Sewall v. Saritvanich

• Decision Date: 12 March 1999
• Citation: 726 A.2d 224,1999 ME 46
• Parties: David T. SEWALL v. Pimonpan SARITVANICH.
• Court: Maine Supreme Court

726 A.2d 224

1999 ME 46

David T. SEWALL v.Pimonpan SARITVANICH.

Supreme Judicial Court of Maine.

Submitted on Briefs January 25, 1999.

Decided March 12, 1999.

Peter A. Anderson, Bangor, for plaintiff.

Martha J. Harris, John D. Bunker, Paine, Lynch & Harris, P.A., Bangor, for defendant.

Before WATHEN, C.J., and CLIFFORD, DANA, SAUFLEY, ALEXANDER, and CALKINS, JJ.

DANA, J.

[¶ 1]Pimonpan Saritvanich appeals from a judgment entered in the Superior Court(Penobscot County, Marsano, J.) affirming the divorce judgment of the District Court(Bangor, Russell, J.).On appeal, Saritvanich argues, inter alia, that the District Court erred when it failed to allocate to the marital estate the appreciation in the value of nonmarital property resulting from the contribution of marital funds.We agree and vacate the judgment.

[¶ 2] Sewall and Saritvanich were married in December 1993, and Sewall filed for divorce two years later.The District Court held a hearing in December 1996 and entered the divorce judgment in April 1997.

[¶ 3] At the time of the hearing, Sewall was forty-one years old and the president of the James W. Sewall Company(Sewall Company), a family business in existence for over one-hundred years.Sewall's father had voting control, but Sewall owned all the common stock.He earned in excess of $100,000 a year and has a 401K plan, an IRA, and life insurance.At the time of his marriage, he owned property in Orono, Castine, and Brooklin.

[¶ 4] Saritvanich is in her early forties.Before she married Sewall, she owned a convenience store in California.She sold the store before her marriage to Sewall, and she receives monthly payments of $382.26 on a note used to finance the sale.¹At the time of the marriage, Saritvanich owned a home in Old Town.She was not employed during her marriage to Sewall, but, at the time of the hearing, she had plans to start an import-export business.Sewall's insurer provided her health insurance during their marriage, but this coverage ended with the divorce.

[¶ 5] After a hearing, the court entered the divorce judgment.The trial court valued the marital estate at $597,000, consisting of the following: $550,000 appreciation in the common stock of the Sewall Company, $45,000 appreciation in Sewall's 401K plan, and a $2,000 appreciation in Sewall's life insurance plan.The court ordered Sewall to pay Saritvanich $75,000 in three annual installments, with 15% interest from the date of judgment, and to pay $6,577.82 for Saritvanich's attorney fees.In addition, the court ordered Sewall to pay Saritvanich $20,000 to reduce a mortgage that Sewall had co-signed during the marriage on Saritvanich's house in Old Town.

[¶ 6]The court valued Sewall's nonmarital estate at approximately $5,664,200, consisting of the following: the Orono property valued at $184,200,² the Castine property valued at $250,000, the common stock in the Sewall Company valued at $5,100,000, a 401K plan valued at $120,000, an IRA valued at $10,000, and an insurance plan valued at $10,000.The court found that Saritvanich's nonmarital estate included the equity of $34,000 in her house in Old Town, rights pursuant to the note acquired in the sale of the California convenience store, and an unknown number of shares of the capital stock of McDonald's Corporation.

[¶ 7] After the entry of the divorce judgment, Saritvanich filed a timely motion for findings of fact and conclusions of law pursuant to M.R.Civ.P. 52.The court denied the motion.Saritvanich appealed to the Superior Court which affirmed, and then Saritvanich appealed to this Court.

I.MOTION FOR FINDINGS OF FACT AND CONCLUSIONS OF LAW

[¶ 8] Saritvanich argues that the court abused its discretion when it denied her motion for findings of fact and conclusions of law pursuant to M.R.Civ.P. 52.We disagree.

[¶ 9]"The divorce court has a duty to make findings sufficient to inform the parties of the reasoning underlying its conclusions and to provide for effective appellate review."Peters v. Peters,1997 ME 134, ¶ 10, 697 A.2d 1254, 1258(quotingBayley v. Bayley,602 A.2d 1152, 1153-54(Me.1992)).Pursuant to M.R.Civ.P. 52(b), "[t]he court may, upon motion of a party ... after notice of findings made by the court, amend its findings or make additional findings and, if judgment has been entered, may amend the judgment accordingly."M.R.Civ.P. 52(b).If the judgment does not set forth adequate findings on the contested issues and the court does not make the requested findings pursuant to M.R.Civ.P. 52, intelligent appellate review is impossible and the denial of a motion for further findings of fact constitutes an abuse of discretion.SeePeters,1997 ME 134, ¶ 11, 697 A.2d at 1258.

[¶ 10]The court did not abuse its discretion when it denied Saritvanich's motion for findings of fact and conclusions of law because the judgment contains adequate findings.The court made extensive findings with respect to the value and division of all property and the parties' earning capacities.Seeid.¶ 12, 697 A.2d at 1258.Although the court declined to award spousal support to either party without specifically enumerating its reasons for that decision, the findings of fact set forth throughout the judgment provide a sufficient basis to inform the parties of the reasoning underlying the court's conclusion.Seeid.¶ 10, 697 A.2d at 1258.Consequently, the court did not err when it denied Saritvanich's motion.

II.DETERMINATION OF MARITAL AND NONMARITAL PROPERTY

A. Orono Property

[¶ 11] Sewall purchased the Orono property from his mother in December 1992, one year before he married Saritvanich.He paid for the property by signing a demand note for $100,000, on which he makes payments of interest only.When asked if the house was worth $100,000 on the date of purchase, Sewall testified that "I don't know that it was worth anything different from that.There is a possibility it was—it could be sold for more than that.I would concede that.But I don't have an appraisal or anything...."Saritvanich testified that she used funds from a mortgage on her house in Old Town to improve the Orono property.Sewall also testified that he made improvements to the property during the marriage including renovations to two bathrooms, painting, wall papering, and electrical work.Sewall testified that all of the improvements cost between $3,000 and $4,000.

[¶ 12]The court allocated the entire present value of the Orono property to Sewall's nonmarital estate.The court concluded that the property is presently worth $184,200, that the renovations were made during the marriage, and that the renovations did not have any appreciable effect on the property's value.

[¶ 13] Saritvanich contends that the increase in the property value is attributable in part to marital funds and Sewall offered no evidence as to the relative contribution of the marital and nonmarital investments, therefore, the court should have allocated the entire increase to the marital estate.We agree.

[¶ 14]Title 19 M.R.S.A. § 722-A(1981& Supp.1996), repealed and replaced byP.L.1995 ch. 694, §§ B-1, B-2(effective Oct. 1, 1997), codified as 19-A M.R.S.A. § 953(1998),³ governed the disposition of property in this case.Pursuant to section 722-A, a court must:

(1) determine what of the parties' property is marital and what is nonmarital, including the contributions each may have made to the acquisition of the marital property, recognizing the contributions of a spouse as a homemaker;

(2) set apart to each that spouse's nonmarital property; and

(3) divide the marital property between them in such proportion as the court deems just.

Dubord v. Dubord,1997 ME 7, ¶ 5, 687 A.2d 647, 648(quotingWilliams v. Williams,645 A.2d 1118, 1119(Me.1994)).A court's determination of what property is marital or nonmarital is reviewed for clear error, and we will not disturb the determination if there is competent evidence in the record to support it.SeeNilsen v. Hanson,1998 ME 109, ¶ 3, 709 A.2d 1190, 1191.

[¶ 15] Although "marital property" generally does not include the increase in value of property acquired before marriage, see19 M.R.S.A. § 722-A(2)(E)(1981& Supp. 1996), the marital estate does include the increase in value of separate property⁴ attributable to marital effort or marital funds.SeeKnowles v. Knowles,588 A.2d 315, 317(Me.1991);Macdonald v. Macdonald,532 A.2d 1046, 1050(Me.1987).The burden of establishing that the value of separate property increased during marriage is on the party asserting the increase.SeeMacdonald,532 A.2d at 1050.Once that party establishes that an increase in value occurred, the burden shifts to the opposing party to demonstrate that the increase resulted from the inherent value of the property and is not the product of marital effort or marital funds.See, e.g., Nilsen,1998 ME 109, ¶ 5, 709 A.2d at 1191;Williams v. Williams,645 A.2d 1118, 1122(Me.1994);Macdonald,532 A.2d at 1050;see also19 M.R.S.A. § 722-A(3)(1981& Supp.1996)(statutory presumption in favor of marital property).If the party fails to sustain the burden of establishing that the increase resulted from the inherent value of the property, the statutory presumption of section 722-A compels a finding that the increase in value of the property is marital.See19 M.R.S.A. § 722-A(3)(1981& Supp.1996);see alsoNilsen,1998 ME 109, ¶ 5, 709 A.2d at 1191;Harriman v. Harriman,1998 ME 108, ¶ 8, 710 A.2d 923, 925.

[¶ 16]The court committed clear error when it failed to allocate the appreciation in the value of the Orono property to the marital estate.Sewall did not refute or deny that the value of the Orono property at the time of the purchase was the value of the note, $100,000.Given that renovations were made to the property during marriage and that the property value increased by $84,200 from the date of purchase, the burden shifted to Sewall to establish that the increase in value...