 508 (1999).

We reject wife's contention that, because the trial court had previously ruled in its letter opinion that each party would bear its own costs, the filing of a statement requesting fees under ORCP 68 would have been futile. Despite the trial court's letter opinion, there were at least two ways in which wife could have brought to the trial court's attention the requirements of ORCP 68 C(4) if she wished to pursue her request for attorney fees: She could have objected to the trial court's ruling in its letter opinion, or she could have filed a statement requesting fees under ORCP 68 C(4)(a). We conclude that wife failed to preserve error by bringing to the court's attention her desire to follow the procedures set forth in ORCP 68 C.

Wife contends that we should nonetheless exercise our discretion to review the assignment as plain error. ORAP 5.45(1). We decline to do so, in part because we are not convinced that the trial court's failure to follow the procedures under ORCP 68 C was plain error in...