Tibbetts v. Tibbetts

• Decision Date: 13 September 1979
• Parties: Donna H. TIBBETTS v. David R. TIBBETTS.
• Court: Maine Supreme Court

Page 70

406 A.2d 70

Donna H. TIBBETTS v. David R. TIBBETTS.

Supreme Judicial Court of Maine.

Sept. 13, 1979.

Paine & Lynch, Errol K. Paine (orally), Andrew M. Mead, Bangor, for plaintiff.

Stearns, Finnegan & Needham, P. A., by John A. Woodcock, Jr. (orally), Bangor, for defendant.

Before McKUSICK, C. J., and WERNICK, ARCHIBALD, GODFREY and NICHOLS, JJ.

NICHOLS, Justice.

This appeal from a divorce judgment focuses upon the proper characterization and treatment in that judgment of a sum of money which during marriage one spouse had contributed toward the married couple's acquisition of certain real estate.

The Plaintiff, Donna H. Tibbetts, appeals from a Superior Court order in Penobscot County, which affirmed in part the District Court decree granting her a divorce from the Defendant, David R. Tibbetts, but for the second time remanded the cause to District Court for a minor amendment to that portion of its decree which related to the distribution of property. ¹

Upon the remand of this cause from a prior appeal to the Superior Court, and at the direction of the latter court, the District Court specifically addressed the disposition of $5,000 which allegedly the wife had invested in certain real estate held in joint tenancy with her husband. On the wife's second appeal to Superior Court, that court substantially sustained the District Court's decree as amended, and from that second order of Superior Court ² the cause comes here on the wife's appeal.

We sustain her appeal.

The factual background of the controversy can with some effort be derived from the sparse record before us. When the original divorce judgment was entered in District Court the wife claimed an appeal because the judgment did not clearly reflect the treatment accorded $5,000 of the wife's funds which during the marriage was involved in the purchase by the married couple as joint tenants of certain real estate. The Superior Court remanded to District Court for further findings of fact. There upon the District Court found the wife's money had been "involved" in this joint purchase but declined "to distribute or involve itself in this property." The wife appealed again to Superior Court, urging that by such abstention the District Court was not "setting apart" the jointly held property as ordained by our statute relating to marital property. ³

The Superior Court rejected the wife's argument and mandated only minor amendments to correct a factual error and to clarify the basis of the decision. It ordered the following language substituted at the pertinent point in the judgment:

Although the above four pieces of property were acquired subsequent to the marriage, their acquisition involved Five Thousand Dollars ($5,000.00) contributed by the Plaintiff. Thus, they are not marital property, and the legal interests of the parties as joint tenants are recognized as being sufficiently set apart to each without the Court making any division or distribution thereof.

Subsequent to that order, and in perfecting their appeal to this Court, through counsel the parties modified their agreed statement of facts to reflect that the $5,000 was contributed to their purchase of but one property, the "Tibbetts homestead," in Orrington, Maine; and that the husband contributed all the consideration for the purchase of the remaining three parcels. This change does not affect the legal issue before us. All four parcels were acquired by the parties in joint tenancy after their marriage and prior to the effective date of 19 M.R.S.A. § 722-A, which date was January 1, 1972. ⁴

Our disposition of this appeal will require further proceedings in the District Court, and the facts set forth in the "Further Agreed Statement of Counsel" will be considered by the District Court at that time. Cf. Winter v. Casco Bank & Trust Co., Me., 396 A.2d 1020, 1023, n. 4 (1978).

The initial error of the Superior Court was its interpretation that the involvement of the wife's $5,000 (which was not the total price) in the purchase of the real estate, completely excluded this property from the marital property category. While 19 M.R.S.A. § 722-A(2)(B) excludes from marital property all property "acquired in exchange for property acquired prior to the marriage," it does not follow that where a part of the property exchanged was non-marital, the entire property acquired is, as a result, non-marital.

The application and meaning of the words "acquired in exchange for" in the factual matrix before us forms the crux of the interpretative problem. Certain factual aspects overlooked in the proceeding below are in fact determinative of the proper disposition of this parcel of real estate.

The key term here, "acquired in exchange for," carries a heavy baggage of meaning. We addressed a related problem in Young v. Young, Me., 329 A.2d 386 (1974). There real estate was acquired in joint tenancy during a marriage. From funds acquired before the marriage each spouse contributed toward the purchase price of the property; the balance was realized from a mortgage loan. The trial court treated this real estate as "marital property" subject to division pursuant to 19 M.R.S.A. § 722-A. We sustained an appeal from this ruling, holding that to the extent the real estate had been acquired in exchange for property of either spouse acquired prior to marriage the presumption in 19 M.R.S.A. § 722-A(3) is overcome and the property cannot be marital property. Id. at 389-391.

Such property is non-marital To the extent that it was acquired in exchange for property acquired prior to marriage. Thus a single item of property may be to some extent non-marital and the remainder marital. Accordingly, where property is acquired in exchange for both marital property and non-marital property, the portion attributable to each must be determined. That portion of the property acquired in exchange for non-marital property must then be "set apart" as directed by 19 M.R.S.A. § 722-A(1). ⁵

This approach is required by the language of 19 M.R.S.A. § 722-A(2)(B). That provision of our statute excludes from marital property only that property acquired in exchange for property acquired prior to the marriage or by gift, bequest, devise or descent. Adoption of the approach erroneously taken by the Superior Court in this case would lead to the treatment of marital property as non-marital to the extent that both were mixed in the acquisition of property acquired subsequent to the marriage. This approach is not authorized by the statute and would be inequitable. This provision was designed to mandate that the divorce court determine how the property of the parties will be apportioned. Zillert v. Zillert, Me., 395 A.2d 1152 (1978).

The divorce court must, therefore, separate marital and non-marital property by tracing from the evidence adduced the contributions each may have made to the acquisition of a particular item. This undertaking is considerably eased by the presumption created by 19 M.R.S.A. § 722-A(3); yet certain cases, such as that before us, will require the tracing of the specific contribution and a determination of both the original purchase price of the property and its present value.

In thus interpreting the process of separating marital and non-marital property which has been conjoined in the acquisition of a single property during marriage, we find guidance in the fundamental purposes underlying the approach to disposition of the spouses' property mandated by 19 M.R.S.A. § 722-A and Section 307 of the Uniform Marriage and Divorce Act as originally promulgated in 1970. ⁶ This research suggests that our choice is between a static or a dynamic interpretation of the term "acquisition." We adopt a dynamic interpretation in that the proper characterization of property as marital or non-marital may shift as individual items of property, marital or non-marital, are contributed by the spouses in exchange for the property acquired.

The approach we choose comports with the general goals of the Uniform Act. The shared enterprise or partnership theory of marriage is a major guiding principle in the separation and division of property at divorce. Handbook of the National Conference of Commissioners on Uniform State Laws 178 (1970); Krauskopf, "A Theory for 'Just' Division of Marital Property in Missouri," 41 Mo.L.Rev. 165, 166 (1976) (Missouri in 1973 enacted legislation substantially tracking the Uniform Act); Cf. Comment, "The Federal Income Tax Consequences of Property Settlements in Common Law States and under the Uniform Marriage and Divorce Act: A Proposal," 29 Me.L.Rev. 73, 91, 107 n. 212 (1977); Foster & Freed, "Marital Property Reform in New York: Partnership of Co-Equals?" 8 Fam.L.Q. 169 (1974). The definition of marital property contained in our § 722-A has its roots in a community property rule. Id.; See generally W. de Funiak & M. Vaughn, Principles of Community Property 114-123 (2d ed. 1971). The decisions from community property jurisdictions as well as those adopting the Uniform Act thus are illuminating in the interpretation of our own Act.

Unfortunately, the practice of these jurisdictions is not wholly uniform. In our specific context here two principal theories appear to invigorate the cases, the inception of title rule and the source of funds rule. See Krauskopf, "Marital Property at Marriage Dissolution," 43 Mo.L.Rev. 157, 180 (1978); de Funiak & Vaughn, Supra at 133. We had occasion to refer to the inception of title rule in Young v. Young, Me., 329 A.2d 386, 391 (1974), where it was utilized to determine the character of certain property at divorce. This decision did not, however, address the problem of selection between the somewhat conflicting rules mentioned above as that problem is presented here.

The pure inception of title rule focuses on the state of the title when it is first taken. Thus, if title to the property is acquired prior to marriage, it remains wholly nonmarital in character, even...