Brennan v. BrennanAnnotate this Case
At the time of separation, Kelly and Rachael Brennan controlled substantial assets, including a successful fishing business, Individual Fishing Quotas (IFQs) that Kelly obtained prior to his marriage to Rachael, and a large home in Halibut Cove. The court ordered Kelly to pay $5,000 per month as interim spousal support. After trial, the superior court determined that the IFQs had become marital property through transmutation, and it divided most of the marital estate 50/50. The property division included the proceeds from two post-separation sales of IFQs; the court also awarded Rachael half the gross proceeds from the post-trial sale of the couple’s fishing vessel. Kelly appealed, arguing the IFQs were his separate property not subject to division; he also challenged several other aspects of the court’s property division, arguing that the court abused its discretion in failing to account for various tax liabilities, payments, alleged damage to marital property, and other factors that he contends unfairly favored Rachael. The Alaska Supreme Court concluded the superior court applied the wrong legal standard to its transmutation analysis regarding the IFQs, and therefore reversed the determination that the IFQs were marital property, and reversed the award to Rachael of proceeds from post-separation IFQ sales. The Court remanded for the superior court to reconsider these issues as well as the overall equitable property distribution, and to explain its reasoning for awarding Rachael gross rather than net proceeds from the sale of the fishing vessel. The Court affirmed in all other respects.