Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions


Touch N' Go
, the DeskTop In-and-Out Board makes your office run smoother.

  This site is possible because of the following site sponsors. Please support them with your business.
www.gottsteinLaw.com

You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Mellard v. Mellard (09/21/2007) sp-6169

Mellard v. Mellard (09/21/2007) sp-6169, 168 P3d 483

     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

MILTON D. MELLARD, )
) Supreme Court No. S- 11987
Appellant, )
) Superior Court No.
v. ) 4FA-04-01363 Civil
)
CATHLEEN C. MELLARD, ) O P I N I O N
)
Appellee. ) No. 6169 September 21, 2007
)

          Appeal  from the Superior Court of the  State
          of    Alaska,   Fourth   Judicial   District,
          Fairbanks, Mark I. Wood, Judge.

          Appearances:  Richard W. Wright,  Richard  W.
          Wright,  P.C., and Christopher E.  Zimmerman,
          McConahy, Zimmerman & Wallace, PC, Fairbanks,
          for  Appellant.  Mila A. Neubert, Neubert Law
          Office, LLC, Fairbanks, for Appellee.

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

          FABE, Chief Justice.

I.   INTRODUCTION
          Milton  Mellard  appeals the property division  in  his
divorce.  He argues that the trial court erred when it failed  to
value   Cathleen  Mellards  retirement  account.    Milton   also
challenges the trial courts failure to provide for Miltons future
medical expenses in the property division and its award of $1,500
in attorneys fees to Cathleen.  Because the trial court failed to
place  any  value on Cathleens retirement account, we remand  the
case  so that the account can be valued and the property division
reevaluated.  The trial courts decisions regarding future medical
expenses and attorneys fees are affirmed.
II.  FACTS AND PROCEEDINGS
          Milton  and Cathleen Mellard were married on  July  14,
1979  and  separated in June of 2004.  They have  three  children
from  the  marriage, all of whom were adults at the time  of  the
divorce.   The  parties had accumulated a substantial  amount  of
property over their marriage and had no marital debt to allocate.
Both  parties had vested IBEW retirement accounts at the time  of
separation.
          After  trial  on May 3-4, 2005, the court awarded  each
party  his  or her own retirement account.  But while  the  trial
court  valued Miltons retirement at $346,319, placing that  value
in  Miltons  column,  it  failed to  value  Cathleens  retirement
account.   Instead,  it assigned to Cathleen  the  value  of  her
survivorship benefit in Miltons retirement, placing that value of
$168,308  in her column.  The resulting division of the remaining
assets  required Milton to pay Cathleen $5,999.44 to balance  out
the  larger award to Milton.  The amount was to come out  of  the
investment  account, life insurance policies,  and  other  assets
awarded  to  Milton.  The trial court also ordered  a  number  of
marital  items sold, with the amount divided equally between  the
parties.   The  court awarded Cathleen $1,500 in attorneys  fees,
bringing  the  total amount that Milton was to  pay  Cathleen  to
$7,499.44.
III. STANDARD OF REVIEW
          The  trial  court  has  broad  discretion  in  dividing
property in a divorce proceeding.1  The trial court uses a three-
step  procedure for a property division.2  First, the trial court
determines what property is available for division.3  Second, the
court  values that property.4  Third, the trial court  determines
how to equitably divide the property.5  The valuation of property
available for division is a factual determination that will  only
be reversed if it is clearly erroneous.6  The equitable valuation
of property is reviewed under an abuse of discretion standard and
will  only  be reversed if it is clearly unjust.7  The  award  of
attorneys  fees in a divorce case is within the broad  discretion
of  the  trial  court and will be overturned where the  attorneys
fees  award was manifestly unreasonable.8  An award of  attorneys
fees  in  a  divorce  action is based on  the  relative  economic
situation  and  earning power of the spouses and is  designed  to
assure  that both spouses are able to litigate on an even playing
field.9
IV.                 DISCUSSION
          Prior  to trial, Cathleen retained an expert to perform
a  formal  valuation  of  Miltons  retirement  account.   Miltons
present  value interest in his retirement account was  valued  at
$346,319.   Cathleens survivorship benefit in Miltons  retirement
was valued at $168,308.  Milton did not retain an expert to value
Cathleens  retirement  account but  instead  provided  a  pension
worksheet which reported all of the contributions that  had  been
made to Cathleens retirement account.  The trial court awarded to
the  parties  their respective retirement accounts  but  did  not
place  a value on Cathleens retirement account because the  court
did  not have a dollar value for it.  Instead, the court assigned
to  Cathleen  the  value of her survivorship benefit  in  Miltons
retirement in order to balance the estate.
          After proposed findings of fact and conclusions of  law
were submitted, but before the trial courts final divorce decree,
Milton  objected  to  various provisions of  Cathleens  proposal,
including  the  treatment  of  the retirement  accounts.   Milton
specifically objected to a proposed finding that [t]he  court  is
unable  to  value Defendant Cathleen C. Mellards IBEW  retirement
because  no  evidence  was presented as  to  its  value.   Milton
pointed   out   that  he  presented  evidence   at   trial   that
contributions to Cathleens retirement account totaled $124,992.52
as  of March 2005 and that even after subtracting Cathleens post-
separation  contributions, the value of her pension contributions
alone  was  $116,040.52.  Milton also objected  to  the  proposed
finding  that  valued Cathleens survivorship benefit  in  Miltons
retirement,  arguing  that  he  should  be  permitted  to  cancel
Cathleens  survivorship  benefit in his  retirement.   The  court
entered  Cathleens proposed findings without making  the  changes
advocated by Milton.
          On  appeal, Milton argues that the superior  court  was
required  to  value  Cathleens retirement account,  renewing  his
argument  that he supplied enough information for  the  court  to
calculate  the value of the contributions made to the  retirement
account  during  the marriage, and that under  this  method,  the
value  of  Cathleens  retirement would be at  least  $116,040.52.
Milton  also  argues that under Root v. Root,10 the  trial  court
should  have  ordered  the parties to fill the  evidentiary  void
regarding the value of Cathleens retirement account.  Milton also
contends  it  was error for the court to award Cathleen  survivor
status under Miltons retirement plan without valuing the award of
survivorship.11  Cathleen counters that the superior court did not
order  that Cathleen be granted survivorship benefits in  Miltons
retirement,  but rather, Milton made an irrevocable  survivorship
election  at  the time he retired.  Cathleen maintains  that  the
trial  court valued the survivorship benefit in lieu of Cathleens
retirement  and  used  it  to  equalize  the  property  division.
Cathleen  contends that if Miltons suggestion of  $116,040.52  as
the  value  of Cathleens retirement is accepted, then Milton  was
not  prejudiced  because Miltons valuation of her  retirement  is
less  than the valuation of the survivor benefit.  Cathleen  also
maintains that under Tanghe v. Tanghe,12 a case decided after the
Mellards trial, it was improper for the court to value a  spouses
survivorship   benefit,  and  therefore   Milton   has   actually
          benefitted from the trial courts valuation of Cathleens
survivorship benefit instead of the retirement account.
     A.   Cathleens Retirement
          The trial judge divided the property evenly between the
parties.    This  resulted  in  Milton  having  to  pay  Cathleen
$5,999.44  in order to equalize the property division.   However,
while  the trial court awarded Milton his retirement with a value
of $346,319, it awarded Cathleen her retirement without placing a
value on it.
          In  Root  v.  Root, the court divided marital  property
that included both a nonvested pension and a vested PERS pension.13
The  court  divided the marital estate without valuing either  of
the  assets because neither party presented any evidence at trial
as to the value of the benefits.14  Although we recognized that it
is  the  duty of the parties, not the court, to ensure  that  all
necessary evidence is before the court in divorce proceedings and
that  a  party who fails to present sufficient evidence  may  not
later challenge the adequacy of evidence on appeal, we noted that
where a party identifies a significant marital asset but presents
no  evidence as to its value, the best practice is for the  trial
court  to  direct the parties, or the delinquent  party,  or  the
party  having  the  best  access  to  the  proof,  to  fill   the
evidentiary void.15  In this case, the pension worksheet submitted
for  Cathleens  retirement account did not  include  evidence  of
present  value  as was performed for Miltons retirement  account.
Thus,  if  the trial court did not wish to resolve the matter  by
issuing  a  QDRO  that would divide the marital portion  of  both
pensions, and wished to award the parties their own pensions,  it
should  have directed one of the parties to fill this evidentiary
void  and to provide a present-day value of Cathleens retirement.
It  was error to fail to value Cathleens account and to assign  a
zero value to Cathleens retirement account.
     B.   Survivorship Benefits
          The  trial court valued Cathleens survivor benefits  in
Miltons retirement at $168,308 and placed that value on Cathleens
side  of the property division worksheet. Cathleen maintains that
Miltons   election  of  survivorship  benefits  was  irrevocable.
Although  the  trial court did not directly address the  question
whether the election of survivorship benefits was irrevocable, it
did  note  its understanding that Cathleen will receive  half  of
Miltons  retirement if Milton dies before Cathleen.  Milton  does
not appear to have contested that fact at trial, and he points to
no  support  on appeal for his contention that he can revoke  his
survivorship election.
          The  trial  court  valued the survivorship  benefit  in
order  to balance the estate.  The question Cathleen presents  is
whether  it  was  error to assign any value to that  survivorship
benefit.  In Tanghe v. Tanghe,16 the husband had elected survivor
benefits  for  his  wife, and the pensions were  separated  using
QDROs.17  The husband argued that because the wife was expected to
live  longer  than he, she would receive not only  her  remaining
interest in the husbands retirement, but also an increase in  her
retirement, representing the portion that was being paid  to  the
husband.18  The husband argued that the court should have assigned
          values for both the wifes survivorship interest in the husbands
pension  and  her reversionary interest in her own pension  after
the husbands death.19  The question before us was thus whether the
wifes  survivorship  interest in her husbands  retirement  should
have  been  capitalized and credited to the wife, in addition  to
being included in the QDRO.20  We held that the capitalization of
the  survivorship  benefits  would  place  all  of  the  risk  of
outliving  the  husband on the wife.21  While the differences  in
parties ages and life expectancies made the risk that the husband
would not benefit from his wifes retirement greater, this was the
same risk the husband took during the marriage.22  Therefore,  we
determined that the use of the QDROs to divide the retirement  of
the  parties and their survivorship benefits was proper and  that
it  was not error for the trial court to refuse to capitalize the
survivor benefits the wife might receive under the QDRO.23
          In this case, however, there were no QDROs dividing the
retirement  accounts of the parties; instead,  the  parties  were
awarded  their  own  retirement accounts.  As  the  Tanghe  court
noted, QDROs do not require that the parties retirement funds  be
valued.24   Although Milton has no interest at all  in  Cathleens
retirement,  unlike the situation in Tanghe, where  both  parties
had an interest in the other partys retirement accounts,25 Milton
will  receive  less  money  for his  retirement  because  of  his
election  giving  Cathleen survivor benefits  in  his  retirement
plan.    On  the  other  hand,  awarding  and  valuing  Cathleens
survivorship benefit and placing it in her column does  place  on
Cathleen  the entire risk that she will outlive Milton.  Although
Milton is twenty-one years older than Cathleen, she only receives
the  survivor  benefit from his retirement if she  does  in  fact
outlive him.
          Because  we  conclude above that it was  error  not  to
value Cathleens retirement account, this case must be remanded to
the  superior  court,  which will have to  revisit  the  property
division  in  order to rebalance the marital estate in  light  of
this asset.  In doing so, the court must devise an equitable  way
to treat the survivorship benefit because Miltons interest in his
retirement  has been reduced by the survivorship  election.   The
trial  court  will  have  several options,  which  could  include
valuing Cathleens survivorship in Miltons retirement interest and
placing  it  on  her  side of the property division,  or,  as  in
Tanghe,  ordering  that Milton receive survivorship  benefits  in
Cathleens   retirement  and  dividing  both  parties   retirement
accounts using QDROs.
     C.   Attorneys Fees
          
          Milton  argues  that  the trial  court  erred  when  it
awarded  Cathleen  $1,500 in attorneys fees.  Cathleen  maintains
that  the  award  was  appropriate based on the  conduct  of  the
parties  throughout  the  litigation.  Cathleen  notes  that  she
provided  thirty-two  exhibits for trial, prepared  the  property
distribution spreadsheet, and obtained real and personal property
valuations  and  a  retirement valuation, all at  her  own  cost.
Milton,  on  the other hand, did not provide any input  into  the
property  spreadsheet  and  refused  to  make  even  the  initial
          disclosures.  Cathleen argues that the trial would have been much
shorter  had  Milton participated more actively in  the  process,
which the court noted in its findings.  Cathleen therefore argues
that   the  attorneys  fees  award  was  appropriate  under   the
circumstances.
          When the trial court made its findings on the record at
the end of the trial, the court stated:
          But  I find that this trial has taken one day
          longer  than  it should [have] because  there
          was  no participation [by Milton]. . .  .  We
          basically did a settlement conference with me
          here  and  me  deciding because either  there
          wasnt  enough proof or there was . .  .  just
          approximate proof on both sides . . . .
          
               And so Im going to assess  you can treat
          it  as  a  sanction or you can  treat  it  as
          attorneys fees, but its $1,500 for  the  cost
          of not participating earlier and causing this
          thing to last an extra day.
          
In  the divorce decree, Cathleen was awarded $1,500 in costs  and
attorneys fees based on a finding that [t]he trial took  one  day
longer than necessary, because of [Miltons] lack of participation
prior to trial.
          In  making  an  increased attorneys  fees  award  in  a
divorce  proceeding, the trial court must engage  in  a  two-step
process.26  [T]he court must first determine what fee award would
be appropriate under the general rule, and only then increase the
award to account for a partys misconduct.  Failure to follow this
two-step process constitutes an abuse of discretion.27  The trial
court  must also make explicit findings of bad faith or vexatious
conduct to justify the increased fee award.28  In this case,  the
trial  court  did  not  first  make a determination  whether  any
attorneys fees award would be appropriate in this case.  But  the
trial  court  did  make references to the  size  of  the  marital
assets, and characterized this case as a fifty-fifty division  in
which no spousal support or maintenance was required because both
parties have their own income.  Although not as explicit as  they
could  be,  the  courts statements indicate that  attorneys  fees
would  not  have been awarded under normal circumstances  because
the parties were economic equals.
          This  brings  us  to the second step of  the  analysis:
whether  the  award should have been increased to account  for  a
partys  misconduct.   The course of conduct  in  this  case  that
justified  the  trial courts enhanced fee award included  Miltons
passivity  during the pretrial proceedings, his failure  to  make
even  initial disclosures without being compelled to do  so,  and
his  failure to present evidence or contribute in any way to  the
property spreadsheet.  This caused the trial to last longer  than
necessary.   Bad  faith conduct that prevents  the  parties  from
litigating  on  an equal plane may lead to an award  of  enhanced
fees.29  By engaging in bad faith conduct, one party can increase
the  other partys attorneys fees and can prevent that party  from
          litigating on an even playing field.  Again, while the trial
court  could have been more explicit in its findings  to  support
the  fee award in this case, it did refer to conduct that touched
on the underlying purpose of allowing an increased fee award in a
case  of  vexatious or bad faith litigation tactics.   Thus,  the
award  of attorneys fees was not an abuse of discretion.  But  we
caution  that a finding of vexatiousness or bad faith to  support
an  enhanced  fee award should be more clear in  order  to  allow
review on appeal.
     D.   Miltons Future Medical Expenses
          
            Milton argues that it was an abuse of discretion  for
the trial court to fail to make some provision for Miltons future
medical  needs.   Cathleen  responds  that  Milton  provided   no
information to the trial court about his health and notes that if
Miltons  future medical needs had been important, he  could  have
presented evidence to the trial court to substantiate his claims.
          On  February  15, 2005, Cathleen sent Milton  a  letter
asking for a signed medical release because Milton might have had
some  medical issues and Cathleen wanted more information  before
trial.   Milton  responded that he [was] at a loss to  understand
why or how the parties medical condition[s] are an issue.  At the
conclusion of the trial, the court made one reference to  medical
issues:
          In  terms  of health, Mr. Mellard, you  know,
          may  have to have some surgery in the future.
          Nobody  talked  to  me  about  what  type  of
          medical  benefits he has.  I  assume  hes  on
          Medicare at this point in time.  I dont know.
          I  assume that.  Should the parties have  set
          aside some money for that future surgery when
          they  got  the  word?  Oh,  absolutely.   Did
          they?   No.   They  went on  vacations,  they
          bought toys, they paid off the house.  Was it
          a boon to the marriage?  Absolutely.
          
          Milton  did  not  request an award for  future  medical
needs  at  trial, and he never argued for an unequal distribution
of  property  based on his medical condition.  We generally  will
not  consider a claim raised for the first time on appeal, absent
plain  error.30   In this case, Milton presented no  evidence  or
exhibits  to the trial court regarding his future medical  needs.
As  Milton  failed to present any evidence or argument  regarding
the  future  medical  expenses at  the  trial  court  level,  his
argument is waived on appeal.
V.   CONCLUSION
          The   trial   court  erred  in  not  valuing  Cathleens
retirement  account.  The decision of the trial  court  regarding
Cathleens  retirement  account  is  REVERSED,  and  the  case  is
REMANDED  to the trial court to reevaluate the property division.
The  trial  courts decisions to award attorneys fees and  not  to
award future medical expenses are AFFIRMED.
_______________________________
     1    Cox v. Cox, 882 P.2d 909, 913 (Alaska 1994).

     2    Laing v. Laing, 741 P.2d 649, 651 (Alaska 1987).

     3    Id. at 651-52.

     4    Id. at 652.

     5    Id.

     6    Cox, 882 P.2d at 913-14.

     7    Id. at 914 (internal quotations and citation omitted).

     8     Kowalski  v.  Kowalski, 806 P.2d  1368,  1372  (Alaska
1991).

     9    Id.

     10    851 P.2d 67 (Alaska 1993).

     11     Milton  argues  that it was error to  award  Cathleen
survivor   benefits  in  his  retirement  without  valuing   that
interest.   However, the trial court did assign a value  to  that
benefit in the property division.

     12    115 P.3d 567 (Alaska 2005).

     13    851 P.2d at 68.

     14    Id. at 69.

     15    Id.

     16    115 P.3d 567 (Alaska 2005).

     17    Id. at 569.

     18    Id.

     19    Id.

     20    Id.

     21    Id. at 570.

     22    Id.

     23    Id.

     24    Id.

     25    Id. at 569.

     26    Kowalski, 806 P.2d at 1373.

     27    Id.

     28    Id.

     29    Id.

     30    Alderman v. Iditarod Props., Inc., 104 P.3d 136, 145-46
(Alaska 2004).

This site is possible because of the following site sponsors. Please support them with your business.
www.gottsteinLaw.com
Case Law
Statutes, Regs & Rules
Constitutions
Miscellaneous


IT Advice, Support, Data Recovery & Computer Forensics.
(907) 338-8188

Please help us support these and other worthy organizations:
Law Project for Psychiatraic Rights
Soteria-alaska
Choices
AWAIC