CARPENETI, Chief Justice.
A husband appeals the trial court's award to his former wife of 60% of the marital property. He argues that the trial court abused its discretion by improperly awarding rehabilitative alimony, and by improperly considering his non-marital assets, the parties' age difference, his daughter's future college expenses, and his spending habits during the marriage. He also challenges the
After nearly 16 years of marriage, Terry and Cathy Cartee separated on June 25, 2006. At the time of trial, Terry was in his early 60s and Cathy was about 50 years old. The parties have one child, a daughter, K.C., born in 1993.
During the marriage, Terry worked a week-on/week-off schedule as an electrician on the North Slope. He spent a few days of each off-week flying for the National Guard and he guided hunting trips a few times a year. Also during the marriage, Terry earned a hunting guide license and an EMT license, worked on a pilot instructor's license, trained for the fire brigade, and otherwise pursued opportunities for career advancement. The year after the parties separated, Terry earned approximately $166,000.
Before the marriage, Cathy had earned a nursing degree and during the marriage she worked part-time as a nurse. Cathy also bore sole responsibility throughout the entire marriage, and particularly during Terry's long absences, for taking care of the home and taking care of K.C. Because of her childcare and housekeeping responsibilities, Cathy was unable to work full time. Also as a result of her domestic responsibilities, Cathy forwent the opportunity to accept promotions, complete additional education, or otherwise advance her career during the marriage. At trial Cathy testified that she would have liked to pursue an advanced nursing degree during the marriage, but that her work schedule and her responsibilities of caring for K.C. made this impossible. Cathy testified that she is still interested in earning the degree, which would significantly increase her earning capacity. After the separation, Cathy went to work full time. She currently earns approximately $38 an hour.
During the marriage, all of Cathy's nursing income went to pay for her own and K.C.'s expenses, including food, clothes, and medical bills. Terry paid the mortgage and utility bills for the family home from his earnings, but much of his income was spent on his personal interests and hobbies, including buying guns, buying hunting and camping gear, and refurbishing his personal airplane.
Terry has significant non-marital assets including the premarital portion of his retirement accounts and a valuable piece of land. Cathy came into the marriage with little other than an encumbered vehicle and a small savings account.
Terry and Cathy's marital property includes a substantial gun collection. Terry submitted at least four different firearm inventories at various points in the litigation: in his initial disclosures, on a handwritten list generated by him at an unknown time and for an unknown purpose, on his July 2008 property spreadsheet, and on the August 2008 spreadsheet provided with his trial brief. The values he gave for the same guns across different lists varied widely
The marital property also includes a small airplane. Cathy's expert witness Keenen
Trial was held on August 12-13, 2008, regarding child custody and property division. The court issued detailed oral findings at the conclusion of trial and subsequently issued written findings of fact and conclusions of law. The court denied motions for reconsideration by both Cathy and Terry.
The trial court awarded Cathy 60% of the marital property.
Among its several bases for the property division, the trial court found that under the circumstances, Cathy was "entitled to an equivalent of rehabilitation alimony that comes in the form of an uneven division of property." That way, the court said "she could reasonably contemplate taking some time off and going full time to school if that were something that interested her." In its order denying reconsideration, the court explained that
The court cited two additional justifications for the unequal division. First, Terry, unlike Cathy, "has very substantial non-marital assets" and is therefore better equipped to deal with the effects of an unequal property division. Second, because of Terry's higher earning capacity, he could readily compensate for the unequal division by increased savings over his remaining work life, or by working an additional year beyond his planned retirement. In addition, the court observed that K.C. "must look to her mother as the only 100% reliable underwriter of a future college expense," a circumstance that the court noted was "merely illustrative of Cathy's situation, [and not] an independent basis for an unequal property division." Finally, the court clarified that although it was aware Terry had spent "wildly over his marital portion of their resources and assets of the marriage for his personal consumption and use," its unequal property division was not, and could not properly have been, founded on this fact or crafted to penalize Terry on this basis.
The trial court valued the marital gun collection at $24,125, saying it arrived at this figure by selecting the largest value for each gun that it found among the multiple inventories submitted by Terry. In its order denying reconsideration, the court explained that
The trial court valued the marital airplane at $162, 979, explaining that it accepted the value testified to by Cathy's expert appraiser, Mr. Zerkel. The court said it found Zerkel to be a "credible witness and [an] accomplished . . . highly credentialed appraiser" who took Terry's criticisms of the appraisal into account. In its order denying reconsideration, the court further explained that
Additional facts and proceedings relating to the trial court's exclusion of Terry's expert airplane appraiser appear below.
Terry appeals the trial court's equitable division of property on several grounds. Terry also appeals the trial court's valuation of the marital gun collection and the court's decision to exclude the expert testimony of his appraiser.
We review a trial court's equitable division of property between parties at divorce for abuse of discretion, and we will not disturb the result unless it is clearly unjust.
Property valuations by the trial court are factual determinations which we will upset only if there is clear error.
A trial court's decision to admit or exclude evidence is reviewed by us for abuse of discretion, and will be upset only if we find there has been an error which affected the substantial rights of a party.
Before discussing Terry's specific objections to the court's property division, we briefly review the applicable law. Although a division of marital property should generally begin with the presumption that an equal division is equitable, a trial court has broad discretion to overcome this presumption.
In addition to these factors, a trial court may consider "any other factors it deems relevant" to dividing the property.
Terry appeals the trial court's equitable division of property on five separate grounds. We discuss each in turn.
The trial court's property division rested in part on the court's finding that during the marriage Cathy sacrificed her career to care for the couple's child while Terry advanced his career away from home. This, the court found, entitled Cathy to "an equivalent of a rehabilitation alimony that comes in the form of an uneven division of property." This extra resource, the court said, would "give [Cathy] the opportunity to take two years out of the work force" to earn an advanced degree. Terry argues that the trial court erred because an allocation of property that considers the effect of the marriage on a spouse's earning capacity, or a spouse's interest in pursuing additional education, is really an award of rehabilitative alimony. Therefore, Terry argues, the court abused its discretion by making the award without making the specific findings required for rehabilitative alimony under Tybus v. Holland.
Equitable divisions of property and awards of alimony are two of the tools available to a trial court in meeting the needs of the parties at divorce.
The standards for property divisions and rehabilitative alimony awards differ because the two mechanisms serve different purposes. While a rehabilitative alimony award is made specifically to fund a spouse's job training,
Because we conclude that the trial court did not err by awarding additional property to Cathy without making the rehabilitative alimony findings, the only remaining question is whether the trial court abused its discretion in making the property award. We hold that it did not. Abuse of discretion may occur when the trial court "considers improper factors, fails to consider statutorily mandated factors, or gives too much weight to some factors."
Terry argues that the trial court nonetheless abused its discretion because its factual findings in support of the property division were clearly erroneous. First, Terry argues that the court clearly erred in finding that Cathy's domestic responsibilities during the marriage "necessarily" impeded her career development because it was Cathy's "choice to stay home with K.C." and "[t]here is no evidence that the parties could not have afforded child care." Terry mischaracterizes the court's finding. The court did not find that it was absolutely necessary for Cathy to stay home with K.C. or that Terry pushed Cathy into this role against her will. Rather, the court found that the role division that the couple in fact adopted—with Cathy working part-time and bearing almost all responsibility
Second, Terry argues that the court clearly erred in finding that Cathy's domestic role "permitted Terry to develop ancillary [career] skills." Terry argues that because he already had substantial career skills before the marriage, Cathy's sole responsibility for domestic matters during the 16-year marriage did not actually benefit him professionally. Terry's contention is not supported by the record. Not only did Terry gain over a decade of work experience during the marriage, the record shows he also earned a hunting guide license and an EMT license, worked on a pilot instructor's license, and trained for the fire brigade. Much of this training took place away from home. From this evidence, it was not clear error for the trial court to find that Terry developed career skills during the marriage and that this was enabled, in no small part, by Cathy's role as sole caregiver to the couple's child.
Because the trial court had a sufficient and proper basis for awarding Cathy additional property in recognition of her lower earning capacity and interest in pursuing additional education, we hold that the trial court did not abuse its discretion in this regard.
The court's equitable division of property was also based in part on its finding that Terry's "significant non-marital assets" would cushion him from the "effects of an unequal property division." Terry argues that consideration of his separate property was an abuse of discretion because "[t]he proper test to be applied by the trial court in making an unequal division of property is the reasonable needs of the parties" and "Cathy presented no specific evidence that she has unmet financial needs." Terry cites Odom v. Odom
Unlike Odom, this case does not involve an invasion of separate property. This case involves the equitable division of marital property, a task that must be guided by the factors listed in AS 25.24.160(a)(4).
Terry argues that the trial court abused its discretion in dividing the marital property without adequately considering the age difference between the parties. Because we conclude that the trial court adequately considered the parties' age difference, we hold that the trial court did not abuse its discretion in this regard.
Terry is correct that the age of the parties is one factor that a trial court may properly consider in equitably dividing the marital estate.
Nonetheless, Terry argues, it was an abuse of discretion to consider Terry's high salary and advanced age without also considering that Cathy "has many more years in the work force" in which her earning capacity might increase. However, while AS 25.24.160(a)(4)(C) explicitly permits consideration of the parties' present earning capacities, it "does not require the court to consider the party's potential future earning capacity following significant additional education."
Terry further argues that the trial court abused its discretion by improperly allocating property to Cathy to account for K.C.'s future college expenses. Terry is correct that he has no legal obligation to pay for his daughter's post-majority college expenses
In denying reconsideration of its decision to award 60% of the marital property to Cathy, the trial court said that
Terry makes two different arguments with respect to the trial court's consideration of his spending habits during the marriage: first, that the court improperly considered his extravagant personal spending in awarding Cathy a larger portion of the marital property, and second that the court erred by considering his spending habits while excluding his testimony on the matter. Terry is correct that a trial court must divide the marital property without regard to fault and may not consider a party's moral or legal marital failings that do not amount to economic misconduct.
Terry points us to a handful of statements by the trial court to illustrate his argument. First, Terry cites the court's question (in overruling a relevance objection regarding airplane expenditures) wondering if Terry "has spent $195,800 from 1990 to 2006, might that have some tendency and reason to prove. . . the nature of his conduct during the marriage . . .?" However, this section of the transcript read in full shows that the court was actually asking whether Terry's conduct in making the expenditures might "be to some extent useful in ascertaining by inference conclusions about the value of the plane." Therefore, this quote cannot be viewed as illustrating the court's improper consideration of Terry's spending.
Second, Terry cites the court's observation in its oral findings that Terry "is a miser, . . . what's his is his, that he's not sharing . . . ." Again, Terry has taken the court's statement out of context. This statement was a finding of fact which the court made not with regard to the division of marital property but in support of its conclusion that a piece of land Terry purchased before the marriage had not been transmuted into marital property.
Terry's third example has some degree of merit. He cites the court's written findings of fact and conclusions of law that "[t]he property division shall be 60/40 in Ms. Cartee's favor. . . . Mr. Cartee spent wildly over his marital portion of the resources and assets of the marriage for his personal consumption and use." This statement is problematic to the extent that it was a basis for
In its order denying Cathy's motion for reconsideration,
Terry has not presented us with any evidence to doubt the trial court's reasoning. Because we conclude that the trial court did not base its property division on an improper consideration of Terry's spending habits during the marriage, we hold that the trial court did not abuse its discretion in this regard.
In sum, because we find that the trial court had a sufficient and proper basis for its decision, we affirm in full the trial court's division of marital property.
Terry argues that the trial court erred in its valuation of the marital gun collection. A trial court's valuation of property when dividing marital assets is a factual determination and will be reversed only if it is clearly erroneous.
During the litigation, Terry submitted at least four different gun lists. The values given for particular guns varied widely from one list to another.
First, Terry argues that the court clearly erred because it made insufficient findings to justify its reliance on the earlier lists over the more recent August 2008 list. Terry correctly points out that under Ogard v. Ogard,
Second, Terry argues that the court clearly erred because, even if the court's valuation date was not improperly early, its conclusion still lacked a sufficient evidentiary basis. Terry is correct that a trial court cannot pull values out of thin air, but must have an evidentiary basis to support its findings.
The court explained that it gave little weight to Terry's testimony on the matter because "Terry did not explain with specificity why he valued his guns at particular amounts" and "[h]e did not offer an appraisal." In addition, the court heard evidence that gun collecting was Terry's personal interest, not Cathy's, and that Terry was secretive about his gun purchases during the marriage. From this evidence a court could infer that Terry knew the gun collection would ultimately be awarded to him in the property division, giving him an incentive in testifying to adjust his valuations downward. Faced with conflicting evidence, and absent an explanation from the person best suited to provide one, we hold that the trial court did not clearly err in choosing to value the guns based on Terry's discovery responses rather than his testimony at trial.
At trial the court excluded the testimony of Dan Hollingsworth, Terry's expert airplane appraiser, because Terry, in violation of the trial calendar order, had failed to produce Hollingsworth's appraisal report.
In March 2008 the court issued a trial calendar order which provided in part that "[a]ppraisals/brokers opinions are to be completed and exchanged thirty days prior to trial." Cathy commissioned an appraisal of the airplane from Zerkel. Terry did not submit a plane appraisal report. At trial, Cathy called Zerkel to testify about his appraisal and Terry did not cross-examine him. Later, during his case-in-chief, Terry called Hollingsworth to give his expert opinion of the plane's value. Cathy objected on the basis that Terry had never provided an appraisal report from Hollingsworth. The court ruled that Hollingsworth could not testify as an expert, explaining that the "trial calendaring order says appraisals . . . are to be completed and exchanged thirty days prior to trial," and that Terry had not provided a sufficient reason for his non-compliance.
Although the court ruled that Hollingsworth could not offer an expert opinion as to the value of the plane, the court did allow him to testify as a lay witness as to the condition of the plane and its components.
Terry argues that the trial court erred in excluding Hollingsworth's testimony on the basis of Terry's non-compliance with the trial calendar order because the trial calendar order did not require disclosure of appraisal reports for rebuttal experts like Hollingsworth, and that, even if disclosure was so required, the court's failure to excuse this requirement under the circumstances was an abuse of discretion. Cathy argues that the trial calendar order did require Terry to disclose Hollingsworth's appraisal report, and that therefore the court properly excluded Hollingsworth's testimony.
Alaska Rule of Civil Procedure 16(e) provides that after a final pretrial conference, the trial court shall enter an order ("trial calendar order") reciting the action taken and such order "shall control the subsequent course of the action unless modified by a subsequent order." The trial calendar order "shall be modified only to prevent manifest injustice."
We review a trial court's decision to admit or exclude evidence, including expert witness testimony, for abuse of discretion
Terry first argues that the trial calendar order did not require him to disclose Hollingsworth's appraisal report in the first place, so any sanction under Civil Rule 37 was improper. In support of this interpretation, Terry offers two pieces of evidence: the fact that the order "does not address rebuttal witnesses at all," and the fact that "as a practical matter, rebuttal reports could not be submitted under the same deadline as initial expert reports." We do not find Terry's interpretation persuasive. Although Terry is correct that the trial calendar order did not address rebuttal appraisers specifically, the order did address appraisers generally, and required that appraisers' opinions be "completed and exchanged thirty days prior to trial." This requirement was framed in general terms, and is fairly read as applying to all appraisers who testify to their opinions during trial. Terry's suggested interpretation sets up an untenable situation wherein a party could disclose no appraiser at the outset, but then freely introduce one at the last moment to testify that the other party's appraisal was all wrong. This is the precise type of surprise and disorder that trial calendar orders are designed to avoid.
Terry argues that rebuttal reports could not be disclosed, as a practical matter, on the same deadline as initial reports. However, we agree with the trial court about when Terry should have raised that point:
Because the trial court order is fairly and sensibly read as applying to all testifying appraisers, and because Terry waived any objection as to the timing of rebuttal disclosures by failing to raise the issue at a reasonable time, we conclude that the trial calendar order required Terry to disclose Hollingsworth's appraisal report 30 days before trial.
The next question is whether the trial court abused its discretion in excluding Hollingsworth's testimony under Civil Rule 37(b). In Nelson v. Progressive Corp.,
The record does not leave us with a "`definite and firm conviction' that the trial court erred."
The only remaining question for this court, therefore, is whether the trial court abused its discretion in refusing to modify its trial calendar order to excuse Terry from the appraisal disclosure requirement. Because we conclude that modification of the trial calendar order was not necessary to prevent "manifest injustice,"
The trial court's findings in support of its ruling demonstrate that Terry suffered no manifest injustice from the exclusion. Terry argues that he was unfairly surprised by the worksheets supporting Zerkel's report and it was unjust to deny him the opportunity to respond. However, we have held that a trial court does not abuse its discretion in finding no manifest injustice where the complaining party with due diligence could have easily avoided the complained-of surprise.
Because we hold that the trial court's decision to exclude Hollingsworth's expert testimony was not an abuse of discretion, we affirm the trial court's valuation of the marital airplane.
Because the court's property division did not constitute an award of rehabilitative alimony, because the court properly considered Terry's non-marital assets and the age difference between the parties under AS 25.24.160(a)(4), and because the court did not improperly consider K.C.'s college expenses or Terry's spending habits during the marriage, we hold that the court did not abuse its discretion in awarding Cathy 60% of the marital estate. Because the court based its valuation of the marital guns on evidence submitted by Terry himself, we hold that the trial court's valuation was not clear error. Finally, because Terry violated the trial calendar order by failing to disclose an appraisal report without good cause, we hold that the trial court's exclusion of Terry's airplane valuation expert was not an abuse of discretion. Therefore, we AFFIRM the decision of the trial court in all respects.
EASTAUGH, Justice, not participating.