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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Edelman v. Edelman (12/27/2002) sp-5652

Edelman v. Edelman (12/27/2002) sp-5652

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA


TAMMI L. EDELMAN,             )
                              )    Supreme Court No. S-10408
             Appellant,            )
                              )    Superior Court No.
     v.                       )    3HO-93-242 CI
                              )
DUANE F. EDELMAN,             )    O P I N I O N
                              )
              Appellee.             )    [No. 5652 - December 27,
2002]
_______________________________ )



          Appeal  from the Superior Court of the  State
          of  Alaska,  Third Judicial District,  Homer,
          Harold M. Brown, Judge.

          Appearances:   Michael  Hough,   Homer,   for
          Appellant.   Allison  E.  Mendel,  Mendel   &
          Associates, Anchorage, for Appellee.

          Before:    Fabe,  Chief  Justice,   Matthews,
          Eastaugh, Bryner, and Carpeneti, Justices.

          FABE, Chief Justice.


I.   INTRODUCTION

          This  appeal concerns the manner in which property  was

divided in a divorce proceeding and the denial of attorneys  fees

and costs to the former wife.  Tammi Edelman challenges the trial

courts  refusal  to compel Duane Edelman, her former  spouse,  to

assign half of his claims from the Exxon Valdez oil spill so that

the  Exxon funds administrator can pay her directly.  Instead  of

assigning  half  of  Duanes Exxon claims to Tammi,  the  superior

court decided to retain jurisdiction until it could determine the

value  of the Exxon claims.  Tammi also disputes the trial courts

denial  of  attorneys fees and costs to her.  Because  the  trial

court did not abuse its discretion in retaining jurisdiction over

the  Exxon  claims and requiring the parties to  bear  their  own

fees, we affirm the superior courts decision.

II.  FACTS

          Duane  and  Tammi Edelman married in 1976.  Their  only

child,  J.E., was born in 1983.  The couple separated in  October

1992  and  Tammi  filed for divorce in June 1993.   The  superior

court granted Tammi a decree of divorce on April 14, 1994.1

          Duane  is  a seasonal fisherman and a claimant  in  the

Exxon  Valdez Oil Spill litigation.  He holds two types of claims

against Exxon.  The first is for income lost from the Cook  Inlet

salmon  set  net  fishery and from hauling Prince  William  Sound

herring.   The  second is for devaluation of his salmon  set  net

permit.   The  superior  court awarded  the  lost  income  claims

equally to Tammi and Duane.

          Duane  and  Tammi  petitioned for bankruptcy  in  March

1994,  after  they had filed for divorce but before the  superior

court  granted the final divorce decree.  Originally filed  under

Chapter  13,  the Edelmans bankruptcy petition was  converted  to

Chapter 7 on October 24, 1994.  Ultimately, the parties appear to

have  changed the bankruptcy from joint to individual,  as  Duane

received  a  discharge  in his name alone on  February  9,  1995.

Tammi did not pursue bankruptcy for herself.

III. PROCEDURAL HISTORY

          This  is the second time that this case has come before

us.  In Edelman v. Edelman (Edelman I), we addressed the division

of  the  marital  property, alimony, and attorneys  fees.2   With

regard  to  the marital property, we held that (1)  the  set  net

salmon  fishing  permit  was Duanes separate  property;  (2)  the

superior  courts valuation of the marital residence  was  clearly

erroneous;  (3)  compensatory damages from  Duanes  Exxon  Valdez

claims  which replaced lost fishing income during marriage should

be  classified as marital property, to be divided equally between

Tammi  and  Duane;  (4) compensatory damages  from  Duanes  Exxon

Valdez  claims  for devaluation of his set net permit  should  be

classified  as Duanes separate property;3 (5) the superior  court

erroneously  awarded  Duane  his  entire  pension  fund   without

accounting for Tammis share of the marital portion; and (6) Tammi

was  not entitled to reorientation alimony.4  We remanded to  the

superior   court  for  revaluation  of  the  marital   residence,

determination of whether Tammi was entitled to credit  for  post-

separation payments she made on the marital residences  mortgage,

and  determination of the value of Duanes pension fund.5  We also

remanded  on  the issue of attorneys fees which we said  must  be

based  primarily on the relative economic situations and  earning

power of the parties.6

          On  remand, the trial court affirmed its original award

of  the marital home to Tammi and adjusted the appraisal value of

the  home  to  $165,000.  The equity in the home at the  time  of

courts  order was $73,588.22.7  The trial court held  that  Tammi

was not entitled to credit for post-separation mortgage payments.

The  court  awarded the pension plan to Duane.  The  trial  court

also  provided  that [a]ny recovery for lost  income  from  Exxon

should be divided equally between the parties.

          Shortly  after  the trial court issued  its  memorandum

decision  and order on remand, Tammi filed a motion for attorneys

fees  and costs.  She argued that Duanes greater earning capacity

and comparative job security, combined with his alleged vexatious

conduct  in delaying the divorce proceedings, compelled an  award

in  her favor for fees and costs.  Duane argued in his opposition

          to Tammis motion that Tammi could pay her own fees and that he

had not engaged in vexatious conduct.

          In addition to her motion for attorneys fees and costs,

Tammi  requested  that  Duane sign two  Exxon  assignments.   The

assignments authorized the Exxon Qualified Fund Administrator  to

pay the assigned amount to Tammi directly.8 Duane refused to sign

the  assignments, claiming the documents did not comport with the

trial  courts decision.  Tammi moved to compel Duane  to  execute

the assignments.

          The  trial court denied both of Tammis motions  in  its

October  11,  2001   supplementary  order  on  remand.   On   the

attorneys  fees and costs issue, the trial court held that  Tammi

could  pay  her  own  fees  and that Duane  had  not  engaged  in

vexatious  conduct.  With regard to the proposed  assignments  of

the  Exxon awards, the trial court decided to retain jurisdiction

over the division of the Exxon claims to monitor distribution  of

that  asset,  if  and when it occurs.  The court noted  that  the

amounts may be subject to third-party claims, such as that of the

bankruptcy trustee, and concluded that the assignments  were  not

necessary;  rather,  some  document  providing  notice   of   the

existence of Plaintiffs interest to the fund administrator should

be all that is necessary.

          Tammi  appeals  the denial of attorneys  fees  and  the

denial of the motion to compel Duane to sign the assignments.

IV.  STANDARD OF REVIEW

          We  review  procedural decisions of the superior  court

under the abuse of discretion standard.9  We will only reverse  a

trial  courts decision not to award attorneys fees if it  was  an

abuse of discretion.10

V.   DISCUSSION

     A.   The Exxon Claims

          Tammi argues that the trial court abused its discretion

in  refusing to require Duane to execute the assignments  of  the

Exxon  awards.   Her  primary argument is that  the  trial  court

          modified her original award of half of the Exxon lost income

claims  to  something significantly less by  deciding  to  retain

jurisdiction.   She  argues that the bankruptcy  trustees  claims

against  Duane may be deducted from the Exxon awards  before  the

awards   are  distributed  equally  to  Tammi  and  Duane,   thus

diminishing her share.

          The  only  potential merit in Tammis argument that  the

trial courts supplementary order on remand modified her award  of

fifty  percent  of  the  Exxon lost income  claims  to  something

significantly  less  comes from a perceived  discrepancy  between

what  we said in Edelman I and the trial courts language  in  its

supplementary order.11  Following our decision in Edelman I,  the

superior  court  stated  in its decision  on  remand  that  [a]ny

recovery  for  lost income from Exxon should be  divided  equally

between the parties.  However, the superior court later stated in

its  supplementary  order  on remand  that  [a]ny  Exxon  damages

arising out of Mr. Edelmans Cook Inlet Set Net permit belong[] to

Defendant  since  that set net permit is his  separate  property.

But in Edelman I, we held that the set net damages reflecting the

loss  of  marital  wages are marital property.12   This  apparent

discrepancy  is not fatal because the set net claim is  comprised

of  two  types of damages: (1) compensatory damages for  loss  of

revenue  in  1989-91 due to the drop in price of sockeye  salmon,

and  (2)  damages  for devaluation of his set net  permit.13   We

interpret  the  trial courts supplementary order to  reflect  our

determination that only the damages for devaluation  of  the  set

net  permit go exclusively to Duane as separate property.  Tammis

share  of  the  Exxon lost income claims continues  to  be  fifty

percent.

          The  superior  court did not abuse  its  discretion  by

retaining  jurisdiction  over the  Exxon  claims.   Both  parties

concede  that  the exact amount and time of payout of  the  Exxon

claims are unknown.  We have held that when an asset is incapable

of   valuation   at   the  time  of  trial  because   of   future

          contingencies, the trial court should retain jurisdiction over

its  division  until  valuation  is  possible.14   Duane  is   in

bankruptcy; Tammi chose not to pursue bankruptcy.  Some of Duanes

debts  may be marital debts.  Presumably, the bankruptcy  trustee

will not have a claim to Tammis share of marital property to  pay

debts  that  are solely Duanes; however, that issue  is  for  the

bankruptcy  court  to  determine.  We  affirm  the  trial  courts

decision to retain jurisdiction over the awards and not to compel

Duane to assign Tammis fifty percent share of the Exxon claims to

her.

     B.   Attorneys Fees and Costs

          Tammis  second claim on appeal is that the trial  court

abused  its discretion in denying her attorneys fees.  She  asked

the court to award her $47,732.00 in attorneys fees and $5,209.68

in  costs.  The trial court denied Tammi any attorneys fees.  She

argues two points on appeal: that the trial court failed to  base

its  decision  on  the relative economic situations  and  earning

powers of the parties as directed by this court in Edelman I  and

that  Duane  engaged in vexatious conduct.  Duane  counters  that

income  disparity alone is not a basis for an award of  attorneys

fees  and  points  out  that, as the  trial  court  noted,  Tammi

received  over $45,000 in spousal support, sixty percent  of  the

marital  estate,  and  that  she has already  remarried  and  had

additional children.  He also asserts that Tammis lack of  income

is due to her lifestyle choice to stay home with her children.

          The  decision  to award attorneys fees  is  within  the

trial  courts broad discretion.15  The trial court  may  award  a

divorcing   spouse  attorney  fees  and  costs  that   reasonably

approximate  the actual fees and costs required to  prosecute  or

defend  the action.16  The purpose of awarding attorneys fees  in

divorce  proceedings  is to assure that  both  spouses  have  the

proper  means  to litigate the divorce action on a  fairly  equal

plane.17  The court must base its decision whether to award  fees

primarily on the parties relative economic situations and earning

          powers.18  However, parties who are in comparable economic

situations should bear their own fees and costs.19  Thus, even if

one  spouse  earns  less  than the  other,  if  that  spouse  has

resources sufficient for the superior court to reasonably  expect

[him or her] to pay [his or her] own fees, it is not an abuse  of

discretion to require [the lower wage earning spouse] to do so.20

          The  lower  court determined that it did  not  need  to

determine what [Tammis] actual income earning capacity  might  be

because  it  found that Tammi has the resources to  pay  her  own

attorneys fees and she was not compromised from litigating on  an

equal  plane with [Duane] as a result of any disparity in  income

earning  capacity. Tammi argues that the trial court thus  failed

to  follow  our  specific direction to base  its  decision  about

attorneys  fees  on remand upon the relative economic  situations

and  earning  powers  of the parties.21   We  disagree.   Partial

attorneys fees are awarded as a matter of course under Civil Rule

82  to  the prevailing party.  Civil Rule 82, however,  does  not

apply  to  judgments in divorce cases.  In such cases  costs  and

fees  are  based on the relative economic situations and  earning

powers  of  the  parties,  rather  than  on  a  prevailing  party

determination.22  In essence, we instructed the  lower  court  to

apply  the  divorce  exception to Alaska Civil  Rule  82.23   The

divorce exception provides that when the parties economic  status

is  generally equal, it is ordinarily error to make any award  of

costs  or fees.24  Tammis resources included: $45,000 in  interim

support  from  Duane,  the marital home, and  the  potential  for

additional  recovery from her fifty percent share  of  the  Exxon

claims.  The equity in the marital home at the time of the  trial

courts decision was $73,588.22.  The superior court awarded Duane

the  marital  portion of his retirement/pension  fund  valued  at

$45,000 and fifty percent of the Exxon lost income claims.  Duane

is  in  bankruptcy.   Because Duanes economic  situation  is  not

significantly better than Tammis, we hold that the trial did  not

abuse its discretion when it denied Tammi attorneys fees.

          The trial court may also increase an award of attorneys

fees where a party has acted in bad faith or vexatiously.25   The

court must follow a two-step process to make an award of enhanced

fees:   It  must  determine the appropriate fee award  under  the

general rule and then it may increase that award to account for a

partys misconduct.26  Failure to follow this two-step process  is

an  abuse  of  discretion.27  Additionally, the court  must  make

explicit  findings of bad faith or vexatious conduct and  clearly

explain its reasons for deviating from the general rule.28   When

the  court  finds  that one spouses misconduct has  unnecessarily

increased  the other spouses costs, the court must  identify  the

nature and amount of these increased costs.29

          Tammi argues that the trial court abused its discretion

when  it  stated that [i]t would be difficult and time  consuming

for  this  court  to  attempt reconstruction  of  the  events  by

examination  of  the five volumes of pleadings in  this  case  to

determine whether Duane acted vexatiously.30  The superior  court

did  not err in declining to find that Duane engaged in bad faith

or  vexatious conduct.  A review of the record shows  that  Tammi

made  only  generalized allegations in her motions for  attorneys

fees  that  Duane delayed the divorce proceedings  and  that  his

alleged  delay  tactics  rose  to the  level  of  bad  faith  and

vexatious  conduct.   The party who seeks an increased  award  of

attorneys fees must show that the other partys vexatious  or  bad

faith  conduct prevented him or her from litigating on  an  equal

plane.31   Tammi has not demonstrated with sufficient specificity

that Duanes actions were vexatious or in bad faith.  The superior

court therefore did not err in finding that Duane did not act  in

bad faith or engage in vexatious conduct.

VI.  CONCLUSION

          Because the trial court did not abuse its discretion in

retaining  jurisdiction over the Exxon claims and  requiring  the

parties  to  bear  their own fees, we AFFIRM the superior  courts

decision.

_______________________________

     1    Edelman v. Edelman, 3 P.3d 348, 350 (Alaska 2000).



     2    e property,



     3     Because the set net fishing permit is Duanes  separate
property, we ruled that the permit devaluation claim is also  his
separate  property.  Edelman, 3 P.3d at 355.  Permit  devaluation
accounts for seventeen percent of Duanes Upper Cook Inlet  salmon
set  net  claim.  Therefore, Duane will receive seventeen percent
of the Cook Inlet set net claim as separate property in the event
that  the claims are paid.  The remaining proceeds will represent
lost marital income and will be divided equally between Duane and
Tammi.

     4    Edelman, 3 P.3d at 352-58.



     5    Id. at 354, 356.



     6    Id. at 359.



     7     The  court  arrived at this amount by subtracting  the
amount of the first and second mortgages on the home at the  time
of Duane and Tammis separation, $74,026.61 and $9,750.00, and the
amount of an IRS lien, $7,635.17, from the appraisal value of the
marital home at the time of trial, $165,000.

     8     The proposed Assignments of Proceeds read in pertinent
part:

          I,   DUANE  F.  EDELMAN  .  .  .  irrevocably
          assign[]  ONE-HALF (1/2) all  of  my  claims,
          settlement or proceeds from the Exxon  Valdez
          Oil  Spill Litigation Tender Exxon  Claim  to
          TAMMI BLUMENTRITT f/k/a TAMMI EDELMAN . . . .
          I  direct the Exxon Qualified Settlement Fund
          administrator . . . to pay the  assigned  sum
          to the assignee . . . .
          
And

          I,   DUANE  F.  EDELMAN  .  .  .  irrevocably
          assign[]  ONE-HALF (1/2) all  of  my  claims,
          settlement or proceeds from the Exxon  Valdez
          Oil  Spill Litigation Upper Cook Inlet Salmon
          Set  Netters Exxon Claim, except compensation
          for  Devaluation of Limited Entry Permit,  to
          TAMMI BLUMENTRITT f/k/a TAMMI EDELMAN. . .  .
          I  direct the Exxon Qualified Settlement Fund
          administrator . . . to pay the  assigned  sum
          to the assignee . . . .
          
     9     Nelson-Lizardi  v. Lizardi, 49 P.3d 236,  238  (Alaska

2002).



     10    Davila v. Davila, 908 P.2d 1027, 1031 (Alaska 1995).



     11    Edelman I, 3 P.3d at 355.



     12    Id.



     13    Id.



     14    Root v. Root, 851 P.2d 67, 68 (Alaska 1993).



     15    Nicholson v. Wolfe, 974 P.2d 417, 427 (Alaska 1999).



     16    AS 25.24.140(a)(1).



     17     Nicholson,  974  P.2d  at 427  (quoting  Kowalski  v.
Kowalski, 806 P.2d 1368, 1372 (Alaska 1991)).

     18    Edelman I, 3 P.3d at 359.



     19    Nicholson, 974 P.2d at 427.



     20    Davila v. Davila, 908 P.2d 1027, 1035 (Alaska 1995).



     21    Edelman I, 3 P.3d at 359.



     22    L.L.M. v. P.M., 754 P.2d 262, 263-64 (Alaska 1988).



     23     The  divorce judgment exception to Civil Rule  82  is

based  on  a  broad  reading  of AS 25.24.140(a)(1),  Burrell  v.

Burrell,  537  P.2d 1, 6 (Alaska 1975), and on the  reality  that

there  usually is no prevailing party in a divorce case.  Id.  at

264.



     24    Id.



     25     Kowalski  v.  Kowalski, 806 P.2d 1368,  1373  (Alaska

1991).



     26    Id.



     27    Id.



     28    Id.



     29    Id.



     30     The Edelmans case was originally assigned to Superior
Court  Judge Charles K. Cranston.  Upon his retirement, the  case
was  assigned  to  Superior  Court  Judge  Harold  M.  Brown  who
explained in his supplementary order:

          [T]his  court has no independent recollection
          of  the conduct of either party prior to  its
          appointment  to  the  bench.   It  would   be
          difficult  and time consuming for this  court
          to  attempt reconstruction of the  events  by
          examination of the five volumes of  pleadings
          in  this  case.  . . . [T]he conduct  of  the
          parties [since the case was assigned to Judge
          Brown]  does  not  independently  justify  an
          award of [increased] attorneys fees.
          
     31     Gallant v. Gallant, 945 P.2d 795, 803 (Alaska  1997);
see  also  Wright  v.  Wright, 904 P.2d 403,  411  (Alaska  1995)
(affirming award of enhanced fees where former husband  concealed
$1,337,136 in marital assets and wife spent $125,000 in attorneys
and accountants fees to track them down).