Loomis and Loomis
Annotate this Case
Download PDF
FILED: December 14, 2011 IN THE COURT OF APPEALS OF THE STATE OF OREGON In the Matter of the Marriage of DONALD WELTON LOOMIS, Petitioner-Appellant, and CLAUDIA CLARA LOOMIS, Respondent-Respondent. Douglas County Circuit Court 08DO0095DS A142038 William L. Lasswell, Judge. Argued and submitted on December 02, 2010. Daniel W Seitz argued the cause for petitioner. With him on the briefs was Daniel W. Seitz, P.C. Jeffrey Mornarich argued the cause for respondent. With him on the brief were Dole, Coalwell, Clark, Mountainspring & Mornarich, P.C., and Stephen Mountainspring. Before Schuman, Presiding Judge, and Wollheim, Judge, and Rosenblum, Senior Judge. WOLLHEIM, J. Dissolution judgment modified to increase husband's equalizing judgment by $96,000 to reflect an equal share in the parties' equity in the Hunter portion of the Cal Henry property; otherwise affirmed. 1 WOLLHEIM, J. 2 Husband appeals a dissolution judgment, challenging the trial court's 3 division of marital property. Husband argues that the trial court erred when it failed to 4 award him 50 percent of the marital property and, further, that the division of the marital 5 property was not just and proper. The disputed marital property includes real property 6 and annuities. On de novo review, ORS 19.415(2),1 we modify the judgment. The parties were married in 1983 and had been married for 24 years when 7 8 they separated in November 2007. Both had been previously married, husband four 9 times and wife once. Wife has two sons from her previous marriage, and husband has 10 one son. At the time of trial in January 2009, husband was 72 years of age and wife was 11 68. When the parties married, they were both employed full time, wife as a 12 13 lighting specialist and husband in flooring sales and installation. Both parties contributed 14 their incomes to the marriage. Over the course of the marriage, husband earned more 15 than wife, but wife was the primary homemaker and was also solely responsible for 16 managing the parties' finances. She also helped husband with the bookkeeping for his 17 business. Husband suffered a stroke in 2000 but was able to return to work. He is 18 19 receiving long-term chemotherapy for liver cancer. He testified that his health has 1 ORS 19.415, which governs our standard of review in this case, was amended in 2009. Or Laws 2009, ch 231, ยงยง 2-3. The amendments apply to appeals in which the notice of appeal was filed on or after June 4, 2009. Because the notice of appeal in this case was filed before that date, the amendments do not apply. 1 1 slowed him down a bit, and that between his health and the economy, he is "pretty much 2 retired." Wife, who has had health problems of her own, including cancer, has been 3 working part time since 1993. Neither party requested an award of spousal support. The 4 only dispute at trial and on appeal concerns the division of the marital property. I. BACKGROUND 5 6 A. Premarital assets At the time of the marriage, husband had few assets and liabilities. His 7 8 estimated net worth was $7,000. Wife owned an interest in real property she had been 9 awarded in a dissolution judgment from her first husband, Hunter. The property, known 10 as the Cal Henry property, was part of a 103.5 acre parcel that wife and Hunter purchased 11 in 1971. During their marriage, wife and Hunter sold approximately 32 acres to Shapiro 12 by a land sale contract. The remaining 71.56 acres that wife and Hunter retained 13 included a mobile home, a garage, a pole barn, and a pump house. Wife and Hunter took out a mortgage to finance the purchase of the mobile 14 15 home on the Cal Henry property. The terms of the judgment dissolving wife's marriage 16 to Hunter required that the property be sold, and that wife receive 60 percent of the 17 proceeds and Hunter receive 40 percent. Until the property was sold, wife could live 18 there if she continued to make the mortgage payments, and she was also entitled to 19 receive the Shapiro contract payments. Efforts to sell the property were unsuccessful, 20 and the parties lived there during their entire marriage. 21 B. 22 The prenuptial agreement Before their marriage, the parties executed a prenuptial agreement that 2 1 recited that "each of the parties desire to preserve his or her present estate for the 2 respective children of each" and "each party desires to accept the provisions of this 3 agreement in lieu of all rights each would otherwise acquire by reason of the 4 contemplated marriage." The agreement further recited: 5 6 7 8 9 10 11 12 13 14 "(1) Release of Marital Rights: All property now owned by either party shall be held in his or her separate name, free from any claim of the other, except for property held jointly as hereinafter provided. The provisions of this agreement shall act as a release and full satisfaction of all rights each party may acquire by reason of the marriage to previously held property of the other party. Each party waives and relinquishes all rights which, as the other's survivor, he or she would acquire under the law now or hereafter in effect in any jurisdiction. Neither party shall have the right to any assets in the estate of the other as may be provided to a surviving spouse by law. 15 16 17 "(2) Jointly-Owned Property: In the event that [the parties] shall own property jointly with right of survivorship, the survivor shall retain such property upon the death of the other. 18 19 20 "(3) Dissolution of Marriage: In the event the marriage of [the parties] occurs, but is subsequently subject to a proceeding for dissolution of marriage: 21 22 23 24 "(a) Each of the parties shall recover the specific assets brought into the marriage by him or her, as listed in the applicable attached and incorporated Exhibits 'A' and 'B', as well as any property then separately owned. 25 26 "(b) Each of the parties shall receive one-half (1/2) of all jointlyheld property. 27 28 "(c) All banking accounts shall be divided equally between the parties. 29 30 31 32 "(4) * * * "(5) Children of the Parties: [The parties] each [have] children from a prior marriage and each acknowledges that this agreement is intended to protect the respective estates of the parties for the benefit of said children." 3 1 On Exhibit A to the prenuptial agreement, wife listed among her assets the 60 percent 2 interest in the Cal Henry property and her interest in the Shapiro contract. 3 C. Assets acquired during the marriage 4 1. The Cal Henry property. During the marriage, the parties lived in the 5 mobile home on the Cal Henry property and improved and added to the property. The 6 parties raised cattle on the acreage. They built corrals and repaired and replaced fences. 7 The parties enlarged the pond on the property and built a shop to store husband's floor 8 coverings. Husband testified that he believed that the costs for the improvements came 9 from joint funds. Wife, who managed the parties' finances, testified that only her funds 10 11 were used. In 1987, the parties decided to purchase Hunter's 40 percent interest in the 12 Cal Henry property for $11,460. The purchase required monthly payments of $100, 13 followed by a balloon payment of the balance when the Shapiro contract was paid off. 14 Husband contributed monthly payments of $100, for a total of approximately $2,100, but 15 the balloon payment came exclusively from wife's separate funds. As additional 16 consideration for the parties' purchase of Hunter's interest, Hunter also received a portion 17 of the Shapiro contract payments. In January 1990, when Shapiro made his final 18 payment, wife used those funds to pay the balance owed to Hunter. Hunter deeded his 19 interest in the Cal Henry property to both husband and wife. 20 During the marriage, wife received gifts of money from her mother. 21 Initially, wife deposited those funds into the parties' joint account, but shortly thereafter 22 she used those funds to pay off the loan on the Cal Henry property. 4 1 2. Annuities. In addition to the gifts mentioned above wife received a gift 2 of $25,000 from her mother that wife initially kept separate, until husband learned of this 3 gift and became upset. To placate him, wife transferred the funds to a joint account, but 4 shortly thereafter she placed the funds in a separate investment account. The account, 5 now known as the Lafayette annuity, has appreciated in value. When wife's mother died 6 in 1990, wife inherited $62,016. Wife kept $30,000 of the funds in a separate account in 7 her name only and placed the rest of the funds in a joint account. That separate account, 8 now known as the Transamerica annuity, has grown significantly. The parties did not 9 make further contributions to or withdrawals from either the Lafayette or Transamerica 10 11 annuity account. 3. The Loomis Loving Trust. In 1995, after more than 20 years of 12 marriage, the parties created the "Loomis Loving Trust," a revocable living trust. Wife 13 testified that she wanted to create the trust because there were difficulties in the marriage 14 and she wanted to protect her separate assets--specifically the Cal Henry property and the 15 annuity accounts--for her sons. Husband testified that he believed that the trust was a 16 means to avoid probate and to provide for the parties' joint financial future. 17 18 19 20 21 22 23 24 25 26 27 The trust provided, in Article I, Section 3: "Any separate property, including any individual interests in property, and the proceeds from such property, which is or becomes trust property, shall remain the separate property of a Trustmaker. A separate schedule of such property shall be maintained to facilitate the payment of income or transfer of all or part of the principal [to] the Trustmaker who is entitled to such distributions. Either of us shall have the unrestricted right to remove all or part of our respective separate property at any time. However, to simplify trust administration, each of us agree that unless an asset is specifically identified as being the separate property of only one of us on such a schedule, that regardless of which of us contributed an asset to the trust, 5 1 2 3 4 5 6 and regardless of the form of the prior tenancy of the asset contributed, that each of us is the owner of an undivided one-half (1/2) interest as a tenant in common in each of the assets contributed to the trust during our joint lifetimes. Any joint tenancy rights or interests which may have existed at any time are hereby extinguished and are deemed to be properties held as equal tenants in common with no rights of survivorship." 7 (Emphasis added.) Upon the death of both parties, the trust provided that 90 percent of 8 the estate would be distributed to wife's sons and the remaining ten percent would be 9 distributed to husband's son. The trust explicitly gave wife's sons the option of receiving 10 the Cal Henry property as part of their shares of the trust. In the event of divorce, the 11 trust provided: 12 13 "It is our intent that our respective property held in trust shall not be used for the benefit of the other spouse upon the dissolution of our marriage." 14 Among other assets conveyed to the trust, the parties conveyed the Cal 15 Henry property and the two annuities to "Donald W. Loomis and Claudia C. Loomis, 16 Trustees." The "Loving Trust Funding Checklist" listed the Cal Henry property and the 17 Transamerica account as joint assets and the Lafayette account as wife's separate asset. 18 In June 2002, wife became concerned that the trust did not adequately 19 protect the Cal Henry property for her sons, and she informed husband that she wanted to 20 amend it. The trust was amended to provide that, upon the disability or death of either 21 party, the trust provisions relating to the Cal Henry property would become irrevocable 22 and the trustee would set aside and hold the Cal Henry property in trust. The expenses of 23 the Cal Henry property, including taxes, insurance, utilities and maintenance, were to be 24 paid from other trust assets. 25 In November 2007, before husband filed for dissolution, wife transferred 6 1 the Lafayette annuity from the trust to an account in her name. The Transamerica 2 account, which had been listed in the trust as a joint asset, remained in the trust. 4. Other assets. The parties have a number of retirement accounts, 3 4 certificates of deposit, checking, savings and money market accounts that the trial court 5 distributed and that are not in dispute on appeal. Husband had business assets, including 6 inventory and accounts receivables, also not at issue on appeal. 7 D. At trial, husband asked that the trust be viewed as having created joint 8 9 Trial court's division of assets. interests in the properties conveyed to it, and that husband receive an equal share of all 10 the assets, including the Cal Henry property and the annuities. The trial court concluded 11 that the prenuptial agreement "provides direction for all the marital property events of the 12 marriage." The court essentially gave no effect to the trust and rejected husband's 13 argument that the conveyance of the Cal Henry property and the annuities to the trust 14 required that those properties be treated as joint assets. The court further found that wife 15 had rebutted any presumption of equal contribution with respect to the acquisition of 16 Hunter's 40 percent interest in the Cal Henry property, the appreciation in the Cal Henry 17 property, and the acquisition and appreciation of the annuities. The court thus awarded 18 wife the entire Cal Henry property and the annuities, free and clear of any interest by 19 husband. 20 On appeal, husband contends that the trial court should have awarded him a 21 half interest in all of the Cal Henry property, as well as half of the value of the two 22 annuities. In husband's view, the parties, through their conduct, rescinded the prenuptial 7 1 agreement. Husband contends that, despite having begun as a separate asset, wife's 60 2 percent interest in the Cal Henry property was commingled through its use as a marital 3 residence, through husband's contributions toward payment of the mortgage, and by 4 virtue of improvements to and uses made of the property by the parties during the 5 marriage. As for improvements, husband notes that during the marriage, the parties 6 improved the ponds and fencing and added a shop that served as husband's office and 7 from which he ran his business. Additionally, for several years, the parties kept a small 8 cattle operation on the property that was primarily managed by husband. All of those 9 circumstances, husband contends, effectively rescinded the prenuptial agreement and 10 caused wife's 60 percent interest in the Cal Henry property to become integrated into the 11 marital estate so as to require that it be treated as marital property and divided equally in 12 a just and proper division of assets. Kunze and Kunze, 337 Or 122, 133, 92 P3d 100 13 (2004). Husband asserts, further, that the remaining 40 percent interest in the Cal Henry 14 property that he and wife acquired in the property during the marriage, as well as the 15 appreciation on the entire Cal Henry property, are marital assets. Olinger and Olinger, 16 75 Or App 351,354, 707 P2d 64, rev den, 300 Or 367 (1985). In any event, husband 17 contends that when the Cal Henry property was conveyed to the trust, the entire property 18 became a joint asset because it was not listed as a separate asset of wife, as was the 19 Lafayette account. The same rationale applies, he contends, with respect to the annuities, 20 which were acquired during the marriage and have appreciated. Finally, irrespective of 21 whether the property or annuities or any part of them are marital assets, husband contends 22 that it is just and proper that he be awarded a half interest. 8 In wife's view, the prenuptial agreement requires that wife's 60 percent 1 2 interest in the Cal Henry property be held out of the marital estate. She asserts, further, 3 that she has rebutted any presumption of equal contribution with respect to the 4 acquisition of Hunter's 40 percent interest in the Cal Henry property, as well as to the 5 appreciation in the Cal Henry property, because any improvements made to the property 6 were made with her own funds, and, finally, that conveying the property to the trust did 7 not alter--and in fact reinforced--the separate nature of the ownership. She makes the 8 same contentions with respect to the two disputed annuities. II. ANALYSIS 9 ORS 107.105(1)(f) provides that a judgment in a marital dissolution action 10 11 12 13 14 may provide "[f]or the division or other disposition between the parties of the real or personal property, or both, of either or both of the parties as may be just and proper in all the circumstances." 15 As we explained in Cook and Cook, 240 Or App 1, 248 P3d 420 (2010), 16 under ORS 107.105(1)(f), property subject to division in a dissolution consists of two 17 classes. The first category consists of "the real or personal property, or both, of either or 18 both of the parties," ORS 107.105(1)(f), consisting of any property that the parties 19 possess at the time of the dissolution, regardless of when the property was first acquired. 20 Pierson and Pierson, 294 Or 117, 121-22, 653 P2d 1258 (1982). That property is 21 referred to as "marital property." Massee and Massee, 328 Or 195, 201 n 2, 970 P2d 22 1203 (1999). The distribution of marital property is governed by a statutory standard of 23 what is "just and proper in all the circumstances." ORS 107.105(1)(f); see also Kunze, 9 1 2 337 Or at 134. The second category, "marital assets," are a subset of marital property and 3 refer to property acquired during the marriage. Pierson, 294 Or at 121. There is a 4 rebuttable presumption that property acquired during the marriage was acquired as a 5 result of the equal contribution of the parties. A party seeking to overcome the 6 presumption of equal contribution has the burden of proving by a preponderance of the 7 evidence that the other spouse did not contribute equally to the acquisition of the disputed 8 property. Id. at 134. 9 If the presumption of equal contribution is rebutted, or if the property is not 10 a marital asset because it was separately acquired, then the party holding the separate 11 asset is entitled to receive the property in the division of marital assets, Kunze, 337 Or at 12 133-34, unless other considerations make it "just and proper in all the circumstances" to 13 distribute the property otherwise. It may be just and proper to divide a separately 14 acquired asset between both spouses when a spouse has so integrated the separately 15 acquired asset into the joint finances of the marital partnership that it would be 16 inequitable to award the asset to that spouse as separate property. To determine whether 17 a spouse has so integrated a separately acquired asset, courts focus on whether the spouse 18 demonstrated an intent to retain that spouse's separately acquired asset as separate 19 property or whether, instead, that spouse intended for that property to become joint 20 property of the marital estate. "[T]he court must evaluate the extent to which a spouse 21 has integrated a separately acquired asset into the joint finances of the marital partnership 22 and also evaluate whether any inequity would result from the award of that asset to that 10 1 spouse as separate property." Id. at 142. In this case, the prenuptial agreement and the 2 trust are additional considerations in determining how the property of the parties should 3 be divided. We address the relevant considerations with respect to each disputed asset. 4 A. The Cal Henry property--wife's prenuptial portion At the time of the marriage, wife's equity in her 60 percent share of the Cal 5 6 Henry property was approximately $72,000; at the time of dissolution, the parties agree 7 that the equity in the entire property--including the Hunter portion acquired during the 8 marriage--was $480,000. Because it was acquired by wife before the marriage, wife's 9 premarital equity in her 60 percent interest in the Cal Henry property is not a marital 10 asset. Kunze, 337 Or at 134. Additionally, the parties' prenuptial agreement provides 11 that, upon dissolution, the parties are entitled to the "specific assets brought into the 12 marriage." Wife asserts for that reason that her original equity in the Cal Henry property 13 is simply not subject to division, either as a marital asset or as marital property. Prenuptial agreements are generally enforceable. ORS 108.140 (1981).2 14 2 We note that because the parties' prenuptial agreement was executed in 1983, the Uniform Prenuptial Agreement Act, ORS 108,700 to ORS 108.740, which took effect on January 1, 1988, does not apply. Purcell and Purcell, 99 Or App 668, 783 P3d 1038 (1989). At the relevant time, ORS 108.140 (1981), provided, in part: "A man and a woman who are parties to an intended marriage may enter into a prenuptial agreement in writing concerning their respective personal property holdings, and the final disposition thereof, upon such terms and conditions as may be mutually determined. If such intended marriage is consummated, such prenuptial agreement shall be binding upon the parties thereto, their heirs, legal representatives and assigns." 11 1 Moore v. Schermerhorn, 210 Or 23, 307 P2d 483 (1957). If the parties' prenuptial 2 agreement applies to wife's premarital equity in the Cal Henry property, then that 3 property is not subject to division in the dissolution. See Proctor and Proctor, 234 Or 4 App 722, 731-32, 229 P3d 635, on recons, 235 Or App 641, 234 P3d 133, rev den, 349 5 Or 56 (2010) (prenuptial agreement, enforced according to its terms, precludes division 6 of encompassed assets). 7 Husband concedes that the prenuptial agreement, as written, is an 8 enforceable agreement, but he contends that the parties' conduct throughout their long 9 marriage and wife's conveyance of her 60 percent interest to the trust, as a joint asset, 10 served to rescind the prenuptial agreement. See, e.g., Francis and Francis, 212 Or App 11 310, 157 P3d 1202 (2007) (husband's conveyance of separately acquired property shortly 12 after marriage supports inference of intention to revoke prenuptial agreement); Baxter 13 and Baxter, 139 Or App 32, 38, 911 P2d 343, rev den, 323 Or 483 (1996) ("[T]he parties' 14 conduct demonstrated mutual intent to rescind the antenuptial agreement * * *."). 15 We conclude that there is no evidence that the prenuptial agreement was 16 rescinded. First, there is no express indication by the parties of an intention to rescind the 17 prenuptial agreement. The trust made no mention of the prenuptial agreement and, as 18 explained further herein, was not inconsistent with it. In fact, at trial, wife testified that it 19 was her intention in establishing the trust to protect the Cal Henry property for her heirs, 20 a reinforcement of the goals set forth in the prenuptial agreement. The trust itself is 21 consistent with those goals, providing that, in the event of dissolution, "it is our intent 22 that our respective property held in trust shall not be used for the benefit of the other 12 1 spouse." We conclude that the act of conveying the property to the trust did not 2 implicitly revoke the prenuptial agreement. 3 Husband contends that an intention to rescind the prenuptial agreement is 4 evidenced by the parties' treatment of the property during the marriage. However, wife 5 was living on the Cal Henry property when the parties met and at the time they were 6 married. She planned to continue to live on the property as long as she could. The 7 parties lived on the property six months before they were married. Thus, the parties' use 8 of the property as their marital residence appears to have been contemplated at the time 9 of the execution of the prenuptial agreement, which was less than six months before their 10 marriage. We conclude for that additional reason that the use of the property as the 11 marital residence did not implicitly revoke the prenuptial agreement. 12 In the alternative, husband contends that the Cal Henry property is, in fact, 13 subject to division under the terms of the prenuptial agreement, because it was a jointly 14 held asset at the time of dissolution, as a result of wife having conveyed her interest in the 15 property to herself and husband, as trustees of the Loomis Loving Trust. 16 It is true, as husband contends, that, in establishing the trust, wife conveyed 17 the entire Cal Henry property, including wife's premarital portion, to husband and wife as 18 trustees of the trust. However, the trust instrument provided that "[a]ny separate 19 property, including any individual interests in property, and the proceeds from such 20 property, which becomes trust property, shall remain the separate property of the 21 Trustmaker." The trust further provided that each party "shall have the unrestricted right 22 to remove all or part of our respective property at any time." Thus, the conveyance of the 13 1 2 property to the trust in and of itself did not create a joint property. Husband notes that the trust further provided for the maintenance of a 3 schedule of the properties "to facilitate the payment of income or transfer of all or part of 4 the principal." The trust stated: 5 6 7 8 9 10 11 "To simplify trust administration, each of us agree that unless an asset is specifically identified as being the separate property of only one of us on such a schedule, that regardless of which of us contributed an asset to the trust, and regardless of the form of the prior tenancy of the asset contributed, that each of us is the owner of an undivided one-half (1/2) interest as a tenant in common in each of the assets contributed to the trust during our joint lifetimes." 12 The Cal Henry property was listed on the trust schedule as a joint asset, and wife's 13 premarital share was not segregated. As husband notes, the prenuptial agreement 14 provided that, in the event of dissolution of marriage, each of the parties "shall receive 15 one-half (1/2) of all jointly held property." In husband's view, read together, the trust 16 instrument and prenuptial agreement require that all assets conveyed to the trust that were 17 not identified as separate assets became jointly held, subject to equal division at the time 18 of dissolution under the terms of the prenuptial agreement. We reject that interpretation. 19 In the first place, in placing the property in trust, wife did not convey her 60 percent 20 interest in the Cal Henry property to husband. Rather, wife conveyed her interest to 21 herself and husband as trustees. As noted, the trust itself provided that any separate 22 property conveyed to the trust was to remain the separate property of the trustmaker. 23 Wife's conveyance of her 60 percent interest in the Cal Henry property to herself and 24 husband as trustees was not a conveyance of an interest to husband. Further, the fact that 25 the trust instrument provided that, for purposes of trust administration, properties not 14 1 specifically identified as separate assets were to be regarded as joint assets did not effect 2 a joint ownership of wife's 60 percent interest for all purposes. Our conclusion is 3 bolstered by the provision of the trust instrument stating that "our respective property 4 held in trust shall not be used for the benefits of the other spouse upon the dissolution of 5 our marriage." Thus, we conclude that the Cal Henry property was not held jointly for 6 purposes of the prenuptial agreement. 7 Further, the prenuptial agreement identified and described dispositions for 8 three categories of properties upon dissolution: (1) assets brought into the marriage or 9 separately owned at the time of dissolution, which are to be "recovered" by each party 10 separately; (2) assets jointly held, which are to be divided equally; and (3) bank accounts, 11 which are to be divided equally. The fact that the agreement provides for a spouse's 12 "recovery" of assets brought into the marriage suggests that upon dissolution, even assets 13 that have undergone interspousal conveyance are to be awarded to the party who brought 14 the asset into the marriage. Husband's interpretation of the prenuptial agreement to 15 require an equal division of assets that were brought into the marriage but that were held 16 jointly at the time of dissolution would defeat the stated purpose of the prenuptial 17 agreement--to preserve the parties' "present estate for the respective children of each." In 18 light of that stated purpose, we conclude that the only plausible reading of the prenuptial 19 agreement is that the first category applies to assets brought into the marriage and that the 20 second and third categories describe assets that are exclusive of the first, i.e., assets 21 acquired during the marriage. That is, the provisions requiring equal division of jointly 22 held assets and bank accounts apply to assets that were acquired during the marriage and 15 1 that do not fall within the first category. As we interpret the prenuptial agreement, the 2 parties intended that upon dissolution, the parties would each recover the specific assets 3 each brought into the marriage, whether or not those assets were held jointly at the time 4 of dissolution. Thus, even if wife's conveyance of the property to the trust had conveyed 5 an interest to husband, we would conclude that wife's premarital equity in the Cal Henry 6 property is not subject to division as a joint asset under the prenuptial agreement because 7 it was an asset brought into the marriage. 8 9 Husband contends, however, that the appreciation in the value of separate property brought into the marriage is nonetheless a marital asset subject to the 10 presumption of equal division, see Massee and Massee, 328 Or 195, 207, 970 P2d 1203 11 (1999) (appreciation of separately acquired property during the marriage is a marital asset 12 to which the rebuttable presumption of equal contribution applies), and that wife has not 13 overcome the presumption of equal contribution with respect to that appreciation. He 14 notes that the Cal Henry mortgage was paid off during the marriage, that improvements 15 were made during the marriage, and that, although wife could trace the financial 16 contributions to her own funds, the income that husband contributed in support of the 17 household helped wife to use her funds to pay off the mortgage and to improve the 18 property. Thus, he contends, he is entitled to an equal share of the marital appreciation. 19 Once again, we must consider the effect of the prenuptial agreement. See 20 Yager and Yager, 155 Or App 407, 414, 963 P2d 137 (1998), rev den, 328 Or 365 21 (whether prenuptial agreement applies only to property owned before the marriage or to 22 increase in value as well depends on terms of agreement). Addressing only that portion 16 1 of the appreciation attributable to wife's premarital 60 percent share of the Cal Henry 2 property, we conclude that, although it is a marital asset, that appreciation is 3 encompassed within the prenuptial agreement and is not subject to division. We held in 4 Proctor, 234 Or App at 732, that, under the terms of the prenuptial agreement involved in 5 that case, marital appreciation associated with separately held property, although a 6 marital asset, was not subject to division. The dispositive provision of the prenuptial 7 agreement in Proctor required that "any community efforts of either party contributed to 8 or directed toward separate property assets of either spouse shall not create community 9 interest in the separate assets." 234 Or App at 725. We stated that that provision 10 indicated an intention that, upon dissolution, the appreciation associated with each 11 separately held asset would be awarded to the spouse who separately held the asset. Id. at 12 132. 13 Here, the parties' prenuptial agreement did not expressly address the 14 disposition of appreciation in separately held property. It provided, however, that each of 15 the parties "desire to accept the provisions of this agreement in lieu of all rights each 16 would otherwise acquire by reason of the marriage," and that "the provisions of this 17 agreement shall act as a release and full satisfaction of all rights each party may acquire 18 by reason of the marriage to previously held property of the other party." An interest that 19 a spouse acquires in marital appreciation of separately held property is "by reason of the 20 marriage." We conclude, therefore, that the language of the prenuptial agreement 21 releases any interest that husband acquired, by virtue of the marriage, in the appreciation 22 of wife's separately held 60 percent interest in the Cal Henry property. Therefore, the 17 1 appreciation, like wife's premarital equity in the Cal Henry property, is not subject to 2 division of the marital property. 3 B. The Cal Henry property--portion acquired during marriage 4 As described, during the marriage, the parties acquired Hunter's 40 percent 5 interest in the Cal Henry property. That share is a marital asset, because it was acquired 6 during the marriage. Wife asserts that she has overcome the presumption of equal 7 contribution as to that property, because she has been able to trace the parties' 1987 8 purchase to her own funds. Although the record shows that wife made the primary 9 financial contribution to the Hunter property acquisition, husband also contributed, and 10 there is no indication that the parties intended for the property to be held separately. As 11 noted, Hunter deeded the property to both parties, and the acquisition took place during a 12 time when husband was participating fully in the marital partnership through the 13 contribution of his income and labors. The parties used the property for their joint 14 marital endeavors. We conclude that the presumption of equal contribution has not been 15 overcome with respect to the Hunter portion of the property acquired during the marriage 16 and its appreciation. Under the terms of the parties' prenuptial agreement, as a jointly 17 held asset, the Hunter portion of the Cal Henry property must be divided equally between 18 the parties. 19 Wife contends, however, that the terms of the trust, which specifically 20 directed disposition of the entire Cal Henry property to wife's children upon the death of 21 both trustees, show that the parties intended that the Hunter portion of the property is 22 owned by wife separately. Therefore, wife contends, the property is not subject to the 18 1 provision of the prenuptial agreement that requires that jointly held property be divided 2 equally upon dissolution. We disagree. As we have held with respect to wife's 60 3 percent interest in the Cal Henry property, upon dissolution, the prenuptial agreement 4 controls the disposition of property described therein. The prenuptial agreement provides 5 that jointly held property acquired during the marriage is to be divided equally. We 6 conclude that it is appropriate for husband to share in the value of the Hunter portion of 7 the Cal Henry property acquired during the marriage, which was held jointly by the 8 parties before the property was conveyed to the trust and was not listed as wife's separate 9 property when it was conveyed to the trust. As previously noted, the parties agreed that 10 the equity in the entire Cal Henry property was $480,000. The Hunter portion, including 11 appreciation, is approximately 40 percent of the total equity in the property, or $192,000. 12 Husband's share of that amount is $96,000. 13 C. Annuity accounts 14 Both of the disputed annuities, the Lafayette annuity and the Transamerica 15 annuity, originated with funds that wife received from her mother by gift or inheritance, 16 and both have grown through passive appreciation. Both annuities were purchased after 17 the parties were married. After the initial acquisition, the funds were held briefly in joint 18 accounts before wife placed them in accounts in her own name. The parties neither 19 added to nor drew from them. Wife transferred the account that preceded the 20 Transamerica annuity to the trust in 1995 and, as noted, the trust described that account 21 as a joint asset. Wife transferred the Lafayette annuity to the trust in 2002, and the trust 22 listed it as wife's separate asset. In 2007, wife withdrew the Lafayette annuity from the 19 1 2 trust. We agree with the trial court that wife has overcome the presumption of 3 husband's equal contribution to the gifts and inheritance that wife received from her 4 mother and that were invested in the annuities. Olson and Olson, 218 Or App 1, 9, 178 5 P3d 272 (2008) ("In order to show that a spouse contributed to an acquisition of inherited 6 property, the contribution must have influenced the inheritance."). We also conclude that 7 wife has overcome the presumption of equal contribution with respect to the appreciation 8 of those annuities, which occurred without any action on the part of either party. Kunze, 9 337 Or at 143. For the reasons explained with respect to wife's 60 percent interest in the 10 Cal Henry property, we conclude that the transfer of the two annuities into the trust did 11 not create joint ownership for purposes of the prenuptial agreement. 12 The prenuptial agreement provides that "[e]ach of the parties shall recover 13 the specific assets brought into the marriage by him or her, * * * as well as any property 14 then separately owned." (Emphasis added.) Property "then separately owned" refers to 15 property separately owned at the time of dissolution. Thus, we conclude that the 16 annuities are wife's separate assets. Accordingly, under the prenuptial agreement, the two 17 annuities were properly awarded to wife. 18 Finally, we must consider whether a just and proper division of assets 19 requires that husband receive any further interest in the marital property subject to 20 division. Husband contends that, in light of his health, the length of the marriage, his 21 financial contributions, and the sharing of the marital home and responsibilities, it is just 22 and proper that he be awarded a greater share of the property. As previously noted, the 20 1 record shows that the parties indeed lived as partners, sharing their incomes, resources, 2 and enterprises, caring for each other, and supporting each other's businesses. Husband 3 contributed his income, as well as a substantial gift from his mother, to the marital 4 partnership. The extent to which wife was able to satisfy the mortgage on the Cal Henry 5 property from her own resources was at least partially attributable to the fact that the 6 parties relied on husband's income to support the family. 7 However, as we have concluded, the prenuptial agreement dictates much of 8 the distribution in this case. Further, as noted, under Kunze, the proper focus in 9 determining whether a separately held asset should be divided as a result of commingling 10 is on whether a spouse's treatment of the asset demonstrated an intention to treat the asset 11 as separate property, or whether, instead, the spouse intended for that property to become 12 the joint property of the marital estate. 337 Or at 142; see also Lind and Lind, 207 Or 13 App 56, 139 P3d 1032 (2006). Nothing in wife's conduct during the marriage indicated 14 an intention to change the provision of the prenuptial agreement that assets brought into 15 the marriage or owned separately at the time of dissolution were to be awarded to the 16 spouse who brought the asset into the marriage. If anything, wife's actions consistently 17 demonstrated an intention to reinforce that plan. Wife kept title to the original 60 percent 18 interest and placed it in trust only because she thought that the trust would secure the 19 property for her heirs, not because she wanted to share the asset with husband. Wife had 20 the trust amended to insure that the Cal Henry property passed to her children in the event 21 that she predeceased husband. Wife used the considerable financial gifts from her 22 mother, as well as a portion of the inheritance from her mother, to pay off the property. 21 1 Although the annuities were briefly held in joint accounts, wife quickly transferred them 2 to accounts in her name only and, at the time they were placed into the trust, both 3 accounts were in wife's name. The testimony at trial indicates that wife intended to keep 4 the funds separate. 5 We have also evaluated whether any other equitable considerations require 6 an additional award to husband, Kunze, 337 Or at 147, and we conclude that the equities 7 are satisfied by the award to husband of an equal interest in that portion of the Cal Henry 8 property that the parties acquired during the marriage. 9 In summary, the Hunter portion of the Cal Henry property, including its 10 appreciation, is properly considered a marital asset, and wife has not overcome the 11 presumption of equal contribution with respect to that portion of the property. For that 12 reason, the dissolution judgment is modified to increase husband's equalizing judgment to 13 reflect an equal share in the parties' equity in the Hunter portion of the property. In all 14 other respects, we affirm the trial court's division of marital property. 15 Dissolution judgment modified to increase husband's equalizing judgment 16 to $96,000 to reflect an equal share in the parties' equity in the Hunter portion of the Cal 17 Henry property; otherwise affirmed. 22
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
